FROM BHUJIA TO MULTI-BILLION DOLLAR COMPANY- HALDIRAM
Haldiram is one of the most iconic brands in Indian business history. And while most of us are taught about American icons like Domino's and McDonald's, very few of us know about the world-class business strategies developed by the homegrown brands of India. And Haldiram is one such brand that started as a small sweet shop in Bikaner, but today, it has expanded its presence in more than 80 countries, employs more than 1500+ people. And in FY 19 alone, Haldiram generated a sales revenue of $1 billion. Haldiram's was founded in 1937 by Ganga Bishan Agarwal, fondly known as Haldiram Ji in his household; as a retail sweets and namkeen shop in Bikaner, Rajasthan. ButThe question is while we see 1000s of sweet shops every single day, What exactly was so particularly special about Haldiram that they were able to build a billion-dollar business? What exactly was their business strategy
What are the lessons that we need to learn from this iconic brand?
This is a story that dates back to 1900 Bikaner. When Haldiram (Ganga Bishan Agarwal) was just 11 years old. He worked at his grandfather's bhujia shop and being a Marwari, he soon enough started finding ways to make money for his family.
Back then bhujia in Bikaner was an extremely commoditized product, which means that since there were hundreds of bhujia shops in Bikaner, there was hardly any difference between their products. Therefore, the competition was solely based on the price and not on quality. During this time, Haldiram would take up odd jobs such as chopping and cleaning the kitchen, and he gradually began to take interest in the making of the bhujia. Originally, the tasty bhujia was actually made by one of the daughters in-laws of the family. And soon enough Haldirams grandfather realized the potential of this product, and he took it to the market. And as soon as this product hit the market, the bhujia started selling very well. And as soon as they started making more money, the entire family was extremely happy. But Haldiram was the only member who was not at all satisfied neither with the penny profits nor with the taste and quality of their product. because deep down he still felt that bhujia was not good enough. And he wanted to make something that was far away from the rest of the competition. And he wanted his product to be not just yet another bhujia among the hundreds of bhujia in the market.
FOUNDING PILLAR OF HALDIRAM-
Driven by this insane obsession for a high-quality product, this little boy started working very hard and started experimenting with different ingredients in search of a mind-blowing product. And that is when many, many iterations later Haldiram was able to make three changes to the bhujia that changed the destiny of his family forever.
The first change he made was that instead of making bhujia out of besan, he started making it out of Moth Ki Dall. And this made bhujia extremely delicious, turning it into a delicacy overnight. In addition to that, instead of making them soft, he started making them into a fine crispy mixture, so that it could give people an enhanced experience of eating bhujia and at the same time, it could make the customers feel something different from the conventional bhujia sold in Bikaner.
Secondly, because this bhujia was extremely commoditized he started selling his bhujia at a 150 percent extra cost at 5 paise per kilo as compared to the market price which was just 2 paise per kilo.
And lastly, he named his bhujia as Dungar Sev which was named after that then Maharaja Dungar Singh. And these three changes ladies and gentlemen gave Haldiram three superpowers over his extremely crowded competition.
THE GAME CHANGER- Dungar Sev. Following Three Reasons Need to Know-
Firstly, the name dungar by default made this bhujia sound like a delicacy that people would want to try. And this is because, although the name dungar did not have any connection to the Maharaja, it acted like a brand ambassador for the bhujia. Therefore, the perceived value of the product was enhanced to a large extent.
Secondly, because of this increased perceived value, people do not mind paying three paise extra because they by default assume that they were buying a premium product.
Third and most importantly, people pay the premium for the bhujia, after perceiving it as a better product. When they actually tasted it, the product genuinely turned out to be absolutely delicious.
As a result, the demand for Haldirams dungar sev skyrocketed within just a few weeks. If you see, this is one of the most powerful principles of marketing which says that brand perception plus a tangible value deliver results into brand value. In this case, by hearing the name of Dungar Maharaj, Haldiram's bhujia attracted more customers due to the enhanced perceived value. After that, when it actually tasted great customers, wholesalers do not mind paying three paise extra per kilo. So if you see, the three paise extra or the 150 percent premium cost was the brand value of Haldiram's bhujia.
And this turned Haldiram's bhujia into a leading product in a highly commoditized bhujia market. And within no time, hundreds of kilos of Haldiram's bhujia started to be sold. This was the founding pillar of the incredible Haldiram story.