Ref. No.

: BRM0004

The Initial Hiccups of a Startup Brand

Anil Kumar (Anil), who owns a distribution firm named Brand Distributors Pvt. Ltd., was in a
dilemma. A fashion designer by qualification and an entrepreneur by nature he loved to face challenges.
Anil was concerned after having a look at the sales figures of his firm. However, having a never say
quit attitude he was determined to find solution for his dilemma. He grabbed his laptop and began
typing to search for some information on Google. He googled for quite sometime and then noted
down few addresses and phone numbers. Those numbers and addresses belonged to the local
business consultants. Deciding to make calls to them the following morning, he called it a day.
When he arrived at his office the following morning, his employees had arrived and were busy
making arrangements to go on their daily marketing tours. Anil gave them the necessary instructions
and entered his cabin. He looked for the notes that he had prepared yesterday. After going through
it for a few minutes, he started calling on the listed numbers. Finally, he struck a deal with one of the
consultants – Srikar Raj (Srikar)– to solve his problem. The consultant agreed to come to his office
at 4 pm to discuss the problem.
Anil was waiting impatiently for the consultant, who walked in to Anil’s cabin at 4.15 pm.
Srikar: Hello Anil, I am Srikar from Bizstrat Consultants Pvt. Ltd.
Anil: Hello. Srikar, I was waiting for you. Please have a seat.
Then Anil took the receiver, ordered for a coffee and instructed the receptionist not to disturb him
for some time.
Srikar: Well to start with, Anil, I would like to know what is the problem with your business?
Anil: I have recently launched a brand and although it has all the potential it does not seem to
work. I see that there are no takers for it in the market. I am unable to understand the actual problem.
What do I do to increase the sales of my brand?

This case study was written by Syed Abdul Samad under the direction of Dr. V. Srinivas, IBSCDC. The author also acknowledges the
inputs from R. Muthukumar. It is intended to be used as the basis for class discussion rather than to illustrate either effective or
ineffective handling of a management situation. The case was prepared from generalised experiences.

© 2009, IBSCDC.
No part of this publication may be copied, stored, transmitted, reproduced or distributed in any form or medium whatsoever without
the permission of the copyright owner.

Licensed to use for IBS Campuses only.

Sem II, Class of 2020-2022.
 The Initial Hiccups of a Startup Brand

Srikar: Ok, let me have a complete picture. Tell me your side of the story from the beginning.
Anil started telling him the entire sequence of events from the beginning.
Anil: As soon as I completed my fashion-designing course, 5 years back, I set up a boutique,
which catered to the needs of the residents of that area and the surrounding areas. My target
customers were women who preferred innovative and hep designs for their garments.
Srikar: How was the customer response for that business?
Anil: The customer response was very encouraging. I received a lot of appreciation for my
quality of work and innovative designs and most of my customers turned out to be repeat customers.
Many of them even brought their relatives and friends to my boutique. I would consider it as a
successful venture.
Srikar: Then, what was your next step?
Anil: Since I am an entrepreneur by nature, I wanted to expand my business. Therefore, after 6
months of establishing the boutique, I signed an agreement with a renowned brand to distribute its
products in the local retail market. My market covered only two districts initially. I had only five
marketers at that time. However, in the next 4 years, I had entered into agreements with five more
brands. The number of staff in my firm also increased and currently I have 15 marketers. My market
region also expanded to seven districts.
Srikar: How do you rate your distribution business?
Anil: I would rate this also as a successful venture. Because there has been an increase in the
number of brands that I market and distribute. I had also expanded my region to seven districts.
Accordingly, the number of employees also had increased. My company has also had a yearly
average growth rate of almost 20%. I had established a good reputation for myself. My firm was
known for its good customer service and timely delivery. I had developed good relations with all my
retail clients in my region and most of them preferred to deal with my firm over other firms. Seeing
the reputation that my firm has in this region, even other brands gave offers for distributing their
product in this region.
Srikar: Then what did you do about your boutique business?
Anil: That business was simultaneously doing well. I handled both of them efficiently, without
facing any problems with customers or employees of both these businesses. I would dedicate half of
the time in creating new designs for the boutique, as I had enough time to handle the distribution
activities. My employees here would take care of all the marketing and distribution activities. I only
had to give the necessary instructions as and when required, and had to look after the issues of
management, growth and expansion of the firm.
Srikar: What happened next?
Anil: Then 6 months back, I decided to launch my own brand. Since I was getting appreciation
and good feedback for my designs and had established a good reputation and distribution network in
the region, I decided to create a brand of my own.

Licensed to use for IBS Campuses only.

Sem II, Class of 2020-2022.
 The Initial Hiccups of a Startup Brand

Srikar: How did you start that?

Anil: Over the last 5 years, I have created around 2,000 designs. I selected the best of those
designs and started developing them into products. As I wanted to pilot test my product in the
market, I hired some freelancers to give shape to my designs. Because I thought, it would not be a
good idea to disturb the established boutique business. I even thought of setting up a new workshop
for this work, but dropped the idea due to financial constraints. As I was not sure whether my brand
would find a position in the market, I decided to start it on a small scale and produced only 1,000
pieces, using 20 different designs and 4 different sizes. I named my brand as ‘D-signs’.
Srikar: How did you take your product to the market?
Anil: Since I owned a distribution firm and had maintained good relationships with the retailers of
the region I marketed my product through the same distribution channel.
Srikar: What did you do about educating the final consumer who purchases your product? Did
you carry out any advertising campaigns for your product?
Anil: No, I did not carry out any advertising campaign for my brand. The reason for that, again,
being financial constraints, as the advertising process would consume a lot of money. However, I
promoted it through my friends and relatives and the customers of my boutique. Moreover, I received
a good response from all of them. In fact, I sold almost 10% of my first stock through them. Most of
the promotion that took place was through word of mouth marketing. But, I was planning to take up
advertising after seeing the initial response my brand receives from customers in my region before
expanding to other markets other than my own region.
Srikar: What were the terms and conditions for the retailers for the sale of your brand? How was
the response from the retail channel that you had used?
Anil: The terms and conditions for the retailers for selling my brand were the same as all other
brands that my firm distributes. However, I offered a 2% extra in their margins. Almost all of them
agreed to sell my product through their stores and accepted the product. However, since last 2
months, they are complaining of low sales and are now reluctant to keep my product in their stores,
as it would cost extra space and maintenance as an extra inventory for them. Some have even
returned the product to my warehouse.
Srikar: What were the retailers’ complaints?
Anil: They complained of very low sales and reluctance from customers to try the product. Only
15% of the inventory has been cleared through the retailers till date. They also complained that the
customers felt that the product was highly priced, while my boutique customers felt that it was a
reasonable price for the quality and design that was offered.
I hope I have provided you with a clear picture of my situation, suggest me ways of improving my
brand sales.
Srikar: Fine Anil, I have noted down the details about your business problem. I will work on the
initial data that I have now and decide about the way this research process should be taken forward.

Licensed to use for IBS Campuses only.

Sem II, Class of 2020-2022.
 The Initial Hiccups of a Startup Brand

However, I would be coming back to you often to know the finer details of the problem if required.
Have a nice day.
Anil was now sitting a bit relaxed in his chair looking at Srikar, who was moving out of his cabin
thinking about the various ways in which he can proceed further on this problem.

Licensed to use for IBS Campuses only.

Sem II, Class of 2020-2022.