TEACHING STG-1-0000A | October 9th 2018

NOTE

FLAME CASE CONFERENCE 2018

Celebration Candles: Confronting Growth Challenges

Synopsis
Pooja Tiwari (Pooja), a homemaker, attended candle making workshop and started making candles
as a hobby and used to gift them to her near and dear on various occasions. After getting good
response from her family and friends, she started a business and registered the company by the name
“Celebration Candles”. Celebration Candles offers wide variety of candles for various purposes like
corporate gifting, event decors, interior decoration for home and hotels, meditation centers and
many others. The product portfolio includes gold and silver radiant candle infused with floral essence,
essential oils and soothing fragrance decorated with dots, seeds, shells and sequins. Best quality wax
was used for manufacturing the candles. By participating in various exhibitions in Mumbai, Pune
and Nagpur, Celebration Candles has developed a good network in local market. Having improved
on packaging and getting registered on Indiamart, Just Dial and various other wholesalers’ websites,
Celebration Candles became a recognized name in the candle business and the distribution was
further expanded to Goa, Nagpur, Mumbai and Hyderabad.
However, rise in threat of substitutes from China, increase in the cost of raw materials and rise in
competition is leading to uncertain future for Celebration Candles. The losses are accumulating due
to rising expenses and increasing competition.

This Teaching Note was prepared by Prof. Pooja Darda, Faculty of Marketing, Department of MBA, MIT World Peace University and Prof. Dr.
Varsha Nerlekar, Faculty of Finance, Department of Management, MIT World Peace University, Pune after classroom adaptation. It is only an
illustrative orchestration of the case study ‘Celebration Candles: Confronting Growth Challenges’. It is never meant to limit the learning outcomes,
nor does it suggest in any way being the best possible outcome or decision approach.
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No part of this publication may be copied, stored, transmitted, reproduced or distributed in any form or medium whatsoever without the permission
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STG-1-0000A | Celebration Candles: Confronting Growth Challenges

Pooja is getting worried about the future of her venture and is struggling to find ways to make it
profitable. She is wondering what marketing strategies can be applied so as to increase the business.
Occasionally, she is in a dilemma as to whether she should even continue with the venture or
diversify it or just shut it down.
This case intends to discuss the challenges faced by entrepreneurs in SME sector due to increasing
competition, dumping of cheap electrical substitutes by China and rising raw material costs. The
case further discusses about the important steps to be taken while establishing a business so as to
ensure the success.

Before the Classroom Readings

• http://candles.org
• http://www.candlewic.com/education/candle-making-projects/candle-making-projects
• https://en.wikipedia.org/wiki/Porter%27s_five_forces_analysis
• https://connect2india.com/global/export-Candle-from-india
• http://www.cybex.in/Indian-Trade-Laws/Default.aspx

Case Positioning and Setting

This case can be used in the MBA/PGDM for the courses of Entrepreneurship management and
marketing management

Pedagogical Objectives
• To conduct SWOT analysis of Celebration Candles.
• To understand and analyze the growth strategies for Celebration Candles.
• To discuss the strategies for capturing domestic and international market.
• To analyze the reasons for slowing down of the business of Celebration Candles
• To suggest revival strategies for Celebration Candles.
• To identify and discuss the factors which are critical to establishing a new business.

Detailed Teaching Plan

Ideal Duration

Section 1: SWOT Analysis of Celebration Candles 10 minutes

Section 2: Growth Strategies of Celebration Candles 15 minutes

Section 3: Strategies for domestic and international market 15 minutes

Section 4: Reasons for slowing down of business 15 minutes

Section 5: Revival strategies for Celebration Candles 15 minutes

Section 6: Critical Success factors for establishing new business 20 minutes

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 Celebration Candles: Confronting Growth Challenges | STG-1-0000A

Case Analysis
1. SWOT Analysis of Celebration Candles

STRENGTHS
• Efficient after sales service
• Positive Client relationship
• Cost Advantage-Better rates than
competitors
• Unique products-A few designer candles
were niche in the market
• Good product quality
• Variety of candles available
WEAKNESSES
• Limited distribution channel
• Inability to enjoy economies of scale
• Problems of spending on marketing
• Less workers
• Small manufacturing unit that's why can't
take big orders
• Inconsistent orders

SWOT

OPPORTUNITIES THREATS
• Online market -it offers abilty to expand • Change in pricing of raw material
business
• Dumping of Chinese candles
• Innvovation-can produce more unique
• Seasonality nature of the product
candles
• Change in MSME regulation
• Customizable orders
• Substitute products leads to switching of
• Diversification into other complimentary
customers
candle products
• Competitor- rise in competitors due of low
• Expansion of business to other regions
entry barriers

2. Analyze the growth strategies for Celebration Candles

• Market Expansion Strategy
1 Diversification: Celebration Candles can diversify its business and can start new
product line of interior products which can be complementary products for candle
such as lamps, candle holders and other decorative glasses. Besides selling candles,
Celebration Candles can also sell candle making materials like candle wax and
fragrances to those who want to try making candles at home as a supplier of wax
because such wholesalers are very few in Pune.
2 Export: United States and Europe are huge market for scented candles. Celebration
Candles can start exporting candles to international markets by getting necessary
licenses.
3 Trading of Tea-light candles: As Tea-light candle manufacturing was not profitable
to Celebration Candles, they can start trading Tea-light candles with certain percentage
of profit margin.

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STG-1-0000A | Celebration Candles: Confronting Growth Challenges

4 Recycle: They can run recycle reward program. They can collect the melted wax
from the regular clients and can recycle the wax. Celebration Candles can encourage
customers to save their empty used candle glass or jars and can offer a 10 -15 percent
discount on customer’s next purchase. This will reduce the material cost and can give
Celebration Candles an image of Eco-friendly Company.
• Product Expansion Strategy
Celebration candle can expand their product line category. They can start making candles
from other types of wax like Soy wax, Bees wax and Vegetable wax which are cheaper than
Paraffin wax. Apart from wax candles, they can make gel candles. They can also enter into
production of mosquito repellent candle by using citronella essential oil in their candle.
They can also focus on the production of aromatherapy candles and start making
aromatherapy candles as it the latest trend of candle everywhere including India and abroad.
• Marketing mix modification strategy-Celebration Candles can improve and change 4P’s
and other promotional factor
Promotion and Sales strategy- Celebration Candles can promote candle utilization beyond
as a seasonal product. They should encourage use of individual candles for decoration
various events and as a gift option in various social media platform like Instagram, Twitter,
YouTube, blogs and various social media groups. They can also give advertisement in local
newspaper and Radio station during Diwali and Christmas. They can do direct mailers.
Company can increase the sales and marketing team as there is only one Marketing Manager.
Celebration Candles should participate in more trade shows and craft shows outside Pune
also to increase brand awareness in other regions as well. They can engage the audience
through their official website and offer them the various customized products available.
3. The strategies for capturing domestic and international market.
Strategies for Celebration Candles to capture domestic market:
• Celebration Candles can tie-up with various e-commerce companies like Flipkart, Amazon
and Snapdeal to increase its reach domestically.
• Celebration Candles can tie-up with local shops and home decor malls on profit percentage
sharing basis.
• Celebration Candles can register its business in local business directory.
• Celebration Candles can tie=up with various corporates for customizable business gifts.
Strategies to capture international market:
• Celebration Candles can take export license and start exporting aroma candles outside
India like Europe, Turkey, Mexico, Singapore and United States.
• It can focus on various international festivals like Easter, Valentine, Halloween,
Thanksgiving Day and Christmas.
• Instead of making candles from Paraffin wax, they can make candles from natural wax and
promote its brand as a Green, non-toxic and non-polluting brand.

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 Celebration Candles: Confronting Growth Challenges | STG-1-0000A

4. Reasons for slowing down of the business of Celebration Candles

Celebration Candles business started slowing down because of change in the price of raw material.
The basic raw material i.e. paraffin wax cost increased, price of gas increased. Chinese candles were
grabbing the market because of their economies of scales production. Chinese battery candles are
acting as substitutes of the handmade candles.
Porter’s Five Forces model for Candles Industry
• Degree of competition: High. The competitors in an industry are firms that produce
similar products or services. Celebration Candles is facing tough competition because of
emergence of candle making as a home business, many homemakers have started doing
business of candle making as a hobby which in future can turn to be potential competitor.
• Bargaining power of suppliers: Low. Various type of wax are available in the market. So
bargaining power of supplier is low.
• Threat of substitutes: High. Chinese battery operated candles. Lots of varieties of Candles
made from other wax apart from paraffin wax are available in the market.
• Bargaining power of buyers: Low. Lots of varieties are available in the market .Also people
make candle as a hobby.
• Threat of new entrants: High. Entry barrier in the candle industry is very low. Candle
making is one of the home based businesses you can start with little or no capital investment.
So many homemakers are entering into this market as a new entrant
5. Revival strategies for Celebration Candles
• Celebration Candles can innovate new designs and ideas for candles as market always
welcomes new designs.
• It should start investing in new mold of candles of interesting shapes and designs.
• Of late, gel candles are also liked by Indian customers and so they can enter into gel
candle production also.
• It can start producing candles in economical ways. Instead of using expensive gas for
melting, they can use either electric wax melter or solar wax melters. They should adopt
new methods of production to save the fixed cost.
• They can make customized candles for all themes like contemporary, modern and classy
look which can be targeted to various interior decorators.
• Celebration Candles can work on customized and damage-proof packaging.
• It can focus on fast delivery of the orders.

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STG-1-0000A | Celebration Candles: Confronting Growth Challenges

6. To identify and discuss the factors which are critical to establishing a new business
In this section, the instructor can highlight the important elements of establishing a successful
business. Through this case, the instructor can discuss the need of critical elements like Doing
market research, Writing a business plan, Doing financial feasibility study, Planning finances, Planning
organization structure, etc. The below mentioned article could be referred for further discussion on
this section.
https://www.forbes.com/sites/cherylsnappconner/2015/06/30/the-20-critical-steps-to-business-
success/#5d92b2741526

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