Sainand beedis was a small business that produced and sold beedis, which was a leaf wrapped tobacco product used for smoking. Sainand Beedis served parts of a district in the southern state of Andhra Pradesh in India. The competition for the firm was from strong regional brands. The firm offered lower priced beedis compared to the large regional brands. The quality of Sainand Beedis was similar to the quality of the competing regional brands. The firm provided superior service to channel members and also gave a higher trade commission. The result was a dominant position in the market it served. Its effort at geographical expansion to neighboring areas was affected by the difficulty in recruiting wholesalers. The competitor's distributor exerted its influence on the wholesalers in these new markets to prevent them from stocking Sainand Beedis. The inability to recruit wholesalers and the inability to service retailers directly hampered its growth plan. The large geographical spread of the semi-urban and rural markets intensified the distribution problem. The loyalty of the small town and rural consumer to existing brands was another important issue that hindered its growth.
