Case Study : Good Knight mosquito repellent

Good Knight - Introduction and background

• Mr Mohan (founder) is an Electrical engineer. • Started a trading firm to deal with ceramic insulators. • Experimented with the design and production of indigenous diapers.

• Had to close down insulator business in 1982.

• Distributorship of Vape. Didn’t work out well.

• Worked possibilities of starting own manufacture of anti-mosquito mats.

Technology:• Collaboration with Sumitomo group that had monopoly over technical materials which were needed for manufacture of mosquito repellent mats was difficult.

• Mr. Mohan flew to Osaka after many attempts to meet their officers in Mumbai and finally established collaboration.

Finance: •No help from friends and family members.

• Loan application rejected by over thirty banks and financial institutions on ground of non viability.

• One private officer offered to lend Rs. 0.20 million at 5% interest per month.

•The financiers son offered funds for purchase of raw materials only if he will be given sole distributorship for Good Knight.

Challenges faced

•The father- son financiers came with a proposal for 50% stake in company otherwise they will have to settle accounts.

•Loan officer of bank of India provided him with a credit facility of 0.5 million and bailed him out with private financiers.

•The total liability that Mohan had with the bank of India came to Rs. 2.10 million after settling his dues with private financers.

About the product• People initially used mosquito coils and skin ointments as mosquito repellents.

• Transelektra Domestic products introduced Good Knight as a substitute to these products.

• Consisted of a rectangular blue coloured paper mat electronically heated at a specified temperature by an EMD.

• The EMD’s were assembled by subcontractors through imported thermistors from Sumitomo, Japan. Later, Transelektra itself started the production of thermistors. In it’s factory in Mumbai

• Production of the mats involved a mixture of allethrin, evaporator and fragrance added to the special paper. These mats were cut into equal sizes and packed.

• A new factory was opened in Chennai in 1991 where production capacity was 70000 boxes per year.

• Raw material import became easy by 1991.

Market share and Competition

• First television advertisement of Good Knight was telecast on 31 July 1985.

•By 1992 the company had 2,50,000 retail outlets.

• Mr. Mohan wanted Good Knight to be easily available everywhere.

• 4. Turnover reached to 468 million in 1992-93.

• Good Knight was later targeted even to middle income group.

• In 1991-92 nearly 20 million was spent on advertisement.

• Good Knight always stuck to quality norms.

• In 1991 they sponsored an all India Good Knight cup football tournament.

• Since entering the market in 1985 Good Knight remained the all India market leader.

•In 1992 Good Knight had 60% share, jet and banish had 15% market share each and Odomos with 8%.

• Other brands such as Casper, Samurai, Six to Six, ARS and Knight Queen shared rest of the market.

• Sales went upto 140 million in 1992. • Jet introduced mats that emitted fragrance throughout the day and was priced lesser than Good Knight and came up with models like Jet gypsy and Jet fighter but couldn’t take Good Knight’s place.

Diversification into other products/activities

Hit : Taranselektra introduced “Hit” for flying insects in Dec 1990 and crawling insects in Dec 1991. It spent 10 million on the advertising of the products. (TV, newspapers, buses etc.).

Snuggy: A new company Diapers India Ltd was started by Mohan with the help from a US company and Snuggy brand of diapers was launched in 1989. Target market was the middle and upper class

• Snuggy along with it’s two small competitors was finding it difficult to sell diapers.

• It spent 5 million each in 1989 and 1990 on advertising.

• Snuggy had a market share of 75% after the shut down of the other two brands. It also increased the price of diapers in 93.

• Snuggy club was started for young mothers.

• In 1992 Snuggy books were introduced to push the sales.

•They published a journal for mothers called Young Mother and sold over 2000 copies.

Feature films : • Mohan got into film making in 1990 and produced his first Malayalam film which was a huge success.

• In 1993 he produced his first Hindi film Gardish which was the subject of a lot of controversies.

• Mohan still continues to finance films and has produced films with many creative directors.

Transelektra changing hands and Mohan’s new venture

• Mohan had dreams of making Transelektra a big firm manufacturing several products.

• They wanted to expand the production of Hit and the thermistors. Required a lot of funds (250 million) that could hamper growth of other products.

• Post liberalisation, Mohan was negotiating with a US firm to sell more than half the equity of Transelektra.

• It was finally sold to Godrej for 1 billion in 1994.

• In 1998 Mohan was managing a company called Shogun producing different varieties of paper.

• He was also involved in aerosol bottling and real estate.

Good Knight : Then and now

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