Namaste Laboratories

Case Study: Namaste Laboratories

Could they grow the company’s revenues beyond their current level of $80 million to $100 million?

Yes, by tapping internationally, Namaste can grow its revenues to $100 million. There is evident demand and interest from South Africans because when Namaste launched an infomercial in the country, its sales increased by 35% over the period compared to last year and 20% over its previous quarter. In addition, according to OECD Better Life Index, South Africa has disposable income of $8,712 per year. To grow the company’s revenues, Namaste must continue to implement its current marketing strategy, especially with the present role of media and online marketing. This strategy may prove to be effective as each day the number of consumers who have access to the internet and view online advertisements continuously increase, not only in developed countries but also in those of developing countries like South Africa. According to Forbes around 40% of people living in South Africa have access to internet broadband which equates to 22.5 million people who are able to access and view online advertisements. Implementing these strategies and Namaste’s steady increase of its revenues by 20% yearly, the company can definitely grow its revenues beyond their current level of $80 million to $100 million. With this said, Namaste can capitalize and further improve its marketing through the usage of internet. They will be able to reach more people at a much faster pace and communicate with them even better. Likewise, they can gain feedback and insights in which the company should be able to use to strengthen the quality of their products as well as receive new ideas on future products which would broaden the selection of their items.

Could they find new markets for existing products?

Not only should Namaste continue to use its current marketing strategy, the company should also penetrate the salon industry to constitute a bigger share, in order to achieve a high profitability rate. As seen in Namaste’s market share, the company only has a small percentage in the salon industry constituting roughly about 2% of the market, unlike its competitors who constitute a whopping 30%. According to Cosmopolitan, those of African descent take their hair care routine seriously and find that getting their hair done in a salon is a must as it usually takes them a whole day to do their hair. By penetrating the salon industry, Namaste will be able to keep up with its competitors and, at the same time, spread awareness of its brand.

In addition to penetrating the salon industry, Namaste should expand its target market. The company should not only target those of African descent but also other women whose needs are unmet as they are not the only ones who have untamed, curly hair. Namaste’s products can cater to both men and women with untamable hair such as those with frizzy hair or those who suffer from hair loss.

With strategies of penetrating the salon industry and expanding target market, revenues of Namaste will sure to follow.

How would they distinguish Namasté in those new markets?

Namaste is able to make a name of itself through its unique selling point of being organic by having natural ingredients and herbal remedies such as carrot oil, olive oil and hair “mayonnaise”. Namaste’s unique products are already proven effective as consumers who use Namaste have noticed a remarkable change over the course of their consumption.

Did they have the resources to ensure success? And would they be willing to take the risks?

Namaste, with its proven accomplishments and sales, already has the resources to ensure success. The company, however, must expand and adjust accordingly to its new markets. Expanding internationally is difficult, and it comes with risks Namaste must be willing to take.

Could existing staff take on the additional workload required to reach the next level? Would Namasté need to ramp up hiring, in particular an additional sales force?

Existing staff cannot take on the additional workload required to reach the next level. Namaste needs to ramp up its hiring and add more sales force in order to expand its sales. With its current sales, Namaste’s employees are already having difficulty doing the work of two people in one position. Its employees are currently working long hours; they cannot take any more labor to be efficient at their tasks. As seen in the text, one of the local distributor in South Africa already had trouble contacting the spokesperson in charge within the area. He then had to contact the president and owner himself to solve the issue. This