How to Sell Anything in India? Cycle Pure Agarbatti Detailed Business Case Study
Summary
TLDRThe video recounts the inspiring journey of Narayan Ranga Rao, the founder of Cycle Pure Agarbatti. It delves into how he built a 1,500 crore business empire by selling incense sticks globally, starting in post-independence India. Despite adverse market conditions, Ranga Rao innovated by improving product quality and using unique marketing strategies. His dedication, empathy, and persistence were key factors behind his success. The video highlights important business lessons, emphasizing cultural sentiment, product excellence, and the power of empathy in creating a lasting brand.
Takeaways
- 🌍 India's independence brought tragedy with 17 million people displaced, creating tough conditions for business.
- 👨💼 Narayan Ranga Rao, despite humble beginnings, founded Cycle Pure Agarbatti, a brand that now sells incense sticks in 75 countries.
- 💡 Ranga Rao identified a market gap: poor quality incense sticks that didn't burn properly and lacked strong fragrance, leading him to innovate with better products.
- 🔬 Rao invested in books on perfumery from Germany, mastering the art of creating high-quality fragrances using synthetic substitutes.
- 🧠 His unique marketing strategy involved lighting incense outside stores, creating demand among customers who in turn pressured shopkeepers to stock Cycle products.
- 💼 Rao’s son, Murthy, improved product variety by introducing '3-in-1' incense packs, addressing customer preferences and boosting sales.
- 🚀 Cycle Pure grew into a 1,500 crore business by mastering the art of fragrances, building customer trust, and consistently innovating its product line.
- 🛡 The brand's success came from understanding customer sentiment, especially the cultural importance of agarbatti in Indian households.
- 🏆 Cycle has expanded into global markets, benefiting from its unique fragrances and brand heritage, while building barriers to entry for competitors.
- 💖 The company prides itself on social responsibility, including empowering women, offering parental leave, and maintaining carbon neutrality.
Q & A
What was the significant event that occurred in India at the stroke of the midnight hour?
-India gained its independence.
What challenges did India face immediately after gaining independence?
-India faced the aftermath of partition and the India-Pakistan war, with around 17 million people displaced.
Who is the central figure in the story of the business empire discussed in the script?
-The central figure is the late Mr. Narayan Ranga Rao.
What was the humble beginning of Mr. Narayan Ranga Rao's business?
-Mr. Ranga Rao started his business by selling sweets and trying multiple jobs and businesses before finding his calling with agarbati.
What was the unique selling proposition of Cycle Pure Agarbati that set it apart from the competition?
-Cycle Pure Agarbati focused on superior fragrance quality rather than just the quantity of incense sticks, offering a better burning experience and a variety of unique fragrances.
How did Mr. Ranga Rao overcome the lack of information on perfumery during the early days of his business?
-Mr. Ranga Rao spent 600 rupees to import three volumes of perfumery books from Germany, which helped him understand and create superior fragrances.
What was the innovative marketing strategy used by Mr. Ranga Rao to introduce Cycle Pure Agarbati to the market?
-He lit his incense sticks outside stores during peak hours, creating interest and demand among customers, which then pressured store owners to stock his product.
How did the second generation of the Ranga Rao family contribute to the growth of the business?
-Murthy, the son of Ranga Rao, went to France to study the art of perfumery and introduced new products like the 'three-in-one' Cycle Pure Agarbati to cater to changing customer preferences.
What is the 'three-in-one' Cycle Pure Agarbati and why was it successful?
-The 'three-in-one' Cycle Pure Agarbati contains three different fragrances in a single pack, offering variety and convenience to customers, which increased sales and customer loyalty.
How has the Cycle brand maintained its competitive edge over the years?
-The brand has maintained its competitive edge by continuously innovating with new fragrances, having a vast catalog of ingredients, and focusing on customer empathy and market understanding.
What are some of the social initiatives taken by the Cycle brand?
-The Cycle brand has supported women empowerment, provided paternity leaves, covered employees under insurance, and became the first carbon-neutral company in their industry.
Outlines
🌙 The Dawn of Freedom and the Rise of an Empire
India's journey to freedom came at a heavy cost, with millions displaced during partition. Amidst this chaos, a man named SRI Ranga Rao, a humble individual from a small town, pursued his dream. This story unfolds how Rao transformed his small venture into an incense empire that united the nation through prayer, especially during post-independence challenges.
📈 The Birth of a Business Vision
Ranga Rao, despite the severe economic conditions post-independence, managed to launch a premium agarbathi brand. His deep understanding of cultural traditions and his passion for fragrances gave him a competitive edge. The older generations, though living in poverty, never compromised on offerings to deities, making agarbathis an instrument of hope rather than just a fragrance product.
🚀 Seizing Market Opportunities with Fragrance Innovation
Ranga Rao identified three major gaps in the agarbathi market: poor product quality, weak fragrance, and lack of innovation. He and his wife pawned jewelry to fund his dream of creating the best incense sticks Mysore had ever seen. His love for fragrances and experimentation led to mastering the art of perfumery through trial and error. This foundation set the tone for Cycle Pure's dominance in the incense industry.
💡 A Genius Marketing Strategy
Ranga Rao's marketing genius was evident when he used a simple yet highly effective strategy to get retailers to accept his premium-priced product. By lighting his incense sticks outside stores, he created demand from customers, forcing shopkeepers to carry his product. This tactic allowed him to command premium pricing for his agarbathis, a rare feat in the incense market.
🛠 Building Customer Empathy and Market Understanding
Murthy, Ranga Rao's son, adopted a hands-on approach by spending hours in stores, observing customer behavior. He realized that customers craved variety in fragrances, which led to the introduction of the 'three-in-one' agarbathi pack. This product innovation not only solved the issue of irregular sales but also became a massive hit in the market, with customers appreciating the diverse fragrance options.
🏆 Unmatched Product Innovation and Market Leadership
Cycle Pure's competitive advantage lies in its vast catalog of 300 fragrance ingredients, making it nearly impossible for competitors to mimic their products. The company’s innovation, like the introduction of four fragrances in a single product, kept them ahead of the competition. Their understanding of customer preferences and continuous product diversification enabled them to expand to over 70 countries globally.
👨👩👧👦 A Legacy of Innovation Passed Down Generations
Ranga Rao’s family continued his legacy, with each generation contributing to the growth of the business. The third generation, led by Arjun Ranga, carried forward the legacy by creating original fragrances and marketing strategies, expanding the company to new heights. Their customer-centric approach and constant innovation ensured the brand’s dominance in the global agarbathi market.
🤝 A Business that Gives Back to Society
Cycle Pure has not only focused on business growth but has also prioritized social responsibility. Over the past 75 years, the company has supported thousands of women through employment, implemented inclusive policies like paternity leave, and has been certified as a carbon-neutral company. Their commitment to making a positive impact on society reflects their mission to be a 'good company' first.
📚 Business Lessons from Cycle Pure Agarbathi’s Success
The rise of Cycle Pure teaches valuable business lessons: cultural relevance can add immense value to a product, extraordinary products serve as their own marketing tools, and empathy and persistence are key attributes for success. By understanding customers and identifying market gaps, Ranga Rao built a 1500-crore empire that stands as a beacon for future generations of entrepreneurs.
Mindmap
Keywords
💡Independence
💡Agarbatti
💡Ranga Rao
💡Cycle Pure Agarbatti
💡Fragrances
💡Market Gaps
💡Sandalwood
💡Empathy and Persistence
💡Perfumery Books
💡Marketing Strategy
Highlights
India gained independence amidst a tragic partition that displaced 17 million people.
Narayan Ranga Rao, a humble man from a small town, founded Cycle Pure Agarbatti in 1948 during a time of extreme market adversity.
Despite economic hardships, agarbattis were viewed as instruments of hope and prayer in Indian households, particularly in South India.
Rao identified three major gaps in the market: poor quality fragrances, incense sticks that did not burn completely, and a lack of innovation in fragrances.
Rao used a genius marketing strategy by lighting incense sticks outside stores, enticing customers to demand the product from shopkeepers.
Cycle Pure Agarbatti became successful due to its focus on superior quality and innovative fragrances.
Rao imported three volumes on perfumery from Germany, becoming one of the first to understand the science of synthetic substitutes in agarbattis.
Cycle’s three-in-one fragrance pack, introduced by Ranga Rao's son, Murthy, solved the problem of irregular sales by offering variety in a single product.
Cycle Pure Agarbatti's market strategy helped it stay ahead of competitors and became one of the best-selling agarbattis in India and internationally.
The brand's three-in-one fragrance pack sold 6 billion sticks in 2021 alone, representing 50% of the company’s sales volume.
Rao's dedication to empathizing with customers was passed on to the next generations, ensuring continuous product improvement and market leadership.
Cycle's wide catalog of 300 ingredients provides a vast variety of unique fragrances, creating a competitive advantage that is hard to replicate.
Cycle became the first incense brand to advertise on TV and associate with cricket, expanding its visibility and market reach.
The company promotes women empowerment by supporting over 25,000 women in the workforce and offers benefits such as paternity leave and insurance for employees.
Cycle Pure Agarbatti has been certified as a carbon-neutral company, showcasing its commitment to environmental sustainability alongside its business success.
Transcripts
at the stroke of the Midnight Hour when
the world sleeps India will awake the
life of Freedom most people wanted
Independence but what came after that
was tragic some 17 million people were
displaced
SRI and ranga Rao a simple man from a
small town but with a big dream sent um
[Music]
today that humble cycle has traveled to
many countries and has United India in
prayer hi everybody today's episode is a
very very special episode because today
we are going to learn about one of the
most underrated business maharajas of
India this is a story of a man who went
from being a sweet seller to building a
1500 Crow business Empire which now
sells agarbatis not just in India but to
75 countries all across the world and
the reason why this case study is very
very special is because this Legend
started his business way back in 1948
during a time when the conditions in
India were so bad that most people were
struggling to even survive because
during that time India just got
independence it was just recovering from
the horrors of both partition and the
india-pakistan war now my question to
you is during such a terrible Market
condition where more than half of the
country is in poverty what do you think
about starting a business when let alone
investors even having a three-time meal
was a big deal would you think about
risking your savings to start a business
but guess what even in these terrible
market conditions this man went on to
build a premium agarwathi brand and
eventually turned it into such a
humongous business Empire that today it
stands as an inspiration for the next
gen generations of India this
businessman that I'm talking about is
none other than the late Mr Narayan
ranga Rao and the brand that he built is
what we all know today as cycle pure
agarbati the question is how on Earth
did this man manage to build a business
Empire in the terrible market conditions
of 1950s India what were his business
strategies that enabled him to beat his
competition and build a 1500 Core
Business Empire by selling agarbatis and
most importantly what are the business
lessons that we need to learn from the
iconic rise of cycle pure aggravity
[Music]
this is a toy that dates back to 1948
Mysore by this time rauji was 36 years
old and by this time he had tried
multiple jobs and businesses he used to
buy and sell sweets used to repair
timepieces took tuitions and even
learned typing and shorten and both
these skills were very very rare skills
during that time but somehow raoji could
not find his calling in any of these
fields but this is when rauji saw a
great opportunity with agarwatis now the
question over here is out of all the
things that he tried why did he
specifically choose agarbatis
well first of all he loved fragrances in
general and the second part of this
answer lies in the importance and value
of agarbatis in our older Generations
life you know guys if you speak to your
grandparents most of them were extremely
poor back then so just to make ends meet
they would literally compromise on every
single purchase that they made they
would pour water into milk and curd to
increase the quantities they would have
only two to three sets of clothes and
have these clothes passed on to the
younger siblings just so that they can
save money for food and shelter but you
know what in spite of all these
compromises there was one thing that the
older generation never ever compromised
on and that was the offering to God in
case of South India the older generation
would never compromise on the coconut
the prasadam and the akalbatis and while
most of us might look at agarbatis as a
mere instrument of fragrance to our
older generation it was an instrument of
hope that complemented their prayers and
more specifically in South India in the
evening time it is the Sandhya Kalam
whereby people pray to Lakshmi who is
the goddess of wealth and if you
remember our grandparents often scolded
us for sleeping in the evening and even
insisted on cleaning the house just so
that the goddess of wealth can come to
our house and this is when those two
sticks of agravatis played a vital role
in their culture not as instruments of
fragrance but as instrument of Hope to
welcome the goddess of wealth
this is the reason why agarbatis were
extremely important and a very big
opportunity to start a business with the
best part was that Sandalwood which was
the main ingredient for agarbatis it was
very affordable in Mysore back then and
the maharajas patronized with the making
of agarbatis and fine fragrances and
this is when ladies and gentlemen ranga
Rao found three major gaps in the market
number one most of these agarwathi
companies were solely focused on the
quantity of the incense sticks and not
on the quality of the fragrances and
this was the reason why they gave out
agrabatis in a pack of hundred with
extremely thin and low quality sticks
secondly these sticks neither gave out a
strong essence of fragrance nor did they
burn completely and they just stopped
burning abruptly so again you had to get
a Matchstick and then light them and
lastly nobody was keen on innovating
with different and Superior Quality
fragrances in fact these companies were
so complicent that these incense sticks
were packed in tin containers so instead
of investing money into making better
fragrances they were wasting their money
on Packaging
this is the reason why rangaraji decided
to enter the market with a vision to
sell the best incense sticks mysur had
ever seen and as we often see in case of
many successful entrepreneurs his wife
pawned her jewelry to provide the seed
fund for his audacious dream this is how
ranga Rao started his quest to establish
a name for itself in the markets of
Mysore and now most of us would think
that what is the big deal with making
incense sticks and this is exactly what
I thought too but guess what as it turns
out decoding great fragrances is an art
that requires a lot of Acumen and a lot
of experimentation and it's not like
decoding Electronics so just to give you
a context back in the 1980s if you
wanted to decode an IBM PC all you have
to do was open it up check the parts by
the exact same specification of parts
and assemble them that's it that's all
you needed to do to make an IBM clown in
the 1980s and this was the reason why
many people including Michael Dell
became millionaires during that time but
when it comes to fragrances you have to
do all the decoding without even seeing
the product so just with the smell you
have to decode three types of notes in a
single fragrance so if it is Jasmine you
can't just go to the store and say give
me Jasmine flavor ingredients you have
to actually break it down into three
notes the top note the mid note and the
bass note in case of a Jasmine flavored
agrabathi you need the essence of Early
Morning Dew as your top note you need
the rose note as the mid note and then
you need a Musky Essence as the base
note and once you figure out these notes
you have to find the ingredients and the
proportion of these nodes that will give
you the perfect Aroma and this requires
a lot of permutations and combinations
now the question we heard is no one
would reveal these secrets right then
the question is how did ranga Rao learn
all this well as it turns out there is
another crazy story behind it and like
we saw this is a story that dates back
to 1948 to 1950 and during this time
books or information on the knowledge of
perfumery was not available in abundance
and most aggravathi manufacturers
counted only on Forest produce and
natural oils and they knew nothing about
aromatic substances and obviously every
manufacturer had kept this process a
secret and would not reveal it to anyone
so you know what rangaro did he spent
600 rupees and imported three volumes of
pouches books on perfumery and guess
what he imported them all the way from
Germany and you know what it took six
months for him to get these books
because back then there was no internet
and international shipment was
practically a nightmare
but you see the return on investment
from these books was nothing short of
extraordinary
these books became the reason why
rangaro became the first manufacturer in
India to realize the importance of using
synthetic substitutes in order to make
agarbatis that do not just rely on
Forest produce this is how through a lot
of permutation and combinations Raji
mastered his product and this was the
first phase of rauji's business growth
and this is where he faced the Second
Challenge which was marketing now you
know out of all the case studies that
I've done in the past the one problem
that every entrepreneur faced in the
initial stages is the problem of
breaking into the dealers so there are
always bigger plays in the market to
give out better margins because of which
these entrepreneurs struggled a lot to
get their product onto the retail
shelves of India
but surprisingly raoji did not just get
accepted in the market easily but also
sold is aggravathi at three times the
cost of conventional agarbatis and that
too right from the early days itself
while other companies sold a pack of 100
sticks for one rupee our raoji sold just
30 sticks for the same one rupee and
that too without giving extraordinary
margins to the dealers the question is
without a big fat budget without a name
in the market how is it even possible
that somebody can sell a new product at
three times the cost and how the hell
did the dealers agree to pay this Hefty
price well as it turns out drowji used a
genius marketing strategy here instead
of going to the stores to pitch his
product one by one he simply went to
each of these stores during the peak
hours lighted his incense takes right
outside the store and left that's it and
what happened next was very very
interesting as more and more customers
came to the store they loved the
fragrance so much that they immediately
asked the shopkeeper if he had these
boxes of incense sticks so the
shopkeeper had no other option but to
deny them then again on the second day
Raji again went to these stores lighted
his incense sticks and was just about to
leave but this time the shopkeepers
stopped him and they asked them to sell
these boxes of agarbatis to them but
rauji replied by saying I know this is
great man but then I cannot sell you
these agarbatis because you cannot offer
them so just enjoy the free steak and
after saying this he just left and the
next day again many customers who came
to the store asked for the agarpatis but
again he refused to sell the sticks now
do you realize how frustrating it would
have been for the shopkeepers some
random kid comes up lights up a stick
with a fantastic fragrance and even
though it could reap profits for both of
them they had to embarrass themselves by
denying the customers so now on the
third day when rauji went to light his
Stakes the shopkeepers gave him an
ultimatum and they told him dude you
either sell us these boxes or don't like
them at all but even then rauji doesn't
agree to sell so now he gives them only
two sticks and tells them I will give
you two sticks use this for your house
and not for the shop about the selling
bit we'll talk about it later so now
many of these shopkeepers went home and
lighted these sticks and this time their
wives and neighbors Loved These
fragrances too
now this is when ladies and chairman the
shopkeepers realized that they need the
product more than this product needed
their shelves
so the next day when the shopkeepers sat
down with Raji for placing the order
there was no pitching no bargaining at
all and with most of them it was a
straight sale
this is how cycle biography became one
of the rare products that commanded
their spaces in the shells of Mysore and
not so surprisingly it was a big big hit
now the question over here is this is a
strategy that could just get you an
entry into the market right but what
about after the computer started
catching up what did cycle do special to
stay ahead of its competition
well the first thing that raoji did was
to inculcate an extraordinary sense of
humility and empathy into the second and
third generation that came into the
business to tell you about it the son of
Raji whose name is Murthy he took out
the business after him and went to
France to study the art of perfumery and
when he returned he saw that the sales
of the incense sticks was slowing down
and moreover they had become quite
irregular now had it been some
conventional businessman who came from
abroad and owns a million dollar
business he would ask his marketing team
to look into the matter and if these
marketeers were sincere they will run
through the data do some white color
work and come out with some insights and
if they're not this entire matter would
just get lost in a pile of gentle
reminders
but you know what guys this man doesn't
do any of this he directly goes to the
market and talks to the retailers and as
it turns out even the retailers did not
know why cycle sales were so irregular
so after that murtiji literally spent
hours in different stores just to see
how the customers behave and interact
with incense products and then he would
talk to the customers to understand
which fragrances they preferred which
brands they preferred and what was the
reasoning behind their purchase and
that's when he came to know that it's
not like the customers do not like cycle
it's just that after using the same
fragrance throughout the month they
needed a change so they shifted to other
brands and then came back to cycle again
this was the reason why the sales were
so irregular for cycle all across the
state so to fix this problem murtiji
came up with the idea of something
called three in one cycle bureaucratic
whereby they put in three fragrance of
incense sticks in the same packet and
guess what suddenly the sale started
increasing the question is why well
because it gave them three major
advantages that no other computer was
giving out number one the customers who
loved cycle bureaucrati wanted to keep
trying new fragrances so now they had
the opportunity to try three flavors in
a single packet secondly the second type
of customers who loved one specific
fragrance would then buy the entire pack
which increased sales and more
importantly for the first time customers
it was a very very convenient option to
buy three fragrances in a single packet
so in a way the ease of acquiring new
customers increased and this product
turned out to be such a big hit that
even today that is after more than 40
years the cycle pure31 agarbati is one
of their best selling products in the
market whereby they sold hold 6 billion
sticks in 2021 alone that is almost 50
percent of their entire sales volume and
today almost every successful agarbati
manufacturer has copied Cycles three in
one model and they've launched their own
duplicate three-in-one products in the
market
so not so surprisingly the cycle brand
went one level further and reduced four
fragrances in a single agarbati which
again made it difficult for the
competitors to catch up this is the
power of the future CEO himself spending
hours on ground with the customers to
try and understand the market
and this Acumen again got passed onto
the third generation whereby While most
children were having fun during their
summer vacations the ranga kids were
doing unofficial summer internships in
the labs whereby they would learn the
art of perfumery
this was the first barrier of entry for
other competitors the second barrier to
entry for cycle biography is the huge
catalog of 300 ingredients that they
have now if you remember from our
Jasmine example just like musk rose and
Morning Dew there are 300 ingredients
that cycle Bure has managed to crack and
master so these permutations and
combinations enable them to bring such a
vast variety of fragrance that's almost
impossible for a newbie or competitors
to mimic so even though the barrier to
entry in this industry is very low even
if someone starts selling incense sticks
they may sell conventional flavors like
Jasmine and Rose but not unique
fragrances like cycled Woods Heritage
Lia flute and Rhythm this is what makes
cycle an extremely competitive brand not
just in India but even in the
international markets this is the reason
why they are going strong in more than
70 countries all across the world and
then of course it's the brand value and
trust that cycle has built over the past
75 years by giving products with unique
fragrances and sticks that burn Non-Stop
of end to end and today rauji's third
generation led by Arjun ranga continues
to further his legacy by being in-house
perfumers creating original fragrances
by deploying genius marketing strategies
like being the first agarwathi brand to
advertise on TV the first in the
industry to associate with Cricket by
creating an omni-channel sales network
and by diversifying the product
portfolio aggressively and ambitiously
they have taken the company from 400
crores in Revenue in 2007 to 1500 crores
as of 2022. this is how by finding the
appropriate Gap in the market through
raoji's genius sales technique with an
extraordinary level of dedication
towards empathizing with the customer by
passing on the same level of dedication
and Devotion to the next two generations
cycle today stands as a 1500 crore
business Empire with an obsession to
sell the best incense Stakes the world
has ever seen and last and most
importantly while growing this business
Empire the cycle brand has always made
sure to go beyond their limits to
empower and benefit the society as a
whole because at the end of the day they
don't want to be a big company they want
to be a good company first for example
to promote women empowerment they have
consciously supported one lakh women
over the past 75 years and currently
support 25 000 women at work both
directly and indirectly similarly While
most companies just give out maternity
leaves cycle along with maternity leaves
even gives out paternity leaves of 21
days for the fathers on top of that all
direct employees are covered under
insurance and lastly they are the first
company to to be certified as a carbon
neutral company
this is how by finding the appropriate
gaps in the market through his genius
sales strategy with an extraordinary
level of dedication towards empathizing
with the customers and by passing the
same level of dedication and Devotion to
the next two generations Raji built a
1500 Crow business Empire by selling the
best incense Stakes Mysore had ever seen
and this brings us to the most important
part of the episode and that are the
business lessons that we need to learn
from the incredible rise of cycle pure
aggravating
lesson number one more often than not we
assume that the value of a product is
directly proportional to the tangible
aspects of the product or the utility of
the product but you see there are some
products in every audience category
where the value of the product goes Way
Beyond the tangible aspects because of
culture and sentiments and if you could
only identify that for your audience you
can command a premium in the market in
this case While most sellers saw
agarbati as just another instrument of
fragrance rauji saw it as an instrument
of Hope for an ordinary family's dreams
as a result he was able to command a
premium and dominate the global
agarwathi market lesson number two if
your product is extraordinary even in
this crowded hyper competitive world
that we live in the product itself will
serve as your most powerful marketing
tool and wherever this extraordinary
value is showcased the right way
negotiations will no longer be the cause
of friction in this case because of
raoji's simple yeah yet genius tactic of
lighting agarbati is outside the retail
stores the shopkeepers struggled for the
product and not otherwise and more
importantly when they realized the value
of cycle negotiation was no longer a
problem and last and most importantly
like I've said a dozen times in the past
empathy and persistence are the
attributes that can turn a commoner into
a king in this case the empathy and the
Persistence of raoji gave rise to one of
the greatest brands in India which we
all know today as cycle pure agarbati
that's all from my shadow today guys if
you learned something I will please make
sure to hit the like button in order to
make YouTube bubba happy and for more
such insightful business and political
case studies please subscribe to our
Channel thank you so much for watching I
will see you in the next one bye bye
awesome
[Music]
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