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Circle –E – Candles Export Business Plan Essay

Circle –E – Candles Export Business Plan

Company Profile

                             Circle E Candle started making fragrance and textured based candles in 1994. Circle E Candles expertise in unique color and textured candles for special occasions by using pigments, oils and waxes. Circle E Candle is headquartered in Fredericksburg, from where it operates its business all across America.

The company operation is built around four core values – Speedy Delivery, Quality Products, Long Lasting Fragrance and Emphasis on Family Values (Circle E Candle Official Website 2006).

Speedy Delivery

                             The Company prides itself in speedy delivery of products to its customers. The company usually ships its products with in two business days through UPS.

Quality Products

                            Circle E Candles produces quality candles by innovating in new textures and designs. The candles are handcrafted and immense care is taken while manufacturing them.

Long Lasting Fragrance

                             The unique selling proposition (USP) of Circle E Candles products is its long lasting fragrance. The company attributes this feature to its preparation and exact ratio of cream and wax in the candle.

Emphasis on Family Experience

                              The company believes that it is not in the business of selling candles but delivering memorable experience to its customers. According to Company’s website the company is committed

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to infinite care and memorable experience for its customers.

Market and Product Overview

                          At present the total market size of candles is around $7 billion (Vinayak, 2006) and it is growing at the rate of 30 percent per annum.

The production of the candle is highly skill based and labor oriented work. It involves the mixture of fragrance and wax to deliver the correct result.

Other than fragrance, candle design is the single most influencing feature of the product. People use creatively designed candles in their home décor, churches, aromatherapy etc.

The median of company’s products are around 20 dollars.

Export Strategy

  After being relatively successful in America the company wants to export its products to foreign market. It has its eye on European Market, Japanese Market, Indian and Chinese markets.

After thorough research the company has decided upon India at first stage of its expansion, once established in India the company will look forward to make foray into European Union markets.

Why India

                             India today represents a massive economic opportunity, both as a global hub for manufacturers and as a domestic market. The Indian economy is growing at around 8% per annum and it is one of the fastest growing economies in the world along with China. The company is the largest democracy in the world with over 1 billion people and 640 million eligible voters. The median age of the country is 24 years and around 65 percent of the people are between the age group of 15 -64 years (CIA World Fact book, 2006).

The company is a secular democracy with trade related issues governed under the World Trade Agreement. The judiciary system in India is free from any political influence but has a very slow pace. At present the government is headed by Manmohan Singh, a former World Bank associate and Finance department is managed by P.Chidambaram, a Harvard Alumni.

Economic Reasons

                                       India took the liberalization path in 1991 and since then grown into a vibrant economy growing at around 8% a year. Indian Gross Domestic Product (GDP) is around $720 billion (CIA World Fact book, 2006) and in purchasing parity terms it is the forth largest economy in the world after United States, China, and Japan. The Indian economy is projected to be about 60 per cent of total US economy by 2025. The rapid growth in the country’s stock market over last two years, around 300% doesn’t belie these expectations.

Historically India is agrarian economy but it has all changed in the last decade. Today Industry and Services contributes around 81 percent to the total GDP by just employing 40 percent of the total population (CIA World Fact book, 2006). The boom in the information technology has massively helped the Indian economy to integrate with the global economy. Today India is one of the largest exporters of engineers to Silicon Valley. This group of well educated English speaking people is growing faster than their fathers’ generations and spending freely compare to earlier generations. If we look according to the wealth distribution, the top 10 percent of the people controls 35 percent of the wealth while bottom 10 percent only have 3.5 percent of the country’s total wealth (CIA World Fact book, 2006).

The interesting thing is that the only top 10 percent of the population in real numbers is around 100 million people, which exceed population of some of the big European countries.

Retail Market Structure

The Gift market all over the world depends upon the vibrant retail industry. In India the retail market is at nascent stage and only 2 percent of the total retailing industry comes under organized retailing, which is growing at 25 percent (MindBranch Market Research Report 2005) year on year basis and considered to be the next big thing in Indian economy after the Information Technology. The Indian retail industry is dominated by of small mom-pop stores and individually owned stores less than 500 square feet (MindBranch Market Research Report 2005). Due to it India has the largest number of retail outlets without having any size to gain from the economies of scale.

 Boosted by increasing income and changing lifestyles the organized retail industry projected to be around 4 percent of the total market.

Three of the major players in Indian Retail Sector

At present the direct entry into organized retail is not permitted, a foreign company must have a domestic partner and it can only hold maximum of 26 percent in the venture.


Pantaloons is the biggest retail chain in the country with a sales revenue of around $300 million. It operates in both departmental store format through its chain Pantaloons and Discounter format through its chain called ‘Big Bazaar’. The discounter chains hold around 178000 SKU’s (Stock Keeping Units) and average footfall on weekend is around 12000 people (S.D. Naik 2005).

Shopper Stop

Shopper Stop is a home grown departmental store retail chain with over 15 stores and on an average 35000 square feet retailing area per square. It is present in almost all the major cities of India provides a lot of opportunities for shop-in-shop stores. The average walk-ins in these stores on a weekend is around 8000 people. The sales revenue of the company is around $100 million (S.D. Naik 2005).


LifeStyle is the chain backed by Dubai based Indians and it is of almost the same size that of Shopper Stop. The company has 12 stores with over 50000 square feet per store. It is also a departmental store and has a revenue of around $120 million (S.D. Naik 2005).

Gift Industry Structure

                                         Gifting industry is growing steadily with the rising income but the exact number is hard to derive as most of the industry is unorganized and to there is no official record for total candle market in India.

Cultural Factors and How They will Drive Growth of Indian Gifting Industry

One of the important reasons why we choose Indian market is cultural reason. India large population consists of people following Hindu religion and the biggest festival in India equivalent to Christmas in west is ‘Diwali – Festival of Lights’.

On Diwali people lit up candles and lights at home as a symbol of victory of light over darkness. So culturally it is very natural for Indians to purchase and use candles.

Secondly as the young generation is getting into jobs earlier and earning more than the previous generation, the traditional family system is breaking up and more and more young people prefer to live in their own homes like here in America. This increasing demand in the housing sector will boost the demand for candles used as décor in the house.

Thirdly increasing income is fast changing the lifestyle of people and most beneficiary of it over the last few years are the hotels and dining industry. With increasing outside eating will lead to booming restaurant industry, which will further fuel the candle sales in the country.

Above all India is a very formal and close knit society with very few options of gifts at present; Creative Candles will add another dimension to the gifting industry.

Entry Strategy in the Country

Though the entry into organized retail chain is restricted, entry into product brand based stores is allowed. Circle E Candles can enter the Indian market through its own Shop-in-Shop concept in the major retail chains. Two of the factors which will help the company in getting Shop-in-Shop contracts with these established players are that at present they don’t really have enough quality in this section of the stores. One can get the best perfumes, cosmetics and jewelry in India but not creative gift like fragrance based candles. Secondly the gifting industry in India though is large but not very diverse so new ways of things people using for centuries will be highly appreciated.

The company can also enter through its standalone stores; it can open standalone stores to provide wide range to its products. The Company won’t face huge amount of competition as not many domestic producers are providing the quality of products people expects.


The attitude towards the American products in the country is positive and with huge footfalls an in-store advertisement will be sure shot way to success. Other forms of promotion which a company can employ are –

Advertise in the cultural magazines and employment magazines.
Advertising on Internet –   To advertise on internet efficiently the company will focus on two core ways (Heather Conary, 2006) -.
Traditional Banner advertising with other websites. Its one of the earliest form of advertising on internet displaying a fixed message on particular spots. The company will try to advertise on all the cultural websites, gifting websites etc.
Pay per click contextual advertising – The Company will target customers through contextual banner advertising (Keyword specific advertising) on various search engines and relevant sites.
Direct Mailing – The potential customers will be sent direct mail regarding the products of the company, with information explaining how they can get the customized candle gifts for their dream homes.


A.J. Vinayak (2006).   Indian candles light up US homes. Retrieved August 15, 2006, from http://www.thehindubusinessline.com/2006/07/17/stories/2006071703291500.htm

 Circle E Candle Official Website(2006).   Circle E Candle. Retrieved August 15, 2006, from http://www.circleecandles.com/Catalog/ProdDetail.asp?productid=71&plist=_4

CIA World Fact book (2006) . Retrieved August 15, 2006, from https://www.odci.gov/cia/publications/factbook/geos/in.html

 Economy Watch (2006).   Indian Economy Overview. Retrieved August 15, 2006, from http://www.economywatch.com/indianeconomy/indian-economy-overview.html

Heather Conary, 2006.  Top 7 Trends in Online Ad Design  [online], http://www.sitepoint.com/article/top-trends-online-ad-design [accessed August 11, 2006]

 Karishma Vaswani  (2006).  Growth gives hope to India’s poor. Retrieved August 15, 2006, from http://news.bbc.co.uk/2/hi/business/4918582.stm

MindBranch Market Research Report (2005).   Indian Organized Retail Industry (2005-2007). Retrieved August 15, 2006, from http://www.mindbranch.com/listing/product/R459-281.html

  Sangita Joshi (2004).    The issue of retail formats. Retrieved August 15, 2006, from http://www.thehindubusinessline.com/catalyst/2004/10/28/stories/2004102800180200.htm

S.D. Naik (2005). Retail boom: FDI can give the extra thrust. Retrieved August 15, 2006, from http://www.thehindubusinessline.com/2005/05/27/stories/2005052700220800.htm

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