c2b

Bottled Water industry in India is expected to increase by a CAGR of 24% in volume terms over the forecast period 2011-2016

In 2012, value growth in bottled water market was 29%. Sales of bottled water are growing at a faster pace than

other soft drinks categories, such as carbonates

Market size(2012) – Rs 129 billion

43%

15%

11%

8%

2%

21%

Bottled Water Brand Shares 2012

BisleriAquafinaKinleyOxyrichBailleyOthers

Key Growth Factors

High awareness of safety and hygiene

Increasing awareness of water borne diseases

Rapid growth amongst middle and lower income groups

Acute water shortages in many parts of the country

Strong Distribution Networks

Govt. failure to address the need for basic services

Source: Euromonitor

Industry Analysis

Research Methodology Key Insights B2B Segment Competitive

Landscape

Brand Communicatio

nMarketing

Mix Distribution Implementation

Source: epa.gov

Rivalry amongst competitors- High-Oligopolistic Competition- High competition to increase market share

Threat of New Entrants- Moderate- Market dominated by existing players- High input costs

Supplier’s bargaining power- Low- Abundant supply of raw material

Threat of Substitutes- High- Tea, coffee, juices & soft drinks are substitutes to water- Aquaguard and RO

Customer’s Bargaining Power- Low- No. of producers is less - Low awareness about difference between different product categories

Porter’s Five Forces Analysis

The segment is growing at a CAGR of about 25 per cent and is likely to

touch Rs 7,000 crore by 2015 from the current level of about Rs 3,200

crore

Industry Analysis


Landscape

Brand Communicatio

nMarketing


To understand the consumer insights of the bottled water market in tier 2 and tier 3 consumer segments, we interviewed consumers across different cities (5 tier 1, 5 tier 2 & 3 tier 3), conducted pilot surveys (33) and interviewed the Retailers/ Convenience Stores/ Supermarkets. We derived the basic factors which drive the sales of the bottled water industry.

PROBLEM APPROACH

PrimaryResearch

SecondaryResearch

Projective techniques – TOMA: Consumers were asked about the top of the mind awareness of brands across various bottled water brands to understand the effect of promotional mix of different players.

Consumer In-depth Interviews: The group conducted 8 in depth interviews to understand the consumer perceptions and preferences of various detergent brands. Non-users were also interviewed to understand their perception about washing clothes and detergent usuage.

Pilot Surveys: We conducted a pilot survey with a sample of 33 respondents across segments to _ test the effectiveness of the questionnaire and research methodology.

Gathered Information from Retailers/ Convenience Stores/ Supermarkets etc.:Personal interviews were conducted with the owners of departmental stores to get a better understanding of the latent needs of the consumers.

Online Databases: Euromonitor for analyzing key trends prevalent in the Indian market.

Online Literature Review:Content analysis to investigate the studies already conducted on similar topics .

Tier-1 Cities Tier-2 Cities Tier-3 Cities TOTAL

Consumer IDIs 5 5 3 13

Pilot Surveys 13 8 12 33

Industry Analysis


Landscape

Brand Communicatio

nMarketing


To determine the choice criteria consumers use while deciding to purchase RO-1

To determine the attributes of bottled waterRO-2

*RO stands for Research Objective

MARKETING RESEARCH OBJECTIVES

To understand consumer knowledge of different types of bottled waterRO-3

To estimate the price elasticity of demandRO-3

To identify the preferred channel of purchaseRO-6

To identify if utilitarian packaging will be attractive to the customersRO-7

Industry Analysis


Landscape

Brand Communicatio

nMarketing


A. INSIGHTS from CUSTOMERS

Key InsightsBrand loyalty is very low

Low awareness about difference in different types of

bottled water

Consumers showed

concerns about safety of local

brand

Mostly impulse purchase

Consumers are favorable to better

packaging

Taste is not much of a concern for most consumers

• 76% of all consumers were unaware of the differences

• 85% consumers preferred cheaper brands but had no particular preference for any one

• Consumers were unsure of how safe most of the local brands were

• Almost all consumers only bought water when thirsty

• 100% of the respondents found packaging of Himalayan better

• Only 9% consumers considered taste as an important factor

“ I really like the look and feel of Himalayan bottles. It’s a bottle I would

like to use regularly”Monisha, College student , Mumbai

“या�र पा�नी� ही� तो� ही�। पा�नी� ले�तो� हुए इतोनी� को�नी सो�चतो� ही�।”

Mr. Shah, Business Man, Ahmedabad

Industry Analysis


Landscape

Brand Communicatio

nMarketing


B. INSIGHTS from various OUTLETS/ CONVENIENCE STORES/ HYPERMARKETS/ SUPERMARKETS/ RETAILERS

Capacity (liters) Schemes to Retailers

½ liter (24pc per crate) 3 bottles of 500ml aregiven free

1 liter (12pc per crate) 3 and sometimes 4 bottles of 1l are given free

2 liter (9pc per crate) 2 bottles of 2 l are givenfree

20 liter Retailers prefer local brands for this size

Incentives offered by most companies

• Customers almost never ask for a particular brand. They mostly ask for just “Mineral Water”

• Most retailers only stock a single brand of water

• Customers don’t generally ask if any particular brand is better than others

• Consumers are mostly travellers or tourists

• Customers generally prefer cheaper brands

• Almost all retailers preferred to stock 20 liter of local brands as consumers generally prefer them

Some Key Insights

ग्रा�हीको ज्या�दा�तोर ले�कोले ब्रां��ड्�सो को� 20 ले�टर वा�ले� बो�तोले ही� मां��गतो� ही�। वा� बिबोसोले�र� सो� आधे� दा�मां मां( मिमांलेतो� ही� इसो�लिलेए ले�ग ज्या�दा� खर�दातो� ही,।- Sonu, Convenience shop owner, Lucknow

Industry Analysis


Landscape

Brand Communicatio

nMarketing


AVAILABLE OPTIONS

Market Penetration- Geographical Expansion- Clientele Extension- B2B growing faster than B2C

Market Development- Enter Retail channel- Need to develop strong distribution network- Phased implementation to counter competition

Product Development- Emerging market for tonic, sparkling or flavored water- Might cannibalize existing product as new products would be targeted at the same market

Diversification- High Costs, High risks- Not enough scale or resources to explore other avenues

Existing Product

New Product

Exis

ting

Mar

ket

New

Mar

ket

Segment Share (%)

North 27

East 12

West 36

South 25

Source: Euromonitor

Industry Analysis


Landscape

Brand Communicatio

nMarketing


Continued Focus on Institutional Channel

FOCUS ON B2B- INSTITUTIONAL CHANNEL

8%

92%

B2B v/s B2C

B2BB2C

• B2B channel accounts for 8% of the bottled water industry

• B2B segment showed high double digit growth of 25% in 2011

• Majorly consists of the following-

Source: Euromonitor

Aviation Sector

Hospitality Sector

Entertainment Zones

Geographic Expansion Clientele Extension OOH Advertising

• Expand to southern states of India

• Target urban cities in southern India

• Low distribution costs due to proximity to the source of raw material

• States along the western coastline are relatively more affluent

Collaboration with Coffee shops and Fast Food Outlets• CCD/Barista etc.

Tie ups with major airports• Target major

international airports

• Tie-ups with gourmet restaurants & executive lounges

Tie ups with premium Hospitals

Safe Drinking Water campaigns in hospitals

Airport advertising and display ads near premium hotel

Advertisements in in-flight magazines

Industry Analysis


Landscape

Brand Communicatio

nMarketing


FOCUS ON B2B- INSTITUTIONAL CHANNEL

Affluent states along the western coastline

Source: Market Research Society of India

Industry Analysis


Landscape

Brand Communicatio

nMarketing


Competitive Landscape in Retail & Bulk Market

Kinley

• Targeted at on the “Go Lifestyle” customer looking for hygeinic and trustworthy pure water

• Positioning- TRUST• “Boond Boond mein

Vishwas”• Strategic Advantage- Coca

Cola’s brand equity & vast distribution network

Bisleri

• Targeted at price conscious consumer who is looking for healthy and safe drinking water

• Positioning- SAFETY• “Stay Protected”• Strategic Advantage- Brand

equity & vast distribution network

• Using its strong brand equity to revive Vedica

Aquafina

• Targeted at consumers who value purity and are also looking for good taste

• Positioning- PURITY• “Pure Water, Perfect Taste”• Strategic Advantage- Brand

equity of Pepsi & vast distribution network

• Also exploring flavored water market

Industry Analysis


Landscape

Brand Communicatio

nMarketing


Competitive Landscape in Retail & Bulk Market

What is common to Bisleri, Kinley & Aquafina??

Strong Brand Equity

Extensive Marketing Initiatives

Robust Distribution Network

PepsiCo, Coca Cola and Parle- 3 of the

biggest FMCG giants

All three run extensive TV and

Print media advertisements

Even though brand loyalty is low, strong brand equity helps fight off local players

92% of tier 1 cities preferred only branded

bottled water

Industry Analysis


Landscape

Brand Communicatio

nMarketing


Brand Communication

Ahmedabad

Consumers associate Aava with a water company but don’t know anything else

about it

Brand Awareness

Brand Recognition

There is a strong need for people to be aware of Aava as a brand, and the difference between Natural Mineral Water and Packaged Drinking

Wate

Industry Analysis


Landscape

Brand Communicatio

nMarketing


Brand Communication

Convey Credibility

Differentiate from packaged drinking

water

Highlight the natural source

Aravalli is the oldest water source on the planet. Even before

the Alps & Himalayas

Raise doubts about the credibility of the packaged drinking

water.

No guarantee of the source

Needs chemical treatment to remove odour

• IBS Certification• Clean room

technology• State of the art

Manufacturing Plant

Industry Analysis


Landscape

Brand Communicatio

nMarketing


PRODUCT

The AAVA product already has a unique existing offering in the market. We propose a 3-pronged strategy to expand its market

Introduction of Club soda to its product portfolioSoda can be made available to institutional channels AAVA caters to like:• Airports•Restaurants and Bars Low brand awareness

and switching costs leads to low entry barriers

Mid sized multi utility variants A 2l and 5l variant with filter caps

A premium bottled variety with thick packaging material and wide mouths to encourage reuse

Venture into the nascent Flavored water market Introduce popular yet uncommon variants like Peach, strawberry and pineappleManufacturing expertise can lead to speedy conversion cycle Leverage the relative ease in obtaining licenses

Industry Analysis


Landscape

Brand Communicatio

nMarketing


PLACE

• Select urban cities across western & southern states

• Gujarat, Maharashtra, Goa, Kerala, AP, Karnataka, Tamil Nadu

Where? Channel?

• Focus on modern retail as small stores will not be able to generate significant sales

• Club Soda and flavored water will be promoted in Clubs, Bars, Restaurants, Multiplexes, Airlines

Which SKUs

• Entire range in more upscale locations

• Only 1liter and 2liter SKUs in other outlets

• A Big Bazaar in Malabar Hill is different from a Borivali

PRICE

SKUs Prices – Gujarat (in Rs.)

Prices – outside Gujarat (in Rs.)

200ml 6 7

500ml 10 15

1 l. 20 30

20 l. 70 250

• Price all SKUs at points marginally lower than its direct competitor, Himalayan

• Proposed mid sized SKUs of 2L and 5L. to be made available at MRPs of Rs. 35 and 45

• Lower distribution costs should be leveraged to price the products competitively

A major challenge to pricing will be the high bargaining power of Distributors/ Retailers. However, to enter the retail space initially margins will have to be compromised

Industry Analysis


Landscape

Brand Communicatio

nMarketing


PROMOTION• Display ads in affluent parts of cities• Airport advertising and display ads near premium hotels• Advertisements in in-flight magazinesOOH Advertising

• Seasonal advertisements on channels viewed by the target market segment E.g. TLC, Tennis Grand Slams, Formula 1 , cricket matches

• Prominent advertisements in leading dailies to create brand awareness and recallTelevision and local

newspaper advertising

• Sponsorship of events like Cricket tournaments and fashion shows (Himalayan uses this strategy)

• Push marketing strategy- will give incentive to retailers to promote AavaPromotions

Guerilla Marketing Movie and TV Sitcoms CSR• Place Aava strategically in

Movies and TV sitcoms targeted at the same premium segment

• Movies- Fashion, Heroine, Ayesha

• TV Sitcoms- K Serials• Celebrity Endorsements

• Aava Care- Similar concept to Coca Cola Happiness Truck

Seasonal Packing• Consumer always connect

better with seasonal marketing

• Special packaging during festive seasons of Diwali, Holi, Ganesh Chaturthi, Navratri

Industry Analysis


Landscape

Brand Communicatio

nMarketing


DISTRIBUTION

Manufacturing Plant

Company warehouse

Distributors

Retailers

Customers

Institutional Buyers

Larger retailers like supermarkets will be

serviced directly by the company’s warehouses

Distribution Routes

Key Accounts

Organisations that buy large quantities in one single order

Restaurants, Hotel, Aviation sector,

Future Consumption

Outlets where considerable amount of stock is kept for future consumption

Departmental Stores, Supermarkets

Immediate consumption Outlets that require stocks on a daily basis,

GeneralAll the outlets that come in a particular area or

an area along with its neighboring areas are catered to

Proposed Distribution Network

• Pepsico, Coke & Parle enjoy higher bargaining power compared to Aava

• Distributors main motive- MARGINS (Greater money rotation)• Need to incentivize more

o Longer credit lineo Higher margins

Industry Analysis


Landscape

Brand Communicatio

nMarketing


We propose, a phase wise implementation plan in order to: Minimize risk Increase capacity utilization uniformly

EXECUTION PLAN

V/S

Phase 1

• Enter the retail market in only select geographies like Gujarat and Maharashtra

• Improve distribution network to reach affluent locations in prime cities of Gujarat and Maharashtra

• Brand communication of utmost importance

• Employ television advertising, newspaper ads and social media campaigns to increase brand awareness across the country

Phase 2

• Gradually phase out to nearby states like Goa, Andhra Pradesh and Karnataka

• Capitalize on lower distribution costs to gain advantage over competitors like Himalayan

• Release Club Soda along with a marketing campaign

• Start guerilla and other covert marketing

Phase 3

• Pan-India presence in the retail and bulk market space

• Well established distribution network across the country

• Release Flavored water in Urban cities

• Explore export opportunities to Middle East, South East Asia and Southern Europe

Industry Analysis


Landscape

Brand Communicatio

nMarketing


Availability

Packaging

Better for health

Price

Taste is good

Dimension

Dim

ensio

n III

APPENDIX

PERCEPTUAL MAP COST STRUCTURE

Perceptual Map Interpretation: Length of a line denotes the importance of that Attribute and Red Dots represents a brand’s positioning in the market (in accordance with the features).

30%

10%

30%

30%

Raw MaterialManufacturing CostTaxesTransport+Miscellaneous

Industry Analysis


Landscape

Brand Communicatio

nMarketing


c2b

Documents