Professional Documents
Culture Documents
CHAPTER - 1
INTRODUCTION
Only three decades ago few knew about mineral or spring water, and fewer still thought that
one day most Canadians would spend a lot of money to buy it!
Water forms an essential part of every human being. After air, water is the most important
necessity for life. Water plays a number of functions for the body. It serves as the body’s
transportation system, it acts as a lubricant, it regulates the body temperature etc.
The eulogy for water is an unending thing. In fact, more than 2/3 rd of the human body is
made of water. The importance of water for human body can be well accessed from the fact
that if the amount of water is our body is reduced by just 1-2%, we feel very thirsty. If it’s
reduced by 5%, our skin will shrink and we will have difficulty moving our muscles and if
it’s reduced by 10%, we will die.
Moreover with this commodity being a human necessity it makes best sense to do business
in. As a normal human being requires on an average needs 2-3 liters of water everyday and
world population is more than bn (growing at 2-3% annually), the business opportunity is
humongous and the potential is largely untapped.
Since ancient time people have used water from mineral spring, especially hot springs, for
bathing due to its supposed therapeutic value for rheumatism, arthritis, skin diseases, and
various other ailments. Depending on the temperature of the water, the location, the altitude,
and the climate at the spring, it can be used to cure different ailments. This started the trend
of using mineral water for drinking purpose to exploit the therapeutic value of the water. This
trend started gaining momentum in mid 1970s and since then large quantities of bottled water
from mineral springs in France and other European countries are exported every year.
The bottled water industry is estimated to be a whopping Rs 1600 crores business. It has
grown at a rate of 38-40% annually over the past four years. Initially pitched at the well-
heeled, bottled mineral water brands like the French-manufactured Danone were promoted at
clubs, fitness centers, cinemas, department stores, malls, ice-cream parlors, cafes and retail
sports outlets, besides restaurants, hotels and supermarkets, with a price tag of Rs 70 for a 1
liter bottle. Other brands later began pitching for the larger middle class and lower-middle
class markets.
The Water shortage around the world and particularly in third world countries has opened
new avenues for bottled water Industry. If we compare the growth and status of Indian
Bottled Industry with western or Asian market, we are far behind in terms of quantum,
infrastructure, professionalism & standards’ implementation.
My experience over more than 10 years in Bottled water industry has given me an insight
into the working style, problems and approach of Indian processors. This WEBSITE is a
platform to provide necessary information to plan, set operate, maintain & grow under
prevailing marketing conditions.
Multinationals have entered Indian Shores, making rapid strides in Indian Market and have
eroded market share, image and infrastructure of leaders and small players alike. My belief is
that through methodical approach, Indian companies CAN withstand this onslaught, which is
threatening to gobble up the competition & eventually, the Market. Though in a way, this
entry has provided a semblance of professionalism to the market and Indian firms HAVE
noted the same. Unless a matching product, not necessarily coming from huge infrastructure
matching them, is brought in the market, it would be reduced to NO COMPETITION.
My wishes to present Indian entrepreneurs and those who are planning to take the plunge. If
one has general perception that bottled water in India is a saturated Market now, take my
words: it is just the beginning and thirsting for more, day by day…
Market Structure
In above table we show the market segmentation of this water across different regions of the
country assume that the consumption of bottled water indicates the property of consumers in
respective region.
The west region occupies the first place in the market while the south and the north jointly
occupy the second position. The market of east region is low. However, the bulk of the
bottling plants are concentrated in the southern region which is starved of water, yet , a place
like Chennai alone account for major part of total revenue.
Lucrative Business
What is amazing is that people are prepared to pay Rs. 10 for a liter of water-especially when
the cost of material input (0.25 paisa per liter excluding labors cost) pales into insignificance
before the price of the product. In nutshell, in manufacturing bottled water, the major costs
are not in the production of treated and purified water but in the packing and marketing of it.
Hence, the cost of packing can be as high as 15 to 35% of the price of the product. The cost
of the bottle along cap and cartoon is the single biggest cost between Rs. 2.50 and Rs. 3.75
for a one –little bottle. For water sold in big plastic jars (20-50 liters), which are also reused,
or in pouches, this cost is much lower. This is precisely why company sell water at even Re.
1 a liter in a 20-25 liter jar and stills makes profits. Labor and establishment and marketing
cost are highly variable and depend on the location and size of the companies. Informal
sources indicate that the gross profits of this industry can be as much as between 20-205%.
The reason that companies do not have to bear the cost of the main row material-water-has
made this industry highly profitable.
The cut-throat completion among the market players in packaged water industries has come
to stay in India. The share of the farm may dwindle if they don’t make any concentrate effort
to change its growth strategy as per the need of the hour. Distribution has become critical for
this industry due to the high volume and low margin effort. The price may more or less
remain strictly under this business as farms are afraid of losing their customer to rival. The
home segment and exploring of country market the best avenues available for the farm to
maximize the profit. Time has come for the bottle water industries in the country to be
innovative in their flavors, the packaging design and promotion to attach highly
conscientious customers.
Source: http://www.epa.gov/
http://www.cfsan.fda.gov/~dms/botwatr.html (FDA/CFSAN website)
http://www.nrdc.org/water/drinking/
265
250
164.5
146.8
200
129.9
112.9
150
97
68.15
82
55.6
100
44.5
33
26
15.5
20
11.5
50
2.2
3.5
4.7
6.5
2.6
8.5
0
1991
1992
1994
1995
1996
1997
1999
2000
2001
2002
2004
2005
2006
2009
2010
2015
1993
1998
2003
2007
2008
Introduction Stage
Here 1990 is select as a base year and from 1990 sales of Bottled water increase year by year
but not that much level up to 2004-05 so this stage covers under introduction stage of bottled
water industry. And after increase awareness among people and also know about side effect
of non purified water people diverse from tap water to bottled water and this change increase
sales of bottled water in market. In this stage firm focus on branding and patent for maintain
right to produce.
Growth Stage
After 2005-06 bottled water sales increase in market and it shows growing stage of the
industry, because people are now use bottle water for status and for health safety. Now in
2008 bottled water industry growing at a rate of 38% so it sales increase faster as compared
to past year so we can say that industry came under growth stage. Maintain existing features
and also add new things in product. Here broader audience available for industry product.
The per capita water availability in India is projected to decline to about 1,140 cubic meters
per year in 2050 from 1820 cubic meters per year recorded in 2001 according to the
Intergovernmental Panel on Climate Change (IPCC).
"India will face a severe water crisis in 20 years if the government doesn't change its ways
and clashes are already taking place because the resource is so scarce." This was the warning
by the World Bank way back in 2005. "Estimates reveal that by 2020, India's demand for
water will exceed all sources of supply.
All these reports point to just one thing for us now. That we should be on serving water and
be judicious in its use. If water is wasted today then its our future generation which will
suffer because of it. So everyone needs to make a point from now to save water in anyway
they can.
Water infrastructure projects should also speeden up in the country through public-private
partnership. This is of immense importance in a country where rural population has very little
access to safe drinking water. What these infrastructure projects will also ensure is
employment generation and in the current global crisis the country need to stand up and
generate local employment through these opportunities and challenges.
With vast population base, growing middle class population and strong macroeconomic
environment, the Indian food & drinks market has emerged as the rapidly growing segment
in the Indian retail industry. Rapid transformation in the lifestyle of Indians, particularly
those living in Urban India, has resulted in a dramatic increase in the demand for processed
or health food, packaged and ready-to-eat food products and water specially packaged in
bottle.
India is developing nation and whose growth last five year increase highly. The growing
demand for bottled water speaks volumes of the scarcity of clean drinking water and the
quality of tap water. It has become an icon of healthy lifestyle emerging in India. It is of the
pet material used in bottled water that makes a big difference in taste. Almost all has traces of
plastic flavor. The interesting scenario is that we have, on the one hand, a vast majority of
population which is struggling hard to get access to potable water and on other, the new
generation concentrated in urban areas getting accustomed to bottled water ‘culture’ even
though it means they have to pay through their nose for it. Selling ‘safety’ –i.e. pure and
simple water- has now become one of the fastest growing industries in India despite the harsh
truth it is build on the foundation of bad governance, inequality and blatant exploitation.
However bottled water provides the distance advantages of convenient packing, consistent
quality and is ubiquitous.
The fastest growth in the consumption of bottled water in the world has been recorded in
India according to a new study conducted by the US based earth policy institute. It even
question the rising thirst for bottled water with consumption tripling in India and more than
doubling in china over the past five years.
The sales of bottled water have exploded globally particularly in Europe, North America and
India in recent years, largely as a result of positive public perception on the safety of mineral
water. The corporate control and distribution over this important liquid asset is growing as
brisk rate in India. The packaged water business in the country is estimated to be a whopping
RS 1600 Cr and is growing at an immense rate of 40% annually. According to Bureau of
Indian standards (BIS), there are 1200 bottling plants (out of which 600 are in the state of
Tamil Nadu) and 200 Brands of packed drinking water across the country (nearly 80% of
which are local) batting over the markets which amply signifies the market is big even by
international standards. At this significant growth rate, the market is expected to humble the
fizzy drinks market soon. Nevertheless, in India the per capita bottled water consumption is
still quite low-less than five liters a years as compared to the global average of 24 liters.
• Parle's Bisleri
• Coca Cola with its brand Kinley
• PepsiCo with its brand AquaFina
• Manikchand with its brand Oxyrich
India had the world's third largest GDP - $4.02 trillion (PPP) in 2006-07 - which is touched to
reach $27 trillion by 2050, becoming the third largest economy after China and the USA.
Given the scenario, boom times are ahead for packaged water (or treated water).
Bottled water or the packaged water category, estimated to be over Rs 1,600 crores (which
according to the Bureau of Indian Standards are more than 1,800 in number), is "witnessing
an unprecedented amount of action."
In other words, domestic companies Parle, United Breweries, Tatas, DS Foods and
multinationals PepsiCo and Coca-Cola, the world's largest aerated drinks maker, are all
"battling for leadership" in the rapidly growing packaged water market in India. As things
stand, food and beverages (not to speak of tobacco) account for the largest consumption
categories (40%) in India, which has emerged as one of the fastest growing economies in the
world with about 8% annual GDP growth.
Bisleri (the current market leader) was the first-of-its-kind packaged water brand in the
country when it was launched in 1967. It has now made a foray into packaged natural spring
water, a category which has been witnessing exponential growth, in double digit figures, over
the past couple of years. Dr Krishna also noted that India was the first market outside the US
to have PepsiCo's Aquafina launched in 1999 when the market was just beginning to grow.
This summer, Coca-Cola's $4.1 bn global acquisition of the US-based vitamin water brand
Glaceau (formally known as Energy Brands Inc) to expand its non-carbonated beverage line
made headlines, even as the Tata group which agreed to sell its 30% stake to Coke by the
year end, had cash registers ringing with its acquisition of mineral water brand, Himalayan.
In June this year, Tata Tea acquired the Mount Everest Mineral Water Company that
manufactures the Himalayan brand of spring water ( a 44% stake for Rs 210 crore), making it
the largest acquisition of a packaged water firm in the domestic market.
In India, the per capita bottled water consumption is still quite low - less than five liters a
year as compared to the global average of 24 liters. However, the total annual bottled water
consumption has risen rapidly in recent times - tripling between 1999 and 2004 - from about
1.5 billion liters to five billion liters.
The rise of the Indian bottled water industry commenced with the economic liberalization
process in 1991. “The market was virtually stagnant until 1991, when the demand for bottled
water was less than two million cases a year. Since 1991-1992, it has not looked back, and
the demand in 2004-05 was a staggering 82 million cases."
Bottled water is sold in a variety of packages: pouches and glasses, 330 ml bottles, 500 ml
bottles, one and 5-litre bottles and even 20-50-litre bulk water packs. The bottled water
business is divided broadly into three segments in terms of cost: premium natural mineral
water, natural mineral water and packaged drinking water. Premium natural mineral water
includes such imported brands as Evian, San Pellegrino and Perrier, which are priced
between Rs 80 and Rs110 a liter. Natural mineral water brands like Himalayan and the
indigenous Catch brand owned by DS Foods Ltd are priced around Rs 20 a litre. Packaged
drinking water is the biggest segment and includes brands such as Parle Bisleri, Coca-Cola's
Kinley and PepsiCo's Aquafina which are priced in the range of Rs10-12 a liter.
As per market estimates, Parle's Bisleri has held on to its 40% market share even as Kinley
and Aquafina "are fast catching up". Aquafina has approximately 10%. The rest, including
the smaller players, have 20-25% of the market share.
Coca-Cola India which has captured 20 -25 % share of the packaged mineral water category
with its brand Kinley, is all set to enter the flavored and sparkling water segment that was, till
recently, the domain of Catch.
Take, for instance, Pepsi’s Aquafina or Coca-Cola’s Dasani bottled water. Both are sold in 20
ounce sizes and can be purchased from vending machines alongside soft drinks and at the
same price. Assuming you can find a $1 machine, that works out to 5 cents an ounce. These
two brands are essentially filtered tap water, bottled close to their distribution point. Most
municipal water costs less than one cent per gallon.
Now consider another widely-sold liquid: gasoline. It has to be pumped out of the ground in
the form of crude oil, shipped to a refinery (often halfway across the world), and shipped
again to your local filling station.
In the U.S., the average price per gallon is hovering around $3. There are 128 ounces in a
gallon, which puts the current price of gasoline at fraction over 2 cents an ounce.
And that’s why there’s no shortage of companies which want to get into the business. In
terms of price versus production cost, bottled water puts Big Oil to shame.
In theory, bottled water in the United States falls under the regulatory authority of the Food
and Drug Administration. In practice, about 70 percent of bottled water never crosses state
lines for sale, making it exempt from FDA oversight.
On the other hand, water systems in the developed world are well-regulated. In the U.S., for
instance, municipal water falls under the purview of the Environmental Protection Agency,
and is regularly inspected for bacteria and toxic chemicals. Want to know how your
community scores? Check out the Environmental Working Group’s.
While public safety groups correctly point out that many municipal water systems are aging
and there remain hundreds of chemical contaminants for which no standards have been
established, there’s very little empirical evidence which suggests bottled water is any cleaner
or better for you than its tap equivalent.
Bottled water produces up to 1.5 million tons of plastic waste per year. According to that
plastic requires up to 47 million gallons of oil per year to produce. And while the plastic used
to bottle beverages is of high quality and in demand by recyclers, over 80 percent of plastic
bottles are simply thrown away.
That assumes empty bottles actually make it to a garbage can. Plastic waste is now at such a
volume that vast eddies of current-bound plastic trash now spin endlessly in the world’s
major oceans. This represents a, killing birds and fish which mistake our garbage for food.
Thanks to its slow decay rate, the vast majority of all plastics ever produced still exist
somewhere.
Many people drink bottled water because they don’t like the taste of their local tap water, or
because they question its safety.
This is like running around with a slow leak in your tire, topping it off every few days rather
than taking it to be patched. Only the very affluent can afford to switch their water
consumption to bottled sources. Once distanced from public systems, these consumers have
little incentive to support bond issues and other methods of upgrading municipal
water treatment.
There’s plenty of need. In California, for example, the requirement of $17.5 billion in
improvements to the state’s drinking water infrastructure as recently as 2005. In the same
year, the state lost 222 million gallons of drinkable water to leaky pipes.
In the documentary film, authors Alan Snitow and Deborah Kaufman demonstrated the rapid
worldwide privatization of municipal water supplies, and the effect these purchases are
having on local economies.
Water is being called the “Blue Gold” of the 21st century. Thanks to increasing urbanization
and population, shifting climates, and industrial pollution, fresh water is becoming
humanity’s most precious resource.
Chapter - 2
Bottled water represents the fastest growing segment of the global beverage market with a
market share of about 38%. World bottled water market is expected to reach $65.9bn by
2012, stimulated by rising population, consumer spending patterns, lifestyle trends and
growing levels of health consciousness, among others.
The market is expected to grow rapidly in the coming years due to growing consumer
concerns about fitness, water quality and health. As stated by the recent report published by
Global Industry Analysts, global bottled water market is dominated by Europe and the US,
which together account for about 55% of the market value estimated in the year 2008.
Bottled water will continue to fare well in the global beverage marketplace as a healthy
alternative to carbonated soft drinks. Gains in bottled water market will also come from
flavored varieties and convenient packaged formats, especially single-serve packs.
Sparkling water market is dominated by Europe, which accounts for more than 75% of the
world market estimated in 2008. Western Europe comprises some of the world's largest per
capita bottled water consumer markets, which include Germany, France, Spain and Italy. The
largest proportion of bottled water consumers can be found in Germany, as 88.2% of its adult
population drinks bottled water.
The non-sparkling water market constitutes the bulk of bottled water shipments, accounting
for between 80-85% of the market in volume and value terms. Non-sparkling bottled water is
also expected to offer the highest growth opportunity, outgrowing the sparkling bottled water
market by three to four times. Market for non-sparkling water in the US is projected to reach
$15.1bn by 2012.
The major challenge for most companies is product innovation and differentiation as water is
still just water. Containers are an important part of bottled water, as they constitute nearly
47% of cost. Even look, weight and price of the product are as significant as the water itself.
For instance, Colorado-based Biota sells bottled water in biodegradable bottles that are
produced using corn in order to attract consumers who are ecologically conscious. Some
companies try to attract children by selling bottled water in attractive bottles with vivid
designs and colors.
Key players dominating the global Bottled Water market include Aqua Gold International
Inc, Boreal Water Collection Inc, China Water & Drinks Inc, Group Danone, Danone Naya
Waters Inc, Isbre Holding Corp, Nestle SA, PepsiCo, Quilmes Industrials Sa-Adr, Saint Elie,
San Miguel Corporation and The Coca-Cola Company.
Europe and North America both contributed more than 60% of global market sales of bottled
water it shows more awareness of bottled water in market and Asia is after this two area Asia
cover 26% from global sales.
Bottled water—a general term referring to natural mineral water, spring water, and purified
water supplied to consumers in bottles—is the world’s fastest-growing commercial beverage.
Global consumption of bottled water more than doubled between 1997 and 2005, reaching a
total of 164.5 billion liters, or 25.5 liters per person. While Europe and North America still
dominate the bottled water market, consumption in Asia and South America has increased
dramatically over the past five years, expanding at 14 percent and 8 percent a year
respectively.
The United States is the world’s largest consumer of bottled water, with Americans drinking
28.7 billion liters in 2005. But consumption per person is a different story: in 2005 each
Italian, on average, drank more bottled water than anyone else in the world—192 liters,
compared with 99 liters for Americans. Among the top 10 countries, Brazil, China, and India
have doubled or even tripled consumption between 2000 and 2005, though per capita intake
in China and India is still far below the global average. Altogether, almost three quarters of
the world’s bottled water is consumed in the top 10 countries.
Worldwide, people buy bottled water in order to have safe drinking water, especially
consumers in developing countries who face unreliable municipal water supplies, water
scarcity, and continual water contamination. In most industrial countries, however, where
municipal water is better regulated, people drink bottled water also for better taste, for
convenience, and as a substitute for other beverages. In the United States, calorie-free bottled
water has attracted consumers concerned about obesity.
The difference in cost between bottled and tap water is staggering: the bottled version costs
from 240 times to more than 10,000 times as much. The Pacific Institute, a California-based
think tank, found that bottled water sold in most industrial countries costs $500–1,000 per
cubic meter, compared with 50¢ per cubic meter of California’s high-quality tap water. Most
of what consumers pay goes into production, packaging, transportation, advertising, retailing,
marketing, and profits—not the water itself. In 2005, selling bottled water in the United
States generated more than $10 billion in revenue.
Bottled water is regulated as a food product in the United States and Canada, while the
European Union has two directives: one on natural mineral water and another on drinking
water that includes bottled spring or purified water. Regulation codes for bottled water
generally cover the composition, contaminants, processing requirements, and labeling. The
Codex Alimentarius—an international food code initiated by the World Health Organization
and the Food and Agriculture Organization— can be adopted by countries that lack national
regulations
CHAPTER - 3
ABOUT COMPANY
A story that began when time began, before the Himalayan or the Alps were born. This is the
story of the majestic Aravallis, one of the world’s oldest mountain ranges, a mountain range
that was before anything else was and is a legend that lives on with the passage of time.
Aava is a natural mineral water originating from the holy hills of Taranga, a part of the
world's oldest mountain range, the Aravallis. Every drop of Aava is naturally purified with
great patience. Drop by drop for 20 years, Aava trickles down from the catchments area to
our deep underground reservoirs.
Along the way, it is purified as it passes through layers of alluvium and clay that act as
natural filters. In a world where every alternate food item claims to be fortified, nothing
about aava is artificial. Nature has endowed Aava with a unique mineral composition that is
beneficial to health.
Aava natural mineral water is directly obtained from protected natural sources, thus ensuring
that’s the water is naturally pure. It therefore need not be put through all the chemical and
other purification processes that packaged drinking water necessarily goes through. Aava
tastes natural. Some even call it delicious. Not like the bitterness of water processed through
reverse osmosis.
Packaged drinking water (IS : 14543) Aava natural mineral water (IS : 13428)
This water is rendered potable through variousAava is natural pure and does not need to put
processes such as reverse osmosis (RO).through any chemical process, UV radiation or
(chemicals, UV rays, pesticides) reverse osmosis.
For every 1 liter if water processed throughNot a single drop of “Aava” water is ever
RO, 2 liters or more is wasted. wasted, hence “Aava” is awarded ISO 14001
certification.
“Aava is India’s most certified water and goes through 77 different tests before and after
being bottled, perhaps making it the “best drinking water of Indian today.”
The Aava water plant is the first of its kind in India; it is a fully automatic, washable,
air-conditioned, hygienic plant.
The plant even adheres to pharmaceutical standards, and uses the “Clean Room”
technology (class 10,000) within the automatic filling, capping and sealing system so
that Aava’s original mineral composition as well as the purity of the air and water is
maintained at all times.
Aava is also not put through any chemical procedures that can contaminate its
original purity.
The company’s fully automatic bottling unit currently produced one Lakh bottles of
water of water a day and another 1000 ‘Family-pack’ 20 ltr & smaller jars.
There are 63 different chemical, microbiological and other tests. Aava does not go through
certain processes that other Packaged drinking water like Activated Carbon Filtration,
Softening and RO purification. The new Osmonics E-Series Ozone Generators feature a
durable flat plate ceramic cell construction that provides stable ozone output at higher
concentrations (from 6 to 10 per cent by weight), while efficiently producing up to 3 ppd (57
g/hr) of ozone.
Today the management people are become more and more important in organization. Most of
the companies are following on the quality of their work force to create a new competitive
advantage for themselves. It is the quality of the work force that will matter in the future. So
investing in the work force is inevitable for any organization, which wants to succeed in the
long run.
The secret of success of the companies is the way they treat their employees. Employees
should be treated as colleagues and merely as means to profit. Employees are more important
of the company, just as much as top management. Employees are the heart of organization.
Thus is because, even though organizations has all the M’s namely machine, market, money,
man, management. It would not be able to achieve its objective more effectively and
efficiently if its manpower is dormant. It is very important, therefore, for the human resource
manager to invest and develop its manpower in such a manner so as to make its lively
resources and it’s constantly responding to any changing situation.
Formerly importance was given to personnel management and industrial relations, which
were treated as separate functions. But now to fast respond to changing environment both
these functions have been assembled in to the Human Resources Management, which is also
concerned with developing manpower and above this.
The resource management, at Aava Company., is divided in to seven important parts namely:
It is a process by which an organization ensures that it was right number and kind of people,
at the right place, at the right time, capable effectively and effectively competing those tasks
that will help the organization to achieve its overall objectives. For this, it takes into account
both the internal activities and factors in the external environment.
3.3.2 RECRUITMENT:
It is a process of searching for prospective employees and stimulating them to apply for the
jobs. It includes job description, position and hiring specifications.The need for recruitment
may arise from the following situations:
At Aava company the following are the steps that are undertaken for determining the type
and the number of people to be recruited:
HR department head and that particular department’s, which want new personnel, sit
together and discuss out the issue
Question-answers are held and on that basis plans are scrutinized.
Finally they the MD and he gives the sanction of manpower.
People are recruited either from within organization or from external sources:
3.3.3 SELECTION:
The next step after the recruitment is selection. Selection is an act of determining by the
organization, whether or not to make a job after and the candidate decide whether or not to
accept it. This involves a series of steps as discussed below.
This is done to see whether they match the recruitments of the job or not. These done by
verifying whether the applications, that are received, are in accordance with those mentioned
in the advertisement. The applications of those candidates who do not match the stated
requirements are rejected and the remaining consider for further processing.
If the candidate is to be interviewed for senior level position, the interview process is very
long. Candidate interviewed by different people through out the whole way. Generally, for
senior level position, mostly all of the senior managers interview the candidates.
Aava Company when the new recruit joints the company, introduce each department of the
company and also inform about the activity of company. New recruit also inform rules and
regulation of the company.
Training is the act of increasing the skills and efficiency of the employees. Training inputs
imparts the necessary skills to the employees. The purpose of this activity is to provide
training to the employees so that they can achieve higher standards of production by
increasing there level of performance on there present assignment, quality of work, to
develop more and more people to take up new challenges so that when the need arises,
vacancies, can more easily be filled up from internal sources to improve organizational
climate, to improve the standards of safety etc. it is needed because Aava’s plant is fully
automated.
At Aava Company for the existing employees, the training needs are identified concluding
regular performance appraisal. During these appraisal the employees himself on the basis of
his performance determines the area in which he is required to undergo training.
At Aava company, the performance is done from six month. Every year the performance
appraisal is done from six month. Every year the performance appraisal form is issued to
each and every employee to be filled.
Transfer:
Transfer of the employees may be due to any of the following:
Promotion:
At Aava bottle, an employee is eligible for promotion strictly on the basis of this capability
and his on the job performance. If this performance track record has been consistent for a
couple of years and if there exists a vacancy at the next higher up then he would be
promoted. Promotion may be gives in the organization in the same level.
INDUSTRIAL DISCIPLINE:
Industrial discipline means to observe the rules, regulations and procedures, which are
necessary for effective functioning of the company. For the purpose of maintaining the
discipline within the company, neutral and fair treatment is given to all the workmen/ staff
members in the manner of discipline.
GRIEVANCE HANDLING:
If workers leave any problem relating to any of the above-mentioned areas, they report
directly the concerned department. The department then reports to the HR department. The
HR department acts as a counselor who tries to solve the grievance by hearing from the both
parties.
WAGE SETTLEMENT:
The wages settlement of the company is cushioned on the staff and workers. The settlement
is reviewed every three years. Workers put their demands regarding the wages, working
conditions, safety level etc to the management.
Satisfied employees are the best assets of the company. Hence importance is given to labor
welfare at Aava Company. The company provides its workers and the staff persons various
statutory welfare facilities as per the provision of the Factories Act.
Provident Fund schemes: Aava Company have started its own trust since 1992 for
provident fund. The contribution of employees is 12% of the salary in the provident fund
scheme.
Bonus: The employees get bonus at the rate of 20% of annual salary during the financial
year.
Gratuity: The employees got the aspects gratuity at the rate of 15 days salary per year of
services at the time of retirement or resignation.
Loans: Aava. provides loans for the employees and workers on 12 monthly installments.
(a) and the company profitability. The payment is made on every last working day of the
month.
Salary Structure
Vision:
To provide superior water to our consumer
Mission:
To provide the healthy water in order to facilitate people
Slogan:
“Water,Water, Evrywhere, Not a Drop to Drink”
Bottled water
2) Cup-cap
For the first time in India, the 1L pack comes with an in-built cup with a unique
double-seal. Thus, it makes sharing your water easy without the mess of having to
drink from the same spout.
3) Sports
The 750ml bottle is designed to suit the needs of the fitness-conscious individual “on
the go”. With a double-seal “sport-cap” that’s leak proof, its deal for people working-
out, as well as for children, to avoid spilling.
The 300ml/200ml bottle is available for you to quench your thirst instantly without
having to carry around the weight of a big bottle. Its convenient size even allows for
it to be stored in small bags.
Aava is also available in 20L & smaller packs so that a glass of refreshing Aava is
only as far as your dispenser is, when you want it.
USP
Packaging
2) Pricing
Changing the product to reflect the product's life cycle is only part of the essence of a well
balanced marketing mix, and so PRICE enters the second important consideration of the
marketing mix. When setting a price on a range for your products, you need to ensure that
you can recoup any overheads, compete with rival companies and charge a price your
customers are willing to pay. To do this you need to fine tune your pricing policy and you
could achieve this in a number of ways.
Price Decisions
3) Place
Distribution channel
Primary distribution
Direct to institutes like IIM, Abon India, Taj, For seasonware, multiplex etc.
Secondary distribution
Advertising is non-promotion of goods and services, by a sponsor (a firm or person) who can
be identified and who has paid for this communication. This purpose of advertisement is to
sell something a good service, idea person or place, either now or later this goal, reached by
setting specific objective that can be expressed individual ads. Those are incorporated into an
advertising campaign recall again from the buying decision process that buyers go through a
series of stages from unawareness to target customers to the next stage in the hierarchy say
from awareness to interest. Advertisement plays an important role in the success of coca-cola
product since its first newspaper ad. Advertisement is a key of implementing a strategy over
one hundred year old to trigger desire as offer and in as many ways as possible.
Aava has been able to blaze a trail by tying up with key hotels and airlines. Air India
carries Aava water for many of its flights and the bottle water has already established a
foothold in Gujarat with a large number of airlines and hospitability companies of Sabse
Bada Gujarti.
A show celebrating the economic and artistic achievement of the local region. Sheeple
Enerprise now plans to take the brand national, focusing on big cities and tourist spots.
Ahmedabad and South Bombay are strongholds for the company. Aava currently serve
nine airports in India and is distributed on air India which files to over 100 countries,
similarities the brand is also available on smaller airlines such as Spice jet and Go Air.
Thirsty for growth while retaining association with luxury and quality.
Aava has secured a listing on the menus of India’s premier clubs and Karnavati Club as
well as hotel groups such as the Four Seasons, Le Merien, Hyatt, Ramada and the Grand
Bhagvati Group.
Aava provide water at time flud, and also free water for Thalesmia, Cancer and also
provide free camp and provide cost to cost to students.
Aava provide water at different college events like B.K. School Management,
Ahmedabad.
The company is currently in negotiation to strengthen Aava’s presence in the Indian states of
Rajashan, Meharastra, Goa and Karnataka. In terms of international expansion, Mehta
believes there is great potential for Aava to gain export growth in the Middle East, South East
Asia and Eastern Europe
Thus marketing role plays a very important role in achieving the objectives of a company.
undoubtly, value utility is created by the manufacture of product or service but time and place
utilities are created by marketing role. According to drucker, “both the market and the
distribution channels are often more crucial than the product”. they are primary. the product
is secondary. in an economy like that of india, where marginal shortages can lead to
disproportation distortion in prices, a dependable and efficient distribution system is very
much essential. the distribution system creates a value added to all most all products. All
from the above study not withstanding its restructuring efforts pepsi is still far away with its
great competitor like coke.
LIST OF CLIENTS:
Fun Cinemas
Wide Angle Cinemas
CCI club Mumbai
Ambani School Mumbai
Jet Lite
Indigo Restaurant
Getting shelves
They gets or purchase shelves in big departmental stores and display their products in that
shelves in that style which show their product more clear and more attractive for the
consumers.
Salesman of the coca cola company positions their freezers and their products in eyecatching
positions. Normally they keep their freezers near the entrance of the stores.
Sales Promotion
Company also do sponsorships with different college and school’s cafes and sponsors their
sports events and other extra curriculum activities for getting market share.
Direct Selling
In direct selling they supply their products in shops by using their own transports. They have
almost 10 vehicles to supply their bottles in ahmedabad. In this type of selling company have
more profit margin.
Segmentation
Customer segmentation is the practice of dividing a customer base into groups of individuals
that are similar in specific ways relevant to marketing, such as age, gender, interests,
spending habits, and so on. Using segmentation allows companies to target groups
effectively, and allocate marketing resources to best effect. According to an article by Jill
Griffin for Cisco Systems, traditional segmentation focuses on identifying customer groups
based on demographics and attributes such as attitude and psychological profiles. Value-
based segmentation, on the other hand, looks at groups of customers in terms of the revenue
they generate and the costs of establishing and maintaining relationships with them.
Aava Natural mineral water has divided segmentation on the bases of geography. Under
geography segmentation they are targeting to urban area just like Ahmedabad, Gandhinagar
and city area.
2) Age –Youngster
Also the Aava is segmenting on the bases of Age that is of youngster and the lady who faces
the problem to drink the water directly from the bottle.
3) Education-Health consciousness
The product itself suggests the segmentation that the product is related with health of the
community and the community understands this thing from the education background. So,
one of the segmentation is education.
4) Lifestyle
The product is stylish so every body will purchase who wants to live in lifestyle. Lifestyle is
a psychographic segmentation which is considered by the Aava bottled water.
5) Need-Basic need
Water is a basic product and Aava providing natural mineral water to their customer. So, one
of the segmentation would be of the need base.
Targeting
Doing business without knowing what your target market is will prevent you from reaching
your objectives: increased sales, market share or brand awareness.
Outline:
There are two types of customer groups that you can target: individual consumers or other
businesses. Individual consumers are somewhat more difficult to target because they are
diverse and unpredictable, they typically have small individual budgets, and their buying
preferences may change as they age. Businesses as a target market tend to be fairly stable
over time and have large budgets to spend on various products and services. The Aava has
also two kind of customers that is individual and institutional customers as they had
identified their potential customer from the segmentation bases.
There are many sources of market research — much of which is free of cost — that have
already been compiled that you can draw from for basic information about your prospective
customer group. Search the Internet and your local library for studies and data that have been
gathered for your particular industry.
After you have conducted a sufficient number of surveys, compile the results to determine
which markets make the most sense for your business to target. And according to that choose
a group which you want to target.
Just as a mission statement guides the operation of your company, a customer profile will
guide your sales effort. Develop an overview of your target customers so that you and all of
your employees are clear about whom you are selling to.
POSITIONING STRATEGIES
The product has natural mineral water features which is does not any RO and UV process to
purify the water. The RO and UV containing chemical and related drugs to clean the water
but it is somewhat harm to body of the human.
It is totally safe and healthy product which can be the benefit of the product. Aava certainly
has positive health implication for osteoporosis, arthritis as well as cataract.
The product can be use to drink as well as for the kitchen use.
The product will be use by youngster, sports person, ladies and child. For child and ladies
they are specially focuses to providing cap on the bottle.
As product is patented from its packaging style no body will copy the packaging style. So,
this could be the strategy against competitor.
Same as above the packaging is the main differentiating factor for the Aava bottled water.
As all players generally focuses on the youngster and men but meanwhile Aava bottled water
is focuses on the child and women also.
The product has natural mineral water features which is does not any RO and UV process to
purify the water. The RO and UV containing chemical and related drugs to clean the water
but it is somewhat harm to body of the human.
It is totally safe and healthy product which can be the benefit of the product. Aava certainly
has positive health implication for osteoporosis, arthritis as well as cataract.
10) Usage Occasions: When / how can the product are used?
The product can be use to drink as well as for the kitchen use.
The product will be use by youngster, sports person, ladies and child. For child and ladies
they are specially focuses to providing cap on the bottle.
As product is patented from its packaging style no body will copy the packaging style. So,
this could be the strategy against competitor.
Same as above the packaging is the main differentiating factor for the Aava bottled water.
As all players generally focuses on the youngster and men but meanwhile Aava bottled water
is focuses on the child and women also.
CHAPTER - 4
Political factors include government regulations and legal issues and define both formal and
informal rules under which the firm must operate. Some examples include:
BIS: Bureau of Indian standards is a premier organization engaged in setting standards for
various products and services. According to BIS, experience chemists and microbiologists
are a must to carry out the tests as per the ISI specification.
ISI: Indian Standard Institution is the former name of BIS but till date ISI is the MARK
given by this organization. It is compulsory for all the manufacturers who intend to set up the
processing unit, to obtain the ISI mark from Bureau of India Standards.
PFA: Governed under Prevention of Food Adulteration Act 1954, this agency safeguards the
interests of the consumers through constant check on the food and beverage sector.
Unless the inspection is done by the staff, tests carried out in an independent lab and official
confirmation and license number is obtained, unit can’t commence commercial production.
1. Packaged Natural Mineral Water [ Under IS: 13428:1998, Amendment 1-5 upto15th
October 2004]
Implication:-
The Govt. has also got into the action by imposing stringent legislations regarding
wastewater treatment. There is also a compulsory requirement of Environment Clearances
from Pollution Control Boards at the Centre and the states. The recent Supreme Court
directive to move polluting units out of Delhi is also likely to act as an impetus to future sales
of water treatment equipment. Also at the same time, many existing treatment plants would
need to be replaced or upgraded to meet with more stringent standards. This norms directly
affect to quality of the water when norms was liberal at that time people not got quality
product but now due to political interferences all player produce quality product and also
norms increase entry barrier in the industry.
Tax Policy:-
Govt. also reduce the excise duty from 16% to 8%. The Rs 1,600-crore packaged bottled
water industry may grow at over 25 per cent from 2008 after reduction in Excise duty on
packaged drinking water will encourage more regional players to enter the business, thereby
fuelling growth in industry currently dominated by few players like Coca-Cola’s Kinley,
Pepsi’s Aquafina and Bisleri, apart from regional brands.
This may also result in a reduction in the prices of branded packaged waters by 10-15 per
cent from next year. In order to promote clean and hygienic packaged water, the food
processing industry wants VAT to be in the range of 0-4 per cent. The proposal is meant to
encourage regional companies to start bottled water and packaging plants.
“Since packaged drinking water fulfills the basic needs of the consumer outside the house
and is an essential item of consumption, the duty should be drastically cut,” CB Gupta,
advisor, Federation of Indian Chamber of Commerce and Industry (Ficci), said.
“If the duty is brought down, the Rs 1,600-crore packaged drinking water industry is
expected to go up by 25-50 per cent,” said Samir Barde, director, Confederation of Indian
Food Trade and Industry (Food wing of Ficci).
Consequence: - By way of taxation, if it will reduce then what happen. There may be
reduction in prices of packaged water. Nowadays, people threaten from psychological pricing
that today people worth bottled water at Rs. 15 and more so, that reduction of tax will result
into 10-15% reduction in price of bottle i.e. people not habitual for psychological pricing and
they are very price conscious.
The labeling of the product should have following provisions & the features
• Label should have
customer brand name
the name of the product category
name and address of the manufacturer
net weight or volume
Implication:- Via this political rules all players provide total detail of product to the
customer, because of increase in health consciousness among people. When it is strict then
player not cheat with the customer.
According to minimum wage Act, 1948 the company must have to pay minimum wage 67.43
Rs. Per day. The Payment of Wages Act, 1936 was enacted to regulate payment of wages to
workers employed in Industries and to ensure a speedy and effective remedy to them against
illegal deductions and/or unjustified delay caused in paying wages to them.
The World Health Organization (WHO) publishes Guidelines for Drinking-water Quality
which many countries use as the basis to establish their own national standards. The
Guidelines represent a scientific assessment of the risks to health from biological and
chemical constituents of drinking-water and of the effectiveness of associated control
measures. WHO recommends that social, economic and environmental factors be taken into
account through a risk-benefit approach when adapting the Guideline values to national
standards. As the WHO Guidelines for Drinking-water Quality are meant to be the scientific
point of departure for standards development, including bottled water, actual standards will
sometimes vary from the Guidelines. It should also be noted that water used for making
edible ice should be subject to the same drinking-water standard and include specific sanitary
requirements for equipment for making and storing ice. For water in car buys, similar
sanitary requirements for dispensing devices need to be observed.
Economic factors affect the purchasing power of potential customers and the firm's cost of
capital. The following are examples of factors in the macro economy.
6 5.3
4.2
3.6
4
2.2
2 1.1
0
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08
year income growth(%)
consumption growth(%)
The consumption and income of the people are increasing. After increasing in income people
consume more as compared to the past year so it increase consumption of bottled water and
people also spend money after their welfare, it increase the rate of spending money on behalf
of their primary need. After increase income people lifestyle also change and it affect
consumption of bottled water.
9.4 40
9.2
36 35
9.2
Aava Growth(%)
9 30
25 25
Growth
8.8
15 20
8.6 8.5
8.4 15
8.4 10
8.2 5
8 0
2006 2007 2008 GDP Growth(%)
year
Aava Growth
Aava Company has tremendous growth from its starting. The company is growing with the
growth of GDP. The company is growing at 25%in last year. So that we can expect that
company is grow more in future.
Labor Cost
Treatment and purification account for the next major cost. Even with the state-of-the-art
treatment system with reverse osmosis and membranes, the cost of treatment is a maximum
of 25 paise a litre (Rs.0.25/litre). Therefore, the cost of producing 1 liter of packaged
drinking water in India, without including the labour cost, is just Rs.0.25. In a nutshell, in
manufacturing bottled water, the major costs are not in the production of treated and purified
water but in the packaging and marketing of it.
The cost of a bottle, along with the cap and the carton, is the single biggest cost - between
Rs.2.50 and Rs.3.75 for a one-liter bottle. For water sold in big plastic jars (20-50 liters),
which are also reused, or in pouches, this cost is much lower. It is precisely owing to this that
companies sell water at even Re.1 a liter in a 20-50 liter jar and still make profits. Labor and
establishment and marketing costs are highly variable and depend on the location and size of
companies. Informal discussions with industry members reveal that the gross profit of this
industry can be as much as between 25 and 50 per cent.
Implication:- we have already seen that labor cost is totally variable and depend on location,
in urban area labor cost is higher so ultimately increase in production cost compared to rural
area in which we get labor at low price and increase profitability. When inflation rate increase
then automatically labor charges also increases in market it directly affect labor cost in
production.
Indian government focus on tourism places and also invite tourist of foreign and all foreign
people use bottled water, government ban on pouches water for reducing pollution of plastic
it increases the market of bottled water. Above all factor increase tourist.
Interest Rate:
Interest Rate
14 13.25
12 10.75 10.75 10.25
9.75
10
Percentage
7.5
8
6
4
2
0
2000 2002 2004 2006 2007 2008
Years
Companies will expand and increase use of debt as a result of the low borrowing rates. Aava
can borrow money for investing in products as the interest rates are low. It can use the
borrowing on research of new products or technology. As researching for new products
would cost less the Aava Company will sell its products for less and the people will spend as
they would get cheap products from Aava. Here Aava is very small company and it is
financially weak. So that company must borrow money from bank.
Bank Growth
ICICI Bank 4.40%
SBI 18.80%
HDFC BANK 27.20%
AXIS BANK 59.20%
PNB 14.60%
BOB 15.30%
LIC HOUSING FINANCE 24.90%
Health Consciousness
As the water supplies today are stretched to meet the demands of the ever increasing
population, more and more people in the urban areas are looking towards bottled drinking
water to meet some of their demands. While safety and health remain the most important
considerations they aren’t always founded on facts. Hence arise the need for having specific
standards, especially in the wake of certain water related disasters.
70 69 69
69
68
67
66 65
Age
65 64 64
64 63
63
62
61
60
2003 2004 2005 2006 2007 2008
Year
Source : ='http://www.indexmundi.com/g/g.aspx
WHO publishes Guidelines for Drinking Water Quality based on which countries have their
own national standards, Though stricter standards are applied for control in Packaged
Drinking Water, it is not always easy to maintain such standards because of long periods and
higher temperature of storage. Also there is no agency to detect fraud at the level of
manufacture or distribution
Keeping the above considerations in mind it is necessary to formulate policies which do not
separate it from health and develop an integrated food and Water resource management.
About 25% of bottled water sold is simply re-processed/used municipal (city) water. While
there have been few comprehensive studies, one analysis several years ago found that about
22 percent of brands that were tested contain, in at least one sample, chemical contaminants
at levels above strict state health limits. If consumed over a long period of time, some of
these contaminants could cause cancer or other health problems at rates higher than those
considered tolerable by the regulatory body setting the standards.
800
726 710
700
613
600 2001-02
2005-06
500
2009-10(E)
404
400
300
285
221
200
120
100 48 74
2 9 20 9 17 33
0
Rich (Above High Income Consuming class Working class Needy (Below
115,000) (57,000 – (23,000 – (10,200 – 10,200)
115,000 57,000) 23,000)
ANNUAL HOUSEHOLD INCOME (IN USD)
As it can be seen from the above graph that, due to liberalization, privatization &
globalization (LPG), now in India many MNC’s & other private companies has created many
opportunities for employment in the country which lead to increase in annual household
income & it will have direct effect on the lifestyle of Indian people.
300,000.00
250,331.60
250,000.00 221,046.20
Million(US$)
200,000.00 182,089.90
164,905.10
144,356.90
150,000.00
100,000.00
50,000.00
0.00
2004 2005 2006 2007 2008
year
In 21st century, life style of the people are changed and they follow the western culture. They
require more safety, cleanliness. Now people are more spend on food and beverages
expenditure of his disposable income.
PERCENTAGE
62
60 59.3
58
56.1
56
54
52
1997 2002 2007
In above chart we can see young people in India is increasing rapidly. Earlier the young
working peoples are 56.1% out of total population and nowadays it is 62.3%. Young people
out of total population. The average young age in India is 25 upto year 2025. It shows a great
opportunity for water bottled water industry. There is a large population of the age range
known as the baby boomers. Since many are reaching an older age in life they are becoming
more concerned with increasing their longevity.
India is a second largest in population so it increases the demand of all products also people
are literate so they all drink safe water so here Bottled water player grabs this market.
1.7
1.61 1.59
1.6
Growth Rate
1.5 1.44
1.4 1.38
1.4
1.3
1.2
2004 2005 2006 2007 2008
Years
48.2
Growth Rate
48
47.8 47.8
47.8
47.6
47.4
2004 2005 2006 2007 2008
Years
Organized packaged water industry provides unique employment opportunities to the locals
under following segments:
(Source:- http://www.merinews.com/catfull.jsp?articleID=137322 )
It creates opportunities for new products and product improvements and of course new
marketing techniques- the Internet, e-commerce.
The Aava water plant is the first of its kind in India, it is a fully automatic, washable,
air-conditioned, hygienic plant.
The plant even adheres to pharmaceutical standards, and uses the “Clean Room”
technology (class 10,000) within the automatic filling, capping and sealing system ao
that Aava’s original mineral composition as well as the purity of the air and water is
maintained at all times.
Aava is also not put through any chemical procedures that can contaminate its
original purity.
The company’s fully automatic bottling unit currently produced one Lakh bottles of
water of water a day and another 1000 ‘Family-pack’ 20 ltr & smaller jars.
There are 63 different chemical, microbiological and other tests. Aava does not go through
certain processes that other Packaged drinking water like Activated Carbon Filtration,
Softening and RO purification. The new Osmonics E-Series Ozone Generators feature a
durable flat plate ceramic cell construction that provides stable ozone output at higher
concentrations (from 6 to 10 per cent by weight), while efficiently producing up to 3 ppd (57
g/hr) of ozone.
The players in the bottle water industry have one of the most competitive rivalries in any
industry. In India the market is dominated by the two international giants, Bisleri and Kinley,
with market shares respectively of 40%, and 23%, leaving little room for others to grow.
Aava can still manage to be profitable in a cutthroat industry, and we plan to position it
strategically in order to do so.
The bottle water industry is a reasonably attractive industry to be in, and with its 19 years of
established presence, Aava is not well positioned to leverage that history so as to attain a
competitive edge. Aava’s current focus is one of a lackluster “if it ain’t broke, then don’t fix
it” attitude, that stems from its history of centralized power base and tall and unprofessional
organizational structure.
In bottled water market most of the brands are unorganized because people are price
conscious and prefer easy availability of bottled water so unorganized player increase the
competition among the player. So that every one try to grab the sales.
• Impact of any one company’s action is very high on other competitors of industry.
• Switching cost for buyer almost or nearer to zero. So buyer can transfer his/her purchase
from one product to another.
In this industry, it is considerably difficult and costly to set up the factories and bottling
plants required. Also, for a new entrant, it would be extremely difficult if not impractical to
infiltrate the established distribution network of the current players like Bisleri, Aquafina etc.
Furthermore, it would be quite a good task to change the hard and fast perception of millions
of consumers, making it a favorable point for this industry. The fastest growing and most
attractive beverage category in the world. Annual growth rate more than 38%. retaliation
Above all points are attract more number of player in market for satisfy the need of the
market and many non organized player are enter in market for capturing untapped market.
In bottled water the cost of production and raw material is not high. One liter bottled produce
in 3 to 5 Rs and sell in market at more than 10 Rs so manufacturer get maximum profit in this
segment.
There are an extremely large number of buyers as compared to companies in the industry,
and these buyers often purchase this industry’s relatively low priced products on a habitual,
impulse, or convenience basis, thus making it favorable for the industry.
• Product Differentiation
In market manufacturer not provide any differentiation in product so buyer bargain more in
one product.
• Price sensitivity
When buyers are more price sensitive then it increase bargaining power of buyer
All Buyers are purchase in low quantity like 1 liter or 2 liter so they not bargain with
manufacturer.
When people are more conscious about health and safety then all are not bargain with quality
product.
• Product Information.
People do not have full data of all brands so they do not compare with other brands and
bargain with dealers
Most of the raw materials required in the bottle water industry are non-specialized
commodity products, such PET bottles, Cup Cap carbonated water, glass bottles, plastic and
cans. There is less supplier of PET bottle available in market. This indicates that suppliers are
non-specialized, allowing companies in the industry to switch between suppliers without
losing any strategic alliance or significant cost advantage. Furthermore, it is also
considerably difficult for any one supplier of the bottle water industry to integrate forward
into the concentrate manufacturing and bottling businesses. Preform purchased from
Reliance industries, Jamnagar, Chemco, suraj beverages and also from Alasca Net and
purchase machine from Shyam blowing, label from barflex, Delhi. Company produce PET
bottle its own. Here company make backward integration due to this company does not want
depend on supplier for bottle. Company bring water from Aravalli. For that company does
not want to depend on water supplier. There are many suppliers of perform like RIL, Parle
International, Chemco etc.
The threat of substitutes, although mediocre, still poses a considerable threat to the overall
profitability of the industry, and that is because in recent times a health craze has taken over
all respects of life, worldwide. Therefore, it would signify a heavy reduction in the
consumption of water due to many substitute available in market like Purifier, Vending
Machine, water pouches, Alcoholic drink etc. this substitutes are readily available.
• Switching cost almost zero. All customers are easily switched over substitute product of
bottled water without any extra expense so the threats of substitute product are stronger in
bottled water market and substitute has better performance.
STRENGTH
If Innovation was to get a distinct and newer description, the credit would must go to Aava
Natural Mineral Water. It is the first and the only Indian Finalist and Winner of the Silver
Award at the Bottled Water World Awards, held recently in Mexico. On the Aava bottle water
there is company description, Manufacturing Date, Size, ISO 14001-2004 mark, License
Number, Price, Batch Number etc. The key to good design lies in making it attractive.
Aesthetics and functionality played a crucial role in our effort at zeroing in for the perfect
design for the Aava bottle water. Aava bottle launch with unique cup and it is the first time in
India, meeting the need of the elderly and young people who may it find difficulty to drink
from the bottle.
Non-Acidic Water
Kinley -
Bisleri
Home Filtered
Water
Source : www.tradersinn.com
In a world where every alternate food item claims to be fortified, nothing about Aava is
artificial. Nature has endowed Aava with a unique mineral composition that is beneficial to
health. Aava Natural Mineral Water is directly obtained from protected natural sources,
thus ensuring thats the water is naturally pure. It therefore need not be put through all the
chemical and other purification processes that Packaged Drinking Water necessarily goes
through.
PH Level (Acid)
The Himalayan waters PH level vary form 7.7 to 7.3 which brings them dangerously close to
water becoming acidic, compared to that “AAVA” is constant at 7.93 making it absolutely
non acidic and liter.
Calcium
It is a well known fact that calcium is good for bones but is also a know fact that excessive
calcium causes kidney stones and therefore across the world FDA’s allow upto 100 mg per
litre as the maximum permissible limit. “AAVA” at absolutely well balanced 20.8mg per liter
proves the superiority of being good and also being safe compared to Himalayans content of
calcium 49mg per liter.
Magnesium
It is excellent for brain power (Sourced Reader’s Digest) but as usual anything excess is not
good. It is also good for heart. It prevents heart from Cardinal Vascular disease. Excessive
Magnesium can cause Diarrhea, nausea, cramps, muscle weakness, and heart abnormalities.
Nitrate
This extremely dangerous ingredient is very harmful for children as well as pregnant women.
Pesticides
Pesticides are extremely harmful for human body and can cause cancer.
Bromide
It can cause eye and mucous membrane irritation and can lead to odour nuisance.
Fluoride
Excessive fluoride can cause fluorisis, a disease in which excessive floride in the blood
causes bones to become brittle. Excess fluoride affects our teeth and bones both. Excessive
fluoride has even been linked to increased lead absorption. This means that if a child is
exposed to lead and has fluoride, he/she can suffer severe lead poisoning. (We all know about
the terrifying effects of lead poisoning.)
The Aava water plant is the first of its kind in India, it is a fully automatic, washable,
air-conditioned, hygienic plant.
The plant even adheres to pharmaceutical standards, and uses the “Clean Room”
technology (class 10,000) within the automatic filling, capping and sealing system
AO that Aava’s original mineral composition as well as the purity of the air and water
is maintained at all times.
Aava is also not put through any chemical procedures that can contaminate its
original purity.
The company’s fully automatic bottling unit currently produced one Lakh bottles of
water a day and another 1000 ‘Family-pack’ 20 ltr & smaller jars.
WEAKNESS
Aava Bottle water does not spend much on advertising while other company like aquafina,
bisleri, kinley spend crore of rupees in advertising and promotion. They give advertisement
in Newspaper, Magazine , TV. While there is no advertisement of Aava in TV channel, etc.
Due to this there is a lack of awareness of Aava bottle water.Aava become failed to
communicate with people. There is a big interval between two advertisement. They give
advertisement in different newspaper every time.
Top 5 Mineral Water Brand along with advertisers on TV during 2007 Year
Aava bottle provide its product only limited to Ahmedabad and Gandhinagar area and
provide only its institutional clients. We do not see its product out of this city. On the other
hand bisleri, Aquafina and Kinley are available at any place. Mr Mehta stressed on the
inevitability of skilled manpower so as to ensure an even quicker growth. Aava company
start from last two year so they are not much financially strong like bisleri, aquafina which
are present in the market for a long period of time.
Aava Water is originally natural mineral water but they are compete with their product with
packaged drinking water like bisleri, Aquafina, Kinley etc. So due to lack of proper
positioning they can not differentiate its product from other competitors. If they positioning
as mineral water, they can more successful in market and capture the market share.
Aava company can not maintain good relationship with its customer. They do not provide
goods to its client due to lack of distribution channel. Due to this problem company loose Taj
Hotel and IIM (Ahmedabad).
OPPORTUNITY
Untapped Market.
In India, the per capita bottled water consumption is still quite low - less than five litres a
year as compared to the global average of 24 litres. Bottled water market focuses only on
urban area but not focus on rural area because in past rural area people not that much
conscious about health and safety also the distribution cost was high. Today more than 50%
market covered in rural area through pouches so here a big opportunity for bottled water
player.
Change in lifestyle.
Bottled water shows the status among society and this reason increase the consumption of
bottled water product. Also rich people are increase demand of bottled water in market.
India is a second largest in population so it increases the demand of all products also people
are literate so they all drink safe water so here Bottled water player grabs this market.
1.7
1.61 1.59
1.6
Growth Rate
1.5 1.44
1.4 1.38
1.4
1.3
1.2
2004 2005 2006 2007 2008
Years
48.2
Growth Rate
48
47.8 47.8
47.8
47.6
47.4
2004 2005 2006 2007 2008
Years
800
726 710
700
613
600 2001-02
2005-06
500
2009-10(E)
404
400
300
285
221
200
120
100
33 48 74
2 9 20 9 17
0
Rich (Above High Income Consuming class Working class Needy (Below
115,000) (57,000 – (23,000 – (10,200 – 10,200)
115,000 57,000) 23,000)
ANNUAL HOUSEHOLD INCOME (IN USD)
As it can be seen from the above graph that, due to liberalization, privatization &
globalization (LPG), now in India many MNC’s & other private companies has created many
opportunities for employment in the country which lead to increase in annual household
income & it will have direct effect on the lifestyle of Indian people.
Awareness on health
People are more conscious about their health and safety so they not use tap water or any
other water which is available without any purification process. This factor affects the total
demand of bottled water market in India.
70 69 69
69
68
67
66 65
Age
65 64 64
64 63
63
62
61
60
2003 2004 2005 2006 2007 2008
Year
Commercialization
Indian government focus on tourism places and also invite tourist of foreign and all
foreign people use bottled water, government ban on pouches water for reducing
pollution of plastic it increases the market of bottled water. Above all factor increase
tourist.
Market Growth
In 2011, the market is forecast to have a value of $86,421.2 million, an increase of 41.8%
since 2006 and the market is forecast to have a volume of 174,286.6 million liters, an
increase of 51% since 2006. Market is growing at 60% CAGR.
140 129.9
112.9
120 60% CAGR 97
100 82
80 68.15
55.6
60 44.5
40
20
0
2002 2003 2004 2005 2006 2007 2008
Research from Zenith International highlight that growth in volume will more than double
growth in volume will more than double growth in value within the next five years. So while
bottled water production in India is set to climb by a whopping 70% to around 3 billion liters
by 2011, the value increase is limited to a rise of only 35% to $880 million. Allocation for
Rajiv Gandhi Drinking Water Mission is proposed to hike to Rs.73bn from Rs.65bn.
Urbanization.
The fact that most of this population growth will be accounted for by urban areas will add to
the existing water crisis in the cities. By 2050, 48% to 61% of India's population will be
living in urban areas.
Before few year people use tap water in cooking but now people use bottled water or purified
water in cooking it increase the use of bottled water.
There are 445 million middle income earners and they earn $2000 - $4000 annually and
influence of foreign media play an important role in increasing demand.
3800
4000 3400
3100
2900 2700
3000 2540
US $
2000
1000
0
2003 2004 2005 2006 2007 2008
Years
Source:www.indexmundi.com
It shows GDP on a purchasing power parity basis divided by population. It is increasing year
by year. So that people can purchase more amount of goods and more disposable income.
62
60 59.3
58
56.1
56
54
52
1997 2002 2007
In above chart we can see young people in India is increasing rapidly. Earlier the young
working peoples are 56.1% out of total population and nowadays it is 62.3%. Young people
out of total population. The average young age in India is 25 upto year 2025. it shows a great
opportunity for water bottled water industry.
The two year old company has been valued at around of Rs.180 Crore by Ernst and young.
Danone of Evian Fame has already signed a non disclosure agreement and mulled a joint
venture with Aava. Invitation galore have poured in for Aava for equity participation and its
pristine water to bottle for other companies. Evian mineral water in India through a
distribution tie up. So Aava get benefit of good financial position of Evian and brand name of
company.
Aava is only one natural mineral water in western region. Other brand which provide natural
mineral like Himalayan etc. they are in south and east region. So they can take advantage of
its product. There are 10 natural water license in India, most of them based in North.
THREATS
Government interferences
The Govt. has also got into the action by imposing stringent legislations regarding
wastewater treatment. There is also a compulsory requirement of Environment Clearances
from Pollution Control Boards at the Centre and the states. The recent Supreme Court
directive to move polluting units out of Delhi is also likely to act as an impetus to future sales
of water treatment equipment. Also at the same time, many existing treatment plants would
need to be replaced or upgraded to meet with more stringent standards.
Pollution norms
Government and NGO try to stop pollution and define criteria for pollution. In bottled water
industry major pollution is bottle & water. When the government make strict norm then it is
threats for producer to maintain all norm.
(Source:-www.bottledwater.org)
Substitute
The bottled water market is growing at the rate of 40% per annum and is expected to cross Rs
1000 crores within a few years. This segment is one of the most developed ones in India.. It
has been estimated that there are around 200 brands of bottled water in India, of which 80%
are local brands.
Aava received a score of 2.15 in the external factor evaluation. This means that they are not
currently well equipped to take advantage of opportunities in the external environment, nor
defend against potential threats. Of the key external factors, the opportunity of health
conscious trend in lifestyles got the highest rating because this has become a huge market
which most major players in the industry are already tapping into with their diet products.
Bisleri , Kinley had the backing of a massive marketing and advertising campaign that
clearly communicated their position and proposition to consumers. Aava’s weak branding
choices regarding its natural mineral water reflect this ineffectiveness in communicating to
end-users. This mistake coupled with ineffective marketing has put Aava in this situation.
Other Cost
Preform – 1.80 Other Cost:
Electric and labor – 0.60 Treatment cost:0.25
Corrugated box – 0.80 Carton cost:0.50
Transportation cost – 0.15 Transportation cost:0.25
Treatment cost -0.10 Total cost (Excluding Labor, Marketing, and
Selling and marketing expense – 0.33 Tax):4.25
Selling Price – 15 Rs. Selling Price :12
Here Aquafina has greater advantage of low cost as compared to Aava. The main cost of
packaging and bottle are very high as compared to other. But due to this company sustain in
the market. Aava company achieve best packaging bottle water award 2007.
Branding and marketing of bottled water is as essential as water for the survival of the human
body. The traditional marketing tools include site advertisement, TV and print media
advertising and brochures. This study allocates 10% of the revenue for advertising and
promotional purposes.
Aava has a huge logistics advantage. Its only licensed mineral water in the West, South and
central India – others being in the Himalayan range. Pan India distributions top our list of
priorities. Aava has an efficient distribution network to fill the vacuum for good natural water
felt in south and West India.
Apart from the traditional marketing tools, this study suggests to focus more on other
marketing magnets that include interactive marketing, interactive marketing may include
educating the general public about the importance of water and its daily consumption
requirements for human body through the participation in seminars and in general public
gatherings (e.g. College and University gatherings).
One of the marketing options is to sponsor public events like cricket matches or hospital
campaigns, distributing free brochures about water and its daily consumption, water
requirements in different age brackets. The interactive marketing may be designed through
seminars and workshops about the daily human consumption requirements and diseases
originating from the lack of pure water.
Overall marketing strategy may change with the change of target market. A market research
study is recommended to design the different dynamics of marketing before launching the
new brand.
Marketing expense has been included in the total project cost and it has been estimated
around Rs.5 million. The entrepreneur may decide to increase or decrease the amount of
marketing expense depending upon this choice of promotion activities and type of media
used. Following table gives the breakup of the marketing expense.2
25 2006
20
2007
15
10
5
0
January
July
August
November
February
June
May
March
April
September
October
December
Months
In the first phase of the launch of the new brand, availability will also play the key role in
attracting the customers. It is suggested that the entrepreneur decides the availability of the
product at A-class, or B-class, or C-class retail outlets or mass availability of the product
(aggressive marketing). Since, the perception of the product is also directly related with is
availability so it is suggested that the strategy for the availability of the product be designed
according to the target market and the perception and positioning the entrepreneur is
targeting.
Aava started from last two years. So it takes some time to take the advantage of its natural
mineral water. Nowadays, Aava can not spend much amount on advertising like Other
companies like Bisleri, Aquafina, Kinley etc.
4.5.2 Pricing
The pricing strategy should be in line with the going rate market prices of the different local
brands. Since a new brand has to face a lot of competition from the market, it is suggested
that the price ceiling should not be crossed whatever price strategy be adopted. Aava natural
mineral water price is low as compared to other natural mineral water company like
Himalayan. Himalayan’s price on one liter is 20 Rs. And on the other hand price of Aava
mineral water is 15 Rs. Per liter.
Product packaging and presentation is one of the main dynamics, which control the flow of
target customers towards the product. Packaging should be inline with the industrial norms.
Packaging may also vary with the understanding of the target market. It is suggested that the
bottles of 0.5 liter and 1.5 liter capacity should be used. Bottles should be clear. The bottle
should give a reflection of light sky blue color, which is considered a natural symbol of the
water. This color also adds a tinge of purity. The water should give a shiny and a glossy
reflection. The opening of the bottle should be large enough to accommodate outflow and
inflow of water. The bottles should be placed in special racks and strand meant for bottled
water at retail outlets, which will be having a unique color and a unique design. The color
and the design will create a positive perception for the new brand. The wrapper of the bottle
is suggested to be on four-color printing and should have the following information in
addition to the logo of the company.
If Innovation was to get a distinct and newer description, the credit would must go to Aava
Natural Mineral Water. It is the first and the only Indian Finalist and Winner of the Silver
Award at the Bottled Water World Awards, held recently in Mexico. On the Aava bottle water
there is company description, Manufacturing Date, Size, ISO 14001-2004 mark, License
Number, Price, Batch Number etc
.
4.5.4 Contracting With Institution
All players do contract with Multiplex, Restaurant, and conference hall and get success in
capturing market for bottled water. Aava Company make contract with ICICI when England
come to India for One-Day series.
LIST OF CLIENTS:
Implication:
Aava received a score of 2.40 in the competitive profile matrix. This Low figure is
representative of Aava’s inability to leverage its competitive advantage of unique tasting
flavors successfully. This inability stems from the company’s lack of effective
communication of their offering and its uniqueness. This is one of the major mistakes
companies make when following a differentiation strategy, they assume that consumers will
recognize the difference that they offer. This is exactly the mistake that Aava has made.
The areas where Aava has taken a beating are in market share and distribution. From a
strategic viewpoint however, distribution is the area which Aava should target in the short run
if they hope to achieve any type of success. Advertising programs that are basically demand-
building exercises are useless if the product has little market reach and is not meeting the
created demand. Therefore, before concentrating on marketing activities in the hopes of
increasing market share, Aava needs to strategically outsource their distribution setup to a
distribution company such as bisleri, Acquafina, with the expertise in how to effectively
increase a company’s reach into the market. In due time the company should build up its own
sales teams so as to make distribution a core competency of theirs. Yet they should trust an
established distribution company in the short-run to improve its product availability.
share
Parle Bisleri 40% 1.60
Coca Cola Kinley 25% 0.63
PepsiCo Aquafina 10% 0.25
Tata Himalayan 8% 0.20
Aava Aava mineral water 0.15% 0.00375
(Source:- http://www.gits4u.com/water/water16.htm)’
BCG MATRIX
From the above BCG matrix, we can identify the situation where Aava will plot in the
Question mark. Under this position, the bottled water is in the growing market but have low
market share and still buyers yet to be buy it. The demands will very high but low returns
due to low market share. Due to late entry Aava have to face this kind of problem.
Aava should take the advantage to get the market having the special natural mineral water
and they need to increase their market share quickly. The best way to handle the question
mark situation is to invest heavily in the business. As Aava is natural mineral water, they
must have to focus on positioning strategy. They had given the distribution ship to Trader’s
Inn but if possible they should focus on their own distribution channel.
Mr. Mehta’s expansion plan is “A Pan – India distribution tops our list of priorities. Aava is
keen that it reaches all our customers, especially since it has an all India presence due to
contracts with Air-India, Spice Jet and other prestigious clients. Aava is looking forward to
put in place an efficient distribution network to fill the vacuum for good natural mineral
water felt in South and West India.
Now due to merge with Evian they get financial support and brand name of Evian. They
make agreement of Rs.20 Crore.
Kinley
Bisleri Aquafina Aava Himalayan
High
Industry Attractiveness
6.7
Medium
3.3
2 Hold/Maintain 3 Harvest/Divest 3 Harvest/Divest
Low
6.7 Strong Average Weak
3.3
The GE Nine Cell matrix is the combine of competitive strength and industry attractiveness.
For this case industry attractiveness is very high but the competitive position is very low as
compared to other player. That’s why Aava is in the average competitive position. Only due
to product quality and the packaging style they are ahead of Himalayan. For recommendation
the Aava should focus on penetration and brand awareness. Ultimately they should invest in
distribution channel and advertising etc.
COMPETITIVE ADVANTAGE
Product Quality
“Aava” has perfectly balanced minerals nothing less nothing more."
.
Acidity Meter as tested on INDIKROM papers (strips) from GlaxoSmithkline
Pharmaceuticals Limited.
----» Non -
«------------------------- Acidic «---- Neutral
Acidic-------------------------------------»
2 4 6 7 8 9 10 10.5
Aquafina Oxyrich Himalayan Aava
Kinley -
Bisleri
Home Filtered
Water
Source: www.tradersinn.com
In a world where every alternate food item claims to be fortified, nothing about Aava is
artificial. Nature has endowed Aava with a unique mineral composition that is beneficial to
health. Aava Natural Mineral Water is directly obtained from protected natural sources,
thus ensuring that the water is naturally pure. It therefore need not be put through all the
chemical and other purification processes that Packaged Drinking Water necessarily goes
through. Aava Natural Mineral Water is only natural water provider in western India.
Market share
The above table shows that Parle’s Bisleri is the market leader and pioneer in bottled water
business and it has 40% market share, Coca Cola’s Kinley is a challenger and having a 25%
market share, Pepsi’s Aquafina has a 10% market share and follower in bottled water though
it is a multinational company. Tata’s Himalayan has a 8% market share and Shelpee’s Aava
mineral water has 0.15% market share. Aava has very meager market share because of severe
competition from the national players.
Brand Image
Brand image is poor because of new entry (just 2 years). It has no brand heritage and
promotional activities are deprived.
Product life cycle is an introductory stage so it will take time to gain competitive advantage
from this.
FINANCIAL STRENGTH
Capital Available:
Aava take the loan from the Bank of Baroda for running the operation activities and now
company will going to merge with Evian bottled water of France to make contract of
20crores, so company has sufficient capital but compare to competitors, they weak. But for
future growth they need more capital.
Aava can easily exit from the market because they do not make high investment but it is very
hard for other competitors like Bisleri, Kinley etc, because they are doing business from long
period of time. They make a huge investment in water business.
In this bottled water industry company has to follow the government norms, quality
standards, minimum wage act and also from the new entry. In this industry quality is the most
important factor. And Aava is number one in quality. If company can not maintain this quality
in future, they can face a lot of problem.
Return on investment
The main attractiveness of this industry is high profitability. The company’s production cost
of one liter bottled water is 6 Rs. And its selling price to distributor is 7.50 Rs. of one liter
bottle. It means there is 25% Profit.
INDUSTRIAL STRENGTH
Barriers to entry
Product is such that differentiation is not possible and investment is low to start the business
so entry barriers is less.
Growth Potential
Industry is in growth stage and market is untapped. Vast opportunity is there and industry is
growing at 38%.
Access to Finance
The finance is easily available sue to high profitability of business. so it is good to start
business.
Consolidation
There are 80% markets is unorganized and so there are many consolidations occur in the
industry.
ENVIRONMENT STRENGTH
Inflation
There is not much effect of inflation on bottled water business because water is a generic
product and primary need of human being.
Technology
It creates opportunities for new products and product improvements and of course new
marketing techniques- the Internet, e-commerce.
Demand Elasticity
Demand of bottled water is depend of the life style of the people, health conscious people,
and literacy level.
Taxation
The company face to pay 30% tax on mineral waters and aerated waters and excise duty is
8% and there is 0-4 % VAT on bottle water industry.
ASSUMPTION:
- By definition, the CA and IS values in the SPACE matrix are plotted on the X axis.
- CA values can range from -1 to -6.
- IS values can take +1 to +6.
- The FS and ES dimensions of the model are plotted on the Y axis.
- ES values can be between -1 and -6.
- FS values range from +1 to +6.
This particular SPACE matrix tells us that Aava natural mineral water company should
pursue a competitive posture. Aava natural mineral water company has a competitive
advantage but it has a limited financial strength. It needs to use its internal strengths to
develop a market penetration and market development strategy. Aava Natural Mineral Water
will maintain and enhance competitive advantage by product improvement and
differentiation, improve marketing effectiveness, and enhance financial resources. This can
include product development (planning to launch 200ml water for especially for aviation),
integration with other companies (Aava natural mineral water going to merge with Evian),
acquisition of competitors, and also concentrate on its main natural mineral water product.
A value chain is a chain of activities. Products pass through all activities of the chain in order
and at each activity the product gains some value. The chain of activities gives the products
more added value than the sum of added values of all activities. It is important not to mix the
concept of the value chain with the costs occurring throughout the activities.
Filtration
Packaging, Labeling
& Dispatch
Trader’s Inn
Retailer
Final User
PRIMARY ACTIVITIES
Inbound logistics
It is the business process that defines the movement of materials from suppliers and vendors
into production processes or storage facilities. The water source is coming from the Aravalli
range at the Taranga. The pure water is provided with the spring of taranga and having the
appropriate composition of the required natural mineral water. They also have to take care
about total material quality and also transportation information is required to manage well.
The process include how to process the water the from the different kind of purification
process just like filtration and all kind of purification. Here, the main advantage of the Aava
natural mineral water is of no process of reverse osmosis(RO) and ultra violet(UV) because
the process to clean the water with the help of chemical and related ingredient which is
somewhat harmful to the human body the process includes:-
There are various processes employed to purify the water and various combinations of the
processes mentioned below are incorporated to ensure that final composition of the product
confirms to latest BIS norms. Apart from the 20 long years of natural purification, just to be
triply sure, Aava is put through certain other purification procedures:
This is to remove all suspended matters and turbidity from the raw water.
Micron Cartridge filtrations ensure that the water has absolutely no suspended solids. It goes
through Absolute Filtration to remove the minutest bacteria and microbes if present in the
water, although this is more a precautionary measure.
And yet to be absolutely certain, that the natural mineral water you receive is pure and fittest
for your consumption, the water is subject to 77 different chemical, microbiological and other
tests.Aava is Natural Mineral Water originating from the holy hills of Taranga, a part of the
world’s oldest mountain range, the Aravallis.The number of purification processes water goes
through, does not necessarily show how pure it is. It does however imply how poor the
quality of the raw water may be. Aava does not need to go through certain processes that
Purified Drinking water is put through such as: Activated Carbon Filtration because the water
is naturally organically stable and healthy and odorless.
Absolute Filtration
Removes the minutest bacteria and microbes, if present in the water. Although is more
precautionary measure. The water is passed through international systems that certify it as
being 100% microbiologically clean. The water is put through 77 different tests before being
bottled to ensure that it is free from harmful chemicals or microbiological organisms. Aava
does not need to go through certain processes that Packaged Drinking Water is put through,
such as :
Though BIS has set a vide range of parameters to confirm to BIS-13428: 2004, and BIS :
14543:2004, a palatable and safe water poses a big challenge for water treatment
professionals due to varied parameters of bore well across India , since these are the major
source of raw water for the industry.
The water treatment plant focuses on the removel of microbial contaminants that cause
typhoid, dysentery, and cholera epidemics. The treatment results in offering the consumer
with absolutely safe ad pure drinking water.
Though BIS has not put any restriction on manual filling, humid Indian conditions makes the
product susceptible to external contamination due to unhygienic conditions. Therefore,
automation in post processing stage is strongly recommended. Monoblock machines, capable
to rinse, fill & cap covered in one single enclosure is recommended as this ensures quick
packing hence less chances of contamination through air.
Monoblock machines offer small footprints and quick transport distance between filling and
closing for highly secured production. As they outperform functions that normally require
employment of several other machines, Monoblock machines are effectively crafted with
modular designs that efficiently help to change over to different functions, product sizes and
shapes. The frequency converter helps to control the production speed.
Since PET has static charge, it attracts lot of contaminants from the atmosphere and thorough
rinsing is required. As jet rinsing ensures proper cleaning of PET bottles, the risk of external
contamination is minimized. These machines reduce the chance of product contamination by
capping containers as soon as they are filled. Direct transfer also reduces the chances of
spilling. This speeds up entire process giving the consumer absolutely pure water.
Date of manufacturing
Batch number
Best Before
After coding the bottle has to pass through shrink tunnel, box strapping machine for dispatch
to the market.
Outbound logistics
It is the business process that defines the movement and storage of products from the end of
the production line to the end user. It includes the bottled water tank is filled with the product
and it is dispatch to the market. In this process there are two types of the clients where they
need to be reached that is individual customer and institutional customer. So the channel of
distributing the product is different from the both the way. Here, finished product will be
marketed through the distribution ship of Trader’s Inn and after that they will provide bottled
water to the retailer and then final user. Total information of the transformation will be their
to reach the target.
Same way the marketing and selling is done as above said that is from both the way
individual customer and institutional customer. They have also marketing manager and sales
staff which is looking after entire marketing and sales department. Here they are providing
their product advertisement in the news paper but the comparison they are lacking in
promotion. Demand forecasting and fulfillment of the demand is possible only due to proper
information but they are also lacking in this part.
Services
Services includes after sales service and replacement services. But in the case of Aava bottled
water they are not providing any replacement services. But they had not faced any
replacement kind of problem in their entire three year. Also they are continuously checking
the product quality by testing. This is nothing but the social responsibility which is looking
for the health of the society.
SECONDARY ACTIVITIES
Firm infrastructure
The company is situated at Hansol, Ahmedabad. The firm is fully equipped with 10
computers, one lab, 10 Rikshaws for distribute.
Salary Structure
Technology development
The Aava water plant is the first of its kind in India, it is a fully automatic, washable,
air-conditioned, hygienic plant.
The plant even adheres to pharmaceutical standards, and uses the “Clean Room”
technology (class 10,000) within the automatic filling, capping and sealing system so
that Aava’s original mineral composition as well as the purity of the air and water is
maintained at all times.
Aava is also not put through any chemical procedures that can contaminate its
original purity.
The company’s fully automatic bottling unit currently produced one Lakh bottles of
water of water a day and another 1000 ‘Family-pack’ 20 ltr & smaller jars.
Procurement
They bring water from hills of Taranga, apart of the world’s oldest mountain range,
the Aravallis.
They purchase filtration machine from Hi-Mec Machine, perform from Reliance
Industries Ltd, Jamnagar, Parle International, chemco and also from 3- start Alasca
net.
SHARED VALUE
Company Vision:
“To be the best and leading provider of natural mineral water in India, and by continually
challenging present conventions and always staying a step ahead of the competition.”
For achieving this vision how other factors are useful like structure, style, staff, skill etc.
ORGANISATIONAL STRUCTURE:
The firm needs to tear-down and restructure an organizational hierarchy which has not
‘evolved’ on a ‘need to’ basis, but instead, erect one that is ‘strategically structured to enable
the organization to best carry out it’s Tactical and Operational Level operations in accordance
with the Strategic objectives of the firm.
Person Position
Mr, Behram Mehta Co- Founder of Aava
The firm needs to tear-down and restructure an organizational hierarchy which has not
‘evolved’ on a ‘need to’ basis, but instead, erect one that is ‘strategically structured to enable
the organization to best carry out it’s Tactical and Operational Level operations in accordance
with the Strategic objectives of the firm.
Aava must restructure it’s inflexible and highly unorganized organizational structure, into a
meticulously planned, well coordinated, supportive more flatter hierarchy with lesser
hierarchical levels and comparatively greater span of control, encouraging more delegation of
authority, leading to greater job satisfaction, enrichment and career development, paving the
way to a Learning Organization. information, Incentive, Control & Strategic Plan.
The elements of Culture and Leadership Style stand to be of prime importance in the success
of any organizations intended Strategy and consequently is one of the primary deciding
factors in whether or not the actual implementation of the Intended Strategy is a success or
failure. For these are the Direction Givers, the Guiding lights that escort an organization to its
ultimate intended goal. Any organization, whether it wishes or not, develops a culture and
this culture in actuality shapes the future of the firm. Since this culture constitutes of people’s
beliefs, behaviors and attitudes, like isolated individuals these too may be conflicting and
destructive setting in motion a culture that pulls the organizations distinct functions in
opposite directions. A destructive culture will, in simple words, put the organizations own
forces at war with each other. Therefore, we are of the belief that a cultural revolution is a
‘must’ for Aava to revamp itself in the slightest of ways. All restructuring fits, whether
involving Functional or Administrative elements are dependent upon the ‘people’ that will
carry them out and if these people are not geared towards a fair, constructive, healthy,
motivating and enriching culture, the best of developed strategies will fail in the worst of
ways. Also, one of the most crucial deciding factors when it comes to shaping culture is the
aspect of ‘leadership’, because it is this Leadership that is responsible for setting in motion
the aspirations, the benchmarks of excellence. It is this Leadership that is responsible for
igniting emotions and creating the drive in the People Force of an organization. It is this
elemental phenomenon that fires up an organization’s engine and sets it on the path to
constructive competitiveness, synergistic activities and ultimately gives it a competitive
advantage like no other. It’s very own core being. It’s people.
STAFF
The Human Resource Team will be responsible for using the most modern techniques to
devise the most appropriate Incentive plan, to mobilize motivation throughout the ranks of
the Manpower force because incentive and management systems are among the most
important sources of influence available to the management to mobilize motivation and push
the force towards the achievement of strategy. No less important is the very selection of
managers who share and possess skills that are needed to achieve the intended strategy, yet,
this process of selection seems deceptively easy in theory when in practical it is equally
difficult because there are nearly always pressures not to fire or demote people and to
promote those that are ‘next-in-line’ rather than those that are more capable of carrying out
the needed task at hand. Similarly, incentive compensation typically focuses on the short-run
rather than strategic performance. For these reasons, we believe that the firm at this point in
time requires an Entrepreneurial Manager. Equally essential is putting in place, ‘checks’
throughout the hierarchal levels, which are capable of quickly identifying any and all
compromised operations and pin-pointing the exact location to rectify the problem while also
laying responsibility for the compromise where it belongs, holding responsible that are
rightly responsible. This must cascade through each and every hierarchical level with no
exceptions, making any negative elements like blame shifting very difficult to do. There are
50 people staff in Hasol Plant at Ahmedabad including Account team, Microbiologist,
Gatekeeper, manager etc..
SKILL
If Innovation was to get a distinct and newer description, the credit would must go to Aava
Natural Mineral Water. It is the first and the only Indian Finalist and Winner of the Silver
Award at the Bottled Water World Awards, held recently in Mexico. On the Aava bottle water
there is company description, Manufacturing Date, Size, ISO 14001-2004 mark, License
Number, Price, Batch Number etc. The key to good design lies in making it attractive.
Aesthetics and functionality played a crucial role in our effort at zeroing in for the perfect
design for the Aava bottle water. Aava bottle launch with unique cup and it is the first time in
India, meeting the need of the elderly and young people who may it find difficulty to drink
from the bottle.
The Himalayan waters PH level vary form 7.7 to 7.3 which brings them dangerously close to
water becoming acidic, compared to that “AAVA” is constant at 7.93 making it absolutely
non acidic and liter.
It is a well known fact that calcium is good for bones but is also a know fact that excessive
calcium causes kidney stones and therefore across the world FDA’s allow upto 100 mg per
litre as the maximum permissible limit. “AAVA” at absolutely well balanced 20.8mg per litre
proves the superiority of being good and also being safe compared to Himalayans content of
calcium 49mg per litre.
In a world where every alternate food item claims to be fortified, nothing about Aava is
artificial. Nature has endowed Aava with a unique mineral composition that is beneficial to
health. Aava Natural Mineral Water is directly obtained from protected natural sources,
thus ensuring that’s the water is naturally pure. It therefore need not be put through all the
chemical and other purification processes that Packaged Drinking Water necessarily goes
through.
SYSTEM
Production system
The Aava Bottle Water plant is the first of its kind in india. It is a fully automatic, washable,
air conditioned, hygienic plant. The plant even adheres to pharmaceuticals standards, and use
the “Clean Room” technology within the automatic filling, capping and sealing systems so
that Aava’s original mineral composition as well as the purity of the air and water is
maintained at all times. Aava natural mineral water is untouched by human hands at all
points.
STRATEGY
Mission
To develop, implement and improve the Integrated water Safety and Quality Management
Systems in a culture of continual improvement which:
For that company is targeting to the health conscious people and they believe in its product.
Right now company is targeting. Company adopts differentiation strategy by good packaging
and through natural mineral water.
With the market just turning the bend to ‘saturation’, it is entering a phase of intense
competition with all major players diversifying their ranges and even businesses into a
versatile range of products to put in place more infantry on the battle ground to use to their
advantage in this war of brands.
Mr. Mehta’s expansion plan is “A Pan – India distribution tops our list of priorities. Aava is
keen that it reaches all our customers, especially since it has an all India presence due to
contracts with Air-India and other prestigious clients. Aava is looking forward to put in place
an efficient distribution network to fill the vacuum for good natural mineral water felt in
South and West India.
CHAPTER - 5
RECOMMENDATION
Aava has strength of natural mineral water and packaging style. So, they should focus on
their strength. But they are compete with package water. They have no clear positioning.
Distribution channel play an important role in this kind of product. But Aava does not
have sufficient distribution network. For selling and marketing Aava should improve their
distribution network and trying to cover other area of Gujarat.
Aava is not focusing on promotion as compared to other. They are giving advertisement
in news paper but they are not regularly giving ad in news paper. They use different news
paper every time. There is a lack of faith in people’s mind.
There is lack of Customer Relationship Management. Just like IIM Ahmedabad and
Grand Bhagwati etc many player relation ship broken due to improper customer relation
ship management.
CHAPTER - 6
BIBLIOGRAPHY
BOOKS
Arthur A Thompson, A J Strickland, John E Gamble, Arun Kumar Jain: “Crafting &
Executing strategy Concept & Cases”, 14th Edition, Tata McGraw Hill Publishing Co.
Ltd New Delhi, 2006, Chapter No.3 “Analyzing a Company’s External Environment” Pg.
No. 45 to 85
Prashan Chandra, “Project”, 6th Edition, Tata McGraw Hill Publishing Co. Ltd New
Delhi, 2006, Chapter No.3 Pg No. 27 To 30
MAGAZINE
India Today
Brochure Of Aava Company
Advertising Express
Marketing Master Mind
Business today
Pitch
Business India
Facts for you
REPORT
WEBSITE
www.Indiastar.com
www.aavawater.com
www.tradersinn.com
http://www.epa.gov/
http://www.cfsan.fda.gov/~dms/botwatr.html
http://www.nrdc.org/water/drinking/
http://www.nestle-watersna.com, http://www.finewaters.com
www.indiastat.com
http://www.wateryear2003.org
www.financialservices.frost.com
http://www.bottledwater.org.au/scripts/cgiip.exe/WService=ASP0003/ccms.r?PageId
=5001
www.bottledwaterindia.web
http://www.hinduonnet.com/fline/fl2307/stories/20060421006702300.htm
www.aquafina.com
www.himalayanspringwater.com
www.ibwa.com
www.bottledwater.org
www.indiabudget.nic.in
http://www.indexmundi.com
http://www.indexmundi.com/g/g.aspx?v=71&c=in&l=en
World Economic Factbook
International Marketing Data and Statistics
Future Demographic
www.censusindia.gov.in
http://www.merinews.com/catfull.jsp?articleID=137322
http:/www.b2bindia.co.in/indianione.exchange/mineral_water_plant
www.ampac.com
www.greatwaternow.com
http://www.naukrihub.com/india/fmcg/overview/bottled-water
http://investorideas.com/IiI/News/080706.asp
www.fnbnews.com
http://www.merinews.com
http://investorideas.com/IiI/News/080706.asp
http://www.financialexpress.com/old/fe/daily/20001227/fst27023.html
www.waterstocks.com
World Consumer Lifestyles Databook
http://www.naukrihub.com/india/fmcg/overview/bottled-water
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