Bisleri's brand positioning stresses on pure, clean and safe drinking water

Competitiors: Nestle's Pure Life, Pepsi's Aquafina,

Coca-Cola's Kinley
French transnational-Danone's
Evian and Ferrarelle and Nestle's Perrier and San Pellagrino.
In August 2001, Kinley launched an ad campaign with the tag line Boond boond mein vishwas (Trust
in every drop). The ad focussed on trust in relationships.
Kinley's brand positioning of trust and purity would be maintained.

Bisleri has a very strong distribution network, which makes it reach out to almost all the region
in the country, company has about 350000 outlets across the country. The company worked on
its dual-distribution strategy to gain competitive advantage.

The rise of the Indian bottled water industry began with the economic
liberalisation process in 1991. The market was virtually stagnant until 1991,
when the demand for bottled water was less than two million cases a year.
However, since 1991-1992 it has not looked back, and the demand in 2004-
05 was a staggering 82 million cases

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 litre
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.

Bisleri uses the route mapping method, in this method the route of transportation and operation is
designed in such a way that it takes minimum time to transport the stuffs. Bisleri makes route
sheet along with the scheduled to make sure the things happen in an effective manner. Current
Bisleri manages 16 plants at 14 locations in different part of India to increase the availability of
product. Bisleri plan to open the 25 new plants till 2010 to increase the growth of 40%. So it will
decrease the supply time and make the product easily available. Bisleri decide to increase its
distribution network by 30%.

FROM "PURE AND SAFE" TO "PLAY SAFE"

WILL BISLERI EVER BE A Rs. 10 BILLION BRAND?

Parle Bisleri's aggressive marketing was aimed at making Bisleri a Rs 10 billion brand by 2003. However, new entrants into the
branded water market like Pepsi and Coca-Cola were equally aggressive in marketing their brands.

In August 2001, Kinley launched an ad campaign with the tag line Boond boond mein vishwas (Trust in every drop). The ad
focussed on trust in relationships. The 40 second commercial opens in a rural setting, showing cracked earth and a young boy
waiting for rain. A Kinley truck arrives and sprinkles water all over. The boy's face breaks into a smile. The ad also shows a father
running behind his son's school truck to hand over a Kinley bottle. Commenting on the ad, Pandrang Row, executive creative
director, McCann-Erickson, Kinley's ad agency said, "We were trying to show images where people had to trust the water they were
drinking, or giving their children. Kinley is the water you use when you need to be able to trust what you're drinking or giving
someone to drink."

In late 2001, Coca-Cola announced that it would enter the bulk segment where Bisleri was a dominant player. The 20 litre bulk
water packs would be targeted at institutional and home segment. Kinley's brand positioning of trust and purity would be
maintained. With the entry into the bulk segment, Coca-Cola aimed to garner a market share of 40% by 2002. Sanjiv Gupta, Senior
Vice-President, Coca Cola India said, "We are aiming to be either number one or a close number two within a year."

Analysts felt that with the cola giants shifting their focus to branded water in India, Bisleri would be the worst sufferer. Chauhan
was already planning to sell a 49% stake in Bisleri. However, according to some analysts; he would wait till 2003 when Bisleri was
likely to touch a turnover of Rs 10 billion, before selling out the 49% stake. Others felt that given the pace at which Kinley and
Aquafina were eroding Bisleri's marketshare, 2003 could be too late.

What remained to be seen was whether Bisleri's new positioning would help it to increase its turnover to Rs 10 billion by 2003.

QUESTIONS FOR DISCUSSION

1. Analyse Bisleri's strategy of shifting its positioning in the late 1990s. Do you think bisleri's new positioning will
help it achieve ambitious targets?

2. What is the market segmentation in branded water? How is the industry shaping?

3. With Pepsi and Coca-Cola entering the branded water market do you think competition will intensify in this market
and that water wars will replace cola wars? Where do you think Bisleri stands in this market?

:: Future Plans

Bisleri was the first to market bottled water in a totally virgin market and naturally people associate the brand with bottled
water. Now Bisleri is perhaps already ten steps ahead of its competitors and will endeavour to widen its gap in the times to
come.

Bisleri's brand positioning stresses on pure, clean and safe drinking water.

Some of the future plans to maintain the top spot that Bisleri commands in the Indian market are:

 New pack sizes in bottles and cups

 Increase the distribution network with an investment of over 200 crores
 Strengthen presence in traditionally weak areas by setting up 12 new bottling facilities at a cost of Rs. 150 crores

In 2000, some giant brands like Pepsi and coca-cola entered the mineral water industry with
a big bang. Bisleri now had a big threat of maintaining its market cap. While Coca-cola
introducing its brand ‘Kinley’ as a health care product, Pepsi projected ‘Aquafina’ as
something as pure as ‘Your own body’. Pepsi targeted the young generation and introduced
Aquafina as a fancy product to carry.

The ad campaign of Aquafina emphasized as ‘70% of your body is water’ and thus give your body the
purest water. The ad showed young vibrant models and created the atmosphere of youthfulness. Water,
Pepsi claimed, was no longer a simple beverage, but was something highly fashionable. They
complimented it by giving their bottles an attractive look. This soon caught the eye of the consumer. All
these factors made Pepsi the biggest upcoming competitor of Bisleri (whereas Kinley lagged behind the
race, showing a doctor advising a family to take Kinley for pure water – not a very attractive ad
campaign).
Aquafina, in fact, is the largest-selling bottled water brand in the US with a 12 per cent market share,
and India is the first country outside of the US where Aquafina is being bottled. Even in the US, the ad
talks of the percentage of water in our bodies, but the handling is a little more serious

They have also ruled out the possibility of catering to the bulk market, which actually constitutes 30 per
cent of the total bottled water market that stands at 70 million liters annually, and is growing anywhere
between 30 and 50 per cent.

Bisleri’s strategy is to build a direct distribution system at an all India level that means serious
investment In company owned trucks and carts, this would make it the largest fleet owner in the
country. Bisleri has around 80,000 retail outlets in the country with about 12,000 each in the Delhi and
Mumbai. It is intended to be increased this no. to 10,00,000 in order to expand brands reach.
The company will invest approximately Rs.200 cr. to procure 2000 trucks and hire same no. of sales
people . the company plans to have its own distribution network in places where it has its own plant

MARKETING MIX
The set of controllable tactical tools- product, price, promotion, and place (4 Ps), that the
firm blends to produce the response it wants, in the target markets.
The 4Ps
PRODUCT

The main challenge facing the company or any other player in this mineral water industry is
that there is no scope of invention and innovation in the product, which can be added as the
additional benefits of the product. It is just water after all. This is what the Indian customers
think of the bottled water. If we are talking about a product like television we can think that
the innovations could provide extra benefits derived from the product. For example other
than its core usage the product can provide for Internet facilities using conversion

PLACE
Place stands for the company activities that make the product available to the target customers. To
make the product available to the target consumers a good distribution network has to be there to
support the good quality of the product. Here in the case of the mineral water industry the distribution
network is the important factor in being competitive and the catch lies in making water available to
maximum number of places in the country.

PROMOTION
Modern marketing calls for more than just developing a good product, pricing it attractively, and making
it available to the target customers, companies must also communicate with their customers, and what
they communicate should not be left to chance.
A Company’s total marketing communications program- called its Promotion Mix consists of specific
blend of advertising, personal selling, sales promotion, and public relations tools that the company uses
to pursue its advertising and marketing objectives.

AQUAFINA
The advantage for Aquafina is that though there are over 300 labels of bottled water in the Indian
market, few can be called brands. It is necessary to remember that every product with a name is not a
brand; even Bisleri has become generic to this category.
It does not have any emotional values attached to it. So there was no difficulty for Pepsi in creating
space in such a market, which is completely different from the soft drinks market, where it will be very
difficult for any new player to find a slot. So the creative team at HTA virtually had an empty canvas to
work on. And it came up with a campaign that did have people talking. First, a series of teasers, followed
by a film that showed healthy bodies and youthful people and, of course, lots of water.
Although Aquafina is only available in a 750 ml pet bottle, the pricing, at Rs.10, is competitive. And it is
safe. In addition to the tamper proof seal, there is a reliable method of checking whether the bottle has
been refilled. The date of manufacturing has been written on the cap as well as on the bottle. Thus a
person who is refilling it would have to find a matching cap and bottle, the probability of which is very
low

COCA COLA- KINLEY

Coca-Cola joined the race by announcing the imminent launch of its own brand of water and, in the
process, putting to rest rumors of its so-called takeover of Bisleri. Kinley is targeting institutions.
Parle Agro’s- Bailley
Bailley the brand that is owned by Ramesh Chauhan’s brother Prakash Chauhan is very popular in the
southern part of India. Southern part of India accounts for 20% of the sale of the whole water market
industry. Bisleri would have a tough competition from Bailley since the company plans to spread its
presence in that part of the country. Another thing that makes the competition difficult for the company
is the price at which it’s competitor is offering the product. Like Bisleri it also gives the 1 lt. For Rs.10.
The only strength point of the company, which it can capitalize, is it’s generic name. And also the
company would have to enter that market with a strong distribution base. We know the fact that Bailley
has grown at a rapid pace using the route of franchising, which Bisleri has not adopted as yet. This is
another point, which the company would have to take care of to face the competition.

It is also changing its production strategy and shifting to a 10-hr production schedule with sudden
increase in demand planned to be met by additional production.
Bisleri has planned to expand its operations by investing Rs.60 crores in the upgradation of facilities. The
120-bottles per minute (BPM) capacity of the 16 units across the country will be increased to 240 BPM.
Conscious of the environmental implications of its PET bottles, the company is to set up recycling plants
at Delhi and Chennai, each with an outlay of Rs.50m. These will process 500 kg of PET per hour. The
processed material will be an input for polyester yarn manufacturers. In centers other than Delhi and
Chennai, the company will set up crushing units to crush the used PET bottles.
The company's expansion plans will see its water bottling capacity go up from the present 400 million
liters to 500 million liters. Parle Bisleri Limited (PBL) is planning to invest Rs 200 crores to increase its
bottling capacity and double its turnover. The expansion will also increase the number of company's
bottling plants from 16 at present, to 25. The company will set up all the new plants as green field
plants. It doesn’t have any intentions to acquire any existing plants.

RECOMMENDATIONS

 Advertisement to build the brand image that will provide the required ground to establish the
authenticity to the product.
 Display of hot and cold dispensers and bottles at places like hotels, clubs and airports where upper
class group visits, as they are the potential customers. Place like departmental stores, petrol pumps and
super bazaars can also be considered.
 The company should organize camps at various part of the city also road show to bring about the
difference between mineral water and filter/purified water and to tell the people how mineral water is
more hygienic than filtered water/purified water.
 To aware people the cost benefit analysis to the customer of how the mineral water would cost less
and benefit more, because people using purifier system cost too much

Why kinley overtook bisleri:

Within 25 months of its launch, Coca-Cola India's bottled water brand, Kinley, has displaced Bisleri from the
number one slot in the country, claims a national retail stores audit by ORG MARG for the period ended July 31,
2002. Coca-Cola’s Kinley has become the number one packaged drinking water brand in the country in the retail
(500ml-2 litre) segment. Coke’s Kinley has overtaken once-popular Bisleri to bag the number one position.
The latest national retail stores audit by ORG-Marg (July 31, 2002) has put Kinley’s market share at 35.1 per cent
against Bisleri’s 34.4 per cent, a Coke release said. Kinley sells in four sizes—500ml, 1 litre, 1.5 litre and 2 litre.
On Kinley’s steady growth, Coca-Cola India deputy president Sanjiv Gupta said, “Quality and easy availability have
made Kinley a popular brand. A strong marketing and distribution network of Coca-Cola has made the easy
availability of Kinley possible. It was not easy to displace the country’s number one water brand for two decades in
just about two years)

By 2001, the mineral water market was worth Rs 10 billion and was growing at the rate of 40% a
year. Kinley and Aquafina made inroads into the market and by March 2001, Kinley had a 10%
market share, Aquafina had 4% and the share of Bisleri had come down to 51%. By June 2001,
Bisleri's market share was 47% and Aquafina and Kinley together accounted for over a third of the
market.
In 2001, both Kinley and Aquafina were making huge investments in bottling plants and
distribution. By 2002, Coca-Cola India planned to double the number of water bottling plants to 16
and Pepsi announced that it would add seven more plants to the existing five. In contrast, Bisleri
had only 15 bottling plants and three franchisees. Kinley had 500,000 outlets compared to Bisleri's
350,000. Analysts felt that Kinley and Aquafina had an edge over Bisleri because of their strong
distribution network.