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Associate Professor IBA-JU
Dr. Mohammad Baktiar Rana
The objective of this discussion paper is to provide an overview of the bottled water market situation. Bottled water is the most dynamic market of all the food and beverage industry. The term bottled water doesn‟t ref er to one single product and the same designation can be used to qualify different products, depending on countries. Our target market is all age group because of the nature of the product. In this comprehensive launch of the mineral water our product will be provided in different sizes according to the market demand. We adopted the penetration strategy. The price charged for products and services are set would be comparatively lower than other companies in order to gain market share. Once this is achieved, the price might be increased depending on market situation. Then we planned the distribution network of the product by our sales force comprising on 20/22 persons including one head of the team in beginning in Dhaka city. We established our head office in Dhaka. And the channel to market the product we will use two channels in which one is distributor and the other is retailer.
“To assure the purest quality of drinking water for every person in Bangladesh.”
We will develop our business into a successful enterprise by investing in people & technology. We believe that integrity is the key to gain the respect of the employees and the consumers throughout the industries. A strong base from which we can build bottled water project into a successful enterprise can only be built by the joint effort and the commitment of our consumers, distributors, suppliers and employees.
To assist, promote, encourage and support the interests and welfare of the water industry in all of its phases. To promote harmony and co-operation between contractors and scientific agencies relative to the proper development and protection of underground water supplies. To make continuous improvement of the quality of products it delivers. To build strong relationships with our suppliers to secure a preferential supply of the best quality products. To provide the pure bottled water.
“H20; The beverage you need most”
One cannot think about life without water. We are blessed with adequate natural resources of water but increasing population, alarming rate of global warming and rapid industrialization and lack of adequate and improved management of the water
supply systems resulted in the increased rate of water consumption, wastage of water and deteriorating condition of the water supply networks and the result is, scarcity of water. The Water shortage around the world and particularly in the developing countries has opened new doors for bottled water Industry. Bottled water is sold in a variety of packages right from 200 ml pouches and glasses, to 330 ml bottles, 500 ml bottles, to one-liter bottles and even 20- to 50-litre bulk water packs. In terms of cost the bottled water business in India can be divided broadly into three segments, premium natural mineral water, natural mineral water and packaged drinking water. It is obvious to found the bottled water manufacturer in metro cities though it might be running only in one room or shop, but it‟s surprising to know that at present in many medium and small villages and even in some of the prosperous rural areas you will find the local manufactures of bottled water and local brand of bottled water laying with the well-known brands on the same shelf. Almost all the major international and national brands water bottles penetrated in the Bangladeshi market and are available at right from the malls to railway stations to bus stations to multiplexes to grocery stores and even at panwala's shop. It has penetrated so deeply in to market and now it‟s become very common to consume bottled water whereas before few years it was considered as the rich people's choice and fashion to consume bottle water. Thanks to low pricing and aggressive marketing strategies adopted by the multinationals. Some surveys show that truck drivers on highways form a major chunk of bottled water drinkers. Penetration in rural areas is another significant factor that is likely to play a key role in the development of the bottled water trade. If we compare the growth and status of Bangladeshi Bottled Industry with that of Western or Asian market, we are far behind in terms of quantum, infrastructure, professionalism & standards‟ implementation. In comparison to global standards Bangladesh‟s bottled water segment is largely unregulated. Safe water is rated with a different yardstick in different countries. In Bangladesh, the aspect has been overlooked since long. Bangladeshi consumers tend to believe that any bottled water is safe water while this may not be true. However there is no need to be disappointed looking at the global bottled water industry because our industry data shows that the Bangladeshi bottled water industry is and already started as one of the most booming sectors in Bangladesh. H20 bottled drinking water
To take advantage of this expanding market for drinking water, H20 Bottled Water has been established to provide home and office delivery of bottled water to Bangladesh. After months of extensive industry and market research, the company has developed a solid marketing plan to enter the market for bottled water. H20 will generate revenue as a result of the rental and sale of water coolers, as well as for the delivery of the three types of water: pure spring water, distilled drinking water, and purified drinking water in 5-gallon bottles.
Segmentation and Targeting Our country‟s demand for bottled water is growing rapidly every year. Bangladeshi customers are increasingly seeking convenience in meeting their recommended daily intakes of minerals and vitamins. Bottled water seems to offer a solution for many consumers across the market. Segmentation is the process of dividing all actual and potential consumers in the product category into groups of like people and where each segment display different needs/wants, characteristics and/or behavior. There are many segmentation variables when segmenting the market these includes Demographic, Geographic and Psychographic. Consumers Consumers who purchase „H2O‟ water are those who are socially aware and have a high to mid-range income and are willing to purchase the bottle of spring water which is at a price of the middle to higher ranged end of the bottled water industry. Those consumers that will purchase „H2O‟ water are those who are socially aware and want
to give back to the community knowing the meaning and image behind the project of „H2O‟ water. Demographic Segmentation For the project of „H2O‟ water demographic segmentation is the most appropriate for segmenting the target market. It refers to identifying variables amongst a group which include age, gender, family-size, family-lifestyle, income, occupation, religion and nationality. Variable Age Sex Family-Size Income Occupation Typical Breakdown 14-35 years Male, Female Young, Singles and Couples Middle to High range disposable income Young professionals, Students(both high school and university students) High school, University and Graduate
A sample survey conducted for household characteristics and income in 2011-2012 consisted of 800 people. The survey showed that middle income households contained more people on average than high income households but contained fewer employed persons. Across the Bangladeshi population the mean equalized disposable income per month across all working age groups was divided into 3 category- Low income, Middle range income and High income. Low Income- 5000 Tk. per month Middle Income- 30000 Tk. per month High Income- 90000 Tk. per month
For the age group of 14-35 years olds the average number of persons in a household was 4 and the equalized disposable household income per month was 35,000 Tk. per month which shows that this is in between middle to high range income. For this income it is suitable to aim „H2O‟ water spring water at our chosen target market, and hopefully increase sales profit for the company by the end of last year. Trends
There are many increasing trends amongst the bottled water industry. The factor of convenience and trend is a big factor when consumers purchase bottled water. For „H2O‟ water it would aimed at those consumers who are socially aware and environmental as the whole image behind the project of „H2O‟ water is to give back to the communities in developing countries to supply them with a safe and clean supply of drinking water. „H2O‟ water will therefore be targeted at the target market ranged from 14-35 who earn of middle to high range income who can afford to spend money on the spring water and who are socially aware of the image behind the product. Lifestyle With a lot more consumers on the go these days, bottled water is becoming increasingly more popular. „H2O‟ water can provide its consumers with spring water of good quality and of a good cause or meaning behind the water. Those consumers who are socially aware and looking for the convenience factor in bottle water will purchase the unique product of „H2O‟ water at a price of 15 Tk. a bottle. The chosen target market for ‘H2O’ water The most profitable target market for H2O water is both males and females in the age group of 14-35 years. Consumers who are socially aware and who are making an income that is of middle to high range will be targeted for H2O water. From a survey taken from the Asian bottled water institute, both females and males aged 14-35 are the most frequent bottled water drinkers as it has been seen as a trend that bottled water drinkers are health conscious and the whole idea of bottled water being convenient. H2O water will provide this chosen target market with a product which is of quality and convenience. Convenience is an increasing trend across the bottled water market and the factor of staying healthy. This target market is suited to these two trend factors. The trend amongst this chosen age group of socially aware will help the project of “H2O” water as the unique image behind it is giving back to developing countries to supply them with a supply of clean drinking water, and will appeal to our target market.
Following the devastating Aila of 27 may, 2009, water supplies in Bangladesh are still suspect, leading many residents to turn to bottled water for health reasons.
However, even before the massive natural calamity, demand for bottled drinking water was growing.
“Water is everywhere but just a little that is clean” Water; “The fountain of all life”. Even a toddler will tell you it is a prime need of the body. Sixty per cent of our body weight is made up of it. Water can also be the cause of much misery. In Bangladesh, where contaminated water continues to bring down millions with diseases such as diarrhea, dysentery, typhoid, jaundice and gastroenteritis. Getting pure drinking water from municipal taps in cities and towns is now luxury. At home most people are forced to either bottled water or install purifiers. While traveling or eating out in restaurants, buying bottled water has become a necessity. This need has seen an explosion of companies that marketing “safe drinking water” in bottles across the country. Till about ten years ago branded bottled drinking water were seen to be an item of upper/upper middle class and an elite product, mostly produced by multinational companies through their Local subsidiaries. The total volume of branded bottled drinking water in Bangladesh about one thousand corer, consumed by some 50 million households.
Our target strategy will be mainly based on marketing strategy and Sales forecast strategy. We are implementing the product development technique, existing market, new product. The definition of marketing strategy says, Find the demand of market Develop your product Earn profit by customer
We have done our survey, we have talked with the distributors, wholesalers, retailers, our potential customers & we know what demand we have in the market, now it‟s time for the implementation. A five liter can is being sold 55-60tk depending on the brand, whereas we are launching our own brand on only 55tk as the labor is still cheap in Bangladesh. We will do some serious type of promotional activities, we have to make such an impression that people has to come to us, from branding to launching, from distributor to retailer to customers, we have to be very much conscious to capture their mind and heart. No matter what strategy do we need to follow, we will do, our main target will be maximizing the profit for the company, if our
organization gets benefit, and we get benefit too. We will call the press, TV, radio media on the product launching ceremony, we will give each of the staff a 5liter of Bottled drinking water as a gift, we will try to bring health minister for the launching ceremony, so that people may understand that even the governments also concern for the common people‟s health. Our main mission is to be the market leader of bottled drinking water industry in near future. Every company wants to be a giant in market, so do we, currently we are in a position of zero but we have a unique and standard product which will be our key of success. Innovative techniques will be added to capture the market share, that‟s why we have hired some of the most experienced sales and marketing team for our company.
We are targeting our market by segmenting it in consumer market &business market. Consumer market: We are segmenting the consumer market by family size and social classes exist in Bangladesh. Family size Social class/Income Level According to income level; consumers like monthly, weekly or daily basis may buy our drinking water from our retailers. A mini pack of 250ml has been introduced for a daily basis use; our research says 20% of our population bye at least one 250ml of bottled drinking water in a day. The average customers will buy 5 liter – 250ml bottled drinking water according to their requirement. It will depend on their income and their daily requirement. The average selling patterns shows that mainly 5 liters to 1 liter containers are mainly sold all over Bangladesh, our main target would be those customers. The future forecast says a lot of things but we must learn what our actual customer would like to see from us after using our product. Most of the family in our country is joint-family structured based, a large number of this is shifting to the single family size, for this our target would be the customers of individual and single family and joint family, our packing size would be according to their demand of consumption.
Hotels and restaurants: 1. Five stars: Pan pacific, Sheraton, Westin, Radisson, all these are world class five star rating hotels, our target will be to convince the quality manger to use our branded drinking water, the restaurant food chain mainly select & segment by the master quality manager itself, we have to let him/her/ team know that our water is good for health, only change will be in ingredient which is very much suitable than other existing water in the market and they can get this water from us in a corporate price. Also in the customer menu, we will let them have this option of regular water and bottled water, its customer choice, but our target will be like so that customer participate to choice our drinking water. 2. Three star: there are more than fifty; three star hotel located all around Bangladesh, we will also target the quality manager and the purchase department to buy our Bottled drinking water, also we will offer them a good amount of commission in a manner so that they may not refuse us, as our product is world class, we strongly believe that it won‟t be a big issue to convince them as we have hired some of the best marketing executives from
different related organizations who knows how to deal with purchase department or committee. 3. Regular hotel: even though five, four & three star hotels are known as corporate client, a big number of local restaurants are available all around Bangladesh who fulfills the need of the main stream. We also are going to target them because, even if we count on a daily basis, a min of one liter to five liters will be required for each restaurant, if we convert it to weekly or monthly basis, it would generate a huge amount of revenue. We have to make them aware of the fact that, a lot of customer visits local restaurant every day, if the restaurant uses good bottled water, customer would definitely come to visit them and we have to make sure that they don‟t use same type of bottled water for later days. 4. Catering service: a good number of catering service and event management companies are currently operating in Bangladesh; a good example is community centers, if we consider a community center misarrange three parties in a week, a minimum of hundred liter of bottled water required for each week, four hundred more or less a month. Which will also generate handsome revenue for the company.
The overall evaluation of a company‟s strengths, weaknesses, opportunities and threats is called SWOT analysis. It‟s a way of monitoring the external and internal environment of a company. Strength and weaknesses are measured from internal environment and opportunities and threats are measured from external environment.
a) The company has strong management b) Latest and efficient machineries and technologies will bemused for production c) Have a secured line of raw material supplies d) Well trained and skilled employees e) Extensive distribution network f)High Quality of the product
a) The company is coming in the market with a new product b) In short of fund for further investment. c) The product (Bottled drinking water d) Price is slightly higher than the existing products (Regular bottled water) in the market
a) Have opportunity of Market/Product development. b) People in the metropolitan areas are inclined towards branded products c) The Bottled drinking water is becoming popular and can be advertised to gain the market share among health conscious people.
a) Already there are many companies in the market. So Competitive environment exists b) People always get substitutions. If they think product price is higher than they will switch to other brand
c) Increase price of raw materials and other necessary things) If Import & export duty & other Government VAT & TAX issue d) Competitors invested huge amount for promotional activities to gain their market share
Here we are showing current situation of regular branded bottled drinking water which are very much popular in Bangladesh. Currently MUM is being considered as market leader in this business and others are as followers. MUM, PRAN, Fresh, Jibon Possible Major Competitors: Our main competition will be with all the companies exist in the market. So we have to compete with other companies for catching the market share. For that we think some company‟s product like MUM, Yes, Pran will be our main competitors. MUM: It is the product of Partex beverage ltd and they have the largest market share. The MUM considered as the main competitor because these are under the same genre. It draws the attention of our target audience due to the well-known products. Right now it captures almost 22% share of total market. PRAN: In order to differentiate from the main competitors, Pran promoted as a mother‟s first choice. They took huge promotional campaign to get the attention of the target group. In order to attract a larger audience and make them aware of this product, creative promotional campaigns with some noises are taken. They are trying to make online campaign interactive and fun. In order to let more people, their target group in particular, to notice that they having a function collaborating with well-known restaurants in the DhakaChittagong highway. Our target market would be whole Bangladesh including all the division of it, main focus would be on the major cities first, as we are very much new in this market, later on, we will move to different segments. We are going to introduce the following product lines: a) 20 liter plastic container b) 10 liter plastic container c) 5 liter plastic container d) 2 liter plastic container e) 1 liter plastic container
f) 500mili liter plastic container and g) 250mili liter mini pack
Our packaging will be done in a way so that we may target any kind of consumer & business market at a same time. Our target market is segmented in few sections: Business market:20lts plastic container10 liter plastic container5liter plastic container Consumer market:5liter plastic container2liter plastic container1 liter plastic container500mili plastic container and250mili mini pack We have described who is our business and consumer market earlier, we are packing this big container as the business market don‟t buy their raw material every day, specially which products are long lasted, so when they will buy, they will buy in bulk, it would save their time and money if they buy it from us. According to necessity of bottled water like monthly, weekly or daily basis customer may buy our water from our retailers. Business market usually means the offices, hotels, restaurants, community centers and other commercial and social programs where large amount of water is needed in daily basis. And for consumer market is actually for all sorts of people.
This would be our first Bottled drinking water launched in Bangladeshi market, there are few large companies who are currently capturing the market of bottled water, a few of them are in top position as market leader and most of them are following the market follower policy. The big companies are dominating cause of their huge investment and promotional activities, their product quality might not be that much of enriched like ours but currently they in exist market with a major market share. Where we are coming as a new comer and we will follow the market follower strategy for few years but we are not here to be a market follower, our main target would be to be the market leader someday. Company like us cannot challenge them with a unique product right now; we are only going to serve apportion of the total market which is known as niche market but we are going to act as market follower in this case. Right now, our position is in zero. We have to take it higher than others, if we can cross the barrier of 10% of the total market, we will create a threat to the existing big companies and they will definitely change their marketing policies and strategies. We must understand that, we cannot dominant the market right now as the major market share are on regular bottled water; we will create threat also opportunity for them. Only a single advantage what we got is maybe for two to three years we might dominant the niche market for our good will and brand position and for high demand of Bottled drinking water but, after that other companies will introduce same product maybe with our compete price or lessees their business is already established. So we can‟t just loose our growing market share, in any mean we have to control the market share and grow it as much as possible.
Every company takes necessary steps to sell their product in the market, even though our product is highly enriched but without any sales promotion activities or strategy, we can‟t get a good response from our target audience. People buy those whom they remember every time when they imagine that particular product; we have to take strategies so that our brand name always stays in their mind whenever they remember bottled drinking water. Whenever they goes to shopping center or local stores, they must remember our brand, that will be our first strategy, and obviously if our product don‟t show high quality then these promotional activities won‟t have any effect. So our prior strategy will be sell high quality product in a competitive price to the customers. We will apply marketing strategy and sales strategy/ promotional activities, we have done our survey, we have talked with the distributors, wholesalers, retailers, and we know what demand do we have in the market, now it‟s time for the implementation. Now the sales promotion activities would be as follow we are taking some strategies for both our target customers and the distribution channels.
Website: We will launch a full dynamic website where we will give a full information about our company, about our company‟s mission, vision and objectives, messages from board of directors, list of the board of directors, backgrou nd of board of directors, our product range, our product specification, our standard quality rating certified by different organizations, ISO certificates, our production equipments, our distribution channels, our sales promotional activities, our new product launching section, feedback section, contact section and a full bulletin board and a discuss forum where both employees and customer can interact same time so that we may get live feedback or suggestion from our customers. Even we will have a live chat option, we will give add to some paid popular website like yahoo, msn, Google, Amazon, CNN, bbc.co.uk, gumtree.com, also on some of the most famous websites like cell bazaar, clickbd, bdtradeinfo.com etc, the daily newspapers websiteslike prothom alo, janakantha, observer, the daily news,BDnews24.com.bd etc.
One of the oldest and most effective media is newspaper, will call newspaper media conference where we will give a detailed idea of our company and our product and for what reason we want to launch this bottled drinking water in Bangladesh, we will
invite all those medias who has a min of 5% of the total market newspaper readers. If it‟s possible we would take the media to our factory for having an inspection, photo session will be allowed but not every part of the factory, and we won‟t revile our secrets to them as our business policy won‟t permit us. Radio: After 2006, radio industry has shown a huge improvement and currently its one of the most famous media all around the country, a huge number of old, young generation are fan of it, we will advertise our product in radio too, maybe as sponsor of a radio program, or any message full commercial related to health awareness. Television: A large number of invest would go on this sector, a full 30 second length of TV commercial will be made by some celebrities and it will be shown of all the television channels, also we will be sponsor partner of two soap opera and four general program, mostly on interval and in news our commercial advertise will be shown.
It is complete and an unbeatable plan designed specifically for attaining the marketing objective of a firm. The marketing objective indicates what the firm wants to achieve. The marketing strategy provides the design for achieving them the linkage between marketing strategies and overall corporate success is indeed direct and vital. Realizing the marketing objectives is the purpose of two generic categories Price Based Differentiation Based
A business that opts for the price route in its competitive battle will enjoy certain flexibilities in matter of its product and use prices as main competitive level. It will price its product to suit the varying competitive demands. It will be enjoying certain inherent cost advantages which permits it to resort a price based fight
Marketing strategy based on differentiation works on the principal that any aspect of the offer and any activity of the firm can be made distinctive compared with the competing offers. Right from technology, plant location to post sale and service a company can perceptively differentiate and many buyer values. Companies usually choose those functions, which give them the greatest relative advantage.
Packaging Variety is spices of life. Today for any business organization to be successful it has to provide its customer with the differentiated product that is a value buy for them. In order to cater to the changing needs of the customer the business has to continuously come out with the variants of the product so that it can target the maximum segments. H2O water will offer a variety of packaging options: 5 Gallon jar, 1 Gallon jar, 2 liter bottle, 1 liter bottle and 500 ml bottle. The 2 liter bottles account for 35% of sales showing a growing health concern among the Bangladeshi society. 500 ml bottles account for 30% of the share. Distribution
It‟s obvious that availability holds the key to the market. For any product to be successful the distribution system has to be really good. Large tracts of the country have not been explored by the national brands, which explain the proliferation of smaller brands. H2O water‟s strategy is to build a direct distribution system in Dhaka that means moderate investment in company owned trucks and carts; H2O will try to reach maximum number outlets scattered around the city. The company will invest approximately Tk. 30 lac to launch the business. The company plans to have its own distribution network in places where it has its own plant. The small scale players built their sales by piggy backing on the generic category built up by H2O water. It‟s a battle that H2O water can win by sheer distribution muscle. One of the reasons why H2O water will run strong in this industry is its strong distribution network built that will cover a small area with good investment. The marketing mix of any organization or company comprises of four important elements which play an important role in the overall performance and business of any organization. These elements are popularly called as 4P‟s of Marketing by the marketing people. These 4P‟s are1. Product 2. Price 3. Place 4. Promotion If we look at the importance of these four elements, then the success and failure of any company depends highly on these alone. Hence it is very important for any company to be very careful while defining its marketing mix. Also such decisions are generally for long term period and cannot be altered easily or in short notice period, therefore much of planning and research work is required here.
Product is anything which is offered by a company to its consumers, which can either be tangible or intangible. Tangible products are ones which can be touched and seen like mobile phones, electronic items, food items etc, while intangibles are the ones which can only be experienced by the consumer through its feel, comfort, satisfying-ability etc. like tourism products, airline services availed by a passenger in the flight, hospitality in a restaurant etc.
Here, talking about the ABC Water Company, then since the company is with water and other water based products, the products fall into the tangible category. ABC is the brand for the simple bottled water to satisfy the need for pure, safe and cheap source of drinking water and thereby quench the thirst of people. This brand was a huge hit as soon as it was launched in the market since it was an innovation in the market and it came at the right time when it could skim the maximum profits from the market since no other domestic company was in the market with bottled water at that time. The company offers its bottled water in different size-packing: 5 Gallon Jar- These jars are ideal for both- home and commercial consumption since they be easily mounted on water dispensers and easily poured through the tap provided with the dispensers. It saves the consumer from the headache of handling too many bottles of smaller capacity and changing or refilling the dispenser repeatedly. Also, these jars or costeffective for the customer and help to save up to 40% of cost as compared against the cost of purchasing a carton of 1.5 gallon. 1 Gallon Jar- These jars are handy enough to be used and carried along for any day-long outing or trip etc. and also offer the customer an economic price. 2 Liter Bottle- These bottles are easy to carry to work, college etc. Also they fit perfectly in the refrigerators, so they are aptly suitable for the home consumption also. 1 Liter Bottle- These bottles are a boon for the daily travelers and commuters since owing to its right size of capacity. Also the people with involved in sports related activities prefer this size. 500 ml Pet Bottle- The Company has taken care of the needs of every possible consumer. This small and compact size is very appealing for the school going kids who want water after every short interval, but also want their total weight on shoulders to be kept low. Same goes for the young girls and ladies whose small purses allow them to stuff it only with such small bottles.
So we can see here that the company has very carefully designed its product and presented it in different quantities so that all categories of consumers can be fitted into one or other of its offered size. It is basically to suit the need of the customers for party purposes and provides them with a refreshing and crispy feel which keeps them rejuvenated and active in their hectic schedules and hot weather conditions.
Price is one of the most important factors which help the customer to reach at a purchase decision since it is what he pays for any benefit availed by him. The amount set for a particular product which a consumer has to pay is known as price. It can be determined by a number of factors which are material costs, competition and many more. However, price is seen as the burden on the consumer's pocket and also we know that resources to satisfy the wants are less and needs are many. So the consumer always makes a rational decision between many options available before him. Now from the company's point of view, price is its only chance to earn revenue. All other activities, right from production to promotion and distribution incur heavy costs for the company, which are met through a number of loans and advances and credits etc. Also the company has to take into consideration several other factors like competition, market demand, economic class of its consumers, demographic factors like age, gender etc. Expectations of distribution channel partners are also other important factor governing the setting up of price for any given product. Now, for the ABC Water Company, the basic problem was to define a price which could persuade the customers to buy the product, i.e. the bottled water. Since it was an innovation, Oasis did not have any competitors to take into consideration. In Bangladesh, where majority of the population comprise of the middle income group and lower income groups. It is not hard to understand that pricing is one of the most important factors in the buying decisions. ABC water has met the expectations of the consumers in terms of pricing the product and also making the product available in variations of liters, making ABC water both convenient and affordable. The company is following a very aggressive pricing. Its product is available at a very reasonable price.
5 Gallon jar – 150 Tk. 1 Gallon jar – 100 Tk. 2 liter bottle – 40 Tk. 1 liter bottle – 20 Tk. 500 ml bottle – 15 Tk.
Its main concern was to: 1. Provide a cheap yet valuable source of water to the people. 2. To establish itself as a brand in the market.
3. To find channel partners to distribute its product with a low profit margin requirement. So, in short we can say that the company wanted to follow a strategy of Economic pricing whereby it could earn normal profits and capture a wide market.
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 quality of the product. It is more often referred as the distribution channel and is defined as the location from where product can be purchased or made available to different customers, who can either be consumers or just some other channel partners of lower level. However it shall be understood here that the lower the channel of distribution, the more is its significance in the whole distribution-channel. And also that the longer the channel of distribution, the wider is the reach of the product while a shorter channel generally suits the premium category products since here the penetration into the market and reach to the customer is weaker in comparison to longer channels. A place of purchase can include any physical store or virtual store such as internet. The placing is again a very crucial decision and involves the answer for certain questions like: 1. Who are the intended end-consumers of the product? 2. What is the demand for the product in the market? 3. How the company wants to position its product? For e.g. - as a premium category item or a general category product. 4. How it wants to approach the customer? Coming back to ABC Water Company again, here the company is offering a product which is intended for the use of common man. Hence the distribution channel should be such that the product can reach every retail outlet and kiosk for maximum availability of water bottles. Hence the company has come up with options like Free Home-delivery system, with the help of its route planning system where the customers can know the schedule for their delivery dates and make arrangements for payment etc. Online booking of order and payment.
Such schemes suit the customers of commercial levels as well as retail customers since they make the whole process easy and hassle-free.
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. Advertisements are one of the most common means of promoting any product. TV commercials and print media are most widely used tools of advertisement which have been brought to an efficient use by ABC water. Another effective means are the promotional schemes like free coupons, home delivery etc. The best way to retain ones customers and cut off the stiff competition is by making your customer feel the extra benefit which he enjoys by purchasing a company's product. So the company also offers the customer with an option to either own or lease its water coolers, which is again a very smart move made by the company to make sure its customers do not shift to any other competitor's products. Such facility allows the customer to avail the benefit without making a big investment, hence appeals them. Taking care of the customer after the sales have been made is also an important aspect, which is often ignored by most of the companies. But ABC water makes sure to handle all customer grievances through its customer care centre where a customer can register their complains. The company also has dedicated in-house software „Customer Relationship Management' which assists its staff in taking care of every customer's needs and problems in efficient manner. Also the company launched a new six-week campaign this February, “ABC Water for Bangladesh 2013”, in collaboration with its global partner, Global Water to provide water to Asian countries, declaration for which was made on the World Water day, March 23rd. The focus of the campaign was on providing water to those who need it the most by building wells in countries like Kenya, Bostwana and Tanzania.
For the success of our bottle drinking water marketing we have estimated and prepared a budget which indicates the costs that are going to be occurred in the upcoming month. Our budget is basically made for the indication towards the cost minimizing and proper use of the capital. This budget will lead us towards the success if we can keep our cost within the budget. So, proper implication of budget is mandatory for this success of our business. Before preparing a budget, the rational and logical applications are necessary, so that the budget could be utilized properly. First we have decided that we will start our business with the amount of 30 lac. tk. as Capital. This amount will be funded by the owner of the company. But from this 30 lac. 7 lacks Tk. has to be borrowed from the bank as a loan, which in eventually a liability for our company prospective. We have to hire factory space. We have to engage 20 workers. We have to arrange gas water telephone & electric line. Though 50 vans are needed but for this opening session minimum 20 van are needed for perfect supply. As the company is offering various product segmentation, here the budget is important for different product size. Advertisement through newspaper, tv, banner, leaflets etc are demanding fund. Raw material purchase is too much costly. Finance is limited that‟s why proper financial planning is nee ded to get quick success. The estimated budget of our bottle drinking water marketing is given in the appendix. The manufacturing plant will work round the year except Fridays, the government holidays and other holidays which are recommended to follow. From the first day the plant will be on full-length operation.
After calculating the revenue, variable cost and contribution for per 100000 units of product along with the fixed cost of the project, we have found that 3.554 is the break- even point. According to our sales forecast, 10 months will be needed to reach the point. So, the break- even sales would be at about 3.554% of its capacity. (Appendix: table 2)
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. “Go Green”. Ensure proper recycling on disposable bottles. We can develo p a network to collect all plastic bottles & recycle these to make it usable again. This activity will make the Earth a better place & also do a green marketing in the consumer market.
Drinking bottled water has become a trivial habit in many people‟s everyday lives. Bad tap water taste or quality, fitness objectives or safety purposes, numerous reasons lead consumers to buy bottled water. Bottled water may even be necessary, for instance in case of temporary tap water contamination. The trend toward consuming more and more bottled water will keep increasing in the coming years. This flourishing market is profitable for a high number of companies, and employs thousands of people nation-wide. Negative environmental impacts of bottled water could be reduced implementing simple solutions, e.g. re-using bottles of water in adequate sanitary conditions on a local basis, rather than just recycle or re-manufacture them into new products. Certification of local supplies under brand names could reduce environmental impacts.
Ajizai. (2012, September 23). Document & Resources forSmall Business & Professionals. Retrieved January 1, 2013, from docstoc: http://www.docstoc.com/docs/130685590/marketingstrategy--segmentation Bashir, S. (2009, January 10). Our Blog: Slideshare. Retrieved from Slideshare; prepare yourself: http://www.slideshare.net/cococorina/marketing-presentation-presentation-906252
Ferrier, C. (2001). BOTTLED WATER: UNDERSTANDING A SOCIAL PHENOMENON. World Wild Fund. khan, m. (2010, January 26). BISLERI(MARKETING STRATEGY OF MINERAL WATER INDUSTRIESSPECIAL EMPHASIS ON BISLERI). Retrieved from Summer Training Reports: http://summertrainingreports.blogspot.com/2010/01/bislerimarketing-strategy-ofmineral.html Olson. (1999). “Bottled water: pure drink or pure hype? Natural Resource Defense Council (NRDC).
Estimated budget of H2O: Descriptions Amount Amount (Total) Capital Fixed costs: Rent Workers Advertisement: Newspaper leaflets Banner 100000 5000 (per year 30000*12) ( per year 3000*20*12) Tk. 360000 720000 3000000 Tk.
Utility costs: Telephone Bill (per year 440*12) Electricity Bill (per year 2000*12) Gas Bill Water Bill (per year 400*12) (per year 400*12) 5280 5000 4800 4800
Decorations Delivery Van Furniture Total Fixed Cost Variable costs: Raw materials Petrol cost Utility costs:
10000 800000 5000 2019880 Tk.
Tk. 600000 60000 7920
Telephone Bill Electricity Bill Gas Bill Water Bill
36000 7200 160000 60590
Packaging Cost Total Variable Cost Total Costs (Fixed costs+ Variable cost) 931710 Tk. 2951590 Tk.
Sales Forecast (Table 1) Year First quarter Second quarter Third quarter Sales (Pieces) 400000 400000 400000 Total Taka 6000000.00 6000000.00 6000000.00 18000000.00
Break-even Analysis (Table 2) Particulars I. II. III. IV. V. Revenue (Per 100000 unit) Variable Cost(Per 100000 pcs) Contribution (Per 100000 pcs) Fixed Cost Break-Even pcs (IV/III) Amount (TK.) 1500000.00 931710.00 568290.00 2019880.00 3.554
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