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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-

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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.

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1.1 ABOUT BOTTLE WATER INDUSTRY
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… DEMAND OF WATER WOULD NEVER GO DOWN… & WATER WOULD NEVER BE OUT OF BUSINESS

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Market Structure
The Market Segmentation of Bottled Water in India Segment Share (%) North 25 East 10 West 40 South 25 Source: Indiastar.com 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.

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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.

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WHY PEOPLE DRINK BOTTLED WATER  Alternative to other beverages  Trendy  Luxurious  Convenience  Worries about tap water  “Bottled water is purer.”  “Bottled water is just safer.”  Differently regulated  Hype,  Perception of difference  “Bottled water tastes better.”  Placebo effect  Caters to different “tastes” (preferences)  Bottled water is better than tap water  3 out of 4 cases, it is tap water Source: http://www.epa.gov/ http://www.cfsan.fda.gov/~dms/botwatr.html http://www.nrdc.org/water/drinking/ (FDA/CFSAN website) myth, and propaganda

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1.2 PRODUCT LIFE CYCLE (ESTIMATION 1990 TO 2015*)
The Exponential Increase In Demand Bottled Water:1990-2015 Year 1990-91 1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2014-15 Million Cases 2.2 2.6 3.5 4.7 6.5 8.5 11.5 15.5 20 26 33 44.5 55.6 68.15 82 97 112.85 129.85 146.8* 164.45* 265*

Source: Advertising express May 2008, - pg- 55

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100 2.2 2.6 3.5 4.7 6.5 8.5 50 0 1991 1992 1994 1995 1996 1997 1999 2000 11.5 15.5 20 26

2001

2002

33 44.5 55.6

2004

68.15

2005

2006

82 97

150

112.9

129.9

200

2009

2010

146.8 164.5 2015
8

250

1998

2003

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.

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2008

1993

2007

265

300

Million Cases

MANAGEMENT RESEARCH PROJECT II ON “AAVA BOTTLED WATER”

1.3 INDIA TO FACE SEVERE WATER CRISIS IN THE FUTURE
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

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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. Major Players in Indian bottle water • • • • Parle's Bisleri Coca Cola with its brand Kinley PepsiCo with its brand AquaFina Manikchand with its brand Oxyrich

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K.K.Beverages with its brand Kingfisher

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

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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. Player Parle- Bisleri Coca cola- Kinley PepsiCo- Aquafina K.K.Beverages Tata Other(Oxyrich,Yes Bailley,Aava) 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. Market share 40% 23% 11% 10% 8% 8%

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1.4 FIVE REASONS NOT TO DRINK BOTTLED WATER
1. Bottled water isn’t a good value
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.

2. No healthier than tap water
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
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established, there’s very little empirical evidence which suggests bottled water is any cleaner or better for you than its tap equivalent.

3. Bottled water means garbage
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.

4. Bottled water means less attention to public systems
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.

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5. The corporatization of water
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. Multinational corporations are stepping in to purchase groundwater and distribution rights wherever they can, and the bottled water industry is an important component in their drive to commoditize what many feel is a basic human right: the access to safe and affordable water

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Chapter - 2
GLOBAL POSITION OF BOTTLED WATER

Bottled Water Consumption Jumps
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.

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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.

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GLOBAL BOTTLED WATER MARKET Leading Countries' Consumption and Compound Annual Growth Rates 2007 Millions of Gallons CAGR* Rank Countries 2002 2007 2002/07 1 United States 5,795.6 8,823.0 8.8% 2 Mexico 3,898.6 5,885.2 8.6% 3 China 2,138.4 4,787.8 17.5% 4 Brazil 2,541.8 3,621.1 7.3% 5 Italy 2,558.2 3,100.9 3.9% 6 Germany 2,291.5 2,743.2 3.7% 7 Indonesia 1,622.5 2,400.6 8.2% 8 France 2,225.6 2,283.2 0.5% 9 Thailand 1,277.0 1,533.1 3.7% 10 Spain 1,191.4 1,284.0 1.5% Top 10 Subtotal 25,540.7 36,462.2 7.4% All Others 9,054.2 13,407.3 8.2% WORLD TOTAL 34,594.9 49,869.6 7.6% Source: Beverage Marketing Corporation GLOBAL BOTTLED WATER MARKET Per Capita Consumption by Leading Countries 2002 – 2007 2007 Gallons Per Capita Rank Countries 2002 2007 1 United Arab Emirates 35.2 68.6 2 Mexico 37.7 54.1 3 Italy 44.2 53.3 4 BelgiumLuxembourg 32.7 39.5 5 France 37.1 35.8 6 Germany 27.8 33.3 7 Spain 29.7 31.7 8 Lebanon 24.9 29.3 9 United States 20.1 29.3 10 Hungary 13.5 28.5 11 Switzerland 24.2 28.2 12 Slovenia 18.8 25.2 13 Austria 20.9 25.0 14 Czech Republic 21.1 24.6 15 Croatia 14.9 24.3 16 Saudi Arabia 23.8 24.1 17 Cyprus 21.4 24.0 18 Thailand 20.1 23.6 19 Israel 12.4 23.2 20 Portugal 19.9 22.4 GLOBAL AVERAGE 5.6 7.6

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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

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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. Urbanization, improved living standards, office working environments, and aggressive marketing strategies have helped boost the global sales of bottled water. Home and office delivery of bottled water has become a popular service and supplies nearly 28 percent of the water consumed. 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

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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. Aava is packaged in an environment that adheres to the toughest international certification standards, guaranteeing that the water contained in every bottle of Aava has the same natural purity and unaltered mineral composition.

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WHAT MAKES AAVA SO DIFFERENT
Packaged drinking water (IS : 14543) Aava natural mineral water (IS : 13428) is obtained from protected

Raw water could be sourced from anywhere.Aava (municipal water, ground water etc.)

natural sources.

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) RO further strips healthy minerals present in water. If the ph level in this demineralised packaged drinking water falls, as per one theory, the water may tend to become acidic. reverse osmosis.

Aava is well-balanced healthy drink. It has a natural mineral composition that is beneficial to health and is absolutely safe to drink.

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. RO can never fully eliminate chlorine content, “Aava” is 100% free of chlorine. which can lead to cancer. Most of packaged drinking waters are treated through cancerous UV rays. Most of packaged drinking waters / bottles are laced with pesticides to eliminate germs.

“Aava” is not put through uv rays at all.

“Aava” is 100 % free of pesticides.

Most of packaged waters sourced from “Aava” has well balanced fluoride content municipal taps have excessive fluoride content within prescribed limits, by ISI & other leading to diseases of teeth, bones as well as international standards. nervous systems.

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“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.”

3.1 PRODUCTION DEPARTMENT
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FULLY AUTOMATED AND HYGIENIC PLANT  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 Natural Mineral Water is untouched by human hands at all points.  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.  Hi Mec Machine which produce 60 bottle per minute  Filler who fill 9 bottle per Sash

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Sand Filtration Machine 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.

3.2 HUMAN RESOURCE DEPARTMENT
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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.

3.3 HUMAN RESOURCE FUNCTIONS
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The resource management, at Aava Company., is divided in to seven important parts namely: 3.3.1 HUMAN RESOURCE AND PLANNING: 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. The various objectives of human resource planning are: (a) Making correct estimation of manpower recruitment (b) Coping with changes. (c) Managing manpower according to need of organization. (d) Help in recruitment and selection. 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:  Vacancies due to transfer, promotion, retirement, termination, permanent disability or death. This type of needs is caused by the mobility of human assets.  Creation of vacancies due to expansion, diversification, growth of job specification. Such need is caused by growth of organization. At Aava company the following are the steps that are undertaken for determining the type and the number of people to be recruited:  The department in which recruitment is required submits such detailed plants to HR department.

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 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:  Deal with internal people.  Call applications through consultants and job hunts.  Recruitment through advertisements. 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. Securitizations of the applications 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. Interview for senior level position 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. 3.3.4 ORIENTATION (SOCIALIZATION)

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It is a programmed design to help employees fit smoothly in to an organization. To make the selected candidate familiar to the culture of the organization, he has to be exposed to various area of the organization, which is called induction of employees. Induction programme is very necessary. Focus is on job rotation. It gives the new entrant appear in to an inner working of each and every department. Induction exposes new entrants to all kind of jobs. 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. 3.3.5 TRAINING AND DEVELOPMENT 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. 3.3.6 PERFORMANCE APPRAISAL Performance Appraisal is an act of reviewing and assessing the performance of the employees on the basis of set standards for each and every employee, through such appraisals, through such appraisals, deviation that is the detected. On the basis of this, other decision and training needs of the employees are identified.

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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.

3.3.7 TRANSFER AND PROMOTION Transfer: Transfer of the employees may be due to any of the following: 1. To fill up the requirements of the important and potential areas. 2. Need based transfer: The excess employees of one department are transferred to the department in which the requirement exists. 3. If the employee has not performed well even after several warning, then of transfers are given. 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.

3.3.8 INDUSTRIAL RELATION FUNCTIONS
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:

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Grievance may be due to discontented in any of the following areas:  Relating to wages and attendance.  Relating to discipline.  Relating to the enhancement in the job.  Relating to the working conditions.  Relating to the method of supervision. 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.

3.3.9 LABOR WELFARE
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: scheme. Bonus: The employees get bonus at the rate of 20% of annual salary during the financial year. 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

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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.

3.3.10 MANPOWER OF THE COMPANY:
There are 50 Employee in Aava Company. It Include:  Co- founder of Aava Company – Mr. Behram Mehta  Assistant Manager – Mr. Rajubhai Padaliya  Account Department – Yamini Gupta and Shekhar Pandey  Creative Department – Sajit Surendran and Mehul Chokshi  Laboratory Chemist – 4 Person  Production department – 30 Person  Administrative Department – 5 Person  Sales Department – 5 Sales executive

Salary Structure
 Assistant Manager – 15000 Per Month  Account department – 9000 per Month  Creative Department – 12000 Per Month  Laboratory Chemist – 9000 Per Month  Employee in Production department – 3000 Per Month  Sales Department – 10000 Per Month

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3.4 MARKETING DEPARTMENT
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”

Short term goals
• • To boost the sales Creating value for customer

Long term goals
• • Make the brand loyalty As PEPSI Has To give the awareness to use it

3.4.1 MARKETING MIX
1) Product Bottled water

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1) Gold 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 workingout, as well as for children, to avoid spilling. 4) Mini bottled water 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. 5) Family pack(20 litre, 10 litre & 5 liter Jars) 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.

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LABELING & PACKAGING  Sticker containing ingredients  On the other side usp of the product is specified  Net weight or volume  The batch number  The name of source or place of origin of the product  The date of packaging  The date of expiry  Direction for storage  Treatment for disinfection  The license or certification from the concerned authority  Introduction about the company USP  Packaging

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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 Some examples of pricing decisions to be made include:
• • • • • •

Pricing strategy (skim, penetration, etc.) Suggested retail price Volume discounts and wholesale pricing Cash and early payment discounts Seasonal pricing Bundling

Price of the bottled water 6) Gold bottled water 7) Cup-cap 8) Sports 9) Mini bottled water 10) Family pack(20 litre, 10 liter & 5 liter Jars) - Rs.60 - Rs.40 - Rs.25 - Rs.15 - Rs.10 - Rs.20 - Rs.15

3) Place
Distribution channel

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 Primary distribution Direct to institutes like IIM, Abon India, Taj, For seasonware, multiplex etc.  Secondary distribution Distributor TO retailer TO consumer 4) Promotion & Advertising 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. Promotion And Advertising Strategy  Radio(Fm Radio 98.3)  Newspaper (Sandesh, Economic Times, Gujarat Samachar)  Billboard  Business to business promotion  Dangular , Banner

Some other techniques for promotion of company
 In INDIA – ENGLAND One-day cricket series Aava Bottle sponsor.

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 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.
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 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:  Air India from 6 Airports  Four Season Hotel Group  Ramada Group Tea  ITC Welcome Group, Baroda  Fortune Landmark, Ahmedabad  Flight Kitchen Ambassador  IIM (Ahmedabad)  Hotel TAJ Umed  Hotel CAMA
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 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.

Eye Catching Position
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.

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3.4.2 STP Analysis 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. Valuebased 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. 1) Geography –Urban and semi urban 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

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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:

I. II. III. IV.

Identify Potential Customers Conducting Market Research Choosing a Target Market Compiling a Customer Profile

Identify Potential Customers 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. Conducting Market Research 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

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customer group. Search the Internet and your local library for studies and data that have been gathered for your particular industry. Choosing a Target Market 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. Compiling a Customer Profile 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.

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POSITIONING STRATEGIES There are seven positioning strategies that can be pursued by Aava 1) Product Attributes: What are the specific products attributes? 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. 2) Benefits: What are the benefits to the customers? 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. 3) Usage Occasions: When / how can the product are used? The product can be use to drink as well as for the kitchen use. 4) Users: Identify a class of users. 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. 5) Against a Competitor: Positioned directly against a competitor. As product is patented from its packaging style no body will copy the packaging style. So, this could be the strategy against competitor. 6) Away from a Competitor: Positioned away from competitor. Same as above the packaging is the main differentiating factor for the Aava bottled water.

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7) Product Classes: Compared to different classes of products. As all players generally focuses on the youngster and men but meanwhile Aava bottled water is focuses on the child and women also.

8) Product Attributes: What are the specific products attributes? 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. 9) Benefits: What are the benefits to the customers? 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. 11) Users: Identify a class of users. 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. 12) Against a Competitor: Positioned directly against a competitor. As product is patented from its packaging style no body will copy the packaging style. So, this could be the strategy against competitor. 13) Away from a Competitor: Positioned away from competitor. Same as above the packaging is the main differentiating factor for the Aava bottled water.

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14) Product Classes: Compared to different classes of products. As all players generally focuses on the youngster and men but meanwhile Aava bottled water is focuses on the child and women also.

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CHAPTER - 4 COMPREHENSIVE STUDY OF INDIAN MARKET & AAVA

4.1 PEST ANALYSIS
4.1.1 POLITICAL FACTORS
Political factors include government regulations and legal issues and define both formal and informal rules under which the firm must operate. Some examples include: Norms and Regulation 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. FDA A regulated packaged food product Bottle water adheres to federal and state regulation and standards. At the federal level, bottle water is regulated as a packaged food product, governed by the U.S. Food and drug administration. At the state level, bottled water is regulated in various ways, typically through state environmental, Food or agricultural agencies. IBWA industry standards are in several cases stricter than both federal and state regulations.

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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. Indian bottled water is governed under 2 categories: 1. Packaged Natural Mineral Water [ Under IS: 13428:1998, Amendment 1-5 upto15th October 2004] 2. Packaged drinking water [ Under IS : 14543: 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:-

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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. Product Labeling Requirement 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

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 the batch number  the name of source or place of origin of the product  the date of packaging  the date of expiry  direction for storage  treatment for disinfection  the license or certification from the concerned authority  Company’s background (Source: - www.ibwa.com ) 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. Minimum Wage Act 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. Industrial safety Regulation 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

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requirements for equipment for making and storing ice. For water in car buys, similar sanitary requirements for dispensing devices need to be observed.

4.1.2 ECONOMIC FACTOR
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. Per Capita income and consumption Per Capita Income Rs. Growth % 20996 2.2 22413 6.8 23890 6.6 25696 7.6 27784 8.1 29786 7.2 Per Capita Consumption Rs. Growth % 13352 1.1 13918 4.2 14413 3.6 15422 7.0 16279 5.6 17145 5.3

2002- 03 2003-04 2004-05 2005-06 2006-07 2007-08

Source: Economic Survey 2007-08, Chapter 8

per capita income and consumption 10 8 growth 6 4 2 0 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 year income growth(%) consumption growth(%) 2.2 6.8 4.2 1.1 6.6 3.6 7.6 7 8.1 5.6 7.2 5.3

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

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of their primary need. After increase income people lifestyle also change and it affect consumption of bottled water. GDP Growth V/s Aava Company Growth

GDP vs Aava growth
9.4 9.2 9 Growth 8.8 8.6 8.4 8.2 8 2006 2007 year 2008 15 8.4 9.2 36 25 8.5 40 35 30 25 20 15 10 5 0

GDP Growth(%) Aava Growth

Source : www.rbi.org.in, Macroeconomic and Monetary Development, annual statement on monetary policy, First Quarter Review 2008-09
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.

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Aava Growth(%)

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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. Tourism and tourist places.

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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 12 Percentage 10 8 6 4 2 0 2000 2002 2004 2006 Years 2007 2008 13.25 10.75 7.5 9.75 10.75 10.25

SOURCE-MONARCH FINPROJECTS LTD

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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. Growth in interest rate (bank wise) Bank ICICI Bank SBI HDFC BANK AXIS BANK PNB BOB LIC HOUSING FINANCE Growth 4.40% 18.80% 27.20% 59.20% 14.60% 15.30% 24.90%

4.1.3 SOCIAL FACTOR
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.

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Life Expectancy Rate(%) 70 69 68 67 66 65 64 63 62 61 60 69 69

Age

65 64 63 64

2003

2004

2005 Year

2006

2007

2008

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.

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Demographical Transformation of India

(In USD) Annual Household Income Rich (Above 115,000) High Income (57,000 – 115,000 Consuming class (23,000 – 57,000) Working class (10,200 – 23,000) Needy (Below 10,200)

POPULATION (MILLION) 2001200502 2 9 48 221 726 06 9 17 74 285 710 2009-10(E) 20 33 120 404 613

POPULATION (IN MILLION)

800 700 600 500 400 300 200 100 0

DEMOGRAPHIC TRANSFORMATION OF INDIA

726 710 613

2001-02 2005-06 2009-10(E)

404 285 221 48 74 120

2

9 20

9 17 33
High Income (57,000 – 115,000

Rich (Above 115,000)

Consuming class (23,000 – 57,000)

Working class (10,200 – 23,000)

Needy (Below 10,200)

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.

Life style Trend
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consumer expenditure on food (us$ million)
300,000.00 250,000.00 Million(US$) 200,000.00 150,000.00 100,000.00 50,000.00 0.00 2004 2005 2006 year 2007 2008 144,356.90 164,905.10 182,089.90 221,046.20 250,331.60

Source : World Economic Factbook 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. Increase in Youth Age People and Elders

Age % of population Under 15 years Between 15-59 years Above 60 years

Population Demographic Shift 1997 2002 37.20% 33.50% 56.10% 59.30% 06.60% 06.90%

2007 30.00% 62.30% 07.50%

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AGE BETWEEN 15-59 YEARS 64 PERCENTAGE 62 60 58 56 54 52 1997 2002 2007 56.1 59.3 62.3

(Source: Planning Commission Projection data) 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. Increasing Population Growth and literacy rate. 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.

Population Growth Rate 1.7 Growth Rate 1.6 1.5 1.4 1.3 1.2 2004 2005 2006 Years 2007 2008 1.44 1.4 1.38 1.61 1.59

Source: <a href='http://www.indexmundi.com/g/g.asp>

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Literacy Growth Rate 48.4 Growth Rate 48.2 48 47.8 47.6 47.4 2004 2005 2006 Years 2007 2008 47.8 47.8 48.3 48.3 48.3

Source: <a href='http://www.indexmundi.com/g/g.aspx Organized packaged water industry provides unique employment opportunities to the locals under following segments: • • • • • • • Geological Engineers (Water Diviners): Mechanical / Electrical Engineers Chemical Engineers Chemist Microbiologists Researchers Marketing & Distribution (Source:- http://www.merinews.com/catfull.jsp?articleID=137322 )

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4.1.4 TECHNOLOGY FACTOR
It creates opportunities for new products and product improvements and of course new marketing techniques- the Internet, e-commerce. Fully Automated and Hygienic Plant  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 Natural Mineral Water is untouched by human hands at all points.  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.  Hi Mec Machine which produce 60 bottle per minute  Filler who fill 9 bottle per Sash

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Sand Filtration Machine 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.

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4.2 PORTER’S FIVE FORCE MODEL
4.2.1 RIVALRY AMONG EXISTING COMPETITION (EXTREMELY HIGH) Rivalry among existing competitors The industry is growing rapidly. The industry is not cyclical with intermittent overcapacity. The fixed costs of the business are a relatively low portion of total costs. There are significant product differences and brand identities Between the competitors. The competitors are diversified rather than specialized. It would not be hard to get out of this business because there are no specialized skills and facilities or long-term contract 7 8 9 commitments, etc. customers would incur significant costs in switching to a Competitor. product is complex and requires a detailed understanding competitors are all of approximately the same size YES(+) ~ NO(-)

1 2 3 4 5 6

        

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. • More number of unorganized player in market.

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o Out of 1800 player only 20% are organized. o 200 brands compete in market.1 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.

1

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4.2.2 THREAT FROM NEW ENTRANTS (HIGH) THREAT OF NEW ENTRANTS Do large firms have a cost or performance advantage in your segment of the industry? Are there any proprietary product differences in industry. Are there any effect on established brand identities in your industry? Do customers incur any significant costs in switching suppliers? Is a lot of capital needed to enter your industry? Is serviceable used equipment expensive? Does the newcomer to your industry face difficulty in accessing distribution channels? Does experience help to continuously lower costs? Does the newcomer have any problems in obtaining the necessary skilled people, materials or supplies? Does product or service have any proprietary features that give lower costs? Are there any licenses, insurance or qualifications that are difficult to obtain? YES(+) ~ NO(-)

1 2 3 4 5 6 7 8 9 10 11

          

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

Buyer needs and requirements increase in market. o Due to the concerns over the safety of tap water.

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o An increased focus on health and fitness. o The hectic on-the-go lifestyles of consumers. o Attracted by the convenience, purity and portability. 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. Enhance waters offered higher margins. 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. 4.2.3 BARGAINING POWER OF BUYERS (HIGH) Bargaining Power of buyers 1 2 3 4 5 6 7 8 9 Are there a large number of buyers relative to the number of firms in the business? Do industry have a large number of customers, each with relatively small purchases? Does the customer face any significant costs in switching suppliers? Does the buyer need a lot of important information? Is the buyer aware of the need for additional information? Customers are not highly sensitive to price. Identity of Buyer adds prestige to the seller’s list of customers, Provide incentives to the decision makers. Not Compulsory to purchase some specific brand YES(+) ~ NO(-)

        

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

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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 • Purchased in low quantity.

All Buyers are purchase in low quantity like 1 liter or 2 liter so they not bargain with manufacturer. • Importance of quality and performance.

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

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4.2.4 BARGAINING POWER OF SUPPLIERS (LOW) Bargaining power of suppliers 1 2 3 4 5 Inputs (materials, labor, supplies, services, etc.) are standard rather than unique or differentiated Company can switch between suppliers quickly and cheaply. Many potential suppliers. Company business is important to supplier’s business Cost of purchases has no significant influence on overall costs. YES(+ ) ~ NO(-)

    

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.

4.2.5 THREATS FROM SUBSTITUTES (MEDIUM)

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Threats of Substitutes 1 Substitutes have performance limitations that do not completely offset their lowest price. Or, their performance is not justified 2 3 4 by their higher price. The customer will incur costs in switching to a substitute. Your customer has no real substitute. Your customer is not likely to substitute.

YES(+ )

~

NO(-)

   

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.

Overall Industry Rating
Overall Industry Rating Threat from new entrants Bargaining Power of Buyers Threat of substitutes Bargaining Power of Suppliers Rivalry Among Competitors LOW MODERATE HIGH

1 2 3 4 5

    

4.3 SWOT ANALYSIS

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4.3.1 INTERNAL FACTOR EVALUATION STRENGTH
Best packaging bottle water awards

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.

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Aava is packaged in an environment that adheres to the toughest international certification standards, guaranteeing that the water contained in every bottle of Aava has the same natural purity and unaltered mineral composition. Non-Acidic Water “Aava” has perfectly balanced minerals nothing less nothing more." . Acidity Meter as tested on INDIKROM papers (strips) from GlaxoSmithkline Pharmaceuticals Limited. «------------------------- Acidic «---- Neutral 2 4 Aquafina Kinley Bisleri Home 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. Filtered 6 7 ----» Non Acidic-------------------------------------» 8 9 10 10.5 -

Oxyrich Himalayan Aava -

Best Drinking Water of Today
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MINERALS PH LEVELS TDS CALSIUM MAGNESIUM SODIUM FLORIDES CHLORIDES NITRATE NITRITE (M. P. L - 0.02) PESTICIDE Ozonisation (Legally not allowed in Natural Mineral Water since it leaves Bromides in water) BICARBONATE PH Level (Acid)

AAVA 7.93 305 20.8 7.6 19.9 < 0.2 45.2 Nil Nil Nil

HIMALAYAN EVIAN 7.3 (on bottle) 7.2 350 (on chart) ? 49 (on chart) 78 35 (on chart) 24 20 (on bottle) 5 0.9 (on chart) ? 8 4 4 3.8 0.01 ? More than permissible ? limit (source - NDTV) Ozonised (As per their website) 263

No Ozonisation

?

145

357

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

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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.) Fully Automated and Hygienic Plant  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 Natural Mineral Water is untouched by human hands at all points.

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 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.  Filler who fill 9 bottle per Sash

WEAKNESS
Lack of promotion, advertising, 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.

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Top 5 Mineral Water Brand along with advertisers on TV during 2007 Year Brand Manikchand Oxyrich Aquafina Mineral Water Bisleri Seagrams Imperial Blue Old Admiral Aqua Pura Advertiser Dhariwal & Doshi Indus Ltd. Pepsi CO. Parle-G Seagram Radico Khaitan Ltd. %share 35% 29% 20% 23% 3%

Source : TV AdEx (January 2008) Lack Of Distribution Channel 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. Lack of proper positioning: 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.

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No Formal Organization Structure There is no formal organization structure in Aava company. There is a problem of delegation of authority. There is only one person who is engaged in activities of production, marketing and all the major activities. Aava is a highly un organized company Poor Customer Relationship Management : 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).

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INTERNAL FACTOR EVALUATION Key Internal Factors Strength Best Packaging Bottle water Non-Acidic water Best drinking water of Today Fully Automated & Hygienic Plant Weakness Lack of promotion & Advertising Lack of proper Positioning Lack of Availability in the remoter area No Formal Organization Structure TOTAL Weight 0.19 0.13 0.09 0.11 0.18 0.12 0.10 0.08 1.00 Rating 1 2 4 3 1 2 4 5 Weighted Score 0.19 0.26 0.36 0.33 0.18 0.24 0.40 0.40 2.46

Aava received a total score of 2.46 in the internal evaluation. This signifies that the company has a weak internal system and is not able to effectively manage any of their strengths in a meaningful manner. Also of their weaknesses, it is worthy to note that their weak distribution setup and advertising had the most weightage. Therefore, from our internal factor analysis we can form two possible strategies. One is the formation of a structured and competent distribution network through the enabling of sales force teams. An alternate path would be to outsource the function to an existing distribution company and over time develop the organization required for an internal distribution setup. Company make clear positioning and make decentralize organizational structure

4.3.2 EXTERNAL FACTOR EVALUATION OPPORTUNITY

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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. Increasing Population Growth and literacy rate 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.
Population Growth Rate 1.7 Growth Rate 1.6 1.5 1.4 1.3 1.2 2004 2005 2006 Years 2007 2008 1.44 1.4 1.38 1.61 1.59

Source: <a href='http://www.indexmundi.com/g/g.asp>

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Literacy Growth Rate 48.4 Growth Rate 48.2 48 47.8 47.6 47.4 2004 2005 2006 Years 2007 2008 47.8 47.8 48.3 48.3 48.3

Source: <a href='http://www.indexmundi.com/g/g.aspx> Demographical Transformation of India (In USD) Annual Household Income Rich (Above 115,000) High Income (57,000 – 115,000 Consuming class (23,000 – 57,000) Working class (10,200 – 23,000) Needy (Below 10,200) POPULATION (MILLION) 2001200502 2 9 48 221 726 06 9 17 74 285 710 2009-10(E) 20 33 120 404 613

POPULATION (IN MILLION)

800 700 600 500 400 300 200 100 0

DEMOGRAPHIC TRANSFORMATION OF INDIA

726 710 613

2001-02 2005-06 2009-10(E)

404 285 221 48 74 120

2

9 20

33 9 17
High Income (57,000 – 115,000

Rich (Above 115,000)

Consuming class (23,000 – 57,000)

Working class (10,200 – 23,000)

Needy (Below 10,200)

ANNUAL HOUSEHOLD INCOME (IN USD)

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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.

Life Expectancy Rate(%) 70 69 68 67 66 65 64 63 62 61 60 69 69

Age

65 64 63 64

2003

2004

2005 Year

2006

2007

2008

Source: <a href='http://www.indexmundi.com/g/g.aspx> Commercialization Due to increase in urbanization commercialization also increasing like offices, meeting places, conference halls and business parties this all are increase consumption of bottled water in India so all factor create opportunity for bottled water player. Tourism and tourist places

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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.

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Total Million Cases
140 120 100 80 60 40 20 0 2002 2003 2004 2005 2006 2007 2008 44.5 55.6 68.15 129.9 112.9 97 82

60% CAGR

83Source: Advertising express May 2008, - pg- 55 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. Extraordinary application of product 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. Lack of pure drinking water over the country Size of Middle Class and Growth

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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. Per Capita GDP Increasing
GDP (Per Capita PPP)US $ 4000 3000 US $ 2000 1000 0 2003 2004 2005 2006 2007 2008 Years 2540 2900 3400 3800 2700

3100

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. Increase in Youth Age People and Elders Population Demographic Shift Age % of population Under 15 years Between 15-59 years Above 60 years

1997 37.20% 56.10% 06.60%

2002 33.50% 59.30% 06.90%

2007 30.00% 62.30% 07.50%

AGE BETWEEN 15-59 YEARS 64 PERCENTAGE 62 60 58 56 54 52 1997 2002 2007 56.1 59.3 62.3

(Source: Planning Commission Projection data)

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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. Joint Venture with Evian Firm 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. Only one as natural mineral water in western region 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

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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

Key External Factors Opportunities Untapped Market Awareness of Health Market Growth Urbanization Increase in Youth Age Threats Government Interferences From big player (Bisleri, Kinley) Substitution. Regional Brand TOTAL

Weight 0.17 0.13 0.10 0.11 0.13 0.08 0.12 0.10 0.06 1.00

Rating 1 2 1 3 3 4 2 1 4

Weighted Score 0.17 0.26 0.10 0.33 0.39 0.32 0.24 0.10 0.24 2.15

In beverages market many substitute products available and for specially bottled water many substitute are available at lower rate so it is a major threats for bottled water player. The main threat is Pouched drinking Water. Now there is vending machine, fruit juice, coconut etc. they give better performance compared to bottle water. Regional Brand 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. EXTERNAL FACTOR EVALUATION

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
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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.

4.4 Cost Structure

Cost of Cup Cap 0.32

Cost of label – 0.40

Cost of bottle – 1.50

Other Cost Preform – 1.80 Electric and labor – 0.60 Corrugated box – 0.80 Transportation cost – 0.15 Treatment cost -0.10 Selling and marketing expense – 0.33 Selling Price – 15 Rs.

Other Cost: Treatment cost:0.25 Carton cost:0.50 Transportation cost:0.25 Total cost (Excluding Labor, Marketing, and Tax):4.25 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.

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4.5 KEY SUCCESS FACTOR
4.5.1 Marketing & distribution
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

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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

According to Research of TAM Media Research, ⇒Mineral Water advertising grew by 28% in 2007 as compared to previous year. ⇒71% rise in advertising spend on Television in 2007 as compared to previous year ⇒Mineral advertiser spend on advertisement in summer.

2

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Mineral Water Advertisement peak in summer
40 35 30 25 20 15 10 5 0 January July August September November February March June April May October December

percentage

2006 2007

Months

Source : AdEx – A Division of TAM Media Research 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.

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4.5.3 Packaging Differentiation
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.

o Certificate mark of the Indian Standards & Quality Control Authority o Water Specification o Expiry Date (Best Before Date) o A brief intro of the company with the address o Website address of the company o Brand Name / Trade Name o Net volume in System International / Metric system o Batch number or code number

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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:  Air India from 6 Airports  Four Season Hotel Group  Ramada Group Tea  ITC Welcom Group, NAroda  Fortune Landmark, Ahmedabad  Flight Kitchen Ambassador  IIM (Ahmedabad)  Hotel TAJ Umed  Hotel CAMA  Fun Cinemas  Wide Angle Cinemas

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 CCI club Mumbai  Ambani School Mumbai  Jet Lite  Indigo Restaurant

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4.6 COMPETITIVE PROFILE MATRIX

Critical Success Factor Aquafina Bisleri Aava Weight Rating Weighted Rating Weighted Rating Weighted Market Share Distribution Customer Loyalty Product Quality Packaging Differentiation Total 0.25 0.25 0.15 0.20 0.15 3 3 2 3 2 score 0.75 0.75 0.30 0.60 0.30 2.70 4 4 3 3 3 score 1.00 1.00 0.45 0.60 0.45 3.50 1 1 2 4 4 score 0.25 0.25 0.30 0.80 0.60 2.40

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 demandbuilding 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.
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4.7 BCG Matrix
Player Brand Name Market share Relative market

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Parle Coca Cola PepsiCo Tata Aava

Bisleri Kinley Aquafina Himalayan Aava mineral water

40% 25% 10% 8% 0.15%

share 1.60 0.63 0.25 0.20 0.00375

(Source:- http://www.gits4u.com/water/water16.htm)’

BCG MATRIX

Aava’s position and its strategy: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

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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 different kind of strategy just like: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.

Recommending new strategy
• • • • • • Focus on product positioning for capturing more market share. Make offensive strategy to build market share. Serve niche market to compete with regional player Grow via merger or Acquisition with regional player Try to compete with natural mineral water player Brand image has significance role. So, by promoting they can increase brand image. Pan India Distributions 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.

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4.8 A NINE-CELL MATRIX

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Industry Attractiveness Weight Rank Score Bisleri Kinley 0.20 Aquafina Himalayan 1.6 Aava Industry growth rate 8 Competitive strength Weight Rank/score Rank/score Rank/score Rank/score 1.4 Rank/score Health consciousness 0.20 7 Relative Market share 0.20 10/2 7/1.4 0.15 4/0.8 Life style 6 3/0.6 0.9 2/0.4 Profitability 8 6/1.5 2 Availability 0.25 7/1.75 8/2 0.25 5/1.25 4/1 6 5/1 0.6 5/1 Brand Urbanization Image & Reputation 0.20 9/1.8 7/1.4 0.10 7/1.4 Competition 8 6/1.5 0.8 9/2.25 Product Quality 0.25 8/2 7/1.75 0.10 6/1.5 1.00 7.3
Distribution Channel 1= Very unattractive 10=very Attractive 0.10 1.00 8/0.8 8.35 7/0.7 7.25 7/0.7 5.65 5/0.5 5.10 6/0.6 5.25

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Kinley Bisleri Aquafina Aava Himalayan

1 Invest/Grow

1 Invest/Grow

2

Hold/Maintain

Industry Attractiveness

High

6.7
1 Invest/Grow 2 Hold/Maintain 3 Harvest/Divest

Medium

3.3 Low 6.7 3.3

2 Hold/Maintain

3 Harvest/Divest

3 Harvest/Divest

Strong

Average

Weak

Competitive strength/Market position

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

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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.

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4.9 STRATEGIC POSITION AND ACTION EVALUATION (SPACE) MATRIX
RATIONALE BEHIND THE ALLOCATION OF SCORE TO INDIVIDUAL FACTOR 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. «------------------------- Acidic «---2 4 Aquafina Kinley Bisleri Home Water Filtered 6 Neutral 7 ----» Non Acidic-------------------------------------» 8 9 10 10.5 -

Oxyrich Himalayan Aava -

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

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Player Parle Coca Cola PepsiCo Tata Shelpee

Brand Name Bisleri Kinley Aquafina Himalayan Aava mineral water

Market share 40% 25% 10% 8% 0.15%

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 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.  Ease of exit from the market
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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.  Risk involve in the 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.
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 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:

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- 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. Competitive Advantage Product Quality Market share Brand Image Product Life Cycle Average Financial Strength Capital Available Ease of exit from the Market Risk involve in the Business Return on Investment Average Industrial Strength Barriers to Entry Growth Potential Access to Finance Consolidation Average Environment Strength Inflation Technology Demand Elasticity Taxation Average

-1 -2 -4 -4 -2.75 +2 +3 +2 +4 +2.75

+3 +5 +4 +5 +4.25 -4 -2 -3 -3 -3

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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.

4.10 VALUE CHAIN ANALYSIS
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. Taranga Aravalli Range Labeling Material Bottle Material

Filtration

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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. Operation

Final User

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

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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: Pressure Sand Filtration: This is to remove all suspended matters and turbidity from the raw water. Micron Cartridge Filtration Unit: 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

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does not need to go through certain processes that Packaged Drinking Water is put through, such as :  ACTIVATED CARBON FILTRATION:  SOFTENING:  RO PURIFICATION Water Treatment plan 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.

Rinsing, Filling and capping machinery 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.

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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. Coding and Packing Machines  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. Marketing and sales 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

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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. Human resource management There are 50 Employee in Shilpee Enterprise. It Include:  Co- founder of Aava Company – Mr. Behram Mehta

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 Assistant Manager – Mr. Rajeshbhai Padaliya  Account Department – Yamini Gupta and Shekhar Pandey  Creative Department – Sajit Surendran and Mehul Chokshi  Laboratory Chemist – 4 Person  Production department – 30 Person  Administrative Department – 5 Person  Sales Department – 5 Sales executive Salary Structure  Assistant Manager – 15000 Per Month  Account department – 9000 per Month  Creative Department – 12000 Per Month  Laboratory Chemist – 9000 Per Month  Employee in Production department – 3000 Per Month  Sales Department – 10000 Per Month

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 Natural Mineral Water is untouched by human hands at all points.

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 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.  Hi Mec Machine which produce 60 bottle per minute  Filler who fill 9 bottle per Sash

Procurement  They bring water from hills of Taranga, apart of the world’s oldest mountain range, the Aravallis.  They purchase PET bottle from Jay Plast  They purchase filtration machine from Hi-Mec Machine, perform from Reliance Industries Ltd, Jamnagar, Parle International, chemco and also from 3- start Alasca net.

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 They purchase blowing machine from shyam blowing company.

4.11 7–S MCKINSEY MODEL

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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 Mr, Behram Mehta Position Co- Founder of Aava

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Mr.Rajesh Padaliya Jagin Tivedi(Jay Plast) Mudra Communication Yamini Gupta and Shekhar Pandey Sajit Surendran and Mehul Chokshi, Tina Mehta

Assistant Manager Production of PET bottle Promotion and design of bottle Account Management Team Creative Team

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.

CORPORATE CULTURE AND LEADERSHIP STYLE
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

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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..

There are 50 Employee in Shilpee Enterprise. It Include:

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 Co- founder of Aava Company – Mr. Behram Mehta  Assistant Manager – Mr. Rajubhai Padaliya  Account Department – Yamini Gupta and Shekhar Pandey  Creative Department – Sajit Surendran and Mehul Chokshi  Laboratory Chemist – 4 Person  Production department – 30 Person  Administrative Department – 5 Person  Sales Department – 5 Sales executive

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.

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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:  Provides framework based on HACCP, CODEX Alimentarius and CGMP for safeguarding the consumer health.  Supports the use of scientific knowledge, risk analysis and controls in the enhancement of hygiene conditions and practices. 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.

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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. PAN INDIA DISTRIBUTIONS 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.

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CHAPTER - 5 RECOMMENDATION

 Company’s organization structure is very highly decentralized. So that company must centralize its department and give responsibility to other people. So the manager concentrate on making strategies and plans etc.

 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.

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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  “Human resources & personnel management” by K Ashwaththapa, published by Tata McGraw-Hill Publishing Company Limited.  “Marketing Management” by Philip Kotler, The millennium Edition, published by Prentice Hall Of India

MAGAZINE
        India Today Brochure Of Aava Company Advertising Express Marketing Master Mind Business today Pitch Business India Facts for you

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REPORT
             May 2008, Advertising express- pg- 55 Beverage Marketing Corporation Report, 2007 Beverage Marketing Corporation Report-American Beverages Report Report by World Bank Review of PepsiCo Chairman, Business Standard Budget: 2008-09 Economic Survey 2007-08, Chaper No.8 RBI Review Ad Ex Jan-jun’2007 Beverages marketing corporation FICCI report Ministry Of Tourism MONARCH Fin Project

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

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                         

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

SEARCH ENGINE
  www.google.com www.yahoo.com

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 

www.msn.com www.scribd.com

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