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The bottled water market is estimated at around Rs. 1,250 crores The market is growing at around 25-30% a year and is expected to continue to its momentum in future as well The per capita consumption of packaged water in India is pitifully low at less than 5 litres a year compared to the global average consumption of 24 litres The annual bottled water consumption in India had tripled to 5 billion liters in 2004 from 1.5 billion liters in 1999 Global consumption of bottled water around 200 billion liters in ¶06
The category (contd.)
Over 1,200 bottling plants across India
± An estimated 600 in Tamil Nadu alone!
There exists more than 150 brands of which nearly 90% are local
± Making bottled water is a cottage industry in this country
Bulk of the growth of the Indian market attributed to two reasons:
± Poor public water infrastructure ± Increasing disposable income
Per capita consumption in India is less than 5 litres/year
The global average is around 24 litres
Indians are ranked tenth in bottled water consumption
the first mover in the Indian market When it introduced Bisleri in India 25 years ago . this industry is dominated by big players ± ± ± ± ± ± Parle Coca-Cola PepsiCo Parle Agro Mohan Meakins SKN Breweries Parle.The competitors Despite the large number of small producers.
110 a litre Natural Mineral Water ± Himalayan and Catch ± Priced at Rs. 12 a litre . Kinley..20 a litre Packaged drinking water . San Pellegrino and Perrier ± Priced between Rs.Treated water ± Bisleri. ± Priced around Rs.80 and Rs. Aqua fina etc.Price-based category segmentation Premium Natural Mineral Water ± Evian.
Share of market Market Share 21% 40% Bisleri 17% Kinley Aquafina Others 22% In the 20-litre bulk water segment .supply to offices and homes ± Kinley & Bisleri are neck-to-neck (in the market not otherwise!) .
Plans to hike advertising and promotional spend by 46% in 2010 to meet rising competition Rs 35 crore on ad and promotion of the regular Bisleri in the current fiscal and Rs 12 crore on Himalayan Bisleri plans to put up 32 new plants over the next two years and plans to invest Rs 10 crore in each of them .
Grocers are among Aquafina·s key distribution points Company launched 2 litre & 500 ml packs to suit various consumer requirements Recently revamped the Aqua fina 500 ml carry pack and introduced a new enhanced translucent blue label giving the brand a new look It·s looking at building strong consumer engagement across geographies through campaigns and trade promos .
Kinley went for an all-new packaging recently Has plans to introduce its global brand ¶Bonaqua· in India very soon It is within the realm of possibility that Coca-Cola·s next step will be to introduce flavoured water in India .
Pack sizes Pouches.40% in 2002 alone ± 25 litre HDPE can ± 20 litre bubble top PET . glasses and cups 200 ml (popular in flights) 330 ml bottles 500 ml bottles ml (a huge hit among the youth) 1 litre bottles (Hotels and travel sector) Large 2 litre bottles Bulk water .grew at a rate of 30 .
Manufacturing cost .
Key industry trends .
is making it mandatory to drink packaged water Drinking mineral water used to be a fad but now a necessity Home delivery of jars highlights need for pure water at home too Consumers believe it is better to be safe than sorry! . led by metros. trustworthy and hygienic beverage solutions Increased health and wellness trends across the country. B & B+ income groups reflecting changing lifestyles and consumption trends Increasingly cool to be seen with bottled water Fast-paced life is making them look for convenient.The consumer SEC A.
Consumption pattern Consumption of bottled water in India is linked to the level of prosperity in the different regions ± The western region accounts for 40% of the market ± The eastern region accounts for just 10% ± Bottling plants are concentrated in the southern region .
combined contributes to 24% .Consumption pattern (contd.) PET is growing in South Accounts for 48 per cent of the total market South India is the largest consumer of PET material for packaging mineral water South India commands a market share of 48% West India accounts for 28% North and East India.
hygienic water The rural market ± Dominated by tourists and travelers ± Packaged water now an essential appendage to any form of travel .The new consumer The main consumers no longer restricted to the upper class but include: ± Middle class ± And lower-middle class families as well Driven to the category by lack of clean.
1 crore daily! Ratio of each player's market share to the entire packaged water market is the same in both lean and peak seasons . bore wells ± With modern reverse osmosis techniques.TN Focus 370 authorized supply units have sprung up across TN The regional players: ± Operate plants replete with wells. UV radiation units About 220 water units operate near Chennai alone Companies rake in Rs 80 lakh to Re.
Apollo and Team are among the chosen ones .Chennai: In focus The water market is worth over Rs 1.250 crore Water-starved Chennai alone accounts for a quarter of that pie! 70 lakh litres of water are sold in the city everyday 3 lakh litres by multinational water brands 2 lakh litres are supplied by Parle¶s Bisleri High-income group & corporates tend to choose Kinley Middle-income households prefer local suppliers ± Bisleri.
000 20-25 litre bubble-top containers from Rs. 1 each 75. 30 each 25. 38 10. 18 to Rs. 700 to Rs.000 12-liter cans @ Rs. 10 to Rs.12 each 100. 900 / tanker .000 water tankers carrying 12.000 1-liter bottles @ Rs.000 litres each @ Rs.Chennai: In focus 5 million quarter-liter packets @ Re.
35 per can The residents are collectively spending more than Rs.000 units a day MRP Rs. 15 lakh every day on potable water Residents got used to packaged drinking water during the successive drought years (a few years back) and there has been no going back! .Rs.The Chennai consumer Majority of city households depend on packaged water for cooking and drinking purposes The bubble top has become the mainstay in most homes despite round-the-clock supply by Metro water Daily sale of 20-litre bubble tops exceeds 75. 15 .
the railways order 10. are fast movers among the train-travelling crowd According to officials at Cherio.A great opportunity Railways is a huge potential market Water bottles.Railways .000 cases (of 12 bottles each) a day It accounts for 5% of Cherio·s water sales . especially the 2 litre variety.
The Marketing Challenge! .
or enhanced waters Large number of players and increasing competition have been pushing the prices and margins down .. nationally. purified. mineral. regionally. sparkling. internationally.Summary of category learnings Competitors compete globally. and locally All brands are pretty much identical ± Though there are sub-segments in the bottled water industry viz.
bottled water is a low-involvement category for them They might ask for a ¶Bisleri· or ¶Water bottle· to the retailer and take whatever is handed to them ± As long as it looks and feels like a mineral water bottle! ± Incidentally. to the consumer ¶Bisleri· means ¶Mineral Water·! Brand loyalty is almost non-existent! ± (Or is it?) .Summary of consumer learnings Though most consumers are health-conscious and all that.
Summary of the advertising scenario Though there has been sporadic advertising. most brands seem to be disinterested to advertise ± Given the low consumer involvement in the category Very few consumers can even recall advertising of the brands that have done so ± Again. due to low category involvement Some brands do resort to ground-level initiatives and activities like sponsorships ± Aqua fina and Kinley are cases in point .
tasteless and odourless liquid!· .. here·s what you are supposed to do« Help launch a bottled water brand for a small company ± Small compared to the likes of PepsiCo. A company that can spend some money on promotion but can·t match the budgets of the biggies in the category The bottled water you are planning to launch would be no different from the other brands in the market ± As my good-looking science teacher in school used to say ¶water is a colourless. Coco-Cola. Parle etc.Now.
Review competitive advertising« .Remember« The facts given in the case are just indicative« You are expected to do some level of research on your own« Talk to consumers« Talk to yourself«« Do some desk research«.
And« «help launch a brand in this category «suggest a persuasive and pocket-friendly promotion strategy «keeping mind the constraints ± Of the category that is low-involvement ± A client who doesn·t have huge budgets ± And a consumer with fickle loyalty levels! .
Good luck! .Un-bottle your strategic and creative acumen.
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