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Water for life

Marketing Strategy

Aura Bottlers

Presented to:
Prof. Yasir Hamayun
Presented By:
Khizar Zafar
023115
AURA BOTTLLERS

According to a survey, 40% of deaths of children below the age of 5 are caused by water
borne diseases; so many organizations are stepping into this water purifying business.
Aura bottler is working in water purifying industry for the last one and a half year
successfully. Aura supplies water at a very nominal rate and is supplying water that is
approved by PCSIR laboratories and totally according to WHO (World Health
Organization) standards. Aura provides free delivery of its products to the doorstep on
just one call. Moreover Aura is available mostly on every retail outlet. The company has
two distributors, Defence Office and Old City Office, which supply water in their areas.
Aura deals in two packages
1- 11 liters bottle Rs. 30
2- 20 liters bottle Rs. 65
Aura charges security for these bottles, which is refundable after the disconnection. The
security is being charged only once and after that the consumer only pays the water
charges. The security is Rs. 100 for 11 liters bottle and Rs. 500 for 20 liters bottle.
Unique Factors:
The unique factor of Aura bottler is that they are providing 11 liters packing which
nobody else is providing, and at the same time its price is very nominal (Rs. 30). And the
second best factor is that all other players in the market supplying 19 liters bottle at a
minimum of 75 Rupees. But Aura is supplying 20 liters bottle at the rate of Rs. 65. Its one
additional liter at a lesser price.
Aura supplies water on just one call. The two distributors cover sufficient areas and they
visit all the main surroundings almost every day. Aura is now signing a contract with a
company that will get the pet bottle filled by Aura and uses their own name for selling
purpose.
The Marketing Plan

The marketing plan is prepared for the Pet bottle, which will be launched by Aura bottlers
in the near future. By looking at the market, there are various brands actively working in
the industry in different sizes. As far as competition is concerned, there is only one big
competitor and that is Nestle. All the other brands have their own circles and catering
customer’s demand. With this launch of Pet bottle of Aura bottlers, the company is trying
to hit those areas in which people are not brand conscious and they only demand purified
water. Nestle has no doubt captured the market but the backbone of sales is the retailer. If
the distributor gives the retailer sufficient margin, deals honestly and gives timely service
with quality, anyone can sell its brand. This marketing plan will be covering all the
necessary details which can be practically implemented.
Product Life Cycle
Aura with its existing demand stands at growth stage in the product life cycle.
Affect on 4 Ps
Product:
Product quality is maintained and additional features and support services may be added.

- Aura’s quality standards are being maintained at this stage. With this existing
demand of Aura, more areas have been covered now to cater all customers
demand.
Price:
Pricing is maintained as the firm enjoys the increasing demand and less competition.

- Aura is enjoying increasing demand from all the areas because of their unique
offerings and minimum prices. At this stage nobody is competing Aura in 11 liters
packing. So the proof of increasing demand is that Aura is having two distributors
now that cover all the major areas of Lahore.
Promotion:
Promotion is aimed at a broader audience.

- Aura is now advertising more and more to reach maximum number of customers.
Aura is giving ads in Value mail, Value ad and sponsoring shop sign boards.
Placement:
The products are placed at the chosen areas.
- Aura is placing its products to nearly all the places in Lahore. Because the demand is
increasing and people have started accepting product in a wide range.
Product Life Cycle (Pet Bottle)

Aura because of its newly launched pet bottle stands at the introduction stage.

4 Ps At The Introduction Stage


In introduction stage, the firm seeks to build product awareness and develop a market for
the product
Product: Product branding & quality level is established and intellectual property
protection such as patents and trademarks are obtained
-But Aura is already a developed brand which is already have got the attention of the
customers. Trademark is already being set. Just the awareness has to be created.
Pricing: Pricing is based on penetration strategy to build market share.
- that is why the pricing is set at a low level.
Promotion: Promotion is aimed at innovators and early adopters. Marketing
communications seeks to build product awareness and to educate potential consumers
about the product.
-For that extensive promotion program is being set.
Distribution: Distribution is selective until consumers show acceptance of the product.
-Aura is capturing only Lahore for its initial launch to identify the consumer behavior.

Aura
Market Growth Trend

Market is extensively growing at a high rate of 25%. After the entrance of Nestle in the
purified water market, many new players have been introduced and are getting their
shares from the market. Aura hopes to get the maximum out of it by focusing on quality
and price and availability. These are the three factors that can help to achieve the targets
in the shortest time.
Quality: Aura has already created brand awareness in the market with their two
packages successfully. Which will help the company to sell the pet bottle.
Price: Price is being set at Rs. 10 per bottle. So it will be attractive for the customers.
Availability: Aura has two distributors who will distribute all the high demand areas
and make sure that product does not get short in the market.
Possible Future Trends
The future trends are very bright for Aura with the existing demand for the previous two
packages and the same demand will be created for the pet bottle.

Competitor Analysis
Key Players Of The industry
1- Nestle
2- Askari
3- Spiral
4- Nation
5- Classic
6- Sparklets
7- Wah
8- Cool
9- Aqua Safe
Core Competencies of The Key Players

All the brands have their own way of creating awareness and promotion. All of them have
several competencies regarding Price, Quality, Availability, Placement etc.
If we take Nestle, they have created extensive awareness. The biggest factor is brand
name and after that, availability, that they provide free delivery at your doorstep.
Askari water has the support of government.

Customer Analysis

Evaluating the Customers in Terms of Core Needs and Wants


According to the survey, there are only few people who are brand conscious. Otherwise
all the customers want Cold water whenever they go to stores.
Need is water and the want is cold water. After these characteristics, comes brand loyalty.
There are very few people who go for brand name; the quality of water is same.

Buying Habits of Customers


Nestle has created demand for purified water with the slogan, Pure Life. After that people
have developed their habit of going for Nestle. It is also because of massive advertising.
But now many new brands are there and people have more choice available with them.
It’s a trend that has been set by Nestle but new companies are also making profits in the
same field.
Now mostly people demand cold water whenever they go to stores. Only few of them
reject other brands if Nestle is not available. But it’s a product that no one can ignore
when he/she is coming form the heat.
Evaluating the Customer preferences and awareness about the Core Product
Considering preferences, Aura aims to focus on price while spreading enough awareness
of the product. It’s a product that lies in low involvement and thinking area as far as
consumer behavior is concerned.
Aura tries to hit mostly those areas that are not brand oriented. So it will be easy enough
to create sufficient awareness.

Five Forces of Porter Model

Any new company with low


scale distribution channels.
Multinational Company with
heavy budget and brand
name.

Threat of new Entrants

SBU: Aura
Bargaining power Intra industry
Rivalry: Nestle,
Of Supplier Bargaining power 1. More choices
Classic, Sparklets, available
Spiral, Wah, Naimat, Of buyer 2. Price Ranges
1- Hundreds of
production houses.
Nation, Cool, Aqua 3. Availability
Safe. 4. Brand
2- Price Ranges
Consciousness

Substitutes

Tap Water, All the


available brands,
Beverages, Juices
Developing Target Market

Aura focuses on all the age groups regardless of the income level. Basically people prefer
purified water. The segment that Aura wants to focus is not brand conscious. People
demand purified water at a cheaper rate.

Key Characteristics of Consumer Behavior


1- Quality Conscious
2- Price Sensitive

SWOT Analysis
Strength
1- Price
2- Availability
3- Brand Awareness

Weakness
1- Brand Name
2- New Entrant in Pet Bottle

Opportunity
1- Wide Distribution Network

Threat
1- Nestle
2- Askari
3- New entrants
Key Success Factors (Aura bottlers)

Company has several Key Success Factors


1- Free Delivery
2- 11 liters bottle with price Rs. 30
3- 20 liters bottle with price Rs. 65
4- Wide distribution range

Basic Strategy for the Year


The basic strategy for the year is to focus on brand awareness. Although people
already have the information about the existence of Aura but only in bulk packages.
Now the company aims to launch pet bottle in specific areas with sufficient
promotion campaign.

Pricing Strategy for the Year

Selling price to Distributor = Rs. 7


Margin given to the Distributor = Rs. 1
Price given by the distributor to the retailer = Rs. 2
Final Selling price = Rs. 10

Placement Strategy
Initially the target market is Lahore. The areas, which will be targeted, are less urban/
old city areas. After that all the major areas will be covered.

Positioning Strategy
More for less
Aura will be offering more for less strategy to the consumer. So the company will be
offering the same quality at a lesser price.
Developing Promotion Plan

Promotional activities giving incentives to distributors and retailers.


Hoardings will be placed on few places.

Strategy
Promotional programs that will give incentives to distributors and retailers. For example
if somebody purchases 2 cartons that retailer will be given 1 free bottle. Time after time
regular retailers will be given wristwatches, wall clocks and other gift hampers.

After one year the new strategy will be chosen of BUS ads.

Total Marketing Budget


600,00 for 2 Years
Cost Analysis

Bottle Rs. 2
Electricity Rs. 0.25
Cap Rs. 0.25
Filling Rs. 0.35
Wrapper Rs. 0.15
Packaging Rs. 0.85
Others Rs. 0.25

Total Price Rs. 4

Company Margin 7 – 4 / 4 * 100 = 75 %

Distributor’s Margin 8 – 7 / 7 * 100 = 14 %

Retailer’s Margin 10 – 8 / 8 * 100 = 25 %

Salaries = Rs. 50,000 Per month (Fixed Cost)


Breakeven Analysis

Selling Price = Rs.7


Variable Cost = Rs.4
Contribution Margin = Rs.3

F.C 900000 = 300000 Units


C.M 3

Dividing the number of units by the months.


300000/ 12= 25000 Units (Per Month)

Multiplying the per month units with 12 months


25000 * 12 = 300000 Units (Per Year)

Dividing these units by the number of bottles

25000/ 24 = 1042 Cartons.

I will have to sell these cartons in one month.

If I supply one Carton through my Distributors to 70 Stores daily, I will achieve the
breakeven in the following period.
24X 70 = 1680 Units Per Day.
Distributors will supply these units in 26 days in a month time. Then one-month supply
will be
1680 X 26 = 43680 Bottles Per month
Total Sales
43680 * 10 = 436800 Rupees Per Month.

436800 * 12 = 52,416,00 rupees per year sales


Profit Margin

For breakeven I needed to produce 39474 units in a month and I am starting my


production with 43680 units. So profit would be:

Produced Units - Required Units for Break even

43680 - 25000 = 18680 Units

Profit
Units X Contribution Margin

18680 * 2 = Rs. 37360

At this stage I am going into profit with 37360 Rupees from one month. And the profit
for the year would be Rs. 4,48,320

Aura with an estimate will get the total sales of 52,41,600 Rupees in one year.
Breakeven Analysis Through Diagram

Cost

Profits Total Cost

Breakeven
F.C + V.C
V.C

900000
Losses
F.C

300000
Sales in Units
Market Share

Currently the Market growth rate is 25%. Nestle has 50% of the share of the market and
the rest of the players get the left out share. Aura being the new entrants in this line will
have a very small share

Total Sales of Nestle

According to the financial report of 2003, Total sales of Nestle in Pakistan were 9558
million rupees.

Assumption
We assume that Pure Life Sales are 25% of the total sales. And that is
9558 / 25 = 382.32 million Rupees over all Pakistan.
We assume that Lahore has 7% share of the total market and that makes approximately 54
million rupees.
Total Market Size
We assume that the sales of Nestle are 50% of the total market. So doubling this amount
will be the total size of the market.

Rest of the
Brands
Nestle

50% Market
Share
Recommendations

I personally recommend that if I cut the supply chain short, I will be getting more
margins. If I go for the distribution myself, I can get more margins out of it. If I invest
more on advertising and go for more billboards and if I sponsor big busses, I will be
creating more awareness among my customers. So these can be done when the product
touches the maturity stage.