Ganga Nagar, Meerut (UP) DECLARATION I hereby declare that the project report entitled (Assessment of Distribution Channel and Opportunities for Improvement of Sales and Promotion-SAHARA Q Bottled water Submitted in partial fulfillment of the degree of MASTER OF BUSINESS ADMINISTRATION of institute of IIMT Management college Meerut is my original work and not submitted for the award of any other Degree, Diploma, Fellowship or any other similar title or prize.
Date: Place:
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ACKNOWLEDGEMENT I would like to gratefully acknowledge the contribution of all the people who took active part and provided valuable support to me during the course of this project. To begin with, I would like to express gratitude towards Mr. Nassir Hussain, Manager (New Delhi ,NCR) for giving me the opportunity to do my summer training at Sahara Q Shop and for his continues support and valuable insights for successfully completing the project. Without his guidance, support and valuable suggestions during the research, the project would not have been accomplished. My heartfelt gratitude also goes to the entire Sales Team and other Executives for their co-operation and willingness to answer all my queries, and provide valuable assistance. I also sincerely thank MR. Jitendra Kuamr (Faculty). my faculty mentor at IIMT MANAGEMENT COLLEGE,MEERUT, who provided valuable suggestions, shared his rich corporate experience, and helped me script the exact requisites.
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EXECUTIVE SUMMARY This report has been prepared with focus on the improvement of sales and promotion of the Packaged Drinking Water of the recently launched SAHARA Q SHOP in Delhi NCR and also looking into the competitors in the market and to recommend ways to improve the market reach of SAHARA Q BOTTLED WATER Methodology Adopted The market was covered intensively, promoting at many retailers and potential distributors small paanwallas to large sweet shops which had kept water with. The questions were decided to be asked to the retailers to understand the market perception of the product and to find out ways for improvement, and then subsequently more than 500 retailers were interviewed in an indirect way while trying to place the water at their outlets. Key Findings And Recommendations:- The research shows that there is scope in the market considering the fact that there are many companies who are well established and many new enterents coming into the picture every year. The market acceptability of Sahara Q Shop was 25% of the market covered by us which included both South Delhi and West Delhi which was 40% and 20 % respectively Furthermore..... we found out
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TABLE OF CONTENTS Section Page 1. List of Tables............viii 2. List of Charts and Graphs.........................viii 3. List of Images........ix 4. List of Excel Sheets........ix 5. Executive Summary......................................x 6. Acknowledgement. ..............xi 1. INTRODUCTION ...............1 1 LITERATURE REVIEW...6 2 PROBLEM DEFINITION... .......11 2.1 Problem Background.....11 2.2 Objectives.............12 3 APPROACH TO THE PROBLEM.............12 4 MARKET RESEARCH...13 5
INTRODUCTION TO THE PARENT COMPANY Sahara India Pariwar is an Indian conglomerate company headquartered in Lucknow, Uttar Pradesh, India. Its diversified business has interest in finance, infrastructure & housing, media & entertainment, consumer merchandise retail venture, manufacturing and information technology. Subrata Roy Sahara also known as Saharasri is an Indian businessman who is the founder and chairman of the Sahara India Pariwar. He founded Sahara group in 1978. In 2004, the group was termed by the Time magazine as the second largest employer in India' after the Indian Railways.
The company has a market capitalisation of US$25.94 billion as of March 2011. The group is a major promoter of sports in India. It owned the New IPL team Pune Warriors India. Sahara is the main sponsor of the Indian cricket Team. They own 42.5% stake in Formula One's Force India Formula 1 Team and also sponsors India national field hockey team SAHARAS PHILOSOPHY SAHARA INDIA PARIWAR'S PHILOSOPHY - "Collective Materialism" In any human relationship, it becomes imperative to take into consideration the materialistic aspect of life - we do so but by giving it second priority. The first priority is given to emotional aspect and with perfect blending of materialism with emotionalism results in continuous collective growth for collective sharing and caring, that gives an impetus to our philosophy 7
" COLLECTIVE MATERIALISM ". NO TRADE UNION In this emotionally integrated family, nobody has ever felt the need for a trade union; therefore, none exists.
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LIMITATION Poor distribution Channels Insufficient Distribution Channel High Penetration of Local Brand Low Margin for Distributor Low Production
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BUSINESSES OF SAHARA Sahara India Parivar has expanded its businesses in nearly every sector. It has its presence in the following sector :- FINANCE Sahara has the following financial schemes:- Sahara India Life Insurance Sahara Mutual Fund Sahara Housing Finance INFRASTRUCTURE AND LEASING Sahara Infrastructure projects comprise 33,363 acres of land. It has following projects:- Aamby Valley City Sahara City Homes ( Mega Quality Township ) Sahara Grace Sahara Swapna City Sahara Hotels in Mumbai and London Sahara Hospital MEDIA AND ENTERTAINMENT Sahara businesses in media and entertainment includes channels like Sahara One, Filmy, Firangi, Sahara Motion Pictures, Sahara Samay, Aalami Sahara, Rashtriya Sahara Newspaper and Sahara Time weekly magazine. 11
MANUFACTURING Sahara has a jute Project known as Araria Jute project and R&D centre, developed with the intention of providing financial rehabilitation to the people of Araria. The Project aims to facilitate the artisans of the region who have been known traditionally for their work of handloom and handcrafted materials of various kinds. Sahara Global Design Studio is presently working on an ambitious MASTERCRAFT project of setting up, top of the line, high end international luxury stores in major cities round the world. The flagship store is planned for a grand opening in London in 2013.
INFORMATION TECHNOLOGY Sahara Next is the Technology Arm of Sahara India Pariwar and is ISO 9001 : 2008 certified which drives and manages Corporate IT & Telecom Initiatives.
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INTRODUCTION - SAHARA Q SHOP SAHARA Q SHOP Q= Quality = Our Mission Sahara Q Shop is the brand name of Sahara Indias mega Quality Consumer Merchandise Retail Venture. Sahara Q Shop offers completely adulteration-free, 100% quality consumer merchandise products in various categories, such as staples, processed foods, personal care products, home care products, general merchandise and lifestyle products, at most competitive prices. You can receive these 100% quality household items every month in the comfort of your home. Quality is a fundamental value offered at Sahara Q Shop. It has adopted an integrated approach towards the same by setting up a Sahara Quality Management System (SQMS), comprising Quality Control and Quality Assurance departments to achieve end-to-end quality control from raw material procurement to manufacturing to packaging to delivery at the doorstep of the esteemed customer.
Sahara Q Shops unbeatable advantages 1. 100% commitment to quality 2. Most competitive price 3. Door-step delivery of products under strict supervision 4. Right weight/quantity
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5. 100% disclosure policy across all products 6. Convenience of phone shopping 7. State-of-the-art Quality Control labs in New Delhi, Mumbai, Lucknow, Nagpur, Hyderabad, Kolkata and Patna 8. Pan-India quality team of 800 people, comprising Scientist Associates, Senior Quality Controllers, Quality Assurance Managers and Quality Assurance Executives 9. One crore - plus sq. ft. space in warehousing Each product of Sahara Q Shop is put through stringent quality tests and standards, be it vendor selection, sourcing, manufacturing or packaging, thereby completing the Q value chain.
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Sahara Q Shop Products:
leanin
Sahara Q Shop Product Profile Home Care Q water Personal Care General Merchandiser CDIT Food Products Pulses Spices Rice Flours Oil & Ghee Sugar & Salt Dry Fruits Beverages Noodles Wash Powder Detergent Toilet Cleaner Dish wash lqw Glass Cleaner Floor Cleaner Mosquito coil Oil Shampoo Skin Cream Toothpaste Talc Soap Hand wash PDW NMW Soda Energy Drinks Nimbooz Coconut Water Utensils Apparels Clening items Mixer Iron Toaster Home Theatre DVD player 15
COMMITMENT: WE CHASE QUALITY, QUANTITY CHASES US Core Commitments - Our Strength Emotion Emotion is in Performance of genuine duties towards the loved ones primarily in their benefit, from their point of view. EMOTION is THE KEY that generates the required energy and enthusiasm for desired quality performance. Discipline The enthusiastic obedience of laws and orders, which are given by the rightful authority. Duty The enthusiastic obedience of laws and orders, which are given by our CONSCIENCE. No Discrimination Never should we discriminate in any of our actions, reactions, attitudes, decisions, conclusions, in any of our expressions while caring for the six healths of other human beings, namely physical, material, mental, emotional, social and professional healths. Quality Results from honoring Rules, Regulations, Commitments, Values, Fairness, Performance of Duties by honestly balancing one's own and others' reasonable point of view in the matters of Material & Emotional aspects. 16
Give Respect To definitely make others feel important and respected by giving sincere regard to others' feelings, reasonable wishes & thoughts with an open and receptive mind. Self-Respect To develop a sense of respect for oneself in others' mind, i.e. to generate genuine & warm feelings for oneself among others on a continuous basis. Truth Means total transparency in action, reaction, attitude and all other expressions and the conviction to follow the right course. Collective Materialism Means to progress and prosper together for collective sharing and caring and not individually or for a select group. Religion There is a religion higher than religion itself - it is NATIONALITY. We may practice our religion in the confines of our homes, but outside, we should be Indians and only Indians. Nationality is thus above religion but HUMANKIND is above Nationality. Absolute Honesty People generally manipulate and deceive for achieving their unreasonable desires and greed if others do not or cannot see, hear or understand. But we firmly believe that our 17
mind inside knows the truth and we should be absolutely honest to our mind inside and accordingly our actions, reactions, directions, decisions and all our expressions should be present in all human dealings.
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LIST OF IMPORTANT PERSONS IN THE COMPANY CHAIN OF HIERARCHY: SAHARA INDIA PARIWAR Shri Subrata Roy (chairman)
Chandrakant kamdar (MD) Finance Shri.Joy Broto Roy (MD) Housing and Infrastructure Mr. Vivek Kumar (CEO) Tourism and Hospitality Shri. Brijendra Sahay (MD) Media and Entertainment Shri. Rommie Dutta (CEO) Consumable and manufacturing Shri. D.J Bagchi (CEO) Services and Trading Mr. Nasir Hussain (Manager- Sales) Delhi Region 19
ABOUT THE INDUSTRY Corporate control over water and water distribution in India is growing rapidly: the packaged water business is worth Rs 1,000 crore, and it's growing at a huge 35-40% annually. Around 3652 BIS approved and 22 NMW approved bottling plants and 100 brands of packaged water across the country are battling over the market, overdrawing groundwater, and robbing local communities of their water resources and livelihoods Bottled water, one of India's fastest-growing industries, is a business built on the foundation of bad governance, inequity and blatant exploitation. Hard to believe, but the evidence is becoming clearer. According to UNDP estimates, around 1.2 billion people worldwide lack access to clean drinking water. Today, there are more people in the world's hospitals suffering from waterborne diseases than any other ailment. Some 6,000 children die of such diseases every day. Providing safe drinking water is the responsibility of the state. That they are failing miserably is evident from the fact that over 1,600 Indians reportedly die every day because of waterborne diseases. Despite these astounding figures, the Indian state has literally washed its hands of the responsibility of providing clean drinking water to its citizens. When one in six people globally lives without access to clean drinking water, does the answer lie in high-tech water purifiers and bottled water that's out of reach for a majority of the Indian population? 20
Multinational corporations would have us believe so. And the reason is not hard to find: along with imported water treatment technology like activated carbon and ultra violet (UV) disinfection (Aqua guard), reverse osmosis (Reviva) and resins (Zero-B), the water treatment market is estimated to be worth around Rs 700 crore. The bottled water industry is estimated to be a whopping Rs 1,000 crore business. It has grown at a rate of 35-40% annually over the past four years or so. Corporate control over water and water distribution in India is rapidly growing. As globalization opens up opportunities for private players, investing in water and/or manipulating water scarcity makes increasingly good business sense for corporations. Over 100 brands are battling over the bottled water market, hard-selling their products in every way possible -- better margins to dealers, aggressive advertising, and catchy slogans. The real boost to bottled water came in the early- to mid-1980s with the growth of PVC packaging and, later, PET bottles.
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- Reasons for growing demand of safe packaged drinking water
Three main players in packaged bottled water in India distribution chart.
Major National players Scarcity of Safe Drinking water Increaing disposable income The rising health awareness among citizens The increasing trend of GO culture Easy availability of packaged bottled drinking water 40% 25% 10% 25% Bisleri Kinley Aquafina Others 22
Bisleri 40% Kinley 25% Aquafina 10% Others 25%
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Sahara Q SHOP High Quality is the USP of every product launched by Sahara Q SHOP Sahara Q SHOP is the brand name of Sahara Indias mega consumer merchandise retail venture. Sahara Q SHOP offers adulteration free consumer merchandise products, such as cereals, ready-made food (processed), personal and home care products, general merchandise and life-style products at very competitive prices. Sahara Q SHOP has taken an integrated approach towards quality by setting up Sahara Quality management System (SQMS), comprising Quality Control and Quality Assurance departments to achieve end-to-end quality control from raw material procurement to manufacturing to delivery at the very doorstep of final customer. Q in the Sahara Q Shop stands for quality Control and Quality Assurance and it promises to provide unadulterated and pure products at home. Sahara Q Shop offers a complete range of products in total 73 categories numbering as high as 1700 which are distributed through direct-to-home mode. For this purpose convenience stores will be opened across the country in numerous cities and in first 24
phase covering states like Rajasthan, UP, Bihar, Uttrakhand and Jharkhand. The initial allocation for this purpose has been done by Sahara itself totaling an amount of 3000 crore and there are provisions of further investments whenever it is required. For this purpose more than 300 warehouses are being opened across the country which will perform as distribution centers and to deliver products to Sahara Q Shop convenience stores and to the final customers at their home. For shopping at Sahara Q Shop customers need membership cards, it is expected that there will be no delay in demand of these membership cards as Sahara India already has a large customer base. Those customers who have membership cards can directly place orders at various designated call centers after which they can get their order delivered at their doorstep through the home delivery system or they can also shop directly from the nearby Sahara retail outlets. To make this dream of Sahara Q Shop a reality Sahara India Pariwar is launching a Consumer Merchandise Retail Venture on a large scale all across India under the brand name of Sahara Q Shop. For this purpose the company is setting for the first time the largest distribution network spanning across 285 cities of India. Through Sahara Q Shop company will be selling its own branded products like FMCG, consumer durables, general merchandise and lifestyle products etc. For this purpose the company will establish more than 4000 branch offices from which its workers will take orders from its prospective customers from their houses every month on a printed order form. Sahara Q Shop will offer unadulterated quality products, and for this purpose 7 Quality labs has been established across India and for this purpose a team of 25
Scientists, Quality Advisers and Quality Assurance Executives have been put in place. All the above arrangements eliminate the possibility of any malpractices.
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Sahara Q Shop Products:
leanin
Sahara Q Shop Product Profile Home Care Q water Personal Care General Merchandise r CDIT Food Products Pulses Spices Rice Flours Oil & Ghee Sugar & Salt Dry Fruits Beverages Noodles Wash Powder Detergent Toilet Cleaner Dish wash lqw Glass Cleaner Floor Cleaner Mosquito coil Oil Shampoo Skin Cream Toothpast e Talc Soap Hand wash PDW NMW Soda Energy Drinks Nimbooz Coconut Water Utensils Apparels Cleaning items Mixer Iron Toaster Home Theatre DVD player 27
COMPETITORS AND OTHER PLAYERS:- INDIA:- Alfa Blue Atlas Premium Avian Bailey Bisleri Cool valley Dew drops Dislaren Golden eagle Golden valley Hello Himalayan Kenbar Kinley Maqua-2000 Nashotah Nestle pure life Palm spring mineral water Pristine Pure life are Raindrops Silver spring aqua 28
Sindhu safe water Spaa aqua Sprint up
The bottled water industry effectively competes with both the water-purifiers as well as the soft drinks industry. The water purifier industry (primarily the Aqua Guard brand of the Eureka Forbes) is credited to have done the spadework for creating the safety and health consciousness in water consumption, and is a serious competitor in the household and institutional consumption market, whereas the soft drinks industry is a strong competitor in the retail consumption market.
Coca-Cola The company had entered the business in May 2000 through its extending its soda water brand, Kinley. The company has tied up with Kothari Beverages, of Yes brand of mineral water, for manufacturing Kinley bottled water at Yes' facilities. The brand is available in pack sizes of 500 ml, 1-litre, 1.5-litre, 2-litre, 5-litre, 20-litre and 25- litre. While the Kinley 500-ml bottle is priced at Rs 6, the 2-litre bottle is available for Rs 17. With the growing market, Coca-Cola is planning to scale up its bottling capacity, up from the 15 existing plants. Coca Cola has identified 10 to 15 sites for 29
additional plants for setting up a combination of company-owned plants, franchisee operations and contract packers.
Pepsi Co The company entered the bottled water business in September 1999 under the Aquafina brand. The company began by targeting its product towards the youth with a 750-ml pack. It now retails in conventional retail pack sizes of 500-ml and 1-litre bottles. The brand has the strong backing of a distribution channel of 60,000 outlet and the refrigerators at Pepsis retail Outlets, which stock its cold drinks. Though the company is present only in selected market as of now, it has plans of increasing share in the market by expanding its SKUs portfolio as well as its distribution reach. Sources say PepsiCo India has been investing in additional capacity at its plants in Bangalore and Chennai for the bulk water foray.
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BISLERI
Bisleri is a brand of mineral water. It is available in 8 pack sizes: 250ml cups, 250ml bottles, 500ml, 1L, 1.5L, 2L, 5L, and 20L. Its headquarters are in Mumbai, India. Their operation run throughout the subcontinent of India and is one of the leading Mineral Water supplying companies in India. Currently Bisleri has 8 plants & 11 franchisees all over India. (As of 2007). The Indian consumer today enjoys the sweet and pure taste of Bisleri mineral water. However in an effort to offer something special to our loyal consumers we have recently introduced Bisleri Natural Mountain Water - water brought to you from the foothills of the mountains situated in Himachal Pradesh. This newly launched offering has widened our product range to two variants: Bisleri with added minerals and Bisleri Mountain Water. Bailley The brand is a product of Parle Agro, the company that launched Frooti (mango drink in tetra packs). 31
Bailley is credited with creating a new segment of 330ml SKU (the right quantity to quench the thirst of an adult!) in the market. Nestle Multinational Nestle has already started making forays into the bottled water industry with its brand Pure Life. Nestle is a big player in the mineral water market internationally, with brands like Perrier and San Pellegrino in its stable. Nestle has set-up two bottling plants in Mumbai and New Delhi, to service the markets in these regions. It plans initially to tap only the huge market for bottled water in large cities and towns. Others : Britannia at present distributes Evian and will launch its own branded water very soon. The National Dairy Development Board also plans to launch Dhara through its distribution chain. New entrants Atco with Brilliant water and DS Foods with Catch spring water are positioned on the mineral water plank. Another player with technical expertise is Thermax, in a joint Venture with US-based Culligan Water Technologies. Largely into industrial water purification, Thermax Culligan recently announced its entry into the household segment with the launch of 20-litre packs of drinking water, branded Good Water, at Rs 60 a pack. Apart from these are the small players, which, according to industry sources, cater to nearly as big a market as the big players. Among these the prominent ones are : Indian Railways Rail Neer, Godrejs G. Kothari Foods Yes and T-Series Ganga in the North and SM Dyechems Peppy in the West. 32
Sahara Q Water Under the mega retail merchandise venture Sahara Q Shop a complete range of packaged bottled water has been launched. Q Water Range Packaged Drinking Water
Natural Mineral Water Soda (Pet and Can) Energy Drink Enriched Drinking Water Swiss International Natural Mineral Water Sparkling Natural Mineral Water From Himalayas Sparkling Natural Mineral Water From Alps Coconut Water Fruit Juices At present only Natural Mineral Water and Packaged Drinking Water are sold through various outlets, the remaining variants will be launched in a phased manner.
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Q Packaged drinking water (PDW) Q Packaged drinking water is aimed at providing pure and safe drinking water to the consumer, which will contribute towards eliminating the spread of water borne diseases. The expertise in water chemistry, state-of-the-art water plants and aseptic bottling technologies find expression in the 100% quality product. PDW is treated through 7 steps of purification process comprising of Chlorination, Sand Filtration, Carbon Filtration, Reverse Osmosis, Ozonisation and UV Treatment. PDW have 71 Co-packer across the country and parameters for all the plant remain same. SKUs 1Ltr 500 ML 250 ML 2 Litre 20 Litres. Jar
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Q Natural mineral water (NMW) Q Natural mineral water has a distinctly sweet taste due to its fine balance of minerals of virgin origin. The heavenly climes of Himalayan foothills, its valleys and the rich flora impart a characteristically fresh sweetness to the water. Spouting from Mother Earths lap in the valley, this water is bottled at the same source after micro-filtration with no further chemical treatment. The fine balance of dissolved salts and minerals in Q Natural is unique to the geology of the Himalayan foothills. SKUs 1Ltr 500 ML 250 ML
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Q Water in Delhi Q water was introduced in Delhi in October, 2012. The company has 18 executives for getting order and 12 distributors for delivering them. Q water has around 2 Super Stockist (SS) who supply to the various distributors and as well do the Modern trade for the company. Process takes place as follows: Placing order The major stock of the company stays with the super stockist. In order to place an order a SS is needed to submit a cheque, after the clearing of the cheque the goods are dispatched. Company has bottling plant in Ludhiana which caters to Delhi market. Delivery of stock to the depot Company has their own delivery trucks which deliver to the SS. The delivery trucks have the capacity of 1200-1500 cases Storage of good SS is selected on the basis of the storage capacity that should be of around 1500 cases. Kidwai nagar and Nangli jalib are the two Depots. Allocation of the stock The stock which is received is allocated to the distributor on FIFO basis.
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Dispatch The stock is delivered by the SS to the distributor. And the same channel of command follows. An invoice is sent along with the order. Q Domestic Strategy In such a competitive market one would expect a clear differentiation among the water brands in terms of both pricing and positioning. While Q touts itself as 'pure and safe, brands like Bailey, Yes, and Hello are trying to ride the mineral water wave. Evian, launched by French transnational Danone sells as water from the French Alps competing with premium soft drinks. The fact however remains that almost all players in this category are positioning themselves on the purity and hygiene platforms, since the basis of success of bottled drinking water is the poor quality of public tap water in India. It has therefore, become increasingly difficult to differentiate Q and Qs ability to lead the market is under question. Packaging Almost 76% of consumption of bottled drinking water happens during transit. Market research conducted by Q revealed that the overriding concern for this set of buyers is the tampering of the seal and the reuse of bottles. Cases of bottles being refilled at railway stations with tap water have been reported. So when a consumer buys bottled water, he would like to be assured that the water has not been tampered with. Sahara has differential. Q by its unique, breakaway seal as an assurance of purity. Currently, Sahara Q is pursuing a multi-pack and multi-price strategy. Today Q offers 7 packaging options; a 250-ml cup and bottles in 500 ml, 1-litre, 2-litre, 5-litre, 10-litre and 20-litre packs. 37
The 1-litre bottle accounts for nearly 50 per cent of the sales, with the 2-litre bottle taking up 20 per cent of the sales. The 500-ml pack priced at Rs 5, and the 250-ml cups priced at Rs 3, have spearheaded Qs growth in the recent years. Sahara believes that real growth can only come from the home segment and if we can rake the home segment we think well have hit.
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Segmentation Not only does Sahara plan to make the basic pack-sizes available all over the country, it has also decided to create greater variety in packaging. Q has a 5 litre pack targeting homes while the 20 litre pack is being targeted at offices and commercial outfits. To strengthen its presence here, Q is investing heavily on vans, since distribution is a key factor in the business, especially when competing with firms like Coca Cola and Pepsi, who would leverage their distribution and retail networks established for their soft drinks business. A replica of a simple house with a concrete roof, chimney, doors and other paraphernalia associated with a normal house, these trucks were taken door-to-door in some select localities. The home segment was targeted with a pack size of 5 litres aggressively priced at Rs 25. The idea was to have high visibility in the home segment and enter the housewife's minds. It was also estimated that four years down the line, almost 75% of the sales would come from bulk packs of 5 to 20 litres. The two accounted for less than 20% of sales, in 2010 and close to 40% of packaged drinking water consumption happened on premises, which includes eateries, homes, restaurants etc. Large shops and commercial complexes are fast emerging as strong potential for packaged drinking water marketers and Q wants to establish itself here.
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Advertising
Q is promoted by an aggressive print-and-TV backed by hoardings and point-of-sale material. Since two of the biggest concerns of a consumer while purchasing bottled water are safety aspect of bottled water and spurious brands, the safety and hard-to- duplicate factors are highlighted in every Q advertisement. Every interface with the consumer is being used as an opportunity to reinforce the message.
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PRODUCT SUMMARY- Sahara Q Water Water is one of the basic necessities for human life to survive on this planet & today getting pure water is not an easy task with so much harmful chemical being disposed into the water by various industries is making the water harmful for drinking. 71% of the earth is made of water out of which only 1% of water can be used by living beings. Among this 1% of water 50% of water is polluted. Under the mega retail merchandise venture Sahara Q Shop a complete range of packaged bottled water has been launched.
Q Water Range
Packaged Drinking Water Natural Mineral Water Soda (Pet and Can) Energy Drink 41
Enriched Drinking Water Swiss International Natural Mineral Water Sparkling Natural Mineral Water From Himalayas Sparkling Natural Mineral Water From Alps Coconut Water Fruit Juices
At present only Natural Mineral Water and Packaged Drinking Water are sold through various outlets, the remaining variants will be launched in a phased manner. Q Packaged drinking water (PDW) Q Packaged drinking water is aimed at providing pure and safe drinking water to the consumer, which will contribute towards eliminating the spread of water borne diseases. The expertise in water chemistry, state-of-the-art water plants and aseptic bottling technologies find expression in the 100% quality product. PDW is treated through 7 steps of purification process comprising of Chlorination, Sand Filtration, Carbon Filtration, Reverse Osmosis, Ozonisation and UV Treatment. PDW have 71 Co-packer across the country and parameters for all the plant remain same. SKUs 42
1Ltr 500 ML 250 ML 2 Litre 20 Litres. Jar Q Natural mineral water (NMW) Q Natural mineral water has a distinctly sweet taste due to its fine balance of minerals of virgin origin. The heavenly climes of Himalayan foothills, its valleys and the rich flora impart a characteristically fresh sweetness to the water. Spouting from Mother Earths lap in the valley, this water is bottled at the same source after micro-filtration with no further chemical treatment. The fine balance of dissolved salts and minerals in Q Natural is unique to the geology of the Himalayan foothills. SKUs 1Ltr 500 ML 250 ML
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LITERATURE REVIEW Bottled Water Industry India is among the fastest growing economies of the world. It is also among the top ten largest economies of the world. We have seen exponential growth in the past two decades and it was just for a brief period of global recession that the market went a bit slow but its fast catching up in India and worldwide. Due increased growth we find a substantial chunk of disposable with common Indian which is a good news for the India Growth Story. The domestic market in India is split between few set of players-national brands with a pan India presence and which are at present worth Rs 4000 crore, many local brands manufactured by registered companies but which are limited to limited regions in different states and have a combined turnover of Rs 2400 crore, local brands are estimated to be at Rs 1600 crore. It is estimated that there are about 2500 brands in this category (unorganised), out of these about three-fourths are local players. While India ranks in top 10 packaged bottled water consumers in the world, its per capita per annum consumption is 5 litres which is way below the global average of 24 litres. From 1999 to 2004 the consumption of packaged bottled water in India more than tripled from 1.5 billion litres to 5 billion litres. While the top players in this Industry are Parles Bisleri and international giants like Coca-Cola and Pepsi, there is a noticeable presence of other national brands like, Bonaqua, Kingfisher, Himalaya (Tata) and Rail Neer (Indian Railways). We see a considerable increase in the supply provided by local food processing and packaging machinery manufacturers, while there is a high demand for machineries 45
featuring state-of-the-art technology. For the manufacturers of food processing and packaging machinery, India has become a very important market in Asia with strong growth potential. In the last five years the Indian imports of food processing and packaging machinery increased by 200 percent which amounted to 550 US $ million in 2008. With a market share of 23 percent Germany is the most important supplying country for the Indian food and beverage industry. The carbonated soft drinks industry in India comprises over 100 plants providing direct and indirect employment for over 125.000 employees and has attracted one of the highest foreign direct investments in the country amounting to around 1049 US $ million. Soft drinks constitute the third largest packaged food segment in India after packaged tea and packaged biscuits. But the penetration level of carbonated soft drinks in India is still low compared with other developing markets, an indication for further potential for rapid growth. The market size for the bottled water in India was estimated at 570 US $ million in 2008. With an annual growth rate of 14.5 percent volume sales of bottled water will increase rapidly within the next five years. The market size for juice will grow also dynamically within the next years with an annual growth rate of almost 15 percent.
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Sales volume of non alcoholic drinks in India Litres mn 2009 2010 2011 2012 2013 Annual growth rate 2009- 2013 Bottled water 3.290 3.885 4.515 5.169 5.825 14,5 % Carbonated soft drinks 1.323 1.430 1.536
1.639 1.738 6,7 % Juice (fruit/vegetable) 456 538 623 709 796 14,9 % The packaged bottled water industry in India is one of the fastest growing industries in India. The packaged bottled water in India is expected to touch Rs 10000 crore mark in the financial year 2012-2013, and currently it is growing at a healthy compound annual growth rate (CAGR) of 19%, moreover it is expected that it will cross the limit of Rs 15000 crore by the year 2015. Currently Bisleri is the leading brand in the bottled water industry with 36% share in the market among the national players. Coca-Colas Kinley is at second position with 25% market share, followed by Aquafina at 15%. Other brands which are present at the national level are Parle Agros Bailey, Kingfisher and McDowells No. 1. The global packaged bottled water industry figure stands at US$ 85-90 billion and is growing at a rate of 40-45 percent for the last five years. There are many reasons due to which the packaged bottled water industry has taken the shape of just another consumer item and its consumption is growing day by day due to the following reasons: 47
the Indian government has not been able to provide safe drinking water to its citizens rising health awareness among citizens the growing number of cases of water-borne diseases due to increasing water pollution and increasing urbanisation Scarcity of potable and safe drinking water at railway stations and tourist places As per an UN study conducted in 122 countries to measure water quality, India has been ranked a dismal 120 Rising disposable income in India
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Packaged Bottled Water Industry Statistics: Consumption (India) Urban Market 84% Rural Market 16% Different geographical regions South India 50% West India 40% East India 10% Due to increased demand in home and institutional segments the trend of bulk water consumption is rising Non-traditional category (bulk-packs) 40% Traditional Category (below 5 litres) 60% There are three kinds of players in India National players 4000 thousand crore Local brands (registered) 2400 crore Local brands (unorganised) 1600 crore
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Major National players Parles Bisleri 40% Coca-Colas Kinley 25% PepsiCos Aquafina 10%
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SWOT ANALYSIS OF SAHARA Q SHOP:- Strength: Brand name of Sahara gives an edge to Sahara Q shop, because its a renowned brand and the trust vote is in favour of it. In order to target big market, Q water has a wide product range starting from Package Drinking water to Natural mineral and Sparkling water. Due to sponsoring of different sports it has a positive image in the minds of customers. Weakness: Limited market share due to high competition in the market. Q water lack on the front of promotion, till date no help of media has been taken in order to promote the product. Distributor lack on the front of supply, delay in supply is not tolerated in the water market.
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Opportunity: Should concentrate on HORECA more that is to make tie-ups with hotels, restaurants and bars. The consumption of packaged drinking water is still low. Increasing trend of drinking natural mineral water and sparkling water. Threats: Local players and surrogate advertisers are playing the price game, which harms companys interest. The larger number of consumers still prefers low price water. Company lack on the front of offers and benefits
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PROJECT To study the challenges faced by a water company in order to penetrate a market A new water bottle in a market is similar to a new dish served. Not everyone is willing to taste it. Dal Bukhara a speciality of ITC Maurya was not accepted in the starting but now it is in the 50 most exotic cuisines in the world. There are challenges obstacles which a new product faces in the market. As per this product, there are many of them. Established players like Bisleri, Kinley and Aquafina enjoys a healthy market share because of their market value and wide acceptance Not well established but well known brands like Catch and bailey play the price game. And try to woo the buyers through offers. Local players like Oras, More, H2GO, Bonaqua and Hello runs on the concept of cheap price. They provide the product at a very cheap price for example: - 80 a case. This is 40 cheaper than Sahara Q water and around 60 cheaper than big players. In order to do surrogate advertising companies like Foster, Kingfisher, Mc Dowels, Bagpiper, and Haywards launch their water bottle. The problem is that they are well known brands; they provide offers which are irresistible and prices as lower as the local players. Its hard to compete them. Water is not a product its a service. If you have a good distribution network, market will surely start accepting your product. Q water suffers with a poor distribution network 53
Advertising plays a vital role in order to establish a brand. Sahara q has 750 products and 210 products are yet to come. Its next to impossible to advertise all of them. And it leads to non acceptance of the product in some markets. The harm to the brand Sahara which has happened in past one year because of frauds and corruption charges is another challenge for the product. Cause with a bad name you cannot survive in the market The look of the bottle is not appealing. People tend to relate the looks of the bottle with a local brand.
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APPROACH TO THE PROBLEM In order to aid the problem the researcher have done a keen study of the market which tends to describe the type of the buyer, the region of the sales, the figure of the sales and the deviation in sale which occurs due to different factors. Some of them are unavoidable which cannot be cured and some comes with answer attach to them. The approach is to study the daily sales report of different regions containing the sales figures and the outlet description. In order to formulate graphs .This can easily describe the problem and highlight the loop holes which are needed to be filled. After understanding the problems researcher can recommend optimum solution for the same. Market Water as a product can be sold anywhere from a pan shop to a pantry, from a chemist to a confectionery store or from a street hawker to a bakery. You require water in Clubs, pubs, discos, hotels etc. There are three types of buyer small, medium and large, which a company tries to cater. They needs are different, the orders are different and they way buyers do the business is different. Small Buyers A pan shop, a tea shop or a street hawker are some names for small buyers. They are people who have a very limited amount of earning. They dont ask for banners or samples from the company. All they want is regular and on time service, that is before 10 am. Their order stays between 1 to 4 cases a day. And they are very frequent in 55
placing order, mainly daily supply is necessary. The major volume of sales comes from these shops, because they are high on numbers. One problem with some street hawkers are their place is not fixed. In a market they can be anywhere. When the distribution van comes distributor faces problem in order to find them. The only benefit is they have cell phones. Medium Buyers Mainly confectionery stores and food stores comes in this slot. Shop keepers dont bargain much. But they do ask for hoardings, banners and samples. Its not easy to bind them for a product but if they get committed they help in brand promotion, brand establishment and sales. The order is under 10 cases. And weekly delivery is required. Shops like this have a large customer intake, every day around 150-300 customer visit them. For a new product this is the best place for seeking attention of the customer. Large Buyers Hotels, discos, bars and pubs are the bulk buyers. The order stays between 30 to 200 cases. Order is on a weekly basis. Payment is bill to bill. Owners will bargain for every penny. Some time the company gives them the price they are giving to the distributor. They dont require any promotional activity but still company tries to convince them for putting their banners. Some time company gives them fridge for mainly promotion. The product gets noticed here by the consumers and attains high brand value. They give a large amount of sales to the company
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ANALYSIS Different market shows different attitude towards the product. Some easily accepts the product but some markets are hard nuts to crack. They are nightmares for sales person. In Delhi markets like Defence Colony, Khan Market, Kailash coloney and Greter kailash are some of the markets where the product didnt even have a double sales figure. The shopkeepers over there were arrogant and were not interested in the product. The sales volumes that they were giving to other competitive brands were quite high. Product got acceptance in the market like Lajpat nagar, Rajouri garden, Rohni and Netaji subhash place. The customer accepted the product in the primary visits only. Company started getting trust votes from the buyer in the first month of the business. When asked for the reason behind the difference, Mr. Nasir Husain said it is because of the gentry that market receives. Product is needed to be well known, if seeking entry in posh markets. Because the people are brand conscious over there. And if the product is not well known it should be appealing for the customer.
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Objective of Study To Know the awareness of Q Water among customer To know the Distribution channel of Q Water To know the different aspect of Q Water according to consumer To know the different companies which are involved in mineral water industry
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RESEARCH METHODOLOGY Research in common parlance refers to a search for knowledge. One can also define research as a scientific and systematic search for pertinent information on a specific topic. In fact, research is an art of scientific investigation. The Advanced Learners Dictionary of Current English lays down the meaning of research as a careful investigation or inquiry especially through search for new facts in any branch of knowledge. Some people consider research as a movement from the known to the unknown. It is actually a voyage of discovery. We all possess the vital instinct of inquisitiveness for, when the unknown confronts us, we wonder and our inquisitiveness makes us probe and attain full and fuller understanding of the unknown. This inquisitiveness is the mother of all knowledge and the method, which man employs for obtaining the knowledge of whatever the unknown, can be termed as research. Research is, thus, an original contribution to the existing stock of knowledge making for its advancement. It is the pursuit of truth with the help of study, observation, comparison and experiment. In short, the search for knowledge through objective and systematic method of finding solution to a problem is research. Research methods used are systematic and it follows a series of steps and a rigid standard protocol. These rules are broadly similar but may vary slightly between the different fields of science.
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RESEARCH DESIGN Descriptive or Survey Research Design attempts to describe and explain conditions of the present by using many subjects and questionnaires to fully describe a phenomenon. It is one of the most popular for dissertation research. Survey research uses questionnaires and interviews to collect information about peoples attitudes, beliefs, feelings, behaviors, and lifestyles. Cross-sectional survey designs survey a single group of respondents, whereas a successive independent samples survey design surveys different samples at two or more points in time. A panel or longitudinal survey design surveys a single sample of respondents on more than one occasion. Since the retailers and the company executives had to be interviewed personally, a mix of independent samples survey design and panel survey design was used.The basic objective was to understand their perception and take on the market as a whole, so as to help develop a holistic strategy. DATA COLLECTION The research was carried out by personally visiting the 110 stores retail stores with the sample Complete data for this project is based on primary research carried out through regular field visits.
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QUESTIONNAIRE DEVELOPMENT AND PRETESTING The questionnaires were developed after a meticulous market study. A basic understanding of the project related concepts was developed on initial visits through observation and general discussions. Based on these findings, it was felt that a total of 2 questionnaires need to be developed in order to carry out an in-depth analysis for benchmarking and strategy formulation. They were Retailer Survey This was designed to get the view-points of the retailers, since they form a crucial link in the supply chain and are the first touch point with the consumers. Hence their take on Dabur and its competitors became essential in order to draw a valid comparison. Concepts such as promotions, schemes, visibility, service levels and sales were covered. It comprised of basic figures-obtaining, opinion based, multiple choice and open-ended questions. Pretesting of the questionnaires was done through discussions with the Industry mentor and general interactions with the retailers. This was done to correct any unknown mistakes and increase the effectiveness and accuracy of the surveys. The valuable inputs received from their experience helped in making the surveys crisp and effective for the customers. Tools for analysing data The tools used for analysing the results or the data gathered from the various surveys were, 62
Pie Charts: These are useful to compare different parts of a whole amount. A pie chart is a circular chart in which the circle is divided into sectors Bar Graphs: A bar chart or bar graph is a chart with rectangular bars with lengths proportional to the values that they represent. The bars can be plotted vertically or horizontally. Bar charts are used for marking clear data which has discrete values.
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Data Analysis 1. Which all brands of Packaged Drinking Water (PWD) do you store?
Nearly all of the retailers had Bisleri bottled water with them, since it has become a generic brand name. Kinley was the other most wanted brand. These two brands enjoy trust of masses when it comes to water, especially in the harsh summer seasons. The other brands which enjoy the trust are Bonaqua , Baileys, and Aquafina. This season we also noticed great market acceptability 0 10 20 30 40 50 60 70 80 90 Series1 64
of More and Orus which was basically due to two major reasons, one, they provided very good margins and second, they had attractive packaging as well.
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Q-2 Reasons for not stocking Sahara Q PDW?
Majority of the retailers did not stored Sahara Q Water. We asked them the reason for it which gave us insight about the reasons for non availability of our water. The major findings were that customers did not preferred the Sahara Q Water along with it retailers considered margins not be competitive enough. They even did not liked the bottle design and mentioned that the bottle did not looked like that of the premium segment as it was priced at. Since there had been a storming of all the markets covered and a few were followed up, we were not able to follow up. Retailers wanted a local distribution and a continuous supply. Along with that the low advertisements, no special schemes like free samples was a demand from a limited number of retailers.
78 69 65 52 44 37 25 there is very less demand of SaharaQ PDW Margins are not competitive/good enough. did not liked the Bottle Design Distribution is not regular. there is less brand awareness of the SaharaQ Shop No special entry schemes/benefits were given. there is less demand of the PDW 66
Q3- What helps other brands in selling?
The market leaders enjoy the brand image has already been established and there is pull from the market as customers ask for these brands and may or may not consider other brands, only if the main brands are not present at the retailer. The reason for keeping local brands is that they offer the best margins and can be sold cheaper than the MRP n still give good returns, which excites the retailers and prompt them to sell the proactively. Most of the big players have a properly established distribution channel in place, which ensures proper delivery of the water in normal days and also in case sudden demand arises. Very few complaints come up against these brands, which is also a good for their reputation. 0 10 20 30 40 50 60 70 80 90 100 -Customer demand. -getting better profit margin from others. -brand image. -proper distribution channel. - less complaints. Series1 67
Q- 4. In which price range do you have PDW products?
A large portion of Indian market is captured by water pouches covering an entirely different segment. Most of the brands had maintained their MRP between Rs.15 and 18 for most of the markets with exception of South Delhi where the price were maintained at Rs.20 per bottle.
0 10 20 30 40 50 60 70 80 90 -10 to 15 -15 to 18 -18 to 20. - Above 20 Series1 68
Q- 5. What are the margin various brands giving you (in a carton of 12 bottles)?
With exception of Aquafina and local brands which offered huge margins other brands offered nearly same margin. Aquafina gave free carton of water along with its coldrinks.
Q-6- What do customers ask for when they come to buy PDW?
Majority of the customers asked for Bisleri and Kinley instead of asking for bottled water as these brands have very high market acceptability.
- A particular brand. - Any bottled water. 70
Q-7-What do you recommend the SaharaQ PDW product should make changes about?
On being asked about the reasons for not placing the product or for changes/recommendations they want were that they were unhappy about the low margin along with low advertisements. They also wanted the appearance of the product to be changed along with reduced MRP as they considered it would help in improving the selling.
0 20 40 60 80 100 -free samples more advertisements reduce prices - Bottle Design n looks -local distributor More margin Series1 71
Conclusion For product design :- We have an example of Kinley which changed the market scenario from being a laggard to a competitor to a well establish brand Bisleri. Other established brands too have good design. They also have either translucent label or wrap- around label which is attractive too. There is a great scope for improvement as we can improve upon the bottle design and its label. For MRP:- MRP was changed during the research process itself depending upon the market we were entering into. For South Delhi the MRP was fixed at Rs.20 and Rs.18 for East Delhi. When confronted with the dilemma of reducing the price below Rs.18 in East Delhi our industry mentor cautioned about the brand image which once gone down will be difficult to built up, citing examples of MacDowells and Kingfisher. For margins for the retailers:- Currently the market leader bisleri gives least margin of Rs.76/carton while giving more to the distributors. Then comes Kinley with Rs.86/carton. Local brands like More and Orus can afford to give a huge margin of Rs.151. Aquafina gives away a carton with each pack of its 2 litre cold drinks. Our cost of one carton comes to be around Rs.105/carton. Considering the fact that Q Shop has support of parent Sahara Company, we can afford to increase the margin, below the cost for a season or two. From then on we can sell at competitive prices 72
For distribution:- we can have two to three Super stockists who have experience in the field and can manage atleast10 distributors under them. Freebies: - Occasional freebies like ice-boxes, refrigerators can be provided to retailers with large quantity of sale. For market presence:-
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RECOMMENDATIONS
1. The company should pay more attention to its distribution channel and services. 2. The brand is losing its image due to duplicity, so proper and strict action must be taken to eliminate this problem. 3. The numbers of small dealer should be increased to make proper and easy availability of water. 4. The production capacity of the plant should be increased or new bottling unit might be set up to fulfill the increasing demand of the market. 5. The new offers and packages should be launched time to time in order to attract new customers. 6. The old and dirty jars should be replaced frequently so as to give more satisfaction to the consumers. 7. The company should introduce some free gift coupons or vouchers to reward its existing and loyal customers. It will help in maintaining good relationship with customers and even attract new customers. 8. There is intense competition in the market so more advertisement should be done to have an edge in the market.
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9. More exclusive depot and company owned outlets should be introduced, so that customers get original water at reasonable price. 10. The number of distributors should be increased so that each concentrates on its specified areas, this will result in better service and customer satisfaction. 11. The company should reward its best performing distributors in terms of incentives or some worthy gifts, so to encourage others to perform well. 12. The company should held monthly meeting with the distributors so as to know the market, competitors activities, problems etc and find out the best solution of each. 13. The company should help and encourage its distributors in promotional activities.
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ANNEXURE Questionnaire to study retailers perception of Campus brand vis--vis competition
1. Name of the shop? ------------------------------ 2. Area/location of the shop? ----------------------------------- 3. Which all brands of Packaged Drinking Water (PWD) do you store? -Bisleri -Kinley -Aquafina -Bonaqua -Baileys -Kingfisher -MacDowells -H2GO -More 76
-Orus -Others -_________ 4. Do Sahara Q Shop Water distribution representatives come to your shop often? -Yes -No 5. Do you stock SaharaQ PWD? -Yes -No 6. If no, then why not? -Margins are not competitive/good enough. -there is less demand of the PDW -there is very less demand of SaharaQ PDW -there is less brand awareness of the SaharaQ PDW. -Distributors are not coming in regularly. -No special entry schemes/benefits were given. 7. What makes you sell other brands? -Customer demand. 77
-getting better profit margin from others. -brand image. -proper distribution channel. - less complaints. 8. You have PDW items in which price range? (Ignoring Water Pouches which capture a large ) -10 to 15 -15 to 18 -18 to 20. - Above 20 9. How many distributors are dealing with you? - Only 1 - 1-2 - 2 to 3 - 4 to 5 - More than 5
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10. What are the margin various brands giving you? -bisleri-__________ -Kinley-__________ -Aquafina-________ -Others-__________ 11. What do customers ask for when they come to buy PDW? - A particular brand. - Any bottled water. - Water pouches. 12. Do you sell PDW at -MRP - More than MRP -less than MRP 13. Who is the major competitor of SaharaQ Shop? -_____________________
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14. What do you recommend the SaharaQ PDW product should make changes about? -Adjustment of margins - Bottle Design n looks -price range -advertisements (promotion) -local distributor -free samples