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Hielo Beverages Case Study

How Hielo will outgrow pre-established leading Bottled water Giants


The problem
Company Context Problem statement

Hielo Beverages is an The company expects to 1. Appearance of new


upcoming mineral water , flourish due to fueling by companies
sparkling water and
nectar-based fruit juices ● Awareness 2.Figuring out most
company under the name ● Health-Consciousness probable markets in India
PEAUR . ● Distribution penetration
3.Devising online and
offline marketing
startegies.
Challenges deep-dive

Challenge 1 Challenge 2 Challenge 3

Expand audience Eliminating risk from Figuring profitable


New Competitive markets and developing
Establishing the name of
designs market strategies
the coMpany when other
giants like Bisleri’s Taking care of Finding the right cities to
Vedica and Tata’s introducing new product expand business in initial
Himalayan are already designs and consumer stages and receiving the
present. cum environment friendly right feedback along with
products at reasonable increasing reputation of
prices to bind customers. Hielo Beverages.
The bottled water Industry has
exhibited one of the biggest growth
rates in recent years . Packaged
water grew 23-25% in year to March
2016, more than twice the rate at
Solutions which sodas grew. Euromonitor has
forecasted that in the period
Factors affecting growth of between 2016-21, while bottled
water will grow 19.8% by volume
Bottled Water Industry
and 16.5% by value.
Tentative Factors affecting Growth of bottled water:
1. Negative publicity of Cola drinks due to high sugar content and lack of nutritional
contents.
2. Increasing health awareness compels customers to look for something that adds to their
nutrition intake on a daily basis.
3. The unavailability of clean drinking water, especially away from home, will continue to be
a major growth driver during the forecast period.
4. Growing health awareness and the rising risk of waterborne diseases will also encourage
growth in bottled water sales.
5. Intensive marketing and advertising of bottled water.
6. Another reason for the increasing demand of bottled water in India is that like in
Germany it is becoming more and more a fashionable lifestyle product too.
7. Increasing affordability due to to reduction in prices of bottles (due to changing quality of
plastics used) is a major growth affecting factor.
8. Sector growth is being fuelled by awareness, health consciousness and distribution
penetration.
9. In India ,unavailability of clean drinking water continues to be major factors behind the
strong growth.
10. In California, tap water costs around one tenth of a cent per gallon, while bottled water is
0.90 cents a gallon
Factual Proofs:
1. BISLERI , one of the leading companies is experiencing 30% year-on
year growth rate.
2. The researcher said companies are expected to ship 12.6 million
gallons of water in fiscal year 2016, compared with 12.4 million gallons
of carbonated beverages.
3. Coca-Cola reported volumes of non-fizzy beverages including water
rose 2% in the second quarter of the current year as sparkling
beverages fell 1%.
4. The total market was valued at Rs.60 billion in 2013, of which the top
five players accounted for 67 per cent of the market share.
Insights to Factors Hindering
Bottled Water market
Small local players eat Large Brands struggle
Poorer sections of the to penetrate non tier
into market by
society and tough to smaller cities helping
imitating brands and
reach areas contribute growth of smaller
charging similar or
least to this industry. markets
lower prices

Affordability Water Smaller Policy Inhibitors to


And outreach Purification markets Changes market

Traditional purifying
FSS Regulation forcing
techniques and water
BIS Inspection to
purifiers are one time
maintain very high
investments and act
standards.
as major setback.
Understanding The Competitors
Heilo Beverages

Target Company

Bisleri’s Vedica Tata’s Himalayan

Competitor 1 Competitor 2

Major distributor Advertisement Campaigns Lead Marketer Major Punch Line


“Play Safe” Taste of
ZopNow Go Green NourishCo
targeting youth Himalayan Water
max growth

Marketing
Strategies that matter
SEGMENTATION:

1. The need to stay ahead of competition


2. Demographic segmentation
3. Geographic Segmentation
4. Psychographic Segmentation

DISTRIBUTION STRATEGIES

1. Retail Outlets
2. Home Delivery
3. Peaur Shoppe
4. Direct Road Transport
SWOT Analysis :
1. STRENGTHS
The industry is growing @ 40%.
In India the market is huge & untapped
Growing awareness among the people about the importance of mineral water
2. WEAKNESSES
Many players entering in the race.
Any local person can start manufacturing.
Rural population is not using the packaged water.
Not very economical.
Quality not properly maintained.
3. OPPORTUNITIES
Sustained market growth increase in coming years.
Literacy rate growing and hence the awareness of safe drinking water to avoid the diseases.
Huge population & untapped market.
4. THREATS
Many substitutes available,
Too many players will dilute the market & the profit margin.
How to outpower Leading Companies and Offline /Online
Marketing Strategies:
1. The recent re-launch has confused the customers about the actual positioning of the
TATA’s Himalayan.
2. The target customer for the Himalayan are low and geographically scattered making the
distribution network complex and less profitable.
3. The Himalayan is competing on quality in a price sensitive Indian mineral water segment.
4. Increasing Availability in tough to reach areas in non-tier cities is an effective strategy due
to non availability of Bisleri and Tata there.
5. The Route selling method used by Bisleri is more expensive than the common method of
appointing distributors in different towns.This increases the cost and many retailers refrain
from keeping the product as well. This directly attacks their distribution potential, revenue
and market share.
6. Lots of local people collect the Bisleri bottles and refill it using the local unclean water and
then mix it with the original batch. This reduces the brand image of Bisleri and may prove
harmful during consumption.
7. Many times Bisleri came under scrutiny in lapses of quality. This damages their brand value
and reputation. They also lost the license to produce at their Noida facility due to a similar
case.
How to outpower Leading Companies and Offline/Online
Marketing Strategies: (cont.)

1. Bisleri is unable to meet the market potential of the south India as well as in various
pockets of India.Production is not as high as it should be because the consumption is very
high.
2. Absence of Himalayan advertising on social media platforms can be used to our advantage.
3. Striking areas of weaknesses of major competitors will provide a headstart to business of
Heilo Beverages in India as well as abroad.
4. Revenues can be increased by either increasing sales or reducing the production costs.
5. Adopting or creating a tagline to associate with Peaur helps in increasing brand recognition.
6. Setting up the production plants in India at places where the electricity prices are low and
reachability is high and focussing on marketing regions where population is high and
availability of clean water is less . High demand of bottled water is an added advantage.
7. Jharkhand , Mizoram and Dadra and Nagra Haveli have the lowest industrial electricity rates.
8. The bottled water produced in Jharkhand can account for the availability of Hielo in central
India . The production in Mizoram can account for the sales in eastern India and production
in Jammu and Kashmir can account for sales in Northern India .
9. The setup plants at various Indian Extremes can also reduce transportation costs , thus
increasing revenues.
How to outpower Leading Companies and
Offline/Online Marketing Strategies: (cont.)

1. Online Interactive Contests are one of the most innovative ways of


marketing aiming at popularizing the brand name and getting feedback
reviews simultaneously.
2. Search Engine Optimization is one of the modern techniques used to
show the customer with ads you want them to see on basis of search
history.
3. Aiming customers who are vulnerable to changing their regular brand
is a good way of increasing sales and finding new customers.
4. Social Media attracts people from all age ranges and in huge
numbers. SOcial media marketing of brands has proven to be a tested
method of increasing sales.
Customer Targeted Marketing and package:

The bottled water can be segmented in different packages:


1. One litre bottle
This is meant to spell safety and security for consumers. It is positioned on
a prestige platform for the achiever segment - who like to make a fashion
statement by drinking mineral water. This segment gets the maximum
sales.
2. 500ml bottle
This size has been introduced in the market to target the individual and
local travelers.
3. PET bottles
The size of the PET bottles varies from 10 to 20 litres. These are mainly for
institutional sales (Wedding parties, Hotels, Corporate, etc.)
Therefore
Target Areas for
Production 1.
2.
Jammu and Kashmir
Mizoram

Plant Setups 3.
4.
Dadra and nagar Haveli
Surat

are 5. Daman and Diu


1. Availability of clean water
2. Frequency of water borne
diseases
Factors 3. Metropolitan cities should be
preferred
affecting areas 4. Easy to reach areas with more
no. of retailers and huge
to concentrate 5.
markets
Areas where major Bottled
for Sales water giants haven’t reached
yet
... 6. Areas where circulation of
products is cheaper.
Strategies/Marketing:
1. EXPANSION: It can expand in different locations across the global
markets to increase the market revenues and profits. Europe and the
Middle East is a lucrative option for the same as Bisleri and Himalayan
are not present there.
2. MATCHING DEMAND AND SUPPLY – A major problem for any retailer
to shift to brands other than bisleri is the regular supply and refill capacity
of Bisleri. The more production Bisleri has, the more market it will
conquer and the more it will be able to match demand with supply which
Bisleri is not keeping up with. Matching the required production rates will
increase Hielo’s revenue tremendously.
3. EXPECTED GROWTH RATE: Packaged water grew at 23-25%
compared to last year which is almost double the growth rate of
carbonated drinks. This shows there is still huge potential in the country
because HImalayan and Bisleri are not keeping up with required
production rates which Hielo can cover for.
Strategies/Marketing:(cont.)
1. E-MAIL MARKETING has astounding potential for ROI because it costs almost nothing to
execute. Start collecting subscribers from your existing customer base, your social media
followers and other new opportunities; from there, even a simple content newsletter can
help you encourage repeat traffic to your site, facilitate more engagement with your brand
and keep your brand top-of-mind with your audience.
2. IMAGE FOCUSING: Most bottled water labels depict mountains and glaciers, which make
consumers assume that the water comes directly from a mountain stream. This isn’t
necessarily true. For example, Aquafina’s logo features white-tipped mountains, but the
product is merely treated tap water. It isn’t nice to lie to your customers, but you do want to
promote the image you’re selling.
3. TURN CONSUMERS INTO CONNOISSEURS. Bottled water companies encourage
consumers to focus on the flavor of their water.If you don’t ask to be perceived as a quality
product, you won’t be.
4. By positioning your product as a sign of wealth, it becomes desirable to people who are
striving to reach the upper class. Back in the 1970s, ordering a bottle of Perrier was viewed
as a symbol of wealth and class. Before long, the beverage caught on among the middle
class. As more and more companies began offering bottled water at lower price points, it
became a “luxury” that just about anyone could afford.
Strategies/Marketing:(cont)
1. POSITION HIELO AS SOLUTION TO PROBLEM -. Generally,
bottled water companies don’t position their product as an alternative
to tap water — instead they market it as an alternative to the
unhealthy soft drinks that consumers might otherwise buy when they
go out.This is a major flaw in Bisleri and Himalayan marketing
strategies. In Nestlé Pure Life’s recent advertising campaign, for
instance, the company asks mothers to pledge to replace one sugary
drink each day with the company’s water products. Bottled water may
not have the best reputation these days… but it certainly beats that of
soda.
2. PREMIUM SEGMENT: It can launch a premium bottled water for
5-star hotels and high-end customers. It can diversify its target
audience and cash in on this segment as well.
Major cities In 1.MUMBAI

India to be 2.DELHI

concentrated 3. BANGALORE

4.HYDERABAD
upon for 5.KOLKATA
maximum
sales:
JUSTIFICATION:
1. According to Payscale.com, the average median salary in Bangalore is Rs. 5,85,527 per
annum and the credit growth rate is 29%. 7 out of 10 engineering students also consider
Bangalore as their first job preference, according to study by Aspiring Minds Research Cell
(AMRC). Combine this with the fact that it's one of the leading IT cities in India, and heavy
work load and high educational levels along with health concerns will provide a head-start to
Bottled water Industry.
2. Hyderabad is famous for its IT sector, being home to big companies like Google, Facebook
and Microsoft. The median salary here is Rs. 489,505 per annum, the employment growth
rate is 10% and 30% of the respondents in the AMRC study consider it the best city, so the
credentials are legit.
3. The median salary of MUMBAI here is Rs. 498,475 per annum, and while the cost of living,
especially rent-wise, is very high, the number of job opportunities do in a way offset that
fact.Coupled with heavy population and lack of clean water for all the residents , especially
the tough to reach outskirts can provide a good target market for setting up base for
Hielo.Presence of major Colleges where students from all parts of India visit can also be a
contributing factor because availability of clean water away from home is a major driving
factor.
Continued :
1. Most of these cities consist largely of 9-5 working people . But most of the employers don’t
take proper care of clean water facilities for the employees . We need to target these people
for a boosted market in Bottled water industry of Hielo.
2. Presence of large number of traders and retailers will provide an easy outreach of Hielo’s
bottled water to large and hard to reach areas which are left by other giants like Bisleri and
Himalayan
3. Presence of large number of hospitals ca also be a contributing factor . Setting up ratailers /
traders selling Hielo’s Bottled water to hospitals in large quantities or settig up Hielo Shoppe
near these is going to be a major drive in Hielo’s campaign.
4. All these cities have major Railway Stations and Inter state bus terminals . Concentrating the
sales in these areas where people come from all over India can helpin boosting sales as
people tend to prefer Bottled water in hot summer days rather than drinking from those
unclean and visibly unhealthy taps.
OVERVIEW of Case Study
Having a deeper look Proposing the various
Introducing the case marketing strategies
on how the problems
can be solved. and potential market
areas.

DEEPER
INTRODUCTION CHALLENGES SOLUTIONS MARKETING
INSIGHTS

Understanding the
Understanding the
problem statements
various factors
responsible for
growth/decline.