Strategic recommendation for new entrant (Product, Pricing, Promotion,

Distribution)

Bottled water is one commodity that is consumed in all parts of the world and
of course those that are in the business of producing bottled water are known
to generate sales year in year out if the business is well – managed. Taking the
steps based on new company product, pricing, promotion and distribution
strategy can provide the edge over the competitors along with gaining a
satisfying experience that allows company to make money while also
helping the customers achieve a healthy lifestyle. 

For a new entrant based on following steps one can analyse before starting
a bottled water company.

 Understand the Industry

 Conduct Market Research and Feasibility Studies
 Decide What Niche to Concentrate On
 Know the Major Competitors in the Industry
 Decide Whether to Buy a Franchise or Start from Scratch
 Know the Possible Threats and Challenges You Will Face
 Writing a Business Plan
 Do a Detailed Cost Analysis
 Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)
 Choose a Catchy Business Name
 Get the Necessary Professional Certification
 Get the Necessary Legal Documents You Need to Operate
 Discuss With an Agent to Know the Best Insurance Policies for You
 Choose a Suitable Location for your Business
 Hire Employees for your Technical and Manpower Needs
 Write a Marketing Plan Packed With ideas & Strategies
 Develop Iron-clad Competitive Strategies to Help You Win
 Brainstorm Possible Ways to Retain Clients & Customers
 Develop Strategies to Boost Brand Awareness and Create a Corporate
Identity
 Tips for Running It Successfully
Now, Investment required by new entrant depends upon many factors such as
production capacity of the plant, location, transportation cost, type of water
used as source or feed water and its chemistry and the type of plant and
production capacity per hour – such as bottled, pouches, jar, etc.

As per my research specific to Ahmedabad region I noticed the space where a

new entrant can introduce Flavoured Bottled Water in the Ahmedabad
market. The idea of introducing Flavoured Bottled Water in the market
emerged from qualitative research based on understanding various brands and
their niche in which products are diversified for Ahmedabad region. As per
sources, the flavoured bottled water market in India is small, only about Rs 11
crore (Rs 110 million) out of the total bottled water market of about Rs 1,100
crore (Rs 11 billion). Also after discussions with company officials I found out
there is room for unique Flavoured Bottled water that are not currently
present at huge numbers and hence market share can be captured if the
strategic plan in accordance to product, price, place and promotion is
constructed well.

Urban residents of Ahmedabad are becoming ever more health conscious.

There is also a rise in the number of working couples and many are shifting to
the city for work purposes. Urban youth are constantly on the lookout for
carbonated drink alternatives generating new business opportunities for a
variety of new entrants. The current market for flavoured water is highly
unorganized, with major manufacturing firms being in-house chefs and
roadside vendors. They supply local hotels and sweet shops and are now
moving gradually into supplying organized retailers.

The end consumer is from 0 – 80 years as water is meant from infant to

everyone. There is an opportunity to position and offer premium and
differentiated water in Ahmedabad. Flavoured Bottled water has to be scaled
higher in terms of positioning – both from functionality perspective, as well as
from a lifestyle perspective.

At present, Parle's Bisleri, PepsiCo's Aquafina, and Coke's Kinley rule the lower
end of the Ahmedabad retail bottled water segment, priced as being between
Rs 10 and Rs 19 for a 1 litre bottle. Other brands such as Clear, Aava, and
Himalayan are averaged priced between 25-50 for a 1 litre bottle.
Imported brands such as the mountain water brand Evian by Groupe Danone
and the sparkling water brand Perrier by Nestle dominate the top end, priced
between Rs 80 and Rs 110 a litre.
Customer
In terms of the socio-economic factors, Ahmedabad lifestyle is undergoing a
massive socioeconomic change, which is also being reflected in food habits as
more and more restaurants are opening focused on healthy dishes. People
want value for time, money in terms of quality and variety. The scenario in
Ahmedabad is alarming with respect to increasing cases of obesity. According
to a research conducted by NHFS (National Health and Family Survey), obesity
has already affected 12.1 percent males and 16 percent females of the
country¡¯s total population, and the percentage is growing rapidly. The need to
shift to healthy drinks from high-sugar containing beverages that can be
achieved through consuming flavoured water is really important to control
obesity.

Collaboration
New entrant can collaborate with the restaurants and wedding houses for
placing it in their complimentary drink menu. It can collaborate with IRCTC to
provide flavoured bottled water in railways. It can collaborate with airlines to
place it in airports and provide it during travel.

Parle can work with the health care awareness committee like NHFS to
highlight the importance of shifting from high calorie drinks to low calories
drinks

Channel
No matter how strong the top of the mind is, brands in this category are
consumed depending on shelf space availability and chill space availability.
Thus it has to flood all possible channel

Marketing Objectives
As suggested by the Ansoff Growth Matrix, our strategy would be one of
Product development and to some extent that of Diversification. This would
entail the following:

Increase the market share – This can be achieved by a combination of

competitive pricing strategies, advertising, sales promotion and perhaps more
resources dedicated to key account selling

Target increased usage by potential customers, e.g. Introducing frequent buyer

schemes, loyalty schemes

To drive sales, we could also consider the following:

Innovative product dimensions or packaging: e.g. offering combo packs, family
packs, increasing pack size.

Proper mix of distribution channels, e.g. making it available in up market

supermarkets, kirana stores, confectionaries, canteens and railways and
airlines

Different pricing policies to attract different customers or create new market

segments, e.g. large size packs could be sold at prices the consumers deem
economical.

Introduction of niche segment variant like flavored water for infant -This may
require the development of new competencies and communications mix
accordingly.

The plan deals with the changes that can be brought about to introduce the
new product, packaging, distribution, pricing and communications mix to
ensure better awareness as well as capture a significant amount of the target

Since we are positioning the “Sheetal” as a healthy substitute for other

beverages, the following excerpt from Euromonitor report on packaged foods
strengthens the future prospects of this product.
“Health-based drinks have increased in favor in 2009. Capitalizing on the social
acceptance of conspicuous consumption, so long as health was not
compromised, companies launched a wide array of products across categories.
Products highlighting health, such as energy bars and drinks, digestive biscuits,
and healthier edible oils, all found ready takers, even as brands jostled for
differentiation”

Financial Objectives
To achieve a crore plus sales in all of the 7 metros where the launch happens in
the first quarter of launch. The metros where the product will be launched are
Bangalore, NCR, Mumbai, Hyderabad, Chennai, Kolkata and Pune.

To break even within 3 quarters and make profits by the end of first year of
operation

The detailed calculations can be seen in the action program and execution
section.

Marketing Objectives
To create an upbeat market for flavored market in Indian metros
Become the market leader with 80% market share of organized market in the
flavored segment by leveraging the first mover advantage

The rationale behind the strategy and objectives set is driven by the following
factors:

To achieve higher market penetration in bottled water segments.

Selling to markets and/or target segments not previously identified.

To accelerate growth in accordance with the forecasted growth rate of the

bottled water category.

To nurture the brand identity and promote brand awareness through

increased advertising and sales promotions.

The objectives outlined above are in conformance with the company mission
‘We are in the business of refreshing India with our products, refreshing the
market with new categories and refreshing ourselves through innovation.”

Market Segmentation
The dietary habits of busy city dwellers are gradually changing, with many
giving in to convenient packaged beverages meals. There is a rising incidence
of double-income nuclear families and growing numbers of single working men
and women professionals with fast-paced lifestyles means. These increasingly
lack the leisure or skills to prepare elaborate Indian beverages like
“Jaljeera/Mint Water / Mango Water “. Thus, while beverages may not be able
to match the taste of home food, consumers are still attracted by its
convenience, hygiene and with these generally proving major draws rather
than just taste.

From the above data depicting the population rise in the target cities, it can be
seen that the number of urban households in the major cities is about 1.72
million. If we consider the top 50 major cities in India this figure grows much
higher.

Double-Income nuclear families

This is an increasing urban phenomenon and is buoyed by the trend of more
and more couples choosing to have children much later in the marriage. With
more women entering the workforce with increased focus on work life in
urban areas, this trend is expected to continue. This segment is characterized
by a fast paced life with little consideration for saving money.
Singles
Sustained economic growth and an increasing number of young professionals
entering the workforce have seen a rise in the number of single member
families in urban areas. Young adults are finding BPO (Business Process
Outsourcing) jobs an early introduction to earning money. This segment is
characterized by people with a high disposable income, busy lifestyles and
relatively lower culinary skills (in particular single working men). The early
adopters seem to be the singles segment, where homemade preparation for
one is not considered worth the time,

Supermarkets see high sales value growth

Middle class Indians, with a credit card, or food coupons provided as part of
their salary package have adopted organized food shopping. These shoppers
are keen to take up special bulk purchase offers and deals. They also have the
advantage of browsing in shops and choosing, without the intervention of the
shopkeeper or salesperson. Increasingly, urban Indians are using both the local
grocer and the supermarket. The groceries the preferred choice for basic food
supplies and the supermarket for a wider choice of processed foods such as
jams, pickles, sauces, juices and ready mixes. This is giving organized food retail
high sales value growth, as these stores are selling higher volumes of value-
added foods. Among the upper middle and wealthier classes, the modern retail
outlets are used for basic commodities as well, as there is a feeling that the
private labels offer cleaner well-picked produce than the local grocer does. As
a result, there is some amount of store loyalty, as customers prefer a particular
chain.

Marketing Implementation &Action Programs

The entire marketing program and the action plan execution is elaborated with
respect to the 4 Ps in the section. We have done a consumer survey to better
understand the marketing mix

Product
Sheetal is a forward integrated product extension to the superbly successful
Bisleri which has a market share of 16% in India presently. The concept is not
new. We have historical evidences that Indian Maharajas drank water with
Indian Herbs to stay healthy and fit.Adding herbs to drinking water has been in
vogue in many parts of our country In Kerala, in most of the hotels jeera water
is being served even today Our country has a rich herbal treasure like vettiver,
athimathuram, vallarai, ginger, seeragam, brahmi, tulasi, nimbu, pudina,
orange, amla, narangi, hibiscus, samandhi, jasmine, etc.Thus consumers get a
variety of flavours to choose from.So there would be many flavours but initial
one would be

Pudina

Jeera

Strawberry

Raw Mango

Medicinal herbs

Tal Mishri (for infants)

The product will be marketed in 4 sizes – 300ml small pack , 1 litre medium
packs and 25 liter large packs.The shelf life will be of 90 days without
refrigeration

Size
Quantity
Retail Price
Small
300ml

Rs 6

Medium
1 lit

Rs. 18

Large
25 lit

Rs. 400

Price
One can sell their products as raw goods; value added goods, goods bundled
with services or goods dramatized with experiences. Given below is the value
addition that can be brought about in wheat by various levels of value add and
the multiplication factor in price applicable with each value add.
Value addition Flow
Price of 1 litre of water = 10rs

Price of flavors available in market (Rasna) = Rs. 4

Other material used like salt, sugar etc = Rs 4

Price of preparing one liter flavored drink at house = Rs 18

Our product priced at = Rs 18

Place
Sheetal will only be sold in metros initially i.e. Mumbai, NCR comprising of
Delhi, Noida and Gurgaon, Bangalore, Hyderabad, Chennai, Kolkata and Pune.
This is primarily because the target audience of this product is concentrated in
these cities. The distribution channels employed for Sheetal has to be multi-
dimensional as it tries to focus on a wide class of people from young working
singles to mothers. Hence the distribution channels will come under 3
categories –

Super market chains like Big bazaar, Star bazaar etc – For distributing to these
chains, the proven sales and distribution channels of Parle will be leveraged.

Local stores selling food items – The stores selected will vary depending on the
markets. In case of south India, the focus will be selling in the following
category of outlets –

Retail outlets selling perishable food items like vegetables, milk etc – These
upcoming outlets are the initial form of organic stores in India. People who are
looking for fresh perishable items target these stores.

Confectionaries selling packaged food and snacks – Bakeries are the coveted
place for south Indians especially the metro class in south to grab a quick snack
or a convenient packaged food.

Kirana stores – As both these kinds of outlets are non-existent in North, the
selling will be through the neighboring kirana stores which form the ubiquitous
neighborhood shopping point for the target audience.

Collaboration with roadside ice cream vendors: People eating ice-cream some
time to quench their thirst. If flavoured water is available they may drink it and
enjoy ice cream for its taste
Key Accounts

Railways The IRCTC sever Rail NEER on the railways and along with those other
drinks. Often the govt policy lead to ban of carbonated products. IRCTC can
bank on this as a politically safe product promoting indianization

Hotel Chains: The hotel chains provide chef prepared welcome drinks most
often than not these are not seen as very hygienic and not taken by consumer.
The flavoured drinks would be readily acceptable by the consumer

Smaller restraunts : They will have thirst quencher extra apart from the usual
carbonated drinks

Marriage halls: The concept of Jaljeera and Pudina drink is very popular in
marriages in India. They are generally prepared handmade and the stall gets
overcrowded due to large preparation time. This packaged flavored water is
both convenient and healthy

Caterers : They get a ready to serve menu on their hand

Promotion
Flavored water is being introduced in India for the first time. That is why
“Sheetal” definitely has the first mover advantage in this new niche of the
market. As the positioning of the product is such that it promises to deliver the
thirst quenching qualities of water, with an essence of fruit and mint flavor, it
will appeal to a wide variety of consumers from age group 10 to 60. Also its
medicinal benefits will make it most suitable for school going children (age 8-
16) and also elderly people (age 55-70). As in this equatorial part of the world
the summers are generally very long and hot, the demand for a thirst
quenching medicinal beverage will definitely drive most of the sales for the
year in that concentrated period in the year.

As the concept of the product itself is very new, the product will require an
extensive promotional program through multi channel, multi vehicle
techniques. There is a need of aggressive promotional activity so as to create
awareness among the consumers about the new product and communicate
the values which the product offers.

We have come up with following four key promotion vehicles which would be
most effective in the current scenario

Advertisement
Sales promotion

Personal selling

Sponsorship

Advertisement
This is the most important mode of communication we would use. Following
are the various tools we plan to use

Television

We will advertise on different primetime channel like Zee, sony, star etc. The
programs will be mainly family and children programs and the timing will be
family viewing timing

Radio

Various FM Channels like radio One, Radio City Red FM etc will be used to
broadcast innovative ads in the morning and evening hours

News print

Newspaper dailies like TOI, Hindu, ET etc will be used to carry out ad campaign
in sizes varying from 200×200 ads to full page ads on weekends

Magazine

Magazines like India today business week etc will be targeted to convey the
values to the targeted audience.

Bill Board

Major city crossroads will be covered under this promotional scheme to carry
Posters of the products, and snapshots of the television ads to generate recall

Mobile and internet

These are very new channel in advertising are found to be pretty effective
among the young generation of the country. Social networking sites like face
book, orkut, twitter, etc can be used to carry out promotions.
Sales Promotion
This is just a backup for the failure of advertisement strategy. In this case
several small retailers in small towns will be provided certain margin which
they can utilize to push customer to try out the new product on the need basis.
We’ll set some targets for the retailers to achieve at the end of each month
and would reward the successful retailers.

Personal Selling
Will be putting up stalls and counters in colleges universities, malls and
shopping centers. Will distribute free samples and conduct taste drives in cities
to make people aware of the product. Will carry out online contest and get
feedback from the customers.

Sponsorship
“Sheetal” will be promoted by sponsorships of various national and
international events, both in the sporting and cultural light this will create
visibility of the brand and will expose the brand to a wide audience. We’ll put
up stalls in the event areas and distribute free sample to the consumers. We
also plan to get the brand endorsed by celebrities and famous personalities to
build brand image among the consumers.