Introduct ion


“Bottled loot - The structure and economics of the Indian bottled water industry.” BY CHANDRA BHUSHAN (Frontline APRIL 21, 2006)

AT the 4th World Water Forum held in Mexico City in 2006, the 120-nation assembly could not reach a consensus on... declaring the right to safe and clean drinking water - a human right.

• The fortunes of this more-than-$100billion global industry are directly related to the human apathy towards the environment – the more we pollute our water bodies, the more the sales of bottled water. • In India, the per capita bottled water consumption is less than 5 litres a year as compared to the global average of 24 litres.

• The total annual bottled water consumption has risen rapidly in recent times – it has tripled between 1999 & 2004 – from about 1.5 billion litres to five billion litres. • These are boom times for the Indian bottled water industry – because of sound economics, fat bottom line and because the Indian government hardly cares for what happens to the nation’s water resources.


• India is the 10th largest bottled water consumer in the world. • With over a 1000 bottled water producers, the Indian bottled water industry is big by even international standards.

• Out of more than 200 brands, nearly 80 are local. • Most of the small-scale producers sell non-branded products and serve small markets. • Making bottled water has become a cottage industry in the country.

Major players Parle - Bisleri Coca-cola : Kinley Pepsico: Aquafina

• It takes about 2-3 litres of groundwater to make one litre of bottled water. • Treatment and purification account for the next major cost. • Labour and establishment and marketing costs are highly variable and depend on the location and size of companies.

Sewage & industrial waste is dumped in rivers and ponds → cleaned in massive centralised treatment plants and then supplied to → urban households → to be discharged again as wastewater → into the same water body.

Bottled water and domestic treatment systems are a hygienic, cheap as well as fill-and-forget solution for only 30 % of the population.


Overview OF


Mineral water ‘‘HYDRA’’ was first procured from a plant located in Kalol, Dist. Gandhinagar. The initial products launched were 1 litre PET bottles in October 2nd 2008, by a group of 5 friends.


• The bottled water industry is growing at the rate of CAGR of 25% which is the highest in the world.




The uniqueness of our product •
Mineral water is that, it is a universally applicable product and can be targeted across all demographic profiles. • Moreover our plan is to introduce new variants in the same segment i.e.: flavoured water. This is a new concept for the Indian consumers. • The 4 flavours of flavoured water are:


Cranberry, Lime n ‘lemon and
Black Currant.



Steps in Purification Process

1. CHLORINATION: Kills micro organisms and removes organic matter. 2.ARKAL FILTER: Removes suspended matter and turbidity. 3.CARBON FILTER: Removes residual chlorine & odours. 4.REVERSE OSMOSIS: Removes organic material. Controls total dissolved solids in the water.

5. ADDITION OF MINERALS: (only in the variant with added minerals) For the purpose of maintaining a balanced mineral content. 6. MICRON FILTRATION: Additional measures to guarantee purity. safety

7 .OZONATION, ULTRAVIOLET TREATMENT and OXYGENATION: Ensures water remains bacteria free for longer life.


Integrated marketing objectives:
• Radio advertisements 5 times in a day on 2 channels, for 1 month. • Newspaper inserts in 2 newspapers (English and Gujarati) alternate days (excluding weekends) for 1 month. • Newspaper advertisements in weekend supplements i.e.: 6 per month for 2 months. • Hoardings at 7 prime locations in the city for 1 month. • Danglers at various grocery stores for 1 month. • Tie up with schools and canteens, and a flex banner at the ordering counter of the canteens or anywhere from where it is easily viewable, for a minimum period of 1 month.


Marketing Strategy and Analysis A. Competitive analysis 2. Points of parity: • Packaged Mineral water, just like other bottled water companies. 2. Points of difference: • Offering bottled water that has been manufactured by completely mechanised procedure. • Eco-friendly initiative through which cash back is given to the customers when the bottle is returned to any of the ‘HYDRA’ outlets. B. Target market College and School going students, household consumers, Offices etc.

Integrated Marketing Communications


Target market analysis
• • • • Identifying markets Market segmentation Select the target market Positioning through market strategies 1. At all places where unbranded and locally made water pouches are available in plenty. 2. Against the leading brands already being used in households and offices. 3. Flavoured water would be positioned as a new healthy and better substitute to other options of beverages.


Marketing plan development
Product decisions A. The product shall be available in bottles of 1litre, 2 litre and 5 litre. 20 litre bottles - launched on the 1st Nov ‘08. The registration for 20litre bottles can be done at counters put up in the front area of grocery stores - “Reliance Fresh”, “More” and other leading retail outlets. B. A refilling counter would be set up at college and school canteens. Pricing decisions • 1litre - Rs 12; 2 litre - Rs 18; 5 litre – Rs 24; 250ml cups- Rs 7; • 20 litre – Rs 35 (for on the spot purchase) Rs 30 (on monthly booking) • Peach, Lime & Lemon, Cranberry, Black Currant – Rs 6.


Channel of Distribution decisions

1. For School and College canteens 2. For grocery stores 3. For household and offices (20 litre bottles)


Promotional decisions
• Local channels - ‘Channel-Surat’, and ‘HIND TV’. • Advertisements shall be given in the wider scrollbar for 1 week, then a break of 1 week shall be given and then again for 1 week the advertisement shall be given. • Bulk purchase done.

Radio • ‘My FM’ and ‘Radio Mirchi’ • Advertisements would be aired for 1 whole month, in two time slots. Newspaper ‘‘Times of India’’ and “Divya Bhaskar” & “Gujarat Samachar” Inserts: Alternate days (excluding weekends) Adv in supplements: Saturday & Sunday.


Magazine • Half page ad for 3 months in ‘Health’ (Monthly), • 1 page ad for 3 months in ‘Bluechip’ (Weekly), ‘Chitralekha’(Weekly) and ‘Abhiyaan’ (Weekly). Hoarding • Prior booking was done and 5 areas were finalised.


Sales promotion
Promotion to the Final buyer

• Hygienic water, in a food grade plastic, cash back on returning bottles. Promotion to Traders Commitment of - ‘timely delivery’ and is duly fulfilled.

Identify markets with unfulfilled needs


• College canteens, stalls where water pouches are available - 250ml disposable cups. • Households, Offices and Tution classes - 20 litres.

Determining market segmentation
• Market segmentation was done based on the needs mentioned above.


Positioning through market strategies
• Eco-friendly packaging • The best mineral water at all those places where it is needed, and more hygienic than other options available.

Bases for Segmentation
‘Behavioristic’ • i.e.: based on usage of the drinking water at places where it is needed the most.


• Differentiated mktg strategy because on different fronts we are fighting against different types of competitors. • ie: At college canteens, stall etc - locally made pouches ; at grocery stores - Bisleri, Aquafina, Bailley, Neer, Oxyrich; at offices and households – other players in the same segment supplying mineral water in bulk.

Selecting a Target market


Determining Which Market Segments Offer the Most Potential
Determine sales potential of the segment • Approx sales growth to be achieved – 25000 bottles – 20 litres in 1 month, 10000 - 250 ml cups, 10000 (combined) for 1 litre, 2 litre & 5 litre bottles. Determine opportunities for growth of the market segment Tie-ups with Caterers – 250 ml cups can be used. Talks are still in progress .


Analyze the competition in the segment
• Local brands: there are many local brands available. • National level brands: Bisleri, Aquafina, Bailley, Neer and Oxyrich.

Analyze the company’s ability to compete in the market segment
• Local - Tough to combat because of 1)Low price 2)Easy availability & 3) Habitual buying behaviour. • National – good financial backing for 1)Advertisements for better brand recognition. 2)Reminder advertisements & 3) R&D.


Decide how to compete in the market segment Local • Brand-name & hygienic water supplyexplicitly. • Implicitly - tie-ups with schools & college canteens and also with caterers(in future). National • All possible media channels adopted for aggressive marketing.

• After successful launch in Surat city, the same model would be replicated at State wide level i.e.: Ahemdabad, Gandhinagar, Baroda, Rajkot& Bhuj. • Cash back on returning bottles would be the point to be focussed upon. • Flavoured water – introduced to make it a success with the youth segment (the same promotional technique as that of mineral water shall be used for it).


Can the size of the market segment be measured?
The size cannot be measured, but only an approximation can be done. The demand may vary from season to season although. An approximation of sales to be expected has already been discussed earlier.


Is the market segment large and profitable enough to serve?
• A study conducted by ‘V’ Publicity, Surat; before launch showed that still a very large amount of population is not used to having mineral water, due to price reasons and due to reasons of change in taste; and therefore this market potential can be tapped upon.


Is the segment identified accessible? Can it be reached effectively and efficiently? The segment is easily accessible and
therefore all possible media channels within the promotional budget are being resorted to in 1 month.

• After 1 month a study shall be done by a marketing research agency & if needed; the advertisements can also be changed as per the details prescribed in the report.


Can effective marketing programs be developed to attract & serve the segment made to design simple identified? • Efforts have been

advertising which can be easily understood by the general public. • According to the reports of the agency hired for the study, all the advertisements are supposed to definitely leave an impact on the general public, strong enough to tempt them to try it out at least once.


Perspectives on Consumer BehaviourCognitive learning theory
Approximation Sequence
1. Induce product trial Free samples of 250 ml on billing of moreProduct performance coupon: than 200Rs at grocery stores and a(a) TASTE- 1 2 3 4 5 sample of 1 litre on billing of more than(b) AFFORDABILITY- 1 2 3 4 5 750Rs. 2. (c) CHANCES OF REPEAT PURCHASE- 1 2 3 4 5

Shaping Procedure

Reinforcement / Applied

Induce purchase withDiscount coupons 25% off on bookingProduct performance coupon: (a) TASTE- 1 2 3 4 little obligation. financialorder of 20 litre bottle for home use on5 billing of more than 500Rs. (b) AFFORDABILITY- 1 2 3 4 5 (c) CHANCES OF REPEAT PURCHASE- 1 2 3 4 5


Induce purchase withDiscount coupons of 10% off on bookingProduct performance coupon: moderate obligation. financialorder of 20 litre bottle for home use on(a) TASTE- 1 2 3 4 5 billing of more than 500Rs. (b) AFFORDABILITY- 1 2 3 4 5 (c) CHANCES OF REPEAT PURCHASE- 1 2 3 4 5 (d) TIMELY DELIVERY- 1 2 3 4 5


Induce purchase with(Purchase full obligation. financialassistance) Booking can

occurs be

without from

couponProduct performance coupon: (a) TASTE- 1 2 3 4 5 counters(b) AFFORDABILITY- 1 2 3 4 5 (c) TIMELY DELIVERY- 1 2 3 4 5 (d) ANY SUGGESTIONS __________________________ __________________________


located outside grocery stores.


The Communication Process & Source Message and Channel Factors
• Test: Sales and all methods to improve sales. • Media: Paper advertisement and Inserts, radio advertisement, TV advertisement. • Creative reminder advertisement: Baby with lipstick on Newspaper, Magazine and Hoarding. • Source encoding: The logo of HYDRA. • Non personal Entity: PET bottle. • Message: Bottle + Tagline.


Message structure
1) Order of presentation Visual: Picture comes first, tagline comes later. Vocal: Message comes first, brand name later. 2) Conclusion drawing Open ended statements.

3) Message sidedness Two sided message. 4) Refutation Supporting as well as comparative statements. 5) Verbal v/s Visual messages Both verbal and visual appeals have been used.

Message appeal
• Only Comparative appeals have been used.


Dangler, Newspaper • Non-personal: inserts and advertisement, Bottle label, Flex, Hoarding, Radio and Television. • Personal: Counter at grocery store.


Receiver/ Decoding

• Simple message • Conclusion drawing is left to the public at large


• Distortion in radio/TV signal. • Untimely delivery of newspapers or its supplements. • Misplacing or paper inserts, danglers, flex and misprinting in the newspaper, inserts or magazine.


Extraneous factors
• Advertisement by competitors and claims by competitors.


Response/ Feedback
• Product response coupon. • Customer enquiries at Toll-free number starting from January 2009 onwards.


Promotional planning through the

‘‘Persuasion Matrix’
Receiver comprehension: Easy Channel Presentation: Media within the budget selected Message yielding: Simple statement explaining its aspects of being eco-healthy. Source/Attention To attract different types of crowds different types of media tactics have been devised.


Models of the response-

Innovation Adaption model.

Awareness, Interest, Evaluation • Advertising through various channels Trial • Free samples at grocery stores. Discount coupons on bulk purchases and one consumer response card. Adoption • Eco-friendly packaging • Cash back scheme


Cognitive Response Approach
Product message thoughts • ‘Live in an eco-healthy way’- This thought is a simple and plain statement which would not evoke any positive or negative feelings in the minds of the reader/viewer- as per our discretion.

Source oriented thoughts • Since our bottle only speaks for itself and a voice over is used, there are lesser chances of origin of source oriented thought.


Advertisement execution thoughts • We expect a positive response from the viewers and audience since all of our advertisements are designed keeping in the mind the simplicity of our product.



‘Affordable method’ of ‘Top down budgeting’ • Approximate amount allocated to all promotional expenses: Rs 18,00,000. • Approximate amount allocated to Contract Manufacturer: Rs 18,00,000. (depending on the sales growth) • Approximate amount allocated for the distribution channel: 2,50,000. •

• If on completion of 1 month of the aggressive promotion; the sales doesn’t boost up then from the 2nd week of 2nd month i.e.: December 2008 new schemes would be formulated for the distributors.

• The approximate budget permitted by the Top management :Rs 18,00,000 for 3 months • only approximately 74% has been utilised effectively • The rest amount is kept for spontaneous expenditures that might have to be undertaken. • Some promotional techniques are being used only for 1 month

• focussing only on the brand Hydra mineral water and its eco-friendly packaging • To be given on My FM
• 9-11am : 2 times - Rs.4000 (Ad– 18secs- 2000) • 5-7pm : 3 times – Rs.7500 (Ad– 18secs-2500)

• To be given on Radio Mirchi
• 9-11am : 2 times - Rs.4400 (Ad– 18secs- 2200) • 5-7pm : 3 times – Rs.8400 (Ad – 18secs-2800)

• Discount for booking time slot for 1 month (‘MY’ FM) - Rs.1,000
• [My FM: 11500(per day) x 30] - 1000 = Rs 3,44,000.

• Discount given for giving simultaneous advertisements on ‘Divyabhaskar’time slot of 45 seconds during the whole month free of charge
• Radio Mirchi: Rs 12800(per day) x 30 = Rs 3,84,000.

• Total expenditure (for 1 month): Rs 344000+ Rs 384000= Rs 728000.

NEWSPAPER ADVERTISEMENTS {Surat Newspaper inserts (‘‘Times of India’’

edition} and ‘‘Divyabhaskar’’: Athwa lines, Nanpura, Piplod, Ghod-dod road, Citylight, Ring road and Adajan.)
20,000 inserts /day. Rate - 30 paise/ insert. 20,000x 0.30 x 15 = Rs 90,000.

• ‘‘Times of India’’

• ‘‘Divyabhaskar’’
30,000 inserts/day. Rate - 20 paise/ insert. 30,000x 0.20 x 15 = Rs 90,000.

• Total expenditure - Rs 1,80,000 (for 1 month)

• Newspaper advertisement (‘Times of India’
{Surat Edition}, ‘Divyabhaskar’ and ‘Gujarat Samachar’) to be given in the weekly supplements of Saturday and Sunday, i.e.: total

6 /month; in the same areas as of newspaper inserts – to be given for 1 month. • ‘Times of India’ – 20x20 size advertisement;
Rate- Rs 800.

• ‘‘Divyabhaskar’ ‘- 20x20 size advertisement.
Rate- Rs 700.

• “Gujarat





advertisement; Rate- Rs.750.

• Total expenditure - Rs 27,000.

• Half page advertisement for 3 months in ‘Health’ (Monthly)
Rs 2500 x 3 (times) = Rs 7,500.

• 1 page advertisement for 3 months in ‘Bluechip’ (Every Wednesday)
Rs 1750 x 3 (times) = Rs 5,250.

• 1 page advertisement for 3 months in ‘Chitralekha’(Weekly),
Rs 800 x 10 (times) = Rs 8000

• 1 page advertisement for 3 months in ‘Abhiyaan’ (Weekly).
Rs 760 x 10 (times) = Rs 7,600.

• Total expenditure – Rs. 23,150.

• • • • • • • For ! Month Area 1 (Ghod dod road)- Rs 40,000. Area 2 (Majura gate) – Rs 35,000. Area 3 (Ring road) - Rs.30,000. Area 4 (Piplod) – Rs.20,000. Area 5(Adajan) – Rs 32,000 Total expenditure – Rs 1,57,000.

• ‘Reliance fresh’ stores in city 15 – Rs 500 for 10 danglers for 1 week.
Rs 500 x 15 stores x 3 weeks = Rs 22,500.


• ‘More’ stores in the city 10 – Rs 500 for 10 danglers for 1 week.
Rs 500 x 10 stores x 3 weeks = Rs 15,000.

• ‘Dhiraj Sons’ stores in the city 5 - Rs 500 for 10 danglers for 1 week. • (Rs 500 x 5 stores x 3 weeks) + 1500 extra charge
taken by ‘Dhiraj Sons Hyper market’ = Rs 9000.

• Total expenditure = Rs 46,500.

• between the exit point of the grocery store and the parking lot. • Charges to be paid to the Grocery stores - Rs 800 - 1000 per day. • 30 x 1000 x 6 = Rs 1,80,000. • Total expenditure on Counters – Rs 1,80,000.

• with a promise to deliver safe hygienic and potable water • to put up a flex banner at the ordering counter. • Number of Flex banners printed – 100 x 20 Rs (price per banner) = Rs 2000 • Total expenditure on flex – Rs 4000.

• to a plant at Kalol, on A’bad-Gandhinagar road • 1 litre bottle: Rs 2.95; 2 litre bottle: Rs 3.25; 5 litre bottle: Rs 4.10; • 20 litre bottles: Rs 5.80; 250 ml cups: Rs 0.75. • 200 ml bottle of Flavoured water: Rs 0.99. • order shall be reviewed at the end of 3 months and then requisite changes shall be made

75,000 bottles of 1 litre. Total = Rs 2,21,250. 75,000 bottles of 2 litre. Total = Rs 2,43,750. 50,000 bottles of 5 litre. Total = Rs 2,05,000. 1,50,000 cups of 250 ml. Total = Rs 1,12,500. 2,00,000 bottles of 200 ml flavoured water. Total = Rs 1,98,000. • 2,50,000 bottles of 20 litre. • Total = 5,00,000. • • • • •
• The current order value to the contract manufacturer goes to approximately reaches to Rs14,80,500. Out of the allocated budget the remaining amount is kept for miscellaneous expenditure

1. Radio advertisement: 18 sec dramatic ad 2. Television: Written script to be put up on the
scrollbar: HYDRA – Packaged mineral water. Also available in flavours: Lime n’ lemon, Peach, Cranberry and Black currant. For booking of 20 litre bottles please contact your nearest grocery store.

3. Newspaper (a)Inserts & (b)Advertiseme nts and 4. Counters at Grocery Stores

5. Magazines (a)Half page advertisement: ‘HEALTH’

Full-page advertisement (b)’Bluechip’ (c) ‘Chitralekha’ and (d) ‘Abhiyaan’

7) Danglers at Local grocery stores.

8) Tie-up with Schools and College canteens (design of Flex to be put up at counters)