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Marketing plan for indian bottled water company

3797 words (15 pages) Essay in Marketing

5/12/16 Marketing Reference this

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This marketing plan is a part of a larger business plan that the team thought of during preliminary discussions. The idea of introducing flavored water in the market emerged from the India’s urban residents are becoming increasingly health conscious. In fact, Off-trade constant value sales of bottled water are predicted to grow by an 18% CAGR over the forecast period 2009 and 2014(source Euromonitor).FMCG players have responded by re-examining their ingredient strategies and formulations to ensure that they suit new healthy habits. Urban consumers are increasingly on the hunt for substitute for carbonated drink creating new market opportunities for an array of suppliers.

The current flavored water market is highly unorganized with major manufactures being in-house chefs and roadside vendor. They supply to local hotels, sweet shops and are now slowly moving into supplying to organized retailers.

We recommend the Indian Parle a FMCG giant to venture in the untapped flavored market to get first mover advantage in India. The established AquaFina brand can be used to launch the product. 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 India today. Water has to be scaled higher in terms of positioning – both from functionality perspective, as well as from a lifestyle perspective.

Key statistics of the Indian bottle water market:

Situational Analysis

The flavored market in India is small, only about Rs 11 crore out of the total bottled water market of about Rs 1,100 crore. But many small market segments have been known to explode with the entry of good products. For example, enhanced and flavored waters were just $ 234 million in the US in 2000. By 2010, the category is projected to grow to $ 8.6 billion and is the fastest growing beverage category

The “2009 India Soft Drinks Report” indicates that carbonated beverages consumption is declining in India for consecutive years since 2007. Packaged water growth projections, however, are in excess of 40 per cent, with still drinks (Frooti, Maaza and others) growing at under 10 per cent.

Parle’s Bisleri, PepsiCo’s Aquafina and Coke’s Kinley at present rule the lower end of the Indian packaged water category, priced as they are between Rs 10 and Rs 14 for a 1 litre bottle. The top end is dominated by imported brands like GroupeDanone’s mountain water brand Evian and Nestle’s sparkling water brand Perrier, priced between Rs 80 and Rs 110 a litre. Himalayan costs Rs 25 a bottle. Flavored water falls in the mid-priced segment of the bottled water category.

Competition

Coca-Cola is expected to launch Bonaqua. Globally, Bonaqua sells sparkling flavored water in ranging from strawberry, litchi, apple and mint to lemon and lime. Coca-Cola already sells in India the bottled water brand Kinley. Tata Tea is also looking to extend Himalayan into flavored water.

PepsiCo too is believed to be planning to extend its bottled water brand, Aquafina, into flavored water. Nestle executives refused to comment. Aqua Montana India recently launched a carbonated niche drink, Slim and energy drink, Explode and is also looking to make a foray in the flavored water space.

Customer

In terms of the socio-economic factors, Indian lifestyle is undergoing a massive socioeconomic change, which is also being reflected in food habits. People want value for time, money in terms of quality and variety. The scenario in India 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 flavored water is really important to control obesity.

Collaboration

Parle can collaborate with the restraunts and wedding houses for placing it in their complimentary drink menu

It can collaborate with IRCTC to provide 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.

City

’95

’00

’03

’04

’05

Mumbai

10,743

11,713

12,289

12,503

12,709

Delhi

8,198

9,542

10,336

10,616

10,881

Bangalore

3,690

4,186

4,483

4,589

4,696

Kolkata

4500

4568

4581

46060

4628

Chennai

4013

4184

4260

4310

4340

Hyderabad

3285

3418

3485

3526

3565

Pune

1930

2423

2735

2839

2935

Source: National statistical offices, Euromonitor International

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.

Annexure 1 PROFIT CALCULATION

The 1st quarter sales target and the 1st year sales target from different metros are given below –

City

Quarterly sales revenues

Annual sales revenue

Bangalore

5,00,00,00

2,00,00,000

NCR

5,00,00,00

2,00,00,000

Mumbai

5,00,00,00

2,00,00,000

Chennai

25,00,00

1,00,00,000

Hyderabad

25,00,00

1,00,00,000

Pune

125,00,00

5,00,00,00

Kolkata

125,00,00

5,00,00,00

Projected Revenue

Projected quarterly revenue

Rs. 2 crore

Projected annual revenue

Rs. 8 crore

Project annual sales volume

44 lakhs litre

Production Cost

Cost of goods sold/kg

Rs. 12

Annual cost of goods sold

Rs. 4,80,00,000

Packaging expenses/kg

Rs. 0.50

Annual packaging expenses

Rs. 20,00,000

Yearly fixed cost component

Rs. 50,00,000

Total production expenditure

Rs. 5.5 crores

Selling Expenditure

Annual advertisements and promotions

Rs. 1 crores

Annual Salesmen commissions (2% of sales)

Rs. 48 lakhs

Slotting fees in first year

Rs. 52 lakhs

Total selling expenditure

Rs. 2 crores

Total Expenditure = Production cost + selling cost

Gross Annual Profits = Revenues – Expenditure

Total Expenditure

Rs 7.5 crores

Gross Annual Profits

Rs. 50 Lakhs

Annexure 2 Questionnaire

1 .Do you drink Tap water or mineral Water for daily use?

Tap 100 %

Mineral 0%

2. How often do you drink mineral Water?

Daily 0 %

Outings 70 %

Occasions 100%

3. How many glasses of water you drink daily

Less than 6 30 %

6- 8 50 %

More than 8 30 %

4. You drink Mineral Water Because

Hygiene 50 %

Taste 10 %

Brand conscious 20 %

5. You don’t drink mineral water because:

Costly 50 %

Don’t feel any difference 10 %

Has Water purifier at home 40 %

6. You drink which mineral water brand?

Aquafina 20 %

Kinley 50 %

Bisleri 20 %

Others 10 %

7. Have you ever tasted flavored mineral water?

Yes 10 %

No 90 %

8. If flavored mineral water is introduce in market do your buy it?

Yes 70%

No 30 %

9. Will you prefer flavored mineral water over ordinary?

Yes 30 %

No 20 %

They are different 50 %

10. Flavors you like

Pudina 30 %

Jeera 50 %

Strawberry 10 %

Other 10 %

11. What price you are willing to pay for 1 litre

12 -15 20 %

15 -18 60 %

18 -20 20 %

12. You see flavored water as alternative of

1 Carbonated Soft Drink 30 %

2. Lassi 10 %

3. Fruit Juice 20 %

4. Homemade jaljeera 40 %

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