On the Mark Aava Case

Challenge
Team Maverick
Venkatesh KG venkateshg.pgpm15c@greatlakes.edu.in 9789589365
Dhulipalla Bharadwaj dhulipalla.pgpm15c@greatlakes.edu.in 9551122267
Harish Narayan harish.pgpm15c@greatlakes.edu.in 9962221862

Bottled Water Industry : Market overview

Rising disposable income levels, coupled with increased health

consciousness, comprise the primary factors driving the bottled water
market in India
Additionally, the rapid introduction of new brands and variants is further
boosting the market
Rising awareness levels with regard to safe drinking water and healthrelated issues, especially have helped push the sales of bottled water
Metropolitan consumers have been observed to be the largest consumers
of bottled water
Indias bottled water market has charted a high growth trajectory, due to
its easy availability, anytime-anywhere consumption, and convenience. It
is expected to grow at a CAGR of 19% from the 2013 valuation of
INR107 billion to INR360 billion in 2020
Western region accounts for nearly 40% of the market while
eastern region accounts for merely 10% of the market

Segments

Brands Coverage

Price Range

Market Share

Regular

Kinley, Aquafina, Bisleri

INR 15-20 per liter

70%

Mid market

Qua , Himalayan , Aava

INR 25-50 per liter

25%

Premium and Specialty

Evian and Danone

Above INR 100 per liter

5%

Natural mineral
water industry insights
Macro economic

Challenges:

Low penetration into tier 2 cities of

the country where disposable
income is increasing rapidly.
Increasing transportation cost.
Increasing use of water purifier
Lower price of other bottled water
not coming under natural mineral
water

Insights:
Customers are unaware of
differentiating natural mineral
water from other bottled waters

Supplier power
Major supplier in this industry is
plastic preform required for bottle
manufacturing.
Water supplier for packaged
water factory. However for natural
mineral water, it is not applicable
since owners either owns or lease
it from the owner.

consideration
Increasing per capita income
Decrease in per-capita water
availability from 5177 in 1950
to 1520 in 2013.
Threats of New entrants
Threats of new entrants in
natural mineral water industry is
very low because it is procured
from natural source.

Rivals in the industry

Himalayan is the top player in
B2C segment and has maximum
market share because of its brand
name - TATA and also due to its
deep distribution network.
Rivals in this segment have
superior packaging and have
strong brand perception.

Threats of substitutes

Substitutes for natural mineral

water is not only regular mineral
water which sold at a lower price
than the natural mineral water
but also non-alcoholic beverages
like soft drinks, fruit juice, energy

Trends:

Brand building
New entrants
Wide range of packaging
formats
Institutional sales
Expanding global presence

Drivers:

Growing upper middle

class population and
disposable income.
Increasing level of health
awareness
Water scarcity
Growing sub-segments
Increasing urbanization

Buyer power
Health conscious/ upper class
people having higher disposable
income comes under this
category (B2C market). Hence it
is not much price sensitive
however more emphasis is given
on brand perception. Building
strong brand image is the
driving factor.
In B2B market, it is both brand
perception and price
sensitive. Hence a balance has
to be maintained for both
Thanks to the intense
competition, buyer is indeed
powerful.

Mineral Water Competitors

Qua

Himalayan

Bottle

Trendy, Trapezoidal and screen printed.

Bottle emulates premium factor of the brand.
Clear bottle emphasizes purity

Form
Factors and
Price

1000ml for Rs. 50

500ml for Rs.30
250ml for Rs. 18

1000ml for Rs. 50

500ml for Rs.30
250ml for Rs. 18

1000ml for Rs 40
500ml for Rs 25
250ml for Rs 15

Source

Himalayan Mountain range

Himalayan Mountain Range.

Himalayan mountain Range.

Website

http://www.danonenarang.com/
Simple & Attractive web page with details

on the brands pitch and other products in

their portfolio.

Web page completely blue in colour,

reflects safety and purity.

http://www.himalayanmineralwater.co
m/
A decent webpage without much
information on the product.

http://www.vedicaspring.com/
Trendy ,unconventional website
emphasizing the prominence of Himalayas
in their product. The web page also echoes
their desire to be on the top.

Facebook Around 1600 likes on

facebook and dormant since 2012.
Not present on twitter.
Sold online through

bigbasket.com and
naturesbasket.co.in and also at
premium modern retail.

Facebook Highly active on facebook with

over 57000 likes and regular activity.
Constant promotional activities
happening through social media.
Not so active on twitter
Sold online through bigbasket.com and
naturesbasket.co.in and also at premium
modern retail.

Associated with Lakme fashion week

and other high profile conferences.

Associated with Fashion shows, theatre arts

and other celebrity events.

Social
Media

Strategy

Facebook dormant activity on facebook.

Only 598 likes and inactive since 2009.
Same on twitter with 37 followers and
dormant since 2009.
Sold online through bigbasket.com and
naturesbasket.co.in and also at premium
modern retail.

Top down strategy. Associated with high

profile celebrity events, fashion shows and
awards.

Trendy, see through clear bottle

Vedica
Trendy hexagonal bottle
See through clear bottle but stickered

Aava : Brand Perception

Points of Parity

Product : Natural Mineral water

Format : Bottled water
Shapes: Modern tetrahedron
plastic containers*
Sold in supermarkets and in bars
and restaurants *

Points of Difference

Natural Spring water , untouched

by hands
Lower price
Variants run through medicinal
gardens to enrich the water
with the natural flavors and add
medicinal benefits to it*
Premium Positioning opportunity

1000ml for Rs. 30

Form
500ml for Rs.15
Factors
200ml for Rs. 7
and that
Price
It is observed
Qua and Himalayan have superior brand strength which

is evident with the higher volume sales in B2C market. This is attributed to
attractive packaging.
Market leaders like Himalayan, Qua, Vedica emphasise more on B2C
marketing and hence their focus is on small volume bottles. Aava comes in
10L, 20L and is having higher volumes sales in B2B marketing . Hence they
have lesser customer awareness.
Quality is assessed by the customer bases on their familiarity to the
product and their packaging. Since Aava is lacking in both of them, it is
perceived to be of relatively weaker value in their market segment.

* To be implemented to improve brand perception

Aava : the Road Ahead

Move into B2C segment, maintain existing B2B as it is.
Moving to B2C:
Rebrand 1000ml, 500ml and 250ml water bottles with a new name ayur Aava.
Address Packaging : Tetrahedron clear bottle. Screen print the brand name.
Price it just below the market leader in B2C premium mineral water segment.
Product Mix : Differentiate with natural flavored water like Tulsi, Mint, Aloevera by running the water
through the respective gardens.
Increase visibility in the digital world more social media marketing.

Develop a call center, portal and a better website to take care of B2B.
Distribution Network : Strategic tie ups for logistics & distribution
Diversify into conventional bottled water market.
Invest in R&D to come up with better techniques of water purification like organic purification and minimize the
use of chemical substances.
Differentiate the bottled water brand by having bottles which are more catchy w.r.t the competitors

Diversify into traditional Indian coolers segment.

Aava: Packaging and Branding

Packagin
g

Aava is currently packaged in a curve shaped

bottle with a label running across the body

Leading brands both domestically &

internationally have modern clear
tetrahedron packages with the brand name
screen printed
Aava should also follow the norm and come
up with attractive packaging to look premium
and also to stand out in a premiuim market

Branding

Competitive Advantage
The appeal of Aava lies in its high quality
natural spring water and premium imagery. It
plays upon the themes of being natural and
pure in an artificial world which is the
perfect beverage of choice among wellness
seekers

Rebrand as Ayur Aava, from the Aaravallis.

Concentrate only on 250ml,500ml and 1L form factors
Use green color to reinforce the natural image subconsciously
Run the water through Ayurvedic gardens so that the water is
enriched with the medicinal benefits and natural associated with
the herbs
Introduce similar themed bottles(See Pic) for various flavors of
drinking water
Turn consumers into connoisseurs : encourage consumers to
focus on the flavor of their water

Only natural spring

water to be run
through medicinal
garden
Cannot be imitated by
other players in this
segment

Aava Distribution : Open up new

avenues
Target SME segment using the already existing distributor network
in Mumbai, Delhi, Chennai
For example Fruit Shop chains in Chennai is an upmarket natural juice
center where Aava can be prominently displayed and incorporated in
the menu
Include organic shops like Brown Tree , Nuts n Spices to increase retail
network
Tie up with Gyms ,speciality hospitals , theme hotels ,up market bars
multiplexes
Focus on Modern Retail better shelf space and visibility to a larger
population
Spend on a good structurally stable standee .

After establishing firmly in the above segment , partner with a

company like ITC/Dabur and leverage their distribution network
through Joint Branding
ITC/Dabur do not have water in their portfolio
This will increase Aavas reach tenfold and make it available across the
country in 10 million outlets

Outsource
Logitics
A two pronged approach, to deal directly with bulk institutional buyers and dealership network to deal with
lower volume retailers.
Because of smaller scale of operation, Aava can outsource its down-stream distribution channel because
they can not achieve economy of scale.
Logistics can be outsourced.
Outsource call centre and a portal to take care of B2B ordering for replenishment
Bottling unit maintenance can be outsourced to facility management services and for cleanliness and
prompt actions in case of machine breakdown.
Aava is facing issues with maintaining relationship with its clients as majority are major institutional players
in airlines, hotels and other domain. So Aava can have direct interaction with major/bulk players and
dealership model for smaller volume customers .

Promotion
Phase 1
(Incubatio
n)

Promotions in social media. Since internet penetration is increasing and our target segment is upper end of pyramid, we can get
easy coverage at lower cost.
In developing economy like India, word of mouth acts as a major influencing force for purchasing decision(Survey conducted by
mckinsey). Encourage dealers to give positive comments on our product and have incentive based program based on turnover.
Sponsoring teams in less expensive sports leagues in the country like ISL, IBL and Kabaddi league, Health awareness Runs .
Sponsoring film festivals, comic cons etc.
Emphasize the differentiating factor water passing through medicinal herbs and its associated health benefit to gain peoples
attention.
Increase visibility through adds in in-flight magazines, internal design magazine. Could be sold online too on websites like
bigbasket.com and godrej's naturesbucket.co.in

Phase 2
(Expansion
)

After gaining sufficient volume in higher end of consumers, we can tap others by promoting our
products using celebrities. This creates a sense of eliteness for using the product.
Provide exclusive shelf to premium shops/ big chain of retails like reliance, Big Bazaar to place Aava
products to attract customer attention.

Phase 3
(Diversify/
Gain
volume)
Phase 4
(Internation
al presence)

For tapping 90% of the market share we can promote our regular mineral water in social media/ Television
programs explaining the minimal chemicals used for purification as a distinguishing factor.
Have packaging in this segment which looks better than the competitors to gain higher market share and at the
same time ensure it is having lesser visual appeal than our premium packaging to minimize cannibalization.

Target low-cost airlines like South west airlines because they can get natural mineral water at lower
price. Later we Can target upper end airlines after developing trust and expand in internal markets.

Thank You