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 health-related issues,
especially have helped push the sales of bottled water
• Metropolitan consumers have been observed to be the largest consumers of bottled water
• India’s 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
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.
Macro economic 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 it’s 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 drinks
to quench thirst.
Trends: Drivers:
•Brand building •Growing upper middle class
•New entrants population and disposable
•Wide range of packaging formats income.
•Institutional sales •Increasing level of health
•Expanding global presence 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 Vedica
Bottle Trendy, Trapezoidal and screen printed. Trendy, see through clear bottle Trendy hexagonal bottle
Bottle emulates premium factor of the brand. See through clear bottle but stickered
Clear bottle emphasizes purity

Form Factors 1000ml for Rs. 50 1000ml for Rs. 50 1000ml for Rs 40
500ml for Rs.30 500ml for Rs.30 500ml for Rs 25
and Price 250ml for Rs. 18 250ml for Rs. 18 250ml for Rs 15

Source Himalayan Mountain range Himalayan Mountain Range. Himalayan mountain Range.

Website http://www.danonenarang.com/ http://www.himalayanmineralwater.com/ http://www.vedicaspring.com/

• Simple & Attractive web page with details on the A decent webpage without much information Trendy ,unconventional website emphasizing the
brands pitch and other products in their portfolio. on the product. prominence of Himalayas in their product. The web
• Web page completely blue in colour, reflects safety page also echoes their desire to be on the top.
and purity.

Social Media • 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.
• 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.

Strategy Top down strategy. Associated with high profile celebrity Associated with Lakme fashion week and other Associated with Fashion shows, theatre arts and other
events, fashion shows and awards. high profile conferences. celebrity events.
 Aava : Brand Perception
Points of Parity Points of Difference
• Product : Natural Mineral water • Natural Spring water , untouched by
• Format : Bottled water hands
• Shapes: Modern tetrahedron plastic • Lower price
containers* • Variants run through medicinal gardens –
• Sold in supermarkets and in bars and to enrich the water with the natural
restaurants * flavors and add medicinal benefits to it*
• Premium Positioning opportunity

Form Factors 1000ml for Rs. 30

500ml for Rs.15
and Price 200ml for Rs. 7

• It is observed that 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
Packaging
 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
 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
Competitive Advantage
 Only natural spring water to
be run through medicinal
garden
 Cannot be imitated by other
players in this segment

• 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
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
 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.
Phase – 1  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.
(Incubation)
 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

 After gaining sufficient volume in higher end of consumers, we can tap others by promoting our products using celebrities. This
Phase – 2 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
(Expansion) attention.

 For tapping 90% of the market share we can promote our regular mineral water in social media/ Television programs explaining
Phase – 3 the minimal chemicals used for purification as a distinguishing factor.
(Diversify/  Have packaging in this segment which looks better than the competitors to gain higher market share and at the same time
Gain volume) ensure it is having lesser visual appeal than our premium packaging to minimize cannibalization.

Phase – 4  Target low-cost airlines like South west airlines because they can get natural mineral water at lower price. Later we Can target
(International upper end airlines after developing trust and expand in internal markets.
presence)
Thank You