COMPETITIVE ANALYSIS OF BISLERI

By: Sachin Mohan (S-59)

A Report submitted in Partial fulfillment of the requirements of the Competitive Marketing Under Prof. Vijay Kapur

FACULTY OF MANAGEMENT STUDIES, UNIVERSITY OF DELHI DELHI

TABLE OF CONTENT

1.INTRODUCTION BOTTLED WATER INDUSTRY IN INDIA 2.BISLERI INTERNATIONAL COMPANY PROFILE 3.MARKETING MIX OF BISLERI SWOT ANALYSIS POTTERS FIVE FORCES MODEL PESTLE ANALYSIS 4.CORE COMPETENCIES EXTENDED VALUE CHAIN ANALYSIS 5.VRHN ANALYSIS 6.FUTURE PLANS 7.SUGGESTION REFERENCES

1 2 3 5 9 12 15 18 21 26 27 29 30

1. Introduction
Water is the most important necessity for life. The drinking-water needs for individuals vary depending on the climate, physical activity and the body culture. But for average consumers it is estimated to be about two to four litres per day. The growing number of cases of water borne diseases, increasing water pollution, increasing urbanization, increasing scarcity of pure and safe water etc. has made the bottled water business just like other consumer items. Scarcity of potable and wholesome water at railway stations, tourists spots, and role of tourism corp. etc. has also added to the growth. Almost all the major international and national brands water bottles are available in Indian market right from the malls to railway stations, bus stations, grocery stores and even at panwala's shop. Before few years bottle water was considered as the rich people's choice, but now it is penetrated even in rural areas. The growth and status of Indian Bottled Industry in comparison with Western or Asian market, India is far behind in terms of quantum, infrastructure, professionalism and standards implementation. The per capita consumption of mineral water in India is a mere 0.5-liter compared to 111 liter in Europe and 45-liter in USA.

Bottled water industry in India

According to a survey, there are about 200 bottled mineral water brands in India and nearly 80% of them are local brands. Making of bottled water has become a cottage industry task nowadays in the country. Most of the cities and even small towns of India have bottled water manufacturers. The industry of mineral water is dominated by some of the top players in India, whose brands are being consumed in larger numbers and the names of these players are given below: Top three players in the Mineral Water industry in India: Bisleri International Coco-Colas Kinley PepsiCos Aquafina

2. Bisleri International Company Profile

Bisleri was originally an Italian company created by felic Bisleri, who first brought the idea of selling bottled water in india. Bisleri then was introduced in Mumbai in glass bottles in two varieties bubbly and still in 1965.parle brought over Bisleri(India) Ltd. In 1969 and started bottling water in glass bottles under the brand name Bisleri. Later parle switched over to non returnable bottles and finally advanced to containers. In 1995 ramesh j. chauhan started expanding Bisleri operations. In 2003 bisleri announced its venture to Europe after that Ramesh j. chauhan sold his stake to Wakharikar and sons. But all operations are under Ramesh j. chauhan. Since 1995 Mr. Ramesh J. Chauhan has started expanding Bisleri operations substantially and the turn over has multiplied more than 20 times over a period of 10 years and the average growth rate has been around 40% over this period. Presently they have 8 plants & 11 franchisees all over India. They have their presence covering the entire span of India. In future ventures they look to put up four more plants in 06-07. They command a 60% market share of the organized market. Overwhelming popularity of 'Bisleri' & the fact that they pioneered bottled water in India, has made us synonymous to Mineral water & a household name. when we think of botteled water we think Bisleri. In endeavor to maintain strict quality controls each unit purchases performs & caps only from approved vendors. They produce our own bottles in-house. They have recently procured the latest world class state of the art machineries that put us at par with International standards. That has not only helped them improve packaging quality but has also reduced raw material wastage & doubled production capacity. The brand name Bisleri is so popular in India that it is used as generic name for bottled water.

Bisleris Vision
Its vision is to be the dominant player in the branded water business where the second player is less than 20% of its business.

Bisleris Mission
It is in the business to serve the customer. He is the most important person. He is

the only one who pays. He deserves the best quality and presentation at a worth of the price. It must have world class quality, at the lowest production & distribution cost. This will make it an unbeatable leader, and will have satisfied loyal customers.

Bisleris values
Integrity, Leadership, Teamwork, Co-operation, Quality, Passion, Openness & Transparency.

3. Marketing mix of Bisleri

According to Philip kotler marketing mix is the mixture of controllable marketing variables that the firm uses to pursue the sought level of sales in the targeted market In simple words marketing mix is the combination of four basic elements / ingredients under one head. The 4Ps ie Product, Place, Price, and Promotion.

`
Types of products
BISLERI values their customers & therefore have developed 8 unique pack sizes to suit the need of every individual. They presently have 250ml cups, 250ml bottles, 500ml, 1L, 1.5L and 2L which are the non-returnable packs & 5L, 20L which are the returnable packs.

BISLERI with added Minerals BISLERI Mineral Water contains minerals such as magnesium sulphate and potassium bicarbonate which are essential minerals for healthy living. They not only maintain the pH balance of the body but also help in keeping you fit and energetic at all times.

Price
Price plays as very important role as it is the only P which helps in getting revenue: Firstly one can explain the factors which affect the pricing decision ie. Price is directly related to 1. Demand 2. Competition 3. Break-even Point.

Secondly, if there is a novel product or almost no competition, one can Go for higher price in the beginning, make good profits to face

Competition and innovations at a latter date. However if you are entering a competitive market your entry price should be low to ensure big volumes to earn reasonable profits. In the beginning BISLERI had no competition, so the price of BISLERI was high, gradually the promoters dropped the price. Buy Huge quantity at cheap rate, after confirming demand and sell at cheap price, make them addictive, then gradually increase price)

BRAND BISLERI

PACKAGINGS

PRICE (in Rs.) Per bottle

20 litre 5 litre 2 litre 1 litre 500 ml 330ml 250 ml cup

70 50 25 15 10 8 5

Place
BISLERI has a specific distribution channel which they follow: Distribution Channel

From the manufacturing plant the bottles will come directly to the stockiest. Taking out the C&F agent from the distribution channel, so as to increase the margin to other elements in the chain.

Promotion
Positioning Target audience Personality Punch Line : : : : Playing Safe Health and hygiene conscious people Guardian, Authoritative, Reliable Play Safe

SWOT ANALYSIS
Strengths

Opportunities

STRENGTHS
Bisleri products are well placed in the market, since the product is fast moving in nature. The company and its products has good Brand image. Bisleri has a vast plant and own infrastructure which makes convenient for huge production and storage. The company has sufficient man power resource to carryout operations. Bisleri is a no.1 bottled water company in India and the company enjoys the 60% share in the market and also the most trusted brand No.2 for cold beverages in India. Credit period given by the suppliers to the company is more than the credit period given to the customers by the company. Having three variants:

ANALYSIS

Threats

Weakness

SWOT

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With added mineral Mountain water Himalayan water All departments are fully equipped with sophisticated technology, which helps in quick completion of jobs.

WEAKNESS:
Having more unskilled workers than the skilled workers Reuse of bottles by local sellers. Having permanent vendors, which may affect the production process when suppliers cannot supply the raw materials accord to demand. Lack in technological advancement. Poor advertising and promotional strategies. Smaller brands affect the market of Bisleri by offering their products at low cost to the retailers. Government regulations towards the production of water, where they cannot cross the limit and produce more quantity of water. Strict rules & regulations followed in company with regard to employee policy.

OPPORTUNITIES:
As scarcity for water is increasing in all areas, demand is increasing for bottled water and hence Bisleri is growing day by day.

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As standard of living of people is increasing, demand for bottled water is increasing day by day. Since the product possesses very good brand awareness, it can go for further expansion. Bisleri entering in to new markets outside India i.e., U.S, Europe and U.A.E. Better market penetration.

THREATS:
Strict government regulation with regards to ground water usage. Strategies of competitors. Increase in the number of mineral water companies in India. Scarcity of underground water source. Reduction in market share because of low profit. Consumers negligence about the brand of water bottles.

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Potters Five Forces Model

Substitutes New Entrant Bargain Power of Supplier Bargain Power of Customer Industry Rivals

Industry Rivals
Rivals divided into organized and unorganized

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Organized
Cokes Kinley, PepsiCos Aquafina, Mohan Meakins, SKN Beweries and Parle Agros Bailley.

Unorganized
Local water brands such as H2GO, Blue Label, Kwencher, Yes, etc.

New Entrants
HUL water purifier Pureit Various new local brands (unorganized players) Shaw Wallace is also in a process to enter the bottled market in the premium

segment.

Substitutes
Soft drinks Water purifiers Tap water Coconut water Vending Machine water The most economical drink -nimbu pani

Bargain Power of Supplier

When the companys suppliers are able to raise price and reduce quantity

then the supplier power would be high

14 Packaging (PET bottles) Labeling material

Bargain Power of Customer

Buyers demand

1. Better quality or service

2. Set competitors against each other at the expense of sellers

profitability
Reason:

1. Industry where many brands fighting for existence and their share 2. Large number of choices available to retailer 3. Low switching cost for retailer

Prices of other products are more of less the same

1. Brand Loyalty of customer is very low

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PESTLE ANALYSIS
We have considered Indian mineral water industry for the analysis. The key points are given below followed by the analysis.

Political
There are various political parties protesting against the pricing of mineral

water.
There is stable government at the centre with liberal policies. The government has imposed price ceiling on bottled water.

Economical
There is an increase in per capita income. Most of the people are from middle and upper middle class. Expansion of multinationals, IT and BPO companies in Tier 1 and 2 cities. There is no licensing policy adopted in this sector. There is availability of cheap labor. The government is promoting new bottling plants through public-private

partnership.

Social
Bottled water was earlier considered as a status symbol.

16 Bottled water is now the only source of pure drinking water in areas where

there isscarcity of water.

The bottled water is considered to be safe as compared to ordinary tap water. There in increase in health consciousness of people.

Technological
The bundling of technologies like distillation, reverse osmosis, activated

carbon filter etc helps in better quality of water.

There has been a shift in packaging from bottles made of glass to

bottles made of PET. This helps in recycling and reducing environmental pollution.
Governed by PFA and BIS standard. BIS has provided standards for mineral and drinking water. The BIS approval

was mademandatory from 1999.

Mineral water should be packed in clean, colorless, transparent, odorless,

tamper proof bottles made up of polyethylene

PFA and BIS lays standard for metals like lead, mercury, arsenic, aluminium

and barium.

ANALYSIS
The PESTLE analysis helps us to analyze the various factors affecting the Indian bottled water industry. We can observe that governmental policies regarding the quality of packaged water are very stringent and all the companies have to adhere to the BIS standards. The liberal government policies, growth of the IT

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and BPO sector in Tier 1 and Tier 2 cities and promotion of bottling plant through public private partnership are favorable to the industry. The lower cost of set up and availability of cheap labor has attracted many small as well as big players. There have been incidents where pesticide contents have been found, also there have been instances where small companies have been found using plastic unsuitable for human health. There is therefore constant pressure on companies to maintain quality of product and packaging. There has been increase in health consciousness among people and unavailability of safe drinking water in low tier cities is favoring the sales of bottled water. The technological advances in purification processes help in enhancing and maintaining quality of water. There is no industrial licensing policy present currently which attracts many players to enter in this industry. The lower margin associated and low entry barriers considerably affect the larger players. We can observe that the companies adhering to the environmental standards, using proper packaging gains advantage. The price war is not possible in this industry as the government has imposed ceiling on the price of bottled water. However there is much possibility that companies start competing through differentiation. The bottled water is considered as a status symbol so it can be possible that companies enter the unexplored area of flavored drinking water. The scarcity of safe drinking water in many areas creates opportunity for the players to cater to this growing demand. There have been instances of protest against the bottled water companies against the pricing strategy and over the depletion of scarce resources. However this will have very meager impact on the industry considering the growing demand for pure and safe drinking water. We can observe that the overall scenario for the industry is favorable for small as well as larger players. The industry has considerable growth prospect in newer areas and the macro environmental factors attract new players.

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4. CORE COMPETENCIES
There are tangible as well as intangible resources. The tangible resources are termed as the physical assets of the organization whereas the intangible resources are termed to be non-physical assets such as the information or knowledge of the product. Bisleri as a brand gains the competitive advantage. It has goodwill in the market. The concept of the bottled water is prevalent in the western countries as people are very health conscious. The bottled water slowly and gradually came into existence as Coca-Cola and Pepsi entered the market. As people think of the mineral water Bisleri is the first name which came into their mind. Bisleri has launched itself into many different brands, as Bisleri mountain water and many more. Bisleri whenever advertise itself on television or on press the only one message which is delivered is Bisleri is safe and pure. The bottles are sealed and refilled and recycled on timely basis. The seal of Bisleri bottles help the customers to remove the doubts which were created in their minds about the purity of the brand. Thus, the brand itself is the core competency of Bisleri. It dominates the market. As packaged water industry is growing at a fast rate (2.5%PA). Bisleri has a market share of 60%. Bisleri maintains the physical and financial resources very efficiently and effectively. These resources when combined helps in maintain and retaining customers expectations to achieve the targets of the company. Entering into various segments of the society as it produces premium, popular and bulk invests a large number and an efficient human resources. The intellectual capital of the brand is playing the major role as the bottle seal of Bisleri is patent. Bisleri provides a safe drinking water which maintains and take care of the health of the people leading and attaining the threshold resources. As Aquafina and Kinley the major competitors of Bisleri are entering with various strategies to beat the competition Bisleri also focused itself to increase the awareness of the brand through advertising and fulfilling customers minimum requirements by giving them pure and safe mineral water to drink. The various segments it entered into covers different price ranges. The price ranges within 10 to 110 which can be easily available for every section of

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the society. Bisleri keeps on advertising again and again that it works on safe and pure form of bottled water, which shows its complementary resources and competencies. Analyzing these threshold resources and competencies is important for the organization to sustain itself in the market with the same position. The seal of Bisleri is also acting as its unique resource as it has got the patent and other organizations cannot imitate it. The brand Bisleri itself acts as a unique resource as it is so popular in the minds of the people that they dont switch to other bottled water easily from Bisleri. This shows that the organization is good in attracting new customers as well as retaining old customers and people turn out to be brand loyal. The packaging was done in such a way that the customers can easily view the sparkling clear water inside the bottle. It made the packaging transparent to gain the trust and confidence of the customers on their brand. It started reinventing and focusing on its distribution network which also plays its major core competency. There were about 15 bottling plants of Bisleri and three franchisees all total there were 350000 outlets of Bisleri. It works through manufacturers to clearing and forwarding agents to distributors and finally to the ultimate customers. It has 52 bottling plants all over the country as in Delhi, Goa, Mumbai, UP, Jaipur, Chennai, Rudrapur and Bangalore. It is going to expand it by setting up new 25 bottling plants across India which will help it achieve 40percent more of the growth rate in the fiscal. The new bottling plants are being placed in Maharashtra, Karnataka, Tamil Nadu, Orissa, Kashmir, Jharkhand, Kerala and north Bengal. These plants are going to be partly set up the franchisees and partly by the company itself. The company is also going to double the capacity of manufacturing in Mumbai and Nagpur. The company has outlined a dual distribution plan this way to gain competitive advantage. Parle Bisleri also tried to launch and introduce bottled water in stationary, chemist shops where other soft drinks were not sold so it was easily available to the customers. The company worked on its dual-distribution strategy to gain competitive advantage. It kept on working and entering into rural India, interior markets and penetrating into smaller markets of the country, pushing the brand in

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the roadside of metros and new territories. The government institutions, hotels, railways were targeted as the major chunks of the market.

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EXTENDED VALUE CHAIN ANALYSIS

When we see the value chain analysis of Bisleri we can easily analysis that the Bisleri is good enough in logistic system to operate the business smoothly. The value that the customer perceived in Bisleri is its operation its cap or packaging. The Bisleri add a lot of value at its each operation. Bisleri also have the first mover advantage over its competitor. Its brand image or brand name is helps to attract a pool of customer. Let us see how Bisleri add the value at each steps of value chain and how Bisleri gain the competitive advantages through various operation and activities.

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Porter Value chain

We can divide the Bisleris activities in two parts on the basis of value chain model 1. Primary activities 2. Supportive activities

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Primary activities:
Bisleri is a leading organization in packaged bottled water. Bisleris primary activities are

Inbound logistics:
The raw material for Bisleri drinking water is water, plastic grain for bottle, packaging equipment, minerals, bottle cap and labels. Bisleri has good inventory system and transportation system. Its inbound logistic is good enough to supply the Bisleri water regular. This helps to available the product at everywhere. The product availability adds the value to the customer. BISLERI manages all the semi finished, finished goods and raw material in stores department. In store department they all keep the stock of rejected bottles or cap to reuse it. Every day 5o tones of stock dispatch from the store house. So this increases the availability of product to consumer. The models are made from polymers like HDPE, LLDPE, PET grains.

Operation:
Bisleri manages its seven department of different operation where hygiene and safety concern is primary focused. Different departments are:
Filter department Caps department. Water treatment plant Water blowing department Water testing laboratory HORAI department(grinding plant) Stores department.

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Filter department is responsible for the filling and packaging of bottles under the rigid control of the hygiene and safety. In the caps department the PET material is used to make the cap and plastic bottles by using 6 Ekou injection modeling machine of 180 and 330 as per the requirement of market. Caps are made from a mixture of HDPE and LLDPE using 4 Cincinnati Milacron and 2 Windsor injection-moulding machines. Water treatment plant where the water is make pure and safe. Water laboratory taste checks the quality before and after packaging. The scraps or used bottle again send to HORAI department for the recycle of bottles. Stores department manages the all raw material and scraps. Bisleri add value at each steps of its operation. Customer perceived Bisleri as pure and safe water with cap security.

Outbound logistics:
The outbound logistic of Bisleri is very strong. To increase the capacity and to cover the maximum market Bisleri increased its transportation by increasing the number of trucks from 1000 to 2000 trucks. Bisleri uses the route mapping method, in this method the route of transportation and operation is designed in such a way that it takes minimum time to transport the stuffs. Bisleri makes route sheet along with the scheduled to make sure the things happen in an effective manner. Current Bisleri manages 16 plants at 14 locations in different part of India to increase the availability of product. Bisleri plan to open the 25 new plants till 2010 to increase the growth of 40%. So it will decrease the supply time and make the product easily available. Bisleri decide to increase its distribution network by 30%.

Marketing and sales:

Bisleri uses competitor price strategy to get the market. As Bisleri has the first mover advantage and the market is full of competition so they decide to increase the advertising expenses for ad campaign. Bisleri itself is known as mineral and pure water. The branding and segmentation of Bisleri is very strong as it cover household to big hotels. To target the customer Bisleri launched different product

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line with different prices and different size of bottles. The Bisleri uses three level of distribution channel as it consists of wholesalers, dealers and retail shop.

Services:
Bisleri has a vast distribution channel so the service and delivery quality of Bisleri distinct it from others.

Supporting activities:
Firm infrastructure: Bisleri manage its network by establishing it unit near by the resources where the availability of water is enough to run the business. Bisleri has the vast and strong distribution channel. Technology and development: As the competition in the market is increasing Bisleris main focus in on to develop new brands and new technology to increase the customer satisfaction. Bisleris unique bottling packaging and temper seal cap technique distinct itself from others. There unique and safe production process also helps to attract the large pool of customer. Bisleri has a good inventory management that helps Bisleri in continuous supply of water.

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5. VRHN analysis
The company has a motive always to beat its competitors and gain competitive advantage. VRHN analysis will help in assessing all that a company gives which differentiates it from its competitors.
Valuable- The purification process of Bisleri is a valuable resource for it.

Ozonization and micron filtration is included in its process to purify the water. The transport facility of Bisleri is regarded as a valuable resource. It has large fleet of trucks to supply the bottles and make the product available. More than 75 vans are there in Mumbai to carry the bottles from the manufacturing plant to its distributor.
Rare- Bisleri is launching water in fruity flavor which is rare. The peach and

green apple flavor water will be available to its customers. This rare combination makes it unique. Natural mountain water which is also launched by Bisleri is rare. The green packaging of Bisleri is also rare. The distribution network of Bisleri is also rare as its bottles are available in all its stores.
Hard to imitate- The bottle of Bisleri have a seal which has a patent, which is

hard to imitate.
Non substitutable- There are substitutes for water but water is the sole agent

for thirst quenching. So we can say that for the company the product itself is non substitutable.

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6. Future Plans
The market size is further projected to increase to 256 million cases by the year 2014-2015 this work out of a projected growth rate of nearly 11% a year. Bisleri was the first to market bottled water in a totally virgin market andnaturally people associate the brand with bottled water. Now Bisleri isperhaps already ten steps ahead of its local competitors and endeavor to widen its gap in the months to come. The brand positioning of Bisleri stresses on pure, clean and safe drinking water. Sales have grown by 140% in the year 2000 in the coming year. Bisleri hopes to boost its sales by more than 400%. Bisleri expects 75% of its volume to come from bulk parts of 5 lt. and 20 .Currently it amounts to be less than 35%. The latter is to be targeted athomes and the former at offices. Some of the future plans to be at the top-spot that Bisleri commands in the Indian market are: Some of the future plan to maintain the top spot that bisleri commands in the Indian market are :
New pack sizes in bottles and cups increase the distribution network with an

investment of over 200 crores.

The demand has been further fueled due to increasing income and changing

lifestyle of the urban middle and upper classes of the population due to globalization
To enhance capital and fixed assets of the group to withstand challenges and

tough market trends We can divide the entire market into two segments:
Retail consumption market and

28 Household institutional consumption market

It is also triggered by advertising and wide spread distribution of the products

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7. Suggestion
We can give suggestion to make some necessary changes are as follows:
Should increase their distribution channel and franchisee. Brand extension to brand proliferation. Bring out different products and extend its product line. Plans to increase its product portfolio in the water and leverages segment. Try and focus on the new trends in the Industry . Eg: Flavoured water. Focus on Advertisements Publicity through Functions, Organisation , Radio etc. Introduce interactive bottles in market

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References
1. Philip Kotler, Abraham Koshy, Mithileswar Jha, Kevin Lane Keller.

Marketing Management: A South Asian Perspective Pearson (2008)

2. Michael E. Porter Competitive Advantage Creating and Sustaining

Superior Performance Free Press (1998)

3. Vithala R. Rao, Joel H. Steckel Analysis for Strategic Marketing Pearson

(2006)
4. www.bisleri.com 5. http://www.business-standard.com/india/news/packaged-water-firms-ignore-rs12-price-diktat/353342/ 6. http://www.financialexpress.com/printer/news/151843/ 7. http://www.business-standard.com/india/news/bisleri\s-expansion-thirst/389299/