Case Study Bottled Water

Section C Group 11

Bottled Water Case Analysis Section - C Group 11

PGP 2011-13

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Case Study Bottled Water Introduction:

Section C Group 11

The Managing Director of Better Life Corporation believes there is a big opportunity in the bottled mineral water business. But his partners are not so enthusiastic about the opportunity because of several reasons. Thus, they have hired a Marketing Research agency to estimate the potential of the market and to assess the ready and latent need of the consumers. Objectives:

1. To estimate the current size and scope of the bottled mineral water market. 2. To estimate the amount of growth possible (the opportunity) in the market i.e. the market potential 3. To analyze the extent of latent and ready demand 4. To analyze the competition 5. To identify the target customers and the suitable price that customers are willing to pay
Target Respondents The ideal target respondents for the market research exercise would belong to the following categories

1. 2. 3. 4. 5.

Aquaguard users who would prefer aqua pure water Families with babies and young children Consumers who are health-conscious 5-star hotels and restaurants who serve pure bottled water Railway stations distributors

For the first three consumers, quality of the product is indispensible and hence they can be classified as high-involvement users. Aqua-guard is a new water purification system for domestic use. Users will be inclined towards ensuring purity and potability of drinking water when travelling or away from home. Families with babies and young children esp. urban are characterized by stability of income and will be particular about the quality of drinking water since children are especially susceptible to water-borne diseases. Consumers who are health conscious usually come under the 2 categories mentioned above. With increase in incomes, health consciousness in India is increasing rapidly. As far as hotels, restaurants and railway station retailers are concerned; the patrons may or may not be high-involvement users. 5 Star Hotels are likely to serve pure bottled water to meet the high standards of quality set for them. Expenses for the same will not be a major issue considering the budgets of high end hotels. Railway station retailers and canteens cater to a wide variety of people and consumers in general are not very concerned about the brand or the quality of the water being sold.

PGP 2011-13

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Case Study Bottled Water Research Methods

Section C Group 11

1. Syndicate research Syndicate service research firms such as NCAER, ACNielsen-ORG-MARG and IMRB International gather consumer and trade information and sell the same for a fee. The data from these firms can be used to estimate the market potential especially by analyzing the presence of Bisleri in the market, their distribution, quantity sold, revenue earned etc 2. Survey Research Two types of surveys will be conducted for potential target customers i. Families with young children and babies: Their concern for quality and pure water (high involvement category) makes them a potential target segment. A survey i.e. personal interview, of this sample audience, is the best way to understand the preference of families with young children.
The sample size would be approximately 100 families across metropolitan cities. Questions would be asked to regarding their apprehensions about drinking water, the price they would be willing to pay, their budget constraints etc. A sample questionnaire is given below:

I. II. III. IV. V. VI.

What is your current method of purifying water? Is it cumbersome? Would you prefer an easier way? Quality bottled water would be around Rs 2-5 higher than cold drinks or unbranded water. Would you be willing to pay the extra amount? How much are you willing to spend on quality water every month? Do you often buy Bisleri when you are outside? Are you satisfied with its price, availability and quality? Where would you expect to find bottled water? Kirana stores, medical stores, pan wala etc If bottled water were made available in restaurants would you buy bottled water or the normal water they serve?

ii.

5 Star Hotels: Hotels have started providing sealed bottles of mineral water to their customers. Thus, a questionnaire would be used to gather data regarding the reason for this shift in trend, the quantity of use, the response of customers etc.
Around 20 hotels, ranging from simple restaurants to 5-star hotels would be surveyed. Some of the questions floated to them would be:

I. II. III. IV.

How many packaged bottles do you order in a day? On an average how many bottles do you use up per day? Do you give them a choice between bottled water and normal water? On an average how many customers ask specifically for bottled water per day?
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Case Study Bottled Water

Section C Group 11

V. VI. VII.

Do customers prefer coloured drinks to mineral water? What kind of customers ask for mineral water? Travellers, families with children, students etc? Do they ask for a specific brand for mineral water?

3. Focus groups A focus group consisting of Aqua guard, health-conscious and sophisticated consumers would be set up to understand their feedback regarding bottled mineral water. More and more people in India are becoming health conscious and thus those who have the purchasing power to pay a premium to a commodity like water are willing to spend on it. The focus group is a gathering of six to ten people who can discuss the usage of quality mineral water. This helps to understand the consumer beliefs, attitudes and behaviour. As most of the high class people have started preferring bottled water over other cocktails across various parties in hotels, a group of such people can give us some insight on the change in consumer behaviour. The same holds true for the Aqua guard consumers. Since these water purifiers are very costly, not all can afford it. A focus group discussion with such consumers can give us insight on the kind of problems faced earlier and the level of satisfaction achieved after using the product. 4. Survey to understand retailer attitude (railways, pan-waala etc) The distribution channel for any new product launch is very crucial. The distributors attitude and stock keeping for a brand has huge impact on consumers brand perception. It is therefore extremely important to understand the current behaviour of various retailers like railway station kiosks, paan walas, refreshment hotels etc. This shall also be the source of vital information on what the consumers wants under different situations of thirst, tiredness, refreshment etc. So a questionnaire can be used to find out various details pertaining to the retailers behaviour in this caseI. Do you keep mineral water bottles? If yes what brands, if no, do customer come to you asking for the same and how often? II. How many customers deny buying a water bottle if its not a reliable brand like the Bisleri? How many customers are indifferent? III. How many customers enquire about mineral water but inspite of availability dont buy it? IV. If cold drinks and water both are available, what is the customers preference and under what conditions? V. How many customers ask for varieties in the mineral water bottle and how many accept the bottle offered by the retailer? VI. In how many cases a child asks for a cold drink but the guardian buys water for him (due to health issues)?
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Case Study Bottled Water

Section C Group 11

VII.

Are the travellers brand conscious or they buy in a hurry (especially at railway stations)?

5. Behavioural Data Customers may not always state the truth in direct surveys and questionnaires and hence the collection of Behavioural data lends greater insight into the preferences of the customers. Behavioural data is reflected by the actual purchases made by the customers. For e.g. Data regarding consumer preferences for water or cold drinks at railway stations can be collected. This data helps us understand if consumers prefer one over the other to quench thirst, the demographics of the persons opting for either kind of drink, etc.

PGP 2011-13

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