Marketing Plan of Water Purifier

Marketing Plan

On

Water Purifier

Submitted to

Prof Alan D’souza & Dr Kishor Barad

Professor,

 Marketing Management

Shanti Business School, Ahmedabad

In Partial Fulfillment of PGDM Trimester I (Batch 2010-12)

Continuous Evaluation in Marketing Management

                                                                                                   Submitted By:-

                                                                                                    Vipul Patel

                                                                                                    

ACKNOWLEDGEMENT

We, as group members, owe this marketing plan project to several people. So we like to thank them. Firstly we would like to thank Prof. Alan D’Souza and Prof. Kishor Barad for their continuous help and support throughout the project. Our valuable thanks to academic associate, Sneha Thakkar for her valuable inputs for our marketing plan. We as group members would also like to thank each other as the project could successfully be completed with mutual co-operation and support.

         Lastly we would like to thank our parents and Almighty God for making us what we are today.

TABLE OF CONTENT

·        EXECUTIVE SUMMARY

·        PRODUCT INFORMATION

·        PRODUCT DESCRIPTION

·        MARKET AUDIT AND COMPETITIVE MARKET ANALYSIS

·        MARKETING OBJECTIVE

·        SALES PROMOTION

·        MARKET SEGMENTATION

·        COMPETITOR’S ANALYSIS

·        RESOURCE REQUIREMENTS

·        EVALUATION OF THE PRODUCT IN THE INTENDED MARKET

·        PROMOTION AND ADVERTISEMENT

·        BUDGET

EXECUTIVE SUMMARY

Half of the world’s hospital beds are occupied by patients suffering from a water-related disease. For children under five, water borne diseases is the leading cause of death. Every 15 seconds, a child dies from a water-related disease. For children under five years of age, water borne diseases are the leading cause of death. Every 15 seconds, a child below 5 years of age dies due to diseases caused by unsafe drinking water.  75% of the rural population in India does not have access to safe drinking water. 80% of diseases and 33% of deaths are caused by unsafe drinking water.

            After analyzing the market we have found out that there is a huge market opportunity in India for water purifiers. The water purifier market is estimated to grow at the rate of 25% to 28% annually. There is huge competition from multinational firms who entered in this field to capture the market share.   Eureka Forbes is presently the market leader in India with its brand Aqua Guard. It is considered as market leader in many countries. Some other firms along with local producers existing in the Indian market are Philips, Kent, Godrej and Usha Ltd.

PRODUCT INFORMATION

Pure Shield is a unique and innovative water purifier. Requiring no energy or running water to operate, the replaceable filter based product, which is entirely portable and based on low cost natural ingredients. It produces clean and safe water without using electric power or running water, which is often not available in rural areas. The cartridge bulb is packed with a purification medium which has the capability to kill bacteria and disease-causing organisms. The new Pure Shield water purifier can purify up to 3000 litres of water after which the cartridge stops water flow. The water purifier gives the user enough lead time for cartridge replacement. The new Pure Shield water purifier will cost around Rs.1,000. The purifier will cost Rs.749 and its Cartridge with cleaning material will cost Rs.299.

KEY FEATURES OF THE PRODUCT

·         Turns your water storage container into purifier-magically!

·         Makes water purification available to anyone, anywhere

·         First ever unbreakable bodied purifier

·         Unbelievably affordable price at jus Rs.799

·         Comes with the patented Pure  Shield bulb, thus carries the performance guarantee

·         High on convenience

·         No electricity needed

·         Comes in attractive color options

PRODUCT DESCRIPTION

WEIGHT: 3 kgs

HEIGHT: 572 mm

WIDTH: 300 mm

DEPTH:  282 mm

MATERIAL OF CONSTRUCTION: Food grade, non-toxic, engineering plastic.

TOTAL STORAGE CAPACITY: 18 litres( 9L+9L)

MARKET AUDIT AND COMPETITIVE MARKET ANALYSIS

.  If an organization wants to make its product or service successful in a particular country’s market, it should do proper market research such as is there any demand or need of that product, which is target market, which sources of advertising would be more effective to communicate to customers, local competition, buying behavior and logistics management. Base on that a company should make effective market plan then only it can sustain in market for long time.(KOTLER and KELLER,2009)

           So we intend to adopt such strategies and prepare a marketing plan that would help us to sustain in the highly competitive market of water purifier.

           

MARKETING OBJECTIVE

TARGET MARKET: Firstly, we will target the government where as we will persuade them to buy our products by telling them the advantages that how can it is helpful to stop water disease and it is also cheaper than other companies‟ products. Secondly we will target middle and low income level customers. By the help of marketing plan, we would try to achieve our targets.

EXPECTED SALE: The main objective of this marketing plan is to increase sales. Our expected sale in three year from India is Rs. 10 cr. First year we expected work with 75% capacity of production second year we expected work with 90% capacity of production and third year we expected work with 100% capacity of production.

EXPECTED PROFIT: Basically service oriented companies set the price according to their operation structure such as how much they are spending on warranty period, production cost, distribution cost, factory overheads and selling and advertising expanses. After analyzing all these cost they add profit according to their strategy such as if they want to become price oriented where their price will be less than competitor price then organization will set low profit because they want to make profit by selling more volume of products. We are using same strategy where we will set only Rs. 175 profits in after that we are looking towards more profit margin than first year.

PRODUCT ADAPTATION: We will also customize our product and service according to need and demand in the market such as if any customer want more than one year warranty then we will provide him but we will charge him extra money.

COMPETITION: Most of the companies which have strong presence in the Indian water purifier market are Eureka Forbes’ Aquaguard (Kaushik, 2003), Unilever’s Pure It, Kent, Philips, Godrej, Usha Brita etc. Our nearest competitor is Aquasure of Eureka Forbes and Pure It of HUL and their cost is much higher than ours, which is above to Rs. 2000

SALES PROMOTION

In the last decade, organizations had been spending huge amount of their promotion budget on advertising. But now due to increase in the competition and change in technology many marketers have realized that there are many others effective and cheaper means of promotion by which company can promote their products more effectively. Many companies are developing fully integrated marketing programs that include consumer and trade promotions. Sales promotion is a very effective short term incentive to encourage customers to purchase the products.

By the help of trade show, special offering such as free home delivery, free service we will try to increase our sale.

Personal Selling

Personal selling is one of the most important variance for water purifier industry. Most of the organization is using it to increase the sales and aware the consumer about the product. In this process, a salesman from company directly will come to meet consumers where he will educate consumers, aware them about the advantage of the products and persuade them to buy the products.

Retailers:

For retailing, we intend to put our products into various small and big retail stores wherein our wholesalers would be in direct contact with our retailers and all the business dealings would be done through this channel only.

Method of operation for each type:

The main method of operation will be by providing incentives or commissions on product sold. Beyond that for the display of the product in conventional stores as minimum one time payment is made to the Shop keeper. No Credit policy is planned for the initial launch.

Scale of Operation for each type:

The scale of operation planned is large. The main entry into the market is via an awareness program which highlights the importance of usage of unadulterated water and also how “pure shield” as a product can bring in the difference. The main USP is the price

Wholesale market:

India has a large number of wholesale and retail distributions. The strategy that “Pure shield” is going to adopt is that to have one main wholesaler who has got the maximum reach in the country and then tie up with the wholesaler for the distribution of the product.

MARKET SEGMENTATION

 We have segmented our market on the basis of income and geographic. We will position ourselves in the market as new technology, affordable and good quality (value for money) product.

GEOGRAPHIC SEGMENTATION:  Initially the product will be launched on the trial basis in metros. After this we would move ahead to tier 2 cities. The major targets then onwards would be cities where municipalities and governments face problem in supplying clean and safe drinking water.

 INCOME: We segment the market according to income level also because Pure Shield is the world’s cheapest water purifier, does not require electricity consumption and is easy to store. The target segment on the basis of income is lower middle class and middle income earning group in India.

COMPETITOR’S ANALYSIS

Importance of understanding competition: When a company launches its product in the market, it tries to position its brand uniquely among other brands present in the market. Therefore it is critical to understand the strengths, weaknesses, opportunities and threats of each of those competitors along with the industry structure itself. This knowledge is important because it’s the competition that helps us to own the unique benefit in our customer’s mind that our competitors‟ have not addressed and cannot easily address in the future.  In our case it is pricing.

Rational behind identifying the competitors: Analyzing the competitors is an essential component of corporate strategy. Knowing about the competitors and their profile will help the concerned organization in knowing its weaknesses that it may exploit. A detailed profile of the competitors, helps an organization in getting an in depth description of the competitor’s background, its unique selling proposition, financial condition, its strategies, the products and the market share.  In our case, our main competitor is Eureka Forbes and Kent.

Competitor’s products: Most of the companies which have strong presence in the Indian water purifier market are Eureka Forbes‟ Aqua guard, Unilever’s PureIt, Kent, Philips, Godrej, Usha Brita etc.

Competitor’s prices: In order to the market segmentation, our product is design for the lower income segment which is 79% of total population of India. In this segment, if we compare our product with competitor’s product, our product is the cheapest (Rs.799) water purifier in the market. Our nearest competitor is Aqua Sure of Eureka Forbes and Pure It of HUL and their cost is much higher than ours, which is above to Rs. 2000 .  

Competitor’s promotion and advertising methods: In its promotional and advertising strategy Eureka Forbes is positioning its brand as an environmental friendly company and using a combination of varieties such as direct marketing, event marketing and many CSR activities (Eureka Forbes). Usha Shriram Brita is selling its products through door to door marketing in India and exporting products from India.

RESOURCE REQUIREMENTS

Finances:

“Pure shield” is new to the market so the finance is solely depended on the sales of the product. The expectations are very realistic, which has been concluded based on the research conducted in India. Research will be undertaken to compare and contrast potential credit facilities if more finances are needed.

Personnel

The personnel requirements for the Water Purifier product are as follows.

 The company consists of Sales and marketing department, finance and administration, Human Resources department and Maintenance and Customer care department

The main responsibility of all this head is to make sure company is moving towards planned estimates of profit year on year, if required take corrective actions and handle concerns and queries of stake holders in a country. Sales and Marketing team is responsible to achieve the sales target and marketing department objective is to make the life of sales department easier by proper campaign and Advertising. Human Resource department will look after the well- being of the employees and also to control employee activities. Finance department to take care of budgets and other finance related activities. Customer care and Maintenance department mot is to take care of customer queries and handle water filet relater queries and maintenance activities.

Production capacity

In the initial years we would be working at 75% production capacity which would be increased to 90% and 100% during the next consecutive two years keeping in the mind the market demand.

EVALUATION OF THE PRODUCT IN THE INTENDED MARKET

Relative advantage and compatibility: There are many advantages by using pure shield water purifier over competitors and local players such as saving of electricity bills, pure water available at low price; everybody can afford it and less water diseases.

Complexity: People should have knowledge about product before using it then only they can use the product in proper manner. There is one complexity which can be faced by us that is to educate people about how to use our products, when to change the filter net and plate and other technological products.

Trail ability and observe ability: Our product can be purchased and used at minimal social and economical risk because it will be wildly available in the market and we will sell it by direct marketing and personal selling where we will send our employees to set up the purifier. There will be only one risk and that would be use of the product. We have to educate people to minimize this risk and train them to use successfully.

PROMOTION AND ADVERTISEMENT

Promotion Mix

Today every organization spends billions of amounts on advertising, sale promotion, direct marketing, personal selling and sponsorship. They establish a separate department which consider only on marketing communication channel operation because in present scenario spending on marketing communication mix is considered as a long term investment not as expensive which helps organization to improve their turnover and goodwill. Integrated Marketing Communication are the channels by which a firms inform, convince and sustain consumers for a long time which help them directly and indirectly to increase their sale and profit. They create the need and demand of new or existing product by telling the uses and the advantages of the products through Marketing Communication. (Kotler & Keller, 2009)

Our promotion mix includes personal selling, trade shows, demos to our potential consumers etc.

Advertising Mix

Advertisement is a paid form of promotion of ideas, goods and services by an identify sponsor. It is the cost effective way to promote the products and in the same way it is also highly accessible means it is only the way to reach out majority of the customers. There are many sources for advertising such as:

Print Advertisement: Newspaper advertisement is one of the easiest ways to convey the message to majority of the customers. We will give advertisement in newspaper where most of the consumer can see our advertisement and in the same way we will also tie-up with famous branded and fashion magazine where we will give pastors and calendars where local celebrities will use our products.

Broadcasting advertisement: We will also use TV advertisement because by visual ads we can show how it is used and what the advantages are by using it.

Radio advertisement:  Radio has become a very effective mean for advertisement as the reach offered by radio is unmatchable. Hence we also intend to advertise our product through radios in local cities as well as through Prasar bharti

BUDGET

Expenses

Selling Expenses Staff salaries, Sales support and distribution staff expenses are included. The total expenditure is	Rs. 6000000.00
Advertising and Promotion Expenses Radio Newspaper/Magazines Regional Television Ad Sales Promotion (Including Customer Awareness Program)	Rs .1500000.00 Rs.7000000.00 Rs. 30000000.00 Rs. 5500000.00  Rs.  44000000
Distribution Expenses	Rs.  5000000
Product Expenses	Rs.  3000000
TOTAL	58000000

Distribution Expenses

Distribution expenses include all associated charges including warehousing charges for freight Carrier Company and expenses for storage and distribution of the product within India. Total expenditure on Distribution costs is Rs.  5000000

Product Expenses

Product expenses include cost of Water Filters, Packaging, operating costs. Total expenditure is

Rs.  3000000

Annual Profit and Loss Statement for 1st year

                            The figures illustrated below are only estimations.

Revenue (sales at 75%capacity) RS. 100000000.00 Selling Expenses Staff salaries, Sales support and distribution staff expenses are included. The total expenditure is Rs. 6000000.00 Advertising and Promotion Expenses Radio Newspaper/Magazines Regional Television Ad Sales Promotion (Including Customer Awareness Program) Rs .1500000.00 Rs. 7000000.00 Rs. 30000000.00 Rs. 5500000.00  Rs.  44000000 Distribution Expenses Rs.  5000000 Product Expenses Rs.  3000000 TOTAL Expenses RS.  58000000 PROFIT RS.  17000000
Annual Profit and Loss Statement for 2nd year
Revenue (sales at 90%capacity) RS. 90000000.00 Selling Expenses Staff salaries, Sales support and distribution staff expenses are included. The total expenditure is Rs. 7000000.00 Advertising and Promotion Expenses Radio Newspaper/Magazines Regional Television Ad Sales Promotion (Including Customer Awareness Program) Rs .3000000.00 Rs. 8000000.00 Rs. 32000000.00 Rs. 7000000.00  Rs.  67000000.00 Distribution Expenses Rs.  6000000.00 Product Expenses Rs.  4000000.00 TOTAL Expenses RS.  67000000.00 PROFIT RS.  23000000.00
Annual Profit and Loss Statement for 3rd year
Revenue (sales at 100%capacity) RS. 100000000.00 Selling Expenses Staff salaries, Sales support and distribution staff expenses are included. The total expenditure is Rs. 7000000.00 Advertising and Promotion Expenses Radio Newspaper/Magazines Regional Television Ad Sales Promotion (Including Customer Awareness Program) Rs .3500000.00 Rs. 8000000.00 Rs. 35000000.00 Rs. 8000000.00 Distribution Expenses Rs.  6200000.00 Product Expenses Rs.  4200000.00 TOTAL Expenses RS.  71900000.00 PROFIT RS.  28100000.00
Salary expenses include: Administration staff, marketing/sales staff and Support staff.  Promotional Expenditure has increased due to an overall increase in sales and because of which more coverage of geographical locations required in. Cost of production also increased due to the increase in sales that caused an increase in production.