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BISLERI A BRAND STORY

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Dedicated to Prof. Philip Kotler and Mr. Jack Trout who were the first one to appreciate and value the new brand tools by me. Year 1969, When Parle sensed a high potential business in mineral water segment and acquired Bisleri from an Italian company-Felice Bisleri. As a soft drinks company, the brand portfolio of Parle was bejeweled by Thums-Up, Gold Spot and Limca (cola, orange drink and lemonade) but still for Parle Bisleri, there was something missing in its brand portfolio. To get a foot hold in soda market Parle launched Bisleri soda with two variants -- carbonated and non-carbonated mineral water and bottled in glass bottles. This market was hard nut to crack for Parle Bisleri as it was marketing something which is colorless, tasteless and odourless. The bottle-neck was to position such a product. Thus, the earlier brand building efforts focused on Bisleri being healthy with adequate minerals. The Italian name added a dash of class to it. The first print ad campaign captured the international essence and showed a butler with a bow tie, holding two bottles of Bisleri. "Bisleri is veri veri extraordinari" (the spelling of the punchline was designed to capture the consumer's attention) was the punch line. The campaign was successful and brand took mindshare of consumers as an identity who catered to the need for safe, healthy drinking water. Early-to-mid-1980s, the time for a real boost in the mineral water segment. Bisleri changed the packaging to PVC packaging and later to PET bottles. The PET packaging did not just ensure better transparency but was a clear evidence to show sparkling clear water to the consumers. It also meant better life for the water. Bisleri soda was doing well but it was discontinued from market after the acquisition of Parles soft drink brands by Coca-Cola in 1993. This was the initial trigger for paradigm shift of brand Bisleri solely to mineral water segment. Selling all soft drink brands to Coca Cola is till date an ambiguity for me (Please take this acquisition a cause, have

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Business News Analysis: Free Student Articles www.internsindia.com-A FREE site for MBA live projects. patience I will show you the effect as how a warrior feels once he auctions his weapons)

There was a clear opportunity of building a market for bottled water. The quality of water available in the country was bad. It was similar to what Europe faced before World War II. The quality of water in Europe was extremely poor, which created the bottled water industry there. In India, too, not only was water scarce, whatever was available was of bad quality. Initially, though bottled water was something only foreigners and nonresident Indians consumed, but targeting mass needed to increase the distribution, which meant the dealer margins reduced. And because of limited sales, the dealer margin had to be kept high to compensate low sales. Now option was to push the sales and to reach out to the masses in an efficient and effective way, the category should be more affordable. The introduction of a comfortable-to-carry 500-ml bottle for just Rs 5 in 1995 not only answered that need, but also meant doing away with carrying the excess water or throwing it away if you were to buy a one-litre bottle. From skimming to penetration strategy with Rs 5 for 500-ml bottle created magic and gave Parle a growth of nearly 399 per cent. Another price extension happened with the introduction of 1.2 litre bottle in 2000, which was aimed at those who share their water. The higher margins were promised by a crate (12 bottles). For student lets see how Parle Bisleri moved according to our marketing books. 1) They followed the basic principle of penetration strategyaffordable price; ie Rs 5 for 500-ml bottle. 2) You remember Ansoff Matrix. I am putting Parle Bisleri moves on to this matrix. So strategy was clear, it was Mass Market that was on radar. I have plotted the first move and will carry the same matrix for plotting further Moves by Parle Bisleri.

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Business News Analysis: Free Student Articles www.internsindia.com-A FREE site for MBA live projects. With other brands joining the fray, things were hotting up -- the bottled-water market was estimated at nearly 2.9 Billions and was growing at 49 per cent a year. Bisleri had captured 41 per cent of the market. Now, it was time for Bisleri to move to the next level -- the bulk segment. Several commercial establishments had no access to piped water. Bisleri tapped into this segment by introducing the 12-litre container, followed by the 20-litre can. It was not only a move for bulk sale but reducing the packaging and other operational cost per bottle packed and it helped in bring down the price per litre from Rs 10-12 a litre to about Rs 3 a litre. The bulk segment was participating 60 to 70 percent of sales. Another opportunity came to Bisleri with rising scarcity of water in cities. Mr. Ramesh Chauhan, chairman, Parle Bisleri, who was constantly looking for new ways to tap the market, engineered the consumer needs and introduced a more user-friendly home pack by introducing pouring spouts and jars with dispensers. Bisleri noticed that during wedding receptions, the older guests (above 50 years of age) generally stayed away from ice cream, soft drinks and so on. Hence, introduced free sampling of Bisleri at the tables where the elderly guests would sit. Soon customers were ordering bottled water on special occasions. Currently, the consumption of bottled water is far in excess of soft drinks on such occasions.

The other major challenge was distribution. Parle Bisleri was well experienced in Soft Drink distribution but Soft drink sales are in glass bottles and the distribution model is built around picking up empty bottles and getting them back to the factory. That's not the case with the retail bottled water packs (below 2 litre). But a product that's not available where it's needed is useless. The number of outlets where Bisleri is available has increased from 50,000 in 1995 to 2,00,000 at present. Moreover, Parle Bisleri also added other channels like chemist, stationary shops which never sold soft drink.

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Business News Analysis: Free Student Articles www.internsindia.com-A FREE site for MBA live projects. The mineral water segment, as a milking cow was sensed by big daddies of the soft drink market. In August 2000, Coca-Cola India gestured for head-on with the launched of its bottled water brand, Kinley. By 2001, the mineral water market was worth Rs 9.9 billion with a growth rate of 39% a year. Kinley and Aquafina played on their distribution as competitive advantage and by March 2001, Kinley had a 10% market share, Aquafina had 4% and the share of Bisleri had come down to 51%. By June 2001, Bisleri's market share was 47% and Aquafina and Kinley together accounted for over a third of the market. The market was creating different patterns in chaos, the product differentiation on the basis of quality became increasingly difficult, with each company claiming that its brand was healthy to drink; Next trump card was to use packaging to differentiate their products. Bisleri introduced a tamper proof seal in the 500 ml bottle but it not enough to protect the market in the absence of patent protection. Distribution was the only card to get hold on the market, proven by the increase in market share of Kinley and Aquafina. They all were just playing the game on the conventional battle field, distribution, manufacturing, price variants-for example and was creating a bloody sea of competition. All the game plan was for the initial market but what about the rest Rs 1000 crore market which was still left to be tapped .Some way or the other you have to create value innovation to consumers for tapping the rest huge potential market because distribution or manufacturing can be strategically out sourced but not the value to consumer. Its your solo offering to consumers at last. However, one area in which Bisleri seemed to have an advantage over Kinley and Aquafina was the bulk segment. In 2000 Bisleri's 5 and 20 litres packs accounted for one-fifth of its sales. In 2001, the company planned to have 75% of its sales from bulk packs of 5 and 20 litres. Even Bulk segment was not left unexposed to intruders. In 2001, both Kinley and Aquafina opted manufacturing and distribution as the battle field to challenge the leader and the followers and designed their game plan on relative superiority. By 2002, CocaCola India stepped to double the number of water bottling plants to 16 and Pepsi revealed that it would add seven more plants to the existing

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Business News Analysis: Free Student Articles www.internsindia.com-A FREE site for MBA live projects. five. In contrast, Bisleri had only 15 bottling plants and three franchisees. Kinley had 500,000 outlets compared to Bisleri's 350,000. The game plan of Bisleri was not to go for head-on straight away with big daddies of soft drink market but to shift their market in a different segment of mineral water, bulk. The distribution and manufacturing as a battle field has changed all rules of the game for retail market. The 1000 Crore market of mineral water was bifurcating between two segments one was retail and another was bulk segment. The later was preferably a strategic choice for Bisleri because of two reasons; firstly to by-pass the competition for the time being and secondly to reduce operational cost by bulk manufacturing. ---------------------------------------The bulk segment had vast potential, and was expected to grow fast. In 2000, 40% of the branded water consumption was in eateries, homes and restaurants. Large shops and commercial complexes were fast emerging as attractive targets for mineral water marketers and Bisleri wanted to be the first to establish itself in the bulk pack segment. Bisleri concentrated on its bulk business and planed to increase it bulk share of 20% in the total sales revenue. ---Playing the aggression card to the hilt, Parle Bisleri Ltd shuffled its trump cards to - strengthening distribution, innovating on packaging and pricing competitively. The company, meanwhile, continues with its dual distribution strategy - penetrating smaller, interior markets in rural India, and pushing the brand in newer territories and roadside stalls in the metros. Within the institutional segment, hotels, railway stations and Government offices are being tapped with increased aggression now. While the 20-litre jar comprises about 40 per cent of overall Bisleri sales, the one-litre bottles account for approximately 25 per cent brand sales. The packaging focus was on to assist the consumers usability, in addition to the breakaway seal, the hexagonal 20-litre jars was supported with dispensers which do away with the need to lift the jars while pouring out water. The strategy was in execution as per the plan. It was not only summer season that was on focus to push sales but increase in travel from November to January was opening gates for wealth. That is to do with tourist activity accelerating in the latter half of the year.

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Business News Analysis: Free Student Articles www.internsindia.com-A FREE site for MBA live projects. Now in the retail segment the emerging fighters were Kinley and Aquafina. Coca-Cola planned to invest Rs 700-750 million in its water business by 2005 and Pepsi around Rs 800 million to Rs 1 billion. In 2001, Kinley contributed 5% to Coca-Cola's revenues in India and Pepsi claimed that by 2002, Aquafina would contribute 7% of Pepsi's revenues in India. . How can we forget if there is money there is a way Nestle jumped in the market with its own mass-market bottled water, Pure Life.

I was impressed with Bisleri strategic move to first concentrate on bulk segment and parallely tossing luck in retail sector. Pepsis love to Bisleri can be seen when it planned Aquafina bulk water, to hit the market after a couple of months, against stiff competition from Parle Bisleri and Coca-Cola India's Kinley. The 20-litre bulk water market has been witnessing aggressive action from both players. Kinley had taken a different stance in 20-litre segment, by entering into contract manufacturing alliances with two domestic manufacturers -- Thermax Culligan Water Technologies Ltd in the West and Nuchem Weir Ltd in the North. Subsequently, the `Good Water ' and `Krystal' brands from these two manufacturers have been withdrawn. While Kinley claims leadership in the retail packaged water segment with a 37 per cent market share, which is about six percentage points ahead of Bisleri, Coke is aggressively pushing its 20-litre bulk business. For the bulk water segment in Delhi and Pune, Coca-Cola had tied up with Nuchem Weir and Thermax Culligan Water Technologies respectively. A similar contract was struck with the Chennai-based S.R. Minerals for marketing the Hello brand. I still think that giving all its brands of soft drinks to coca cola Parle had closed down all its options to challenge soft drink players on their basic turf. Story would be different if after launch of Kinley and Aquafina in mineral water segment Bisleri would have challenged them on soft drink with thums-up which was the biggest trump card of its time. Intelligent Bisleri thought to come out of rat and cat game and play it open. Now it was the time for a major expansion by increasing its manufacturing facility as also to widen the distribution network. The

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Business News Analysis: Free Student Articles www.internsindia.com-A FREE site for MBA live projects. total project cost is estimated around Rs 260 crore. Of this, nearly 23 percent utilized to expand the existing manufacturing facilities wherein the bottling capacity would be doubled to 200 million cases per day. Around Rs 200 crore will be spent on increasing its distribution network five-fold over the next two years. As a result, the company will have 10-lakh retail outlets endorsed by a stance of over 5,000 vehicles. Parle Bisleri also plans to procure recycling plants from Japan, for its PET bottles, and set up at least two such plants in Chennai and Delhi at a cost of Rs five crore each. Crushed and compacted bottles from other parts of the country will be transported to the two plants and a better part of the compacted PET will go into manufacturing polyester yarn.

Investing millions of rupees in mineral water business was neither a hunch of top executives nor experimentation. There was an array of fact based logic behind this game plan which they were planning to encash sooner. Some facts are; in 2001, India was classified as a water-stressed region, because utilisable freshwater stood at 1,122 cubic km, far below the 1,700 cu km prescribed as the international standard. Projections were that by 2025 India would become a `water scarce region, with utilisable freshwater falling to three digit levels. Water tables have fallen by more than 5 meters in over half of India's districts since 1980 and in other parts they are falling by 3 meters every year, that more than 40 per cent of the country's utilisable water drains into the ocean from the Himalayan watershed comprising the Ganges, the Brahamaputra and the Indus. All the facts fueled by the water born dieses in the country. Earlier, barriers to entry were low, which made venturing into bottled water easy and inexpensive. The political effects can be seen with the imposition of laws set by the Department of Prevention of Food Adulteration (PFA) about what qualifies as `purified', have been lax in the past, flouting which was a common practice by backroom operators. The competition did not stop here. The time for spring water as a pure ware with naturally added minerals and calcium was giving a new

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Business News Analysis: Free Student Articles www.internsindia.com-A FREE site for MBA live projects. shape to the premium market segment. But for Bisleri, opponents for this game were different; Himalayan ,Evian and Catch. The presence of spring water got focused when mineral water was found containing traces of pesticides. I still cant understand where the big soft drink daddies have missed in strategy to plot that if the pesticide problem can happen with water as a raw material for soft drink why it cant happen with mineral water. But the history repeats itself, now the targeted brands were Bisleri, Aquafina and Kinley. Ah!!! Coca Coal not again how can you take some thing so much for granted. The effect of this can be seen as the market share enhancement of Himalayan, Mount Everest Mineral Water Ltd. Sales of Himalayan have grown from 3 lakh litres per month to 10 lakh litres. The only thing they are still encashing as the brand leader was the association of its brand name Himalayan with its spring water with 50% market share. Himalayan as brand name was in itself the strongest brand position. Other players in this category were Evian and Catch Since 2003, Bisleri had planned to venture out into Europe and America to sell bottled water not exactly by exporting mineral water but by settling manufacturing plan in Europe. I am unable to fathom this geographical expansion as the battle field for retail market is distribution plus manufacturing where MNCs like Coca Cola and PepsiCo are on relative superiority across the globe. Taste and added mineral are the best guards that are still shielding the bulk segment consumers especially in the house-holds, Offices and other high volume consumption places from substitutes like water purifiers, Aqua Guard. I still find it difficult to fathom why electronic purifiers are promoted only for drinking water. If they were to be projected as water purifiers then they can break the competition by broadening the usability factor for a series of everyday functions: cooking, making tea, washing utensils hygienically, for example. If you zoom up the market, core problems for Bisleri were coming from three dimensions; firstly low competency in the retail segment due to distribution as competitive advantage for big players. Secondly it was unable to shield the market in the bulk segment from big players. Thirdly Himalayan as a brand occupied the market leadership

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Business News Analysis: Free Student Articles www.internsindia.com-A FREE site for MBA live projects. due to strong association of its brand name with the benefits it was offering. The next difference in spring water segment derives from brands claim in relation to the source of its water. Himalayan projects its source as the glaciers. The impression thus conveyed is that since water is taken directly from snow, it is bottled before it is exposed to pollutants. Bisleri, on the other hand, claims that its water source is Gangotri. The general assumption based on that claim is that since Gangotri is a river, the flow from the snow form to the water form involves a greater exposure to environmental factors, and the chances of contamination are therefore higher. Now the new theme after spring water is flavored water and vitamin specific water. It is still to guess what will be the battle field for this and what will be the rules. Internsindia.com has few plans for its clients. RECOMMENDATIONS Based on the story we read, Internsindia.com suggests Parle Bisleri, to challenge all intruders on the Brand Image front as still mineral water stands with its nick name Bisleri. But before hand lets solve few twisters for Bisleri: a) What value equations (except price reduction) Bisleri is prepared with to face the price war if triggered by Coca Cola or Pepsi in future? b) In which segment Bisleri has relative superiority over financially sound competitors? c) If bulk segment follows 80/20 rule for profit maximization, how much Bisleri can shield it from intruders? d) What is the KSF (key success factor) of the industry? e) Himalayan spring water plays on its logically strong brand association with glaciers. How can Bisleri break it? I answer the previous question. Water directly from Langtang valley is a fiction of extreme purity which Himalayan has created in the mind of consumers well endorsed by its brand name. It got acceptance as consumers have hardly experienced the pure water from glaciers. They took it as offered by Himalayan. Now if Bisleri can articulate the parameters for spring water in the mind of consumers then it can root out the ice berg. Still spring water

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Business News Analysis: Free Student Articles www.internsindia.com-A FREE site for MBA live projects. concept is an abstraction, I wish Bisleri to explore a parameter which can deliver a feel of water from glaciers. Internsindia.com has a few value innovations, brand extension and new consumer acquisition plans which I cant disclose as per our professional ethics. If you find some please let me know. I will welcome your suggestions.
These suggestions are commonsense based and are influenced by the above case study designed from secondary data. The recommendations should not be taken as a base to judge the professional capabilities and efficiency of internsindia.com. All professional suggestions are based on regress analysis and driven by intensive facts-gathering process.

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