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The Prahalad Effect

Kata Technologies Limited (KTL) is one of
the leading players in the agribusiness
sector. The company‘s portfolio includes
crop nutrition and consumer products like
Salt and its customer base is spread across
five continents.
report (2007)says that half of the world‘s
hospital beds are occupied by the patients
suffering from waterborne diseases. In India,
waterborne diseases cause more than 1.5
times the deaths caused by the AIDS and 2
times the deaths caused by road accidents.

Exactly one year ago,

AnirbanShukla, MD of the KTL was

watching news on TV and was shocked to
know that waterborne diseases are the single
greatest threat to the global health.
Contaminated Water is the main cause of
diseases like typhoid, cholera,diarrhea,
jaundice and gastroenteritis. United Nations

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After reading this,AnirbanShuklastarted

thinking that ―the primary reason for these
The very next day at 9‘0 clock in the
diseases is contaminated water, nowwhat if
morning, AnirbanShukla reached his office
we provide pure water to the people? The
and called his management team for a
problem will be solved‖. But when he
meeting at 11‘0 clock. AnirbanShukla
pondered on this issue for some time he
started briefing his management team about
realized that the solution is not as simple as
the issue which had kept him awake the
it seems.
whole night. After the brief he asked his
team comprising of R&D manager,
Marketing Manager, Sales Director ―what if
KTL launches a water purifier?‖ Hegave his
team a weeks‘ time to come up with the
water purifier industry analysis.After a week
the meeting was again called by
AnirbanShukla to discuss on the findings.

Water Purifier Industry

Management team of KTL came up with

the following facts:
Government is doing their part to prevent
Total market for water purifiers in India is
water borne diseases by spending heavily on
valued at INR 9 bn in 2009.
water purification and sewage treatment. But
this has been insufficient considering that
 Water Purifiers Industry is growing at
70% of Indian population lives in rural areas 40% per annum.
 Penetration level of purifiers in India as
and most of the government funds are being a whole still stands at less than 1
utilized in the urban India. AnirbanShukla percent, with penetration in Tier I city
being close to 35 percent, and in Tier II
thought―the best way to solve this problem cities at only 11 percent.

is if all the households of India use water

purifier‖. He decided to take up this issue There are both organized and unorganized
with his management in KTL. players in Water purifier sector and the

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 Copyrights Reserved by NEEV 2010
contribution of unorganized sector in overall
business is estimated to be 45%
Organized players involve Pureka Korbes,
Dent, Tillips, Ruminous, Swirlpool and
BharatFever.
Penetration level of purifiers in India as a
whole still stands at less than 1 percent, with
penetration in Tier I city being close to 35
percent, and in Tier II cities at only 11
percent.
The highest penetration level recorded in
Delhi, where the figures stand at 25 percent,
when we look at the other parts of the
country penetration level of the water
purifier is 0.42 percent in Bihar, and less
than 5 percent for Gujarat, Tamil Nadu,
Punjab and Karnataka.
There are several kinds of purifiers in the
market. Most popular types are RO (reverse
osmosis), and UV (ultraviolet) based.
Besides these, there are simple candle filter
purifiers, softener plants, and distill water
plants (used for commercial purposes alone).
Pureka Korbes is the leader in UV category
of water purifiers with 68% market share. In
the reverse osmosis segment, Pureka
Korbes is again the major player with 60%
share. A major portion of the remaining 40%
belongs to Dent reverse osmosis Systems.
Prahalad Effect
Symbiosis Centre for Management & HRD
Organized players usually sell their branded
UV purifiers between Rs 7,500 and Rs
10,000, while unorganized players sell the
same for anything between Rs 5,000 and Rs
7,500, and the Chinese UV purifiers are
priced between Rs 3,500 and Rs 4,500. As
far as RO purifiers are concerned, the
Chinese ones are at the lowest rung again,
selling at anything between Rs 5,500 and Rs
7,500. Unbranded good quality RO products
are sold between Rs 9,000 and Rs 12,000,
while branded RO purifiers range between
Rs 12,000 and Rs 18,000.
Indian market has tremendous potential
which is evident from the fact that global
majors such as Tillips and Bharat Fever
have stepped in and are looking to increase
their share of the market.
The Big Plan
After going through the above facts
AnirbanShukla and his team were of the
view that penetration of water purifiers in
India is very low primarily because of the
price at which these water purifiers are
available. They came to the consensus that if
we can come up with a water purifier which
is very less in price and is efficient in water
purification then it can help us penetrate into
the Indian market. Anirban Shukla and his
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team seeing the huge opportunity in water
purification segment started working on
developing a purifier which would meet
their criteria of lesser price and efficient
purification of water.
After six months of hard work Kata
Technologies embarked upon the journey
and unveiled Kata Shudh, the
nanotechnology water purifier, in December
2009, in two variants with retail prices of Rs
749 and Rs 999, respectively.
The technology was based on low-cost
natural ingredients like rice, husk, and ash,
and uses Nano technology to make it
efficient. It required no energy or running
water to operate. Based on low-cost natural
ingredients, it was a replaceable filter-based
Prahalad Effect
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product, which delivered safe drinking water
at a new market benchmark price of Rs30
per month for a family of five. The price
was less than half the cost of Cureit, a
purifier produced by Bharat Fever,
apparently the best machine of the lot.
Kata Shudh has a 9.5-liter capacity and can
filter 3,000 liters until the cartridge has to be
replaced. The Kata Shudh bulb (cartridge),
which shuts off water supply after its useful
life, is priced at Rs299 and is good to purify
3,000 liters. The product development has
resulted in 14 patents being filed by the
company. Kata Group already has set up a
plant in Haldia, in West Bengal, with a
capacity of 1 million units of Shudh. This
capacity will be increased by another 1
million units within 3 months.
Anirban Shukla thinks that this product will
enable KTL to penetrate into the rural
market of India and his initiative will help
India to reach the dizzy height of progress
which has been envisioned.
The Challenge
However, nearly a year has passed since
Kata Shudh‘s launch, although the product
has had a successful run in Maharashtra,
Karnataka and Northern India. Its eminent
runaway success as was imagined by all its
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creators had not taken place. There were
some hurdles that were being faced by KTL,
A: The rural market was made of the
following kinds of segments:
1: Purani Soch Junta: One that thought
that the conventional water purifier
substitutes of Alum and boiling water is the
best form of purification that can happen
and hence the water purifiers are a waste and
should not be purchased.
2: Bhool Chuk Junta: One that thought that
we have not been affected by any kind of
water-borne diseases, hence there is no use
of buying it.
3: Darpok Junta: One that thought that
water purifiers even if bought cannot be
bought from a village centre because then
quality will be doubtful also the machine if
bought will be difficult to service and will
cost them. Hence better not buy it.
It was very difficult in targeting the proper
audience. KTL needed a solution by which it
could convince consumers to use KATA
Shudh.
B: The market leader Pureka Korbes,to
counter the price point advantage of KTL
had initiated a marketing campaign that only
those technologies which are visible through
Prahalad Effect
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normal eyes can be believed ―Jo Dikhta Hai
Wohi Sach Hai‖, which was a total negative
campaign against KTL as it was using Nano
technology for water purification,
purification process was invisible to human
vision.
A solution for this marketing tactic was
needed desperately.
C:Anirban Shukla had estimated a sale of 30
lakh water purifier machines by the end of
the year and had scaled the total factory
capacity to such an extent. The existing
distribution system of agro-products and
consumer goods was by no means capable
reaching the rural consumers to this scale.
Moreover the existing system was totally
unprepared to act as a channel for such a
product. An altogether new distribution
system needed to be envisioned for this
purpose, keeping in mind the reach of the
competitor like Bharat Fever.
Besides these problems, the current market
scenario in water purifier is as follows:
Kata Shudh is now available in variants of
18, 15 and 7 liters storage capacity.KTL has
further breached the price point and
launched variants of Kata Shudh starting
from Rs499. This new variant comes with
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the patented Kata Shudh bulb — and thus
carries the same performance guarantee.
On the pricing front, Shudh costs far less
than rivals Bharat Fever's Cureit and Pureka
Korbes' Quasure, which cost Rs 2,000 and
Rs 1,950, respectively. Interestingly,
Cureit's battery or its chlorine-discharger kit
lasts for 1,500 liters, after which it needs to
be replaced. This battery kit costs Rs 365.
The Quasure cartridge is priced at Rs 400.
Shudh's replaceable cartridge lasts longer,
KTL claims, and costs Rs 299.However one
of the competitors, Dent has also responded
to the challenge by launching its own two
variants of non-electrical water purifiers
Dent Bold Optima and Dent Bold Plus
priced at Rs 2,600 and Rs 1,500
respectively.
Prahalad Effect
Symbiosis Centre for Management & HRD
To counter these problems AnirbanShukla
has recruited you as one of the new MTs in
the company and you have been specifically
been assigned to this project. Anirban
Shukla now wants you to present to him the
solutions of the above questions along with
a proper road map of what needs to be done
in terms of the 4A‘s
Marketing mix is such an element in rural
market which gives the sense to think of
marketing activities.
This 4Amodel is similar to the 4P model of
marketingmix, the difference it shows is
main streamline and Rural Market. 4A
perceived to be more customer oriented. The
4A's are Affordability, Availability,Awareness,
and Acceptability.
Of rural marketing such that KTL is able to
penetrate the rural market and achieve its
targeted sales of 30 lakh units in next five
years.
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Appendix

Appendix 1: Penetration of Water Purifiers

Penetration of Water Purifiers

Tier II cities 11%

Tier I cities 35%

Whole of India 1%

Appendix 2: Market Scenario

Market Scenario

45% Organized Sector

55% Unorganized Sector

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Appendix 3: Figure indication of working of Kata Shudh:

Appendix 4: Water Sample Before and After Water Filtering

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Deliverables for Preliminary Round

Participants are required to analyse the given case which gives details of a brand trying to
penetrate to rural markets with low price point and nano technology as its USP.

Participants are required to chart out a plan to attract the rural market that is segmented on the
above lines, counter the ‗seeing is believing campaign‘ and envision a road map to penetrate the
rural market and achieve the target sales of 30 lakh units.

Groups are required to submit an abstract which includes the following details:

 A marketing tactic to counter the ‗seeing is believing campaign‘

 Abstract road map of not more than 2 pages to penetrate into the rural market segments to
achieve the target sales

RULES AND REGULATIONS

 Each team will comprise of 2 members from the same institute.

 A student cannot be part of more than one team
 One team can submit only one entry
 Only students of full time MBA can register
 There is no restriction on the number of teams from an institute
 The participants should submit the abstract in pdf format.
 Each entry should have a cover page mentioning team name, participants, e‐mail ids and
mobile nos. of the team member(s) and the name of the institute they belong to. The
format for the same has been mentioned under.
 Font Details: Times New Roman, 12 point, 1.5 line spacing
 Word Limit: 750 words
 The case deliverables have to be mailed at prahaladeffect.neev10@gmail.com .
Participants shall receive an acknowledgement within 24 hours of mailing their entries
 All the files mailed should follow the format Prahaladeffect_<Team Name>_<College
Name>
 The subject of the mail should be of the format Prahaladeffect_<Team
Name>_<College Name>
 The mail should contain the following details of the team members –

Sr.
Participant Name E-Mail ID Phone No
No
1
2

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 The name of the participants, college name etc. should be mentioned only on the cover
page and nowhere else in the entire document. Failure to adhere to this clause will result
in automatic disqualification.
 The shortlisted teams will be invited on campus for subsequent rounds

For any queries regarding the case write to us on prahaladeffect.neev10@gmail.com

Or Contact:
Ajay Kasana +91-9595058764
AdishAnanthakrishnan +91-9833033694

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