final report for jeevan dhaara_final

Marketing Management Project

Jeevan Dhara

( We serve it pure)

Submitted by:Abhimanyu YadavDivya JainGirishMayank JainMamta SinghPurushotamSanjeet Kr. SumanVarun Goel

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Contents1 Introduction...................................................................................................................................1

2 Value Delivering Process..............................................................................................................2

2.1 Choosing the value................................................................................................................2

2.2 Providing the value................................................................................................................2

2.3 Communicating the value......................................................................................................2

3 SWOT Analysis.............................................................................................................................3

3.1 Strength.................................................................................................................................3

3.2 Weakness...............................................................................................................................3

3.3 Opportunity............................................................................................................................3

3.4 Threat.....................................................................................................................................3

3.5 Porter’s Generic Strategy:......................................................................................................3

4 Marketing Strategies.....................................................................................................................4

4.1 Segmentation.........................................................................................................................4

4.2 Target Market........................................................................................................................4

4.3 Positioning.............................................................................................................................4

4.4 Product...................................................................................................................................4

4.5 Price.......................................................................................................................................4

4.6 Place......................................................................................................................................4

4.7 Promotion..............................................................................................................................4

5 Gathering Information and Scanning of Environment...................................................................5

5.1 Competition...........................................................................................................................5

5.1.1 Normal competition:......................................................................................................5

5.1.2 Potential Competition:...................................................................................................5

5.2 Analyze the Macro Environment:..........................................................................................5

5.2.1 Needs and Trends:.........................................................................................................5

5.2.2 Demographic Environment:...........................................................................................5

5.2.3 Economic Environment:................................................................................................5

5.2.4 Socio-Cultural Environment:.........................................................................................5

5.2.5 Natural Environment:.....................................................................................................5

5.2.6 Technological Environment:..........................................................................................5

5.2.7 Legal Environment:.......................................................................................................5

6 Marketing Research and Demand Forecasting...............................................................................6

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6.1 Define the problem & Research objectives............................................................................6

6.2 Develop the Research plan.....................................................................................................6

6.2.1 How the data will be collected.......................................................................................6

6.2.2 Sampling plan................................................................................................................6

6.3 Collecting Information...........................................................................................................6

6.4 Analysis of the data...............................................................................................................7

6.5 Demand Forecasting..............................................................................................................8

7 Creating Customer Value, Loyalty and Satisfaction.......................................................................9

7.1 Creating customer value and loyalty......................................................................................9

7.2 Creating Customer Satisfaction.............................................................................................9

8 Analysing Consumer Markets......................................................................................................10

8.1 Cultural Factors...................................................................................................................10

8.2 Social Factors......................................................................................................................10

8.3 Personal factors....................................................................................................................10

8.4 Motivation...........................................................................................................................11

8.5 Perception............................................................................................................................11

8.6 Learning...............................................................................................................................11

8.7 Memory...............................................................................................................................12

9 Identifying Market Segments Targets..........................................................................................13

9.1 Bases for Segmentation.......................................................................................................13

9.1.1 Geographic Segment....................................................................................................13

9.1.2 Demographic Segmentation.........................................................................................13

9.1.3 Psychographic Segmentation.......................................................................................13

9.1.4 Behavioural Segmentation...........................................................................................13

9.2 Market Targeting.................................................................................................................14

10 Dealing with Competition........................................................................................................15

10.1 Competitive Forces..............................................................................................................15

10.2 Identifying Competitors.......................................................................................................15

10.3 Analyzing Competitors.........................................................................................................15

10.3.1 Identification of Strategic Group..................................................................................15

10.3.2 Objectives....................................................................................................................15

10.3.3 Strengths and Weaknesses..........................................................................................15

10.3.4 Selecting Competitors..................................................................................................15

10.3.5 Selecting Customers.....................................................................................................16

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10.4 Competitive Strategy for firm..............................................................................................16

10.5 Balancing Customer and Competitor Orientations..............................................................16

11 Creating Brand Equity..............................................................................................................17

11.1 About Brand Equity..............................................................................................................17

11.1.1 The Role of Brand.........................................................................................................17

11.1.2 The Scope of Branding.................................................................................................17

11.1.3 Defining Brand Equity..................................................................................................17

11.1.4 Brand Equity as a Bridge..............................................................................................17

11.2 Building Brand Equity...........................................................................................................18

11.2.1 Choosing Brand Elements............................................................................................18

11.2.2 Designing Holistic Marketing Activities........................................................................18

11.2.3 Leveraging Secondary Associations..............................................................................18

11.3 Measuring Brand Equity......................................................................................................18

11.4 Managing Brand Equity........................................................................................................18

12 Crafting the Brand Positioning.................................................................................................19

12.1 Developing and Communicating a Positioning Strategy......................................................19

12.1.1 Points-of-Difference and Points-of-Parity....................................................................19

12.1.2 Establishing Category Membership..............................................................................19

12.2 Differentiation Strategy.......................................................................................................19

12.3 Product Life-Cycle Marketing Strategy.................................................................................19

13 Setting Product Strategy..........................................................................................................20

14 Designing and Managing Jeevan Dhara Services....................................................................22

15 Developing Pricing Strategies and Programs...........................................................................28

15.1 Setting the price...................................................................................................................28

15.2 Adaptation of price..............................................................................................................29

16 Designing and Managing Integrated Marketing Channels.......................................................30

16.1 Level of Channels.................................................................................................................30

17 Managing Logistics...................................................................................................................31

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Jeevan Dhara –Water Vending Machine

1 IntroductionThe climate of India remains very hot for almost eight months in a year with a scarcity of pure drinking water. This scarcity and increasing health awareness amongst the Indian people make them to purchase packaged bottled drinking water at a high cost and those who can’t afford it, either sometimes have to drink unhygienic water or unwillingly purchase the expensive packaged drinking water.

India is the 10th largest bottled water consumer with 15 billion litre of sale in year 2008 and Rs 50 billion of revenue which will increase to almost Rs 100 billion by the end of 2012. Seeing this as an opportunity Jeevan Dhara comes up with a plan to offer water vending services at various public places such as bus stands, railway stations or big city markets. Currently pure drinking water is available at around Rs 12-15/lit which each and every person may not be able to purchase and those purchasing might not require one litre of water so they refrained from purchasing such products.

Our company will install automated vending machines which will deal in different quantities of water ranging from 200ml to 1 litre.

MISSION STATEMENT

“Filter and provide pure drinking water to our customers at a very affordable price with ultra cleanliness, sufficiency and availability in order to achieve utmost satisfaction and preserve environment.”

IIT Roorkee – Marketing Management Page 1


2 Value Delivering Process

2.1 Choosing the valueOur company will install automated vending machines which will deal in different quantities of water ranging from 200ml to 1 litre. The consumers across the income group would be given easy accessible to pure water at an affordable price.Jeevan Dhara will be targeting the customers with medium income group as its most profitable customers. About 70-80% of the servicing will be used to focus medium class persons only and to develop brand image.Jeevan Dhara will position itself as the value for money brand. One that is cheap, pure and hygienic. Its appeal will be “Purified water on your way”.

2.2 Providing the valueWater processed with Reverse osmosis and ultra violet treatment. We will launch other products like Neembu Pani and other health drinks for the further expansion of the company. It will be value for money beginning with price band of Rs 2/- for 250ml, Rs 4/- for 500 ml and Rs 7/- for 1 litre of water. Initially, the water vending machine will be installed at major public places such as KarolBagh in Delhi, Colloba market in Mumbai.

2.3 Communicating the valueThe basic promotional route will be providing services free of cost at the important places for initial few days.



3 SWOT Analysis

3.1 Strength Low cost of the service.

The high standard services can be maintained easily to keep the surroundings clean and hygienic.

This company will be first of its kind in providing water through vending machines.

3.2 Weakness Since Water vending machine technology is not widely used, the technology cost might be

very high.

Taste of the water can be lost while purifying it.

3.3 Opportunity India’s climate is very hot for almost 8 months in a year and scarcity of water during summer

season becomes the good opportunity for the company to provide this service.

Consumers are not satisfied with the high price of the bottled water.

The size of people travelling daily by bus or railways is huge. An even small percentage of which can act as a large consumer base for the company.

3.4 Threat Land acquisition at public place for installation of machine can be difficult.

Local organizing bodies can come up with their free of cost concept.

Settled brand in packaged drink water can come up with same concept which may hinder the growth of our brand.

Due to climatic reasons water may not be available for commercial use.

3.5 Porter’s Generic Strategy:Marketing Strategy for this product will be of overall cost leadership. Our service is pricing lower than its competitors like packaged drinking water and soft drinks and this can help in winning a large market share.



4 Marketing Strategies

4.1 Segmentation The market can be divided into three segments on the basis of income level:

1. Low Income Group2. Medium Income Group3. High Income Group

4.2 Target MarketJeevan Dhara will be targeting the customers with medium income group as its most profitable customers. About 70-80% of the servicing will be used to focus medium class persons only and to develop brand image.

4.3 Positioning Jeevan Dhara will position itself as the value for money brand. One that is cheap, pure and hygienic. Its appeal will be “Purified water on your way”.

4.4 ProductWater processed with Reverse osmosis and ultra violet treatment. We will launch other products like Neembu Pani and other health drinks for the further expansion of the company.

4.5 PriceIt will be value for money beginning with price band of Rs 2/- for 200ml, Rs 4/- for 500 ml and Rs 7/- for 1 litre of water.

4.6 Place Initially, the water vending machine will be installed at major public places such as KarolBagh in Delhi, Colloba market in Mumbai. Later it will be installed in another major cities of India like Kanpur, Bhopal etc.

4.7 PromotionThe basic promotional route will be providing services free of cost at the important places for initial few days.



5 Gathering Information and Scanning of Environment

5.1 Competition

5.1.1 Normal competition:

It includes all the company selling package drinking water already existing in the market like Aquafina, Kinley, Bisleri and other local brands.

5.1.2 Potential Competition:

As it involves very less initial investment and very less technology so any big player like FMCGs company can use their brand value to penetrate into the market at faster rate.

5.2 Analyze the Macro Environment:

5.2.1 Needs and Trends:

In environmental conditions like in India, where climate remains hot for almost 8 months in a year and the scarcity of pure water makes large amount of people to go for packaged water. As per capita income of our country is rising and with increase in awareness of people towards their health, makes India as a potential place for such product.

5.2.2 Demographic Environment:

India has a very large number of rural and semi urban class people. The recent trend of rural people migrating to semi urban class and subsequent rise in income level has increases the demand for this product.

5.2.3 Economic Environment:

As the urban people have a higher level of disposable income, this product will attract their share of wallets.

5.2.4 Socio-Cultural Environment:

The behaviour pattern of urban customers are uniform, it is not regionally influenced.

5.2.5 Natural Environment:

Now days, people are more health conscious so this product will serve their purpose by providing hygienic water at effective cost.This product is eco friendly and promoting green environment by providing plastic free product.

5.2.6 Technological Environment:

The urban people will adapt easily to the technology used in vending machine.



5.2.7 Legal Environment:

Since all people of the country have the right to pure water, we will raise awareness about the impure water being sold in the name of pure water by local water bottling Companies.

6 Marketing Research and Demand Forecasting

6.1 Define the problem & Research objectives1. What? Collecting info about the customer preference, pricing & site of installation.2. Why? To make decisions about customer behaviour, competitive price & site of installation

6.2 Develop the Research plan

6.2.1 How the data will be collected

Secondary data will be obtained online. Primary data will be collected using two research approaches namely Survey research using questionnaire as research instrument & Observational research.

6.2.2 Sampling plan

Sampling unit will consist of 1st class & 2nd class travellers in trains & bus travellers in VOLVO & ordinary buses. Age of respondents will be above 15 yrs.Sample size will be 50 in each categoryContact method will be personal

6.3 Collecting InformationPrimary Data:

Teams members in groups of two visited the respondents in various categories & got the Following questionnaire filled from them.

1. If you are thirsty, what will you prefer? a. Packaged drinking water costing Rs. 12b. Cold drinks costing Rs. 12

2. While travelling, which do you choose firsta. 2 litre of waterb. 1 litre of water

3. Given an option, would you like to buy a. 1 litre of waterb. Less than 1 litre

4. When do you buy water, the most important consideration is:a. Costb. Purity & Eco Friendly

5. Where do you get water from during your travel?a. I bring it from home.b. I buy on the way.

6. If you buy on the way, where do you prefer to buy it from?a. I buy it in buses/trains.



b. I buy it from retail shops.7. Provided the same purity, quality and taste of water, what will you prefer

a. Packaged drinking water costing Rs. 12b. Unpackaged drinking water available through a vending machine

costing Rs. 7

Secondary Data:

1. India is the tenth largest bottled water consumer in the world. In 2002, the industry had an estimated turnover of Rs.10 billion (Rs.1, 000 crores). Today it is one of India's fastest growing industrial sectors. Between 1999 and 2004, the Indian bottled water market grew at a compound annual growth rate (CAGR) of 25 per cent - the highest in the world. The total annual bottled water consumption in India had tripled to 5 billion litres in 2004 from 1.5 billion litres in 1999.

2. Making the plastic in the bottles requires 47 million gallons of oil annually.3. Up to 70% of bottled water is unregulated by the Food & Drug Administration.4. The existing law says that "the person who owns the land owns the

groundwater beneath". This means that, theoretically, a person can buy one square metre of land and take all the groundwater of the surrounding areas and the law of land cannot object to it.

5. There are more than 200 brands, nearly 80 per cent of which are local.6. Bottled water top companies earn extraordinary profits. As per data from Centre

for Science and Environment, the total cost of producing 1 litre branded bottled drinking water is Rs. 2.85 to Rs. 4.25. This excludes cost of labour, marketing and tax.

7. The selling cost of the above packaged drinking water is Rs. 10-12 per litre.

6.4 Analysis of the dataThe Summary of the above survey is given in the following table:

Question Response 1 Response 2 No. of response 1 No. of response 2 Cat1 Cat2 Cat3 Cat4 Cat1 Cat2 Cat3 Cat4

If you are thirsty, what will you prefer?Packaged drinking water costing Rs. 12 Cold drinks costing Rs. 12 30 45 32 46 20 5 18 4

While travelling, which do you choose first 2 litre of water 1 litre of water 12 8 11 5 38 42 39 45

Given an option, would you like to buy 1 litre of water Less than 1 litre 12 25 15 28 38 25 35 22When do you buy water, the most important consideration is: Cost Purity & Eco Friendly 30 10 28 22 20 40 22 28Where do you get water from during your travel? I bring it from home. I buy on the way. 40 10 35 9 10 40 15 41If you buy on the way, where do you prefer to buy it from? I buy it in buses/trains. I buy it from retail shops. 42 40 38 36 8 10 12 14

Provided the same purity, quality and taste of water, what will you prefer

Packaged drinking water costing Rs. 12

Unpackaged drinking water available through a vending machine costing Rs. 7 26 32 22 40 2 18 28 10

Note: in the table



Category 1: Ordinary bus travellersCategory 2: VOLVO bus travellersCategory 3: Second class travellers in trainCategory 4: First class travellers in train

6.5 Demand ForecastingAs per the secondary data obtained above, the total annual bottled water consumption in India had tripled to 15 billion litres in 2008 from 1.5 billion litres in 1999. With this rate of increase, the approximate consumption as of 2009 should be around 25 billion litres. So the potential revenue = total consumption in litre * price per litre = 25 billion * 7 = 175 billionAs per the primary data obtained by survey, the willingness of the customers to go for the new product from Jeevan Dhara is high. So by proper service and distribution, the potential market of the packaged drinking water can be tapped with the new product from Jeevan Dhara.



7 Creating Customer Value, Loyalty and Satisfaction

7.1 Creating customer value and loyalty

1. We will be serving RO and UV purified water.2. These services will be easily accessible like ATM machine.3. Quantity as per usage as every person does not require one litre of water every

time.4. We will install these machines on public places like bus stands, railway

stations and major city markets. 5. With due course of time, smart cards can be issued to regular customers.6. We will have cleaning of the vending machine tank per week to maintain the

hygienic content of the place.7. The price of the water will be to attract every class of customers. 8. Different range of products can be introduced by understanding our customers

more.9. To attract high profitable customers, we can design promotional campaigns

that appeal them.10. We will have toll free number to provide live customer feedback and to

register any complaint regarding the same.

7.2 Creating Customer Satisfaction

1. We will understand the customers interests needs and will serve them accordingly.

2. We will have 24 hrs helpline to help our customers in different terms like locating the nearest vending machine.

3. We also plan to delight our customers by exceeding their expectations by introducing variety of drinks at the same place.

4. We will have the best mix of value, service and price.5. Since customer satisfaction is the top priority. If a customer is not happy with

service he can give us feedback or suggestions via means of different customer surveys and by calling customer care.



8 Analysing Consumer MarketsConsumer behaviour depends on different factors like how individuals or organization select, buy use and dispose goods to satisfy their needs. These factors can be categorised in various factors as mentioned below:

8.1 Cultural FactorsWe will have to understand our culture and identify the points that can be linked to our products. In this context, it is important that our brand should depict following qualities-

Respect and Care for elders(an ad can be made on this showing an aged person in difficulty being served water by a young guy with the help of our product)

Honesty and integrity Hard work Achievement and success Humanitarianism Sacrifice

As India is a multi-cultural country, a special attention has to be paid on culture while introducing the product at various places, (in south, north, west and east).Our product should fit across all social classes.

8.2 Social FactorsWe will try to make an effect on the primary reference group, family of procreation being the primary target so that we can have greater word of mouth publicity with the help of family, friends and relatives.

8.3 Personal factorsAGE AND STAGE IN LIFE CYCLE:

People above the age of 65+ will not be our target customers as they won't be going much to the public places. Also, they may carry inherent beliefs.

OCCUPATION & ECONOMIC CIRCUMSTANCES:

People who travel a lot due to work related activities will be our target customers. Also, those customers who due to time-constraints have forgotten to carry water with them will be our targets. Also those who think that carrying an extra bottle with them will increase their burden and not carrying it will free them from some psychological tension. This thing can be shown in ads also, (ab bottle ka koi janjhat nahi, jiyo jindagi tension free).

PERSONALITY AND SELF CONCEPT:

Out of the five brand personalities, our product can have sincerity which will carry the following qualities:

down-to-earth( as the basic thing is water), honest ( by purity of water),



wholesome( by the fact that water is the whole thing in nature, body etc..) and cheerful(just like the playful and free flow nature of water)

LIFESTYLE AND VALUES: Lifestyle:

LOHAS(Lifestyles of Health and sustainability) will be our targets as most of them are environment cautious. Also, those people whose lifestyle is money constrained as in India there is a lot of population which falls in this category. By introducing smart cards, we will help people which are having a very time-constrained lifestyle.Values:

Persons having honesty (and more to be identified) as values can be targeted as this will appeal to the inner selves of the people, which in turn will influence their outer selves(their purchase behaviour).

8.4 MotivationFreud's Theory:

We will play around few of the subconscious needs of the consumer.Conscious need will be to get pure water a low cost.Subconscious need given to the customer will be that he don't have to carry the bottle, he can withdraw any amount of water (starting from 200ml, in multiples of 200mls), he will save our planet earth.

Maslow's theory:

Our product will come under category 1(physiological needs)

Herzberg's theory:

We will have to remove all the dissatisfiers from our product and incorporate all the satisfiers.Dissatisfiers and satisfiers can be identified by market survey.

8.5 Perception Selective attention will be brought by the price difference of our product.

Selective distortion of some sweetness contained in the water can be brought into the minds of consumers.

We can use repetitive ads to enhance selective retention in the minds of consumers so that they can forget good points of competitive products, if any.

8.6 LearningWe will have to put a well-designed "directions of use" that will tell customers how to use vending machine. Instructive ads and websites, customer care support etc. to collect feedbacks.



8.7 MemoryBy associative network memory model, we have to strengthen the linkage of the node of the brand with other nodes (can be done via repetitive ads) and create more links to other nodes (more nodes means more cues) for ex: a node can be thirst, can be refreshment etc.Brand association will contain brand related thoughts, feelings, perception, images, experiences, beliefs, attitudes. To help memory retrieval, small pamphlets can be shown at public places to tell them that ultrapure water is very near to them.



9 Identifying Market Segments TargetsOut of the four levels of micro marketing i.e. segment, niches, local areas and individuals, the product will need segment marketing. A market segment consists of a group of customers who share a similar set of needs and wants. In our case, the market can be segment according to the basis of income i.e. high Income group, medium income group and low income group. Jeevan Dhara will be targeting the customers with medium income group as its most profitable customers. About 70-80% of the servicing will be used to focus medium class persons only and to develop brand image. A flexible market offering will be there with naked solution as the drinking water only and the discretionary options will have products like, neembu pani and these options will be available on extra charge. This product will be categorized as the Homogeneous preference as all the consumers have roughly the same preferences.

9.1 Bases for SegmentationThe major segmentation variables are geographic, demographic, psychographic and behavorial segments.

9.1.1 Geographic Segment

One of the major geographical segmentation is the division of markets into rural and urban areas. The product will cater to the need of urban markets as persons from rural market may not be able to pay enough money and also they are not highly literate. Rural markets in India are divided by socio economic classification using two variables namely, occupation of the chief wage earner and the type of house they live in. R1 section and R2 section of rural market can also be used for this product because these two sections contain Landlord farmers and rich farmers respectively.

9.1.2 Demographic Segmentation

This part is already discussed under section 8.3 of personal factors.

9.1.3 Psychographic Segmentation

According to VALS segmentation framework consumers are divided into two groups viz. Consumer Motivation and Consumer Resources. There are another set of people who are primarily motivated by ideals and are guided by knowledge and principles. These kind of persons will be attracted towards the technology used in product and will create a good segment. Many people in India has tendency to save money. For e.g. if a person is going to market and he will see both the free water source e.g. running tab and Jeevan Dhara vending machine, he will choose running tab as it is free of cost. These people are believers of the traditional product only.

9.1.4 Behavioural Segmentation

Under the behavioural variables – Benefits and Usage rate are the best starting point for the starting of constructing market segments. Benefits will comprise of purified



water at low cost. On the basis of usage rate the markets can be segmented into light, medium and heavy product users. People using this machine in the important markets will comprise of our heavy product user as they will be using it continuously. So more services and discounts can be provided to these types of users.

9.2 Market TargetingAmong five patterns of target market selection i.e. single segment concentration, selective specialisation, product specialization, market specialization, and full market coverage, we will be selecting product specialization as our product caters to the needs of different market segments.

M1 M2 M3

P1

P2

P3



10 Dealing with Competition

10.1 Competitive ForcesAccording to porter’s model of five forces:

a) Threat of intense segment rivalry: Big FMCG companies with high brand value.b) Threat of new entrants: Here, entry barriers and exit barriers are low.c) Threat of substitute products: the product will face threat from packaged brands of soft

drinks and milk products.d) Threat of buyer’s growing bargaining power: the switching costs of urban middle income

group people will be low.e) Threat of supplier’s growing bargaining power: Companies like Eureka Forbes or others

giving UV and RO solutions might increase the cost equipment.

10.2 Identifying CompetitorsFor our product, the basic need is some “thirst quencher”. Our competitors will be all the companies in the operating in mineral water, carbonated drinks, fresh fruit juice, milk beverages, cold coffee and all other kind of beverages in soft drink business.

10.3 Analyzing Competitors

10.3.1 Identification of Strategic GroupPrimarily, there will be 5 strategic groups:

a) Local Brands of Mineral water.b) Branded Mineral Water Companies (Big brands like Bisleri, Aquafina, Kingfisher etc.)c) Carbonated Soft Drinks (like Coke, Pepsi etc.)d) Fresh Fruit Juice Companies (like Appy, Frooty, Leh Juice, Minute Maid Pulpy Orange etc.)e) Milk Products (like Amul cool, Amul Buttermilk etc.)

This product will compete within strategic group a) i.e. with Local brands of mineral water.

10.3.2 ObjectivesThe objectives of competitors identified in strategic group a above are primarily to increase sales and work for profit without any expansions.

10.3.3 Strengths and WeaknessesThe strength of local brands lays in easy availability at places where branded mineral water is unavailable and to a certain extent their price. The weakness of local brands is the less recognition of these brands by the customer. The local brands are able to grow just on their strengths but they have totally failed to capture their share of mind and share of heart. The local brands are not able to establish themselves as the branded product which raises doubt on their product quality by some customers.



10.3.4 Selecting CompetitorsThe product will first compete with the weak local brands while establishing a good brand for itself. Having built the brand, the product will be able to take on competition from strong branded mineral water companies. All this will help the product to combat close competitors but the seemingly distant competition from carbonated soft drinks will also have to be kept in mind. Also, product might have to deal with bad competitors which may upset the industrial equilibrium, invest in overcapacity, take larger risks or try to buy share.

10.3.5 Selecting CustomersA customer selection grid can be formed like:

Vulnerable Not Vulnerable

Valuable These customers are profitable but not completely happy with the company. Find out and address their sources of vulnerability to retain them.

These customers are loyal and profitable. Don’t take them for granted but maintain margins and reap the benefits.

Not Valuable These customers are likely to defect.

These unprofitable customers are happy. Try to make them valuable or vulnerable.

Shifting of customers across this grid can be done by introducing new quantities at new prices that were not offered before.

10.4 Competitive Strategy for firmThe firm will be a leader in small market. This supports porter’s view, “Firms entering a market should initially aim at a niche rather than the whole market.” Also, because the niches weaken, the firm can create new niches while “sticking to its niching”. Thus, by developing strength in two niches, the firm will increase its chances of survival.

10.5 Balancing Customer and Competitor OrientationsThe firm will have to maintain a balance between focusing on competitors and focusing on customers. The firm must not spend all its time analyzing the competitors only because so much, then, depends upon the competitor’s strategy. By monitoring customer needs, it can decide which customer groups and emerging needs are the most important to serve.



11 Creating Brand Equity

11.1 About Brand Equity

11.1.1 The Role of BrandBrand will signal a certain level of product quality so that satisfied buyers can easily choose the product again. Brand loyalty will provide security of demand for the firm and it will create barriers to entry that will make it difficult for other firms to enter the market. It may also result into customer willingness to pay a higher price. Thus, branding will be a powerful means to secure a competitive advantage.

11.1.2 The Scope of BrandingFor branding strategy to be successful and brand value to be created, customers must be convinced about the meaningful differences that Jeevan dhara product will have from other brands. Customers will be taught what the product is by choosing appropriate brand elements.

11.1.3 Defining Brand EquityBrand equity is the added value endowed on products and services. The brand knowledge will be given to customers in such a manner that brand must create strong, favourable (in terms of purity and quality) and unique brand associations with customers.

11.1.4 Brand Equity as a BridgeJeevan dhara as a brand will promise to exhibit a certain level of quality in the mind of target consumers. Using the Brand Asset Valuator model, there will be 5 key components-or pillars-brand equity:

a) Differentiation measures the degree to which a brand is seen as different from others.b) Energy measures the brand’s essence of momentum.c) Relevance measures the breadth of a brand’s appeal.d) Esteem measures how well the brand is regarded and respected.e) Knowledge measures how familiar and intimate consumers are.

Differentiation, Energy and Relevance combine to determine Energized Brand Strength. These three pillars point to the brand’s future value. Esteem and Knowledge together create Brand Stature, which is more of a “report card” on past performance.

Jeevan Dhara as a strong new brand will show higher levels of differentiation and Energy than Relevance, whereas both Esteem and knowledge are lower still. As the brand will grow and will become niche, Relevance, Esteem and Knowledge will also increase.

Using the Aaker model, brand identity will be developed by keeping elements like product scope, product attributes, quality/value, symbols in core identity elements and



uses, users, brand personality in extended identity elements. The core identity elements will drive the brand building program something like “Get cold and pure drinking water on the way at right price” or “purest water at cheapest price”and extended identity elements will add texture and guidance like “Building a Hygienic India”. The ultimate brand essence will be “Serving pure water for healthier India”.

11.2 Building Brand Equity

11.2.1 Choosing Brand ElementsThe brand elements for the product will be the brand name “Jeevan Dhara”, a logo and a slogan “We serve it pure”. The logo will be having colour background with cyan and royal blue with Jeevan Dhara written on it in middle in Hindi or English

. Cyan and Royal blue both are variants of blue and are chosen as blue is considered to be having a cool and calming effect matching with the brand personality. Thus, the name, logo and tagline will fulfil all the six criteria namely memorable, meaningful, likeable, transferrable, adaptable and protectable.

11.2.2 Designing Holistic Marketing ActivitiesBrand Contact will be created through many avenues such as clubs and consumer communities, trade shows, event marketing, sponsorship, public relations and press releases, and social cause marketing. There is a strong need of internalization which will help to inspire and inform employees. The brand promise will not be delivered unless everyone in the company lives the brand. This can be done by choosing the right moment to capture employee’s attention and imagination, by linking external and internal marketing, or by bringing the brand alive for employees. This will ensure that all the employees have an up-to-date, deep understanding of brand and its promise.

11.2.3 Leveraging Secondary AssociationsThe firm will create brand primarily through co-branding (for e.g. with IRCTC at railway stations) or spokespeople (through endorsements) or sporting and cultural events (through sponsorship).

11.3 Measuring Brand EquityBrand Audit and Brand-tracking studies can be conducted to measure brand equity. While the former measures the sources of brand equity and how they affect outcome of interest, the latter measures how these outcomes and sources change.

11.4 Managing Brand EquityBrand Equity will be managed by Brand reinforcement and brand revitalization from time to time.



12 Crafting the Brand Positioning

12.1 Developing and Communicating a Positioning Strategy

12.1.1 Points-of-Difference and Points-of-ParityThe POD for our product will be its price which the consumers strongly and positively associate with the brand. The POPs will be the necessary Category POP in the product category of drinking water such as cold and pure water.

12.1.2 Establishing Category MembershipBefore stating PODs, the consumers must be informed of a brand’s category membership- the products or sets of products with which a brand competes and which function as close substitutes. Initial advertising will concentrate on creating brand awareness and subsequent advertising attempts will craft the brand image. There are three main ways to convey a brand’s category membership:

a) Announcing category benefits.b) Comparing to exemplars.c) Relying on the product descriptor.

Considering the negative correlation between price and quality, two separate marketing campaigns can be launched, one devoted to price (POD) and one devoted to quality and purity (POP). These marketing campaigns will try to convince customers that the negative relationship is in fact positive.

12.2 Differentiation StrategyThe brand will look for image differentiation wherein it will try to craft powerful and compelling images. This image will be of “helping in developing a fit, healthy and hygienic India”.

12.3 Product Life-Cycle Marketing StrategyIn the introductory stage, sales growth will tend to be slow. Profits are negative or low and promotional expenditures are at the highest ratio to sales because of the need to inform potential customers and induce product trial. The firm will have to continuously keep on innovating in order to keep its cost low and to be a successful market pioneer. Beginning with pure drinking water, the firm can introduce such as nimbu paani (lemon water), fruit juice etc, and can expand in the market. Thus, initially overall sales will be low, costs will be high per customer, and profits will be negative. The market objective will be to create product and awareness and trial. The strategy will be to offer basic product along with building product awareness among early adopters and use heavy sales promotion to entice trial.



13 Setting Product StrategyThe customer judges the offerings by three basic elements:

1. Product features and quality

2. Service mix and quality

3. Value based prices

Product is anything that be offered to a market to satisfy a need or a want.

Our product, Jeevan Dhara, is basically designed to meet the core benefit of satisfying a

consumer’s thirst. During summer, people feel thirsty and there is a need of drinking

water. Jeevan Dhara aims to satisfy this need of drinking water. The basic product is the

drinking water. People expect that they may get a clean and hygienic drinking water with

a glass or a bottle. Jeevan Dhara exceeds the expectations of the customer in a way that

they can set the temperature of the water according to their requirement and can also get

the quantity as desired. Jeevan Dhara can also be used to provide cold drinks or nimbu

pani during the summer in the future.

According to the product classification, Jeevan Dhara can be placed in Convenience

goods- Impulse because people don’t plan and go to market to buy it.

Jeevan Dhara can be differentiated on the basis of its features and low cost. It is available

in low cost compare to the bottled water and also RO and UV technology is used to purify

water. People can use the water according to the requirement without wasting the water.

Also people can set the temperature according to their need.

According to the service differentiation, it is easy to operate this machine as only a coin

has to be inserted and the desired quantity of water button has to be pressed. Also, in case

of any help, customer care number will be provided on the machine. They can just dial

the number and follow the instructions.

Product hierarchy can be stretched from basic needs to particular items to satisfy those

needs.



Product Hierarchy:

Item (Unpackaged Drinking Water)

Product type (Filtered Water)

Product line (Water)

Product class (Non-alcoholic Drinks)

Product family (All Drinks)

Need family (Thirst)

Jeevan Dhara, at the initial stage will be introducing drinking water and later on can go for

line stretching (upward stretching) and will introduce cold drinks and other juices according

to the customer requirement.

The vending machine can contain a label with a name “Jeevan Dhara” written on it and also

the date of cleaning of the machine so that it can give information about the cleanliness and

hygienic condition of the machine. Also the label can contain the technology adopted for the

purification of the water.



14 Designing and Managing Jeevan Dhara Services• Hybrid Offering

Jeevan Dhara will be offering home delivery of water-can apart from

unpackaged drinking water at the public places.

• Equipment based service:

Jeevan Dhara provides water with the help of water vending machine.

• It’s service meets personal needs of the travelling people and business needs of the

small-scale fast-food services and restaurants.

• High in Experience and High in Credence Qualities

The buyer can evaluate the taste of water after purchase but can find hard to

evaluate the technical quality even after consumption.

• Demand or Yield Management

The right services must be available to the right customers at the right places

at the right times and right places to maximize profitability.

On the Demand Side:

Non-Peak Demand during winter season: It will tap the demand of

drinking water requirement at various parties, weddings etc.

On the Supply Side:

Part-time employees will be employed to serve peak demand of home

delivery during summer season.

Jeevan Dhara may need to install more vending machines than

expected during summer season.

• Strategies for improving Service Quality:



Listening: Though the basis expectation of customers is clear, we will

continue to learn the expectations and perceptions of customers and

noncustomers through direct interactions.

Reliability: Jeevan Dhara will meet the promised service of purified water

dependably and accurately on a priority basis.

Basic Service: We will keep promises, use common sense, listen to customers

and be determined to deliver value to customers.

Service Design: Jeevan Dhara will have comprehensive database system to

have the details of all the small-scale fast-food services and restaurants. Based

on the location, it will design the optimum home delivery system.

Team Work: As the business grows, Jeevan Dhara will take utmost care and

be attentive by improving employee motivation and capabilities.

Encourage customer citizenship

• Root Causes of failure of Jeevan Dhara Customers

People

Communication: Statements made by Jeevan Dhara should set the

realistic customer expectations.

Effort and Attitude: Employees does not enough willingness to serve

the customers if not motivated by any means.

Training: Training is not proper for all the tasks of home delivery right

from taking order to delivery and billing.

Process: Difficulty in use of vending machine.

Technology:

Vending machine is not working properly.

Not reliable to produce pure water.



Purifying technology is not yet branded and established in the market.

Servicescape:

The layout where the vending machine is installed is not as clean as

expected.

Ambient conditions are not comfortable.

• Factors which can lead Jeevan Dhara Customers to Switch:

Inconvenience:

Due to inappropriate location of the vending machine;

Wait for service: Home Delivery may take more time than expected.

Core Service Failure:

Service Mistakes: Delivery at the wrong address, quantity of water

may be incorrect.

Billing Errors

Service Encounter Failures:

Uncaring, Impolite, Unresponsive, Unknowledgeable

Competition : Customers may find better service.

Ethical Problems:

Cheating in billing by employees,

Unsafe drinking water supply

• Holistic Marketing for Jeevan Dhara Services

External Marketing:

As a growing business firm, Jeevan Dhara will focus on preparing,

pricing and distribution and promoting the services to customers.



Internal Marketing:

Jeevan Dhara will impart proper training to and induce motivation

among employees to serve customers well during home delivery.

Interactive Marketing:

For home delivery service, employees need to have basic skill of

taking order and delivery, billing, customer interaction etc.

• Five gaps that can cause unsuccessful delivery of Jeevan Dhara( Reference:

Service-Quality Model )

GAP1(Between consumer expectation and management perception)

Though Jeevan Dhara will not have any issue on personal needs

delivery but it may not perceive business needs customer’s

expectation; what the small-scale fast-food services want from Jeevan

Dhara.

GAP2(Between management perception and service quality specification)

Jeevan Dhara may estimate the quantity of demand of these services

but may not specify the time of delivery.

GAP3(Between service quality specification and service delivery)

Jeevan Dhara personnel may be poorly trained, or incapable of or

unwilling to listen to customers and serving them fast.

GAP4(Between service delivery and external communications)

Statements made by Jeevan Dhara may set the wrong expectation of

delivery time irrespective of customer locations.

GAP5(Between perceived service and expected service)

Even after meeting the quality standards of water, customers may

perceive it of low quality because of low brand value in the initial

phase.



• Practices to be followed for Service-Quality Management:

Strategic Concept:

Jeevan Dhara need to be customer obsessed. It needs to have a clear

sense of their target customers and their needs.

High Standards:

Vending Machine will provide water 24*7.

For Home Delivery services, Jeevan Dhara will take 30 minutes to

deliver at home.

Self-Service Technologies (SSTs):

As the business will grow, it will adopt the model of self-pumping at

water-stations to encourage big transactions.

Monitoring Systems:

Jeevan Dhara will collect voice of the customers through response

cards and measure to probe customer satisfiers and dissatisfiers.

Satisfying Customer Complaints:

Jeevan Dhara will provide toll-free number to raise the complain and

set the high standard to resolve those complaints.

• Managing Service Brands:

Differentiating Services :

For the long-term business needs customers, Jeevan Dhara can provide

free cans to store water. Water cans will have Jeevan Dhara logo,

symbols and slogan and contact numbers to make easier for customer

to recall the brand.

Choosing Brand Elements:



Jeevan Dhara has got easy-to-remember brand name.

It will have its own logo, symbol and slogan- “We Serve it Pure”.

Establishing Image Dimensions:

Jeevan Dhara needs to do very less for personal needs customers.

For business needs customers, it needs to convey, explain and persuade

all the services and facilities provided by Jeevan Dhara on a regular

basis.

Devising Branding Strategy:

Jeevan Dhara can cultivate different brand for personal needs

customers and business needs customers. It will help in developing a

brand hierarchy and brand portfolio that permits positioning and

targeting of different market segments in the different seasons.



15 Developing Pricing Strategies and ProgramsPricing decisions are based on how consumers perceive prices and what they consider the price to be - not the marketers stated price. Consumers may have price threshold below which price signal inferior or unacceptable quality, as well as an upper price threshold above which prices are prohibitive and seen as not worth the money. Keeping this in mind Jeevan Dhara price will set its price as per quality perception by customers.

15.1 Setting the price Setting price objective - The objective of Jeevan Dhara will be maximum market

penetration strategy with lower costs and high sales. We will adopt market-penetration strategy.

Determining demand – As there are other alternatives available for the same product at not very high price, a slight increase in price will cause a large reduction in demand. This makes demand for the product highly elastic. Demands for the product can be estimated by surveys at different proposed price levels and also by doing statistical analysis of quantities sold and other factors such as which location can have more demand etc.

Estimating costs - fixed costs and variable costs. Variable costs vary directly with the production. Cost estimation can be done by ABC analysis. ABC accounting tries to indentify the real costs associated with serving each customer. It allocates indirect costs like clerical costs, office expenses, supplies, and so on, to the activities. Both variable and overhead costs are tagged back to each customer.

Analysing competitor costs, prices and orders – As mentioned above, the competitor for our product will be packaged drinking water company like Bisleri, Rail Neer, Kinley etc. The price of our product will be lesser than these products as we are targeting customer with a cost leadership. Below is the prices of few products:o Bisleri - Rs 15

o Rail Neer- Rs 12

o Kinley- Rs 15

Pricing method – As per the primary survey conducted for the product, it has been estimated that in one location, 100000 litre of water will be consume yearly by customers.

o Fixed Cost of Machine – Rs. 1,00,000/-

o Variable Cost per litre of water (including maintenance) – Rs 5/-

o Expected litre to be consumed annually – 1,00,000 litres

o Total Variable cost = Rs 5,00,000/-

o Price Set = Rs 7/- (keeping approx 15% return on sales)

o Break Even Volume = 50000 litre per machine.



Also the company will adopt value pricing model which wins loyal customers by charging a fairly low price for a high quality offering. Selecting final price - Final price will include other prices of advertising and

marketing and administrative expenses.

15.2 Adaptation of priceThe company will provides price discounts and allowances for customers who purchase in bulk and customers which are loyal to company and purchase regularly. For e.g. the customers who have their shops in the market and they always keep on taking water regularly throughout their stay in market. So for such customers, we will provide discount by means of discount card or by providing different ranges such as 5 litres or 10 litres for their water jug in lesser price depending on the consumption in a particular location.



16 Designing and Managing Integrated Marketing ChannelsA marketing channel system is the particular set of marketing channels a firm employs. Jeevan Dhara employs a push strategy which uses the sales force, trade promotion money or other means to carry, promote and sell the product to end users. We are using push strategy in the earlier stage of the product as the product is new in its kind in the market and the people does not know more about the product.

Secondly, when the machines get installed in the markets, the curiosity among the people and the demo by sales person of the company will make the end users use this product. This will make them habitual of this as this will be available right next to their shops at much cheaper price than a bottled water and the people who are in the market for shopping will feel it much better as they don’t have to bother about carrying bottle with them.

At the later stage when the market develops for the product and company comes up with its own packaged drinking water then at that point company will adopt pull strategy as the brand name is already set and customers now can be pulled by advertising etc.

16.1 Level of ChannelsCompany will adopt zero level channel which consists of a manufacturer selling directly to the final customer. As stated above, the company will install machines and do door to door promotion in the early stages of the product and the benefits will be clearly stated to the consumers by means of pamphlets, posters etc.


Manufacturer (Jeevan Dhara)

End consumers


17 Managing LogisticsOut of the four levels of service we will position our product in the category of Self service wherein customers will serve themselves.

Out of the two broad categories of retailing i.e. Store retailing & Non- store retailing our product will come under the category of non store retailing. Out of the four types of non store retailing jeevan dhara would come under the category of automatic vending.

The four steps of market logistics planning for our project will be:

1. We will have to decide what delivery standard we want to offer to our customers. “What levels of billing & ordering accuracy we want to offer?”

2. Whether we want to sell directly to customers or through intermediatories. For us it is “direct to the customers”. The other decision that we have to take is “Where should we source our unprocessed water from?”

3. We will have to develop operational excellence in sales forcasts, Transportation management & Material management.

4. The fourth and final step will be to implement this solution with best information system, equipment, and procedures.

The market logistic object of our company would be “delivering the purified water to the right places at right time for the least cost.”

Given the market- logistics objective the company must design a system that will minimize the cost of achieving these objectives.

The total cost for our market logistic system will consist ofM=T+FW+VW+S

Where M= Total market logistics cost of proposed system T = Total freight cost of proposed system

FW =total Fixed Cost of proposed system (cost of vehicles)VW= Total variable cost (cost of transportation of unprocessed water)S =Total cost of lost sales due to average delivery delay under proposed

system.

Finally our market logistic strategy will be derived from our business strategy rather than solely cost considerations. Our logistic system will be information intensive & will establish electronic link among all significant parties.


final report for jeevan dhaara_final

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