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Group 4: Dheeraj Arora E05 Vidisha Garg E015 Anchal Goyal E016 Eshan Kapoor E023 Ishan Katyal E024 Gourab Ray E044

Industry Overview Industry Highlights: • Global Soft Drink Industry – $310Billion(2015 Expected) • Indian Beverage Industry – $230 Million of the $65Billion Food Industry • Increase in aerated drinks: 3 to 14 servings/person • Current Growth Rate: 15% & Expected Rate: 16-17% • Coke & PepsiCo covers 90% of the market. • Juices will surpass carbonate market by 2016

Indian Market Analysis PESTLE •

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Beverages account for $230 million in the $65 billion food processing industry in India. In terms of volume, total soft drink (carbonated beverages and juices) market is estimated at 284 million crates a year ($1billion) The market is predominantly urban (75%) and 25% contribution comes from rural areas In the latter part of the year 2000, due to the economic slowdown, there had been a negative impact on the food and beverage industry. The beverage sector witnessed a decline of 73.2% in terms of transaction value and 37% decline in the number of transactions. The consumption of aerated beverages in India has increased from a meager three servings per person, per annum in 1993 to 14 servings in 2013.  The non-alcoholic beverage segment can broadly be classified under three categories: carbonated drinks, fruit drinks and functional drinks.

Porter’s 5 Force Analysis New Entrant (High) • High market potential •Increasing competition

Buyers (Medium) •Retailers and departmental stores •Corporate, airlines

Existing Rivalry Real Juice, Tropicana, Minute Maid, Maaza

Substitution (High) •Other aerated beverages •Unorganised sector juices

Supplier (High) •Only one supplier

Industry Forecasts

Forecast Sales of Soft Drinks by Category: Value 20132018 Source: Euromonitor International

Future looks good for the brand as well as the product category

Parent Company

Hector Beverages Pvt. Ltd.

Category

Beverages

Sector

Food product

Tagline/Slogan

Drinks and memories

USP

Real Fruit Extract, traditional flavors, childhood memories STP

Segment

Beverage market

Target Group

Youth and Middle age(30-40) of all income groups

Positioning

Brand synonymous with Indian old familiar taste

Marketing mix of Paperboat Product •Paper Boat created a pleasant experience with its unique combination of ‘Drinks and Memories’ •Most ingredients are naturally available spices, thus differentiating itself as a niche • Salty alternatives reaches out to diabetic capital of the world •Keeps taste closer to mom’s recipe

Price

Place •Targeted retail outlets by offering 5% more profit margin to the retailers as compared to the competitors •Collaborated with Indigo Airlines to sell products on board •Targeted school canteens

Promotion •Relatively subdued because of the unexpected sales since its inception •Advertises in newspapers, digital marketing, social media, and most importantly by positive word of mouth communication •Its efforts of posting images about childhood memories on FB pages are in sync with their tagline

•Prices premium as no competitor in terms of the flavors offered

Drinks and memories

SWOT Analysis Strengths

•Attractive and unique packaging •Competitive price points •Available in variety of Indian traditional flavors •Good distribution and availability at retail stores

Weakness

•Limited brand recall and brand awareness among customers •Less retail shelf space compared to leading players •Weak brand backing of parent brand

Opportunities

•Tie ups •New range of winter drinks •Gift packs

Threats

•Direct competition •Cheaper variants possible

Brand equity for Paperboat

Affiliation, brand loyalty, trust, engaged community

Relationships What about you and me

Resonance Judgements

Feelings

Childhood Healthy, tasty, memories, high quality ethnic Indian feel

Performance Imagery Innovative, good quality

Response What about you?

Traditional flavours yet urban, on the go drink

Meaning What are you?

Salience Fresh, drink, childhood, traditional, Indian

Identity Who are you?

Paperboat Analysis Hector’s Paper Boat come in 7 variants such as Aamras (45% mango pulp), Kokum (20% kokum), Jaljeera (8% lime), Jamun (10% Jamun), Aampanna, Imli and Golgappe. Major competitor for this can be Coca Cola’s Minute Maid having 6 variants such as Pulpy orange (11.8% Orange), Nimbu fresh (5.7% of lime), Guava (15.5% guava), Apple(17% apple), Mango(11% mango) and Mixed fruit {Mango Pulp (10.7%), Guava Pulp (2.9%), Banana Puree (2.9%), Papaya Puree (0.3%)}. Hector’s Paper Boat has comparative advantage over other brands as Hector has given drinks traditional names which are catchy and attracting the consumer and also fruit content of Paper Boat drinks are higher than its competitor brands.

Paperboat variant analysis

Paperboat price analysis

It clearly indicates that Paper Boat is amongst the highest priced beverage as compared to its close competitors in the 200 – 300 ml range and the second highest after Minute Maid in terms of the price per ml.

Competitor Analysis •Considering entire beverage market including juices and water, Coke leads the market with close to 56% market share, followed by Pepsi with approx 34% market share. Rest 10% includes Parle Agro, Dabur etc •When only carbonated soft drinks are considered, Coke again leads with 55% share and Pepsi 45% •Sprite replaced Pepsi as the #2 brand 4 years ago. •Mountain Dew is the country’s fastest growing aerated drink but declined to divulge market share •Coca-Cola emerges as overall market leader without considering the bottled water sale. It is then followed by PepsiCo •Dabur Real is the market leader in juice segment which is followed by Tropicana from PepsiCo

Consumer behaviour •It is a well known fact that we carry a limbic imprint of certain preferences in our brain •Paper boat is a result of an amazing insight that urban youth crave for something that is simple, delightful and non-transactional •The success of this brand lies in the combination of catchy name, very differentiated packaging and the superb recipes

Difference from other companies: •Independent of competition •Purely based on human insights and had no references in the market •A Blue Ocean Strategy Single aspect used in Paper Boat design Desire for Simplicity

Consumer behaviour analysisprimary research results What category of beverages do you prefer? Out of 75 respondents surveyed maximum prefer aerated beverages with a close second preference to fruit drinks and milk based drinks. However consumer behaviour is changing and fruit based drinks show positive growth

What is the average ticket price you are willing to consume for your beverage? 63 Out 75 respondents prefer the price range of 0-20 Rs as they prefer small SKUs and one time consumption beverages, Paperboat is however priced on the higher side, the premium due to the competitive advantage

How often do you consume your preferred beverage? Avery close call between “once daily”, “twice a week” and “doesn’t matter its an impulsive purchase”

Do you like the novel idea of Indianising the beverage flavours? About 90% respondents said yes

Consumer behaviour analysisprimary research results What is the preference between the following in terms of flavours for your drink? A majority of respondents prefer Indian and ethnic flavours and show greater acceptance of the same

What is favourite Paperboat flavour? Popular flavours are Aam panna, Jamun, Jaljeera and chilled Rasam

How much importance do you give to packaging, look and feel of the drink ? Around 70% of the respondents give importance to the packaging, look and feel of the drink where Paperboat stands a clear winner

What according to you is the most striking feature of the product? A very close call between the Indian traditional feel, the flavours and the distinctive packaging

Strategies and Recommendations •

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Penetration of Paperboat is very limited: With limited visibility, it has a direct impact on the sales of the Paperboat. It must make sure that it is present in all retail outlets where maximum footfall happens. Generally there are long queues at the billing counter in big retail outlets e.g. Big Bazaar. It would also be wise to run discounts and offers for the first few weeks of existence, in order to draw in more potential customers In bars and pubs, 30-40% people don’t take hard drinks. Instead look for drinks which add to their taste. This is one of the area which is untapped by many beverage players and there is a huge demand in these channels Owing to the price of the drink and affordability as compared to other drinks in the same category, Paperboat needs to tie up with schools where majority of the drinkers are children. They are going to be the potential buyers and thus it is important to encash this opportunity at its early stage In order to increase the visibility of Paperboat, company should give incentives to shop owners to keep the stock and keep it at a position where display of the product is proper. Retail Schemes like certain number of bottles free per case, display schemes, target schemes, installation of refrigeration facilities

Strategies and Recommendations •

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One of the problems is that most of the consumption of the drink happens during summers. All the variants i.e. Aamras, Aam panna, Jamun kala khatta, Kokum, Golgappe ka paani and Imli are all summer coolers. Paperboat should try to introduce some winter drinks also. This would not only keep up the sales during winters but also keep the brand visible and connected throughout the year. The promotion strategy could consist of advertisements which relate Paperboat with taste and healthy drink. An emphasis on the healthier aspects over things like coffee must be stressed in an early advertisement campaign. Associating Paperboat with a tagline will help in the increasing the percentage of recall for the brand. In order to maintain exclusivity, Paperboat should also come in gift packs where all the variants are packed together. Most of the people nowadays prefer giving some gifts whenever they visit friends. This will help in circulating all the flavors and urge the people to try out all the flavors.

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