Analysing the bottled water industry

Published Date: 23 Mar 2015

Water is the one of the most important necessity for life. There are different drinking-water needs for individuals and they vary depending on the climate, physical activity and the body culture of every individual. But for average consumers water need is estimated to be about two to four liters per day.

The growing number of cases of water borne diseases, increasing water pollution, increasing urbanization, increasing scarcity of pure and safe water etc has made the bottled water business just like other consumer items. Scarcity of potable and wholesome water at railway stations, tourists spots, and role of tourism corp. etc. has also added to the growth Indians currently spending about $330m a year on bottled water, analysts estimate. The packaged water market constitutes 15 per cent of the overall packaged beverage industry, which has annual sales of at least $2.6bn, Deepak Jolly, a spokesperson for Coca-Cola India said. 

President Dr. A.P.J. Abdul Kalam has urged youngsters on July 17, 2010 to be aware of water conservation techniques to avoid grave water crisis in future."It is so sad that today, people are forced to buy water in plastic bottles

The annual volume of the world bottled market of amounts to 109 billion liters, an average 17.5 liters of bottled water drunk yearly per person (Zenith International, International Council of Bottled Water Association, 2000). India ranks in the top 10 largest bottled water consumers in the world; its per capita per annum consumption of bottled water is estimated to be five liters

Western Europeans are the major consumers, with an average of 93 liters/person/year. Asians presently consume the least. Thus there exists a vast potential market for bottled water in Asia.

In India the value of bottled water industry is around Rs 1000 crore and its growing with the rate of about 40 percent annually (Business Today, 2001) and looking at the marketing potential many of the multinationals have entered the Indian market and has enhanced the marketing activity to tap the unexploited potential. Many of the brands compete in a very narrow market segments, comprising majorly upon the Travel, Tourism, Caterers, Restaurants, and Hospital segments and Meeting local demands. The attention is currently being focused on tapping the vast potential presented by entry into affluent / upper middle class households. The bottled water market share is majorly captured by Bisleri (51 per cent), Bailley (17 per cent), Yes (11 per cent) and Followed by Kinley (10 per cent) and Aquafina (4 per cent) (Source: BT Estimates June, 2001). In the natural mineral water sector Evian, Perrier, bisleri, and Himalayan are the major brands operating in India. According to a study conducted at national-level, there are more than 200 bottled water brands in India and out of them nearly 80 per cent are local brands. Except in the metros, a bottled-water manufacturer was not to be found even in a one-room shop, 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 turned to 5 billion liters in 2004 from 1.5 billion liters earlier in1999. Global consumption of bottled water was nearing 200 billion liters in 2006.

The market leader is Bisleri International, which boasts a 40 per cent share. It is followed by Coca -Cola's Kinley (around 25 per cent) and PepsiCo's Aquafina (around 10 per cent). The top players in bottled water industry in India are the major international giants like Coca cola, Pepsi, Nestle and noticeable presence of national players like Mount Everest, Manikchand, Kingfisher, Mohan Meakins, SKN Breweries , Indian Railways so on. PepsiCo India has prepared plan including, investment in capacity enhancement, packaging initiatives and below-the-line activities to pump up volumes in the over-crowded category. Meanwhile, India based Parle Agro is extending the manufacturing facility for Bailley from 29 to 60 plants. The Indian packaged water industry will soon see a major tussle between Indian and international brands to gain market share.   major multinationals such as Coca-Cola and PepsiCo have been trying from the past 10 years to capture the Indian bottled water market. Now finally they have captured a significant part of it. However, Parle Bisleri kept its market share of 40 percent. Kinley and Aquafina are fast moving up, with Kinley holding 20-25 per cent of the part and Aquafina approximately 10 per cent of the market.

1.2 PURPOSE OF THE STUDY

As we know bottled water is sold in a variety of packages: pouches and glasses, 330 ml bottles, 500 ml bottles, one- liter bottles and even 20- to 50-litre bulk water packs. The formal bottled water business in India can be divided broadly into three segments in terms of cost: premium natural mineral water, natural mineral water and packaged drinking water. 

Premium natural mineral water includes brands such as Evian, San Pelligrino and Perrier, which are imported and priced between Rs.80 and Rs.110 a liter. Natural mineral water, with brands such as Himalayan and Catch, is priced around Rs.20 a liter. Packaged drinking water, which is nothing but treated water, is the biggest segment and includes brands such as Parle, Bisleri, Coca-Cola's Kinley and PepsiCo's Aquafina. They are priced in the range of Rs.10-12 a liter.

THE OBJECTIVES

To study the consumer behavior and adaptation towards packaged drinking water

To study brand equity and market share of various packaged drinking water brands

To study the marketing strategies adopted by various packaged drinking water brands

To study the market penetration of various packaged drinking water brands

As the consumption of mineral/packaged water is very high with our research we will try to understand various factors which our affecting customer behavior, study of different dependent and independent variables and application of suitable tests will help to compare and analyze the data and acquire the objectives and successful completion of research.

1.3 CONTEXT OF THE STUDY

We are conducting this study in the purview of Indian context. We have undertaken study to compare few packaged drinking water brands in Delhi and NCR region

Why bottled water?

Millions of people, both in rural and urban India, suffer from inadequate or no tap water supply.  Even some parts of Mumbai, the country's financial capital, get a mere two hours of daily water supply. The growing number of cases of water borne diseases, increasing water pollution, increasing urbanization, increasing scarcity of pure and safe water etc. has made the bottled water business just like other consumer items Bottled water has been treated by distillation, reverse osmosis, or other suitable process and that meets the definition of "purified water".  The bottled water treatments include: 

 * Distillation. In this process, water is turned into a vapor. Since minerals are too heavy to vaporize, they are left behind, and the vapors are condensed into water again.

 * Reverse osmosis.  Water is forced through membranes to remove minerals in the water.

 * Absolute 1 micron filtration.   Water flows through filters that remove particles larger than one micron in size, such as "Cryptosporidium", a parasitic protozoan.

 * Ozonation.  Bottlers of all types of waters typically use ozone gas, an antimicrobial agent, to disinfect the water instead of chlorine, since chlorine can leave residual taste and odor to the water.

In India around 100 companies sell an estimated 424 million liters of bottled water valued at around Rs 200 crore in the country annually. Most bottlers claim that their water is 100 per cent bacteria-free and contains minerals that make it tastier and healthier. But is the water in these bottles really safe to drink? Do they conform to international or national standards? 

To find out, the Ahmadabad-based Consumer Education and Research Society (CERS), an independent non-profit institution with a sophisticated product-testing laboratory, recently carried out a detailed study on 13 major brands of bottled water available in the country. The national brands -- Bisleri (separate samples were taken from their units in Bangalore, Ghaziabad, Calcutta and Baroda) and Bailley (Mumbai and Surat) -- were selected on the basis of their dominant position in the overall market. Bisil (Mehsana), Golden Eagle (Chennai), Aquaspa (Mumbai),Saiganga (Ahmednagar), Nirantar (Thane), Tirupthi (Chennai) and Yes (Nadiad) were included because of their regional popularity. To conform to international standards for such testing, 21 bottles of each brand were tested in the CERS laboratory against "analytical" and "sensory" parameters as well as for "microbiological" contamination. To ensure fairness, the results were sent to the individual companies for their comments

1.4 BACKGROUND

In India For the product certification BIS have a scheme licenses are being grated to manufacturers who wish to claim that their bottled water brand is up to the Indian standards. It enables manufacturers to use popularly known ISI mark under BIS Act 1986 after that On September 29, 2000 the Union Ministry of Health and Family Welfare issued a notification [No. 759 (E), effective from 29.3.2001]. An amendment to the Prevention of Food Adulteration Rules 1954, the BIS certification Mark is now mandatory for packaged drinking water and packaged natural mineral water according to BIS water filled in hermetically sealed containers of various compositions, form, and capacities that is suitable for direct consumption without further treatment. It is subjected to treatment: decantation, filtration, and combination of filtration, aeration, filtration with membrane filters, depth filter, cartridge filter, activated carbon filtration, and demineralization. It is disinfected to a level that will not lead to harmful contamination in the drinking water.

There are Separate standards have been formulated by BIS for packaged drinking water (IS14543: 98) and for packaged natural mineral water (IS 13428:98). These standards give parameters to be tested and the requirements to be met in respective category of packaged water.

According to BIS natural mineral water is different from packaged drinking water it is obtained directly from natural or drilled sources like spring artesian well, drilled well or from an underground water-bearing strata for which all possible precautions should be taken within the protected perimeters to avoid any pollution of, or external influence on, the chemical and physical qualities. It is characterized by its content of certain mineral salts and their relative proportion and the presence of certain trace elements of. It is required to be collected under conditions, which guarantee the original Natural bacteriological purity and chemical composition of essential components and is bottled at the point of emergence of the source under hygienic conditions. First ever bottled water in India under the name 'Bisleri' was first introduced in Mumbai by Bisleri Ltd., a company of Italian origin in 1965. This company was started by Signor Felice who first brought the idea of selling bottled water in India.

Parle bought over Bisleri (India) Ltd. In 1969 and started bottling Mineral water in glass bottles under the brand name 'Bisleri'. Later Parle switched over to PVC non- returnable bottles and finally advanced to PET containers. Since 1995 Mr.Ramesh J. Chauhan has started expanding Bisleri operations substantially and the turnover has multiplied more than 20 times over a period of 10 years and the average growth rate has been around 40% over this period. Presently it has 8 plants and 11 franchisees all over India. Bisleri command a 60% market share of the organized market. To disinfect the water instead of chlorine, since chlorine can leave residual taste and odor to the water. To disinfect the water instead of chlorine, since chlorine can leave residual taste and odor of the chlorine and however it can be noted that retailers prefer Bisleri because people recall bottle water with name Bisleri.

The FDA also classifies some bottled water according to its origin.

Artesian well water: Water from a well that taps an aquifer--layers of porous rock, sand and earth that contain water--which is under pressure from surrounding upper layers of rock or clay. 

Mineral water: Water from an underground source that contains at least 250 parts per million total dissolved solids. Minerals and trace elements must come from the source of the underground water. They cannot be added later.

Spring water: Derived from an underground formation from which water flows naturally to the earth's surface. Spring water must be collected only at the spring or through a borehole tapping the underground formation feeding the spring. If some external force is used to collect the water through a borehole, the water must have the same composition and quality as the water that naturally flows to the surface. 

Well water: Water from a hole bored or drilled into the ground, which taps into an aquifer. Tap Water: Some bottled water also comes from municipal sources--in other words--the tap. Municipal water is usually treated before it is bottled.

CHAPTER2: REVIEW OF LITERATURE

FDA defines bottle water as "water that is intended for human consumption and that is sales in bottle or other containers, with no added ingredients except that may contain safe and suitable antimicrobial agents"

In the year 1980 we were able to see more changes by introduction of a tap attachment where Iodine resin was used to filter the water. Iodine deactivates the microbiological impurities to a great extent but with this it also has side effects due to iodine and does not take care of dissolved impurities mineral balance.

In the same year Late 1980's it was visible that Ultra Violet based purifier, which filters dust and deactivates bacteria to a much greater extent as compared to Iodine. U.V. based purifiers maintain the odor and color of water but even they do not clear out the dissolved impurities and mineral particles. Thus came the concept of mineral water.

Reporting requirements are significantly less stringent for bottled water facilities and allow the industry much latitude in assessing risks as well as make assessment of compliance difficult. A regulation body was set in place to periodically and systematically collect, compile, and assess complied statistical Information and was provided by the international Bottled water association (IBWA) on the bottled water industry. The IBWA has set the current annual market for bottled water at about two billion gallons. Wells and natural springs are the main sources for 75 percent of bottled water and for rest the source is the municipal water supplies. Wells and springs are considered to be the sources from ground water.

There are different regulation, rules and laws for different counties. For example there is a regulation in the United States, that whenever bottled water is being sourced from community water source then the label of bottle should mention this clearly so it is easily seen and recognizable. However in other case if the water is subjected to distillation, deionization or reverse osmosis then it can be categorized that way and then there is no need to mention the source.

As we know Ground water passes through igneous rocks due to which very small quantities of mineral matter gets dissolved as we know this is because of the relative insolubility of the rock composition. Sedimentary rocks as compared are more soluble than the igneous rocks. Because of their higher solubility, they combined with greater abundance in the earth's crust; they contribute a major portion of the soluble constituents of ground water (Todd, 1959). In areas recharging large volumes of water underground such as alluvial streams or artificial recharge areas, the quality of the infiltrating surface water can have intensive effect on the ground water. Salts are added to ground water passing through soils by soluble products of soil weathering and of erosion by rainfall and flowing water. Excess irrigation water percolating to the water table may contribute substantial quantities of salt (Todd, 1959)

Qureshi and Barrett-Lennard (1998) reported that out of 560,000 tube-wells in the Indus Basin, about 70% of them are pumping sodic water. Thus use of sodic water has in turn affected the soil health and decreased the crop yield. It further concludes that the geographic conditions of the area may contaminate the underground water. However, the source of origin of ground water as well as its recharge is of great importance for bottling companies as to maintain the water standard.

Jeffrey Smith.B. (2009) ("Providing clean and safe drinking water is a major challenge not only in India but also globally".)As the contamination of drinking water has increased so the supplies and shortages due to overuse has put substantial stress not only on the portability of this resource but also on its availability to the growing global population. Because packaged water provides an important source of potable water for the Indian population, it is important for all the stakeholders to review and discuss best practices, so that working together; the Indian population can have confidence in the packaged drinking water.

Mayers Michael (2007) said that ("Consumers are profiled in terms of demographics and variations by region".) He also discussed what motivates consumers to pay more n more for bottled water, than they do for the water that is available from their household tap. Improvements have been made with regard to the taste and health related qualities of products. 

In 1958 - the international bottle water association (IBWA) came in picture which was a trade association of water procedure, distributers, and supplier's activities include technical relation government relations and communication.

E Selman n.keith (2005) conducted a survey which revealed that the data collected on bottled water production, specifically the production from the ground water, the primary source of bottled water relative to other uses of ground water, bottled water production was found to moderate uses of ground water.

In Feb. 1999, drinking water foundation, The Natural Resources Defense Council (NRDC) issued a report by the title of "Bottle Water: Pure Drink Pure Type?" in which they raised numerous wrong allegations against bottled water.

CHAPTER 3: RESEARCH METHODS AND PROCEDURES

3.1 PURPOSE OF THE STUDY

Convenience and quality have made the aspect of packaged drinking water quite familiar. There are quite a few numbers of brands marketing their packaged drinking water, and the variety of the same is also mushrooming with the introduction of various styles viz., bottled, bubble top, and so on. But with the number of brands influencing the purchase pattern, there comes the threat on domestic brands, hence a research has been carried over to analyze few brands of packaged drinking water to understand

a) The consumer behavior and adaptation of packaged drinking water,

b) The brand equity and market share of various packaged drinking water brands,

c) The marketing strategies adopted by various packaged drinking water brands, and,

d) The market penetration of various packaged drinking water brands.

3.2 RESEARCH DESIGN

Simply put, a research design is the blueprint for a study that guides the collection and analysis of data. The survey research approach was used in this project, saimple cause being that the consumer's feedback was absolute for obtaining the data. A research project, initially, needs a basic preparation regarding the issues related to topic selected. For this one needs to do some deskwork. Deskwork includes:

Determining the basic objectives of the study being pursued.

Collation of secondary data related to the topic from sources like the internet, magazines & newspapers.

Studying the market, which one wants to cover?

Analyzing the objectives on the basis of second hand data collected.

The above mentioned activities at the initial stage of the project must be completed & then the main part would be focused upon.

3.3 RESEARCH QUESTIONS

Each of our objectives has to be converted into certain questions in the questionnaire. The research objective will only be fulfilled if we are able to do this conversion successfully and effectively. The objectives of our research are:

To study the consumer behavior and adaptation towards packaged drinking water.

The concerned research question corresponding to this objective are:

What type of water do you prefer to drink?

Mineral Water Filtered Water

How frequently do you drink mineral water?

Always Sometimes

Often

You drink mineral water because it is:

Safe/Bacteria Free Handy/Portable

When feeling thirsty you choose mineral water over soft drink?

Always Often

Sometimes Never

Rank the following parameters as per your preference while purchasing mineral water.

Brand

Quality

Price

Availability

To study brand equity and market share of various packaged drinking water brands.

The concerned research questions corresponding to this objective are:

Which brand do you prefer while buying mineral water?

Bisleri Kinley Himalaya Qua

Rate these brands on the factors given below( 1=bad; 5=excellent)

Factors Bisleri Kinley Himalaya Qua

Taste

Price

Availability

Brand

Packaging

To study the marketing strategies adopted by various packaged drinking water.

The concerned research questions corresponding to this objective are:

Does advertising of the product have any effect on your purchase?

Yes No

What size of packaged water do you usually prefer?

500ml 1 ltr

5ltr 20 ltr

To study the market penetration of various packaged drinking water brands.

The concerned research questions corresponding to this objective are:

Where do you buy bottled drinking water from?

Metro/Railway Station Bus Stand

Local Vendors Office/School

Cafeteria Retail Outlets

3.4 PARTICIPANTS

Population of the study: the group of individual to be studied. Our population of the study covered the region of Delhi/NCR.

Sample size:

We had taken a sample size of 100 consumers who were our respondents. They were selected by simple random sampling, due to the fact that in this case systematic sampling is not possible, cause one cannot say whether a person is using mineral water or not.

Sampling technique:

Simple Random sampling technique has been used in this project. In simple random sampling each unit of the population stands an equal chance of being selected in the sample size. Each unit has the same probability of being selected i.e. 1/N.

PROFESSION

% OF POPULATION

IT/ITES

10%

SPORTS/TRAINER

5%

HOSPITALITY

15%

MANAGEMENT

15%

STUDENT

40%

OTHERS

15%

3.5 DATA COLLECTION

One of the most basic differentiation is between collecting primary data or secondary data. Secondary data collection is any information we may have used, but which has not been specifically collected for the current marketing research. But marketing research typically requires a lot of current data that is not available through the secondary means. The methodology used for the secondary data that is already collected may be unknown thus validity and reliability of the data is not known.

Primary data collection is the data that is collected specifically for the project undertaken from the real respondents such as consumers, dealers, and other people associated to the research.

In our project we have used primary data collection method through questionnaire from the consumers. We had circulated the questionnaire online as well as manually.

3.6 INSTRUMENTATION

Mode Of Survey

The consumers had to fill up our questionnaire , which was our instrument of survey.

While pursuing the research, structured questionnaire with closed-ended questions were used.

Structured Questions: they improve the reliability of the study, by ensuring that every respondent is asked the same questions.

Structured answers: structuring or standardizing answers which the respondent can choose from in a questionnaire also achieves consistency of form. Additionally, it makes the interpretation of answers, analysis and tabulation, easier than in the case of unstructured answers.

Closed-ended questions: questions which structure the possible answers beforehand are known as closed-ended questions.

Preparing the questionnaire

The questionnaire was prepared keeping in mind the objectives that we had laid down for the project. Each objective had had a set of questions lined up.

The questionnaire followed the "funnel approach" i.e. the questionnaire follows a sequence starting with the general questions first and with more specific and personal questions later on to avoid specific questions biasing the general questions.

A close end questionnaire was prepared by us for the same purpose, to be filled by the consumer.

We have used the following types of questions in our questionnaire,

Dichotomous questions

Multiple choice questions

Rating questions

Ranking questions

Semantic differential questions etc.

3.7 PILOT STUDY

A pilot study is a "pre-study" of your fuller study. It can also be referred to as a miniature study of the project. In order to improve the macro picture, it is to a feasibility study, a small experiment designed to gather logistics and information prior to a larger study in order to improve the latter's efficiency and quality.

A pilot study will reveal deficiencies in the design, if any, of the proposed experiment or procedures and these can then be rectified before a larger picture is painted using more efforts and resources.

Generally a pilot study is miniscule in front of the whole experiment, and therefore would provide only limited information on the sources and magnitude of variation of response measures.

In our project we carried out a pilot study on 20 consumers as respondents. Our selection was again through simple random sampling. The pilot study helped us in the restructuring of certain questions lacking the simplicity and effectiveness of a survey. Through this pilot study we could make the appropriate and necessary changes in our research instrument on time rather than after completing the research paper.

3.8 DATA ANALYSIS

After collection of data another work necessary for any data collector is to correctly analyze that data. Statistical tools helped us to correctly analyze the data. The statistical tool that we have used in our project is SPSS software.

SPSS(originally, statistical package for social sciences) was released in its first version in 1968 after being developed by Norman H. Nie and C. Hadlai Hull.

Statistics included in the basic software:

Descriptive Statistics: Cross Tabulation, Frequencies, Descriptive, Explore, Descriptive Ratio Statistics

Bivariate Statistics: Mean, T-Test, Anova, Correlation( Bivariate, Partial, Distances), Non Parametric Tests

Prediction for numerical outcomes: Linear Regression.

Prediction for identifying groups: Factor Analysis; Cluster Analysis(Two-Step, K-Means, Hierarchical), Discriminant.

The statistical tools used in the project are:

Attribut Based Perceptual Mapping Using Discriminant Analysis

Discriminant Analysis

Anova

Correlation

3.9 LIMITATIONS

Every project report has limitations, our project which was " Comparative Study Of Few Packaged Drinking Water Brands" also faced certain limitations.

We observed the following limitations:

The sample size of our project i.e 100 respondents was too small in comparison to the population. Too small a sample would have affected the reliability of the finding from the research.

The data collection was done in some parts of delhi and noida . the project was generalized for the entire delhi/ncr region.

There might have been biasness on the part of the respondents.

3.10 SUMMARY

Research methodology and procedures are the most important part of a project report. The finding and the result of the research depends upon the methods used, the data collection, the research questions, the data analysis tools used.

The final objective of a research is to achieve what it was meant to achieve. The conversion of the objectives into the questionnaire and ultimately the findings from the research is the core of the research project.

CHAPTER 4 - : DATA ANALYSIS AND FINDINGS

4.1 REVIEW METHODOLOGY

Quantitative data collection

The valuable data for the research has been taken from the given source;

Primary data

. The data was collected from:

1.a Customer Surveys - A carefully structured questionnaire used to measure customer attitudes, levels of perception, intentions to purchase etc.

1.b The questionnaires have been filled online and through personal interview.

Instrument

2.a Statistical Package for the Social Sciences was used for data analysis.

Qualitative findings helped us to effectively phrase and position questions and eliminate ambiguity (in questionnaire/survey) by providing a platform to better understand brand preference, brand equity, marketing strategies and consumer behavior. The findings that emerged from the above mentioned research methods are crucial in assessing our objectives.

4.2 FINDINGS

Through One Way Anova we came to know that the frequency of purchase of packaged mineral water by the consumer does not converge significantly on the consumer's income. Whereas the consumption quantity of packaged mineral water by the consumer converges significantly on the income of the consumer. This helps us in understanding price sensitivity of the consumer while deciding the quantity of consumption of packaged drinking water

Bisleri the brand has a strongest brand equity which attributes to its success in comparison to its other attributes like price, packaging ,taste and availability .The unstandardised discriminant function would help us in classify the customer as favorable and unfavorable. It helps us in understanding the adaptation towards packaged drinking water.

There is a weak correlation between Qua, Himalaya, Bisleri and Kinley on the bases of price. Thus implying the companies do not follow a competitive pricing strategy for increase in sales. The price war between the brands is miniscule.

Bisleri is undoubtedly the market leader in comparison to Qua, Kinley and Himalaya as 69% of consumers prefer Bisleri.

ONE WAY ANOVA

Interpretation

The analysis of variance technique was used to determine the effect of annual income of the customers on their frequency of purchase of packaged drinking water and on the quantity of their purchase.

The ANOVA table contains the significance of F-test and it is used to test the null hypothesis that the values of the frequency of purchase and quantity of purchase are not significantly different from each other, at different intervals of annual income. There are two hypotheses here.

From the output table we found that the significance level of frequency of purchase is 0.731 which is more than 0.05 so null-hypothesis is accepted. However, the significance level for quantity of purchase is 0.026 and here null hypothesis is rejected.

It can thus be interpreted that although variation in annual income is unable to cause significant variation in the frequency of purchase but it proves that, at the 95 per cent confidence level, variation in annual income is able to cause significant variation in quantity of purchase.

Table 4.1 Anova

Sum of Squares

df

Mean Square

F

Sig.

Q2.How frequently do you drink mineral water? (mark one only )

Between Groups

.976

3

.325

.431

.731

Within Groups

72.414

96

.754

Total

73.390

99

Q10.What size of packaged water do you usually prefer? (mark one only )

Between Groups

5.337

3

1.779

3.236

.026

Within Groups

52.773

96

.550

Total

58.110

99

DISCRIMINANT ANALYSIS

Interpretation

From the output table "classification matrix", we can observe that the discriminant function, obtained, is able to classify 100% of all the customers. Thus the discriminant model gives us a classification (or prediction) accuracy level of 100%.

Table 4.2 Classification Results

do you prefer bisleri

Predicted Group Membership

yes

no

Original

Count

yes

69

0

no

0

31

%

yes

100.0

.0

no

.0

100.0

a.100.0% of original grouped cases correctly classified.

From the following table, the value of Wilk's Lambda is found to be .042. Since the value is closer to 0 it indicates better discriminating power of the model. The probability value for chi square test indicates that the discrimination between the groups is highly significant. This is because p-value is .000.

Table 4.3 Wilks' Lambda

Test of Function(s)

Wilks' Lambda

Chi-square

df

1

.042

303.659

5

We have 4 independent variables, Bisleri rating on the basis of price, availability, taste, brand and packaging, with one being a better predictor on purchase of national brand. From the following table it can be inferred that the best predictor, of the buying behaviour for Bisleri, is the brand power itself.

Table 4.4 Standardized Canonical Discriminant Function Coefficients

bisleri on bases of price

bisleri on bases of availability

bisleri on the bases of taste

bisleri on the bases of brand

bisleri on the bases of packaging

Classification of a new customer into purchase behaviour for the brand "Bisleri" can be judged from the table where the means options yes and no are plotted on a scale ranging from -7.089 to +3.185. If the discriminant score of a customer falls to the left of the midpoint (zero) we classify him as one who would not buy Bisleri and the one on the right signifies a preference to buy Bisleri.

Table 4.5 Functions at Group Centroids

do you prefer bisleri

yes

no

Unstandardized canonical discriminant functions evaluated at group means

The unstandardised discriminant fuction is:

Y= -7.089+ 0.727(price rating) + 0.577(availability) + 0.570(taste rating) + 0.421(brand) + 0.583(packaging)

If we have a customer's ratings for price, availability, taste, brand and packaging then the above discriminant function gives us the score that helps the retail outlet to classify the customer.

Table 4.6 Canonical Discriminant Function Coefficients

Function

1

bisleri on bases of price

.727

bisleri on bases of availability

.577

bisleri on the bases of taste

.570

bisleri on the bases of brand

.421

bisleri on the bases of packaging

.583

(Constant)

-7.089

Unstandardized coefficients

CORRELATION

Interpretation

The values of the correlation table are standardized, and range from 0 to 1(+ve and -ve). The brands Bisleri, Himalaya, kinley and Qua are weakly correlated on the basis of price but the correlation is significant the 0.01 level.

Table 4.7 Correlations

bisleri on bases of price

himalaya on the bases of price

kinley on the bases of price

bisleri on bases of price

Pearson Correlation

1

-.463**

-.417**

Sig. (2-tailed)

.000

.000

N

100

100

100

himalaya on the bases of price

Pearson Correlation

-.463**

1

-.116

Sig. (2-tailed)

.000

.250

N

100

100

100

kinley on the bases of price

Pearson Correlation

-.417**

-.116

1

Sig. (2-tailed)

.000

.250

N

100

100

100

qua on the bases of price

Pearson Correlation

-.337**

-.010

-.093

Sig. (2-tailed)

.001

.921

.356

N

100

100

100

**. Correlation is significant at the 0.01 level (2-tailed).

ATTRIBUTE-BASED PERCEPTUAL MAPPING USING DISCRIMINANT ANALYSIS

Interpretation

The following figure represents the perceptual map of various attributes- price, availability, packaging, taste- for various brands namely Bisleri, Himalaya, Kinley and Qua.

Those variables closer to a given axis (dimension represented by the discriminant function) are contributing more to the interpretation of that dimension. Looking at all variables that contribute to a given axis (dimension), we can label the dimension as a combination of those variables.

As seen from the graph, Qua has its unique position on the map. In addition we have also plotted values of the attributes on the same two dimensions (each discriminant function represents a dimension). As we can see, dimension 1 seems to be a combination of taste and availability (closest to x-axis). This is also evident from the standardized discriminant coefficients for availability (0.981 and -0.267) on dimension 1, from the output table labeled "standardized canonical discriminant and function coeffients".

Dimension 2 seems to comprise of price. This is also evident from its standardized coefficient on dimension 2, from the table.

Table 4.8 Standardized Canonical Discriminant Function Coefficients

Function

1

2

Price

-.245

.872

availability

.981

-.267

Taste

.440

.452

packaging

-.670

.570

Table 4.9 Functions at Group Centroids

Company name

Function

1

2

bisleri

.616

-.067

himalaya

-.863

.427

kinley

.979

.085

qua

-.732

-.445

Unstandardized canonical discriminant functions evaluated at group means

Brands and their associations

While Bisleri and Kinley are stronger in Dimension 1 (taste and availability), Himalaya seems to be closer to Dimension 2. However Qua seems to be weak in both the dimensions as compared to its competitors.

Table 4.10 Perceptual Mapping

CHAPTER 5 - CONCLUSION AND RECOMMENDATION

5.1RECOMMENDATION

Qua should improve its marketing strategies as it has still not been able to position itself in the mind of the customers.

Bisleri should continue to increases its brand equity as it is the strongest attribute of the product The company can enhance its brand equity through providing value to the customer

For Cost Leadership Bisleri can create price differentiation in comparison to its competitors

Bisleri should work on its other attributes like price , availability , taste and packaging

As per the perceptual map Bisleri and Kinley need to work on price and packaging. While Himalaya good in price and packaging needs to work on its taste and availability. Qua on the other hand has to work on all four factors namely packaging, price, availability and taste.

5.2 IMPLICATIONS FOR FUTURE RESEARCH

Cluster perception mapping can be done

Further enhanced study can be done in depth about the different marketing strategies of the four brands namely Qua, Himalaya, Bisleri and Kinley.

Study can be undertaken for Improving the performance of Qua in the Indian market.