Case Study Presentation OnBlair Water Purifiers- IndiaGROUP NO:III

Objective of the case

• To make a recommendation on market entry and on elements of an entry strategy.

Introduction-Indian Market for Home Water Filtration and Purification

• Rahul Chatterjee Came to India for Blair Company Inc.

• Purpose: Gather information on the possibility of Blair company entering the Indian market.

Introduction : Chatterjee’s findings

Four or five competitors in the market.

Only one or two companies in India’s 25 states.

Its stage is in early growth stages.

Many Indians felt the need for improved water quality.

Target consumers

40 million households of middle- and upper-middle-class households – were health conscious.

4 million households who had similar values and lifestyles

50% of our target market used boiling to make clean water

40% of our target market used a mechanical device to improve their water quality

Rest 10% owned neither filter nor a purifier and seldom boiled their water.

Traditional Method for Home Water Purification

Boiling - Two to five liters of water for 10 minutes, allow it to cool, and then transfer it to containers for storage (often in a refrigerator).

This procedure is cumbersome, time consuming, and ineffective.

“Before storage they will filter their boiled water through “candle filters”. Water can become recontaminated during handling and storage”.

Mechanical Methods for Home Water Filtration and Purification

Candle Filters - Low price depend on material (plastic, porcelain or stainless steel) and easy of using. Candle filters were slow, producing 15 liters (one candle) to 45 liters (3 candles). It is needed to be removed, cleaned, and boiled for 20 minutes. Price Rs.350 to Rs.1,100.

Water Purifiers - Better than Candle Filters. There are three steps, the first removed sediments, the second objectionable odors and colors and the third harmful bacteria and viruses. Price is Rs.2,000 to Rs.7,000.

Three ways for investment

1. Joint working

arrangement

Supply key purifier components

License fees will be calculated by per unit basis over the item of

the agreement

2. Joint venture

company

Be partner with an existing Indian

company

Share 50% profit

3. Acquisition

Purchase an existing Indian company then expand to include the

water purifier

All profit will belong to us

BLAIR COMPANY, INC.

Established in 1975 by Eugene Blair

First product was a desalinator.

In 1996, the product line included desalinators, particle filters, ozonators, ion exchange resins, and purifiers.

In 1996, sales revenues was almost $400 million (annual growth average 12% for past five years), with an expected profit close to $50 million.

In 1994, water purifier was added to product line by using brand name “Delight”.

Delight Purifier

Used a combination of technologies to remove four types of contaminants found in potable water: sediments,

organic and inorganic chemicals, microbial or cysts, and objectionable tastes and odors.

This technologies to purify water to a level beyond WHO standards.

There were two models:

Countertop Design &

Wallmount Design.

Competitors

There are three major competitors. These are

• Joint venture company in 1982 between Electrolux (Sweden) and Forbes Cambell (india).

• First brand name was “Aquaguard” (used ultraviolet rays to kill bacteria and viruses) Rs.5,500

• Second brand name was “PureSip” (used polyiodide resin to kill bacteria and viruses) Rs.2,000

• Used 2,500 person salesforce (directly on households) to sale Aquaguard and independent dealers to sale PureSip.

• Aquaguard’s promotiotion strategy emphasized on personal selling.

1. Eureka Forbes

Competitors (Contd.)

• Began operation in 1964, they use brand name was ZERO-B (Zero-Bacteria)

• ZERO-B purifiers used a halogenated resin technology.• It helped prevent iodine deficiency diseases and

permitted purified water to be stored up to eight hours without fear of recontamination

• Every year needs to replace the halogenated resin at a cost of Rs 200.

• Chatterjee estimated that Zero-B had captured about 7% of the Indian water purifier market.

2. Ion Exchange

Competitors (Contd.)

• Might be a suitable partner to manufacture and distribute the Delight purifier.

• The product contained nine stages (removed sediments, heavy metals, bad tastes, odors, and colors, killed bacteria and viruses, fungi, and nematodes)

• Life of flow rate at 3.8 liters per minute was at 40,000 liters (4.4years for 25 liters per day), but slower liters per minute was 70,000 liters (7.6 years for 25 liters per day).

• They described their product as “state of the art”.• Singer was a well-known and respected brand name in

India and launched water purifier as “Aquarius”.

3. Singer

Other Competitors

The Delta - carbon copy of Aquaguard by S&S Madras.

Alfa Water Purifiers

Symphony’s Spectrum

The Sam Group -> “Water Doctor” purifier

Batliboi, etc.

Information collected

Sales volume of ZERO-B and Singer was around 60,000 units in 1996.

Sales volume of Aquaguards and PureSips was 190,000 units.

More than 100 Indian companies made and marketed candle filters.

All of purifier sales came from large urban areas and only ten to fifteen percent of the entire Indian population could be reached.

Recommendations

Three “Givens”:-

Firstly, market entry would begin with larger Indian cities, most likely on the west coast.

Secondly, market entry would require manufacturing units in India leading to import a few key components.

Thirdly, Blair company should find an Indian partner.

Field testing & product recommendations.

Immediate decision- weather or not he should recommend a field test.

The test would cost about $25,000 placing 20 units in Indian homes in three cities & monitoring them for 3-6 months.

The basic model would be counter top model unit.

Two alternatives for market entry

Joint working arrangement with a licensee – Blair’s company financial

investment would be minimal

Joint venture or acquisitions - financial investment & annual fixed

cost would be much higher and depend mainly on the scope of operations.

Pros & cons

Pros Cons

- Low risk -Cannot control

- Low cost -Loose image- No need to study India's

culture

Licensing

Pros & Cons (contd.)

Pros Cons

-controllable -High cost

-High Risk

-Low Return

-Long Term Pay-Back Period

Joint Venture & Acquisition

“If we go ahead with Delight we have to decide Quickly”- By

chatterjee

THANK YOU….!!!

Queries Are Welcome..