STRATEGIC MARKETING MANAGEMENT

COMPETTIVE ANALYSIS OF SUFI WATER

SUFI’S MARKETING COMPETITORS

There are two levels of competitors in environment.

 National Level

Nestle, Kinley, Aquafina is the major competitor of Sufi on national level. These companies
have a cutthroat competition with each other. There is competition due to coverage and their
image in the mind of the people.

 Regional Level:

There are many brands, which are competing Sufi on regional level. These include Gourmet,
Aab-e-hayat, Aab-e-joo etc.Sufi water competitors in the bottled water industry are mainly
Nestle, Kinley, Aqufina and Gourmet.

TOP THREE COMPANY’S PROFILE

 Nestle

In regard to the dynamic prospects of Pakistan’s bottled water market, it is not surprising that
Nestlé wanted to take shares of it. In its mission statement, Nestlé concludes that its brand
‘Pure Life’ is the “base of operations to meet the need of the continent's emerging nations for
clean, good-tasting water in convenient sizes and packages to satisfy a family's daily
requirements”. The development of Nestlé’s market share, in the bottled water market in Asia,
is closely linked to its leading world-brand ‘Pure Life’. It is now available in many countries but
this worldwide business began in 1998, in Pakistan.

In April 2002, Nestlé renamed its water business as Nestlé Waters, which now represents 10%
of its sales. Today, Nestlé Waters are established in markets about 77 with different brand
names.
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 Aquafina

Aquafina is a bottled water brand of PepsiCo. It was first distributed in Wichita, Kansas in 1994,
and was distributed across the United States, Canada, Turkey, Saudi Arabia, Vietnam, Pakistan
and India. Aquafina is sold inZ0.5-liter, and 1.5-liter bottles. Pepsi Cola’s beverage brands in
Pakistan include Pepsi, Mountain Dew, Aquafina and Tropicana Juice Drinks. Aquafina uses
PepsiCo's own seven-step purification system, which it calls HydRO-7 which includes charcoal
filtration, reverse osmosis, and ozonation. PepsiCo states in marketing material that this system
removes substances that may be in other brands of bottled water. As of July 27, 2007, PepsiCo
put a disclaimer stating the water comes from a "public source" (meaning tap water) on each
bottle. Aquafina uses the term "Purified Drinking Water" on its label. Aquafina water is
municipal water that has undergone their trademarked HydRO-7 process. Distillation is not
included, so Aquafina water is not considered distilled water.

 Kinley

Kinley is a brand of purified or carbonated water owned by The Coca-Cola Company and sold in
many countries and also in Pakistan. Its carbonated forms are used for mixers, and also
available in a variety of fruit flavors. The new Kinley bottle has been made in an ‘easy-to-hold
shape' with transparent labels.

The new packaging innovation is design based on consumer needs to offer a more convenient
grip and is in keeping with the ‘Spirit of Purity' along with reaffirming the company's
commitment to purity. Kinley uses reverse osmosis to purify its water, and with a Coca Cola
brand image, it is considered to be one of the foremost bottled water brands of the Pakistan’s
water industry.

STRATEGIES OF THESE COMPANIES

Nestle Water

Every product on the shelf, every service and every customer contact helps to shape this image.
A Nestlé brand name on a product is a promise to the customer that it is safe to consume, that
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it complies with all regulations and that it meets high standards of quality. Customers expect us
to keep this promise every time. Under no circumstances will we compromise on the safety of a
product and every effort must be made to avoid hazards to health. Likewise, compliance with
all relevant laws and regulations is a must and is not negotiable. People, equipment and
instruments are made available to ensure safety and conformity of Nestlé products at all times.
The effort is worth it. Companies with huge quality standards make fewer mistakes, waste less
time and money and are more productive. They also make higher profits. Quality is our most
successful product. It is the key to our success, today and tomorrow.

 The customer comes first

We want to win and keep customers, distributors, supermarkets, hotels, shopkeepers and the
final consumers. They have very different requirements trade customers expect excellent
service, correct information and timely delivery. Consumers consider taste, appearance and
price when they make their choice. Our task is to understand what customers want and
respond to their expectations rapidly and effectively. We serve various groups of consumers
and there is demand for products at different levels of perceived quality and price. All
customers, however, expect value for their money good quality at a reasonable price. When
offering quality to customers we also mean environmental quality. Nestlé shares society’s
concern for the environment and is committed to environmentally sound business practices
throughout the world.

 Quality is a competitive advantage

We live in a competitive world and must never forget that our customers have a choice. If they
are not satisfied with a Nestlé product, they will switch to another brand. Our goal, therefore, is
to provide superior value in every product category and market sector in which we compete.
The pursuit of highest quality at any price is no guarantee for success, nor is a single-minded
cost-cutting approach. Lasting competitive advantage is gained from a balanced search for
optimal value to customers, by simultaneous improvement of quality and reduction cost.
Success can never be taken for granted. We must watch and learn from our competitors. If they
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do something better, we must improve our own performance. We can achieve competitive
advantage through Quality.

 Quality is action

Quality is the result of deliberate action. It is the responsibility of senior managers to

communicate the quality objectives and to provide the resources necessary for their
implementation. It is then up to all employees to make Quality happen throughout the
company. Progress is followed by listening to our customers and by measuring our
performance. Shortcomings and mistakes must be analyzed and corrected. Problems must be
anticipated and prevented before they occur. We also must identify and take advantage of
opportunities. To stand still is to fall behind. So we must strive for continuous improvement in
every area. It is through many small improvements as well as through major breakthroughs that
we will achieve excellence.

 Sales Strategy of Nestle Pure Life

The sales strategy which Nestle adopted for Pure Life water is Availability & Visibility. To
increase sales and gain profit the company has to provide proper supply of product in the
market.

Personal Selling:

A direct Vendor Selling Activity was coordinated and carried out during the summer months of
June, July, and August in Lahore. A team of vendors, clad in branded T-shirts, caps and jackets,
sold chilled 0.5 liter bottles to travelling customers on all major intersections. The brand got
great mileage out of this innovative idea of personal selling in terms of brand awareness, paid
trial, image as well as real sales.

Publicity:

Nestle Pure Life was launched on 14 December, 1998 in Karachi with a huge amount of
enthusiasm and positive response shown by the locals. The successful story of its launch was
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printed in all the local newspapers the next day. This greatly helped in creating awareness of
the brand and gave its introduction a good start.

Sales Promotion:

Specific promotions of Nestle Pure Life were arranged in some of the key outlets of Lahore.
Elaborate shelf space was acquired for product display and specially designed POS material was
extensively used to promote sales. On a 12-bottle purchase of 1.5 ml, one 1.5 ml bottle was
offered free to consumers. Similarly on a 6-bottle purchase of 1.5 ml, one 0.5 ml bottle was
offered free. Regarding trade promotion, the retailer was also given an additional discount of 4
% during this sales promotion. Not only did the sales of Nestle Pure Life grow tremendously
during the promotion, these continued at a higher pace even after it was over.

 Positioning Strategy

There are some competitive advantages or important attributes of Nestle Pure Life drinking
water, occupying in consumer's mind relative to competing mineral waters are as follows:

PURE DRINKING WATER: Nestle Pure Life is only drinking water product in the market. Their
competitors are selling mineral water which contains extra chemicals which are harm full for
human body, but as far as pure life is concerned it is made by keeping in mind the chemicals
which human body requires.

NESTLE LOGO: Pure life use Nestle brand name and the logo of nestle pure life is also showing
family care to consumer which is enough to attract the customer. That's why customer gives it
preference on other products.

COMMUNICABLE: Nestle pure life is a brand of nestle which shows a big sign of quality to
customer. Due to its brand name it is very easy to communicate.
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STRATEGIES OF AQUAFINA

An ongoing battle for market share has now more aggressive between Pepsi and Coca-cola. So
therefore Aquafina has tried a number of strategies to gain a sustainable competitive
advantage.

Product Analysis and Product Strategies

 Invitation in product

 The company has introduced the flavored water in abroad but not yet in Pakistan, Company
has its intention to introduce the new flavored water in Pakistan, and the company is working
in this regard as it needs a good market for the flavored water because people are hesitant to
buy such water in Pakistan. And this also needs a good marketing.

 Expiry of Product

 Expiry of the bottled water is judged by the quality assurance department of the AQUAFINA.
The expired water is disposed of properly because the expiry is printed on the label of the
plastic bottle.

 Quality Inspection

 The quality inspection teams not only check the ready water from the factory and from the
stores but also from the market as they don’t want the supply of unhealthy water to the
consumer as it destroys their credibility.

 Brand Name

 The brand name is itself a bigger advertisement for the AQUAFINA, as its backed by the strong
brand PEPSI CO. the name AQUAFINA has two parts. AQUA means WATER and FINA is derived
from the word FINE. That means FINA WATER.
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Pricing Strategy

Price comparison:

 The AQUAFINA compares its price with Nestlé PURE WATER as they have good market place in
the country, Nestle are the strong competitors of the AQUAFINA, so the AQUAFINA sets its
price according to the market situation and also the price is based on the activity of its strong
competitor Nestle. AQUAFINA does not compare its price with COCA COLA’s KINLEY as the have
not as much market share as the Nestle or AQUAFINA itself has.

  Price Matching:

 AQUAFINA try to match with the Nestlé’s price strategies, as AQUAFINA lower downs its price
if the Nestlé is going down in its pricing techniques and vice versa.

Target Market:

 Target market of AQUAFINA is off course the urban areas as in rural areas no one is interested
to drink the bottled water as they think that they have canals and tube wells to suck their own
clean and clear water beneath the surface of land. So the marketing in rural areas is almost 10%
as compared to the urban areas. In urban areas also the marketing is limited to some major
cities like Lahore, Karachi, Islamabad, Faisalabad, Gujranwala, and Peshawar.

Price Setting:

 AQUAFINA has a separate department for its price setting, who oversees the all the market
trends, take its report through the marketing department to know the market trends. They set
a unit price for the convenience of the consumer for the bottled water as people don’t like to
give the scattered money like coins to the market.

  Low Pricing:

 Offering low prices to the consumer for their product is one of the price strategies of the
AQUAFINA WATER. They try their best to offer the comparatively low prices than offered by
other companies in the market to enhance the market share.
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STRATEGIES OF KINLEY

At Kinley, sustainable success means operating responsibly and creating enduring economic
value that serves their business and their share owners well. As they continue to listen, learn
and build, they strive for a model that is relevant, industry-specific, systematic and as attainable
as it is accountable.

PRICING STRATEGY

Trade Promotion:

Kinley company gives incentives to middle men or retailers in way a that they offer them free
samples and free empty bottles, by this these retailers and middle man push their product in
the market. And that’s why Kinley seen more in the market. And they have a good sale in the
market because according to the expert which product seen more in the market that sells
more. “Seen as sold” They do agreements with a shop keepers and stores to exclusive sale in
that stores. These stores are called as KEY accounts in their local language. And coke also invest
heavy budget on these stores and offers them free samples and free bottles and some time
cash incentives.

Different Price In Different Seasons:

Some times Kinley Company changes their product prices according to the season. Summer is
supposed to be a good season for beverage industry in Pakistan. So in winter they reduce their
prices to maintain their sales and profit. But normally they reduce the prices of their pet bottles
or 1 liter bottle.

 Promotion Strategies

Getting Shelves :

They gets or purchase shelves in big departmental stores and display their products in that
shelves in that style which show their product more clear and more attractive for the
consumers.
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Eye Catching Position:

Salesman of the Kinley company positions their freezers and their products in eye catching
positions. Normally they keep their freezers near the entrance of the stores.

Sale Promotion:

Company also do sponsorships with different college and school’s cafes and sponsors their

sports events and other extra curriculum activities for getting market share.

UTC Scheme:

UTC mean under the crown scheme, Kinley often do this type of scheme and they offer very
handy prizes in it. Like once they offer bicycles, caps, tv sets, cash prizes etc. This scheme is very
much popular among children.

 DISTRIBUTION CHANNELS

Kinley Company makes twot ypes of selling

Direct Selling

Indirect Selling

Direct Selling:

In direct selling they supply their products in shops by using their own transports. They have
almost 450 vehicles to supply their bottles. In this type of selling company have more profit
margin.

Indirect Selling:

They have their whole sellers and agencies to cover all area. Because it is very difficult for them
to cover all area of Pakistan by their own so they have so many whole sellers and agencies to
assure their customers for availability of Kinley products.
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CONCENTRATION INDEX OF BOTTLED WATER INDUSTRY OF PAKISTAN

The concentration index is the percentage of market share owned by the each firms in an
industry. in general, if the CR measure is less than about 40 (indicating that the largest firms
own less than 20% of the market),  then the industry is considered to be very fragmented,  with a
number of other firms competing, but none owning a very large chunk of the market. On the
other extreme, if the CR measure is more than about 90,  that one firm that controls more  than
90% of the market is effectively a monopoly. If the CR measure is more than about 50,  that
larger firms that controls more than 50% of the market is then it is called that market is very
competitive. These are the concentration index of bottles water industry of Pakistan .

Market Share

Others
11%

Aqunfina
12%

Nestle
Kinley 51%
10%

Sufi
16%

What do it signifies:
The chart signifies that Bottled water industry is very competitive in Pakistan because above of
50 percent share is in the hand of nestle and rest (Sufi, Kinley and Aquafina) has also very
competitive share in the market therefore it is very difficult to enter in the market and it is also
very difficult to compete in the market. It also signifies that nestle is the market leader and others
are challengers.
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COMPETITIVE PROFILE MATRIX (CPM)

Critical success Weigh Nestle Sufi Kinley Aquafina

t
factors Ratin Score Rating Score Ratin score Ratin score
g g g

1 Market share .11 4 .32 3 .24 3 .24 3 .24

2 Advertisement .09 4 .36 2 .18 3 .27 3 .27

3 Financial .09 4 .36 2.5 0.23 3 .27 3 .27

position

4 Research and .07 4 .28 3 .21 3 .21 3 .21

Development

5 Product quality .08 4 .32 3 .24 3 .24 3 .24

6 Price .11 2 .22 3 .33 2 .22 2 .22

competitiveness

7 Global .08 3 .24 0 0 3 .24 3 .24

expansion

8 Sales and .09 3 .27 4 .36 3 .27 3 .27

distribution
network

9 Availability .08 2 .16 3 .24 2 .16 2 .16

Total 1.0 3.23 2.03 2.12 2.12