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Project Presentation

Searle Vitamin Water

About Case Study

This case study based on “Vitamin Water” a product of Searle Private Limited. It is prepared by the group of IoBM SMP class students based on the visit to the company, information provided by the representative of the company, Mr. Khalid Siddiqui, internet research and Consumer survey based on questionnaire prepared by the team and above all a friendly support and guidance from our Mentor teacher, “Mr. Naveed Ilyas”.

IoBM Class Survey Response

Yes No0%

10%

20%

30%

40%

50%

60%

70%

80%

33%

67%

Awareness of Product

Are you aware of Vitamin Water?

Frequently Asked Questions

1) What is Searle Vitamin Water?2) Why should we drink Searle Vitamin Water?3) What is the difference between SVW and Energy Drinks?4) Is it safe to consume SVW frequently during the day?5) Is SVW safe for children?6) Is SVW safe for people with diabetes?7) Is SVW safe for pregnant women to consume?

Group Members

1 2

3Khurram Shakeel

4 5

Mustafa Amir Ali

Rehan Mehboob

Muhammad Umer Siddiqui

Farhan Ali Marri

What is Vitamin ?

• Definition :– Organic compounds which are essential for normal growth and nutrition and are

required in small quantities in the diet because they cannot be synthesized by the body.

– Vitamins don't give you calories or energy but do help you stay healthy. Types of Vitamin :

They are split up into two groups and defined by the materials in which they dissolve

Water Soluble Vitamins Fat Soluble Vitamins Dissolve in water and are

excreted out of the body through biological fluids

Important to replace them on a daily basis

Water-soluble vitamins include the vitamin B-complex group and vitamin C

Dissolve in fat, and excesses are stored in fatty tissues

Distributed slowly throughout our bodies, we don't need to replace them daily

Fat-soluble vitamins include vitamin

A, vitamin D, vitamin E and vitamin K

Vitamin Deficiency

What is Vitamin Water?

• Beverage Product• It is the combination of Water that is

enriched with vitamins and minerals.• Coca Cola “GALCEUE” is the market

leader followed by Pepsi internationally.• Presence in almost 52 countries.• Growing brand almost by 12.5 % YOY

internationally.

History of Vitamin Water

• 1996: J Darius Bikoff founded Energy Brands

• Energy Brands also known as Glaceau privately owned subsidiary of Coca-Cola

• 2007: Bikoff agreed to sell to Coca- Cola for 1.4 billion

• Bikoff still manages vitamin water with a agreement

Introduction

Searle Vitamin Water

Introduction of the Product

• Considering Vitamin Deficiencies and Potential in

Pakistan Searle Private Limited Introduce a new

product as “Searle Vitamin Water.”

• Searle Vitamin Water is a new range of non-caffeine,

non-carbonated drinks.

• It mostly contains Water Soluble Vitamins.

• The product was introduced as part of a Ramadan

deal with Dunkin’ Donuts in mid of 2013; this was

followed up with an ATL campaign on August 7, 2013.

• In 2014, the product went under phase to which

some call a “Re-launch” phase.

Our Mission is to Build an organization which

provides its customers with the best possible

products and Services in the health care and

consumer industries that is ever - evolving in step

with the changing market place to maintain its

leadership role.

Incorporated in Pakistan as a Private Limited

Company on October 5, 1965 .

Subsidiary of G.D. Searle & Co., U.S.A.

Two state-of-the art manufacturing facilities in

Karachi and Lahore.

1966 - Searle Pakistan (Private) Limited acquired

a small manufacturing facility in S.I.T.E.

It is a public limited Pharmaceutical company.

About the Company

Beverage Industry

Islamic Republic of Pakistan

Beverage Industry – Key Information

• Pakistan’s Beverage industry is one of the top industries in Pakistan.

• It’s operating with around 170 units.

• Its sales volume is up to 30.5%.

• The beverage industry in Pakistan, currently having a size of little

over 120 million cases per annum with an annual growth of around

10-15 per cent,

• It has the potential to double its size in the next 3-5 years, if the

government's taxation policies towards this industry are corrected.

Neilson data for 20,000 individuals regarding there daily consumptions of a particular type of Beverages. Data provided by IBL representative

Beverage Industry- Pakistan

Beve

rage

Mar

ket

Bottled Beverage

Carbonated

Soft Drinks(Pepsi, Coke)

Energy Drinks(Stings)

Non-carbonated

Mineral Water (Evian)

Bottled Water (Nestle)

Sports Drinks (Gatorade)

Juices(Fruita-vitals)

Vitamin Water (Searle)

Non-bottled Beverage

Pakistan - Beverage Industry

Tea Soft Drinks Juices Milk/Flavored Drinks

Coffee Bottled Water Energy Drinks0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

6,026

4,118

2,658 2,5432,012

1,700

944

Tea30%

Soft Drinks21%Juices

13%

Milk/Flavored Drinks13%

Coffee10%

Bottled Water

9%

Energy Drinks5%

Tea Soft Drinks Juices Milk/Flavored Drinks

Coffee Bottled Water Energy Drinks0

5

10

15

20

25

30

13

18

16

26

23

21

13

BI Value Share PKR Bn

Tea10% Soft Drinks

14%

Juices12%

Milk/Flavored Drinks20%

Coffee18%

Bottled Water16%

Energy Drinks10%

BI Volume Share

Neilson data for 20,000 individuals regarding there daily consumptions of a particular type of Beverages. Data provided by IBL representative

Beverage Industry Carbonated and Mineral only (PKR 130bn)*

Mineral Water Carbonated Drink0

20

40

60

80

100

120

140

8

123

Mineral Water4%

Carbonated Soft Drink96%

Source : http://www.finance.gov.pk/survey_0910.htm, http://blablawriting.com/beverage-industry-in-pakistan-essay l

Major Players – Pakistan (Carbonated + Mineral)

Nestle Coca Cola Pepsi Vitamin Water Others -

200

400

600

800

1,000

1,200

1,400

124

687

1,225

0

324

Nestle5%

Coca Cola29%

Pepsi52%

Vita-min

Water0%

Others14%

Nestle3%

Coca Cola30%

Pepsi57%

Vi-tami

n Wa-ter0%

Others10%

Volume Units mm

Nestle Coca Cola Pepsi Vitamin Water Others -

10

20

30

40

50

60

70

80

4

38

74

0

13

Value Share PKR Bn

Source : http://www.finance.gov.pk/survey_0910.htm, http://blablawriting.com/beverage-industry-in-pakistan-essay l

Major Player in Mineral Water - Pakistan

Nestle Kinley Aquafina Vitamin Water Others0.0

20.0

40.0

60.0

80.0

100.0

120.0

140.0124.0

51.0

25.0

0.2

57.8Nestle

48%

Kinley20%

Aquafina10%

Vitamin Water

0%

Others22%

Nestle49%

Kinley22%

Aquafina11%

Vita-min

Water1%

Others16%

Volume Share

Nestle Kinley Aquafina Vitamin Water Others0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0 3.7

1.7

0.8

0.1

1.2

Value Share PKR Bn

Source : http://www.finance.gov.pk/survey_0910.htm, http://blablawriting.com/beverage-industry-in-pakistan-essay l

Product Analysis

A Complete Overview

Product Mix

SEAR

LEPharmaceutical

Analgesics

Antibiotics

Orthopaedics

8 Others

Consumer Brands

Canderel Sweetener Tablets

Vitamin Water

Coconut

Peach

Red berries

Apple

Watermelon

Orange

Lychee

Pomegranate

Lemon

Nutrition & Healthcare Nurturemil Water

The Core Competency - PharmaceuticalGood Distribution Partner - IBLNon-carbonated and caffeine freeProvided essential vitamin and mineralsAssociated with Searle brandFirst mover brand

Strengths Weaknesses

No direct competitor as yetIntroduce diet version of Vitamin waterGrowing trend of the segment globallyYouth tend to try new productPharmaceutical back ground

OpportunitiesCoca Cola & Pepsi both globally have a vitamin water of their own name Glaceue and GatoradePertain more flavours then Searle’sNo occasional relation of the productTreated as medical drink

Threats

SWOTAnalysis

Vitamin Provision by other beverages (Tang, Milo)Wrongly Positioned in Consumer mindTapping only Niche market segmentsLimited understanding of the productNot actively present over Social MediaHigh sugar content

Creating Value - Product

Core Benefit: Healthy Hydration, includes 6 essential vitamins to cover basic Needs

Actual Benefit: Not Just water, enhanced Flavored Water, Attractive packaging, Stylish Bottle, Impressive labeling, Quality Flavor,

Augmented Benefit: Provides taste as well as Vitamins and Minerals

Composition & Daily Requirements

Nutrition Facts

Serving Size 300/500 ml

Calories 84/140

% Daily Value * Reference Daily Intake (Adult)

Total Fat (0 g) 0% 90-160 mg

Total Carbohydrates (21 g) 7.2-12% 300 g

Sugar 21 g 25-37.5 g

Vitamin A 15-25% 500-900 µg

Vitamin C 30-50% 30-90.0 mg

Vitamin B12 30-50% 2.4 µg

Vitamin E 15-25% 15.0 mg

Calcium 6-10% 1000 mg

Zinc 6-10% 8-14 mg

* Percent Daily Values are based on a 2,000 calorie diet

Management Focus

• Vitamin Water is essentially for anyone looking for a healthy lifestyle and seeking healthier alternatives. We’ve designed this product for people on-the-go; young individuals with an active, happening lifestyle who are seeking simple ways to stay healthy.

• A "nutrient-enhanced" water consists of Vitamins and Natural flavors hydrating yourself with truly healthy beverages.

• USP is healthy drink against energy/soft drinks that is not carbonated and Caffeine free.

Market Geographic

Mar

ket D

emog

raph

ics

38%

SegmentationGeographic Segmentation World region or country PakistanDensity UrbanDemographic Segmentation Age 12-38Gender Female, Male Family size Not relevantFamily life cycle Young, single, married, married with children, single parents Income 25K+Occupation Students, doctors, engineers, managers, officialsReligion Any ReligionEducation Literate Psychographic Segmentation Social class Middle class, upper middles, Upper ClassLifestyle Healthy, professionals, businessmen Behavioral Segmentation Occasions Not specificBenefits Quality, convenience, safe and healthy User status Potential users, first time users, regular users User rates Daily User and Occasional userLoyalty status None, medium, strong, absolute Readiness stage Unaware, aware, informed, interests, intending to buy Attitude toward product Positive

Targeting

• Age group: 18+• Gender: Male and Female• Health conscious individuals• Literate - understand benefits• Intend to shift from CSD’s• Purchasing power parity• Social Economic Class: A & B• Wants consumer to perceive product

not just a healthy drink

Positioning

Position as an athletic product as a running and winning against the car. “KEEPS YOU RUNNING”

After the advertisement, people perceived as energy drink , without carbonated water and a good option than soft drinks. “VITAMINS KA BOOST - FLAVORS KA BURST”

But having perceived for sports or energy drink was not the idea upon which Searle wanted to position the product rather, it is a different product which comes under the enhanced water category. “KUCH TU MISSING HAI . . . VITAMIN”

Latterly come up with the new Position of ”BETTER THAN JUST WATER”

Product Differentiation

• Searle Vitamin Water is a new range of non-caffeine, non-

carbonated drinks.

• Core competency is association with Searle brand

• Identified points like thrill and health as possible relation

to brand.

• With uniqueness of Searle Vitamin Water is its attractive

packaging with low-end pricing.

P • Competitive based pricing• Rs. 35 for 350 ml• Rs. 50 for 500 ml• Gives maximum revenue

Price Product

• Niche markets• Metro Cities• A-class outlets• Dunkin-Donuts

Place• School/College Campaign• Trade Discounts• Social Media (Facebook)

Promotion

Marketing Mix

• Caffeine-free• Non carbonated• Healthy hydration• Fruity flavors

Channel IBL Retailers End-consumers

P

P P

Key

Com

petit

ors

Direct

In-direct

Generic

Budget

Perceptual Mapping

Carbonated Drinks

Energy Drinks

Fruit Juices

Vitamin Water

Mineral Water

Beverage Market

Heal

thy

Wat

er

Availability

Heal

thy

Wa-

ter

Availability

Wide Choice

Falv

ored

Wa-

ter

Based on consumer buying behavior, with the customer playing the three distinct roles of user, payer and buyer

Consumer Behavior Analysis

Consumer Behavior Analysis

Yes45%

No55%

Awareness of Product

Yes40%

No35%

Don't Know25%

Healthy Drink

Fair47%

Good27%

Very Good7%

Excellent7%

Poor13%

Overall Brand Rating

Energetic22%

Healthy35%

Price20%

Taste18%

Don't Know5%

Selection Criteria

Everyday; 3%

Once a month; 38%

Never; 30%

Thrice a week; 4%

Once a week; 25%

Frequency

Availability54%

Flavor26%

Taste7%

Price7%

Don't Know6%

Aspects to Improve

Consumer Behavior

The following conditions were there on the basis of which we felt that the consumers for this product is variety seeking: They are not much involved in purchase

of the brand They perceive high differences among

brands The product is not expensive The product is less risky, rather it is

nutritional The frequency of purchase of this

product is high Consumers may switch between the

brands not because of dissatisfaction but just for the sake of variety.

Variety seeking

behavior

Dissonance reducing buying

behavior

Complex buying

behavior

Habitual buying

behavior

High involvement

Few differences between brands

Low involvement

Significant differences between brands

Communication Mix

Advertising Sales Promotion

Public Relations Personal Selling Direct Marketing

Print & Broadcast Ads

School/College campaigns

Social MediaFacebook

Sales Representative

Plan to do SMS marketing

Packaging Outer Sampling Company magazine Sales meetings

Poster & Leaflets Shops and key outlet Events Incentive

programs

Billboards Annual reports Samples

POP display Fairs and trade shows

TV Commercials

Radio Ads

Facts and Opinions

Insight Marketing - The Next Big Thing

Sales Trend and Projection

2013 2014 2015 2016 2017- FC 2018 - FC 2019 - FC 2020 -FC 2021 -FC0

20,000

40,000

60,000

80,000

100,000

120,000112,782

66,353

55,294

82,941

74,647

67,182

77,260

88,84893,291

Company Showed us the Financial but refuse to share due to confidentiality

Decline Sales Trend Observed.

Heavy wastages and return due to Expire issue (18-22 %).

Product cost is almost half of the retail price.

Over head cost is almost 8% of the Sales. Due investment.

Not much spent on Adverting and promotion. Initially spend heavily.

Selling and administrative expense are 11 – 12% of Sales.

Financial Charges 6% of Sales.

Net Profit is showing a loss and increasing trend of Loss. (-11% to -15%) Approx. –

10 MM loss per year.

Financials - Our Findings

Sales Wastages/Return

Overheads BTL activity Operating Exp

Financial Charges

Net Profit

-9% 18-22 % Sales

8 – 9 % Sales Not much 11-12% sales

6% sales -11-15%

Issues and Criticism

Issues and Myth Criticism Management Response

No vitamin/minerals Low price cannot justified Not an instant energy drink, works as supplement.

Unhealthy drink Not suitable for routine consumption

Quantity allocated as per recommended RDI, as vitamins are water soluble.

Too sweet lead to bitter Excess sugar intake Intake sugar level is more than twice in contrast to SVW serving.

PET bottle is carcinogenic Carcinogenic if exposed to direct sunlight

Minimal the chances because of cold storage, shelf life is less than 6 months though chances of contamination is much low.

Hourly Type Questions

1) In your view do you think that this product is successful? If not, Why?

2) Do you think the positioning of Brand is correct ? If not, Why? Discuss

3) What do you think what strategy company should adopt in order to revive

the product and make it profitable?

4) Is it good idea for Searle to enter into new categories? If yes, in what

attributes?

CONCLUSION

• Excellent Concept and Product, has potential of performing better.

• Still struggling to position this product due to confuse positioning.

• Not being able to capitalize the early mover advantage.

– Limited marketing funds, consumer awareness, undeveloped brand identity

– Crucial objective to achieve big market presence with small budget.

• Targeting age bracket between 15-38 years only.

• Mainly Focusing in the Niche market. (Metropolitan cities)

• Fear of short Shelf life i.e. 6 months expiry.

• Some essential vitamins missing due to high cost.

• Two to three attempts made to correct positioning, all gone in vain.

• Product trial was quite successful but due to incorrect category analysis followed

by improper positioning of the brand experience non-repetitive behavior.

Key Determinants (Conclusion)

• Issues with Strategy implementation.

Key Determinants (Conclusion)

Description Check Mark Remarks

Generation of Idea

Concept or Idea was good as per the market need.

Analysis of Idea Proper analysis was done on the product. Neilson data acquire. Due diligence done.

Strategy Formulation

Wrong positioning, R&D issues of Expiry. Confuse advertising. Good Distribution IBL. Wrong choice of flavours.

Strategy Implementation Wrong formulation implemented correctly.

Evaluation and Control No Post launch evaluation and Control

Monitoring of Marketing Strategy

• Effective for the period of Six Months.• Continue if found successful.• Make changes as per recommendation of stakeholders.• Re launch the strategy.• Monitor further 3 months.• Continue if successful.• Discounting if unsuccessful.

RecommendationsFactors Issue Recommendations

Product / category

Too many flavors

SKU rationalization Improvised flavor to revamp the product Searle should try to enter into new categories e.g. Sports, Corporate,

Women/Children (Category Formation) They should communicate their message clearly regarding the product

efficacy. Need to incorporate ethnocentrism factor

Customer / Market Niche Market

Searle should explore more market expansion option. (2nd Tier) Searle should expand its net of target customer. Since current targeted

segment accounts for only 1-2% of the total population, so in long term benefits can’t be reaped off.

Positioning Confuse Positioning

Searle should be more focused upon the positioning of the product. Either they want to let the product perceive as a healthy drink for all or is

it as an energy drink. Enhanced water category should be formed i.e. Healthy water

Recommendations

Factors Issue Recommendations

Consumer Behavior

Variety Seeking Behavior

Encourage the habitual buying behavior by ensuring availability at all outlets.

They should avoid getting stock out conditions They should increase their advertising Price could make a difference Free samples and gifting and/or special package should be

planned

Other Partnership and Acquisitions

Focus on Relationship marketing by creating theme such as Pure Water for All

Partnering with public/private organizations (Airlines) Can export to Middle East region through international partners.

Low Profitability

High Sales Return and write off due to shorter shelf life.

Searle Should do some R&D to increase the expire of the product in Order to reduce the loss and invests in Advertising to create the awareness of the brand.

Reduce production cost by achieving economies of cost.

RecommendationsFactors Issue Recommendations

New Product Development

Cater large number of target audience

Searle can also come up with the variant of carbonated water. They can have 2 product lines, Vitamin Water with carbonated and

caffeine and non-carbonated water. Since the acceptability of carbonated water is more than Vitamin Water in Pakistan.

Need to use zero-calorie stevia sweetener by combining stevia extract with sugars, by which can reduce the sugar and calorie levels of the range by 30 per cent.

Communication Confuse Advertising

Searle should enlighten its customers regarding the product. Make and air logical advertisement with meaningful message. Develop integrated campaigns combining well-known celebrities

with unexpected marketing channels. Stretch early budget eff orts with aggressive outdoor response

advertising solutions that accelerated buzz of entire media campaign

Brand Awareness Top of the mind share

Brand awareness is something which Searle has to work upon. As the idea of school campaigning was quite good but still there

should be more sponsorship to some sports programs as well with free gifting in order to create space for them in the market.

For targeting children and adults, need to cope-up with some fictional character and celebrity endorsement respectively.

When actually Marketing Rocks

• Marketing is not sales its about satisfying a need to enable the product to sell itself

• Marketing is storytelling to create anticipation of the consumption moment and then prolong the delight

• Marketing is a science of pricing, of behavioral economics, of consumer research and product design

• Marketing acts as the voice of customer and drives customer centricity

Revenue or Brand?

Mind Share

Market Share

Profit Share

Simpler - The Better

Who Am I? Why Buy Me? Why Not Buy Something Else?

QUESTIONSWe’re Ready To Answer Your

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