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8/8/2019 Prahalad Effect_1st Round
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8/8/2019 Prahalad Effect_1st Round
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Copyrights Reserved by NEEV 2010 Symbiosis Centre for Management & HRD
Prahalad Effect Page 2
Kata Technologies Limited (KTL) is one of
the leading players in the agribusiness
sector. The companys portfolio includescrop nutrition and consumer products like
Salt and its customer base is spread across
five continents.
Exactly one year ago,
AnirbanShukla, MD of the KTL was
watching news on TV and was shocked to
know that waterborne diseases are the single
greatest threat to the global health.
Contaminated Water is the main cause of
diseases like typhoid, cholera,diarrhea,
jaundice and gastroenteritis. United Nations
report (2007)says that half of the worlds
hospital beds are occupied by the patients
suffering from waterborne diseases. In India,waterborne diseases cause more than 1.5
times the deaths caused by the AIDS and 2
times the deaths caused by road accidents.
The Prahalad Effect
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Copyrights Reserved by NEEV 2010 Symbiosis Centre for Management & HRD
Prahalad Effect Page 3
After reading this,AnirbanShuklastarted
thinking that the primary reason for these
diseases is contaminated water, nowwhat if
we provide pure water to the people? The
problem will be solved. But when he
pondered on this issue for some time he
realized that the solution is not as simple as
it seems.
Government is doing their part to prevent
water borne diseases by spending heavily on
water purification and sewage treatment. But
this has been insufficient considering that
70% of Indian population lives in rural areas
and most of the government funds are being
utilized in the urban India. AnirbanShukla
thoughtthe best way to solve this problem
is if all the households of India use water
purifier. He decided to take up this issue
with his management in KTL.
The very next day at 90 clock in the
morning, AnirbanShukla reached his office
and called his management team for a
meeting at 110 clock. AnirbanShukla
started briefing his management team about
the issue which had kept him awake the
whole night. After the brief he asked his
team comprising of R&D manager,
Marketing Manager, Sales Director what if
KTL launches a water purifier? Hegave his
team a weeks time to come up with the
water purifier industry analysis.After a week
the meeting was again called by
AnirbanShukla to discuss on the findings.
Management team of KTL came up with
the following facts:
Total market for water purifiers in India is
valued at INR 9 bn in 2009.
There are both organized and unorganized
players in Water purifier sector and the
Water Purifier Industry
Water Purifiers Industry is growing at40% per annum.
Penetration level of purifiers in India asa whole still stands at less than 1
percent, with penetration in Tier I citybeing close to 35 percent, and in Tier II
cities at only 11 percent.
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contribution of unorganized sector in overall
business is estimated to be 45%
Organized players involve Pureka Korbes,
Dent, Tillips, Ruminous, Swirlpool and
BharatFever.
Penetration level of purifiers in India as a
whole still stands at less than 1 percent, with
penetration in Tier I city being close to 35
percent, and in Tier II cities at only 11
percent.
The highest penetration level recorded in
Delhi, where the figures stand at 25 percent,
when we look at the other parts of the
country penetration level of the water
purifier is 0.42 percent in Bihar, and less
than 5 percent for Gujarat, Tamil Nadu,
Punjab and Karnataka.
There are several kinds of purifiers in the
market. Most popular types are RO (reverse
osmosis), and UV (ultraviolet) based.
Besides these, there are simple candle filter
purifiers, softener plants, and distill water
plants (used for commercial purposes alone).
Pureka Korbes is the leader in UV categoryof water purifiers with 68% market share. In
the reverse osmosis segment, Pureka
Korbes is again the major player with 60%
share. A major portion of the remaining 40%
belongs to Dent reverse osmosis Systems.
Organized players usually sell their branded
UV purifiers between Rs 7,500 and Rs
10,000, while unorganized players sell the
same for anything between Rs 5,000 and Rs
7,500, and the Chinese UV purifiers are
priced between Rs 3,500 and Rs 4,500. As
far as RO purifiers are concerned, the
Chinese ones are at the lowest rung again,
selling at anything between Rs 5,500 and Rs
7,500. Unbranded good quality RO products
are sold between Rs 9,000 and Rs 12,000,
while branded RO purifiers range between
Rs 12,000 and Rs 18,000.
Indian market has tremendous potential
which is evident from the fact that global
majors such as Tillips and Bharat Fever
have stepped in and are looking to increase
their share of the market.
After going through the above facts
AnirbanShukla and his team were of the
view that penetration of water purifiers in
India is very low primarily because of the
price at which these water purifiers are
available. They came to the consensus that if
we can come up with a water purifier which
is very less in price and is efficient in water
purification then it can help us penetrate into
the Indian market. Anirban Shukla and his
The Big Plan
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team seeing the huge opportunity in water
purification segment started working on
developing a purifier which would meet
their criteria of lesser price and efficient
purification of water.
After six months of hard work Kata
Technologies embarked upon the journey
and unveiled Kata Shudh, the
nanotechnology water purifier, in December
2009, in two variants with retail prices of Rs
749 and Rs 999, respectively.
The technology was based on low-cost
natural ingredients like rice, husk, and ash,
and uses Nano technology to make it
efficient. It required no energy or running
water to operate. Based on low-cost natural
ingredients, it was a replaceable filter-based
product, which delivered safe drinking water
at a new market benchmark price of Rs30
per month for a family of five. The price
was less than half the cost of Cureit, a
purifier produced by Bharat Fever,
apparently the best machine of the lot.
Kata Shudh has a 9.5-liter capacity and can
filter 3,000 liters until the cartridge has to be
replaced. The Kata Shudh bulb (cartridge),
which shuts off water supply after its useful
life, is priced at Rs299 and is good to purify
3,000 liters. The product development has
resulted in 14 patents being filed by the
company. Kata Group already has set up a
plant in Haldia, in West Bengal, with a
capacity of 1 million units of Shudh. This
capacity will be increased by another 1
million units within 3 months.
Anirban Shukla thinks that this product will
enable KTL to penetrate into the rural
market of India and his initiative will help
India to reach the dizzy height of progress
which has been envisioned.
However, nearly a year has passed since
Kata Shudhs launch, although the product
has had a successful run in Maharashtra,
Karnataka and Northern India. Its eminent
runaway success as was imagined by all its
The Challenge
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creators had not taken place. There were
some hurdles that were being faced by KTL,
A: The rural market was made of the
following kinds of segments:
1: Purani Soch Junta: One that thought
that the conventional water purifier
substitutes of Alum and boiling water is the
best form of purification that can happen
and hence the water purifiers are a waste and
should not be purchased.
2: Bhool Chuk Junta: One that thought that
we have not been affected by any kind of
water-borne diseases, hence there is no use
of buying it.
3: Darpok Junta: One that thought that
water purifiers even if bought cannot be
bought from a village centre because then
quality will be doubtful also the machine if
bought will be difficult to service and will
cost them. Hence better not buy it.
It was very difficult in targeting the proper
audience. KTL needed a solution by which it
could convince consumers to use KATA
Shudh.
B: The market leader Pureka Korbes,to
counter the price point advantage of KTL
had initiated a marketing campaign that only
those technologies which are visible through
normal eyes can be believed Jo Dikhta Hai
Wohi Sach Hai, which was a total negative
campaign against KTL as it was using Nano
technology for water purification,
purification process was invisible to human
vision.
A solution for this marketing tactic was
needed desperately.
C:Anirban Shukla had estimated a sale of 30
lakh water purifier machines by the end of
the year and had scaled the total factory
capacity to such an extent. The existing
distribution system of agro-products and
consumer goods was by no means capable
reaching the rural consumers to this scale.
Moreover the existing system was totally
unprepared to act as a channel for such a
product. An altogether new distribution
system needed to be envisioned for this
purpose, keeping in mind the reach of the
competitor like Bharat Fever.
Besides these problems, the current market
scenario in water purifier is as follows:
Kata Shudh is now available in variants of
18, 15 and 7 liters storage capacity.KTL has
further breached the price point and
launched variants of Kata Shudh starting
from Rs499. This new variant comes with
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the patented Kata Shudh bulb and thus
carries the same performance guarantee.
On the pricing front, Shudh costs far less
than rivals Bharat Fever's Cureit and Pureka
Korbes' Quasure, which cost Rs 2,000 and
Rs 1,950, respectively. Interestingly,
Cureit's battery or its chlorine-discharger kit
lasts for 1,500 liters, after which it needs to
be replaced. This battery kit costs Rs 365.
The Quasure cartridge is priced at Rs 400.
Shudh's replaceable cartridge lasts longer,
KTL claims, and costs Rs 299.However one
of the competitors, Dent has also responded
to the challenge by launching its own two
variants of non-electrical water purifiers
Dent Bold Optima and Dent Bold Plus
priced at Rs 2,600 and Rs 1,500
respectively.
To counter these problems AnirbanShukla
has recruited you as one of the new MTs in
the company and you have been specifically
been assigned to this project. Anirban
Shukla now wants you to present to him the
solutions of the above questions along with
a proper road map of what needs to be done
in terms of the 4As
Of rural marketing such that KTL is able to
penetrate the rural market and achieve its
targeted sales of 30 lakh units in next five
years.
Marketing mix is such an element in rural
market which gives the sense to think of
marketing activities.
This 4Amodel is similar to the 4P model of
marketingmix, the difference it shows is
main streamline and Rural Market. 4A
perceived to be more customer oriented. The
4A's are Affordability, Availability,Awareness,
and Acceptability.
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Copyrights Reserved by NEEV 2010 Symbiosis Centre for Management & HRD
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Appendix
Appendix 1: Penetration of Water Purifiers
Appendix 2: Market Scenario
55%
45%
Market Scenario
Organized Sector
Unorganized Sector
Whole of India
Tier I cities
Tier II cities
1%
35%
11%
Penetration of Water Purifiers
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Appendix 3: Figure indication of working of Kata Shudh:
Appendix 4: Water Sample Before and After Water Filtering
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The name of the participants, college name etc. should be mentioned only on the coverpage and nowhere else in the entire document. Failure to adhere to this clause will result
in automatic disqualification.
The shortlisted teams will be invited on campus for subsequent rounds
For any queries regarding the case write to us [email protected]
Or Contact:
Ajay Kasana +91-9595058764
AdishAnanthakrishnan +91-9833033694
mailto:[email protected]:[email protected]:[email protected]:Ajay%[email protected]:Adish%[email protected]:Adish%[email protected]:Ajay%[email protected]:[email protected]