This report is concerned with the assessment of the feasibility of Schweppes to expand its bottled water market in the Indian bottled water industry. In order to properly assess the feasibility of such expansion, the report starts with a brief description of the current business of Schweppes in Australian market. The mission, vision and values of the company has also been assessed which indicates that the company wants to delight its customers with fun, refreshing and natural moments of pleasure. The environmental analysis of the Indian bottled market has been assessed which indicates that there are certain political interference in the bottled water industry in India, the economical growth has found to be good and opportunity for technological advances are also there. The legal aspects indicate that the legal matters with respect to bottled water industry in India are less and the overall environmental analysis indicates that it becomes feasible for the company to start its operation in the Indian market. The SWOT analysis has also been performed which indicates the major strength point of the company is its brand name all across the world, its weakness as identified is presence of lots of segments with the Schweppes brand, opportunity includes the growing Indian bottled water market and threat represents the rising competition. The existing marketing objectives of the company is to promote health related matter among its consumers so that they can be persuaded to purchase its products and remain fit with respect to health related aspects. The segmentation profile of the company indicates that the bottled water should be targeted at young generations and the tourists, and also includes those who give high preference to their values. The target market should be the metropolitan cities at the initial stage and later on, upon the success of the product, it should be expanded to other parts of the country. The marketing mix strategy as recommended is standardization and new product development in case of product mix, price skimming and dual pricing for pricing mix, distribution selection and price consideration for place mix and sales promotion strategy for the promotion mix. Finally, the implementation and evaluation schedule for the company has been presented
Background Description of the Company
The given paper is developed in order to assess the feasibility of a bottled water company that has its operations in the Australian market and is planning to expand its operation in the international market, particularly in India. This is because for trapping the opportunities in the bottled water that exists in the Indian market. The feasibility study considers all the aspects that would be essential for the bottled water company to achieve success in its expansion to the international market. The factors that would be essential for the company to achieve its objectives in the international market would be critically analyzed to assess the feasibility of the decision of the company to expand into the Indian bottled market industry.
Schweppes is a beverage brand that has its operation all across the world. There are variety of carbonated water includes under the brand name of Schweppes. Schweppes has its operations in the Australian markets as well. Schweppes Australia is known as a wholly owned subsidiary of Asahi Breweries Ltd. The company is known for the development, manufacturing, selling and distribution as well as marketing of a large range of non alcoholic ready to drink beverages. All its products are meant for meeting the thirsty needs of its consumers. There are more that 1500 people that are working all across the Schweppes Australia with a prime role of achieving huge success in all its major brands. All the employees are encouraged to work with integrity within the organization so as to protect its valuable reputation in the country (Tremblay and Tremblay 2007). There are various functions being performed by Schweppes Australia, of which the major ones include the manufacturing, distribution and promotions, marketing and sales, finance, legal, tax, treasury and risk. As the company manufactures a wide range of beverages products, the customer’s database of the company is also very huge, as it includes customers from large supermarket chains to corner milk bars. The customers of the company can be traced at Hotels, Restaurant, Cafes, Milk Bars, Convenient stores etc. (Orangina Schweppes 2011).
Although, there are various beverages brands that the company is operating; with respect to bottled water, the company is operating in the Australian market under the name of Cool Ridge. Cool Ridge is directly concerned with the Aussie spring water. Cool Ridge spring water is all about providing a thunder feeling to the customers. There are various sizes under which, the brand is made available into the market by the company such as the sizes of 350ml, 600ml, 1.5L, 6X600ml, and also in a new 1L Sipper Cap. In addition to Cool Ridge spring water, the company also offers Schweppes flavored mineral waters to its customers. The flavored mineral water is being developed by the company after taking into consideration, the needs and requirements of its customers. Company have undertaken various steps in the past twelve months in order to redevelop its brand in a manner that best suites the need of its customers. There has been a growing trend in the Australian market with respect to low sugar consumption in the beverages and as a result, Schweppes have newly formulated its flavored mineral water with 25% less sugar. This is considered to be the most exciting product of Schweppes with regard to mineral waters in the past few years (Orangina Schweppes 2011).
Vision, Mission and Corporate Goals of the Company
The mission, vision and corporate goal of an organization are an important means of identifying the role of an organization in the society. These aspects of an organization helps in assessing the overall performance of an organization also in identifying the accomplishment that the company wish to achieve from its operations in the future. These are the main guiding factors for the organizations that drive them so as to attain a particular position in the industry. With respect to Schweppes, the company also has vision as well as mission statements with a clear indication of the values that the company wants to incorporate in all the activities as undertaken by it. The mission of the company is to delight its customers with fun, refreshing and natural moments of pleasure. As the company deals in beverages products, the aim of the company has been to provide a feeling of freshness to its customers from its product offerings. In order to attain its mission statement of satisfying its customers with fresh products, it also customize its products that best suites the need of its customers, as it can be evident from the fact that the declining trend of sugar consumption among the Aussies is reflected in the policies of the company to reduce the level of sugar in its flavored mineral water. The company aims at providing the freshest, most natural and delicious drinks to its customers (Orangina Schweppes 2011).
In addition to the mission statement, the vision statement of Schweppes is to become the fast growing beverages company in the International market, especially in Europe by becoming leading, premium and differentiated brands in non alcoholic beverage industry. The company aims at achieving its mission by focusing on naturalness, wellness and pleasure. The natural aspect in all the non alcoholic products as offered by the company is considered to be the major strength points of the company in the process of achieving its mission. In addition to this, company also focuses on the importance of creative ideas on the part of its employees, so as to comprehensively achieve its mission (Orangina Schweppes 2011).
In order to comprehensively achieve its mission and ultimately the vision, there are certain principle values of the organization that guides the behavior of its employees and also the relationships that exists among the management, employees and all other members of the group. There are five major values that are being identified by the company as being inherent into its group. These include:
The inclusion of all these principles among its team members encourages them to contribute their maximum effort towards the achievement of its mission and ultimately the vision (Orangina Schweppes 2011).
Environmental Analysis of the Industry
Environmental analysis is one of the most important analyses that help in assessing the position of a particular company that falls within the industry. Environmental analysis as the name indicates the assessment of the environment in which a company is performing its business functions. All the factors that need to be assessed in the performance of environmental analysis of a company are external to it. The external factors have a huge impact on the performance of a company, as they have a direct impact on all the daily activities that are being performed within the company. Thus, the consideration of environmental aspects becomes crucial in assessing the overall performance of an industry operating in a particular country (Kleibohmer 2001).
The need for performing the environmental analysis for a particular industry gets further increased in cases when a company decides to expand its operations in the international market. The expansion of business activities in the global market becomes a common phenomenon for the companies operating across the world and as such, the effectiveness in the decision to expand in the international market can be achieved by examining the environmental conditions for the industry in the international market. The impact that the political conditions have on the performance of the same industry in the international market needs to be assessed. In addition to this, the economic performance of the country in terms of GDP growth rate, inflation, unemployment rate also need to be assessed in order to take a better decision of expanding into the international market. Apart from the political and the economic conditions, there are various other factors that need to be considered in performing the environmental analysis of a country for a particular industry,. These factors include the cultural, technological, environmental and legal forces that are prevailing in the country and have a direct impact on the performance of the industry (Graham 2008).
In the given case of Schweppes, the proposed entry of the company into the Indian market for trapping the opportunities that are available in the bottled water industry also requires the company to have a proper assessment of all the environmental factors that have a direct bearing on the performance of bottled water companies. The identification of the environmental factors that have an impact on the bottled water industry in the Indian markets would require Schweppes to formulate necessary strategies so that the impact of environmental factors on the performance of the company in the international market can be reduced and overall developments of the company can ultimately be achieved. Thus, the major environmental factors that govern the bottled water industry in India which needs to be taken into consideration by Schweppes in its decision to expand its bottled water in the Indian market are discussed as follows:
Political Environment: The political aspects that prevail in a country are most crucial to be assessed in order to consider the expansion of business into that particular country. With respect to bottled water industry in India, the political factors have a major dominance over the bottled water companies operating in India. There are various independent bodies that are operating within the country in order to keep a close watch on the beverages regarding their compliance with all the necessary regulations that have been set. For instance, Centre for Science and Environment (CSE) is one such non profit non governmental organization that operates in the country and keeps a close eye on all the necessary compliances that are being set for the beverages companies operating within the country. The main aim of CSE is to raise awareness among the common individuals that resides in the economy pertaining to the issues related to environment and development that have a direct impact on such individuals. CSE was active in identifying various issues with respect to Coca-cola and Pepsi regarding the level of pesticides (McKee and Lamb, 2009). In addition to this, CSE has also found extremely harmful pesticides in some of the popular brands of bottled water in some of the Indian states. This has also resulted into stringent political actions and finally leads to the development of strict rules that needs to be adhered by the bottle manufacturers in the country. With respect to the packaged drinking water, the BIS standard applicable is (IS: 14543) and for the packaged mineral water, the standard applicable is (IS: 13428). However, there were certain modifications that have been made to these standards in 1998 in order to ensure maximum protection with respect to the mineral water production in the country. This indicates that the political interventions in form of compliance with the laid down standards have been crucial in India and as such, Schweppes need to consider the political aspects before expanding its bottle water plant in India (Executive summary and recommendations of the committee on the pesticides residue in packaged drinking water and packaged natural water 2011).
In addition to this, the ISI certification is also considered to be essential for the bottled water brands that are operating and plan to operate in India by the Bureau of Indian Standards (BIS). BIS considered the bottled water industry as an industry that has a low cost with respect to barriers to entry and exit, as there are very few types of equipment that are essential for the manufacturers to manufacture bottled water. BIS issues necessary licenses to the bottled water manufacturer and that needs to be obtained by each manufacturers in successfully operating in the bottled water industry in India (India and the Regulation of Bottled Water 2011).
Economical Environment: In addition to the political environment, the performance of the economic environment of the country is also essential to be assessed. The economic growth of the country in terms of the GDP growth rate, rate of inflation in the economy, growth of particular industry within the economy etc are also essential to be assessed in order to have a better decision making concerning the expansion into an international market. As a result of this, it becomes essential for Schweppes to consider the economic environment that prevails in the Indian economy in order to make the expansion of its bottled water product into the market of India.
With respect to the economic growth of India, the country has achieved significant economic growth over the years. There has been a steady increase in the growth of the economy since 1979 and by the financial year 2005-06, the country has achieved a growth rate of 6.9% in its GDP. By the financial year 2009-10, it has reached the benchmark of 8% and for the financial year 2010-11, the growth is being estimated at 8.5% (India Estimates 2010 Economic Growth 2010). From the perspective of overall growth of the economy, the Indian economy is considered effective for Schweppes in expanding its bottled water operation into the Indian markets. In addition to this, the market with respect to the bottled water in India is also very good and achieving significant growth rates over the year. It has also been projected that there would be significant growth that would be achieved in the Indian bottled water industry in the years to come. The growth will be experienced in case of both the industrial water as well as the drinking water. The growth in the water market in the country is identified as 15-20% annually. As per the recent assessment done by the government, the growth in the water market is observed at 55% on an annual basis. The total Indian water market is valued at Rs 1000 crores and it has a growth rate of around 40%. The market is also being expected to achieve huge benchmark in the near future and has also crossed the 4000-5000 crores benchmark in 2010 (Murthy 2011). Overall, the economic performance of the country and also the performance of the bottled water industry in the country seem to be growing at a rapid pace, which would ultimately be considered as favorable for Schweppes in expanding its bottled water operations in the Indian market (Bottled Water set to become billion-dollar industry 2009).
Technological Environment: It is also considered as one of the most important aspects of the environmental assessment. The development in the economy in terms of technology is also essential to be assessed, so that the decision pertaining to the expansion into the country can be made in a most effective manner. With respect to the technological developments in the country, there has been significant development that has been experienced with respect to such development in 2010. Although, the implication of technology is not at a high level in the process of manufacturing bottled waters, yet, it can be applied in order to gain significant achievements with respect to the quality of water and also with the compliance procedures that are essential to meet in order to successfully operate in the bottled water segment in the country. There has been computerization in all the fields within the country. However, the technological developments in case of bottled water industry in India are still very slow and there lies a huge scope for further development. The bottled water segment in India is highly unorganized and there has been a rapid need for further development in the field of technology in the bottled water industry so that the overall developments in terms of quality of water can be possible (Bottled water India n.d).
Cultural and Legal Environment: These are other important aspects that need to be considered in the process of assessing the environment of a particular country. The cultural as well as the legal aspect forms the basis for the overall assessment of the environment of a country. For Schweppes, it becomes essential to know the culture that prevails in the Indian market, as all the strategies pertaining to communication about its bottled water product requires the company to know the prevailing culture, so that it can easily target its customers. For instance, in case of Europe, there has been a culture of drinking bottled water with wine at meal times. This type of culturally related aspects is very much essential to be aware of by the companies, when they plan to expand their operations in the international market (Bottled water industry-Global Overview 2011). In addition to the cultural aspect, the consideration of legal aspects is also very essential as it may directly impacts the performance of the entire business. The legal rules that are being formulated in the country should be adhered while conducting the business in the country. As such, the consideration of all the legal aspects with respect to the bottled water industry in India should need to be complied by Schweppes in its expansion of bottled water product in the Indian market. For instance, the rules and regulations as framed by BIS and the various standards applicable to the Indian bottled water market such as IS: 14543 and IS: 13428 should be complied by Schweppes while entering into the Indian bottled market (Executive summary and recommendations of the committee on the pesticides residue in packaged drinking water and packaged natural water 2011).
Thus, the overall assessment of the external environment of Indian bottled water market indicates that it is favorable enough for Schweppes to enter such Indian market with its bottled water products in the country. All the political, legal, technological, cultural as well as economical factors support the expansion of bottled water products in the Indian economy. The continuous growth of the bottled water industry in the country is quite effective which also adds towards the decision of the company to expand its operations in the Indian markets and trap the opportunities available in such market.
The acronym for SWOT analysis is strengths, weaknesses, opportunities and threats. Strengths and Weaknesses are internal to organization and opportunities and threats are external to the organization. SWOT analysis helps in assessing both the internal as well as external environment of an organization. In case of Schweppes, it becomes essential to conduct a SWOT analysis of the company after looking at the proposed decision of company’s expansion of the bottled water segments in the Indian market.
Strengths represent the strong points of the company. The analysis of Schweppes indicates that the major strength point of the company is that it has been an acceptable global brand in terms of beverages. It has its operations in almost all parts of the world which indicates that the company has the potential to effectively serve the international market with its brand. The acceptance of the brand name as the favorable brand all across the world is another major advantage as enjoyed by the company over the other brand. Another major strength point of the company is that it was able to maintain a stable growth rates from its operations (SWOT Analysis and Report for Cadbury Schweppes - Business Research Paper 2011). This would also encourage the company to ensure success in its proposed expansion of bottled drinking water in the Indian bottled water market. Apart from this, company also offers flavored mineral water to its customers. This can be considered to be one of the major advantages for the company as no such companies in India offers flavored drinking water. As a result, it would become possible for the company to serve a different class of customers with its flavored water in the Indian bottled water market (Schweppes 2011).
As far as the weaknesses of the company are concerned, there are various segments in which the company presently deals in, such as Cadbury confectionery, beverages etc. In addition to this, the operation of the company can also be found in almost all parts of the world. As a result, it would become a difficult task for the management to ensure the effective management of its expansion of beverage section in the Indian market. Further, the lack of experience in the Asian region is also another major weakness of the company. However, the company would develop its brand name from its operation in the Indian market over a period of time (Schweppes 2011).
Apart from the weaknesses, the opportunities available to the company are enormous, as can be identified from the external environment analysis that has been performed in the aforementioned section. The major opportunities available to the company are that the Indian bottled water market has the high chance of growth in the near future. As a result, it becomes possible for Schweppes to track the opportunities from the Indian market. Further, the Indian bottled water industry is also highly supportive to the bottled water manufacturer in the sense that barriers to entry and barriers to exit is very low in case of Indian bottled water market (Bottled Water Industry in India 2006).
Finally, there also have certain threats that need to be faced by Schweppes in its proposed expansion to Indian bottled water market. The major threat is in the form of stiff competition that exists between the two major bottled water manufacturers such as Pepsi and Coca-cola. Because of having intense competition between them, it would become essential for Schweppes to remain competitive in order to survive in such bottled water market. Apart from the two major giants operating in the market, there are various local brands of bottled water manufacturers that are operating in the country. They also pose severe challenges to the big giants operating in the country. As a result, it becomes essential that the company needs to have a well developed strategy in order to effectively deal with the threats that persists in the Indian bottled water industry (Bottled Water Industry in India 2006).
Implications from the SWOT Analysis: The SWOT analysis as performed indicates that it has been a favorable condition to Schweppes in expanding its bottle water operations in the Indian market because such market supports the entrance of a bottled water manufacturer. There are huge opportunities available and by leveraging on the existing strengths, the company can achieve huge success. However, the weaknesses and threats imposes certain kinds of restrictions which can easily be overcome through the formulation of better strategies regarding business expansion.
Existing Marketing Objectives of Schweppes
In order to achieve success in the present complex business environment, it becomes essential for the companies to successfully market their brands in the market so that most of the potential customers for the products of the company can easily be targeted. There should be specific objectives from the marketing activities as undertaken by the companies. The set up of specific objective from its marketing activities enables the companies to focus on each and every aspect of the marketing activities undertaken by it, so as to achieve the objectives set for such activities.
As far as the marketing objectives of Schweppes is concerned, the company’s marketing objective is to enable its consumers to aware of the fact that their health should be the primary concern for them and in order to maintain their health, they can consume the healthier products as offered by the company. Thus, the main objectives of the company behind marketing its products is to increase the health related awareness among its target consumers so that the achievement of a definite increase in the sales for the products as offered by the company can be possible. The promotion of a healthy lifestyle becomes the primary objective of the company from the marketing of its products (Urban 1975). The company pays high attention towards the health related aspects of its consumers, as it can be evident from the fact that a rise in the level of obesity among its consumers in the western countries would result into the promotion on the part of the company that its products should be consumed in a balanced diet. This aspect of promoting its product indicates that the company is highly concerned with the health related aspects of its consumers. Ultimately, by becoming health conscious, the company aims at achieving increased sales for its health related products. In addition to this, the marketing objectives of the company also include the promotion of its products as stylish, interesting, cool as well as refreshing. With these objectives in mind, the promotions of the product are being performed so that the accomplishment of all such marketing objectives can ultimately be possible (Ferrand, Torrigiani and Camps 2006).
Segmentation Profile for company’s Target Market
The segmentation of market is one of the most important tasks to be undertaken by companies in targeting their products to the consumer. The importance of segmenting the market further increases with the planning of the company to expand its operation in a new international market. ‘Market segment’ can be defined as a group of customers that have the similar characteristics. The product for a particular market segment is homogenous and the customers in that market segment also have the similar needs (Croft 1994). The main purpose of the developing a market segment is to allow the marketing professionals to focus on the particular purchases offerings (Peter and Donnelly 2002). It helps to provide highest return from the expenses on the marketing or sales programs. Looking at the benefits from market segmentation, it is essential for Schweppes to perform the segmentation of Indian bottled water market so that it can focus on a particular segment and leverage the opportunities available in such market. For the purpose of segmenting the target market, it is essential to identify the target market for bottled water industry in India.
Target Market: Target Market for any product includes that particular segment to which the product can easily be launched at the initial phase. Target market comprises of group of customers who are being targeted with the product by means of various kinds of marketing campaign so that the customers can be persuaded to purchase the company’s product. The selection of target market is essential as it helps the company in maintaining its focus over a particular segment and ultimately, all the strategies are being devised on the basis of the need of the selected target group. With respect to the Schweppes, the target market basically includes the young and middle aged professionals who often need bottled water while travelling. In addition to this, the tourists that come to the country can also become the target market for the bottled water in India (Weinstein 2004). A brief description of the target profile on the basis of demography, psychographic, geographic and benefits is discussed as follows:
Demographic: On the basis of demographic segmentation, market for the bottled water can be classified in terms of the age group of the target audience. As already mentioned, the most effective target audience for the Schweppes bottled water includes the young and middle aged professional ranging from an age group of 18 to 35 years. The need for targeting the young and middle aged professionals is that most of the India’s population includes young and middle aged people. In addition to this, the emphasis should be on those individuals who use to travel a lot, as they need water on regular basis. Apart from this, the tourists should also be targeted because they also become a major consumer for the bottled water industry in India (Dibb and Simkin 1996).
Psychographic: Psychographic aspect is also an important aspect for targeting a specific group of consumers. With respect to bottled water, the important psychographic characteristics that need to be paid attention is the values as exhibited by the younger generation in the country. There are people with certain values and principles and drinking pure and safe water is one such values of their value system. As such, those people should be included in the target market group for the bottled water by Schweppes (Dibb and Simkin 1996).
Geographic: The consideration of geographic aspects is also very essential while selecting a target market for a particular group. In case of large countries such as India, it is not feasible to consider the whole country as the target market for a particular product. As such, the selection of a specific target market is essential for considering the plan of expansion. In case of Schweppes, the most important areas that need to be included in the target market group at the initial phase should be the four metropolitan cities of the country. The success of the product in these states of the country would be considered for the further expansion of products in the other parts of the country (Weinstein 2004).
Benefits: This is another important criterion in the process of segmenting the target market. This type of segmentation on the basis of benefits indicates that the product should be segmented on the basis of benefits that if offers to the final consumer. As the bottled water is basically for the creation of freshness among the target consumers, its benefit could better be availed by those people who use to travel a lot and often faces with the problem of thirsty. Bottled water could be used in order to create a more pleasure and refreshing environment for those who are faced with such a problem (Dibb and Simkin 1996).
Marketing Mix Strategy
The selection of a most appropriate marketing mix strategy is essential for Schweppes in order to achieve success in the Indian bottled water market. For the multinational enterprises, international growth is a key objective. There are various kinds of challenges that are to be faced by companies who want to operate their business across national boundaries. These challenges are in the form of performing a complete set of new tasks, different people from across the world etc. In order to achieve success in the international market, a suitable marketing mix is very much essential. The company needs to decide the marketing mix strategy that would be best for the company. It can be standardization of the product offering or the company can decide on differentiation in order to outperform its competitors from the market. The marketing mix related decision of Schweppes with respect to the bottled water operations in Indian market should consider the product, price, place and promotion related aspects (Haberer 2010). The best possible strategy that should be followed by the company is discussed as follows:
All these marketing activities would be quite helpful to provide a good base to the company to market its new product with greater efficiency. These marketing activities would position the bottled water product in the potential market in such a way that it would attain greater success at its introductory phase of the product life cycle and there by occupies the major percentage of the entire bottled water industry in India.
Implementation and Evaluation Chart
The marketing mix strategies need to be implemented in a procedural manner so that the maximum advantage can be availed from such strategy. An implementation chart would help in assessing the manner in which all the strategies should be placed into practice. The implementation chart is discussed as follows which includes the strategies under each marketing mix options and the time when such strategies needs to be implemented are also highlighted.