AAVA CASE STUDY ANALYSIS

Group number: 6
Ketaki Desai
Vivek Srinivas
Manish Kankani
Sushank Jindal
Geet Leuva
Pratik Mahale
Rupankar Biswas

Q1. Evaluate the performance of Aava Mineral water in the industry so far?

From its inception in 2005, the Aava brand has many accolades to talk about. Aava can boast about a
well-balanced product portfolio that caters to wide range of consumers across market segments,
innovation in packaging, and gaining volume leadership in the Natural Mineral Water (NMW) market
with 50% market share up until 2009. With weekly sales of nearly 1 Million bottles in Western India, the
region seems to have been a stronghold for the brand till 2009.

However, a quick scan of the competition shows gaps between Aava and the competition. Following is a
summary of the key areas where Aava falls behind:

1) Brand Positioning:

 Aava’s attempt to establish itself as a premium and healthy NMW brand (Case B, Exhibit 3 & 4)
has not created an impact that was expected by the Brand. While the awareness quotient is high
compared to other brands, (exhibit 6), Aava has not managed to capture the mind space of
consumers and drops way below competitors and Packaged Drinking Water (PDW) brands.
 An analysis of consumer behavior towards bottled water (Case B, Exhibit 7), reveals that, besides
Taste and Color parameters, Aava was lagging behind brands in both, NWM and PDW
categories, especially in image and product packaging. ‘Consumers of Aava could barely
differentiate it from
regular packaged drinking water brands’

2) Distribution and Logistics:

 Aava has a stronghold in the western part of India and, as a result, several logistical advantages
owing to its unique location. From sourcing raw material to an advantage over competitors for
distribution, Aava was benefiting up until Himalayan managed to aggressively take over and
establish itself as a market leader in western India.
3) Product variants:

As of 2010, Aava NMW was focused only on providing NMW to the market. Comparatively, the
competition provided a wider range and variety including flavored water, health water, soda water and
sparkling water.

Q2. Considering the growing competition in the market, which customer segment(s) should Aava
target primarily, and accordingly which product stock keeping units (SKUs) or package size should it
focus on? Should it target the large institutional customers (SKU 200 ml bottles), retail and small
institutional customers (SKU 1 liter bottles) or the bulk water customers (SKU 20 liter jars)? Taking the
two cities of Ahmedabad and Mumbai as the base, which SKU is more profitable for the company?
Conduct the profitability analysis of various SKUs considering different parameters?

PROFITABILITY ANALYSIS -

Aava should keep focusing primarily on the institutional customers. Given the fact, that 88% of its
current customers can be catered with this product. It should be focusing majorly on the large (SKU 200
ml) institutional customers. Aava does not have the retail network like Himalayan, which leverages its
network of the parent company, Tata. So, entering this space would be extremely difficult and also the
advertising costs for brand building would be huge. As seen in the calculation above, even though the
bulk market is most profitable, it is limited by geographical area. Given the total SKU’s quantity for each
SKU, the above analysis suggests 200 ml to be most profitable for the company.

Q3. Why does Aava feel the need to improve its positioning in the market? Considering how some of
Aava’s closest competitors have positioned their brands, should Aava continue with its current
positioning or should it modify it?

Summarizing the positioning of Aava and its Competitors

Brand Positioning
Himalayan High quality Natural Mineral water
Premium Imagery
Focused on uniqueness of Himalayas
 Can be trusted as associated with Tata Brand
Qua Fine Water with balanced minerals,
Contains essence of pristine Himalayas
Premium and Aspirational
Vedica Mass and Prestige
Natural Mineral
From Pristine Himalayas
Catch Only soda in the country made from natural spring water
Evian Catered to Elite class – Highly Premium
NMW from the Alps
Quality bottled water
Perrier Refreshing, all-natural, calorie free
Alternative Beverage (not referring specifically as ‘natural water’)
Aava Sourced from Aravalli’s, which are older than Swiss Alps and Himalayas
Nutritious and Healthy
Natural mineral water helps in keeping negative effects to health away

As seen above, while Aava stands out in a clutter of seemingly similar positioning among brands, Aava is
not aspirational enough. While Aava attempts to push the advantages of consumption of healthy and
nutritious water, in the minds of its consumers, it lacks in creating a perception of High Status and
Assurance. (Ref: Case B, Exhibit 5, 6, 7)

Also, the with Aava being positioned as ‘Healthy and Nutritious’ NMW, the key issue that arises is the
positioning vs target consumer base.

Based on Case A Exhibit 6, we see that the maximum sales contribution for Aava comes from the
Aviation, Hospitality and Entertainment institutions (88%).

As a result, positioning Aava as a ‘Healthy and Nutritious’ alternative to other natural mineral bottled
alternatives will not necessarily create the impact expected by Sheelpe Enterprises Private Limited.

Due to this, it is recommended that Aava should continue to sell to institutions such as aviation,
hospitality and entertainment. As far as positioning is concerned, currently Aava is positioned by price. It
should continue to do so in this B2B market.

Q4. Considering how other natural mineral water manufacturing companies are expanding into other
product categories, should Aava introduce new products to expand its consumer base or should it
remain focused on its core product offering of natural mineral water?

Aava needs to reassess its positioning. Based on the analysis above, the suggested target consumer
segment is the large institutional clients in aviation and hospitality. For this segment, a premium
packaging along with a variation in the product offering is suggested.
The suggested variants in the profitable SKUs are as follows:

Variant (current and recommended) Consumer Segment

Natural mineral water (SKU: 200, 500, 1
liter)
Flavored water (SKU: 200 ml)
Sparkling NMW (SKU: 500 ml)
All carriers, high-end hotels and restaurants and other
large institutions
Small institutions and low-cost carriers
All carriers, high-end hotels and restaurants and other
large institutions

The renewed brand image of Aava can further be portrayed as a Premium Natural Mineral Water.