HINDUSTAN UNILEVER’S ‘PUREIT’
WATER PURIFIER
PREPARED BY
Abhishek Chawla B19120
Akshat Khandelwal B19122
George Ashok B19129
Shourya Sardana B19168
Shshank Pandey B19169
Raj Gopal Tripathi B19155
Amandeep Singh Kalsi B19123
Harshit Verma B19139
Sarthak Harnathka B19163
Shagun Mathur B19165
Simran Kathuria B19171
PROFESSOR IN CHARGE
Prof. Himadri Roy Chaudhuri
EXECUTIVE SUMMARY
Hindustan Unilever Limited (HUL) – manufacturer of several home care, food and personal care
brands, entered the water purifier business in India with the launch of Pureit Classic in 2008. The aim
was clean drinking water at an affordable price.
In 2010, nearly two billion people lacked access to safe water. The situation in India was even more
bleak with water quality being the most important issue. Environmental factors and social issues further
sought to aggravate the situation.
HUL saw this as an opportunity and deep-dived into the issues faced by the consumers. It observed
that the predominant method of purifying water by boiling was cumbersome, time consuming and
altered the taste of water. Moreover, existing water purifiers were expensive and needed electricity or
pressurized tap water to work effectively. Also, the high cost of bottled water made it an infeasible
option to meet the growing needs of the market.
Keeping all these needs in mind, HUL designed a product which could work without running tap water
and continuous power supply. It also incorporated an indicator to signal the expiry of the “Germ-Kill
Kit” and an auto-shut off mechanism in case the kit expires.
To target the rural households, HUL marketed the product by attaching an aspirational value to it. It
also realized that a large population in India considered boiled water as the benchmark of water safety.
Consequently, the marketing campaign aimed at establishing credibility of Pureit by promoting its
filtered water “as safe as boiled water”. Then, they tried to reinforce this trust among consumers that
only Pureit could provide them with complete protection from germs.
HUL faced competition from other market players offering differentiated products. Differentiation was
not only on the basis of price ( Tata’s ‘Swach’ priced at $22) , but also on the basis of features (P&G’s
sachets and Asian Paints’ water bottle purifier), performance, quality and reliability. Leveraging its
competitive advantage of its vast distribution network, the company laid down an ambitious objective
to protect 500 million lives by 2020 through its water purifier alongside the significant additional
challenge of financially turning around the business.
COMPANY DESCRIPTION
Hindustan Unilever Limited (HUL) is the manufacturer of several home care, food and personal care
brands and a part of the €39.81 billion Unilever Group. HUL’s corporate vision is “earn the love and
respect of India by making a real difference to every Indian”, and its mission is “doing well by doing
good”. With its move to foray in water purifiers’ segment, HUL ventured into the consumer durables
market with its target market as every household from the bottom of the pyramid to the top. With such
a large number of household brands under each product category; whether it is home care, food &
refreshments, personal care, it is serving each and every segment of the society which has helped the
company to emerge as a biggest FMCG player in India.
In cognizance of the fact that it caters to such a wide spectrum with such diverse brands, it employs
different marketing strategies to reach out to its consumers. The competitive advantages that HUL
enjoys are its vast distribution network in India, innovative distribution model such as Project Shakti
and the advertising muscle with which it can generate an immense consumer pull around its product.
PRODUCT DESCRIPTION
Pureit is designed in a way that it can work without running tap water and continuous power supply.
The product comes in four variants - Classic, Auto-fill, Compact and Marvella. Depending on the
variants and their prices, HUL used an amalgam of marketing strategies. It marketed the product by
attaching an aspirational value to it. It established the credibility of the brand by promoting its filtered
water “as safe as boiled water”.
To enhance a value-based channel, HUL used Direct-to-home sales channel and Doctor’s Partnership
Program to reach out to the urban population. For rural areas, it leveraged Project Shakti's infrastructure
and tied up with NGOs. It also used print advertising campaigns such as “1 crore Safety Challenge” to
build consumer confidence. In the initial phase, the company targeted the lower and middle-income
groups by offering a low-cost product which itself generated a revenue of $57 Million. Upto 2008,
2.1M products were sold using the Direct-to-home channel. Parallelly, it started establishing retail
channel which contributed to 0.55 million sales volume between Jan 2009 and March 2010. In 2009,
water purifier market was estimated to be $450M with a CAGR of 20% and Pureit occupied a market
share of 52% by volume and 18% by sales revenue.
SITUATIONAL ANALYSIS AND UNDERSTANDING
CONSUMER
Due to rapid population growth, urbanization and lack of proper planning the government authorities
are unable to provide basic utilities such as running potable water to majority of homes in the country.
To capture the actual reality of the water situation, we visited Adityapur colony in Jamshedpur which
lies outside JUSCO jurisdiction and hence does not receive JUSCO water supply. A brief summary of
the findings of the customer survey is below:
1. Water Quality: Presence of polluting industries nearby has caused severe contamination of
groundwater. The water was also very hard which necessitated use of softener plants in addition
to water purifiers.
2. Awareness: Low brand awareness for PureIt Range. Most of the consumers we surveyed
seemed to not know about the PureIt brand of water filters off the top of their heads.
Competitors like Kent (through their extensive ad campaigns using Hema Malini as brand
ambassador) and AquaGuard (purely by virtue of having become a household name)
dominated the talk about water filters.
3. Customer preferences: Low preference for PureIt products.
By virtue of not having a strongly established brand image among consumers, PureIt has a very
low preference among the consumers. None of the households we visited had a PureIt set-up
installed or plans to install one in the near future
4. Willingness to pay: High willingness to pay
Water purity is of high importance to mostly all the households we visited primarily because
of the presence of industries close by. This supplemented with the fact that income levels in
these households could accommodate a fairly high expenditure on water filters, meant that
willingness to pay was high among consumers, for a good water purification system.
Retailer Survey:
For the purpose of retailer survey, we visited Reliance Digital and a few other retailers in Sakchi and
Bistupur area. The findings are summarized below:
HUL
• Pureit Classic only has a simple filter instead of a 4-stage filter and cannot be used for boring
water, which requires RO and UV. Only 3-4 units are sold per month, mainly to offices and
lower income households.
• Pureit Marvella though equipped with RO and UV, is considered a very old model. Only 2-3
units are sold every quarter.
• Pureit Advanced’s ‘mineral booster’ feature to change the taste of water also failed to
generate any demand. Only 1-2 units are sold every quarter.
Competitors
• 5-6 units each of Kent Pearl, Superstar, and Grand are sold every month. Kent products are
priced lower than their Pureit equivalents, and a higher discount is offered.
• 3-4 units of almost every Aquaguard variant are sold every month. Moreover, Aquaguard
also sends its salespersons to stores for training where they learn about the features of various
products.
Critical Issues
Initially after the launch Pureit seemed to have hit the right note with the consumers, quickly claiming
market leadership in the lower segment. Though with the end of the honeymoon period, the sales
started to dwindle, and the market share took a sharp dip. This was due to a couple of reasons primarily:
1. The entry of competitors in the lower segment range such as Aquasure Amrit, Tata Swach Cristella
plus and Kent Gold Optima
2. The tendency of Indian consumers to go for water Purifiers with UV/RO technology even if they
cost significantly higher. This ensured lesser demand than expected as the masses preferred UV
technology and hence Classic failed to meet its forecasted demand.
Awareness
None of the families surveyed were aware of Pureit. Most used Kent, and could clearly recall that the
advertisements featured Hema Malini. Thus, Pureit should either have opted for a distinct brand
ambassador the way Kent did, or spent more time in the ad repeating the brand name
Pureit classic was conceptualized for rural markets and BoP. However, our market research shows that
a combination of low brand awareness, trust of the middle income earners on RO and UV products and
poor customer service has made it difficult for pureit to capture the lower segment customers. In the
high end of the market, Kent RO and Eureka Forbes have captured a loyal customer market because
of the people’s trust on RO/UV products and excellent customer service. Customer perceived value is
very low as can be inferred from the market share of Pureit shown in Exhibit 1.
Need Gap Analysis
Initially, HUL was targeting three unmet needs of the customers. It had to fulfill these three needs to
move to its desired state from its current state. They have been discussed below:
1. Improving the availability and quality of water
2. Tapping the lower end of the market
3. Tapping the higher end of the market
Regarding improving the situation of water, HUL has undertaken a number of initiatives, like
establishment of the Suvidha Centre and “Water for Public Good” programme. Some of the short-
comings of the approach are below:
- Regarding tapping the lower end of the market, HUL tried to do so through the HUL Compact
priced at $22. The presence of Tata Swach today is much more than PureIt’s compact, and
people prefer the former if they are looking for a cheaper alternative.
- PureIt has not been able to tap the higher end of the market through Marvella either. Through
our research, we found out that if people look for a better priced product for better quality, they
prefer Kent due to its effective campaigning.
Overall, PureIt has not been able to reach its desired state. What it had planned was very different from
how the industry turned out to function.
Competitors of Pureit in the market include Eureka Forbes, Kenstar, Kent, Philips, Godrej, Whirlpool
and Tata. Water purifying is a relatively new entrant into the common Indian household. Eureka Forbes
was the first company to pierce the market and set up Aquaguard which had a very strong brand
perception in the market. In 2004, HUL introduced a new product PureIt Classic which was able to set
a very strong market image because of its non electric - easy method of water purification. Since then,
many brands have entered the market.
A few reasons for this trend are:
a) Brands like Eureka Forbes and Kent rely on strong Demo marketing. This allows the customers
to sample the way the devices work and reduces the retail sellers to simply pick-and-buy shops.
b) Brand perception of Aquaguard is synonymous with water filtering. This allowed the brand to
continue holding a substantial market share even years after its pilot entry.
c) Brand Awareness of PureIt is relatively lower compared to the other brands. This can be
countered with stronger advertisements.
d) Most of the customers belong to the middle-class consumer bracket who are reluctant to invest
large amounts of money for water filtration.
e) Brands like Kent and Eureka Forbes have designed a promoter-seller relationship with most of
the retail shops. This allows greater promotion of the competitor markets - leading to an
increase of their sales.
f) Most of Indian middle and upper middle-class households have been using water purifiers since
at least 15-20 years. As HUL was a relatively new entrant into the mid-range water purifier
range, other brands had already set up their market into this segment. Now, there is reluctance
to change brands among this segment.
RECOMMENDATIONS
• More aggressive marketing strategy to increase brand awareness among consumers. A
celebrity brand ambassador can be used as they have significant influence on the masses.
• Product portfolio strategy should be realigned to promote RO and UV based purifiers to
conform to changing consumer preferences
• Retail Channel should be prioritized as this channel leads to majority sales in urban areas
which are the primary market for UV and RO based products
• Existing distributor network in rural areas can be leveraged to sell gravity-based purifiers
APPENDIX
MACRO LEVEL EXTERNAL ENVIRONMENTAL ANALYSIS
MICRO LEVEL ANALYSIS
SWOT ANALYSIS
COMPETITIVE ANALYSIS
Market research survey consisted of the following questions:
1. How is the water condition and supply in this area?
2. Do you use a water purifier?
3. Which brand of water purifier do you use?
4. Which technology of water purifier do you prefer?
5. How much will you be willing to spend on water purifier?
6. What technology you prefer, do you know about Pure it and why not pureit?
7. Where did you hear about the product?
8. Rate following attributes on a scale of 1 – 5 where
9. Are you aware of the technology used in your purifier?
10. Who suggested you to use water purifier?
11. Since how long you are using water purifier?
12. How much capacity does your water purifier have?
• less than 10 Liters
• 10 Liters
• 18 Liters
• 20 Litres
13. Do you agree that the technologies like RO and UV are beneficial for cleaning germs more
effectively?
• strongly agree
• agree
• neutral
• disagree
• strongly disagree
Research Findings
Table 1. Distribution of users based on brands
Purifier HUL KENT Eureka Blue AO LivPure Havells TATA Others
used Pureit RO Forbes Star SMITH Swatch
Number 0 7 3 1 0 0 0 0 3
of users
Figure 1. Market share based on survey
Figure 2. Technology Awareness
Figure 3. Market overview by technology
Figure 4. Consumer willingness to pay
Figure 5. Market distribution by capacity
Figure 6. Water collection sources
Figure 7. Value proposition for customers
Figure 8. Advertising channels
Figure 9. Consumer Segmentation
