Hindustan Unilever ‘Pureit’ Report
BM Section A- Group 2
Ambar Laad - B19005
Arpit - B19009
DVS Sudhama Battula - B19013
Kondapuram Vamsi Krishna - B19023
Medida Vishal Manmadharao - B19027
Munugoti Anurag Sharma - B19028
Ramapriyan SV - B19036
Ritika Deshwal - B19038
Shah Utsav Mehul - B19045
Trivedi Tosha Niraj - B19056
Executive summary
PureIt is Hindustan Unilever’s attempt at entering the consumer durables market. World
Health Organization reported that 7.5% of all deaths in India in 2002 were due to diseases
caused by unsafe water which was caused by various forms of contamination. Hundreds of
thousands of villages and hospitals required clean water supply. With increasing demand for
safe, potable water, HUL sought to tap into this potential. However, this endeavor was
fraught with roadblocks.
It was estimated that Point-of-Use water purifier market would grow at 20% YoY. However,
it was found that most Indians use obsolete water purification technology or rudimentary
methods like boiling, which was both cumbersome and time consuming, due to various
reasons that made POU water purifiers unviable in India. Existing technology of RO and UV
required electricity, and pressured water which were not available in most parts of India.
Efforts also showed that one-time educational programs didn’t really change consumer
behavior. Customers also needed clear signals like clarity, lack of odor etc. that the water was
cleaner. HUL targeted to create an affordable product which could function despite these
conditions, would adhere to the highest of standards, and achieved this using a radically
different process. It included more than 200 design changes spanning across 4 years to create
a sustainable product. However, getting the product to the consumer was a colossal challenge.
Consumers were apprehensive about water quality and receptivity was low during test runs.
To address this, HUL had created a comprehensive marketing strategy that capitalized on
HUL’s strong retail network and also formulated a new Direct-to-Home strategy. To get
sustained use from consumers they should be creating an aspirational trigger. The company
made a road map in three stages i.e. short term, medium term, long term to increase the brand
relevance. Initially HUL focused on educating customers by building awareness among
doctors and building strong direct to home network. It built customer confidence through
effective advertisement campaigns. HUL forged partnerships with NGOs, banks, and
government organisations to create a sustainable and scalable health intervention model.
Competitors like EFL had given higher retailer margins which pushed the product into the
market whereas HUL model of creating consumer pull forced the retailers to sell for lower
margins. The value offered by PureIt is higher which led to increase in sales and therefore
they were able to reach 1500 towns and positively affect 15 million people. Thus, retailers
chose to sell PureIt despite lower margins offered by HUL.
Company Description
HUL is a part of Unilever group. It was set up as Hindustan Vanaspati Manufacturing company,
Unilever’s subsidiary Company in 1931. Later, it merged with Level Brother India Limited in 1933
and with United Traders Limited in 1935 to form Hindustan Lever Limited (HLL) in 1956. In 2007,
HLL was renamed to HUL. Its corporate vision was to “earn the love and respect of India by making
a real difference to every Indian.” Core values of HUL include integrity, responsibility, respect and
pioneering.
Its core competencies include its distribution network which consists of about 2800 stockists
supplying 6 million of the 7.7 million retail outlets in urban and rural India. Its goods are
manufactured in more than 37 factories across India. Its competitive advantages include its huge retail
network of small mom-and-pop stores selling consumer durables, considerable advertising muscle,
safety net of larger corporate company and entrepreneurial network of underprivileged women under
Project Shakti.
Product Description
Pureit, a revolutionary countertop water purifier is the brainchild of the global water initiative project
at Unilever. Pureit was launched in four different models, each based on the same basic technology:
1. Classic: A 23 litre device with output of 9 litres and priced at $44 and with manual filling.
2. Autofill: A 23 litre device with 9 litres of output with automatic filling feature and priced at $70.
3. Compact: A 15 litre device with 5 litres of output with manual filling and priced at $22
4. Marvella: It was fully automatic water purifier; it was launched in 2010 at a price of $150.
Presently, the major channels for sales of POU systems which HUL used for selling its PureIt range of
water purifier were as follows:
1. Direct-to-Home Demonstration system: HUL built up a 4-tiered team of 10000 demonstrators in
partnership with external agencies.
2. Doctor’s Partnership Program: HUL reached out to a large number (around 10%) of doctors and
other influencers to create awareness about the efficacy of its product.
3. Retail Channel: HUL first focused on brand building for creating consumer pull.
4. Partnership channel: To increase penetration in rural areas, HUL partnered with several NGOs
and also leveraged its existing network of underprivileged women under the Project Shakti.
HUL’s target market for durable goods like Pureit Compact was the rural population of India, which
accounted for 72% of the country’s one-billion plus population. Owing to the lack of awareness, this
high potential market has historically been largely unexplored. For Pureit Marvella water purifier,
with its premium features, the top end market was the target.
Key issues
A survey was conducted in the suburban areas around Jamshedpur to gain insight into
consumer behavior with respect to the scene of drinking water. While the answers varied
from person to person, we were able to observe common themes that tied together the
different responses we had gotten.
In the current scenario, some of the respondents of the survey weren’t even aware of the
existence of a product like Pureit. The other persons who were aware of the project felt that it
was too expensive for them to afford. Water purifiers were considered a luxury. The initial
cost of purchase was therefore a barrier that has to be addressed. Moreover, the high
recurring maintenance costs also served as a deterrent. Even if they could afford it, presently,
the erratic nature of electricity supply was also a roadblock in converting intent of purchase
to an actual purchase.
Another requirement for water purifiers was a source of continuous water supply. However,
people in these suburbs lacked such a source. They had to rely on a common source of water
in the locality. These could be common water taps or common water tanks. The proximity of
these sources and the ease of using indigenous means for purifying water prevented
respondents to invest in a dedicated water purifier. They saw the product as a fancy way of
achieving the same results that they were already achieving using simpler means. “What
looks clean, should be clean” is what they believe in. So though HUL was able to identify the
need for clean water, they failed to realise that it does not necessarily translate to a ‘want’ for
clean drinking water.
Some of the people we had talked to did not take the concept of clean and filtered water very
seriously. They consumed water directly from the tap or employed rudimentary means to
purify it. Few of the most commonly used means were getting the water to a rolling boil and
letting it cool down before consumption. Other means such as letting the water rest to achieve
sedimentation and then decanting before consumption was the second most common method
across interviewees.
Another significant reason as to why people were skeptical about water purifiers was because
they were being shown the most expensive product by retailers during their visits to stores.
This simply discouraged the customer from even considering water purifiers as a product in
their list of needs because they would’ve needed to stretch the budget beyond their capacities.
The go-to market strategy for Pureit mainly involved three channels- Direct-to-Home
demonstration system, doctor’s partnership program and retail channel. The initial idea was
to primarily go with the D2H channel and build upon the other means of marketing. After a
strong head start, it was expected that Pureit would grow on to dominate the point-of-use
market. But with the entry of competitors like Eureka Forbes, Kent, and LG, Pureit was
unable to maintain their market share and revenue. As of now, they have entirely
discontinued selling their products through D2H channel. For the urban markets, Pureit was
unable to compete with new entrants like LG and Havells. Both these companies launched
their water purifiers less than 5 years ago. They were able to rapidly capture market share
thanks to their product innovations. LG came up with a stainless-steel interior whereas
Havells made maintenance cheaper and convenient.
Recommendations and rationale
With rising health concerns and increased awareness of the people together with a population
of 133 crores and a growth rate of 1.1% the untapped potential for a product like Pureit is
immense. Rapid urbanization is leading to improved sanitation, connectivity of electricity,
and continuous supply of water. This creates the right kind of backdrop as it checks all the
boxes in terms of prerequisites for owning a Pureit. Migration from rural to urban areas
ensures creation of new market. Migrating youth, owing to increased affordability, enhanced
awareness, and easier access to basic necessities serve as the perfect market for Pureit.
The regulatory environment in the country is a major influencer of company policies in any
sector. The current NDA government’s focus on cleanliness and sanitation can be capitalized
by the firm to fully utilize market potential. With the launch of Swacch Bharath Abhiyaan by
Government of India, people in the rural areas have developed awareness regarding the
necessity of clean water. The Department of Drinking Water and Sanitation, Government of
India has launched the National Rural Drinking Water Program under which almost 80% of
Rural India has access to purified water. HUL can use these policies to their advantage and
market the product as being synonymous with clean and pure drinking water.
With development of technology, increased penetration of mobile phones, and declining costs
of using a phone, people are now aware of lifestyle enhancing products like water purifiers
and the brands associated with these products. With growing health concerns being linked to
impure and unclean water, people might be inclined to spend a greater portion of their budget
on ensuring that their family gets safe drinking water.
Action Plan
Since the product is perceived as a luxury by the people and there is unwillingness to spend
more than INR 500 to INR 1000, HUL could also look at product differentiation, both in
terms of price and features to cater to various sections of the society, including the elusive
low income groups who are seen as the hardest to convert. HUL has to augment this strategy
through novel and unconventional marketing methods, primarily thorough sensitization
drives about the harmful effects of drinking impure water. The ad campaign should not only
focus on the product but should address the emotions of the consumer by focusing on the
safety of their families, benefits of a healthier lifestyle etc.
The macro factors, both on the demand side as well as regulatory side, make it conducive for
Pureit to re-enter the market with renewed vigor. Consumers in tier-II and tier-III cities
associate the effectiveness of a product with the brand ambassador who represents it in the ad
campaign. This is a major reason for the success of Kent RO water purifier as it has
capitalized on the popularity and fame of Smt. Hema Malini. HUL should try to emulate this
strategy and ensure they have a reliable and famous personality as their brand ambassador.
This should be coupled with non-standard channels of advertising such as YouTube, Google
AdSense, targeted ads on social media such as Facebook, and Twitter. These forms of
advertising should be employed over and above the conventional channels of television,
Newspapers etc.
Design changes need to be implemented for to stay abreast with changing tastes and
preferences of consumers and retailers. With aesthetics becoming increasingly important,
HUL must focus on developing a product that looks trendy and contemporary.
Another priority among consumers these days is after sales service. HUL must focus on
providing smoother service and could implement provision of DIY replacement kits to make
servicing easier for consumers.
SWOT Analysis
EXHIBITS
DATA PRESENTATION AND ANALYSIS
The following data has been collected from 117 people from the urban areas of Jamshedpur,
through an online survey:
The total number of people surveyed was 117. And the frequency of how many have water
purifier and how many do not use water purifier is given in the table below:
USE A WATER PURIFIER
FREQUENCY
PERCENTAGE
YES
88
75.2%
NO
29
24.8%
TOTAL
117
100%
Showing frequency of people of which company’s purifier, they use:
Table: Frequency of water purifiers people use:
COMPANY
FREQUENCY
PERCENTAGE
KENT
22
25%
AQUAGUARD
36
40.9%
EUREKA FORBES
12
13.6%
PUREIT
10
11.4%
TATA SWACH
1
1.1%
AQUA NATURAL
1
1.1%
LOCAL BRANDS
1
1.1%
ALFA
1
1.1%
AQUA SURE
1
1.1%
GRANT AQUA
1
1.1%
AQUVIO
1
1.1%
BLUE STAR
1
1.1%
TOTAL
88
100%
There is still a lot of market potential that PUREIT can tap into with aggressive advertising
and awareness among the lower strata.
CUSTOMERS SATISFIED OR NOT SATISFIED WITH THE CURRENT PRODUCT:
FREQUENCY OF PEOPLE SATISFIED OR NOT SATISFIED WITH THE CURRENT
PRODUCT:
PREFERENCE
FREQUENCY
PERCENTAGE
SATISFIED
82
93.2%
UNSATISFIED
6
6.8%
TOTAL
88
100%
If No, which brand would you like to switch to? (9 responses)
BRAND
FREQUENCY
PERCENTAGE
PUREIT
6
66.67%
AQUA GUARD
2
11.11%
KENT
1
22.22%
TOTAL
9
100%
Choice of people not using water purifiers:
Table: Willingness of people (who are currently not using) towards buying water purifiers:
WILLINGNESS
FREQUENCY
PERCENTAGE
YES
10
34.5%
NO
19
65.5%
TOTAL
29
100%
The urban market is not saturated as of now and if approached correctly PUREIT can capture
this part as well. This is behavioral problem which can be tackled with increasing awareness
about the degrading water quality because of the polluted ground water.
PREFERRED PRICE RANGE OF PEOPLE WILLING TO BUY WATER PURIFIERS:
FREQUENCY OF THE PEOPLE WILLING TO BUY AND THEIR PREFERRED PRICE
RANGES:
PRICE RANGE
FREQUENCY
PERCENTAGE
BELOW Rs. 1000
0
0
Rs. 1000- 2499
6
60%
Rs. 2500-4999
1
10%
Rs. 5000-7499
2
20%
Rs. 8000+
1
10%
TOTAL
10
100%
Majorly, people prefer to buy in the range of Rs. 1000-2499, the strategy of developing the
technology and reducing the price should be focused on by the company, as has been done till
now.
FEATURES/CRITERIA NECESSARY FOR PEOPLE WHILE BUYING A NEW WATER
PURIFIER:
CRITERIA PEOPLE CONSIDER BEFORE BUYING A NEW WATER PUEIFIER:
CRITERIA
FREQUENCY
PERCENTAGE
AUTOMATIC WATER
9
90%
END OF LIFE INDICTOR
6
60%
NOT RUN ON
5
50%
RO, UV, FILTERS
6
60%
BUDGET FRIENDLY
6
60%
LONG-LASTING FILTER
6
60%
FILLING
ELECTRICITY
INFERENCES
People consider automatic water filling the most basic need to be fulfilled by a water purifier,
manual procedures are too cumbersome. So HUL should primarily focus on developing a
product which is low in price and does not need to be filled manually. As these are the major
inferences from the survey conducted. Also there is a need for aggressive advertising as
people are not aware of a lot of products in the purifying vertical itself plus the strategy of
door to door selling should be started again.
Video: https://drive.google.com/file/d/1Q0UWI9p56yoAXcu56mR49ti5A2swBvj/view?usp=sharing