The End Price
In India, usually the end price for the "Packaged Drinking Water" is more or less the same (Rs.20) , whereas the "Packaged Natural Mineral Water" prices vary. However, almost 99% water you see in Indian Markets is Packaged Drinking, priced at Rs. 20. And here I wish to talk about that. The thirst quenching market.
Option to control just the distributor pricing
The producer, just has an option to control what price he sells the water to the distributors and NOT the end pricing [a few exceptions like shweppes]. In this scenario, I have observed 3 types of producers :
- Type "A" : The National Level brands
- Type "B" : The Local Brands
- Type "C" : Non-Brands
Type A usually offers 50% margin to the Wholesaler , whereas Type B offers 60 followed by Type C which gives almost 70%.
What Should Your Policy ?
We have observed, that just by reducing prices & matching the lowest you won't survive. Similarly, just by matching the highest, also will effect the same. You can follow a general pricing policy like follows :-
- Have a 3 -year plan to match the Type "B" Local Brands, followed by Type "A" in 5-7 years
- Start with price little higher that Type "C"
- Gradually match to "B" within 3 years
- Same in 5-7 years with "A"
Is it that simple ?
Yes, simple, but not easy. You will constantly need to create your "why"s. That's the differentiators.
(For Pricing of Natural Mineral Waters, read the case study )
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