PUREIT CASE STUDY

1.What was so compelling for HUL to develop a product like Pureit? What factors accounted for its success?

At a time when the global mantra “Blue is the new green” indicated that availability of clean water was essential, HUL found the opportunity to introduce a water purifier product in the middle and lower class segments. Most market players were offering the higher end models of water purification and hence there was an open market for the affordable water purifier model. The opportunities for innovations meant that HUL could work like a start-up and have a dedicated research and development team, which in the long run could provide very compelling prices for its products. Statistics like the one that reports only 60% of water in India was usable showed that there was a huge potential for clean water in the market.

The factors that accounted for the success of Pureit are: 

a. The low prices that it offered its product compared to the competitors.

b. No need for electricity.

c. Targeted the open market of lower and middle class.

2. Explain the product portfolio of Pureit? How would you explain the rationale for current offerings of the company?

Pureit offered mainly 4 types of product varieties. The initial launch in 2008 saw the classic model being released at $44 The classic was a manual fill type water purifier, initially aimed at bringing an affordable water purifier into the market.

The next step was to improve on the existing model by ensuring a better consumer experience. The company offered the autofill model that made the work of consumer less. Such a system would draw water from the supply when available and the consumer didn’t have to worry about filling water in the compartment. This product was priced at $70.

The 2 latest models are the Compact and the Marvella. The compact was a cheap version of the classic that looked to make the cost of clean water even more affordable. Marvella on the other hand is a fully automatic water purifier that was sleek and offered a multitude of benefits. This was meant to conquer the high class market. The compact costs $22 and the Marvella costs $150.

The reasons for the launch of the compact and the marvella are as follows: the compact was a means of offering a very low cost product for ensuring a strong market penetration. Pureit had to reach the masses and reducing costs was one of the significant ways of ensuring this. Marvella on the other hand was aimed at ensuring a complete market presence and eventual dominance of Pureit. Hence marvella was offering compelling features at a price range significantly higher than the other products from the company.

3. What was so special about the Water Team that enabled the success of the project?

The water team was built like a start-up. For HUL to become a successful player in the water purifying market, it had to ensure that the employees had a personal touch with the product. This was done by deviating from usual company norms of cycling employees. Usually cycling ensured a wider experience base. However, it was important that a few key players were retained in the same role for Pureit. This could ensure that the employees were personally accountable for the success or failure of the product. This kind of setup also allowed the employees to learn from their mistakes and could eventually thrive from failures. 

Another important aspect was that the knowledge that there was a larger safety net in the form of HUL allowed the company to “fly” in the words of Yuri Jain. Therefore, such a setup allowed the employees to work with a start-up attitude while also not having the risks associated with failures in normal start-ups.

4. How would you interpret the consumer behaviour?

Consumers wanted not just a clean water supply, but needed to see in physical interpretation that the water had been purified. This was a common feature for all consumers who preferred to physically see that their water has been purified. Apart from that, consumers also felt the need to have value for their money. This meant that due to the huge variety of options available for them, it was possible to bring down costs. This could be seen even in the higher end market that saw its prices drop significantly. 

Coming to Pureit, it wanted to entice the consumers using a few strategies like low price and also using doctors to recommend their product. This helped in gaining the trust of the market and hence allowed Pureit to be successful. This strategy also resulted in the pull effect wherein, retailers were forced to bring in the Pureit products due to demand from the consumer end. Hence we can conclude that the consumers were happy with the product offerings of pure it.

5. Explain the competitive scenario in the product segment?

The water purifier segment is highly competitive with over 150 players in the market. There was always the presence of higher end product offerings that used the UV and RO technologies to draw in customers. However, Pureit was one of the first to let its presence be felt in the lower price category. This would however not be for too long. The Tata company introduced the Swach. It was also a low priced entry that made the market fiercely competitive. With India’s POU water purifier market estimated to hit 41.1 billion by 2014, there is huge potential and lots of competitors for the same. Some of Pureit’s fiercest rivals include the Tata Swach, the EFL Aquagaurd, the Kent RO and the EFL Aquasure. Currently the market is dominated by the UV and RO technologies but with the Pureit, Swach and Aquasure launches, this is set to change.

 This wasn’t all of it though. Many other players like Phillips, Godrej with its “Krystal’, and Asian Paints with its water bottle purifier also entered the market. 

Another important competitor later came into the picture in the form of Proctor and Gamble’s sachet packs capable of purifying 10 litres of water per sachet. The pricing was also quite good at $0.01 per sachet. This is the current scenario of the market competition.