Coke, Tatas watch out: Patanjali’s bottled water plan could create a splash | Moneycontrol.com

Predatory pricing strategy can’t be ruled out

Patanjali’s pricing strategy has been varied depending on the product category under question. While for Ghee, Patanjali enjoys a certain premium pricing with respect to other national players. In case of honey, Patanjali has resorted to predatory pricing. In case of bottled drinking water, we expect Patanjali to opt for the latter, as the product segment is reasonably commoditised.

Premiumisation could partially rescue

A few of the major industry players in the segment have moved up the value chain by offerings value-added products like enriched vitamins, flavoured drinks and so on. While such premiumisation could help in defending margins to an extent, incumbents should brace for tough competition, especially in the value segment.

Currently, NourishCo (a JV between Tata Global Beverages and PepsiCo) has a similar offering under the brand “Himalayan”, with the same being bottled in Himachal Pradesh. Tata Global Beverages has recently introduced new variants and entered new markets (including the USA). However, this JV of Tata is still waiting to turn profitable (loss of Rs 21 crore in FY17).

In the coming days, it won’t be surprising if we witness a significant change in the 3Ps of marketing for the bottled water category — which is in terms of product pricing, place (distribution, logistics) and brand promotions.

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Coke, Tatas watch out: Patanjali’s bottled water plan could create a splash – Moneycontrol.com.