Alternative for a candle plant

In the market of potable bottled water begins the real boom — during last year in this business came more than tens of new players. Their birth nonspecifically influenced on work of the great companies yet. But experts afraid of provoked novice sweeping growth of offers, can negative influenced on development this market. In chase of momentary gain, many new companies don’t take in account of specific character of «water» business, thus put on threat its future. These businesses attract new players by high efficiency and comparatively not large starting consumptions. By qualification of experts, subject to quality of production and assignable service, efficiency range from 70% to 300%. Moreover, top class reach not large companies, insert in business minimal tools.
Starting consumptions
Aleksandr Ostapenko the Head of company «Waterwork-Ukraine», which make and procurement special installations for producing and delivering bottled water says, that starting investments can composes from $18000. till $45000. Minimal range of installations consists of water purifying systems, machines for purifying bottles and filling water facility. «As we see on practice, investments cover a cost in range of 1—1,5 year, but after 3 years pure gain gives $200 - $300 thousands», — he says.

There are some ways of purifying water, which permit, in the end of manufacturing, impart it variable soft and saturate with mineral substances. Nowadays each company choose technique of purifying water unsolicited, experts says that properly constructed business shouldn’t orient only onto one type of production. Ostapenko says, “We don’t have to argue with clients, we should give them option.”

Nowadays companies, which work on this market, can be sorted on 2 categories: at the first category companies, which already work more than 3 years: «Clean Water» (BM Clear Water), «Tivay Ukraine» (BM «Eden»), «Etalon-Ukraine» (BM «Etalon»); at the second - experts put all other players. As a rule, the companies from the second category fix less expensive price on their production. But many producers, spare their money on fabrication, and usually, haven’t got even special complex of facility. What, naturally, influence on quality.

Market perspective view
The first business «with water» was producing and delivering bottled water to clients — 10 years back their work began «Ukrainian äæåðåëà», created at the expense of American and Ukrainian investors. From the beginning, this company organized market by themselves — business rivals appeared only after several years. Later «Ukrainian äæåðåëà» bought international company «Eden springs» (in Ukraine presented with branch establishment «Tivay Ukraine»).

As shown by the head of the company «WaterWork-Ukraine», in spite of the fact that original forming of business of delivering refined bottled water in Ukraine and Russia had dealing Americans, the way of developing markets appreciably differs. In Moscow this business has been developing very quickly and efficiently: stake on corporative clients, companies was making a huge profits. In Kiev in this period market was unready to accept this kind of production. «Situation in Ukraine remind me the Italian way of development: in both countries, at the start this business wasn’t perceived by market at all — for example, at the beginning 1990th commercial agents in Ukraine had to impose their production, explain clients that for the good potable water, purified by special filters, they have to pay, — says Ostapenko. — At the end of 1990th. in Ukrainian market came the new company «Clear water» (Moscow), they offered premium quality production with corresponding price. And existing on that moment current situation of the market allowed them virtually without difficulty entered in segment corporative customers. In Ukrainian companies started the flow out of customers, the condition haven’t rescued even proposed them (èìè*&^%$#@!!!!!!!) less expensive prices. Nowadays native «water» business åùå áîëüøå ïîõîæ íà èòàëüÿíñêèé, è âåëèêà âåðîÿòíîñòü òîãî, ÷òî âñëåä çà ñòðåìèòåëüíûì ðîñòîì ðûíêà íà íåì íàñòóïèò ðåçêèé ñïàä è ñîêðàùåíèå óðîâíÿ ïîòðåáëåíèÿ bottled water. The reason why — unfair competition from the new players, which, desire to save money, from the side of new players, which, desiring to economize, do not care of quality of the products, and, thus, discredit a market on the whole»

Confirms these conclusions and brand-manager of DP «Tivey Ukraine» the Sergey Kosyashnikov: «Large minus - exactly that at many companies going out to this market quite recently, there is no strategy of development and clear plans on a future carefully thought out - they live by today only».

By estimation of operators, in 2003 loud speaker of growth of market of delivery of bottled water clients made no less than 50%, at to this the capacity of one only Kiev region is estimated more than in a $6 million As specialists assert, only in a capital can be the users of such water to 25% habitants. Today the quantity of clients of all companies
in an aggregate makes the thousand about 25 On the prognoses of experts, this year business «on water» actively will begin to master regions. In particular, «Standard-Ukraine intends in earnest to settle in Crimea: now a company completes the reconstruction of a new factory on production of butilirovannoy water in Sevastopol. The «last 8 years we worked, mainly, to the market of Russia, however today many Ukrainian regional companies are interested in the developed business plans for construction of this business, with some of them are already negotiated on acquisition of equipment», - the director of the company «Âàòåðâîðê-Ukraine» marked.

Strategies of success

The representatives of large companies assert that delivery of bottled water - it foremost is service, and to provide stability of work it is possible only by high loyalty of clients. But to attain it becomes all more difficult. Now users of steel considerably more legible: they produce the requirements not only to quality of products, but also to service, some are taken into account even time of delivery of water. In such terms a low price far not always guarantees to the company permanent demand on its products.

«Revision on market usually take place only in office’s segment, moreover struggle, mainly, is proceeding for already existent customers», — notes Sergey Kosyashnikoff. And at the same time frequent changing customers makes work of company unprofitable, therefore great enterprises try to avoid from their part such heavy casualties.

«Prices of new companies less cost on 30—40%, than we have, — says director of company «Etalon-Ukraine» Alexander Kryuchko. — But as distinct from them we have certified production and so totally sure in quality of our output. Authority of company on market and image of merchandise mark bring us to the most effective advertisement «by word of mouth» — last time our clients often bring to us new customers».

Experts advise for new investors to investigate closely experience of realized projects of purifying and delivering water and also not to make faults, which were already made others. Especially thoroughly should analyze faults decisions in marketing and tactical slips of predecessor companies. The success of business on “water” in many respects depends on rightfully marketing politic, organizing advertisements campaign.

Marketing strategy of production progress of each player different from others, but representatives of companies unanimously asserts that advertisements on television and in mass media not effective. Mainly, is having used internet-advertisements. Also quite effective advertisements are on vehicles, which delivers something.

The majority of market segments of delivering bottled water haven’t filled up until now: many players master segments corporative clients, even so nobody of them don’t deliver potable water for industrial complex, virtually not involved in kids’ target group.

Svetlana Popel