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Presented by

Anand Patel

2012-08-28

Contents

1. Purpose/Inspirations

2. Project: Tap filter market• Research question

• Definition

• Raw Data

• Scope of market• Price

• Countries and competitors

• Realisations

3. Testing of Brita product

4. Results

5. Potential of Aqua Optima• Market position

• Strategy

• My Idea

6. Summary of work experience

Project – faucet tap filter

Research Question

Is this a product that Aqua Optima should spend

money and resources onto develop in 2013?

Essentially:

• Investigate the market through Internet research

• Test a leading brand (BRITA 2289)

• Report

• My view if Aqua Optima should invest

Firstly, what is a faucet filter?

• Domestic, day to day filter

• Uses a carbon filtration process and fit directly on your faucet (tap).

PUR is the

second leading

brand in the

faucet filter

market

Research

My Priority: ‘What makes a good filter?’

• N:SRON\AquaOptima\Arnie stuff\

Scope of market

Price:

• Ranges from £15 to £1000

• Ideal domestic pricing is about £40

• Vast range of prices dependant on product

differentiation. Eg. BRITA/PUR

• Price is dependant on type of filter and extras

• For BRITA, they can charge extra through

branding/popularity

Scope of market

Competitors/Countries:

• Market leaders are BRITA and PUR

• Other outbound competitors:

• US: BRITA US, PUR, Culigan, Instapure, Omnifilter,

GE, Dupont . (Take a small percent of market

share)

• UK: BRITA UK Prozone (anomalous), Kinetico

• China/Asia: PUREEASY, XTK (abbreviated)

• More detail, refer to ‘Brief Evaluation Handout’

Realisations• Products tend to be misleading

Example Enviro, claiming ‘10 Stage Filtration’:

Stage 1: 30 micron filter pad Stage 2: 8 oz of KDF-55 filter agent Stage 3: 10 micron filter pad Stage 4: .5 Sub micron fine mesh coconut shell carbon Stage 5: 10 micron filter pad Stage 6: 1.3 oz of cation exchange resin Stage 7: 30 micron filter pad Stage 8: 3.5 oz of ultra fine GAC filter agent Stage 9: 2 oz of calcite Stage 10: 30 micron polishing filter

Testing of BRITA product

From first glance....

Test procedure

N:\SRON\AquaOptima\Arnie stuff\Tap research -

faucet.xlsx

Test Results

• Chlorine levels have been significantly reduced

• Turbidity has been reduced on both units

• Flow rate consistent on tap supply

• Hard water flow rate stagnated at interval 100L

• Scale testing needs to be confirmed

Results- hard water termination

Lime scale build-up

General conclusion of BRITA 2289

•Consumer convenient

•Works well under tap water conditions

•Inefficient under hard water mains

•Dependent on the quality of piping, which

varies with each household

•Reliable product

Market

• Not a saturated market

• Two main producers (BRITA and PUR)

• Acts as an oligopolistic market (like soft drinks

market)

• Set prices, where other firms follow

• PUR/BRITA are giants – Economies of Scale,

skilled labour and a great labour force.

• Product differentiation

However for Aqua Optima.....

WE CAN COMPETE:

• Same characteristics/experience/reputation

But the question is...

Will we get a return?

Response to question:

Is this a product that Aqua Optima should spend

money and resources onto develop in 2013?

Yes, as it is a strategy in opening a new market, which is

ESSENTIAL in times of recession.

My general strategy:

1. Differentiate - Expand filter range

2. Capital development

3. Exploit services scheme

4. Intellectual Property (IP)

Target Market – target consumers

Who?

• Ages of 25 onwards

• Sport... NSC?

• People with a poor access to drinking water. Ie. Greg

Allen!

Where to sell/retailers?

US: Kmart, Wayfair, Amazon US, Drugstore, Walmart, Savestore

UK: Amazon, Dyas, fridgefilter shop, Amazon UK

Europe: ProTechshop, Pixmania

A Target Market – infiltrating the

bottled water market

Cost per litre =

46p

Cost per litre =

3p

Cost analysis, over three years

Cost analysis

Marg. Cost Full Cost

Selling Price (unit + 1 filter):- 14.86 14.86

Selling price of 1 unit 10.12

Selling price of 1 filter 4.74

Marginal Cost:- 7.43 7.88

Contribution:- 7.43 6.98

Total Volume 3 Year Period:- 36,000 36,000 Faucet unit vol. only

Total Volume 5 Year Period:- 60,000 60,000 Faucet unit vol. Only

Development Costs:- 10,000 10,000

Capital Investment:- 35,000 35,000

Cash Generation over 3 Years 222,480 206,104

Payback number of Units:- 6,057 6,452

In-depth strategy and forecasts

Product Assessment Brand BRITA PUR Aqua Optima 1 Aqua Optima 2

Price (£) 44 30 £34.99 £59.99

Filter Price 30 20 £24.99 £34.99

Filter Type 2-stage 3-stage 2-stage 3-stage

Lifetime 3 months 4 months 3-4 months 6 months

Predicted retail prices, from market judgement

What I have learnt

• Never Judge a liquid by its smell!

•Strix is more than just kettles!!!

What I have achieved

• Prepared myself for University

• Gained experience/ solid background in

lab work

• Perspective on a job which is science –

related

• Perspective on research

Always look under a kettle before using it

(WARNING.. Scalding is a possibility)