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Hector Beverages’ Paper Boat: Diffusing Innovation through “Drinks and Memories”

CASE STUDY, CONSUMER BEHAVIOR
ET Cases, 11 pages

Case Preview

Hector Beverages’ Paper Boat: Diffusing Innovation through “Drinks and Memories”

 

“The company (Hector Beverages) sells nostalgia, 250ml at a time.”1

– Diksha Madhok, Ideas Editor, Quartz


Paper Boat, an ethnic drinks brand launched by Hector Beverages in 2013, found a ready audience among the urban Indian consumers who used to relish variants such as aam panna (a juice made from raw green mangoes) and jaljeera (cumin water) in their childhood but no longer had access to them in the urban areas. Besides developing variants that satiated the emotions of consumers, Hector Beverages increased the consumer base for Paper Boat by selling its products on airlines and five star hotels. Besides offering tastes that rekindled memories of one’s childhood, Paper Boat’s products contained no preservatives on account of using best practices available globally in packaging. This was a facet that also appealed to consumers. Stylish and elegant packaging and facility to order its products online also resulted in Paper Boat gaining prominence in the ready-to-drink beverage category. Hector Beverages also created advertising campaigns that adroitly established linkage between Paper Boat’s variants and consumers’ memories of their childhood. However, would Paper Boat be able to overcome the challenges related to sourcing of its unique ingredients and have the wherewithal to expand beyond the urban centres? ......................

 



1 Diksha Madhok, “This company sells Indians beverages with a dose of nostalgia, in a way Coke or Pepsi never can”, http://qz.com/234045/this-company-sells-indians-beverages-with-a-dose-of-nostalgia-in-a-way-coke-or-pepsi-never-can/, July 14th 2014 (accessed date:March 27th 2015)

Teaching Note Preview

Hector Beverages’ Paper Boat: Diffusing Innovation through “Drinks and Memories”

 

Synopsis

This case study serves as an example of how thoughtful innovations can be diffused through engaging consumer communication that would propel a better adoption, especially for newly launched products. Paper Boat, a ready-to-drink juices brand launched by Hector Beverages in August 2013, quickly gained market acceptance in India’s beverages category. By October 2014, it was selling 1.5 million packs per month. This was primarily on account of offering variants that were missing from the urban landscape but were very much a part of childhood of adult Indian consumers. Some of these variants were aam panna and jaljeera. Hector Beverages employed innovative distribution channels for Paper Boat products such as airlines, five star hotels and ecommerce to get Indians familiarized to its unique variants. Other key factors that helped urban Indian consumers to lap up Paper Boat’s variants were the non-use of preservatives, attractive packaging and advertisements that rekindled memories of the days gone by. However, would Paper Boat’s growth be constrained by its supply chain challenges and premium pricing?

Prerequisite Conceptual Understanding (PCU)/Before the Classroom Discussion

This case study presupposes an understanding of the concept of diffusion of innovations. The participants were asked to read the following to help them better connect the concepts:

  • • Leon G. Schiffman, et al., “Consumers and the Diffusion of Innovations”, Consumer Behavior, 10th Edition, Pearson Education Inc., 2010 – To understand the concepts of diffusion of innovation, including the channels of communication and social system, newness of product with regard to cultural association and consumer innovators

 

The students should be encouraged to view the following social media video and advertisements of Paper Boat:

  • • “A Paper Boat Ride Down the River of Memories”, https://www.youtube.com/watch?v=t7I6zYp0CU8, March 12th 2015
  • • “Paper Boat’s Jamun Kala Khatta”, https://www.youtube.com/watch?v=kZCGwipK2XE, March17th 2015
  • • “Paper Boat’s Aamras”, https://www.youtube.com/watch?v=dzAdsXpKun4, March 17th 2015
  • • “Paper Boat’s Aam Panna”, https://www.youtube.com/watch?v=yyVPgxIbO0I, March 17th 2015
  • • “Paper Boat’s Jaljeera”, https://www.youtube.com/watch?v=rdPnF2YTFdw, March 17th 2015
  • • “Paper Boat’s Rasam”, https://www.youtube.com/watch?v=KGFQ3lbWYoU, March 17th 2015

 

Case Positioning and Setting

This case study is positioned for discussing the aspects that companies have to factor in when designing new products and how they can go about creating markets for such products. Ideally suited for “Consumers and the Diffusion of Innovations” chapter of Consumer Behavior course, this case study can be used in MBA, Executive MBA programs and Product Development module.

Assignment Questions

  • I. What are the key elements of the diffusion process? What factors contribute to consumers accepting a new product? Has there been any change to the pattern of adoption of new products over the years?
  • II. Was there anything innovative about Paper Boat’s marketing mix? What were the strategies adopted by Paper Boat with regard to its Customer Value Proposition, Customer Offering and Customer Communication that put Paper Boat in a different orbit? What was Paper Boat required to do at the backend to get the aforementioned 3Cs (Customer Value Proposition, Customer Offering and Customer Communication) right? Demonstrate how the diffusion of innovation happened in case of Paper Boat.
  • III. ......................

 

Case Analysis

The classroom discussion was facilitated under three broad sections as explained in Exhibit (TN)-I...........

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Abstract


This case study's objective is to sensitise the participants/students to the process of innovation diffusion and the role of culture in product innovation. It enables a discussion on how a company can tap culture to create a new product that can quickly gain acceptance among consumers. It also throws light on what other factors a company should take into account when developing a product that is perceived to have an edge over existing offerings in the market on certain aspects. Paper Boat, a beverage launched by Hector Beverages in 2013, offered ethnic juices that were very much a part of India around 25 years back, but today are difficult to access at least in urban areas. Its variants such as aam panna and jaljeera found ready audience among the rich urban consumers. Paper Boat used no preservatives and stood out on a crowded retail shelf because of its attractive pack design. The case study further throws light on how Hector Beverages employed innovative distribution channels such as upmarket hotels and an e-Commerce website to reduce the impact of a fledgling distribution network. This was besides using a tagline and marketing campaign that effectively rekindled memories of one's childhood. However, will supply chain challenges restrict Paper Boat from launching new variants and will premium pricing limit its expansion plans?



Pedagogical Objectives

  • To introduce the theoretical constructs behind nuances and importance of innovation diffusion process and discuss on how the innovation diffusion process, through its myriad contours, affects the consumer behavior
  • To relate innovation diffusion process to Hector Beverages 'Paper Boat' ethnic beverage and analyze how Paper Boat's innovation has spiralled through various dimensions of a new product launch and penetration
  • To discuss and debate on the impending and innate challenges for companies that opt for a niche positioning i.e., in the name of differentiation, would such companies be closing the doors behind them?

Case Positioning and Setting

This case study is positioned for discussing the aspects that companies have to factor in when designing new products and how they can go about creating markets for such products. Ideally suited for 'Consumers and the Diffusion of Innovations' chapter of Consumer Behavior course, this case study can be used in MBA, Executive MBA programs and Product Development module.




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