Hector Beverages’ Paper Boat: Diffusing Innovation through “Drinks and Memories”
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.
- 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. ......................
The classroom discussion was facilitated under three broad sections as explained in Exhibit (TN)-I...........