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Marketing Case
Fairchild Water Technologies, Inc.
Rong Fan

I. Firm Summary a. What is the firm’s current mission/vision?
Gather background data on the possibility of Fairchild Water Technologies, Inc. entering the Indian market for home water purification devices. b. Describe the firm’s current brand.
Fairchild Water Technologies, Inc. was founded in 1980 by Eugene Fairchild. The company’s first product was a desalinator used by mobile home parks in Florida to remove salts from brackish well water supplied to residents and that lead a huge success. New products’ prices higher than other competitors. The company have over 4,000 employees. The company start to export sales from 1985 and almost reach $140 million in 2000. The company has a lot of sales offices, small assembly areas and distribution facilities in other countries. By late 1995. Two models had been sale to other countries and got a big success. In late 1999, the company has the “delight purifier”. c. What is the firm’s current unique selling proposition (i.e. what is it that they do that their competition doesn’t do)?
Delight Purifier. The Delight purifier used a combination of technologies to remove four types of contaminants found in potable water. The engineers at Fairchild Water Technologies, Inc. had interpreted several WHO reports on potable water and had combined the technologies to purify water to a level beyond WHO standards. II. Firm Marketing Mix Summary d. What are the firm’s current products?
Delight Purifier. e. What are the firm’s current prices for those products?
RS.5900.
f. What are the channels in which the firm currently distributes those products?
Dealers, smaller businesses, hospitals, bottle of water, resorts and direct salesforce. g. What are the forms of communication the firm currently uses to promote those products? Advertisements. III. Market Conditions Summary h. Who is the firm’s current target market? (There could be more than one.) Describe the target market and their buying behavior
The Frankfurt office targeted exclusively to consumer households- a home water filter for the company’s first product.
Chatterjee forecasts applied only to industry sales in larger urban areas when he estimate sales in India.
Middle-and upper-middle-class households.
Chatterjee had identified as his target market these 40 million households who are better educated, wealthier, and more health-conscious plus those in another four million households who had similar values and lifestyle. i. How big is the firm’s current target market and is it increasing or decreasing?
Many Indians felt the need for improved water quality. There is no large competitor having a national presence. The market could be in its early growth stage. Better educated, wealthier, and more health-conscious consumers took steps to safeguard their family’s health and often continued these steps year around. A good estimate of the number of such households would be around 40 million. j. Identify any potential political, legal, or societal factors that may impact the firm’s target market
If they have enough money to buy.
Even there is no big competitor, however, still need to think about the government will protect local enterprises and consuming habits.
A lot of families use traditional method for home water purification and mechanical methods. k. Identify any potential supplier or distribution factors that may impact the firm
If the company locate in one of India’s six Free Trade Zones the tax will be lower. However, still higher than the U.S. l. How much competition does the firm have? Is the competition powerful? List the firm and the competition’s current market share if given in the case.
There are three major competitors: Eureka Forbes, Ion Exchange, and Singer. Chatterjee estimated that ZERO-B captured about 7% of the Indian water purifier market.
Other competitors: Delta, Symphony’s Spectrum brand, The Sam Group, Batliboi.
There are at least 100 Indian companies made and marketed candle filters. The largest one is Bajaj Electrical Division. m. How is the firm’s current brand positioned relative to the competition? (i.e. How is their image/reputation different than their competition’s image/reputation? Is it different?).
Not mention, however, the company might be work on the distribution of the dealers. Because Chatterjee mentioned that their major competitors are weakly of distribution. n. Is the firm’s brand or unique selling proposition a sustainable competitive advantage (i.e. can it be copied by the competitors or new entrants)?
The technologies of Delight Purifier.

IV. SWOT analysis o. List your points in a table that looks like this: Internal Strengths | Internal Weaknesses | High quality and performanceHigh sales revenueHigh profit Focus on water purifier for several years | Higher prices No brand recognitionElectricity required for purifier | External Opportunities | External Threats | Increase demandIndian market has potentialCan get favorable tax treatment and high profitsLow cost such as cost of skilled labor | Still have some uncertainly elements in marketCumbersomeHigh taxCompetitors |

V. Case Summary p. Briefly summarize the events and facts in the case
Fairchild Water Technologies, Inc. was founded in 1980 by Eugene Fairchild. The company’s first product was a desalinator used by mobile home parks in Florida to remove salts from brackish well water supplied to residents and that lead a huge success. New products’ prices higher than other competitors. The company have over 4,000 employees. The company start to export sales from 1985 and almost reach $140 million in 2000. The company has a lot of sales offices, small assembly areas and distribution facilities in other countries. By late 1995. Two models had been sale to other countries and got a big success. In late 1999, the company has the “delight purifier”. Many Indians felt the need for improved water quality. There is no large competitor having a national presence. The market could be in its early growth stage. Better educated, wealthier, and more health-conscious consumers took steps to safeguard their family’s health and often continued these steps year around. A good estimate of the number of such households would be around 40 million. Chatterjee had been to Indian to gather information about to make decision to entry into India market or not. VI. Primary Case Decision(s)
Entry into India Market or not VII. Firm’s Alternatives q. List the alternatives the firm must decide from * Not entry into India market * Entry into India market 1) Entry into India market in the form of a joint working arrangement 2) Entry into India market in the form of a joint venture/acquisition considerations in skimming strategy. 3) Entry into India market in the form of a joint venture/acquisition considerations in penetration strategy. VIII. Qualitative Evaluation of Alternatives
• Not entry into India market If the company did not entry into India market, the company can avoid the risk of entering a new foreign market such as a lot of competitors and high tax and use those resources for other expansion opportunities. However, the company will lose some opportunities. Depending on the analysis of target market, the India’s demand is huge, if the company didn’t entry into India market, the company might be lose a lot of beliefs from India market. From the analysis, it is not that hard to take India market share since there is no big competitor in this market. The company will lose a good way to make their brand be more recognized in the international markets.
• Entry into India market 1) Entry into India market in the form of a joint working arrangement
If the company entry into the India market in the form of a joint working arrangement, the financial investment would be minimal. The fix costs will decrease to $15,000 from $40,000. The company would work individually with Fairchild personnel in the U.S. Use joint working arrangement, it would supply key purifier components to an Indian company which would manufacture and market the assembled product. Depending on there is no big competitors in that market, the company will get a good benefits from this market. However, use this form to entry into India market will face no control over the licensee’s operations. The company needs to pay royalty fee about RS. 280 for each unit sold in the domestic market and RS. 450 for each unit that was exported. The average royalty probably would be around RS.300. Of course, the company will faces on the risk of entering foreign market and their resources will put into this market, those resources will not available for other opportunities. 2) Entry into India market in the form of a joint venture/acquisition considerations in skimming strategy
If the company entry into India market in the form of either a joint venture or an acquisition and use skimming strategy. Beside the same advantages of 1) such as no big competitors, more control, and easy get market share, the profits will either from the joint venture operation would be split between the two parties per the agreement or from the acquisition would belong to Fairchild. However, do not need to pay royalty fee.
Product design for the skimming strategy would be noticeably superior, with higher performance and quality, a long warranty period, more features, and more attractive appearance.
The fixed costs would be much higher and depend greatly on the scope of operations. The price of the product will increase. The priced to dealers at RS.5, 500 and to consumers at RS. 5,900. Other disadvantages such as the company will have the risk will be the same with 1). 3) Entry into India market in the form of a joint venture/acquisition considerations in penetration strategy.
Compare with 2) if a penetration strategy were used and the product sold through a dealer channel, the price of product will reduce. IX. Quantitative Evaluation of Alternatives
1) Entry into India market in the form of a joint working arrangement
Assuming the units of sales will be the same of joint venture market | Two regions | Four regions | National market | sales | 55,000 | 110,000 | 430,000 | Price | 300 | 300 | 300 | Revenue (RS) | 16,500,000 | 33,000,000 | 129,000,000 | Revenue ($) | 264,000 | 528,000 | 2,064,000 | Cost ($) | 30,000 | 30,000 | 30,000 | | 5,000 | 5,000 | 5,000 | | 15,000 | 15,000 | 15,000 | | 25,000 | 25,000 | 25,000 | Total cost | 75000 | 75000 | 75000 | Profit | 189,000 | 453,000 | 1,989,000 |
1 Indian Rupee equals 0.016 US Dollar
2) Entry into India market in the form of a joint venture/acquisition considerations in skimming strategy
Dealer channels: $25000/0.016= Rs. 1562500

| Two regions | Four regions | National market | sales | 55,000 | 110,000 | 430,000 | Contribution | 650 | 650 | 650 | Revenue | 55,250,000 | 71,500,000 | 279,500,000 | Cost | 4,000,000 | 8,000,000 | 30,000,000 | | 1,562,500 | 1,562,500 | 1,562,500 | | 4,000,000 | 7,000,000 | 40,000,000 | Total cost | 9,562,500 | 16,562,500 | 70,156,250 | Profit | 45,687,500 | 54,937,500 | 209,343,750 | Direct salesforce | | | | Contribution | 500 | 500 | 500 | Revenue | 27,500,000 | 55,000,000 | 215,000,000 | Profit | 17,937,500 | 38,437,500 | 144,843,750 |

3) Entry into India market in the form of a joint venture/acquisition considerations in penetration strategy | Two regions | Four regions | National market | sales | 55,000 | 110,000 | 430,000 | Contribution | 300 | 300 | 300 | Revenue | 16,500,000 | 33,000,000 | 129,000,000 | Cost | 4,000,000 | 8,000,000 | 30,000,000 | | 1,562,500 | 1,562,500 | 1,562,500 | | 4,000,000 | 7,000,000 | 40,000,000 | Total cost | 9,562,500 | 16,562,500 | 70,156,250 | Profit | 6,937,500 | 16,437,500 | 58,843,750 | Direct salesforce | | | | Contribution | 200 | 200 | 200 | Revenue | 11,000,000 | 22,000,000 | 86,000,000 | Profit | 1,437,500 | 5,437,500 | 15,843,750 |

X. Recommendations
After the analysis, we recommendation that the company entry into India market in the form of a joint venture/acquisition considerations with skimming strategy.