Selling Water: How do you market something as basic as water?

 

Business Mirror

 

Sunday, 06 March 2011

In Photo: Carson Tan, GQWEST Inc. President and CEO

How do you market something as basic as water?

This is the question that Carson Tan, president and CEO of GQWEST Inc., which is behind the Aquabest brand, has pondered and worked at for more than a decade. In the course of finding the answer, he has revolutionized the industry that has long been stagnating from years of price wars.

The Philippine water refilling industry first emerged in the mid 1990s when the deteriorating state of Metro Manila’s water pipelines made access to potable water difficult. This led to a surge in the number of water refilling stores in the country. Overnight, there was a water store in every corner leading to intense competition as everyone fought over the same customers.

It was in this environment that Tan entered the water industry in 1997. At the time, Tan was in the packaging business when a group of friends approached him to invest in a water store. The store, then called Bestlife, was located in Diliman, Quezon City. Things were good at the start as purified water then was considered a status symbol.

However, as more and more water stores opened the industry began to compete more and more based on price. This intense price-based competition resulted in eroded margins leading many players to close down. At the same time, the original store was also feeling the crunch, while at the same time experiencing the effects of mismanagement on the part of the managing team.

Initially, unknown to Tan, the store was actually hemorrhaging financially.

Eventually, the combination of stiff competition and mismanagement brought the company to the brink of bankruptcy. While the other partners wanted to give up, Tan and Neil Delgado, his fellow partner and currently the company’s general manager, thought otherwise, seeing that the water industry was very promising. That is why he raised P1 million and bought out the other partners in order to reorganize the company.

Turning around the company was easier said than done as most of the million pesos raised went to paying off creditors.

“We had to immediately pay P750,000 to our creditors because if we didn’t we couldn’t get the needed supplies. So you can imagine the difficulty of running a company with only P250,000 in operating capital,” says Tan.

Still despite the difficulties, Tan soldiered on and eventually turned the company around.

One of the challenges they faced at the beginning was how to differentiate themselves from the mom-and-pop stores that proliferated the market. Initially, the company focused on adding more steps to the filtration process. However, competitors soon followed suit and the company realized they can’t keep it up and needed to do something else.

That is when the company decided to focus on the core values of Quality, Service, Value and Technology or QSVT. The core values express the company’s commitment to providing the best quality and service to their clients. Proof of the company’s commitment to excellence can be found in the ISO 9001 certification it received from Bureau Veritas. The ISO certification is given to companies who comply with globally recognized business best practices. To date they are the only water franchise in the country to receive this certification.

Another cornerstone of the company’s strategy is its investment in utilizing advanced technology in its operations. The company has secured the exclusive rights of Grander Technology from Austria. It works by realigning water molecules into microclusters to allow for better adsorption by the body and put back the form to its natural configuration. Overall, by reorganizing the water molecules Grander Technology energizes them and makes them more efficient, leading to better water that will reinvigorate you to your very core.

Finally, the company aims to give back to society and the environment through its Corporate Shared Values (CSV) program. Unlike ordinary CSR programs that emphasize giving back to the community, CSV emphasizes giving back more than one takes. This is evident in the combo store concept pioneered by the company; the concept not only saves water but also makes better use of it by utilizing the water effectively with environmentally friendly detergents. The company also has a tie-up with the Haribon Foundation to plant trees and other fundraising and awareness campaigns.

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