BUCHAREST UNIVERSITY OF ECONOMIC STUDIES

Faculty of Business Administration – English section

Borsec - Czech Republic Entry

Final project

Coordinating teacher: Alexandru Dima

dima1alexandru19@stud.ase.ro
Lecturer, PhD Daniela Ioniță

Subject: International Marketing Petre-Cornel Grigorescu

grigorescupetre19@stud.ase.ro

Winnie M. Seumo

seumomatchuiessiwinnie19@stud.ase.ro

January, 2022
Table of contents

1. The Product…………………………………………………………………………..3

1.1. History…………………………………………………………………………...3

1.2. Characteristics & Benefits……………………………………………………….4

1.2.1. Characteristics…………………………………………………………....4

1.2.2. Benefits…………………………………………………………………..5

1.3. SWOT Analysis………………………………………………………………….5

2. The Market…………………………………………………………………………...6

2.1. History…………………………………………………………………………...6

2.2. Competition……………………………………………………………………...6

2.3. Product Segmentation…………………………………………………………....7

2.4. Targeting…………………………………………………………………………7

2.5. Positioning……………………………………………………………………….8

3. Marketing Mix………………………………………………………………..……...8

3.1. Product…………………………………………………………………………...8

3.2. Price……………………………………………………………………………...9

3.3. Place……………………………………………………………………………..10

3.4.
Promotion………………………………………………………………………..1
0
The Product
History
There are not a lot of products in the world with the same longevity and prestige as Borsec.
The leader of the Romanian mineral water market celebrates 215 years of tradition and of
industrial exploitation this year. The Borsec springs are in the North-East part of Romania, in
the Borsec depression, Harghita county, in the heart of the Carpathian Mountains. Borsec
resort is located at an altitude of 900 m above sea level.

From the first bottling, in 1806 until 2016, Borsec produced 34 billion liters of water. The
bottling of borsec mineral water has been carried out over time by several entrepreneurs, and
from 1945 the bottling activity was continued by various contractors until its nationalization
in 1948. In 1998, the former state enterprise "Queen of Mineral Waters Borsec'' was
transformed into the private company Romaqua group S.A. Borsec, one of the main
producers of mineral water and soft drinks in Romania. The company has owned a mineral
water bottling plant in Borsec since 1999 founded in 1998. With 11 brands in its portfolio:
Giusto, Brifcor, Cico and Quick Cola soft drinks, Giusto Natura and Giusto Natura Plus non-
carbonated soft drinks, Stânceni, Aquatique and Borsec natural mineral waters, Metropolitan
coffee and Albacher and "Dorfer'' beers.
Characteristics & Benefits
Characteristics
Borsec is a line brand, with two product brands: natural carbonated mineral water and non-
carbonated mineral water. There are more than 15 springs of natural mineral water. In
addition, in addition to these springs, there are numerous boreholes that demonstrate the
potential of these mineral water reserves. Their chemical composition is almost identical and
stable. From the point of view of flow and quality, the most important are sources 1 and 2 for
carbonated Borsec water.

Its emblem is represented by a bear in the forest, alluding to the name given to it, by the king
of the forest, making an analogy with the title given to the product, by "Queen of mineral
waters". It is therefore an allusive emblem. The logo is an iconographic one, the brand name
being accompanied by the brand emblem, and the title "Queen of mineral waters”.

The Borsec packaging is a classic one, it has not undergone many changes over time, so it is
very easy to associate with the brand. The label contains the same type of information on
chemical composition, bottling, specifications on how to use, etc. The bottles are transparent,
dark blue, and the main label shows a landscape with mountains, forests and spring water,
and the dominant colour is green, which signifies nature. Bottles of non-carbonated water are
differentiated from those of carbonated water by the plastic that has very prominent streaks in
relief, a trademark of the brand.

Borsec's personality is a strong one, the brand identifies itself in the minds of consumers with
the "Queen of mineral waters", being internationally recognized. Due to its reputation, Borsec
Water has won numerous awards, over 25 medals and many other titles.
Benefits
Borsec Mineral water has multiple health benefits. It contains a mix of bicarbonate, calcium
(an extremely important mineral for bones, teeth, and muscle flexibility), magnesium
(contributes to the normal functioning of nerves and muscles), sodium (sodium helps
maintain internal balance), an insignificant iron content (helps to rejuvenate the skin and
improve physical) and a high and stable concentration of natural CO2. This diversity of
chemical constituents gives the water special healing qualities compared to other mineral
waters.

Due to a very balanced mineral composition, a low iron content and viable over time, it has a
very pleasant taste, being one of the most appreciated mineral waters in the world, being
exported to many countries, such as: USA, Israel, Cyprus, Germany, Hungary, Republic of
Moldova.

SWOT Analysis
This SWOT analysis is a great way to assess the overall state of BORSEC to properly plan
the development project considering its strengths, eliminates weaknesses, and effectively
exploits opportunities. and to address potential threats.

Strengths
Ø The leader on the natural mineral water segment in Romania

Ø Well known logo

Ø The strongest bottled water brand in Romania

Ø National and international reputation established (especially Eastern Europe)

Ø Good quality of products - its curative effects (rich in magnesium)

Ø extraction and bottling facilities at E.U. quality standards (Advanced technology)

Weaknesses

Ø High transportation costs

Ø poorly developed exports

Ø product range is not diversified

Ø Lack of offers and promotions

Ø very few commercials

Ø price is higher than for its competitors

Opportunities
Ø Sales growth by product development and market penetration, such as offshoots of the
bottled water market (sugary or vitamin water) in markets where Borsec is already
present, namely Romania and Hungary

Ø Increased recognition and prestige of Romanian mineral water, specifically the Borsec
brand’s, as well as the spring it is produced from

Ø international expansion

Threats
Ø Direct competitors: Mattoni, Rajec, Magnesia, Bílinská, Baldovska

Ø Already established producers on the Czech Republic’s bottled ordinary water market

Ø The risk of botched market penetration leading to large losses

The Market
History

The large mineral water market in today’s Czech Republic was largely developed during the
political union with Slovakia, under Czechoslovakian colors. Many of the brands present
today in either of the two countries are also present in the other as a result, with Slovakian
brands being important players on the Czech bottled water market. The large presence of
Slovakian brands on the Czech market may be due to the relatively few fresh water sources in
the Czech Republic – only 11 springs as compared to the 28 Slovakian ones. (European
Commission, Feb 2019 Consultation)
That being said, the Czechs’ history with mineral water goes much further back in history.
The first and oldest Czech mineral water company, Bilinska Kyselka, was founded as far
back as 1664, when the land now known as the Czech Republic was part of the Duchy of
Bohemia and incorporated into the Holy Roman Empire.

Competition

Due to the historically established brands, the Czech market is rather crowded – brands such
as Mattoni, Rajec, Magnesia, Bílinská, Baldovska and many others compete for market share,
but this also means that the market is indeed fragmented between all of these firms. Some of
the companies have developed related products such as artesian, flavored or vitamin water,
with Magnesia and Bílinská excelling leading in this regard, but otherwise most of the brands
deal exclusively in unflavored mineral water.
Product Segmentation
One segmentation method that can
prove effective in this expansion is
the ROPER method, as developed by
GfK AG. An explanatory variation
of the most effective methods to
appeal to customers from a certain
part of a quadrant is available on the
right.
According to GfK, should we split
European cultures into Eastern and
Western European, we would find
that customers from these regions
fall mostly on the right side of the
spectrum, with Western Europeans
tending towards materialism and price orientation, and Eastern Europeans towards
postmaterialism and quality. (GfK AG, Lifestyle Research 2007)

Targeting
As bottled water is a common household good, as well as one of the more essential products
someone can buy, Borsec water shall continue to be aimed towards grocery shoppers and not
focus on a specific segment.

Borsec should focus mainly on

clientele from the Settled,
Rational-Realist, Homebody and
Organic segments by focusing on
an image of “premium” bottled
water. These segments are most
prevalent in Western and Eastern
Europe, and as the Czech Republic
is a cultural mix of the two, these
segments should prove to be the
best choice. Although bottled
water is not the most fun product
to have, even the most adventurous
of customers will buy it for their
day to day consumption, so the
remaining ROPER segments
should not be excluded either.
Positioning
The Borsec brand products that are made for the Czech market will be marketed with a focus
on them being “premium” products, emphasizing the high quality standards maintained in the
production process and the many awards the brand has won since the company’s conception.
Although the oldest brand of mineral water on the market would still be Mattoni, Borsec can
nonetheless advertise its long history as a producer in order to cater their products as the
higher quality alternative, ultimately aiming to be perceived like the Aqua Carpatica brand is
perceived in Romania.

Marketing Mix
Product
Physical characteristics of the product:

The color: Flat and carbonated water are both colorless.

The quantity: Borsec mineral water will be distributed in bottles ranging from 500 mL to
19L.

The taste: The special development of the Borsec bottling industry is primarily due to
consumer demand, which appreciates the pleasant taste of the water as well as its high
chemical stability that places it in the top of the best waters in the world.

1. Name and brand. Borsec is an internationally renowned brand. In February 2004, Borsec
was named "Best Mineral Water in the World'' at the Berkeley Springs International Water
Tasting Awards in West Virginia, USA. In 2005, Borsec Carbonated Water was awarded the
Special Gold Medal, and Borsec Flat Water was awarded the Gold Medal at the "World
Quality Selection'' organized by the International Institute for Quality Selection in Brussels,
Belgium.

Related to the Czech market, the name Borsec has no other connotations that could damage
the brand image.

2. The packaging. As mineral water is sold in both plastic and glass packaging on the Czech
market, we will be using the same packaging in order to be able to compete with the existing
companies. Borsec mineral water will be exported in the following varieties:

· 0.5 L glass bottle, elegant and refined for prestigious locations.

Packing 6 / carton box.

· 1.5 L glass bottle, elegant and refined for prestigious locations.

Packing 6 / carton box.

· 0.5 L plastic bottle.

 Packing 12 / carton box.

· 1.5 L plastic bottle.

Packing 12 / carton box.

· 5L, 10L and 19L plastic bottles, only for flat water

3. Label. This is a required item and contains all the mandatory specifications, written in both
Czech and English. The color and shape of the label will remain the same. We will provide
the potential consumer with all the data needed for accurate viewing and information.
regarding the chemical components contained in the water, the method of use, the shelf life,
the approvals obtained and last but not least information about the manufacturer, the product
brand and the slogan which will initially remain the same.

4. Guarantees. Romaqua Group was the first Romanian bottling company to receive the ISO
9001 quality management system certification. Two other management systems implemented
are HACCP (Hazard Analysis and Critical Control Points) and IFS (International Food
Standard), on ensuring food safety from a hygienic and sanitary point of view, certified by
the famous German company TUV CERT.

Price
Price is one of the most important aspects of selling a product. Pricing can determine if that
product will be successful or not, being the main indicator if the ratio between value and
quality is correct, customers having the last word.

The factors that influence the determination of prices are very diverse, the most important
being the cost of production which will be the same for both domestic production and export.
Shipping costs have the largest share in the price of the product. Romaqua Group will use
land transportation to export mineral water in the Czech Republic. As a strategy we will
adopt the penetration pricing strategy which is a safe option, thus avoiding the price war
between competitors. The competition in the Czech Republic for mineral water is quite
fierce, as tap water is usually safe to drink, which is another reason for resorting to this
strategy. We will also take into account the level of demand when setting the price.

On average, a 1.5L bottle of water costs 12.66 CZK in the Czech Republic. In order to
successfully penetrate the market, we decided to set the price of a 1.5L water bottle to 10
CZK. The price for a 1.5L glass bottle, which is more expensive to produce, will be 15 CZK.
As the amount of mineral water increases, the price will decrease per liter, so for a 5 L bottle
Czech consumers will have to pay a price of 30 CZK, for a 10 L bottle a price of 55 CZK,
and for the 19 L bottle of water the price will be 105 CZK.

Place
Distribution consists in making the connection between the producer and the final consumer.
In order to have a successful product on the market, an efficient distribution network must be
set up, which minimizes costs and which brings certain advantages in line with the way the
market is approached. In order to establish a distribution network, company- and consumer-
specific policies and strategies must be formulated.
We decided to create a system based on the introduction of an intermediary or agent in the
distribution process. We will use an external intermediary because it specializes in the local
market and can easily distribute the product to traders.

This distributor will connect the manufacturer with supermarkets and will facilitate an
efficient distribution channel. Also, the promotion will be much easier to do with an
intermediary on the spot, who can suggest ways to improve the product and the
advertisement.

Promotion
Promotion is the pillar of the strategy adopted for this export business. We want to rely
heavily on effective techniques and methods to build consumer loyalty and build an
impressive brand image.

Using the technique of a lower price leads us to create an aggressive campaign and large
investments in this regard, the company must focus on the long term and build a loyal
customer base.

There may be situations where the company's intentions are not well exposed to customers
due to differences in culture. That's why we will work together with an advertising agency in
the Czech Republic to help us get the most out of our communication with consumers.

Advertisement

Advertising is the basic technique by which promotion is carried out. In international

marketing you have to pay close attention to the advertisement because a lot of money can be
spent without giving the expected results if the advertisement is not done well. That's why
we'll be working together with a local advertising agency to create a personalized campaign
based on the Czech culture.

The primary goal of the advertising campaign is to familiarize potential customers with the
brand and introduce them to the new products. Educating and captivating the consumers’
attention plays an important role in the strategy to present a high-quality product that will
attract the customer segments specified in the previous chapter.

We believe that an aggressive campaign is necessary to enter this market and one of our
objectives is building a strong brand. The advertising promotion strategy will be adapted for
the Czech Republic, which means that the whole campaign will be made for the target
audience, respecting its culture, language, trends and general environment.

One of the media used for the campaign will be the TV, to play video commercials to a very
large audience. Due to the high costs, there will be only one short spot, a teaser, to arouse
interest in the new products.

The most common way to promote the product will be in magazines, especially those that
focus on health, as it is one of the most popular media in the Czech Republic. This
communication channel is cheaper and allows an acceptable conversion rate, using a QR code
to send the customers to our website.
Banners and billboards will also be placed in the supermarkets to promote at the point of sale.
In order to promote the products, we will also place advertisements on the internet and host
giveaways on social media platforms such as Instagram and TikTok.

Sales promotion

With this technique we want to help the retailers sell as much as possible, in order to create a
familiarity with the product among the consumers.

We will use methods such as sampling and price reduction promotions, which will help us
not only establish a relationship with our distributors (small businesses up to supermarkets)
but also with our prospective buyers, as well as hasten our market penetration.