Hector Beverages' Paper Boat is an ethnic drinks brand launched in 2013 that emphasizes nostalgia and unique flavor offerings without preservatives. The company employs a strategy focusing on emotional connections and cultural insights to engage consumers, effectively selling its products in diverse retail environments, including airlines and hotels. Despite its success, Paper Boat faces challenges in niche marketing, high competition from major beverage brands, and a significant percentage of potential consumers remaining unaware of the brand.

1. Hector Beverages’ Paper Boat:
Diffusing Innovation Through
“Drinks And Memories”
Presented by :
Akash Sharma (0141MBA014)

2. Objectives of this case study
• Introduction to the process of innovation,
diffusion and the role of culture in the product
innovation.
• How a company can tap culture to create a
new product that can quickly gain acceptance
among consumer.
• Factors a company should take into account
when developing a product.

3. Paper Boat advertisement
JAB BACCHE THEY…..!!!!!!!!

4. Company Profile
• Hector Beverages Private Ltd is a manufacturer of
Energy Drinks and Fruit Juices
• Started by Neeraj Kakkar, Suhas Misra, James Nuttal
and Neeraj Biyani in the year 2009.
• It is currently operating with one plant in Manesar,
Gurgaon.
• It manufactures its products under the brands Tzinga
and Paper Boat.
• It currently exports its products to countries like
Australia, United States of America (U.S.A), United
Kingdom, Nepal, United Arab Emirates (U.A.E) and
Canada.

5. Introduction to Hector Beverages’
Paper Boat
• Paper Boat, an ethnic drinks brand launched
by Hector Beverages in 2013.
• HB increased the consumer base for paper
boat by selling its products on airlines and five
star hotels.
• USP of paper boat : rekindle memories of
one’s childhood with unique design
• No preservatives, no added color

6. How Paper Boat caught imagination of
Indian consumer??
• It is well known fact that we carry a limbic
imprint of certain preferences in our brain.
• Paper boat is a result of an amazing insight
that urban youth crave for something that is
simple, delightful & non-transactional…..
• The success of this brand lies in the
combination of catchy naming, very
differentiated packaging & the superb
recepies

7. Differences from other companies:
• Independent of competition
• Purely based on human insights and had no
references in the market.
• Clearly a Blue Ocean Strategy
Single aspect used in Paper boat design
…… Desire for Simplicity

8. Shelf life of this design
The point in change is to stay
aligned with the audience while
being true to the brand essence.
• since its launch, shape of pouch has been
change to feel better grip.
• Cap has recently been changed.

9. it reminds you of the days gone by.
A look at Paper Boat will definitely tell you that a lot of attention has been paid to the packaging.
Available at all leading food and grocery stores and in supermarkets too.
Part 1

10. Knowledge- The individual is first exposed to an innovation, but lacks information about
the innovation. During this stage the individual has not yet been inspired to find out
more information about the innovation
Persuasion- The individual is interested in the innovation and actively seeks related
information/details
Decision- The individual takes the concept of the change and weighs the
advantages/disadvantages of using the innovation and decides whether to adopt or
reject the innovation.
Implementation- The individual employs the innovation to a varying degree depending on
the situation. During this stage the individual also determines the usefulness of the
innovation and may search for further information about it.
Confirmation- The individual finalizes his/her decision to continue using the innovation.
This stage is both intrapersonal (may cause cognitive dissonance) and interpersonal,
confirmation the group has made the right decision

11. consumer adoption:
awareness
interest
evaluationtrial
Adoption/rej
ection

12. Yes, there has been a change to the pattern of adoption of new product over the
years.
psychological processes
Technological change

13. Product
• Paper Boat created a Pleasant Experience with its
unique combination of ‘Drinks and Memories’.
• As most of the ingredients are naturally available spices
and condiments. Paper boat has differentiated itself
from the crowded aerated soft drinks(with loads of
sugar).
• The flavors, one sweet and other salty, helped it to
reach out to diabetic capital of the world and others at
the same time.
• By keeping the taste closer to mom’s recipe, the
product endeared itself to ipad and no-pad
generations.
Part 2

15. Price
0
5
10
15
20
25
30 Price based Analysis of Paperboat
It clearly indicates that Paper Boat is amongst the
highest priced beverages as compared to its close
competitors.

16. • Paper Boat is competing with non-branded
products, some of which are still prepared in
many households in India, especially in smaller
cities.
• Paper Boat has to price its products very carefully,
so as to be able to justify as to why will consumers
pay a premium price for its products which they
can prepare by themselves.
• Majority of the players in this industry are
competing on freshness, taste and variety.
Paperboat distinguishes itself by selling the
products with emotional connect.
• As these types of flavors are not available in the
market, that’s why they come up with high price
as compared to their competitors.

17. Place
• H.B targeted retail outlets by offering 5 %
more profit margin to the retailers as
compared to their competitors
• They also collaborated with the Indigo airlines
to sell paperboat products on board.
• They also targeted school canteens because
their product is considered healthy for
children.

18. Promotion
• Paper Boat’s promotional efforts have been relatively
very subdued until now because of the unexpected
sales that the brand has had since inception.
• The company’s current marketing efforts are focused
largely on advertising in newspapers, digital marketing
through their website, social media and most
importantly by positive word of mouth
communication.
• Its promotional efforts, which include posting images
about childhood memories on their Facebook page and
website, are in sync with the tagline of the product.

19. Paper boat flavors

20. Part 3
CHALLENGES FACED BY COMPANIES
OPTING FOR NICHE POSITIONING
Because of the smaller market size, this is not suitable for a
company that is small and intends to grow in the current
market. The smaller market makes it difficult to enjoy a
larger profit margin in the market.

21. 1. The niche marketing strategy may not be
suitable for long-term marketing, as niches
may not give adequate business.
2. The niche markets may be invaded by large
companies and small marketers may find it
difficult to compete.
3. A firm’s survival chances may decrease if it
depends solely on niche.
4. It would be difficult for a product to get
known to a very wide audience if it is
implemented.

22. While Hector has a different product
portfolio and distinct positioning, it has
competition in the segment. Dabur has
entered the functional drink market with
its aam panna. And, beverage giants
PepsiCo and Coca-Cola, which have a
presence in the non-carbonated drinks
space, are said to be watching the ethnic
drinks space closely.

23. Paper boat has carved a niche for themselves by
identifying and nurturing the ethnic beverages market,
but percentage of consumers unaware about Paper Boat
as a brand is high.
It also faces a paradoxical challenge — that of marketing
a better product at lower price!" Blame it also on the lack
of a well defined counter culture movement in the
country.
CEO Neeraj Kakkar says "A consumer's choices of brands
is still based, in large part, on what consumption does for
their projected self image rather than on the inherent
"goodness" of a product." He adds a tad loftily, "Even
though we created the best energy drink formulation
from day one, consumer adoption was limited to the
truly smart people who bother less about self image