Bottle Water Industry Case Analysis

Topics: Bottled water, Dasani, PepsiCo Pages: 5 (1713 words) Published: March 19, 2011
The rising success of the bottled water industry can be attributed to many reasons. One of the main reasons is the creative marketing behind it. Companies like Perrier have created an illusion of water as being a part of a modern and sophisticated life style. High end water brands are seen in expensive restaurants and hotels as well as health spas. Through time, water has gone from being a necessity to a trendy and healthy choice of beverage. Aside from brilliant marketing strategies, another significant reason for the popularity of bottled water is the increasing number of Americans who are physically active and health conscious. Though the bottle water industry has enjoyed enormous success, recent change in economic times reflect the fact that people are less willing to buy branded water and instead prefer small private labels. Hence, for big water companies to survive they would have to rethink their business model and make changes to compete with smaller brands.

Water is the essential element to maintain life and is critical for the proper functioning of the human body. In addition to its role in the daily maintenance of our body, water is also known to prevent disease. It is recommended by nutritionists to drink at least six to eight medium glasses per day (BBC Health, 2001). At this rate, water supply has to be enormous to match the needs of water consumption. The success of the bottle water is a marvel of our times. Billions of bottles are consumed each week and the U.S population has spent nearly $16 billion dollars in 2007 on this luxury (Fishman, 2007).

As it became more popular, bottled water naturally became a more competitive market and forced companies to come up with more creative and vast marketing strategies. Examples of this include partnerships with regional brands and forming new produces such as flavored water and vitamin water. Accessing new markets is one of the major growth strategies companies in the bottled water industry have used to increase their sales. Both Coca-Cola and Pepsi Co have used their wide partnerships with bottlers to break into the water industry. Currently Coca-Cola markets Dasani water and similarly PepsiCo markets Aquafina (McWilliams, 2010). This growth method has proven to be a success and Aquafina has launched Pepsi into one of the 10 sellers of bottled water in the U.S. (Olson, 1999).

Another important growth strategy is to develop new products. For the bottled water industry new products in the recent years include flavored water, vitamin water, and athletic drinks. An example of this includes Coca-Cola’s Dasani lemon and strawberry flavored waters and Propel’s line of fitness, vitamin, and flavored waters (Coca-Cola, 2009). Finally, another method of growth is to expand the brand by creating other products. This is most notably seen in Evian’s skin care products such as its facial spray (Evian, 2010). Problem and Opportunity

Despite the enormous success of bottled water, the industry has its shares of external factors that have an impact on its growth. One of these factors is the environment. The environment plays a huge role in the water industry from many angles. One perspective is the protection of the natural springs and to help preserve the overall quality, purity, and freshness of the water. The Florida Springs Initiate has an ongoing relationship with the Department of Environmental Protection to draw a regulation for spring protection (Florida DEP, 2009). Furthermore, the recycling and waste management of the bottles also has an environmental impact. There is also the need of transporting the bottled water which brings about the issues the massive use of fuel and its toll on the environment. This mainly depends upon the fact that there is tremendous fuel combustion which leads to pollution. Finally, the choice of packaging materials also plays a role. The use of the plastic water bottles in the industry has received...
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