The Goods and Services Market - Bottled Water - Essay Example

Brands attributed to high quality make huge sales at high prices.

This observation is realized from several variables that differentiate bottled water from tap water. On the same note, these differentiating variables allow bottled water to obtain price premiums, a scenario that lacks in cases of tap water. The sale of bottled water is undertaken by firms that are in business. They, therefore, have business aspects to account for in their operations. In this regard, value creation becomes a critical differentiating variable. This is done through processing and packaging water in ways that appeal to the customers (Shiv, 2007). Value creation differentiates tap water and bottled water, with the primary activity being packaging. This process costs the various firms that engage in it, and the price of bottled water must account for the costs as well as business profits.

The providing firms themselves act as a differentiating variable. Tap water is provided to the masses as an aspect of human rights by local governments or the state at large. Water treatment processes are undertaken at a central point before the supply is done. For this reason, water tap is regarded as a necessity and a right of the population. On the other hand, bottled water is associated with luxury, a complement to tap water. Therefore, obtaining the water attracts a luxury price premium.

Quality is another aspect that differentiates bottled water from tap water. It is often held that bottled water is of high quality than tap water. While this claim may or may not be true, a high-quality product is likely to attract a high price. The quality aspect has given rise to numerous bottled water brands, and the higher the quality attached to a specific bottled water brand, the higher the price premium that brand obtains.

Marketing activities significantly differentiate tap water from bottled water. Firms that sell bottled water are business enterprises. Companies that supply tap water are either state-operated or private firms that have been contracted by the government to undertake the activity. Companies that deal with bottled water,r therefore undertake advertisement campaigns, unlike many companies that offer tap water. The advertisement is tailored towards convincing customers to buy by presenting the benefits of bottled water. This marketing strategy encompasses highlighting aspects like the availability of minerals in bottled water.

The portability of bottled water is a crucial differentiating variable in the bottled and tap water business. Tap water is only accessible from central points where taps are available. Bottled water on the other hand is accessible from almost every place, as long as a store that stocks bottled water is available. The convenience provided by bottled water comes at a premium (Kim, 2009). Buyers, therefore, incur an additional cost, which in most cases is ignored, for the convenience realized from bottled water. Read More