Segmentation Variables for the water market in the UK. Coca-Cola in UK - Assignment Example

? Week 3 discussion Contents Coke's Water Bomb 3 Segmentation Variables for the water market in the UK 3 Segments for bottled water 4 Segment targeted by Coke 5 Mistake made by Coca-Cola in UK 5 Reference 7 Bibliography 7 Coke's Water Bomb Coca Cola which is known for its innovation and best soft drinks produced by them globally is not a company which makes mistakes often. Coke had launched its Dasani bottled water in UK which resulted in a disaster for the company. Dasani which was launched in USA in 1999 as purified bottled water and experienced a huge success and so Coke launched the same product in the UK market also expecting the same success as that in USA. Dasani failed in the UK market because unlike most of the bottled water which were obtained from precious natural spring or alpine glaciers, Dasani was obtained through local tab water which the company put in the purification process and added mineral salt to it. Within just five weeks of its launched Dasani was withdrawn from the market resulting in financial loss, created a bad image in the minds of the customers reducing the brand value. Bottled water is the fastest growing product in the soft drink category and Coke needs a successful bottled water to capture the UK and European market (Garrett, 2004). Segmentation Variables for the water market in the UK The benefits of market segmentation are highly recognized by the marketing practitioners. With more advanced and sophisticated technology the consumers have become more sophisticated in their shopping behavior and so it becomes important for the marketers to consider the potential market segment and introduce the product. The principle assumption lies on the fact the consumers are numerous and are varied in their product needs and requirements and are not satisfied by single offering, thus market segmentation is required to satisfy the different needs and demands of the customers. For most of the marketer, market segmentation enables the marketers to closely monitor the needs and examine whether the needs are closely matched. To match the specific needs technological advances have enhanced the capacity to manipulate and store customer information and improve the segmentation opportunities (Dibb, 2001, p. 193). The water market can be divided into soft drink segment in which various categories in which water is used are highlighted. The UK soft drink sector has showed a growth rate in the year 2010 and is expected to grow in the future. The soft drink market registered an impressive 4.1% of growth along with 5.8% increase in the value and stood at 14585 million litters in 2010. UK soft drink sector is divided into five segments comprising of carbonates (44%), dilutables (24%), fruit juice (8%), bottled water (14%) and still and juice (10%) respectively. UK water markets are segmented into three types of water which includes natural mineral water comprising of 61%, spring water comprising of 28% and bottled drinking water which comprises of 11% (BSDA, 2011). Segments for bottled water UK soft drink sector consists of five different segments in which the bottled water compromises of 14% of the market share. Consumption of bottled water in UK was highest in 2006 where consumption amounted to 2240 million liters and in 2010 consumption of bottled water amounted to 2055 million liters. UK bottled water falls under three segments, still bottled water comprising of 72%, sparkling bottled water accounting for 14% and still water cooler comprising of 14% in the bottled market sector (BSDA, 2011). UK bottled water market continued to recover and grew by 0.7%in volume. With promotional activity along with few lucky breaks experienced in the weather kept the market share of bottled water rising. Segment targeted by Coke The target audience segmented by Coke was similar to the soft drinks, Diet Coke one of the most popular and famous product of Coke. The target customers were all those people who wanted to a product that would quench their thrust and at the same time is healthy. It can also be said that Coke targeted the consumer based on geographic segmentation. Dasani target market included consumers within the age group of 20to 35 years who would like to see Dasani as a lifestyle brand and not merely bottled water (Lindgreen, Hingley and Vanhamme, 2009, p. 6). Coke launched its Dasani in UK as one of the biggest competitors Pepsi did not have any market share in bottled water segment in UK. Thus to keep up the position and gain market share Coke targeted the consumers in UK by launching the bottled water. Mistake made by Coca-Cola in UK Dasani which was launched by Coca Cola in the UK market in the year 2004 following a huge success in the US had to experience unpleasant episode which made the company to withdraw Dasani from the UK market. One of the major mistakes made by Coke was the bottled water contained tap water which was sent to process and finally added mineral salt to it. The UK market had a good knowledge about bottled water and was well informed about the process and types of bottled water made available to them. As a result the unethical and illegal way of processing water and marketing it to the target consumers cost Coke to withdraw the brand. In addition to this, batch of minerals present in the Dasani plant contaminated the water with carcinogenic bromated (Garrett, 2004). Coke did not understand the consumer behavior of the UK consumers both in terms of spending and health. Coke had positioned Dasani as “natural, pure mineral water” however the incident which took place did not show this picture. As a result the brand name of Coke along with its reputation was hampered. Therefore it can be said that due to lack of proper market research about the consumer behavior and the launch of tap water in a highly educated market led to the breakdown of the brand along with its product, Dasani. Reference BSDA, 2011. UK Soft Drink Report. [Pdf]. Available at: [Accessed 17 August 2012]. Dibb, S., 2001. New millennium, new segments: moving towards the segment of one?. JOURNAL OF STRATEGIC MARKETING, 9(3), p.193. Garrett, B., 2004. Coke's water bomb. [Online]. Available at: < http://news.bbc.co.uk/2/hi/business/3809539.stm> [Accessed 17 August 2012]. Lindgreen, A. Hingley, M. K. and Vanhamme, J., 2009. The Crisis of Food Brands: Sustaining Safe, Innovative and Competitive Food Supply. Gower Publishing, Ltd. Bibliography Pride, W. M. et al. 2008. 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