Brand Management: One Water - Case Study Example

Brand management: One Water ID: Module: Word Count:2501 Introduction: company profile The idea of launching One was conceived by its owners in 2003 and in 2005, Global Ethics Ltd and the brand One was launched in the market. At present, the company is operating in the UK and produces a variety of bottled water. These brands are One water, One flavoured water, One water glass, One juiced water, and One water premium. Presently, the company is diversifying in a number of segments such as One egg and One kitchen foil (One Brand, 2015). However, it is yet to strengthen its presence in the market as a key player. In this paper, branding strategy of One Water will be discussed and in this context, the existing strengths and weaknesses of the brand and its future scope will be discussed. The paper proposes strategy for change management and alongside, existing market trend and challenges will also be discussed. Furthermore, choice of appropriate advertising agency and its rationale will be discussed in the paper along with necessary recommendations. Strong and weak points of brand Strength: One Water is essentially British by nature and can be availed in various size and flavoured and unflavoured forms. The brand mainly sells sparkling and still mineral water in different sizes that are mostly preferred by consumers. The products of One can be broadly categorised as budget and premium products and the main advantage of this categorisation is that different pricing strategies will allow consumers from different income group to purchase it. One of the important strength of the company is that its products are eco-friendly and are available at almost all places such as coffee shops, supermarkets and delis in the UK. The company strictly uses spring water and each product is strictly carbon neutral in nature. Additionally, all products are completely recyclable resulting to limited environmental footprint by the company. One Water is a profit making company but the profit of the company is fully distributed for funding various water projects in Africa. The company is funding several projects and this non-profit motive of the company can be considered as its strength. The company has strong strategic business alliance with prominent companies such as Starbucks and various restaurants such as Hawksmoor restaurant group (One Brand, 2015; Market Line, 2014). Weakness: Despite being a leading ethical bottled water brand in the UK market, the company is essentially threatened by commercial brands in the market. Since One brand is a charity brand, it is yet to achieve commercial success. One Water does not market its product through advertisement and other promotional tools; instead, it sells its products by means of direct marketing at supermarkets such as Tesco and at airlines such as Virgin. The market is highly competitive and One Water is yet to achieve strong market position. The company, being a non-profit organisation, often face difficulty to access retailers for distribution purpose. The company is presently working on a number of water projects in Africa where it invest its total profit; consequently, the company is not able to focus on other issues in other geographic locations. The company is presently selling its products in the UK and for better profitability; it needs to focus on wider market (One Brand, 2015; Market Line, 2014; The One Foundation, 2015). Future scope of the brand The future prospects of a business organisation depend heavily on the industry it is operating in. Correspondingly, the future scope of One Water has been evaluated using Porter’s five force model: Buyers’ Power: For bottled water manufacturers, the buyers are essentially various food and beverage retailers and they include bars, cafes, restaurants, supermarkets, independent retailers, convenience stores and other service providers. These commercial buyers are mostly large organisations and therefore have tendency to exert significant bargaining power on the bottled water producers. These customers cannot be neglected as they act as a decider for the financial position of the company. However, most retailers stock various kinds of products and consequently contribute little towards bottled water industry revenue in the UK. Interestingly, buyers’ power declines considerably with greater degree of differentiation in the types of bottled water. Overall, the bargaining power of buyers’ power was determined to be strong (Market Line, 2014). Suppliers’ power: The bottled water industry is dominated by manufacturers of bottles and bottling equipments. The suppliers’ power increasing as significant number of FMCG organisations depend on these suppliers along with the bottling companies. Additionally, bottled water companies do not involve in backward integration with these suppliers and it further increases their bargaining power. Another important supply for bottled companies is water supply. Different bottled water companies produce various kinds of bottled water such as purified tap water, mineral water, sparking water and flavoured water; for this reason, they need o have access to water source either in the form of ownership or as lease. In this context, suppliers’ power is extremely strong as the companies need to purchase or hire the water source from its owner. As a whole, the suppliers’ power is fairly strong (Market Line, 2014). Threat of new entry: The bottled water industry is mainly threatened by entry of soft drink producers in this sector; but such companies that are already present in non-alcoholic beverage sector face certain technical difficulties related to distribution and supply chain while diversifying their offerings. Besides this, the threat is further nullified by the act that new entrants cannot diversify in the industry and have to offer similar products. New entry is further affected by presence of strong brands in the industry. The industry is capital intensive as manufacturers need to access source of water along with other supplies. However, the likelihood of new entry is strengthened as the industry does not have intellectual property rights and capabilities for exploitation of niche market. This suggests that the degree of threat is moderate (Market Line, 2014). Threat of substitute: From end-consumers’ perspective, tap water can be considered as a substitute of bottled water but as per retailers, main substitutes are various non-alcoholic beverages. The market is currently flooded with several products that are targeted at different needs of consumers. For instance, consumers looking for heath drink can select from fruit juices and functional drinks while those seeking hydration can opt for lightly flavoured beverages. Not to mention, soft drinks can be considered as the greater substitute of bottled water. Therefore, it can be argued that the threat of substitute is moderately high (Market Line, 2014). Intensity of rivalry: The bottled industry is driven by significant degree of consolidation. It can be observed that most supermarkets stock variety of bottled water brands reflecting strong level of competition and rivalry. Many multinational firms in the food and beverage industry have more than just few brands in the bottled water sectors resulting to substantial increase in rivalry among different companies instead of brands. Consolidation has negative impact on the rivalry. Another important aspect of rivalry is switching cost and it was determined that due to low switching cost, the intensity is increased. Overall, it can be agreed that the degree of rivalry is moderate (Market Line, 2014). Current market trend and challenges The bottled water industry comprises retailing of flavoured and unflavoured water in sparkling and still forms. The market is valued in terms of retail selling price of products with added taxes. Between 2009 and 2013, the growth was observed to be lowest in 2012. Additionally, market research suggests that the growth in the industry will remain stagnant for next few years. The net revenue of the industry was determined to be around $2685.1 million in 2013 and in past five years it witnessed a composite growth of only 2.3 percent (Market Line, 2014). In the European market, German market witnessed a stronger growth than that of the UK and earned net revenue of 415539.3 million in 2013. In last five years, the consumption volume has increased only by 2.2 percent and it is expected to rise by another 1.9 percent by 2018. Studies suggest that hypermarkets and supermarkets account for greatest share of the sales in the UK bottled water industry. The channel generates around 45% of the revenue of the industry ($1211 million). It was gathered that another strong sales channel in the industry is the convenience stores and it contributes towards 19.2% of the total market revenue. The market trend suggests that the industry is still recovering from the impact of recession and consumers are purchasing less in order to save their disposable income (Market Line, 2014). The prevailing challenged in the industry are intensifying competition and ever-growing debate and consumer dilemma over tap water versus bottled water. Ethical challenges are one of the greatest issues affecting the industry. Disposal of bottles and environmental footprints are some of the issues that have been raised by the environmentalists. Market oriented challenges include managing consistently rising competition in the industry with large number of brand and establishing commendable position in the market. The subject brand, One Water is an ethical bottled water brand, but it is yet to establish strong market position with respect to its competitors such as Danone, Britvic and Nestle (Rodwan, Jr., 2008; Market Line, 2014). Strategy for change management: what, why and how The marketing and ethical challenges need to be handled tactfully and for that, strategic formulation is essential. One Water is an ethical non-profit brand that contributes its total profit towards success of clean water projects in Africa. However, the growth of bottled water industry is stagnant in the UK and other parts of Europe (McCann World Group , 2015). As a result, it is suggested that the company should plan for international expansion so that other developed and emerging markets can be approached. Significant numbers of multinational firms are presently investing in advertising and promotional tools for increasing consumer awareness. One Water should take up advertising and other marketing tools so that consumers can connect with the product and its underlying cause. One Water is presently selling through various supermarkets in the country and limited tie ups with restaurants and airlines. The proposed strategy herein suggests that the company should increase its visibility by organising campaigns, events and strategic partnership (One Brand, 2015; Pearce and Robinson, 2000). The proposed strategies are essential for One Water because the company needs to increase its visibility to consumers for generating greater revenue. Arguably, the company need to gain strong market presence for funding its charitable cause. If the company can make its consumers aware of the underlying cause and features of its products, then it is possible that the demand for the company’s products will improve. International expansion has been proposed in the paper so that One Brand can access consumer base in other economies. According to studies, demand of bottled water is comparatively higher outside Europe. Strategic partnership in this regard can prove to be useful. Marketing is an essential aspect of business so that consumers are well aware of products and its differentiating factors. The differentiating factor of One Water is its underlying charitable cause and limited environmental footprint, and it needs to be brought in the limelight by means of advertisement (Pearce and Robinson, 2000). Rebranding can be considered as an effective tool for establishing the product in its home and host market. Television and in-store advertisement can prove to be effective for the company to establish its brand. Campaigns and event sponsorship will also bring sufficient consumer exposure to the product. A firm can adopt several measures for entering into foreign market and some of these are franchising, direct investment, licensing, joint venture and exporting. It has been proposed that the company should adopt either direct investment or franchising for international expansion as per location suitability. It was determined that direct investment is useful when a company enjoys cost advantages in a location in terms of raw material and labours. Additionally, direct investment will also present the company with the opportunity of employment generation in other nations (Pearce and Robinson, 2000; Cravens and Piercy, 2008). Realistic choice of advertising agencies and why McCann World Group has been chosen for marketing of One Brand products. The company is known for high class strategic and creative services and ensures brand building by implementing and integrating various communication channels. The company is presently operating in 120 countries and have over 20000 employees all over the world. The company essentially integrates event marketing, relationship management, public relation and different forms of digital marketing for promoting the brand. Creativity is the company’s forte and it ensures that the marketing strategy of a company conveys and meets the consumer needs. McCann World Group was chosen for rebranding and marketing of One Water because the firm is omnipresent in various countries and will be able to develop appropriately aligned marketing strategy for the company as and when it chooses to undertake international expansion. Additionally, the marketing strategies will help in increasing visibility of the brand to different consumer groups (The One Foundation, 2015). Online presence of the brand Majority of the products of One Water are sold through supermarkets, coffee shops, restaurants and duty free stores in airports, but the company has contracted with Ocado for selling of the bottled water in different sizes. However besides online selling, the company has negligible digital footprint. In present day market, digital presence is essential for a company as it can easily promote its products as well as advertise its features. Most companies not only promote their products but also market the image of the company. The company needs to establish its digital presence by means of social media and micro-blogging, so that technology savvy consumers are targeted. It is argued that hiring McCann World group as the company’s advertising agency will help it improve its online market presence (One Brand, 2015). Conclusion and recommendations The brand One Water is essentially non-profit where profit generated through selling is distributed in African water projects. However, very limited consumers have actual knowledge of the main purpose of the company behind selling of bottled water. The reason is lack of sufficient marketing. Considering the stiff market competition, strategies have been proposed for the company and it is recommended that the company appropriately implement the same in its business. Product rebranding was proposed so that consumers are made well-aware of the company and its product. One of the renowned advertising agencies has been chosen so that marketing management of the firm is well taken care of. Social media presence is almost negligible for the company and it was determined that involvement of an advertising agency will bring about greater integration of all kind of marketing media for promoting the product and establish strong market position. Furthermore, the paper has proposed international expansion by means of direct investment and/or franchising so that the business is not affected by geographical risks associated with operations in one specific economy. Reference List Cravens, D. and Piercy, N. F., 2008. Strategic marketing. New York: McGraw-Hill Irwin. Market Line, 2014. Bottled Water industry in the United Kingdom. [pdf] Market Line. Available at: [accessed 20 April 2015]. McCann World Group, 2015. McCann World Group. [online] Available at: [accessed 20 April 2015]. One Brand, 2015. One. [online] Available at: [accessed 18 April 2015]. Pearce, J. A. and Robinson, R. B., 2000. Strategic management: Formulation, implementation, and control. New York: Irwin/McGraw-Hill. Rodwan, Jr., J. G., 2008. U.S. and International Bottled Water Developments and Statistics for 2008. [pdf] Bottled Water Reported. Available at: [accessed 18 April 2015]. The One Foundation, 2015. Rebrand: Global Ethics Ltd. [online] Available at: [accessed 18 April 2015]. Bibliography Alvesson, M., 2008. Critical theory and consumer marketing. Scandinavian Journal of Management, 10(3), pp. 291-313. Anderson, J. C. and Narus, J. A., 2007. Business marketing: Understand what customers value. Harvard Business Review, 76(6), pp. 53-62. Calder, B. J. and Malthouse, E. C., 2008. Qualitative Media Measures: Newspaper experiences. International Journal of Media Management, 6(1&2), pp. 123-130. Cameron, G. T. and Haley, J. E., 2007. Feature Advertising: Policies and Attitudes in Print Media. Journal of Advertising, 21(3), 47-55. Chattopadhyay, A. and Laborie, J. L., 2010. Managing Brand Experience: The Market Contact Audit. Journal of Advertising Research, 45(1), 9-16 Plan Read More