: Bottled Water Critical Analysis - Case Study Example

?Case Study: Bottled Water – Critical Analysis Introduction Globalization has levelled the playing field for the business world to some extent. Worldis virtually flat and business today thinks in terms of global audience, markets and products. The ways businesses function and operate has undergone a complete makeover. New products and services have been developed which would have been unimaginable a few decades ago. While some products have had a major influence on the way we live, others have been a mere creation of marketers for achieving financial gains. Some products deliver no benefits to the consumers or the society but have been commercially successful due to the intelligent use of branding and marketing. To some extent, globalization can also be credited for the success of these products. One such product is bottled water; its consumption has been consistently growing and, as a result, the industry is expanding at a great pace. Case study “Bottled water – a pure or guilty pleasure?” has tried to address this issue with respect to the bottled water industry; this paper is a critical analysis of the case study. Globalisation and Marketing Marketing – A Universal Discipline? Globalization has brought down the barriers between economies and markets, and has created a truly global market place. Businesses today are building products and services that cater to a global audience. Marketing is one aspect of the business which needs a more focused and targeted approach than a universal one. Even though marketing is a universal discipline, marketing practices must vary from country to country. The customers, available media, channels of distribution, competitors, etc are different in different countries. Therefore, it is very essential for a company to adapt to different countries and markets by changing the market plan (Keegan, 2002, 31). Failure to design marketing strategy to adapt to different market conditions could be disastrous for a company. This was clearly evident in the case of Coco-Cola’s Dasani. Dasani (bottled water) was a successful product in the US designed and marketed to the US consumers. Coco-Cola tried to replicate this success in the European market but failed miserably. Even though there are other reasons for the failure, one of the reasons was that the company failed to redesign its marketing and positioning strategy. It was not able to connect with target audience. This, coupled with other reasons, forced Coco-Cola to withdraw the product within a few weeks of the launch. Hence, it is vital for a company to market and position its products and services differently to each market rather than adapting a universal approach. Marketing Objective – Profits or Stakeholder Benefits There has been a revolutionary shift in strategic concept of marketing since the 90s where the primary objective has shifted from profit to stakeholder benefit. The primary objective of marketing has now shifted from generating profits to creating value and benefits for the stakeholder. Profits are now seen as rewards for satisfying the needs of the customers in an acceptable and socially responsible way. Therefore, in order to effectively compete in the global markets, companies must focus on innovation and developing products of great quality, and the marketing focus should be on creating value for the stakeholders (Keegan, 2002, 29). The above concept of creating stakeholder benefit is being lost in some industries, like the bottled water industry. Profits have become the primary drivers, and stakeholder benefit is being ignored. On closely observing the bottled water industry, it is evident that the need for the product is a creation of the marketers and false claims have been made about the benefits to consumers. It has been shown that there isn’t much difference between bottled water and tap water. The whole industry is an attempt by the companies to generate profits rather than creating stakeholder benefits. Marketing is used to create needs rather the fulfilling them (in Morgan, 2003, 122). Such approach would bring short term success but in the long run would hurt the brand image of the company. Branding and Its Misuse Branding is the reputation that a company builds for itself. Branding, unlike marketing, is not about promoting the product by communicating how it is different and how it would satisfy the needs of the consumer, but by communicating what it stands for (values) (McDowell and Batten, 2005). Every company has its own value system that is drafted by the management and these values must be reflected in its products and services. These values must then be translated into brand image. This process must repeat itself with every product wherein value creation is of primary importance; brand image built along the way is an added advantage, but this is not the case. According to Klein, many companies have boldly claimed that producing goods was only an incidental part of their operations and what actually they wanted to produce was images for their brands and not things. Actual effort was targeted towards marketing and not manufacturing (2000, 4). The core meaning of a company is no more the product but the brand that it symbolises. Therefore, the primary focus of companies is to build a brand and then market it. This is the reason why Coco-Cola entered the bottled water market. It tried to cash in on its brand image. This is also the reason why there is an increase in consumption of bottled water even though there is no real need for such a product. Consumers are falling prey for the brands rather than the actual product and its values. Culture and Consumerism Consumers recognise or identify themselves with the products they use and they buy those products because of what the brand stands for rather than the actual value associated with the product. This association with products has a downfall and it is best put forward by Marcuse when he says “products indoctrinate and manipulate; they promote a false consciousness which is immune against its falsehood” (in Morgan, 2003, 122). Today’s consumer’s self-identity is derived from the goods and services that they use. With the use of branding and popular culture, companies have been able to ascribe a symbolic value to the commodities which contributes to enhancing the self identity of the consumer. Commodities take on a wide range of cultural associations and illusions and this is exploited by advertising to attach images of fulfilment, desire, good life, etc to mundane goods, such as alcoholic drinks, automobiles, washing machines, etc. (in Willmott, 1999, 208). The primary driver of modern consumerism and marketing activities is the identification of consumers with particular images and lifestyles. Consumption of bottled water has become a life style choice for many and this is what has caused an increase in bottled water sales. It is the branding and marketing of bottled water that has manipulated the consumer to buying the product to satisfy the need that did not exist in the first place. More than satisfying the needs, consumers buy bottled water for the values associated with these brands. Consuming bottled water defines the customer in a certain way to go with their false beliefs. Marketers and advertisers have successfully influenced consumer’s culture and long standing consumption traditions. They have manipulated consumers and convinced them to fulfil their false needs. The consumer behaviour has now been changed to meet the revenue needs of the companies rather than their actual needs (Miller and Rose, 1997). Business Ethics There are different views on business ethics. Kant is of the belief that reason for a company’s existence is to satisfy the needs of the society. He argues that companies have a moral obligation to act in a way that society is benefitted (Carrigan, 2005). According to this argument, achievement of customer satisfaction and social development are the primary objectives of a business while market share and profitability become the by-products. According to Mills, a business is ethical or not should be decided based on the consequences of its actions. That is, business actions are ethical if they are aimed at maximising the total pleasure in the world and minimising the total pain in the world (Carrigan, 2005). Mills definition emphasises on generating greatest good for the greatest number of people. From above views, business ethics can be defined as the actions of a business that generates benefits to consumer and the society along with generating profits for the business. A business must also operate in such a way that it does not negatively impact on stakeholders of the organization or the society. Companies must strike a balance between delivering benefits to all stakeholders and generating profits for the business. Going by the above understanding of business ethics, many instances of unethical behaviour can be identified in the case study. Firstly, any product must be aimed at delivering benefits to the consumer but as mentioned earlier the bottled water industry is built around false needs created by marketers. The product does not add any value to the consumers except for satisfying their false conceptions of life style which again is a product of manipulative marketing and branding strategies. Innovation is reserved to branding and marketing the product rather than the product itself. Water is easily available in the most suitable form to the target audience while there is a huge percentage of the world population that does not have access to safe drinking water. There are other negative effects of the industry such as environmental effects, unfair pricing policies, etc that have been identified in the case study. It is clear that the companies in the industry fail not only to deliver benefits for the society but also fails to deliver benefits for the consumers. The only benefit that it delivers is to the company itself through revenue generation. Any business that is only focused on revenue generation by all means is an unethical business, and bottled water industry is an example. Corporate Social Responsibility (CSR) has attracted a great amount of attention from businesses. Companies are playing a major role in the community and are investing heavily to making a positive social impact. Efforts are being made to negate or offset the negative impacts on the environment caused due to the products and services that they offer. Social responsibility in today’s world is being consistently integrated into the business model. By becoming active in the area of CSR, corporations have been able to overcome many threats to their brands. Also CSR is now being actively used by marketers in developing brand loyalty, social branding and cause related marketing in order to achieve financial success (Shamir, 2004). CSR initiatives which should be a part of internal organizational strategy are increasingly being used as an external communication policy in brand building and marketing (Walshe, 2007). Companies have failed to realise the fact that CSR alone is not enough to sell a product or a service. Most consumers view many CSR initiatives as merely window dressing. What matters more than CSR is consumer fairness and the ability of a brand to deliver on its promises (Walshe, 2007). For instance, Coco-Cola has been socially very active and contributed to the welfare and development of the communities. It also claims that all its business operations are monitored to reduce the negative effects on the community. But the fact, that it was irresponsible in product development (its bottled water was found to have harmful chemicals) shows that many of the CSR initiatives are part of an external communication policy aimed at marketing and brand building. Companies must focus internally when trying to contribute to the community. It must first get all its internal business activities in accordance with CSR policy and must stop adopting unethical business practice of using CSR for brand building and marketing. Another example is Fiji water. While water from a natural source in Fiji is bottled and exported to the rest of the world for financial gains, more than third of the population in Fiji does not have access to safe drinking water. Hence, irrespective of what CSR initiative the company employs, it is failing at the most basic level in delivering benefit to the society. A socially responsible company would build a business model that would provide safe drinking water to the local population and then export for generating profits. As this is not the case, sooner or later the company’s brand image will suffer as a result of this unethical business practice. Therefore, it is very important for a business to act ethically by delivering benefits to both the consumer and the society, and in the process generate profits. Conclusion This paper has analysed the case study “Bottled water – a pure or guilty pleasure?” There have been various issues addressed in the case study that have been critically analysed in this paper. Issues, such as profits being the primary marketing objective and not stakeholder benefit, misuse of branding, manipulation of consumers by marketers and unethical business practices, have been discussed in detail in this paper. Various conclusions can be from this analysis. Companies which focus on profits rather than stakeholders’ benefits and which misuse branding will sooner or later face severe criticism from different quarters of the society. It can also be said that modern consumerism is mainly driven by false needs created by marketing and branding rather than actual needs. Finally, it is very important for companies to abide by ethical norms and codes, and stop indulging in unethical business practices in order to achieve long term success. References Carrigan, M., Marinova, S. & Szmigin, I. (2005). Ethics and International Marketing. Research, background and challenges. International Marketing Review, 22(5), pp” 481-493. Keegan, W. (2002). Global Marketing Management, Upper Saddle River, NJ: Pearson Education Inc. Klien, N. (2000). No logo. London: Harper Perennial. McDowell, W. & Batten, A. (2005). Branding TV: principles and practices. MA: Elsevier. Miller, P. & Rose, N. (1997). Mobilizing the consumer: assembling the subject of consumption. Theory, Culture and Society, 14(1), 1-36. Morgan, G. (2003). Marketing and Critique: Prospects and Problems in Alvesson M and Willmott H (eds) Studying Management Critically, London: Sage. Shamir, R. (2004). The De-Radicalization of Corporate Social Responsibility. Critical Sociology, 30(3), pp: 669-689. Walshe, P. (2007). CSR is not Consumers’ Priority’, Marketing Week, 26 April pp: 36- 37. Willmott, H. (1999). On the idolization of markets and the denigration of marketers: some critical reflections on a professional paradox. In Brownlie, D., Saren, M., Wensley, R. and Whitington, R (eds). Rethinking Marketing: towards critical marketing accountings, London: Sage. Read More