Ice Mountain Water - Term Paper Example

Marketing Plan for Ice Mountain Water al Affiliation Marketing Plan for Ice Mountain Water Environmental analysis Ice Mountain Water is only one of the 14 bottled water brands manufactured by Nestle Waters (Nestle Waters North America, n.d.). The brand reportedly joined Nestle Waters in 1987 (Ice Mountain Water, 2015). Several external factors impinge on the operations of Ice Mountain Water and determine the success and continued growth of the product over time. The following factors comprise essential elements required from an environmental analysis of the product. As such, a comprehensive discussion of each factor is presented below: •Political factors As Ice Mountain Water is produced and marketed in the United States, the political factors affecting the product include government policies and regulations pertinent to the product, as well as to the operations of the firm, Nestle Waters North America. Regulatory requirements include payment of corporate taxes, licenses, consumer protection, as well as compliance to fair competition, among others. •Economic factors The economic factors affecting Ice Mountain Water include purchasing power of the consumers, the demand and supply of bottled water in the market, as well as employment rates (Weberience LLC, 2105). For instance, unemployment rates contribute to lesser purchasing power of consumers that further impact on the kind and type of beverages being bought and consumed. Beverages, especially bottled water, are perceived to be almost the same among diverse manufacturers. As such, the lesser the price, the more that consumers would tend to shift on purchasing the brand with the least cost. •Social factors The social factors affecting Ice Mountain Water include consumer preferences for beverages, in general, as well as the type of Ice Mountain Water in volume and prices that are preferred to be purchased. According to Nestle Waters, there was actually a change in consumer preferences for beverages from 2003 to 2012, as shown in the pie chart, below. From the chart, it could be deduced that consumer preferences for consuming bottled water had increased from 11.8% in 2001 to 16.7% in 2012. The increase in preferences for bottle water shifted from previous preferences of consuming carbonated soda drinks, alcoholic beverages, coffee and fruit drinks. Figure 1: Consumer Preferences Change in Beverage Consumption, 2003 vs. 2012 Source: Nestle Waters North America, 2013, p. 2 •Technological factors Technological factors include new discoveries pertaining to bottle water, as well as in applying technological applications affecting the manufacturing and marketing of Ice Mountain Water. Specifically, the treatment methods and processes applied after sourcing their water from natural springs should be disclosed to prevent false labelling charges and to ensure that Nestle Waters comply with transparency regulations. The proliferation for the use of the online medium impacts marketing of Ice Mountain Waters through opportunities for gaining more information on the product, especially in terms of delivery options and placement of orders (Ice Mountain Water, 2015). •Legal factors The legal factors that influence and impact Ice Mountain Water include labor laws and regulations (benefits to employees, equal employment opportunities), product laws (ingredients, labelling, packaging), competitive regulations, consumer and employees protection through health and safety laws, among others. In fact, there has been recent news items of the organization regarding false representations or labelling of the product. As revealed, “a Chicago-based business has sued Nestlé over claims that the five gallon jugs of Ice Mountain Water it purchased for its office dispensers were falsely advertised as containing natural spring water when in reality they were simply filled with regular tap water” (Arumugan, 2012, p. 1). Other legal suits were previously filed against Nestle on other bottled water products. These legal cases could pose potential costs for the product and for the organization in terms of generating negative image on the company, as well as increasing legal costs which would be detrimental to the financial condition of the organization. •Environmental factor The environmental factors that impinge on the firm relative to manufacturing and marketing of Ice Mountain Water include: the climate and weather (which could impact consumption patterns, as well as delivery of the product), waste disposal laws, sources of water and treatment methods that comply with health and safety standards, as well as energy consumption which further impacts greenhouse gas emissions and climate change. Other environmental factors include compliance with environmental regulations in sourcing natural water resources, as well as avoiding polluting waste water sewerage. 2. Market Assessment and Analysis SWOT Analysis Strengths: The length of experience of Nestle Waters in manufacturing different brand of bottled water have gained core competence and competitive advantage in this field of endeavor. Ice Mountain Water has been in existence for 28 years and have gained a steady number of clientele, representing an average of 9.41 million from 2008 to 2014, as shown in the line bar below: Figure 2: Ice Water Consumption, 2008 to 2014 Source: Statista, 2015 The product is available in different sizes ranging from 8 ounce-bottles to the five-gallon bottles. Also the product is also offered in different flavors, such as original, lime, lemon, mandarin orange, raspberry lime and black cherry for the sparkling variant (Ice Mountain Water, 2015). Likewise, Nestle Waters has been revealed to have generated as much as 35.8 percent of the market (Nestle Waters North America, 2013). Weaknesses: False labelling issues impinged weaknesses of the organization for full and complete disclosure of sources of water for their five-gallon bottle products (Arumugan, 2012). The advertisement issues incurred negative image for the product; as well as exposed weaknesses in the application of appropriate promotional strategies and campaign. The Environmental Working Group (EWG) rating for Ice Mountain Water was D, and meant the following, shown in Figure 3, below: Figure 3: EWG Rating for Ice Mountain Water, 2011 Source: Environmental Water Group, 2011 Opportunities: Growth prospects and increasing market trends for global bottled water poses increasing opportunities for Ice Mountain Water to gain greater market share, revenues, and profits. The predictions on consumer preferences for beverages revealed that “bottled water is predicted to the No. 1 packaged beverage sold in the United States by 2016” (Bizzozero, 2015, p. 1). Threats: Continued exposure to legal battles would create repercussive threats in terms of sustaining negative image for the product in the long run. Greater prospects and increasing growth trends would lure stiffer competition which could erode market share. After identifying the strengths, weaknesses, opportunities and threats, Nestle Waters should convert the weaknesses into strengths and the threats into opportunities. The false labelling and advertisement issues should be immediately addressed and corrected by disclosing all information required (the treatment methods and contact information on the products’ labels). Disclosing this information would provide strengths to Ice Mountain Water in terms of adherence to standards and commitment to transparency. The EWG rating would also be improved, possibly to ‘A’ from the ‘D’ rating upon making the recommended courses of action. On the other hand, the threats from legal battles and increased competition could be turned into opportunities through the lessons learned from them. As corrections have been made, the corporate image and product image would improve and would be seen as an opportunity to tap potential clients and increase their market share. Likewise, increased competition could be seen as an opportunity to improve the marketing strategies, as would be proposed below. BCG Matrix Analysis Using the Boston Consulting Group (BCG) Matrix, it is deduced that Ice Mountain Water is in the ‘stars’ category or dimension where the market growth is still increasing and the market share is high (Value Based Management, 2014). Product Life Cycle Analysis The product is in the growth stage as evidenced by the following characteristics: many entrants in the industry, there is still an increasing trend for growth, products are being mass produced and the organization seeks strategies to improve the quality or design of the product (Kaplan Financial Limited, 2012). 3. Mission statement The mission of Nestle Waters for Ice Mountain Water is to become the leader in the bottled water industry with sustained market share through providing high quality of natural spring water that is refreshing, invigorating, and safe. 4. Target markets The two (2) distinct and specific market segments that Nestle Waters target for Ice Mountain Water are as follows: (1) health-conscious adults above 18 years old and who belong to the middle income level; (2) active and sports-oriented people above 18 years old and who belong to the middle income level. 5. Goals/Objectives The goal for Ice Mountain Water is to increase preferences of consumers to purchase the product and to be included among the top 10 bottled water brands in the United States in 2016 and onwards. The objective is to increase the market share for Ice Mountain Water to at least 5% in 2015. Statistics revealed that as of 2014, the market shares of the leading bottled water brands in the United States based on sales, are shown in Figure 4, below. As could be seen, products produced by Nestle Waters that belonged to the top 10 are Nestle Water Pure Life with 9.6% and Poland Spring with 6.1% (Statista, 2014). Figure 4: Market share of the leading bottled still water brands in the United States in 2014, based on sales Source: Statista, 2014 6. Strategies 6.1 Strategies for the Health-Conscious Adults Product Strategy Focus and capitalize on the strengths of Ice Mountain Water especially its natural spring feature. For health-conscious adults emphasis on the health components would be most viable, especially stressing the benefits that natural spring water gives or provides to the body. In addition, the weaknesses should be appropriately addressed, especially the EWG rating by describing the treatment methods in the two (2) springs reported as sources of the water; as well as provide consumers contact information to validate data on water quality. Likewise, for the five (5) gallon bottles, Nestle Waters should provide full and complete disclosure of sources of water. Pricing Strategy Retain the competitive pricing strategy of Ice Mountain. With the incorporation of additional details in the label of the product, as well as disclosure of contact information to enable customers to validate the water quality, any potential increases from the labelling could initially be assumed by Nestle to ensure similar high quality of the product with the competitive price, as accorded to the target market. Price off discounts are to be retained for new customers placing their orders for the product. Promotional Strategy The promotional strategy would focus on emphasizing that all necessary information pertaining to treatment methods used from sourcing the water in natural springs, or other identified sources have been effectively addressed. Likewise, the promotions would also emphasize retaining the cheap and competitive prices in all product sizes and flavors. Distribution (Place) Strategy Retain the access to ‘Where to Buy’ locator option in the official page of Ice Mountain Water where current and potential customers could input their product type, the distance range, as well as the zip code (Ice Mountain Water, 2015). 6.2 Strategies for Active and Sports Conscious People Product Strategy Similar product strategies are to be applied for the active and sports conscious people; as above-mentioned in product strategy for the health-conscious adults. In addition, since the product is in the growth stage of the product life cycle, Nestle Waters could determine the possibility of producing the product in other flavors to rejuvenate the product and offer something new to the target market. A market survey could be undertaken to determine which flavor they prefer or which flavor they look forward to savor and consume. As such, the information generated from the market survey would become the basis for producing new flavors that are preferred by the target clientele. Pricing Strategy Similar product strategies are to be applied for the active and sports conscious people; as above-mentioned in product strategy for the health-conscious adults. Loyal customers should be provided with price-offs and discounts for repeat purchases. Promotional Strategy In addition to the promotional strategies noted above, the strategy pertaining to active and sports conscious people should emphasize how Ice Mountain Water should help rejuvenate and strengthen their stamina as it replenishes the body’s nutrients lost from regular physical fitness activities. As such, the print advertisements could augment advertisements from online sources so that active and sports oriented people who read sports magazines could view the product and the information required. Distribution (Place) Strategy Similar information on accessing ‘where to buy’ locator from the official website of Ice Mountain Water would effectively provide the needed data to purchase the product. In addition, free delivery options and discounts are to be continued, as published (Ice Mountain Water, 2015). 7. Tactical actions 7.1 Product Tactics The paramount concern is to capitalize on the strengths of Ice Mountain Water through emphasizing the benefits of drinking water sourced from natural spring water. In addition, the identified weaknesses should be appropriately address, as stipulated under the product strategy. It is important that the EWG rating for Ice Mountain Water be significantly improved by indicating the treatment methods from water sources from natural springs. In addition, other legal charges, like failure to include source information of water for the five (5) gallon water be appropriately disclosed. Nestle Waters should be careful of being charged for false labelling since the negative image that the publicity generates is detrimental to the corporate image, as well as to the product. The threats noted in terms of receiving a negative image based on published false labelling, as well as the results of the EWG rating when corrected would be effectively addressed. As such, the opportunities of tapping a larger market share, as revealed from the increasing trends of growth prospects for bottled water would be captured. 7.2 Pricing Tactics Competitive pricing strategies are to be retained; while price discounts are to be provided to new and potential customers to lure them into trying Ice Mountain Water. Careful review and assessment should be made on the pricing strategies of competitors before applying new pricing strategies and discounts, to avoid price wars. 7.3 Promotion Tactics Since promotional strategies would focus on communicating to the customers that the weaknesses have been corrected, advertisements and publicity information should be sent through print media (newspapers as well as sport and health magazines). In addition, the official website for Nestle Waters and Ice Mountain Water should also emphasize that the weaknesses have been addressed. A 20% increase in advertising budget from last year’s budget should be allocated to disseminate all the information regarding correcting information on false labelling charges, as well as in improving the EWG rating. The 20% increase in advertising budget should be allocated according to the following promotional elements: 50% for print advertisements (newspaper as well as sports and health magazines) 20% for online advertisements (social networking sites) 20% for promotional campaign placed at retail store outlets 10% for billboards in local communities 7.4 Distribution (Place) Tactics The distribution tactics would include focusing on speed of delivery and reliability. For instance, upon placing an order, the product/s would be delivered within a specified time frame, say, within 30 minutes or less. Likewise, for deliveries of greater volume, say five (5) gallon bottles in 20 or more bottles, price discounts, of say, $5 per bottle would be availed, in excess of 5 bottles. Frequent deliveries in bulk would also enable customers, especially business clients, to avail of price discounts. 8. Monitoring Procedures Since the objective would be to increase preferences of consumers to purchase the product and to be included among the top 10 bottled water brands in the United States in 2016 and onwards, management of Nestle Waters who are in charge of managing the Ice Mountain Water brand would be tracking the improvement in the volume of sales for the product after the weaknesses and threats have been effectively addressed. Likewise, with additional budget allocated for promotions and advertising which discloses appropriate information to correct the weaknesses, the bottom line for Nestle Waters would also be tracked in terms of evaluating how net profits have increased or decreased, despite increasing the advertising expenses. The performance monitoring and financial analysis would be tracked on a monthly basis, as soon as appropriate corrections and information dissemination programs have been made. The financial statements would prove and attest the effectiveness of the strategies that were proposed. The following financial figures would be closely monitored: sales, expenses (especially advertising and promotions), and net income. Likewise, the number of clients (current and new) should also be monitored and the figure could be determined from the sales, as well as delivery information. The information gained from this disclosure would become the basis for monitoring the marketing plan in terms of the ability to achieve the objective of increasing market share for Ice Mountain Water to 5% in 2015. Thus, the plan is to be reviewed at the end of 2105 and every three months, thereafter. 9. Conclusion The current paper successfully achieved its objective of presenting a marketing plan to evidently show a more in-depth understanding of marketing, the strategic planning process, and the key elements involved in developing and implementing a marketing plan. From the presented information, it was disclosed that Ice Mountain Water needs to implement the proposed marketing strategies to correct the weaknesses and thwart the risks brought about by the identified threats in the external environment. The tactical actions would ensure that the suggested marketing mix strategies would be undertaken effectively through the provided rationalization and justifications. Likewise, monitoring would ensure that Nestle Waters would determine the progress of the proposed strategies in meeting the identified goals. 10. Executive summary The current discourse aimed to present a marketing plan for Ice Mountain Water which would enable presenting an assessment of its present condition, as to propose areas of improvements based on the results. As such, one proposed that Ice Mountain Water should address the negative image and EWG rating that has been generated by Ice Mountain Water to achieve the following goals: (1) to increase preferences of consumers to purchase the product and to be included among the top 10 bottled water brands in the United States in 2016 and onwards; and (2) to increase the market share for Ice Mountain Water to at least 5% in 2015. Several marketing strategies according to the marketing mix for two (2) types of target clientele were likewise suggested. The benefits of the proposed strategies would be to enable Nestle Waters to sustain market leadership in the global bottled water market. In addition, the strategies were designed to generate and regain its overall positive corporate image in all the brands of bottled water, specifically Ice Mountain Water, as well as improve its net profits or overall financial condition for the coming years. References Arumugan, N. (2012, October 19). Nestlé Sued AGAIN For Falsely Representing Bottled Tap Water As Naturally Spring-Sourced. Retrieved from Forbes: http://www.forbes.com/sites/nadiaarumugam/2012/10/19/nestle-sued-again-for-falsely-representing-bottled-tap-water-as-naturally-spring-sourced/ Bizzozero, J. (2015, January 6). Bottled Water to Overtake Soda as No. 1 Drink by 2016. Retrieved from Food Product Design: http://www.foodproductdesign.com/Blogs/trending-foods/2015/01/Bottled-Water-to-Overtake-Soda-as-No-1-Drink-by-2.aspx Environmental Water Group. (2011). 2011 Bottled Water Scorecard. Retrieved from ewg.org: http://static.ewg.org/reports/2010/bottledwater2010/pdf/2011-bottledwater-scorecard-report.pdf?_ga=1.228852572.178183351.1430021394 Ice Mountain Water. (2015). About us. Retrieved from icemountainwater.com: http://www.icemountainwater.com/#/about/about_us Ice Mountain Water. (2015). Ice Mountain Brand Sparkling Natural Spring Water. Retrieved from icemountain.com: http://www.icemountain.com/#/products/sparkling Ice Mountain Water. (2015). Ice Mountain water delivery. Retrieved from icemountaindirectdelivery.com: http://www.icemountaindirectdelivery.com/ Ice Mountain Water. (2015). Where to Buy. Retrieved from icemountain.com: http://www.icemountain.com/where_to_buy# Kaplan Financial Limited. (2012). Product Life Cycle analysis . Retrieved from ktfknowledgebank.kaplan.co.uk: http://kfknowledgebank.kaplan.co.uk/KFKB/Wiki%20Pages/Product%20Lifecycle%20analysis.aspx Nestle Waters North America. (2013). At a Glance 2013. Retrieved from nestle-watersna.com: http://www.nestle-watersna.com/content/documents/pdfs/at-a-glance-2013.pdf Nestle Waters North America. (n.d.). Bottled Water Brands. Retrieved from nestle-watersna.com: http://www.nestle-watersna.com/en/bottled-water-brands Statista. (2014). Market share of the leading bottled still water brands in the United States in 2014, based on sales . Retrieved from The Statistics Portal: http://www.statista.com/statistics/252408/market-share-of-bottled-still-water-in-the-us-by-brand/ Statista. (2015). Ice Mountain consumption. Retrieved from statista.com: http://www.statista.com/statistics/228142/ice-mountain-consumption-usa/ Value Based Management. (2014, April 11). BCG Model. Retrieved from valuebasedmanagement.net: http://www.valuebasedmanagement.net/methods_bcgmatrix.html Weberience LLC. (2105). What is Environmental Analysis? Retrieved from pestleanalysis.com: http://pestleanalysis.com/what-is-environmental-analysis/ Read More