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Buttled water - Case Study Example

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The bottled water industry is massive, with huge sales and relatively large profit margins each year (Thomas, 19), yet is facing difficult economic times, being the target of…
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Bottled Water Case study [Type the document sub [Pick the Bottled Water Case Study Introduction This paper is to analyze the bottled water industry, its current state and its future prospects. The bottled water industry is massive, with huge sales and relatively large profit margins each year (Thomas, 19), yet is facing difficult economic times, being the target of several pressures that are keeping the industry from expanding. Competition in the bottled water industry is fierce, as each company is essentially marketing the same product (water), and they only have a few factors they can use to entice buyers – source of water (all natural European spring water, might, for instance, sell better than Joe’s House of Drink), image, and brand loyalty.
Identification of challenges facing bottled water industry
There are several issues facing the bottled water industry today
Increased competition from other drinks (energy drinks, for instance)
Shrinking of the market based on people leaving bottled water for alternatives such as home filtration systems
Pressure from environmental forces
Image of non-sustainability
Raising transport costs
Water is an incredibly heavy resource that can be sold for very little per unit
Analysis and Evaluation
The fact is that bottled water is operating in a very harmful market environment. This is especially true because the people who would be its primary consumers, such as health conscious people, also tend to be most acutely aware of the supposed problems of sustainability associated with bottled water.
OPTIONS: What does bottled water have going for it?
There are several options that that companies could pursue in order to increase sales and revenues in the bottled water field, and protect themselves from some of the harmful market forces:
Attempt to build brand loyalty
Target younger audience
Target other drinks and try to cannibalize their market share
Get soccer moms to buy bottled water rather than soda, marketing its health benefit and convenience
Diversify marketplace by expanding to similar, but slightly different products
Recommendation: Build, but diversify
Many bottled water brands have good public images and popularity, but the fact remains that bottled water is an expensive commodity that people can easily get for free by buying home filtration units and a permanent bottle, such as aluminum ones that are becoming so popular. I would recommend that bottled water companies continue to support their primary product while simultaneously diversifying in order to be able to escape if the market continues to be more and more hostile to their product. Luckily, diversifying is somewhat easy. A bottled water company could make and market home filtration units with permanent bottles, building off of their brand popularity, and then marketing their traditional bottled water as an emergency or convenience item. They could also begin adding additives to their water, such as vitamins, minerals and nutrients, in order to make their product differentiated from what people could get at home. Bottled water, as an industry, may be on the decline, and if that is the case companies need to prepare for the future.

Works Cited
Joe Thomas. "Bottled Water." Marketing (2009): 17. Print. Read More
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