The Growth of Bottled Water Industry

Introduction

Bottled water is that which comes from springs, mineral water, or any other pure water with legal definitions (Balmond 2005, p.3). Unlike tap water, bottled water is considered healthy, though this may only be in words. Bottled water is gaining ground in the U.K. markets at a rate that is beyond what the players had predicted at its inception. People prefer bottled water to tap water and this has seen many brands of bottled water mushrooming in the market. Initially, the U.K market was flooded with brands from France, which had gained ground in their home market. Currently, there are numerous U.K. brands, which include, among others, Aqua-Para, Highland Spring, Abbey Well, and Forest Glade.

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This developing industry has been hit by a recession, which has significantly affected the lifestyle of the Britons. Many people are facing hard economic conditions, and now consider items like bottled water, a luxury. The industry that had experienced growth in the near past is now faced with a shrinking market. According to Kimmel (2007, p.6), this situation is made worse by the fact that the industry is open to competition. The U.K. alone has more than 35 firms in this industry. Many of the French firms are also rooted in this market. This means that firms must develop proper marketing strategies and incorporate market segments that were not covered before. We consider some factors that are key to the bottled water industry.

Branding

A firm’s most important asset is not its brick moter, but it is brand. A strong brand can stare competition in the face, even if it is so stiff. Dasani is a brand that is known, not just in the U.K., but also in other parts of the world. It is doing well in continents outside Europe, and therefore it has vast experience in this industry gained in the many markets it serves. Geissler and Gamble (2002, p.12) appreciate the fact that the British market is increasingly becoming competitive for the bottled water firm and that only strong brands may survive the wave.

Aqua-Pura, as a brand, has achieved substantial growth. It is currently rated as one of the best bottled water brands in the world. Through market research analysis, this company has penetrated markets that had not been tapped before. Among the European bottled water brands that cover African and Asian markets, Aqua-Pura comes second only to Dasani a product of Coca-Cola. Having realized that a number of their customers are avoiding their cola products for health reasons and preferring water instead, Coca Cola came up with Dasani in 1999, to counter their rival’s (Pepsi cola) Aquafina.

Perception

Hawkins et al. (2005, p. 279) argue that perception is the attention, interpretation, and memory that one has towards a product or service. Perception concerns the mind, how one views or appreciates a given item. Bottled water has no major difference from tap water and health experts have proven this. Nevertheless, more people, especially those of higher living standards have become weary of tap water. They fully depend on bottled water for drinking. The recent review of academic literature shows that many people perceive tap water to be contaminated and hence health hazardous. Another perception is that bottled water is a sign of class. Market data shows that college and university students make the largest and fastest-growing market. They look for more in water than just quenching their thirst. They want class, and for this reason, they will avoid tap water as much as they can, especially when in school. However, environmental concerns are giving a new twist to this. The plastic bottles are turning into a menace. Once they have served their purpose, the bottles are always poorly disposed of. They are causing an environmental scare in the major cities. Environmentalists are now advocating for tap water, as opposed to bottled water. They argue that tap water is as safe as bottled water, and better still, they do not cause any form of pollution Bainbridge (2007, p. 99).

These two contradicting perceptions have equal effects on the sale of bottled water and the entire growth of this industry, but they work in opposite directions. The youths are determined to be seen as health-conscious and classy individuals. They will not relent on the usage of bottled water. They are the major target of the bottled water firms. The production units provide them with custom-made plastic bottles that emphasize this sign of class. On the other hand, environmentalists are also determined to ensure that bottled water is regulated, or even eliminated from the market. This has made these firms come up with larger containers of ten liters and above for family use. These containers can also be used for other purposes, once their intended purpose is complete (Porter 1998, p. 103).

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Consumer Behavior

Hoyer and McInnis define consumer behavior as “the totality of consumers’ decision concerning the acquisition, consumption, and disposition of goods, services, ideas, and time by human decision-making units” (2008, p.3). They further assert that consumer behavior involves the activities and experiences of the individual. This, therefore, means that an individual bottled water company must understand the target market in terms of age, lifestyle, and even religious beliefs. With the environmentalist advocating for the abolition of small water bottles, these companies must act to avoid the loss of the market segment that is sensitive to this demand. With the once active and fast-growing market now experiencing near stagnant growth, the players in this industry must make an effort to revive it.

Decision Making

According to Huczyn and Buchanan (2007, p.89), decision-making refers to the process of making choices from among several options. The bottled water industry has several brands of water. An individual will, therefore, have several options from which to choose. A firm should have a proper market positioning, with its brand being conspicuously strong in the market. With this, it will be able to face competition in the market and manage it. Aqua-Pura understands that the decision-making process lies with the customer. The youths will decide whether to listen to the demands of the environmentalists and avoid bottled water or to stick to their lifestyle issues. However, these companies must understand that even though the customers may make a decision that is favorable to them today, at last, they may give in to the environmentalists, and this will change their decision on the purchase of bottled water (Wedel & Kamakura 2000, p. 129).

Conclusion

The bottled water industry has experienced terrific growth over the past few years. Many people currently prefer bottled water to tap water. This is because they consider it to be healthier to drink, compared to tap water. This perception may not be very true according to health experts who say that tap water is as safe to drink as bottled water. Youths, especially those in colleges and universities make up the highest segment in the market. This is the segment experiencing the greatest growth level. The bottled water companies have realized this and are working hard to attract this segment. However, this industry has been hit by serious challenges like the recent economic recession and environmental concerns. To survive in this market, the companies must therefore make a concerted effort to overcome these challenges and get this industry back to its feet.

References

Andrzej, A & Buchaman, A 2007, Organizational behavior, Prentice Hall international, London.

Bainbridge, J 2007, Sector insight: Bottled water health drowns out green concerns, Marketing BrandRepublic, vol.12, no.7, pp.1-99.

Balmond, S 2005, Bottled water sales are booming in the U.K. market, Design Week Journal, vol. 20, no.30, pp.1-11.

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Del, I, Best, J & Coney, K 2005, Consumer behavior, Tata McGraw Hill, New York,

Geissler, G L & Gamble, J E 2002, Straight from the tap? Consumer evaluation of a bottled water product concept, Journal of Food Products Marketing, vol. 8, no. 2, pp.1-25.

Kimmel, R 2007, Fill with care’ promotes lifestyle, well being, Evian’s Caswell Brandweek, vol. 48, no.30, pp.1-42.

Porter, M 1998, Competitive strategy: Techniques for analyzing industries and competitors, Simon and Schuster: New York.

Wayne, D & Hoyer, M 2008, Consumer behavior, Cangage Learning, South Western.

Wedel, M & Kamakura, W 2000, Market Segmentation: Conceptual And Methodological Foundations, Springer: New York.

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