The bottled water industry has seen enormous growth in the past couple of years in the United States. The industry has appeared to be booming even though many people wonder as to why a commodity which offers something that is freely available in every person’s house would be bought at a more costly rate from some gas station or outlet. The bottled water industry is hence associated with a high standard of living and a comfortable lifestyle (Bottled Water: A Symbol of U.S. Commerce, Culture, 2007). So marketing a product which depends highly on people’s perception of its need is a very tricky affair to handle. The growth of the industry can then be attributed to the level of comfort that people have become accustomed to.
The ease of accessibility to the bottle eventually leads up to its sale. If the placement of bottles is obscure and difficult to get to then it becomes extremely difficult to make any sale. Keeping this in mind the water bottle industry aims at making their product highly accessible and easy to get a hold of. People would purchase bottles rather than waiting to get home or their destination to get a glass. Besides that with the increasing emphasis of people towards health, many people prefer drinking bottled mineral water as it boasts of purity and nutrition (Demographics, 2001). The relative ease in accessibility with the abundance of gas stations, retail outlets and overall stores which stock bottle water beside other beverages has made the selling of bottled water easier.
Since we have determined the placement part of the marketing mix we must now consider the other factors before deciding whether investing in a bottled water company is feasible or not. The pricing of these bottles of water is relatively low but even then it cannot beat price of the public water provided which is free. Thus, conflict arises whether buyers would wait to get home rather than purchase a bottle of water. This leads us to consider the buyer behavior. As far as American market is concerned the people have modest incomes and can easily afford life’s luxuries (bottled water being a luxury as even obtaining regular unprocessed water is a problem in most countries). Therefore, Americans can afford to buy water if they feel the slightest bit thirsty. For any other country it would be very difficult to persuade people to buy water when it is freely available but in the United States this is not a problem. Usually when people decide to buy a bottle of water it is because they are in transit and want a portable source with them during their trip. Bottled water provides them that utility. Health conscious people get their peace of mind that the water they drink is pure, the go-getters and active people have a source of water on hand whenever they are thirsty and people who do not wish to drink carbonated sodas and other caffeinated drinks at restaurants and eateries have a healthy alternative on hand.
The competitors in the U.S. are numerous and are from both local and international competitive classes. Existence of Nestle bottled water and Pepsico’s Dasani can be counted as international competition whereas smaller brands such as Evian cater to local states requirements. The entry and exit into this market is also relatively easy and getting a slice of market share is also easy. The proper marketing campaign and the perfect gimmick can help emerging companies profit from sales.
This leads us to proper branding and product image. If the brand name is trust inducing and appears to provide what they promise then the profits from the business venture could turn out to be astronomical (Karolefski, 2002). Since water isn’t manufactured the overall cost of production is zero. The costs required are for extraction and bottling. The major costs are of labor, machinery, buildings, distribution and promotion. These costs exist in every other industry along with the manufacturing cost. Here the manufacturing cost is missing meaning more capital for investment in promotions (Centre for Agribusiness and Economic Development).
The bottled water industry is a feasible option for investors who would like to concentrate in countries which have a high income per capita and are progressive. The U.S. industry is both the things. In my opinion it would benefit investors to concentrate on this industry. Though it is also important to note that they must have a strong marketing team to manage to capture the market from existing competition. The brand image, the product placement, the pricing, and the product itself must uphold consumer confidence because if the organization fails to fulfill their promises then the consumers would shift from them to any of the other numerous brands available.
References
Bottled Water: A Symbol of U.S. Commerce, Culture. (2007).
Centre for Agribusiness and Economic Development. Bottled Water Feasibility. Web.
Demographics, A. (2001). Water, Water, Everywhere – bottled water market in the US – Industry Overview – Statistical Data Included. Web.
Karolefski, J. (2002). Bottled Water Floods the Market. Web.