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>In 1977 In America a company munched bottled water called Peppier which was sold In a glass bottle. These drinks were targeted at the high end of the market as a luxury Item as It was expensive and exclusive. Many celebrities were also seen drinking bottled water which added to the prestige and Increased demand for the product. This was also around the time that the American people were starting to realize that the amount of soft drinks they were consuming was bad for their health and they started looking for an alternative instead.
These bottled water companies centered their marketing campaign around owe much cleaner and purer their water was compared to tap water because it came from a natural spring. These companies were thus using fear (of unclean tap water), which is one of man’s strongest emotions, to steer people away from tap water and towards theirs. Obviously tap water didn’t have a marketing campaign behind it to make a counterargument and thus the bottled water companies enjoyed a competition free environment. There was a problem though in that the packaging still made it too expensive for the average Joe to swoop his Coke or Pepsi for a bottle of eater.
That changed in 1989 when a new plastic started being used to package beverages. This plastic was called PECK and it was lighter clearer and most of all, less expensive to produce. The lighter bottle allowed it to be more portable which added to the convenience factor of bottled water. The clearer bottle also made the bottle look cleaner, supporting the marketing campaign of “a cleaner product”. And the fact that it was cheaper opened up the potential market to virtually anybody and it could now compete in terms of price with the major soft drinks.
These factors added much needed value to the product which water as a raw product does not have. After this happened bottled water sales began to rise while soft drink sales started to take a dip. In South Africa the bottled water industry is flourishing as well with many deferent companies coming up with their own unique product to satisfy their particular target market. We will critically look at the proposal made by Mr. Bert Markham to start selling bottled water from Sheffield which Is situated on the Garden Route, Western Cape.
Mr. Sheffield has proposed that due to the water shortage In the area, a desalination plant should be used to process see water and turn It Into drinking water. The water will be used for the benefit of the community and the excess will be sold In bottled form. The fact that It Is situated on the Garden Route presents an opportunity for word of mouth advertising as the area Is a very popular tourist destination. This Is why Mr. Markham has proposed that It be sold at local restaurants which are often filled with tourists.
It was also a good idea to fill motions of vitality and goodness in the customer. When a product stirs up a positive emotion in a customer it increases the chances of that customer becoming loyal. Making reference to the fact that the product contains minerals from the sea is also a smart move as this is something South Africans seek. This is proven by the fact that South Africans from inland often take bottles of sea water home with them if they find themselves on the coast. The locals have said that they prefer the taste of this particular brand of water over others found in the area.
Mr. Marshal’s proposal to use the local Pick n Pay and Checkers stores as distribution points is a good idea as it would ensure adequate distribution of the in demand product to the locals. The fact that there are so many competitors shows that the market is very segmented and it is therefore important for a new company to find a particular niche in the market and exploit it instead of taking on a well-established brand. Mr. Markham has recognized that his product is unique in that it comes from the sea while others are either from springs or the tap.
This can allow him to ask for a higher price as he has less competition in his particular niche. He has chosen to sell a wide variety of products which has its advantages but it would be better if he could see which particular product brings in the most revenue and focus more resources on that instead. The 20 liter bottle that he proposed to sell to surrounding areas which don’t have the best quality water should be done with caution as these areas would be buying the water in bulk. His product isn’t targeted at this market as it is a bit more expensive than the there bottled waters.
Mr. Markham proposes that he sells mall and 1 liter bottles. Seeing that Pump has been doing so well, being the only brand with a mall bottle, with water that comes from the tap it would be a good idea to experiment with a mall bottle as well. Due to the fact that his source is from the sea, it would be a superior product in a relatively untapped market. The fact that he has chosen to sell only still or sparkling, unfiltered form is interesting as well. He must have done some market research to find out that these options offered the best return.
In the still form he has lots of competition and as a result even though he currently holds sufficient market share, he would have to keep his eye on developments made by the competition as they will constantly try to increase their market share at his products expense. The sparkling, unfiltered form presents better long term stability as there is less competition in this market. In conclusion there is a place in the market for Mr. Markham product and his bottled water should be flying off the shelves for years to come.