Discuss product service terms current target market demographics U.S. Census Data. 2.Determine product service declining popularity. Be include information social, demographic, ethnic markets; economic technological factors; political legal factors; competitive factors.
The market for bottled water in the U.S. has been experiencing a steady decline in growth as a result of huge awareness campaigns that are conducted to curb consumer demand. This is in contrast to other parts of the world where the popularity of bottled water is continuing to increase by 6.7% each year which is reported by the Beverage Marketing Corporation (2008)
as the smallest increase experienced in the last 10 years. The U.S. used to be the largest consumer of bottled water but in the latest years, there has been a shift towards preference of tap water rather than bottled water Institute, 2012()
The Beverage Marketing Corporation (2008)
states that 54 per cent of the American population drinks bottled water with 36 per cent drinking it regularly which is more than once every week. The target market of bottled water is the African-American, Hispanic and Asian communities who constitute 54 per cent of the consumer demographic trends for 2011. According to the U.S. Census Bureau (2010)
, Latinos and African-Americans together account for almost half of the U.S. population that is living under the line of poverty. As a result of this, these communities lack access to clean water which makes them prefer bottled water which they believe is much safer to drink. American target market demographics also state that women constitute the majority of drinkers of bottled water. Data indicates that 45 per cent of women aged between 18 and 34 years and 44.6 per cent of women aged between 35 and 54 years old consume bottled water. The percentages for men are much lower with 35.3 per cent of those aged between 18 and 34 years and 34.5 per cent of those aged between 35 and 54 years consuming bottled water. According to the U.S. Census Bureau (2010)
, women constitute 50.8 per cent of the American population with 32.3 per cent aged between 18 and 34 years and 35.8 per cent aged between 35 and 54 years which is a clear indication that women form a greater majority of consumers of bottled water.
Reasons for declining popularity
It is believed that this paradigm shift from bottled water to tap water is as a result of economic, social justice and environmental reasons. Marketing campaigns run by municipal councils also seek to emphasize on these reasons which has encouraged increased the popularity of tap water. Furthermore, restaurants, schools and food stores have all decided to purchase tap water instead of carrying bottled water. They have all created lobby groups which have led to significant cancellation or non-renewal of bottled water contracts. Other cities have responded with bans on the sale of bottled water at city functions.
The economic factors that have led to the decline of popularity are as a result of the high pricing of bottled water. In the U.S., bottled water costs between $500 and $1,000 per 1,000 liters as compared to $0.5 for the same amount of municipal water in California. Pricing for other states differ but are at the same range. This shows a significant premium pricing of bottled water yet industry data reported by the Olson (1999)
study on bottled water shows that 40 per cent of bottled water is sourced from public water supplies.
As a result of the study conducted by the Natural Resources Defense Council as well as the American Beverage Association, Mayor's Business Council and International Bottled water Association, there is no significant difference between the qualities of bottled water over tap water. In recent years, municipal supply of water has been improved considerably which has given it competitive advantage against bottled water. This has led to the municipal campaigns for the shift from bottled water to tap water.
In 2011, Corporate Accountability International pressured bottled water companies to disclose the sources and quality of their water which revealed shocking information to the public. Pepsi announced that their bottled water product, Aquafina comes from purified public water sources. Though Coca-Cola did not respond to this, information from reliable sources shows that Dasani bottled water is also from a public water supply. Nestle's Pure Life Purified Drinking water was also announced to come from municipal supplies. These shocking reveals are also a major reason for the decline in popularity of bottled water.
Recommendations for marketers
The best chance for the marketers to recover their products from doom as a result of the declining popularity is the use of advertising and promotion activities to assure the public on the significant difference in quality of bottled water over tap water. Marketers will need to reach the wider population and especially those who are underserved with clean tap water. Through advertising and promotion, marketers should inform the public on the other advantages of bottled water which include the convenience of the packaging, additional taste and flavoring and the addition of nutritional supplements to improve the nutritional value.
Marketers may also be able to salvage the situation through consumer education. This will require consumer education activities that conduct experiments to show these differences as well as educate the consumers on other benefits of bottled water such as convenience of carrying. Consumers should also be educated on the recyclable nature of the plastic packaging of bottled water which reduced environmental impact considerably. This will help paint the picture of the eco-friendly nature of bottled water packaging.
Marketers will also be able to counter this paradigm shift through better pricing. As revealed by the target market characteristics, bottled water uses a premium pricing policy. Marketers should evaluate the impact of reduction in pricing in order to use this as a strategy to increase the popularity of drinking water. A significant reduction in pricing of bottled water will change the attitude of consumers towards bottled water being very expensive as compared to its competitor, tap water.
Best foreign country for bottled water
The best foreign country for marketing bottled water is India. India is a severely water-scarce country with 585 cubic meters of fresh water per capita per year. This is far below the 1,000 cubic meters minimum standard set by the United Nations Central Intelligence Agency, 2012.
Furthermore, 80 per cent of tap water in India contains dissolved impurities and an imbalance of mineral content Central Intelligence Agency, 2012.
There has also been significant concern of the high microbial content in Indian tap water. Water pollution is also widespread in the country which leads to increased concern over the quality of tap water as drinking water. Over the years, there have been many cases of leaks and sources of contamination of tap water supplies along the supply line.
Most Indians also live in densely populated areas such as slums which do not have access to tap water supplies. Though most of the population is poor, it is anticipated that the lack of tap water will lead to increased demand for tap water which is significantly safer to drink than tap water. In addition to this, Indian restaurateurs have also embraced bottled water. This is because Indians prefer to purchase bottled water at restaurants rather than tap water which has more impurities. This has increased the target market demographics for bottled water in India.
The attitude and perception of Indian consumers towards bottled water also creates a perfect environment for the marketing of bottled water. In most Indian homes, there is the use of home water purifiers which help to filter and clean the tap water supplies to make it fit for human consumption.
Debut of bottled water in India
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