Marketing plan development and strategy

Marketing Plan for New Evian Bottled Water

The marketing operations are an integrant part in the activity of every company and what was once a temporarily occurring solution is now an ongoing process. With the launching of a new product, all companies conduct intense market research in order to identify the characteristics of the competition and the customers; they analyze the internal and external forces which affect the corporate operations and develop a complex set of decisions on product, price, distribution and promotion, all organized into the marketing plan.

The current plan is focused on developing strategies and conducting research prior to the launching of Evian's new line of bottled water. The marketing campaign will be based on the benefits of drinking the new water which contains increased levels of oxygen and it will take an environment friendly approach. The primary features in this approach will be given by the Alpine source of the pure water, the biodegradable nature of the bottles used and also the promotion of drinking water as source of energy and health. But before actually developing the campaign, the company has to conduct market research in order to identify the characteristics of the consumers and the industry.

2. Company Description

Evian is an international brand in water, selling pure bottled water emerging from springs in the French Alps. Today, the company is part of international conglomerate Danone Group, which registers annual profits over 13 million euros and which employs more than 88,000 individuals. Danone's corporate mission is to "bring health through food & beverages to a maximum number of people" (Official Website of Danone, 2008)

The beverage sector is extremely important for Danone and in 2005 they retrieved more than a quarter of their annual profits from the selling of beverages. "Beverages, which accounted for 27% of consolidated sales, showed continued pace in 2005, with organic growth for the past five years averaging close to 8% a year. Sales for the year came to 3.5 billion euros, showing a raise of 10% at constant exchange rates and scope of consolidation. Operating margin reached a vigorous 13.7% despite the steep rise in prices for the PET used to make bottles - the business line's main raw material" (Danone Group 2005-2006 Annual Report).

The French group has established a clear strategy in promoting a healthy life style through the consumption of healthy aliments. The Evian water perfectly integrates within this desiderate as the consumption of water has always been promoted as a benefit to the individual's health. In addition, the group also emphasizes on the pure source of provenience and the process through which the water is collected and bottled. "Every drop of Evian starts in the heart of the pristine heights of the French Alps. Here, pure, clear rainwater and melting snow slowly filter down through ancient layers of glacial sand and rock. In a journey that takes over 15 years, the water gradually becomes enriched with essential minerals, until one day it emerges, 800 feet below, at the famous spring in Evian-les-Bains" (Detox with Evian, 2008)

3. Situational Analysis

The situational analysis is an important process in the launching of a new product as it identifies the characteristics of the market onto which the product will be sold, including customers' preferences and the competition's strategies. Relevant analyses to be conducted at this stage include the SWOT, PEST and competitor analyses, as well as the identification of the primary target market.

3.1 SWOT

Internal Strengths

Danone is an undisputed leader onto the international market, possessing extensive experience and enjoying a well established reputation

They register impressive financial highlights with all their business operations, beverages, biscuits and dairies

They have increased access to all required resources, including capital, labor and technologies and have a committed and skilled workforce to integrate the resources into the operational process and support the organization in reaching its overall goals

The Danone brand is a definite strength as it is an international label, recognized all over the world

Danone operates in both foods and drinks industry, balancing as such their revenues and diversifying their sources of income

Danone has become involved in a wide series of humanitarian activities, which improved its public perception

Internal Weaknesses

Danone has often been criticized for the usage of preservatives in preparing the dairy products, accusations mostly based on the extended warranty of the items; however they constantly denied it and explained the manufacturing process, the accusations forwarded by the public had some negative implications

Danone has also been accused for using chemical compounds in the manufacturing process and however the suppositions were denied with scientific testing, the damage had already been done; in Romania for instance, sales decreased dramatically after such a rumor was launched in regard to their fruity yogurt

Danone addresses a rather narrow market, which combined with the increased competition, has materialized in a slower growth rate during the past recent years

External Opportunities

Danone promotes a healthy life style throughout the consumption of their products, and the external environment offers both of these features: consumerism and focus on eco products wide series of technological developments have been realized to which Danone has increased access and can incorporate them into the manufacturing process as to increase the efficiency of their operations as well as the quality of the products

Danone has set the basis for numerous strategic alliances in various emerging markets through joint ventures, operations which today account for one third of the company's total revenues

The increased focus on home and office delivery of bottled water has offered Danone the chance for further expansion (Food and Drink Europe, 2005)

Market liberalization and increased globalization has offered Danone the chance to expand internationally

External Threats

Increased competition on both national and international markets

The multitude of regulations with which Danone must comply generate additional expenses

The Evian water has often been criticized for its high price and for creating the misconception that tap water is unhealthy; several organizations have spoke in the detriment of such beliefs and this could eventually reside in reduced sales of Danone's beverages

3.2 PEST

Political

Due to the international expansion of the operations, Danone has to make sure their products comply with the product standards in France as well as in the destination countries. Then, the large numbers of international organizations that regulate trade impose the need to comply with a multitude of regulations. Finally, various regulations such as the GATT or the norms of the WTO stimulate free and globalized markets, which present the company with both opportunities as well as threats.

Economical

The economic background promotes an intense but fair competition. An important focus must be placed onto the monetary consequences. France is now a member of the European Union, using the Euro as its national currency. Recently, the Euro has become increasingly stable as compared to the American dollar that continues to decline in international value. From this particular instance, the Danone Group will have to pay close attention to the international payment methods used and select those that best protect them against exchange rates risks.

Another force which must be consider is the economic growth and it has to be mentioned that the growth has been steady during the past recent years, forcing as such the consumers to orientate towards low-margin products (Hoovers, 2008)

Socio-Cultural

The social environment of today tries to direct the individual towards living a healthier life and an important aspect in achieving this desiderate is the large consumption of water. Water has a net advantage on those who drink it in large quantities and recent studies have even shown that the populations which consumed large amounts of water on daily basis lived better and longer (Tools for Wellness, 1988-2008)

Technological

The contemporaneous society is constantly presented with new innovations in the technological field, advancements which make the quality of live superior. A major such technology in this particular sense is that of increasing the amount of oxygen in the drinking water. "One of the best devices is the Antioxidant Water Ionizer. It first filters the water of impurities, then it uses ionization to make the water alkaline. When you drink it, your body becomes more alkaline so your blood is able to absorb much more oxygen from the air you breathe. [...] the E-Water Machine also uses ionization to reduce the cluster sizes of the water. Water molecules stick together in strands of about 12 molecules, so when you reduce these clusters in half, the water becomes more absorbable by the cells to hydrate you faster. It is very useful for cellular detox. You can also use Crystal Energy drops to reduce the cluster size of your water just by adding several drops to your glass" (Tools for Wellness, 1988-2008)

3.3 Competition

The competition has to be analyzed from two perspectives: the competition for the Danone Group and the competition they encounter into the beverages sector, particularly bottled water. In this instance, the main competitors of the Danone Group are PepsiCo, Coca-Cola, Nestle and Kraft Foods which pose threats onto three major industry sectors: dairy, canned and frozen foods and grains (Hoovers, 2008).

The bottled water industry is an extremely dynamic one which has brought the players major revenues. Seeing the great potential for further profits, new companies have emerged and some of the already existent ones merged as to get better comparative advantages. Evian's main competitors are the Perrier Group, Aquafina and Dasani, and all these have engaged in marketing operations to differentiate themselves from the newly entered players and consolidate their position in the international market. The Perrier Group based their marketing campaigns onto radio announcements in order to reinforce their brand; Dasani has launched a new television advertisement featuring the Commodores and other funk stars; and Aquafina (from PepsiCo), has developed a televised campaign based on advertisements featuring celebrities (Hein, 2001).

3.4 Target Market

The target market is identified through the application of the segmentation criteria. The most commonly used such criteria include age, cultural background, economic and social status, political and religious convictions as well as any other criterion considered relevant for the product analyzed. In the particular case of the Evian water, the primary selection criteria are given by socio-cultural background, age, gender and economic status. All these reveal the primary target market for the new Evian water as being formed from high class women between the ages of 31 and 50 who desire to improve the quality of their life and health. The economic status criteria is necessary so to identify those that are willing, and more importantly, able to pay the rather higher price of Evian in comparison to other products on the market. Women are then targeted primarily because they tend to consume larger amounts of water than men do and because they are more conscious of the beneficial effects of water onto the individual's body. The age limitation is given by the belief that women younger than 30 are rarely health oriented and also, women older than 50 find it difficult to drink large amounts of water. As such, however it will address it products to a wide palette of customers, the primary market will consist of high class 30 plus women.

4. Marketing Mix

Before actually developing the marketing mix at the basis on launching the new line of Evian water, the company has to identify the features that differentiate it from the competing products. There are two main features that differentiate the new line of Evian water from competing products and which give it a sustainable comparative advantage. These refer to the oxygenated nature of the water and the biodegradable nature of the recipients. Highly oxygenated water offer the consumer larger amounts of energy and Danone has incorporated the technological developments in their operational processes as to increase the levels of oxygen in the water. Then, the biodegradable recipient is environment friendly and does not eliminate greenhouse gases that contribute to global warming.

4.1 Product

The new line of water will be sold under the Evian brand, with focus on the benefits of drinking Evian water and the complex but natural method of extraction and bottling

The stated functionality of the water is to clinch the thirst of the consumer and help her / him stay in shape by preserving his health

The water will be packed in bottles with modern designs; they will contain depictions of family life, nature and health and will be biodegradable as to limit the polluting waste released into the atmosphere