Evian Oxygenated Water Launch: Full Marketing Plan

Introduction

Marketing operations are an integral part of every company's activity, and what was once a temporary solution has become an ongoing process. With the launching of a new product, companies conduct intense market research to identify the characteristics of the competition and the customers. They analyze the internal and external forces that affect corporate operations and develop a complex set of decisions on product, price, distribution, and promotion — all organized into a marketing plan.

The current plan is focused on developing strategies and conducting research prior to the launch 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 environmentally friendly approach. The primary features of this approach will be the Alpine source of the pure water, the biodegradable nature of the bottles used, and the promotion of drinking water as a source of energy and health. Before developing the campaign, however, the company must conduct market research to identify the characteristics of consumers and the industry.

Company Description

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

The beverage sector is extremely important for Danone. In 2005, the company derived more than a quarter of its annual profits from beverage sales: "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 rise 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 of promoting a healthy lifestyle through the consumption of healthy products. Evian water fits perfectly within this objective, as water consumption has always been promoted as beneficial to individual health. Danone also emphasizes the pure source and the careful 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).

Situational Analysis

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

Internal Strengths

Danone is an undisputed leader in the international market, possessing extensive experience and enjoying a well-established reputation. The company registers impressive financial results across all its business operations — beverages, biscuits, and dairies — and has increased access to all required resources, including capital, labor, and technology. A committed and skilled workforce integrates these resources into the operational process and supports the organization in reaching its overall goals. The Danone brand is itself a definite strength as an internationally recognized label. Danone operates in both the food and drinks industries, balancing revenues and diversifying income sources. The company has also become involved in a wide range of humanitarian activities, which has improved its public perception.

Internal Weaknesses

Danone has often been criticized for the use of preservatives in preparing its dairy products — accusations largely based on those products' extended shelf life. Although the company has consistently denied these claims and explained its manufacturing processes, the accusations have had some negative implications for its public image. Danone has also been accused of using chemical compounds in manufacturing. Even though the claims were denied through scientific testing, the damage had already been done; in Romania, for example, sales decreased dramatically after a rumor was launched regarding one of the company's fruity yogurt products. Additionally, Danone addresses a relatively narrow market, which, combined with increased competition, has contributed to a slower growth rate in recent years.

External Opportunities

Danone promotes a healthy lifestyle through the consumption of its products, and the external environment supports both consumerism and a growing focus on eco-friendly products. A wide series of technological developments has emerged, to which Danone has increased access and can incorporate into its manufacturing processes to improve efficiency and product quality. Danone has also established the basis for numerous strategic alliances in various emerging markets through joint ventures, 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 further expansion opportunities (Food and Drink Europe, 2005). Market liberalization and increased globalization have similarly created opportunities for international expansion.

External Threats

Increased competition on both national and international markets represents a significant threat. The multitude of regulations with which Danone must comply generates additional expenses. Furthermore, Evian water has often been criticized for its high price and for creating the misconception that tap water is unhealthy. Several organizations have spoken out against such beliefs, and this opposition could eventually result in reduced beverage sales.

Political

Due to the international expansion of its operations, Danone must ensure its products comply with product standards both in France and in destination countries. The large number of international organizations that regulate trade imposes the need to comply with a multitude of regulations. Various agreements such as the GATT and the norms of the WTO simultaneously stimulate free and globalized markets, presenting the company with both opportunities and threats.

Economic

The economic environment promotes intense but fair competition. An important consideration is the monetary context: France is a member of the European Union and uses the euro as its national currency. Recently, the euro has become increasingly stable compared to the U.S. dollar, which continues to decline in international value. As a result, the Danone Group must pay close attention to the international payment methods it uses and select those that best protect against exchange rate risks.

Another force to consider is economic growth. Growth has been steady in recent years, which has pushed some consumers toward lower-margin products (Hoovers, 2008).

Socio-Cultural

The social environment increasingly directs individuals toward healthier lifestyles, and an important component of this trend is the large consumption of water. Water offers clear advantages to those who drink it in large quantities, and recent studies have shown that populations consuming large amounts of water daily tend to live better and longer (Tools for Wellness, 1988–2008).

Technological

Contemporary society is continuously presented with new technological innovations that improve quality of life. A major such technology, directly relevant to this product, is the process of increasing the amount of oxygen in drinking water. As one source describes: "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" (Tools for Wellness, 1988–2008).

The competition must be analyzed from two perspectives: the competition facing the Danone Group overall, and the competition it encounters in the beverages sector, particularly in bottled water. The main competitors of the Danone Group are PepsiCo, Coca-Cola, Nestlé, and Kraft Foods, which pose threats across three major industry sectors: dairy, canned and frozen foods, and grains (Hoovers, 2008).

The bottled water industry is extremely dynamic and has generated major revenues for its players. Seeing the great potential for further profits, new companies have entered the market and some existing ones have merged to gain better competitive advantages. Evian's main competitors are the Perrier Group, Aquafina, and Dasani, all of which have engaged in marketing operations to differentiate themselves from newer entrants and to consolidate their positions in the international market. The Perrier Group based its marketing campaigns on radio announcements to reinforce brand recognition; Dasani launched a television advertisement featuring the Commodores and other funk artists; and Aquafina (from PepsiCo) developed a televised campaign based on celebrity endorsements (Hein, 2001).

The target market is identified through the application of segmentation criteria. Commonly used criteria include age, cultural background, economic and social status, and political and religious convictions, as well as any other criterion considered relevant for the product being analyzed. In the case of Evian water, the primary selection criteria are socio-cultural background, age, gender, and economic status. These criteria reveal the primary target market for the new Evian water as high-class women between the ages of 31 and 50 who desire to improve the quality of their life and health.

The economic status criterion is necessary to identify those who are willing — and, more importantly, able — to pay the higher price of Evian relative to competing products. Women are targeted primarily because they tend to consume larger amounts of water than men do and because they are generally more conscious of water's beneficial effects on the body. The age range is based on the observation that women younger than 30 are less frequently health-oriented, while women older than 50 may find it difficult to drink large amounts of water. Accordingly, although the product will be available to a wide range of customers, the primary market will consist of high-class women aged 30 and above.