Bottled Fiji Water Chain Analysis - Research Paper Example

FIJI WATER CHAIN ANALYSIS By Fiji Water Chain Analysis The use of bottled water among the American citizenshas rampantly increased over the past few years. According to reports released by the International Bottled Water Association (IBWA) “the overall consumption of bottled water has increased by 4.1 percent” (IBWA, 2012, para. 1). This implies that most Americans have turned to using bottled water as opposed to tap and other sources of water. Overtime, Fiji Water Company (FWC) technologically established bottled water, a product that has become a symbol of class and luxury among Americans. However, many bottled water companies have been faced by numerous challenges, with others even being forced to close down due to excessive competition that exists in this industry. To evaluate the issues that exist in this industry, it is important to carry out a commodity chain analysis using FWC as an example. Fiji water has always been ahead of other companies when it comes to the production of bottled water. The production process begins with the tapping of rain water that is purified by the equatorial winds after travelling through the Pacific Ocean. The water is then filtered for a long period during which essential minerals such as ions and silica are gathered to increase the health of the consumers. The company’s marketing structure has been one factor that has enabled them to gain popularity and acquire a competitive edge against rival companies such as Dasani water from Coca Cola, Nestle’ water among others. FWC bases its strategy on the premise that when the consumers understand that their product originates from a remote aquifer in Fiji, they will have a liking towards it since it would represent an “untouched water with untouchable taste,” (Sorrells, 2012, para.1). This therefore implies that creating an identity to the customers would increase the customer reliance on the product. Fiji’s marketing strategy has been a success over the last few years. This success can be attributed to the use of ideal aspects such as perfect market timing, a unique product positioning, premium product pricing, creating image publicity, innovative packaging and effective distribution. For instance, they have created a notion to the customers defining that their premium product is far from pollution, acid rain, industrial waste, and it is uncontaminated, untouched and uncompromised. According to Jessop, this product has been “preserved and protected by geography and geology” (2013, p. 10). This therefore results to a fine taste and mineral properties that are enjoyed by top chefs and discriminating consumers worldwide. In addition, FWC has employed the use of celebrity product placement and endorsement to increase its image publicity. For instance, prominent figures, movie stars, popular musicians, use of high end restaurant and hotel product placement has elevated the use of the product to a ‘celebrity like’ status. Besides, FWC has also adopted several differentiation strategies to help in the marketing of its bottled water product. The company as packaged the water in bottles with different labels that contain three dimension graphics. The labels include the gold label, pink hibiscus flower, blue cap, pacific paradise image, high quality and PET plastic (Jessop, 2013, p. 13). This different labels will provide the customers with a variety of product choice, depending on their unique preferences such as size, price, and brand among others. This will eventually increase the competitive edge that FWC will have in this industry. Various resources are used by FWC in order to ship their products to the ultimate consumers. The company has adopted different network and distribution channels such as wholesalers and retail chains to ensure that their product reaches the target market. It has also partnered with other organization to make sure that the product becomes widely recognized. For instance, FWC entered into an exclusive distributorship partnership with Cadbury Schweppes in 2000 for the American and 2008 for the Canadian markets. When it comes to shipment, FWC endorses their customary square designed bottle. This allows them to use up to 10 percent less trucks during transportation. It is however believed that the initial incentive for this square design was purely economic. In New York, the products are shipped through the Panama Canal instead of first shipping them to Los Angeles then trucking them all the way across America. This could adequately reduce effects of greenhouse emissions. Shipping however still stands as a massive transportation obstacle to FWC since in other parts of the world such as the Midwest and China, it still uses trucks to transport its products. In most countries, bottled water is usually perceived to be a symbol representation of high class and a friendly approach to Mother Nature. FWC’s bottled is a product that has for a long time been associated with a luxurious state, and the company has claimed that it has used sustainable practices in its production. However, when one closely examines this company and the product at large, it is difficult to come to terms that their product is certainly sustainable. Throughout the globe, bottled water has been largely surrounded by controversy with its ecological sustainability in prime focus. FWC’s bottling plant increased its bottle production and filling by an outstanding 15 percent in 2009 (Fiji Water, 2010). This plastic has been looked at as a way towards increasing sustainability by the company. FWC exclusively uses the PET plastic in packaging its water, a decision which it claims was made to benefit the environment through reduced pollution since manufacturing the bottles require 24 percent less energy, 40 percent less solid waste and emits up to 46 percent less carbon during shipping as compared to the glass bottles (Fiji Water, 2010). This therefore implies that using plastic has an ecological gain as opposed to glasses. Additionally, FWC notes that PET can be easily recycled and has many other exclusive post consumption uses such as carpeting and fabricating. The recycling ability of PET is therefore an important step in the life cycle of the company. However, even though this plastic bottles have numerous after initial consumption uses, one major concern still remains. In order for the plastic to be recycled, people have to recycle it. As at 2010, “PET bottles accounted for 11 percent of plastic based materials that ultimately end up in landfills” (Saquing et al., 2010, p. 6399). It is therefore evident that these plastics are not that environmental friendly as the company claims. It is therefore the responsibility of the company to ensure that all used bottles are carefully disposed to increase and facilitate recycling. Plastic bottles are therefore not completely sustainable, no matter what the water companies have said. The bottles are manufactured using large quantities of fossil fuels and water which are at rimes not good for individuals’ health. Consequently, most of the bottles used are made of plastic and glass materials, elements which are not degradable in any meaningful way. Besides, most bottle water is usually mere tap water that has been nicely packaged. Sometimes the label on water bottles may symbolize a mountain spring but contrary, it might be highly true that the water inside is not pure and pristine. Therefore, only some bottled water comes from springs or groundwater sources. “Approximately 25% of bottled water is sourced from the tap” (Peppard, 2013, para. 2). This is absolutely true since some companies filter and distill tap water, package it before selling it to the consumers at a much higher price as compared to the tap water bills. Furthermore, multiple studies have depicted that bottled water samples contain phthalates, fungus, bacteria, benzene and even arsenic. Therefore, health standards are usually endangered when using bottled water. Plastic bottles also contain toxins which might be harmful to consumers. For instance, many companies have increased their use of the “BPA-free plastic” that when they are exposed to excessive sunlight or heat, the chemicals can react, thereby leading to dangerous health hazards to the consumers. Employees who work directly on the recycling plants may also be affected. This is because the in the recycling process, bottles are melted to a high degree thereby producing hazardous fumes which could affect the workers. Even though protective gears could be assigned to the workers, there is always little chance that the workers would always put them on. Even though FWC has been seen to uphold high standards it has also been associated with some flaws. The question that arises therefore, is how can FWC get away from selling contaminated water and still compete effectively? The absolute answer lies on the United States Food and Drugs Administration Standards (FDA). The FDA has been largely blamed for not closely monitoring water bottle brands. When the body discharges its duties to the latter, the amount of impure water that is sold to consumer would decrease, thereby leading to competitiveness and customer trust among the water brands. While public outlook inclines to favor bottled water because of its perceived secure and healthiness, tap water is in fact more regulated than bottled water. Tap incredibly follows strict guidelines and standards of filtration, contaminant detection and purification. Whereas tap water is preserved by the governing standards, bottled water is not subject to much regulation by the Food and Drug Administration. The Federal government should therefore put measures in place to ensure that clean water is circulated to customers. Doing these will gradually reduce the number of hazards posed by drinking contaminated water. Reference Fiji Water. (2010). Fiji water. Retrieved from http://www.fijiwater.com/. International Bottled Water Association. (2012). Bottled Water. Retrieved from http://www.bottledwater.org/content/us-consumption-bottled-water-shows-significant-growth-increasing-41-percent-2011. Jessop, A. (2013). Prezi. FIJI Water. Retrieved from http://prezi.com/k0lze3nft1ie/fiji-water/. Peppard, Z., C. (2013). Mind Body Green. 7 Reasons to Never Drink Bottled Water Again. Retrieved from http://www.mindbodygreen.com/0-11193/7-reasons-to-never-drink-bottled-water-again.html. Saquing, J., Saquing, C., Knappe, D., & Barlaz, M. (2010). Impact of plastics on fate and transport of organic contaminants in landfills. Environmental Science Technology, 44, 6396-6402. Sorrels, M. (2012). How Fiji Water Got 25,000 Consumers to Try Its Product. Retrieved from http://www.bizbash.com/how_fiji_water_got_25_000_consumers_to_try_its_product/new-york/story/24304/#.VFIYLxaWw0o. Read More