Bottled Water Industry: Brand Re-launch of Perrier - Case Study Example

and Section # of INTRODUCTION Doctor Louis Perrier in France bought a spring which was later used for a spa. Louis Perrier then sent a gift to a wealthy British person by the name of Harmsworth. Harmsworth marketed that bottled water in Britain and thus by the name of the actual owner of that spring, Doctor Perrier, Perrier started and now it is owned by Nestle. From 1900 onwards, it became a fashion to buy bottled water but in 1970s, the fashion started fading away. Therefore, Perrier came with a new marketing campaign in 1974 which was a great success. The overall market in 1976 bought 3 million liters of mineral water and the figure rose to 128 million by 1991, but sales of Perrier were relatively low compared to other companies. In 1990, it was found that Perrier bottles contains Benzene contents which are poisonous and even though Perrier assured it was a minor mistake done during operations, people didn't believe and had to reposition their brand after calling back 160 million dollars worth of sale. Perrier then introduced the lime and lemon flavors, and to introduce new stuff, they have also introduced Grape mint flavor after 2000. The bottled water boom was actually an unpredicted and strange phenomenon because the demand rose when Britain was at a height of recession, but now that it is mature and people are consuming it, there is cut-throat competition to capture the 1 million Euros per day market (second-opinions.co.uk). COMPETITION The UK market for natural bottled water has grown by 54% between 1993 and 1997, with volume sales reaching 804 million lt and worth an estimated 402 million pounds sterling. Still mineral water sales amount to 504 million lt in 1997, representing 62.6% of the market, with sparkling water sales estimated at 300 million lt. Premier Waters, with its Evian and Voltic brands, leads the branded market with a 17.6% share. The mineral waters market is forecast to reach volume sales of 1.42 billion lt by 2002, worth 493.6 million pounds sterling (faqs.org). Spokeswoman for Perrier America said that before the Benzene incident, Perrier had a record of 120 million dollar sales in a year resulting in a capture of one fourth of the market volume in 1980s. This resulted in Perrier having 5.7% of total market share in bottled water market and it was ranked third, with Arrowhead and Sparkletts at number 1 and 2 respectively. Unlike most of the similar products that promote health and safety through the water, Perrier shows the way to be cool and target youth. The restaurant chains make a big time business for Perrier as the brand is widely used and even after so many ups and downs with the brand, it still remains at the top with a relatively good image. Perrier's sales in 1987 were 180 million Euros and they captured 40% of the market that year (books.google.com). Although the UK government and the ministry has tried several times to tell people that tap water is as safe as mineral water and they should not spend Euros on it, but nothing helped and people still use it in a large quantity. The market has now grown to more than 92 mineral water producers and another 30+ flavored mineral water producers. Most of the companies market themselves as a drink that is a family need, with sophistication and love. On the other hand, only Strathmore water and Perrier markets itself as a cool and chilling drink for the youth which should be taken on beaches and events. The most common observation is the sport event sponsoring done by most of the companies. Highland Spring sponsored UK cycling marathon held in January 2010 and British tennis in November 2009 (highland-spring.com), similarly Buxton water called itself 'the official water of England cricket'. This shows that there is a cut throat competition and companies are constantly trying to be at the top by spending millions on advertising and promotional campaigns. Deside water even announced that they have scientifically proven that they are better than the other producers and that their water shows sign of ageing and comparing it with the other tested waters, it is 50% more effective (deesidewater.co.uk). Thus we can conclude that even with so many brands and with a sector that touched worth of 900 million pounds in pounds in 2001, there will be more expense and aggressive marketing because even the top 4 brands acquire only 5% to 10% of market share (food.gov.uk) and Perrier is one of the hit brands which has also been the most successful brand once. Thus through a proper promotion and diversified products, it can move up the ladder and we will discuss in detail the way of doing it. PRODUCT Perrier comes in five flavors which are unflavored, lemon, lime, Citron lemon-lime and Pamplemousse rose. Unflavored, lemon and lime are the oldest flavors Pamplemousse Rose (Pink Grapefruit) was introduced after 2005 and Citron lemon lime after 2000. There are multiple reasons why Perrier was such a resounding success earlier. First of all Perrier is famous for its renowned carbonation which is exactly same as it was found decades ago at a remote spring that is located in France. Secondly Perrier's unique and highly aesthetic bottle design has also been one of the major reasons for its success and the reason why many of society's elite preferred Perrier over all others. Perrier is making the right moves by re launching itself in Britain. Britain is one of the few European countries where the market for bottled water is still in its infancy. Reportedly the British drink only eight liters of bottled water per head per year, which is very low as compared to the French (111 liters per head per year) and the Italians (132 liters per head per year). In line with the changing trend and demand of bottled water consumption which has evolved from a market approximately equally divided between still and sparkling water, to a market which largely prefers still bottled water now, I think Perrier should introduce a still variant in the UK and try to exploit this growing segment of the market. Traditionally Perrier has not been very successful in capturing the youth market in the UK, therefore this segment of the market should be the main focus of the company. The company should also keep in mind that its core drinking group lies between the ages of 28-48 and should channel its marketing efforts towards this group. Another target segment that Perrier could be interested in, is the restaurant, caf and eateries business. Perrier products are sold from these venues to their ultimate consumers and thus institutional marketing should be carried out effectively and proactively. PRMOTIONAL CAMPAIGN Perrier is an internationally renowned brand, famous the world over for its bottled water products. Being a veteran n the industry Perrier has faced its ups and downs. Perrier was enjoying a healthy business in the UK market before it experienced a fall from grace due to the benzene incident. Therefore Perrier should realize that the time has come for reworking and reintroducing its brand to take it to whole different level. Perrier would like to improve its business performance in the UK and for that it is essential that a well thought out and planed marketing strategy is developed and implemented. The main objective of any successful promotional campaign and or brand re-launch exercise should be to bring the brand to an improved position in terms of its sales, market share and overall profitability. Perrier's main aim should be to develop an optimal market mix so that it could confidently launch its product in the UK market. According to me Perrier has chosen the right time to enter the UK market. As in the UK and all over the world there has been an increasing interest in health and fitness, aided by the various programs and health shows in the media, which has led the youth, specially younger females to buy and consume increasing amount of bottled water. Additionally although per head consumption of bottled water in the UK has grown substantially, the market is still considered in its infancy stage as its still ranks low in bottled water consumption compared to many European countries and the US. Moreover the UK market has switched from being divided between still and sparkling water, to substantially still water. Therefore developing a promotional campaign centred around relaunching the brand with a Still variant is the most appropriate course of action for Perrier. If we look at the marketing mix, there are certain areas Perrier could increase its focus to establish itself successfully in the UK market. If we look at the distribution side of things, then Perrier should closely follow its major competitors in their distribution strategies, in order to gain access to markets within the UK to compete with. In addition to this, Perrier should give heed to the research carried out by ACNielsen, which points out that a dominant and ever increasing source of retail shares of bottled water comes through grocery multiples/ co-ops. Such grocery chains are frequently visited by people who are identified as the target market for Perrier's products. Large Grocery chains like Tesco and Sainsbury experience large volumes of people coming to their stores everyday, increasing the chances of interacting and purchasing bottled water from such stores. These chains are also a source of bulk sales and are a potent source of providing a brand with very deep and wide coverage. Therefore it is important that the marketing campaign takes these chains into account. However various other outlets where bottled water is available should not be ignored. Such outlets include petrol station forecourt shops, confectioners, snack shops, kiosks, railway/airport shops, variety stores, tobacconists, medicines/toiletries retailers, department stores, newsagents and garden centre's etc. It is in these apparently smaller but 'impulse' outlets that sales by value significantly exceed sales by volume. Therefore such outlets should be at the center of Perrier's promotional campaign as they are widely dispersed thus giving huge coverage and reach to its product. Plus such outlets have another advantage over other larger retail grocery chains, that is in such outlets Perrier would not have to compete with the Chain's own-label brands and thus achieve higher profit margins. Therefore the significance of effective B2B marketing cannot be stressed enough, and Perrier should find creative ways to forge mutually beneficial B2B relationships with other companies and businesses that serve as venues of sale for its products. Cinemas are also an emerging market for bottled water products, as people frequently drink and eat snacks during a movie, if Perrier can capture and maintain this segment of the market, the company would reap significant benefits and will have a competitive edge over its rivals. If we look at the Product and Promotion, then Perrier's efforts should be focused on capturing and attracting the youth market, as it is both stylish and common for the youth to drink bottled water as an alternative to other carbonated soft drinks in the UK, as all over the world. I personally think that Perrier should launch its still variant in the same bottle that is a trademark for Perrier. St. John Harmsworth design of the Perrier bottle is still considered as stylish and iconic and serves as a hook for many of the brands customers. The bottle is a major source of brand recall and Brand loyalty and therefore I think any major changes in the packaging should be avoided. However the company can introduce new and unique limited edition bottles per year to spice things up and create renewed interests in its products. Furthermore the company's advertising efforts should be focused on the youth and promoting Perrier still water as a healthy alternative to other soft drinks available in the market. The advertisement campaigns should be relevant to the youth and should be hip and trendy enough to attract the attention of tat segment of the market. Therefore Perrier should promote a lot of activities that are related to health, fitness, sport and leisure (beach events). Many brands sponsor sporting tournaments like the infamous Wimbledon, various snooker championships, cricket tournaments and various other Athletics events, Perrier should follow suit and make its Brand visible at such occasion in order to get optimal marketing coverage and attract its target market as well. Additionally Perrier should reposition itself as a luxury item, rather than as a substitute for tap water. It should position itself as an adult soft drink, the champagne of table waters if you may and a special drink from France rather than just Mineral water. The company could take this concept and further develop Perrier as an adult drink which could also be used as a mixer for alcoholic and non-alcoholic beverages. This would allow the company to gain additional reach both in the soft drink and on-trade markets. Various Posters, fan websites, a trendy official website, plus interesting story boards, new designs & concepts, unique and eye catching postcards and gimmicks like an appealing presentation tin, could help the company market its bottled water to bars and nightclubs so that it could be used as a mixer, mineral water or a cocktail mixer. This will help the company in creating a niche for itself and will help the company in reaping huge profits due to little competition from its rivals. The company will also gain additional markets for its products. The company has apparently put this idea to the test and is developing a splash-proof version of a Perrier book of cocktails for bars and night clubs. CONCLUSION If Perrier is able to effectively design, develop and implement a promotional strategy that adequately addresses the issues highlighted above, the company will be able to relaunch itself in the UK market which has huge potential to become one of the biggest markets for producers of bottled water. If Perrier is able to avoid its past mistakes and position itself in the minds of its target market as being as stylish, healthy and eye catching as the shape of its infamous bottle, then the company may redeem itself in the UK market and could be one of the front runners in the UK bottled water products market. The time and conditions are right, it is up to Perrier to learn from its mistakes and move forward in this new era. BIBLIOGRAPHY 1) Groves, Berry. (2009) The Bottle Boom - Why Buy Bottled Water Second Opinions. Available from: http://www.second-opinions.co.uk/bottle.html. Accessed Date: February 22, 2010 2) (2004) Mineral Water. Available from: http://www.faqs.org/abstracts/Business-international/Bottled-water-Mineral-water.html#ixzz0gGqonVNu. Accessed Date: February 22, 2010 3) Booth A. S. Simon. (1993). Crisis Management Strategy: Competition and Change in Modern Enterprises. Google Books. Available From: http://books.google.com.pk/booksid=_ygOAAAAQAAJ&pg=PA202&lpg=PA202&dq=Perrier+water+bottle+competitors+UK&source=bl&ots=ZtdtNhrv9p&sig=Uy6rJ-dQrpDMkrEWRuUHN3mGv48&hl=en&ei=SnmCS6O_LJStrAfgnbWVBw&sa=X&oi=book_result&ct=result&resnum=10&ved=0CCQQ6AEwCQ#v=onepage&q=&f=false. Accessed Date: February 22, 2010 4) (February 22, 2010). News and Offers. Highland Spring. Available from: http://www.highland-spring.com/newsOffers/ Accessed Date: February 22, 2010 5) (2010). News. Deeside Mineral Water. Available from: http://www.deesidewater.co.uk/index.phpoption=com_content&view=category&layout=blog&id=1&Itemid=50. Accessed Date: February 22, 2010 1) Green ,Christine. (2003) Natural Mineral Water, Spring Water and Bottled Drinking Water. Food Standards Agency. Available from: http://www.food.gov.uk/multimedia/pdfs/draftriabottledwater.pdf. Accessed Date: February 22, 2010 Read More