This observation is realized from a number of variables that differentiate bottled water from tap water. On the same note, these differentiating variables allows bottled water to obtain price premiums, a scenario that lacks in cases of tap water. The sale of bottled water is undertaken by firms that are in business. They therefore have business aspects to account for in their operations. In this regard, value creation becomes a critical differentiating variable. This is done through processing and packaging water in ways that appeal to the customers (Shiv, 2007). Value creation differentiates tap water and bottled water, with the primary activity being packaging. This process costs the various firms that engage in it, and the price of the bottled water must account for the costs as well as business profits.
The providing firms themselves act as a differentiating variable. Tap water is provided to the masses as an aspect of human right by local governments or the state at large. Water treatment processes are undertaken at a central point before supply is done. For this reason, water tap is regarded a necessity and a right to the population. On the other hand, bottled water is associated with luxury, a complement to tap water. Therefore, obtaining the water attracts a luxury price premium.
Quality is another aspect that differentiates bottled water from tap water. If is often held that bottled water is of high quality than tap water. While this claim may or may not be true, a high quality product is likely to attract a high price. The quality aspect has given rise to numerous bottled water brands, and the higher the quality attached to a specific bottled water brand, the higher the price premium that brand obtains.
Marketing activities significantly differentiates tap water from bottled water. Firms that sell bottled water are actually business enterprises. Companies that supply tap water are either state operated