Competition in the Bottled Water Industry in 2006

The rising popularity of the bottled water in United States was attributed because of the following reasons:y y y y y Concerns over the safety of municipal drinking water Increased focus on fitness and health Hectic on the go lifestyle of American Consumers Convenience, purity and portability Dissatisfaction with tap water and carbonated beverages

The strategies which were followed because of the fierce competitive rivalry as the world bottled water sellers went for market share and volume gains:y Develop low cost production y Distribution capabilities y Use differentiation strategies y New product attributes y Innovative product Variations y Lowered prices in developed market y Acquiring smaller sellers to gain footholds in rapidly growing emerging market Transition from soft drinks to bottled water was basically because of the concerns about sugar consumption other nutrition, fitness issues and concerns over quality of tap water. The strategies adopted by the companies in 2006 were:y Home and Office Deliveries(HOD) y Convenience and portability of water bottled in single serving PET containers that could be purchased chilled from a convenience store and drunk immediately y Product differentiation  Bottled water in 2-litre  1-litre  Smaller single-serving PET bottles  5 gallon containers  2.5 gallon containers y High emphasis on healthy life styles and improved consumer awareness of the need for proper hydration led many consumers to shift traditional beverages preferences y Bottled water was positioned as which improved the appearances of the skin and gave them more energy

Price competition . of deliveries per driver. handheld inventory tracking devices and labor Provide on-time deliveries Offer responsive customer service to large customers Low production costs. but also to avoid spring water s in bound shipping cost of 5 to 15 cents per gallon since arrived at the bottling facility by pipe rather than by truck Key Competitive Capabilities in bottled water Industry Bottled water seller needed to have efficient distribution systems to supermarket. universities and school systems Suppliers if the Industry Companies selling purified water merely purchased tap water from municipal water system.since distribution included high fixed costs for ware houses.Basically there were concerns over the tap water because:y y Chemical taste of water Included the use of chlorine and other chemicals such as fluoride Although tap water was no less healthy than bottled water but the major concerns were because of the chemical taste of tap water Bottled water in US were required to meet standards from both EPA (Environmental Protection Agency) and FDA (Food and Drug Administration) Distribution and Sales of Bottled Water The strategies followed by the companies were:y y y y y Easily Available:. The strategies involved were:y y y y y Efficient distribution systems Maximize no.Consumer could purchase in nearby locations in US where food was also available Distribution varied depending on the producer and the distribution channel Water was distributed to large grocers and wholesalers directly Pepsi and Cola s vast beverage distribution system made it easy Always negotiated contracts with sports stadiums. As a result sellers of purified water were able not only to pay less for water they bottled. trucks. wholesale clubs and convenience store channels.

vitamins. The strategies involved were:y y y y y y y Offer considerable discounts Purchasing smaller regional brands Acquiring bottled water producers Entering into joint ventures to increase penetrations of selected emerging and developed markets Expand into international market by allowing foreign bottling franchisees to license the brand Introduced variations of their products that included flavoring. electrolytes and other supplements Promoting mental stimulation. carbohydrates. COCA-COLA. and PEPSICO. Nestle The strategies employed by the companies were:y y Acquiring of established local brands Wide range of portfolio  2 global brands  5 International premium brands  68 local brands Innovations  Two innovative calorie-free flavors  Packaging innovations to differentiate its bottled water brands New design to appeal to children New PET containers to revitalize the prestigious brand which was experiencing sales decline HOD( Home & Office Delivery) Acquisitions and JV to develop market leading positions in countries Whole sale pricing advantage as compared to competitors y y y y y y GroupeDanone The strategies employed by the company were:y y y Acquiring established brands of bottled water industry Entering into JV s to strengthen its distribution network Partnership with companies to accelerate its development of market opportunities . physical rejuvenation and overall improved health Competitors There were many players into the bottled water industry. The names of few are NESTLE WATERS. DANONE WATERS.Recent Trends Price competition was avoided through 2004 but now largest sellers began to offer considerable discounts on 12 and 24 bottle multi packs.

the company voluntary recalled the bottles because they were tainted with bromate. world s most valuable brand.Their marketing expertise and vast distribution system and joint venture with Danone waters allowed CocaCola to position Dasani as a upper-midpriced product The company later added strawberry and grape flavors to Dasani Line. The company relied upon their vast global distribution system. The company produced soft drinks. water and coffee and was best known for Coca-Cola. PepsiCo The strategies followed by the companies were:y They believed it would be easier to produce national brand of bottled water that could utilize the same water purification facilities in Pepsi bottling plants that were used to produce the company s brands of soft drinks By stripping all chlorine and other particles out of tap water Product lines were developed around customer type and lifestyle Packaging was marketed to image-driven consumers Company s strategy involved offering a continuum of healthy beverages from unflavored Aquafina to nutrient-rich Gatorade They acquired Mexico s largest bottler.Coca-Cola Company With 300 brands worldwide. y y y y y . After the international launch of Dasani. sports drinks. They also introduced Dasani Sensations and Powerade Option. which was supported by $15 million advertisement which they raised to $20 million in 2005. Fruit flavored Dasani proved to be successful in market in 2006.a cancer causing agent. the Coca-Cola Company was the world s leading manufacturing marketer. Pepsi-Gemex. The company introduced Dasani in 1999. juice drinks.