Marketing Assignment report writing analysis review:: Marketing report analysis on Glaceau scenario, SWOT & Strategy
Introduction
The bottled water has a significant and a major share in the soft drinks industry at the global level. In the beverage market at the global level, the bottled water segment is one of the fastest growing segments. It has a vast and strong presence in regions of America and Europe, and is increasingly capturing the market in the developing regions of Asia and Middle East. However, the market is facing difficulties in terms of its environmental and ethical concerns due to which companies in the bottled water market are searching new ways to increase their market share and improve their image in front of consumers (Gleick 2010).
The report presents the current market scenario for the bottled water industry with reference to the brand Glaceau, the vitamin water brand from Coca Cola, discussing the overall market and the specific market of the brand with insights on development of the brand in future taking into consideration challenges and opportunities that the brand have at present and can confront in future.
Recommendations for the future strategy of Glaceau are discussed along-with emphasis on needs of various stakeholders involved.
Current market scenario for bottled water industry
Bottled water industry is the fastest growing segment considering the overall beverage and soft drinks market at the global level. By the end of 2012, the industry is expected to reach the market of $65.9 billion. This trend of rise in the market share of the bottled water industry is the result of stimulation given by increasing population, change in buying patterns of consumers, trends related to lifestyle, growing levels of health consciousness, and so on (Salazer 2012).
There is an increasing concern of consumers towards fitness, health, and the quality of water. The current market share of the bottled water industry stands at 38%. Europe and United States dominate the global bottled water market. The product of this segment is considered as the healthy alternative for the carbonated soft drink products (Copes et al 2009).
The flavored varieties of the bottled water along-with convenient packaged formats are also contributing to the rise in the market share of the industry at the global level. Key players that dominate the concerned market include Aqua Gold International Inc., PepsiCo, Coca Cola Company, Danone, Nestle, Saint Elie, Boreal Water Collection Inc., etc. With the increasing presence of soft drink industries in the market, the competition is becoming fierce (Dege 2011).
The current market scenario comprises of mineral water, purified water, spring water, artesian water, ground water and well water. The strongest rate of growth is for the category of fruit and fruit flavored bottled water. This is due to the switching of consumers from sugary carbonated soft drinks to comparatively healthier flavored alternatives for bottled water (Wilk 2006).
The environmental concerns regarding the bottled water industry is a challenge for the industry as large numbers of plastic bottles are being thrown away every year. Every second almost 1500 plastic water bottles are being thrown away. Although water bottles are made up of PET (Polyethylene terephthalate), only 14% of such bottles are recycled. Moreover, the high cost of these bottled water packs, there is growing movement of back to tap water, which is a challenge for the industry compelling it to make use of new and innovative technologies and products for attracting the consumers (Sizer and Whitney 2012).
Market scenario for Glaceau
Galceau is the bottled water brand of Coca Cola and is a privately owned subsidiary of Coca Cola. It comprises of a line of enhanced water products, such as vitamin water, Smartwater and Fruitwater (History Glaceau 2012). The enhance products of Glaceau are different from other water products in several aspects such as the labels, packaging, ingredients, appearance, etc. The product aims to provide nutrients in the drink so as to meet the needs of people throughout the day. The bottles of the product are quite colorful that targets the youth in an effective manner (Glaceua 2012).
The target of Glaceau vitamin water is those people who have a good concern and attention towards their health. The specific market of flavored mineral water brands is increasing in all the regions including America, Asia, Europe and Middle East. Considering the stimulating factors for the increasing market share of the vitamin water Glaceau is consumers giving preference to taste, health and convenience associated with these products (Glaceau 2012).
Current trends in the market such as huge marketing efforts, innovative packaging, development of new products, etc. are positive for the specific market of the brand which is flavored bottled water products (Insel et al 2009). There is growing popularity of innovation in bottled water products, such as water containing vitamins, minerals, caffeine, flavors, herbal extracts, sweeteners, colors, etc. Going with the importance of water in the body, people are increasingly accepting bottled water with presence of innovative varieties owing concerns to health and general notion that tap water is not very pure and is not 100 percent free from contamination (Ward et al 2009).
Over the last five years, the overall sales of the energy water drinks have doubled. Vitamin enhanced waters are targeted to individuals with health consciousness. The Glaceau brand products come in eleven flavors and they are enriched with natural ingredients as well as vitamins. The brand is positioned so as to directly compete with the traditional form of bottled water, flavored waters and sports drinks. At the global level, the brand is recognized as simply another version of enhanced bottled water (Glaceau 2011).
There is presence of more than 500 energy drink products with Red bull leading the market with effective sales share of almost 42.7%. Between 2011 and 2012, the flavored water accounted for 51 percent of the total bottled water product launches in North America. Addition of Stur-D in vitamin water brand of Glaceau also increased the sales revenue as it contains 120 percent of the total value of Vitamin C for daily consumption that helps the body to make the collagen necessary for supporting joints (Vitamin Enhanced Water Could Make a Bigger Splash 2011). Vitamin water brand of the Glaceau is a major product in the portfolio as it targets both energy drink consumers and fitness consumers at the same time (Vitamin Enhanced Water Could Make a Bigger Splash 2011).
Although, the enhanced water products are registering increase in sales and revenues, but there are some challenges faced by Glaceau in the bottled water market that are required to be dealt in an effective manner so that the future marketing strategy can fit with the requirements and needs of various stakeholders.
Challenges present for the Glaceau brand
There is an increasing awareness for the health and fitness among consumers. Although, flavored water drinks are on the rise in the overall bottled water segment, but there are some challenges and key issues faced by this segment and the organization in concern. The category of enhanced water drinks and flavored water drinks face the challenge of having a large content of sugar. Campaigners criticize the flavored water drinks for showing emphasis on the fruit content contained in the drink in their advertisements but not on the high sugar levels present in the water (Gray 2008).
The sugar content in the Glaceau vitamin water is a problem or challenge for the brand. A 20 ounce bottle of this drink has the content of sugar that can be matched with 8 teaspoons of sugar which is almost equal to 33 grams of sugar in that single serving (Doria 2006).
Increased food safety and environmental stewardship are key issues and challenges for the organization. Moreover, presence of little evidence that the bottled water with enhanced contents is safer and better than the tap water, is another challenge and a key issue for positioning and marketing of these products from Glaceau (Spoolman and Miller 2011). Unhealthy ingredients, such as crystalline fructose and citric acid are other concerns for the organization. The inclusion of words such as enhanced water drinks can sound to be attractive to consumers, but due to the increasing health and environmental concerns, various campaigners are raising questions regarding the ingredients of such enhanced water bottled products that are being positioned as a healthier alternative to regular tap water, soda and other soft drinks (Wilk 2006).
There are other key issues for the company in the industry, such as implications of waste generation, proper use of ground water and economic costs. Moreover, the whole idea of paying for water sounds offensive to various people from various grounds, such as political, economic and ecological. The safety and risk aspect that are associated with the bottled water products are a key issue for the organization (Insel et al 2009). The health effects of drinking sugary and flavored water drinks also pose challenge for the successful marketing strategy by Glaceau (Gray 2008).
As Glaceau is positioned as an enhanced water drink and directly competes against regular water as well as other energy drinks, the consumer wants to know the health content present in the drink due to increase in health and fitness awareness (Ward et al 2009). Presenting the drink as the safe and healthy content rich drink in the market is a challenge as it is necessary to create a fit between the marketing strategy of the company, and the needs and requirements of various stakeholders including consumers and environmentalists who have their questions regarding sugar and unhealthy content of the drink, and environmental concerns respectively.
Needs and requirements of various stakeholders
There are varying needs of stakeholders that are required to be met by the company Coca Cola and it brand Glaceau.
Need of Consumers: Due to the changing lifestyle and trends, there is an increasing tendency of inclination of consumers towards health and fitness aspects in their daily consumption. They want products that can give them energy with no health risks, and an experience of drinking enhanced mineral rich water that is free from impurities and contaminants. As they understand the importance of water in their body and due to the sedentary lifestyle, the demand for products that can provide them both health and fitness are their priority (Sizer and Whitney 2012).
Need of shareholders: Shareholders want to have an increase in the worth of their shares which is possible when there is huge profit and the company is performing well in the market (Salazer 2012).
Government and non government agencies: These agencies require the bottled water products to be environmentally viable. There are concerns about safety of plastics, generation of waste in terms of thrown up plastic water bottles and the level of sugar content in these enhanced water drinks that pose health risks to the consumers in comparison to the regular tap water (Dege 2011).
There is need to meet the requirements of all these stakeholders so that the company can create a fit between its marketing strategy and the needs of its stakeholders. Presently, there is no fit between these two aspects as environmentalists consider the marketing campaigns led by the company to be misleading as they show or publicize only the presence of specific minerals or flavors, which is quite misleading because there is presence of high sugar content in the products of Glaceau that make it questionable on the aspect of its marketing as a healthier and enhanced water product (Gleick 2010).
SWOT analysis of the Glaceau
The SWOT analysis of the brand presents various challenges and weaknesses of the brand in terms of its marketing strategy and how it can address these challenges and do away with weakness through its strengths and opportunities present for the development and extension of the market.
Strengths: The management of the company is purchased by Coca Cola Company which can be used by this brand by utilizing the well developed system of Coca Cola that has experienced management. The vibrant marketing of the brand attracts young customers to a large extent (Vitamin Enhanced Water Could Make a Bigger Splash 2011).
Weaknesses: The weaknesses of the company include restricted sale location, such as that to US mainly, less or very little presence in convenience stores, very less marketing and advertisement in the overseas markets. The product lines are few and the sugar content is high (Glaceau 2012).
Opportunities
Significant decline in social consumption of carbonated soft drinks presents an effective opportunity for the company. Moreover, increase in the health awareness and related concerns among people with emergence of wellness beverages present opportunities for the brand to capture significant share in the wellness market.
Another opportunity lies in growing markets of Asia and Middle East where the bottled water consumption is on the rise. The new age Glaceau attracts young customers as they feel that this brand represents their image and lifestyle. This image of the company can be used as an opportunity by attracting large segment of consumers in the age from 18 to 24 to try the new and innovative products launched by the company. The brand is the competitive pioneer in the enhanced bottled water category with possession of distinctive color blocked labels (Vitamin Enhanced Water Could Make a Bigger Splash 2011).
The company can tap the growing markets of Asia Pacific specifically India and China where the market for bottled water is still at its growing stage and young individuals who are health conscious can be targeted well.
Threats: The premium price of the products of the brand present threat in form of limited access to the mass market. Brand loyalty is not very strong and presence of other energy drinks in the market with PepsiCo’s Gatorade presents threat to the company. Emergence of competitors due to less entry barriers and availability of substitutes can take away the large market share enjoyed by the company.
Launch of Gatorade, SoBe Lifewater, by Pepsi is another threat to the brand as they contain natural sweeteners with low calorie (Salazer 2012).
Future strategy and key recommendations
The future marketing strategy of the company keeping in mind needs and requirements of its stakeholders is repositioning of the product as an energy as well as fitness drinks. This repositioning can be attributed to the growing energy and fitness segment share in the bottled water market. All the other energy drinks such contain caffeine as one of its ingredients. The positioning of the product as an energy and fitness drink can be suitable as people prefer to have natural ingredients in their drinks rather than some chemical based drinks, and Glaceau focuses on the inclusion of vitamins in their drink (Vitamin Enhanced Water Could Make a Bigger Splash 2011).
Launch of products that contain extra nutrients for the body so as to balance the diet can create a large customer segment for the company. Owing to this future marketing strategy, three recommendations are given:
Firstly, the company should make use of less calorie natural sweeteners so that the complaint of people regarding its high sugar content can be addressed effectively. Presence of low sugar and natural ingredients would present the brand in a more attractive manner than before, thus creating large consumer base that is health conscious and want an energy drink (Sizer and Whitney 2012).
Secondly, the company should improve its packaging and labeling to attract a large number of customers with appropriate mentioning of its ingredients and all the nutrient contents. Presence of an attractive labeling and information of ingredients in noticeable way can address the current challenge of meeting the needs of the consumers and environmentalists (Gleick 2010).
Thirdly, the company should actively participate in the recycling of its plastic products so that it can present itself as the environmentally sustainable company. As the companies in the bottled water industry are required to use PET in their plastic manufacturing, which is recyclable, the active contribution of the company towards recycling of its plastic bottles can improve its image and present itself in a better image in front of governmental and non-governmental agencies that raise the environmental concerns regarding generation of waste through bottled water products. Moreover, it can be formed as a part of the corporate social responsibility program of the company so that all the stakeholders of the company can remain satisfied (Spoolman and Miller 2011).
Conclusion
Health drinks are the latest trends in the bottled water industry. It is one of the fastest and innovative segments in the drinks market. The bottled water industry has seen both its rise and fall in terms of popularity, consumption and environmental issues. The bottled water products are presented as safer than the tap water and also gain the market share due to its health, energy and fitness aspects all over the globe. The markets of America and Europe are well tapped by companies in the industry and the growing regions of the world, such as Asia, Africa and Middle East present potential growth of the business of this industry.
However, there are concerns regarding the generation of waste due to use of plastic bottles, the use of energy in producing these products that could have been used to generate a purified form of tap water, and the high level of sugar content in these products which is sidelined by companies in their attractive marketing and advertising campaigns.
Glaceau is the brand which is the privately owned subsidiary of Coca Cola and is a major player in the category of enhanced water segment. However, the company faces challenges in terms of high level of sugar content which is as much as 30 gram in single bottle, and use of unhealthy ingredients, such as citric acid. The future marketing strategy of the company can be repositioning the brand as an energy and fitness drink so as to enlarge its customer base, along-with use of less caloried natural sweeteners so that the issue of high level of sugar can be addressed.
Moreover, with the help of use of effective distribution system of coca cola and making the containers more biodegradable, the company can create a fit between its marketing strategy and requirements of its various stakeholders.
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