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Fiji Natural Artesian Water Marketing Report

Table of Content
Title Executive Summary 1.0 Introduction 2.0 Brief review of direct competitors 2.1 Positioning strategies 2.2 Message strategies 2.3 Media strategies 3.0 Environmental analysis 3.1 Economical analysis 3.2 Social analysis 3.3 Environmental and natural analysis 3.4 Potential Opportunity 3.5 Potential Threats 4.0 Consumer analysis 4.1 Needs/Wants/Desire 4.2 Demographic 4.3 Psychographic and benefit sought 5.0 Segmentation and targeting 5.1 Market segments 5.1.1 Health conscious segment 5.1.2 Value-for-money segment 5.1.3 The innovation adopters segment 5.2 Segmentation table 5.3 Primary target segment 6.0 Positioning strategies 6.1 Positioning by price/quality attribute 7.0 Communication Objectives Reference list Appendices Page i. 1 2 2 2 3 3 3 4 4 4 5 5 5

6 6 7 7 8 8 9 ii. iii, iv

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Executive Summary

This report carries an objective to perform a study on Fiji Water Companys only product range which is the Fiji Natural Artesian Water. The market growth of bottled water had been performing well throughout the years but fails to maintain its consistency when the economic crisis in 2008 struck. The markets pace slowed down also due to the increasing awareness of the environment issues. However, Fiji Water Company had been able to drive its sales against the situation, to an increase of 6.7% in the 2008. This report covers also the segmentation table of Fiji Waters potential market and recommended a target segment with consistent to environmental issues and socioeconomics of the world. Repositioning is suggested for Fiji Water to appear as the leading brand in the bottled water market. Furthermore, influences which compiled of internal and external influences on the targeted segment are discussed in the report for the company to take effective advertising approaches. With regards to this, the needs and perception of the group are found out along with suitable message framing, emotional and reference group appeals which might influence them most. Lastly, recommendations are included to suggest ways Fiji Water can adopt in order to achieve the top position in the current market. The recommendations are in terms of suitable route of persuasive, the design of the water bottle, their pricing strategies, distribution channels and promotions of their product. It is hoped that the report would be helpful to the company for improvement.

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1.0

Introduction
This report holds an objective with regards to perform the study on the brand

product of Fiji Water Company Fiji Natural Artesian Water 500ml in the bottled water industry. The report will be focusing on Fiji Waters segmentation, and influence on the target segment. The bottled water market had been reporting favorable growth for years in the global beverage industry and it was not until the economic downturn which struck the world in late 2007 that affect the performance of the industry. According to Michael Bellas, the chairman and CEO of Beverage Marketing Corporation (BMC), bottled water was the perfect portable and healthy lifestyle beverage for the past 15 years but the economic situation in 2008 and awareness brought up by environmental issues had caused the growth of the industry to slow down (Beverage World, 2009) (Refer to Appendix 1 & 2). Part of the factors include introduction of drinking tap water by governments (Canadean, 2010) which encouraged the slow-down of the market. As for Fiji Water, it is seen from figure 3 (Refer to Appendix 3) under 2008 Top Selling Bottled Water Brands in The US, that Fiji Water experienced an increase of sales in 2008 by 6.7% from year 2007 (Beverage World, 2009). Fiji Natural Artesian Water falls under the category of still unflavoured water which occupied the most counts of shares in the global bottled water market, generating 65.8% of the total revenues amongst the other segmentations which is depicted in table 1 and figure 6 (Refer to Appendix 4). Within the category of still unflavoured water, one of Fiji Waters head-on competitors is Frances Evian, which dominates the convenience/PET category while some other indirect competitors include Dasani from Coca Cola, and Aquafina from Pepsi (Roll, 2006). However, Fiji was positioned ahead of the category leader Evian in 2008, when Evians sales of the year declined by 19%, leaving Fiji

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Water as the market leader in the segment of small bottled water manufacturers (Mintel Oxygen, 2008). Fiji Natural Artesian Water the only product range of Fiji Water Company, is an artesian water, like how its name sounds, bottled in the islands of Fiji, a place far from pollutions. It is a result of rainfall filtering through layers of rocks and sands, gathering minerals along its way down into the underground. One of Fiji Waters remarkable nutrition values is that it contains high silica contents of 85mg/L. Furthermore, the collection and bottling of the water from an aquifer underground allow Fiji Water to make the statement of water untouched by man until the cap of the bottle is unscrewed (Fiji Water, 2009). This report is looking at Fiji Waters segmentation globally. The sources of information are mainly from the universitys databases, journal articles, textbooks and electronic sources from the internet. Limitations had been faced during the construction of the segmentation table when it comes to using only 3 main segmentation bases while other bases such as demographics will perform a more detailed profile.

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2.0

Market Segmentation
Ever since its launching, Fiji Water had been differentiating their product as an

exotic bottled water brand with the only product range Fiji Natural Artesian Water. Even so, Fiji Waters potential market remains to be widely diverged in their needs and wants, as well as buying responses. As suggested by Daniel Yankelovich and David Meer (2006, p. 1) in Harvard Business Review, market segmentation would be crucial to guide companies in tailoring their product and service offerings to the groups most likely to purchase them, if the technique is applied appropriately.

2.1 Segmentation Bases Segmentation bases describe the characteristic of consumers in the market (Schiffman et al., 2008). Three segmentation bases are used to describe the profiles of Fiji Waters consumers which are the benefit sought, psychological factor consumers personality, and their psychographic characteristics (i.e. lifestyle). First of all, benefit of Fiji Natural Artesian Water 500ml sought by purchasers is used as a basis for the evaluation of its market segmentation because it represents the major valuable or factor in resulting a purchase of an offering. Information about benefit and features that matter to the customers are relevant data marketers would like to collect in order to construct a meaningful segmentation (Yankelovich & Meer, 2006). Hence, the benefit sought basis could be helpful in dividing the potential customers into segments with different benefits they seek for when purchasing Fiji Natural Artesian Water. Another segmentation basis utilised to explain the market segments is the personality of consumers. As proposed by Kassarjian (1971), individuals tend to

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respond consistently with the ever-changing environmental situations and these generalized patterns of responses can be called personality. It is crucial for Fiji Water Company to have a thorough understanding regarding the personality of different segments as it would be useful in showing consumers who are likely to give positive responses towards the Fiji Natural Artesian Water and therefore depicting which segment to target at and suitable marketing approaches to utilise. Besides, the psychographic characteristics are also adopted as one of the segmentation bases which show the lifestyle of the consumers. According to Yankelovich and Meer (2006), psychographic profiling holds a purpose to discover customers whose behaviour can be changed or those needs are not being met, which had been wastefully misused by marketers nowadays. Although this basis may seems to be weak in picturing the purchase decisions of consumers, it provides greater degree of innovativeness for Fiji Water Company to influence their consumers. 2.2 Market Segments 2.2.1 Health conscious segment As introduced, Fiji Natural Artesian Water is obtained from an unpolluted and natural source. The EPA (Environmental Protection Agency) claimed that artesian water is more pure because it is protected from contamination by confining layers of rock and clay (Fiji Water, 2009). In addition, its high silica contents added values to the speciality of the product. Based on recent studies, silica is found to decrease the risk of Alzheimers disease (American Journal of Epidemiology, 2009 as cited in Fiji Water, 2009). These are definitely attractive features for the health conscious segment to take notice of. This segment of consumers does normally aware and responds to features that might affect their health positively and negatively. They have a neurotic personality as

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they tend to experience negative emotions, for instance, fear of sickness or fear of impurities if they consumed tap water. Besides, this group of people has high need for cognition as they are likely to take effort in searching information about the health benefits of Fiji Water. They are also more of verbalisers who respond more towards written information on advertisements or nutrition contents on the bottle of Fiji Water. As they are concern about their health, they carry out healthy lifestyle and involve in sports or activities such as jungle trekking and joggings. 2.2.2 For a better world segment The second segment of Fiji Waters market is the For a better world segment. They are made up of people who are concern about the environment and the social wellness. They are likely to purchase Fiji Water with an intention to help the environment and socio-economics of the need-helps. The company has reduces a large portion of plastic and carbon consumption in their manufacturing process. Most importantly, Fiji Waters had been actively involved in charity works and environmental saving activities which induce this segments consumers to act for supports. This group of people has high agreeableness as they always hold intention to act kindly towards the others (Schiffman, 2008). They are also people who have internal local of control where they think that their purchase might be impactful to the environment and the nations. Hence, they are actively involved in charity works as well as supporting environmental awareness campaigns. 2.2.3 The luxurious segment The luxurious segments are people who have higher spending power. It is suggested that they usually make their purchase of Fiji Water for thirst quenching. This is because they easily narrow down their choice of purchase and look for branded

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products or products in a higher price range when there is a need as they marked an equal sign between price and the perceived quality. In addition, the luxurious segment normally pays visit to high-end hotels and restaurants where Fiji Water is available through the companys controlled distribution. This segment market is high in dogmatism as they are more likely to choose established products or branded goods. They practice a luxury lifestyle where their usual activities include travelling and shopping around the world, and also sports activities like playing golf. 2.2.4 The trendy segment The trendy segment contains people who tend to be attracted by trendy and fashionable products. Their purchases are normally due to the iconic square water bottle and the design of graphic on the bottle of Fiji Natural Artesian Water. This shows that the group is more of visualiser with low need for cognition because they prefer products which have good imagery values and are normally attracted by visual information. Besides, their purchases are influenced by endorsement of the product in famous movies and TV shows such as including "Desperate Housewives," "Entourage" and "Sex and the City" as well as the position of the water as a favourite of celebrities (Lazarus, 2007). This depicts the personality of the group who are other-directed where they are easily influenced by others and conclude that the product is socially approved (Schiffman, 2008).

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2.3 Segmentation Table

Segments Segmentation Bases

Health conscious segment Nutrition values Pureness of water Source of water

For a better world segment Environmental friendly bottle packaging Supports for Fiji Water companys active role in environment saving and charity High agreeableness Internal local of control

The luxurious segment

The trendy segment

Thirst Quenching High end bottle water brand

Iconic square bottle design Endorsement in Hollywoods movies Celebrities favourite

Benefit sought

Neurotic Verbalisers Psychological (Personality) High need for cognition Sports Psychographic (Lifestyle) Exercises

High in dogmatism

Visualisers Other-directed Low need for cognition

Charity/ voluntary works Environmental awareness campaign

Shopping Travel Golf

Fashion Celebrity gossip

Table 2

2.4 Primary Target Segment The primary target segment of Fiji Natural Artesian Water suggested would be the For a better world segment. This is supported by the increase in size of this market segment especially when greater awareness of the environmental issues arose. It was mentioned in this report that environmental issue was one of the factor for the slowdown of the bottled water market, hence it is seems that this segment has significant influence over the growth of the market. Besides, Fiji Water Company had implanted its

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image as a company who are concern about the well-being of the nation, therefore, it would be more convincing and trustable for them to convince purchases.

3.0

Positioning

3.1 Positioning Strategy The current positioning strategy adopted by Fiji Water Company is by finding an unowned position. Fiji Water had positioned its brand as a location-based quality water which is a niche unfilled by other bottled water brands. Fiji Water emphasizes on its high quality artesian water, untouched by man and bottled from the islands of Fiji. The company often emphasizes the exotic quality of Fiji Water by phrasing slogans such as Paradise in a bottle and The taste of paradise. 3.2 Perceptual Map

High Softness (Lower pH value) Perrier (pH 5.58)

Low creativity of design

Fiji (pH 6.65) Voss (pH 6.67)

(Reposition)

High creativity of design

Waiwera (pH 7.87)

Evian (pH 7.53)

Low Softness (Higher pH value)

Figure 7

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From the report on water research by Wilkes University, it is claimed that generally, the pH of water determines the softness of water. The prices of bottled water used above are within $1 USD to $2 USD. Products of competitors (Perceptual Map): Perrier Mineral Water Fiji Natural Artesian Water Evian Natural Spring Water Voss Norway Artesian Water Waiwera Artesian Water

3.3 Repositioning Even though Fiji Waters water bottle is unique with its award-winning iconic square design (Roll, 2006) , there are many competitors staying ahead of the brand in term of their creativity of bottle design. Reposition is suggested for Fiji Water Company to enhance its product design in order to increase customers perceived values. As for the case of pH values, it is impossible for Fiji Water to improve in their softness of water as their pH values are unchangeable. This is because Fiji Water is sourced naturally without adding in or taken out anything from the artesian water (Fiji Water, 2009).

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4.0

Influences on the target segment

4.1 Internal influences 4.1.1 Needs According to Maslows hierarchy of needs, human tends to satisfy lower-level of needs before higher level of needs arose (Schiffman, 2009). In the case of target segment of Fiji Water, their psychology needs would be water. This need is likely to appear first in their mind get a bottle of water, when going through the process of getting a bottle of Fiji Water. Then, the social needs of the segment emerged when they are motivated by love for the environment and love towards the society. This is where they seek for product which can fulfil their higher need Fiji Natural Artesian Water which reminds the market segment of the products environmental friendliness and the companys image in helping out the socio-economics. 4.1.2 Perception The perceived price is how much does the product cost to purchasers themselves. If the purchaser is dissatisfies with her choice, the perceived price for her would be high as she did not benefit as much as the cost she paid for the product. The For a better world segment purchase Fiji Water to play their part on saving the environment and helping the poor. Their perceived value of purchasing Fiji Water would be how much they can help the world in terms of environment as well as the socio-economics of the poor or the undeveloped. For instance, the promise of Fiji Water Company to donate 5% of its sales to a charity association is fulfilled, this segment of consumers feel that they gained their perceived value, hence satisfy with Fiji Water Company and conclude that the perceived price of Fiji Natural Artesian Water is low. The perceived risk of this

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target segment on their purchase of Fiji Water would be that worries arose where they are afraid that their supports may not be resulted for good outcomes. For example, they will doubt about the companys promise on donating 5% of their sales revenue to charity associations or the companys foundation. Therefore, it is important for Fiji Water Company to hold their promises and fulfil them to enhance the customers perceived values and quality of their product. 4.2 External influences 4.2.1 Message framing With regards to the prospect theory, framing is defined as the presentation of either one of the two outcomes positive or gain terms, and negative or loss terms, to the decision makers. (Chang & Lee, 2010). It is suggested that negative framing to be tailored for the For a better world segment to induce their purchase. This is because negative information can grab attention greater compared with positive information as losses are said to be experienced more strongly than gains under the same circumstances (Maheswaran & Meyers-Levy, 1990; Homer & Yoon, 1992; Rothman et al., 1999). Negative consequences are to be included in the message such as negative case stories and issues like poverty, food crisis, homelessness and climate change, to attract the targeted segment to encourage charitable giving. This would be useful as this group of consumers are sensitive with such issues. This can also induce the consumers to obtain information about the relevant attributes and ways to prevent the situation to occur (Burnkrant & Sawyer, 1983; Chang, 2007a, 2007b, as cited in Chang & Lee, 2010).

4.2.2 Emotional advertising

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Pictorial display is widely used in charity advertising in order to bring out vividness effects (Isen & Noonberg, 1979; Thornton et al., 1991; Barnett & Hammond, 1999; Perrine & Heather, 2000, as cited in Chang & Lee, 2010). A suitable choice of emotional appeal by marketer is crucial as it determines the degree of responses of the target segment. In the case of Fiji Water with a target segment consisting of people who are environmental and socio-economical concern, fear appeal is recommended which is closely linked to the negative message framing suggested. Situations of environment or living standard of the poor caused by the inactions of consumers can be implanted into advertisements to personalise the intended beneficiaries and enhance sympathy and altruism towards a needy recipient (Chang & Lee, 2010). 4.2.3 Reference group Targeting at the For a better world segment, celebrities as reference group to influence purchase is recommended. Celebrities actions have always been highly concerned and influential on their fans and the public as they are perceived as idealisation who will never be wrong. For the environment, new term of Green Celebrities had been introduced where these celebrities had appeared to be green conscious. As for charity works, it was common for celebrities to position themselves as active players in charity as this would enhance their positive image in the publics mind. These celebrities can be employed as ambassador of Fiji Water as well as the Fiji Water Foundation to convince the consumers that they can also play their part in saving the environment and reaching their hands to the needy. Example of celebrity who would fit this purpose would be Leonardo DiCaprio who had been ranked the top 10 green celebrities (Hinkel, 2009). He narrated, co-produced and wrote the climate change documentary The Eleventh Hour which had impressed the world, as well as

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producing reality program Greensburg to be aired on the Discovery Channel. Recent news also reported that he donated $1 Million to the Clinton Bush Haiti Fund.

5.0

Recommendation

5.1 Elaboration Likelihood Model (ELM) Since the purchase of Fiji Water is not a high involvement decision, a peripheral route of persuasion should be utilised (Schiffman, 2008). This includes inducement of purchase such as discounts, purchase with purchase, attractive product design, celebrity endorsement and etc. It is not necessary for Fiji Water Company to include much information when dealing with people who would be persuaded by this route of persuasion. 5.2 Product attributes Design As suggested under repositioning, the only way for Fiji Water to enhance its product attributes is to come out with more creative water bottle designs as its waters content is unalterable due to its natural source.

5.3 Pricing Satisfaction-based pricing Pricing strategy should be implemented based on perceived value of customers and hence benefit-driven pricing can be utilised. Avoid placing prices exceeding customers perceived values to reduce dissatisfaction from arising when their perceived price is low for the water. It would also be possible to position the product as an affordable bottled water.

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5.4 Distribution Selective distribution Inclusion of distribution channel of selective wholesalers or retail stores such as organic shops should be implemented. Other than that, Fiji Water can enhance its placement in hotel or restaurant as well as airplanes menus. Direct marketing channel like ordering directly from the official website should be highly encouraged.

5.5 Promotion Fiji Water Club can be organised to give privilege to members such as rebates, discounts and privileges. Fiji Water Company has to be actively enrolled in sponsoring events and holding roadshows. Besides, more creative and interactive advertisements along with impactful slogans are to be designed to ensure deliver of right information and message.

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References
Beverage World (April, 2009) State of the industry 09: Bottled water report. s8 9. United States: Ideal Media LLC Beverage World (March, 2010) Bottled water: some ups and downs. Global Report. United States: Ideal Media LLC. Chang, C. T. & Lee,Y. K.(2010) Effects of message framing, vividness congruency and statistical framing on responses to charity advertising. International Journal of Advertising, 29(2), 195220. Datamonitor (June, 2009) Global Bottled Water: Industry profile. United States: Author. Datamonitor (April, 2010) Global Bottled Water: Industry profile. United States: Author. FIJI Water Company LLC. (2009). About the water. Retrieved from: http://www.fijiwater.com/Bottled.aspx FIJI Water Company LLC. (2009). Our promise: saving the rainforest. Fiji Green. Retrieved from: http://www.fijigreen.com/SavingTheRainforest.html Kassarjian, H. H. (1974). Applications of Consumer Behavior to the Field of Advertising. Journal of Advertising, 3(3) 10 15. Kassarjian, H. H. (1971). Personality and Consumer Behavior: A Review. Journal of Marketing Research (JMR), 8(4), 409 418. Lazarus, D., (January 21, 2007). L.A. business tries to make Fiji Water a star. San Francisco Chronicle (CA), retrieved from: http://www.sfgate.com/cgibin/article.cgi?file=/c/a/2007/01/21/BUGE7NL8RA1. D TL Maheswaran, D. & Meyers-Levy, J. (1990) The influence of message framing and issue involvement. Journal of Marketing Research, 27(4), 361367. Roll, M., (2007) Fiji Water - The exotic water brand. Retrieved from http://www.venturerepublic.com/resources/Fiji_Water__The_exotic_water_brand.asp Schiffman, L., Bednall, D., OCass, A., Paladino, A., Ward, S., & kanuk, L. (2008). Consumer Behaviour (4th Ed.). Frenchs Forest, NSW: Pearson Education Australia.

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Yankelovich, D., Meer, D. (February, 2006) Rediscovering market segmentation. Harvard Business Review. United States: Harvard Business School Publising Corporation.

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Appendix 1 Global bottled water market value: $ million, 200509(e)

Figure 1

Global Bottled Water Market Value: $ billion, 2004-2008

Figure 2

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Appendix 2 Global bottled water market volume: million liters, 200509(e)

Figure 3

Global Bottled Water Market Volume: Liters billion, 2004-2008

Figure 4

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Appendix 3 2008 Top Selling Bottled Water Brands In The US* Dollar Sales and Percent Change:

Figure 5 Retrieved from: State of the Industry '09: Bottled Water Report, Beverage World, April 2009

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Appendix 4 Global Bottled Water Market Segmentation : % Share, by Value, 2009(e)

Table 1

Global Bottled Water Market Segmentation : % Share, by Value, 2009(e)

Figure 6

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Appendix 5

By 2010 we are committed to reducing the amount of packaging we use to make our products by at least 20%, and to reducing manufacturing waste at our Fiji bottling facility by 33%. And, because quality matters as much as quantity, we are also looking at ways to significantly increase our use of recycled resin, board and other raw materials. We bottle all of our remarkable water in polyethylene terephthalate (PET) because we believe it is the most responsible environmental choice. Liter for liter, PET bottles require 24% less energy to produce, generate 40% less solid waste, and emit 46% less carbon during shipping than glass bottles.1, 2 While we have considered corn-based plastics, we believe they are not a truly sustainable solution. They are likely to require the conversion of large tracts of land to agricultural usage, with profoundly detrimental impacts on those tracts' ecosystems. Large-scale use of corn-based plastics would also cause food prices to rise further, with the greatest burden falling on those least able to afford it. Even now, demand for corn-based ethanol is making food more costly, as the increasing scarcity of corn makes it more expensive to use as an ingredient in food products and as feed for livestock. And, compared to other plastics, PET is easily recyclable and has many uses. The demand for recycled PET is extremely high due to its use as a replacement for polyester, which can be used in carpeting, clothing material and textile products such as polar fleece. Some companies turn PET into fiberfill for sleeping bags, toys and jackets. We are looking into programs that promote recycling in the U.S. and in other markets. For example, in the U.S. a combined system of curbside recycling and container deposits gives consumers two opportunities to recycle. That is why FIJI Water sees an active role for itself in

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advocating for legislation that will boost overall recycling rates via expanded curbside recycling programs and container deposit laws that include bottled water and other non-carbonated beverages.

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