During the recent years, Fiji water brand came across several strategic problems; where the main issues included economic recession, health awareness, environmental issues and socio-economic changes (Kulin, 2010). The economic recession played a major role in the decrease of sales and consumption; as it resulted in changing the consumer’s purchasing tendencies, making the company financially unstable (Kulin, 2009). Health conscious consumers find the purity and the water source very essential when choosing their products; where the credibility of Fiji’s bottled water was questioned as not enough thorough research was conducted. Environmental issues similar to waste and pollution could have an impact on the purity and taste of the water; making it hazardous to consume and affecting the brand Fiji and its opponents (Kulin, 2010). Therefore, most bottled water brands tend to satisfy environmentally sustainable costumers by trying to switch their current production to an ecological friendly material (plastic to glass for example). In 2008, Fiji water brand were forced to lay off around 40% of their staffing resources due to these issues, in addition to negative reviews about the socio-economic conditions of the water source (Mishra, 2016). Since only limited resources are available to Fiji water, their approach on stimulating the growth of the company should be critically analysed were it is not only extremely effective but cost efficient too (Kulin 2010).
Fiji water is a premium bottled water company of an artesian water source that was originally founded by David Gilmour in 1988, however was not available in the market till 1996 (Martin, 2014). Fiji water is one of the fastest growing water brands, holding a premium position in the competitive premium bottled water market. Its headquarters are situated in Los Angeles, where in 2004, it was a fully owned subsidiary by Roll International Corporation (RIC) (Kulin, 2010). The acquisition of Fiji water by the RIC -a private corporation involved in several industries such as consumer packaged goods, floral services and agriculture- was estimated to cost around £37 million (Dean, 2010). Moreover, the acquisition turned into success within the short span of a year, increasing Fij water sales by 50%. The beverage industry is determined out of three categories: major manufacturers (Nestle), private labels and small manufacturers such as Fiji water itself (Kulin, 2009). This enabled Fiji water to identify their market segmentation as high-end hotels, restaurants and retail. The brand’s water source is exported from Viti Levu – the largest island in Fiji- making it the leading export of the world’s finest water with a distribution of several sizes (refer to figure 1) in over 60 countries (Fijiwater, 2017).
1 litre of Fiji water is priced for £1.49, making it an affordable and of high quality. Further, the image of the brand is supported by high awareness from large marketing and promotions to media placement advertisement, hence in 2008, they increased their advertisement budget from £4.
5 million to £7.5 million (Hein, 2008). This is done as the competition in the premium bottled water market is high, from indirectly competing with Pepsi, Coca-Cola, Dasani and Aquafina to directly competing with all other water brands found on the shelf (Evian, Perrier and Voss for example) (Advertising Age, 2009).In the following essay, Fiji water business strategies on positions will be evaluated using different methods of analytics; where recommendations will be provided based on the strengths and the limitations of the company.
FijiFiji’s organization goal of occupying one of the top desired positions -within a short amount of time- in a highly competitive growing global market was achieved based on three supports: the creation of an exotic story about the source of water, including personal relationships and product placement within precision marketing and applying a controlled distribution strategy (Martin, 2014). Building a strong brand equity was the main focus of the brand; therefore, a two-pronged strategy (building strong relationships and product placement) was invented. The strong connections formed were with the top league industries from hotels, resorts, clubs and such to retail; further, creating a huge desire from elite chains and celebrities including musicians, actors and models. Additionally, to creating an opportunity for a free product placement in Hollywood movies and series, elite events such as the Emmy Award show and the Oscar’s; managing to successfully raise demand on the brand.
The following market strategies contributed in raising Fiji’s sales by £87million (Kulin, 2010).In the figure above, Fiji’s pricing strategy in the UK over the period of the last 12 months could be observed. £1.49 per litre was used as their premium pricing value from February until June.
However, from the 11th of June till 2nd of July, Fiji’s premium pricing strategy switched temporarily to market penetration, decreasing their price to £1.00 per litre in order to increment their market share.Voss, established around 2001, is a premium Norwegian bottled water company, with headquarters located in New York and an iconic reputation for its glass cylindrical design. Voss is considered as one of Fiji’s main competitors, since both brands (Voss and Fiji) are obtained from an artesian water source. Moreover, Voss’s premium pricing with the use of controlled distributing strategy managed to determine their market segmentation and ensured its availability to the top elite restaurants, clubs, hotels and retail in the bottled water industry. In the present time, Voss is sold in over 50 countries with a value of £2.86 per litre.
Their premium pricing is a result of the quality of product provided, where not only the glass design offers luxury but raises awareness on environmental issues too; targeting health conscious consumers. Furthermore, their market strategy, similarly to Fiji’s, includes product placement in Tv commercials and music video clips which lead to an increase on the demand of Voss, therefore; increasing sales.In 1863, Perrier natural sparkling water was recognized in southern France. They had a very high amount of market segments from retail, celebrities, offices to dining restaurants since they were a subsidiary of Nestlé’s (nestle-waters, 2017). Figure 8 shows how from 2000 to 2009, Perrier suffered from a high penetration rate with a low average weight purchase; which lead to the use of concentrated marketing strategy. Danielyan (2016) noted how Perrier used market penetrating strategy on their current merchandise (new ways of delivering), while applying product development strategy on their products that are yet to be invented (addition of flavoured water). Perrier tends to use bundle and physiological pricing, as 1Litre is valued at £1.
09.Acqua Panna Still Natural Mineral Water:Acqua Panna, an Italian high-end bottled water, was founded in Italy’s northern hills Tuscany in 1564 (Acquapanna, 2017). Acqua Panna joined San Pellegrino to form a partnership, aiming for the title of the best dining water; therefore, targeting the finest dining restaurants on earth using a concentrated market strategy (Rahayel, 2017). 1Litre is valued at £1.
15. Evian: Evian is a prestigious water bottled brand that has been aiming to provide consumers with the heathiest mineral water from the French Alps since 1829. However, it was not till 1978 till they identified the market segment from premium retail to hotels and restaurants. Unlike other premium bottled companies, Evian used differentiated marketing strategies with economy pricing (1litre valued at £0.65) as Evian’s natural mineral ware is presumed to benefit a sector (from pregnant women and their infants, to toddlers and seniors).
This strategy helped in increasing their market share in the UK by over 13% (Leaftv, 2017).