5 Marketing Lessons from the Bottled Water Industry
Who would pay more than a 4,000-percent markup to buy a product that’s available practically for free nearly everywhere in the United States? Fans of bottled water, that’s who.
The domestic bottled water industry today is worth more than $15 billion annually — despite the fact that, according to the Natural Resources Defense Council, bottled water isn’t likely to be any safer or cleaner than the EPA-regulated municipal tap water that’s available in 90 percent of American households. In fact, about 25 percent of bottled water is municipal tap water — “sometimes further treated, sometimes not.”
Why are so many people willing to buy a product that’s readily available in their own homes? Smart marketing. Here's a look at the bottled water industry's sales strategies.
- Focus on image. Most bottled water labels depict mountains and glaciers, which make consumers assume that the water comes directly from a mountain stream. This isn’t necessarily true. For example, Aquafina’s logo features white-tipped mountains, but the product is merely treated tap water. It isn't nice to lie to your customers, but you do want to promote the image you're selling.
- Turn consumers into connoisseurs. Bottled water companies encourage consumers to focus on the flavor of their water. Fiji Water “has a smooth, silky mouthfeel,” company executive Thomas Mooney told the Washington Post. If you don't ask to be perceived as a quality product, you won't be. However, when people don’t know what they’re drinking, tap water often comes out ahead. In one blind tasting, London’s tap water ranked third among 24 water products; in another, at a high school in Atlantic City, more than a third of students chose tap water over two bottled options.
- By positioning your product as a sign of wealth, it becomes desirable to people who are striving to reach the upper class. Back in the 1970s, ordering a bottle of Perrier was viewed as a symbol of wealth and class. Before long, the beverage caught on among the middle class. As more and more companies began offering bottled water at lower price points, it became a “luxury” that just about anyone could afford.
- Offer convenience. These days, bottled water is available just about anywhere drinks are sold. If you’re on the go, it’s generally easier to simply pay for a bottle of water than to seek out a public water supply. Likely as a result of the rise of bottled water, public drinking fountains have become less common — making consumers even more likely to buy bottled water.
- Position your product as a solution to a problem. Generally, bottled water companies don't position their product as an alternative to tap water — instead they market it as an alternative to the unhealthy soft drinks that consumers might otherwise buy when they go out. In Nestlé Pure Life's recent advertising campaign, for instance, the company asks mothers to pledge to replace one sugary drink each day with the company's water products. Bottled water may not have the best reputation these days... but it certainly beats that of soda.
The tide is finally beginning to turn against bottled water, due largely to its negative environmental impact (1.5 million tons of plastic are expended each year in the bottling process, according to the WWF). Numerous cities, including Seattle and San Francisco, have initiated bans on spending public funds on bottled water, and some colleges have even banned the stuff altogether. Nonetheless, the industry's provided some valuable marketing lessons that can help you get your product noticed, no matter what you're selling.
Kathryn Hawkins is a business writer for Intuit and is passionate about solving small business problems.