Dasani's UK Debacle: Marketing Strategies and Implications

This case study examines the reasons behind Dasani's withdrawal from the UK market, focusing on issues such as negative publicity due to the source of water being the same as Thames tap water and containing bromate, the lack of a counter-strategy to combat negative media exposure, and the failure to establish a unique brand identity separate from Coca-Cola. It discusses potential strategies for preventing recurrence, including re-entry strategies considering market competition and regulatory obstacles. The analysis also explores internationalization strategies like global, transnational, and multidomestic approaches, emphasizing the importance of adapting to local market preferences while maintaining brand consistency and efficiency. The case highlights the challenges Dasani faced and the broader implications for companies considering international market entry and brand management.

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Table of Contents
1. Main issues leading to the withdrawal of Dasani in the UK market......................................3
2. Strategies of preventing recurrence........................................................................................5
3. Implications for considering internationalisation...................................................................6
References................................................................................................................................10

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1. Main issues leading to the withdrawal of Dasani in the UK market
At the time when the product was being introduced in the UK market, it was
described by the marketers as a unique product that had been especially formulated by the
customers of Great Britain. It can be emphatically commented that the customers of Coca
Cola have a high brand esteem. They expect high end quality as well as uniqueness from the
brand name. The company that launched with 7 million Pounds announcing that the best
business opportunities come out of the blue, could not likely make much of an effect (Wright
2015). There were several factors that initially developed the fame of the Dasani brand in the
market of UK. The first among them was that Dasani used the source of water that was same
as that of the Thames tap water (Carroll 2016). Nut the same reason start to account for the
negative publicity against the company. Legal findings confirm that the water source
contained the same amount of bromate that could enhance the level of risk of causing cancer,
if consumed repetitively.
In this context, researchers like Mason, Welch and Neratko (2018), opines that if the
public purchases a bottle of packaged drinking water they are expecting a certain quality
attached with the brand and it match the standard of the water that is coming out of the
kitchen taps of their houses. When a bottle of drinking water is being packaged as mineral
water, the buyers might well expect that the same water have been naturally filtered by
passing through the layers of rocks and this is the reason why they are willing to pay the extra
price for buying the bottles of drinkable mineral water. However, as per Hawkins (2017),
when the Dasani scam came out in to the open, the drinking water sold by the company had
been labelled as purified tap water. This had a deadly impact up on the sales of the products
of Dasani.

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Another important issue that requires mention is that when this issue came out in the
open, the company did not follow any counter strategy in order to combat the impacts of such
negative media exposure. The Public relations machinery of the company did not take any
extra initiative in order to reflect any justification from the end of the company for combating
the impacts of the negativity that have already been attached to the brand fame of the
organisation. The company in spite of using the water from the Coca Cola factory in Kent,
the company made use of the unique process of reverse osmosis, a NASA perfected process
that is the key to the authentic taste, combination, texture as well as other qualities in the
mineral water. They actually made the purest possible drinking water that was available in
the whole of the UK market (Hawkins, Potter and Race 2015). In fact the elements that were
present in the water made it favourable for the health, nutrition as well as the lifestyle of the
UK people.
On the contrary when the news of the presence of bromide came out in the open, the
company did not make any media releases. The parent company simply made a market
announcement of the declaration of the formal and voluntary withdrawal of the Dasani brand
from the market. The company also did not take the initiative of explaining to the Food
Standards Agency of the country that there was no harmful element present in the packaged
drinking water of the company. In fact the assessment of the National Food Testing authority
returned that there had been no harmful element present in the water (Bangs and Smith 2018).
In UK another similar case happened with a mineral water company whose source of water
had been questionable. The company opened their production inlets to the public where they
could come and see themselves if any harmful element was present in the water or any
harming procedure was being followed in the manufacture of the packaged water.
Rather than defending the brand, Coca Cola wanted to cut down their trail with
Dasani. As stated by Schuhmann (2016), they did not consider the fact that 12% of the

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revenue generation of the company in the UK market rested on the Dasani sales. On top of
that with a product diversification the company can have gained control over a target
customer base different than the regular consumers of Coca Cola in the soft beverage market.
In the PR campaign, the company’s marketing head, clearly objectified that that the company
had never been a direct extension of the Coca Cola brand and that is why the company in
latter phase could never crate a unique identity as a secluded company (Biro 2017). In the end
the company was forced to stop their operations in the market of UK.
2. Strategies of preventing recurrence
In the latter part of the market scam that shook the company in the year 2017, the
company could have considered a strategy for a re-entry in the market. However there had
been some feasible factors that prevented the forces from making an entry in the UK market
again. There are ample reasons because of which the company could not gain entry in to the
market. The first factor is that by the time the impact of the scam had subsided, there had
been many new market entrants that had been providing the same product to the customers
and at a very competitive price also. Besides, the Food Safety and Standards Authority also
posed various obstacles before the forces of the company so that their market re-entry could
be stalled (Brei 2018). On top of that the company did not have the option of professing their
business under the brand name of Coca Cola. As such they should have made the market
entry as a separate market entity. As an impact, several consequences would have aroused.
The first one of them is that the marketing expenses of the company would have been greater.
They would not have enjoyed the facilities of the production units of Coca Cola. The brand
name of Dasani was also needed to be changed. As such the potential majority of the
customers in the UK market would not have recognised the company as the same brand that
existed once in the UK market (Soheilifar et al. 2018). The competiveness in the sector is
very huge. The new brands are competitive enough to let down their market prices in order to

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reduce the competitiveness in their favour. That is why, the company would also have faced
huge issues in the context of price competitiveness. They would have priced the products to
the premium pricing range and on top of that their market value would have depreciated
considerably which would have made it difficult to hold their brand competitiveness to that
same extent. The fixed costs of the company remains the same and as such the exit costs of
the company would also have been high if they were not able to operate with efficiency in the
existing market. As observed by KHANIKI et al. (2017), the substitute products’ threats is
also high. This is why the company is in a strategically marginalised position also. The
energy drink products and the simple calorific drinks have occupied the market of the
premium drinks in the UK market, which is why the market demand over the packaged
mineral drinking water has been somewhat low in the country. As a consequence, some of the
brands of premium drinking water had left the market also. This has in turn allowed many
small brands to occupy the market of packaged drinking water as well. As such, if the Dasani
brand enters the market under the current circumstances, the company would be faced with
the issue of enjoying a brand fame that would be much under the brand equity that the
company used to enjoy in the initial market position. The demand of the government is quite
high in the context of the industry. They are banning the use of plastic bottles under 40
microns for packaging the bottles of drinking water. In such a circumstance, the company
would have to develop a different packaging line under which the operating cost would be
greater (Viscusi, Huber and Bell 2015). As such it would be further difficult for the company
to control its branding as they would have to bear an additional operating expense since they
would have to packet the products in pouches or aluminium cans.
The position of the buyers is another fact that the company needs to consider. The
users generally consider that the fact is that there is no diversification between the product
lines of the various brands of packaged drinking water. As such they would not be willing to

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pay at all any extra price for the premium standard products. That is one main area of
compromise that is to be considered is this context.
3. Implications for considering internationalisation
The first important strategy of internationalisation that holds relevance to the case that
is considered here, is that of global strategy. A company that is using the Global strategy has
to sacrifice the responsiveness of the business to the local requirements in cooperation with
the local markets for the purpose of emphasising efficiency of the business and its sales,
proportionately. This Global strategy is absolutely contrasted from the multidomestic strategy
where by the company themselves set definitely Strategies for running the operations in
different democracy. In case of global strategy, minor modifications in terms of products can
be done for the various Markets and this is emphatic early done by the companies for gaining
Economics of scale show offering essentially the products of same standard in every market
(Brands and Rajagopal 2018). The example of the company that is under focus here can be
taken. In case they are adopting a global strategy they can use the local languages for
marketing purposes. They can use local languages for packaging and in order to gain
efficiency as well as higher possibilities into the local market and as such create a genuine
Global brand they can use the strategy of using the local warehouses and the local production
units where by franchised production units might be set up. The local entrepreneurs can be
given the opportunity to produce and packaged products under the Global brand name and
this is how Economics of scale can be easily gained by the company.
The next strategy in that can be emphasised upon is the transnational strategy. This
Framework can be considered to be a middle ground between multidomestic strategy as well
as the Global strategy. Search an organisation, for example the company under focus here
might try to balance its desire for efficiency when they are not finding adequate market

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response from their core market. In this context they have to comply with and adjust to the
local preferences of the Unique demographics where their operating. For instance Coca Cola
and the company under focus here are operating or had been operating under the same brand
names and under the same industrial tag of soft beverage around the world (Yousef 2018).
The distribution and packaging sources are different but the central element of the brand
name is same in all the countries and as such the brand loyalty that is developed for the
product in USA will be equally applicable to the brand name of the subsidiary product that is
being sold in UK or France.
The third and emphatically the most important internationalisation strategy can be the
multidomestic strategy. Under the multidomestic strategy the company have to sacrifice
efficiency against emphasizing responsiveness from the local requirements within every
market where they operate. Rather than emphasising on the sales Line or the forces of sale
that they used to push sales in America and the subsidiary region, the company might be
using a different advertising campaign or different sales strategy for using its local channel of
sales in countries like New Zealand, Pakistan, Portugal or India (Johanson and Mattsson
2015). In this context the emphatic strategy of Heinz Ketchup Company can be highlighted
who attempted to adopt its products in order to match the local preferences. in spite of having
the garlic and onion flavoured Catcher in the market in the company after 3 years of its
operations realised that some of the demographic groups might not be accepting these
ingredients in their Catcher for some social cultural or religious factors as well. This is when
they decided to develop a parallel product line for the market where buy a slide
differentiation will be employed in terms of ingredients or taste of the products. Besides that,
the company realised that in different countries the consumption rate of ketchup which food
is different. Hence, in countries where the people used to consume large amount of catch up
with their foods, they emphasised the sale of large packs where they offer discount to the

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customers if they bought the ketchup in the same proportion. On the contrary, in countries
where the consumption rate is lower, the company emphasize on selling sachets or pouch
bags where by the price of based on demand was matched by selling small amount of product
at proportionately Higher price. The same strategy can be employed for this company also.
The product line will be accompanied by small, medium as well as large sized bottles where
buy if the demographics of one customer base matched one kind of product, The Other
demography would be pertaining to consuming a different kind of product at a high rate.
Equivalently, the company can also develop a price differentiation strategy where by true
matching the needs of the demography, they can alternate their sales strategy but keep the
revenue generation pattern in analogy with that in other demography (Laurens et al. 2015).
As the company had been running on losses, the multidomestic strategy can we supposed to
be the best strategy if there were considered a Re-entry to the market. At large if after
reestablishment in the market there were attempted to spread their business, then probably the
Global strategy of internationalisation would turn out to be the best alternative market selling
strategy for them. The last strategy that is the transnational strategy is absolutely meant for
organisations who are having successful business in many demographic. As such they can
launch the product on experimental basics in a new country and without much hope for a
large business extravaganza. This is how internationalisation can be considered for the
company in focus here and a successful market alternative can be established for them.

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