Marketing Management Report: Nestle Waters UK Analysis

This marketing management report provides an in-depth analysis of Nestle Waters UK's marketing strategies. It begins with an introduction to the company and its market position, followed by a macro-environmental analysis, including political, economic, social, technological, environmental, and legal factors. The report identifies a growth opportunity for Nestle Waters UK in the flavored water market, considering the increasing consumer demand for healthier alternatives and the company's existing market share. The report then delves into segmentation, targeting, and positioning strategies, proposing behavioral and demographic segmentation approaches, targeting both existing and new markets, and positioning the new product to be distinct from sugary drinks. The report emphasizes the importance of environmentally friendly packaging and effective online marketing to reach the target audience. The analysis concludes with recommendations for channel, product, and service differentiation to strengthen Nestle Waters UK's market presence and capitalize on the flavored water opportunity.

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MARKETING MANAGEMENT
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Marketing strategy
Introduction
Nestle waters UK bottles more than 50 brands of water which are quite popular with the
market to which they are sold. Though profits in 2018 rose 2.1% from 2017, there have been
continued campaigns against bottled water in favour of tap water which might have an effect on
sales and eventual profits (CIS, 2019). This could have a possible negative impact on sales because
so many groups are coming forward with allegedly proven facts about the futility of buying what
already flows from taps.
One main reason why bottled water became such a huge industry is that it was recommended
that for health purposes one has to consume 2 litres of water every day (DLA Piper, 2019).
Researchers have however found that body hydration is not a monopoly of water and can be
found in just about every beverage, and this could jeopardize the market share of plain water
(Cabinet Office, 2011). This is enough reason for the company to consider introduce a new
product, preferably which is not so freely available.
Macro-environmental analysis
Political – the government has been active in discouraging the consumption of bottled water. In
fact, it has banned mineral water from being supplied in civil service meetings because of the
negative effect bottles have on the environment (Elearn, 2008). On the other hand, the government
introducing a soft drink levy will increase their cost and therefore more bottled water will be
consumed.

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There was a bit of unrest because of the brexit situation which resulted in a weaker pound and
increased commodity prices but sales have been pretty steady as the process is not yet complete.
Economic – bottled water on average costs 900 times more than tap water. This includes brands
like Nestle Pure life, and brands from more specific sources cost more (FME, 2013). To a lot of
people, it does not make economic sense to purchase at an extravagant price a product that may
just as well be filtered, bottled tap water. Profits are on the rise which indicates that the
restructuring worked.
Social – with the rise in incidents of cancer and lifestyle diseases like diabetes, the adult
population is mostly very health conscious and will prefer consuming water more than sugary
soft drinks (Flinders, 2018). This is a positive to the company. However, test that have been
conducted show a presence of micro fragments of plastics in bottled water, a fact that will make
these very adults to be sceptical about bottled water. It is also important to note that the
tastelessness of plain water and the dull branding does not appeal to a younger demographic.
Studies have shown that 45% of UK consumers believe that tap water is just as safe as bottled
water (Good Firms, 2019). With this belief the perceived purity of bottled water that encourages
some purchases is not there.
The company has an arrangement to give a certain amount for each sale made to enable
availability of water in remote regions so for each bottle bought a fraction helps a less fortunate
person. This factor encourages some purchases.
Technological – the manner in which the product has been presented to the market is quite at par
with competitors (Ismail, 2018). However, if the company is to reel in a different market, the
product will have to be communicated in a different way. Technological advancements like

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social media have brought about an easier way not only to communicate products to the market
but to also interact with it.
Environmental – bottled water companies unavoidably have a much larger carbon footprint than
tap water, almost to the tune of a thousand times, mostly because of packaging and
transportation. The company has introduced light-weighting which makes too small a difference
and recycling which is a bit futile because recycled Polyethene terephthalate gives weaker
plastics. The plastics, which are single use, are not biodegradable and take close to 450 years to
be broken down; therefore they are not environmentally friendly as is expected (Klever, 2008).
Emissions are however within limits set by government environmental bodies.
Legal – standards for the quality of products are set and must be followed to avoid legal
implications. So far there have been no complaints about quality.
Growth opportunity
Even though Nestle Water holds the largest market share for bottled water in the world,
the company has specialized in spring water, mineral water and prepared water. The section of
the market that prefers flavoured water or just is not willing to buy plain water does not have a
Nestle water product to choose from. This is whole market section which is not being explored
(Kotler, 2012). The fact that reusable water bottles are now being made to include filters in some
parts of the world, and that drinking fountains are being actively installed means that demand for
bottled water may get low with time. The bottles are single-use and have to be disposed of
immediately after use which causes devastating effects to the environment. These factors if
altered just a bit present a whole product idea.

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Flavoured water can be every bit as healthy as plain water as long as no sugar or artificial
sweeteners are added. As the company does not yet have a product geared specifically to a
younger demographic, this would be a perfect product to begin with. With the concern about
diabetes getting more serious, extremely sweet drinks are discouraged. A newly introduced tax
on sugar also promises to increase prices of beverages containing sugar thus creating a sort of
market gap. A soft drinks levy is also being introduced which means that despite opposition the
bottled water industry will experience a boom. Flavoured water is not only fresh hydrating as it
also refreshes and can deal with bad breath for a short time (Kotler & Keller, 2012).
With flavoured water, Nestle water can introduce a new product to its already established market
and attract a whole new market.
Segmentation, targeting and positioning
Segmentation
 Behavioural:
The market that has been established by the company is composed of sportspeople whose
bodies quickly dehydrate, and people who recognize the impact of lifestyle diseases and here
prefer unprocessed drinks. These are people who are more interested in the utility of water than
its flavour and are more willing to pay for plain water. The younger demographic, though, has
limited funds at its disposal and will pay only for a different experience. With the existence of
reusable water bottles and free drinking fountains, this market will only be tapped when a tailor
made product such as this is introduced (Kotler & Keller, 2012). The regular market can be
convinced to buy the product too as long as there is an assurance that the flavouring does not add

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calories and hydrates the body in a similar way. The environmental friendly packaging can also
encourage purchases.
 Demographic:
Older people are also a target since people are known to prefer sweeter tasting things as
their age advances. The young target demographic includes members of learning institutions and
especially lower levels of school who must be swayed to buy flavoured water instead of other
more sugary drinks. Since older individuals expectedly have more money to spend than young
ones, plain packaging that is more attractive to them should be used to pack larger amounts of
product. Younger children are attracted to colour so bright packaging will cater to them (Levens,
2009).
The main challenge in marketing will be to differentiate the flavoured water from the
flavoured, sugary and unhealthy drinks in the market if their packaging turns out to be almost
similar. For a company known for selling plain water with no artificially added electrolytes or
manual carbonation, assurance of product purity is relieving to the market.
Targeting
The company’s goal of hydration using pure water products is what has helped it build
the large customer base, so it must be maintained. The lack of sugar and calories is crucial to
note too. The company’s habitual market which buys more because of the brand and the product
should be assured of the maintenance of quality standards. Though this product is an attempt to
create a new market to add to the already established one, there is no harm in selling it to all

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demographics (Market Inspector, 2016). Though the people being targeted by the marketing may
not themselves like the product, they might buy for their dependants who may be encouraged to
drink water if there is flavour in it. The reputation built by the company and its products that
gave it the biggest bottled water market share can in a way be expected to sell the product even
before much marketing is done.
Attractive packaging is crucial in marketing to young people, and the company’s
obligation to the environment should be covered too. With the environmental impact of plastics
being viewed as highly unsustainable, and studies relating that majority of plastic waste in the
oceans are plastic bottles, it is wise to use a different material in packaging. There are many
options including biodegradable plant plastics, glass and boxes (Moutinho, 2000). Plant plastics
have widely been used in fraction but it has been found that these bottles too end up like the
synthetic plastic ones and end up joining the underwater food chain. They also cost more. Box-
like packaging like that of some juice brands would be suitable. A market such as that which will
be the target of this product is likely to be on social media, and input on the package design
might be sought from there. It is expected that an individual would be more compelled to
purchase a product in whose creation they are involved (Open Access Government, 2019). Also
emphasis should be laid on the choice of packaging material being influenced by a need to
protect the environment. This way in their consumption of the product they will feel nature-
conscious.
For the older market, a more sober package design should be chosen. More than one
package design for a single product is not a new concept and has been used to include all
possible buyers of the product. This demographic would also appreciate the less bulky
packaging.

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The younger market being targeted is expected to have less money than the already
established market. For this reason, smaller package sizes with fair pricing that cater for this
limitation will be necessary. Changing purchasing habits of the mature plain water market would
be difficult so marketing for the product in beginning of sales is better geared towards the young.
Most of the money here is expected to be made from consumption by the younger
demographic. Whether they make the purchases themselves or not, promoting the product online
as cool, safe and customer oriented will ensure that this product becomes a definite choice in a
market flooded with similar products.
Positioning
If the product packaging turns out to be as eye catching as proposed, it will be important
to make it distinctive from all other artificially flavoured and coloured beverages on sale. A
unique colour would do the trick. Also advertise as effectively as possible so that the target
market is not at all conflicted about what to buy.
 Channel differentiation:
The product should be situated as close to the market as possible.
 Product differentiation:
Providing a line of with a wide range of choices automatically broadens the market. In
the case of flavoured water, the essence of fruits like lemon, orange, strawberry, red
apple, green apple, pineapple and even other flavours like mint will give many choices
where the customer can be both refreshed and hydrated.

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 Service differentiation
This ensures that there is a constant means for customers to contact the company so that it
can be established if the goods being produced are satisfactory (PBC Today, 2018).
Communication with customers can also yield suggestions. Consumer surveys can be
done though they may give an incomplete or lop-sided view of things.
 Image differentiation
Nestle water has a logo and brand that is well known. This prominence will help sales if
the new product is marketed as part of a range of already well recognized brands.
Marketing mix
Product
Flavoured water brands already exist in the market, but are marketed as water drinks that are
low-calorie, low sugar and great tasting. There has been a marked increase in the market for
flavoured water because buyers prefer it to sugary drinks. They however make up less than 5%
of the market share. Introducing a no sugar water would appeal to this market. A healthy and at
the same time flavourful and affordable alternative to juice drinks is will possibly sell very well.
The flavour is to be artificially infused into purified water. The children’s packets can include
attractive additions like straws and stickers.
Price
The mostly young demographic that is the main target of this product is not expected to have a
lot of money so smaller packaging will have to be made to accommodate this. This product will
cost slightly more than plain water but significantly less than sugary fizzy drinks and fruit juices

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(UK Construction Media, 2017). This is further enhanced by the sugar tax which in an economic
sense makes water drinks more attractive to buyers.
When pricing is done it is always a good idea to consider competitors pricing so that the
figure arrived upon, while still giving a reasonable profit, is competitive. Water has also always
been more attractively priced than its sugar free counterparts like fruit juice so infusing fruity
flavours in water is a sure way to create a new market. In the first days of selling the product,
there should be a sort of discount on it so that many buyers do not feel much of a pinch buying
an experimental product.
Promotions
Selling a product that already has a presence in the market will require communication on factors
other than the novelty of the product. Appealing to the environment consciousness of buyers is a
major selling point in beverages today. Nations have made agreements to control their carbon
waste emissions ad people are more conscious of the impact of plastic wastes on the
environment, so the box packaging is a great idea. The Nestle brand is well known for its water
products because of safety and competitive pricing. Promotions should highlight this in relation
to the new product.
Social media is the most effective promotion channel because of the target market. Mot
young people do not watch television any more since the advent of streaming services for
television shows, but they will regularly log onto social media. This will be necessary to
establish a new market. The already established market is likely to buy as long as the product
remains within their price range.

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Online customer Interactions that involve them in the creation of the product and its
packaging is a very effective marketing strategy (Willmot Dixon, 2010). Communication on what
other companies making the same product are doing correctly and wrongly can help in the
creation of a product tailored for the consumer and with more pros than cons. Questions about
the company’s other products can be answered here and clarifications can be made. The wording
to be used in promotion channels can be decided from online interaction. Also by studying how
the customers relate to each other, we can be clued in on the market that is reliably found online
and this is important for future sales purposes.
The final product can be presented to the market by billboards and salespeople at the
purchase points. A marketing promotion where a buyer gets a small box of flavoured water for
each bottle of plain water purchased will introduce the product even to reluctant buyers.
Place
Nestle products are sold at grocery stores and retail shops because these are closer to the market.
Majority of the market is expected to reside in urban areas, this including restaurants which stock
Nestle pure life due to its fair pricing.
They can also be put in dispensers at early learning institutions.
People
Interactions with the market are crucial because eventually, only the commodities that appeal
most to them will be bought. Considering that at any one time there are multiple brands of the
same product or different products with the same utility, customer feedback must be taken

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seriously. Multiple channels should be used for this depending on behaviour descriptions of the
market.
Conclusion
The advent of bottled water as a product for the market to consider though clowned at
first has grown into a formidable industry. Consumers are finding a need for this product that
they previous did not even consider. Bottled water is convenient, mostly affordable, and has been
tested for assured purity unlike water from other sources like taps. Nestle holds the largest
market share of bottled water in the world. The company is determined to always deliver as per
the standards promised. Nestle also acknowledges that competitors are stepping up and they need
to do the same if they have any intention to maintain their position in the market. Tis new
product proposal suggests an addition that will hopefully lure a new breed of customers.