Worldwide Casebook In Marketing Management

Luiz Moutinho

• Publisher: WSPC
• Year: 2016
• ISBN:
  9789814689625
• Topic: Business
• Subtopic: International Marketing
• Index: Business

Worldwide Casebook in Marketing Management comprises a large collection of case studies in marketing and business management. It covers a huge array of decision-making areas and many different industries ranging from computers, petrol retailing and electronic gaming to drinks, fashion, airlines and mobile communication. The worldwide cases are all related to many well-known brands and corporations like British Airways, Red Bull, Nintendo, Google, Microsoft, Cacharel, etc.

Worldwide Casebook in Marketing Management comprises a large collection of case studies in marketing and business management. It covers a huge array of decision-making areas and many different industries ranging from computers, petrol retailing and electronic gaming to drinks, fashion, airlines and mobile communication. The worldwide cases are all related to many well-known brands and corporations like British Airways, Red Bull, Nintendo, Google, Microsoft, Cacharel, etc.

Readership: Graduate students and researchers who are interested in marketing management.
Key Features:

• Comprises of a large collection of case studies in marketing and management
• Covers many different industries, well-known brands and companies
• Offers studies on new trends and innovative marketing concepts

Part 1

Consumer Behaviour

1

San Pellegrino (Italy)

Environment/Industry

Americans spent more money on bottled water than on Ipods or movie tickets⁸

The largest bottled-water factory in North America is located in the outskirts of Hollis, Maine. In the back of the plant, stretches the staging area for finished 24 million bottles of Poland Spring water. As far as the eye can see, there are double-stacked pallets packed with half-pint bottles, half-litres, litres, Aquapods for school lunches and 2.5 gallon jugs for the refrigerator.

Really, it is a lake of Poland Spring water, conveniently celled off in plastic, extending across six acres, eight feet high. A week ago, the lake was still underground, within five days, it will all be gone, to supermarkets and convenience stores across the Northeast, replaced by another lake’s worth of bottles. Looking at the piles of water, you can have only one thought: Americans sure are thirsty.

Bottled water has become the indispensable prop in our lives and our culture. It starts the day in lunch boxes, it goes to every meeting, lecture hall, and soccer match, it is in our cubicles at work, in the cup holder of the treadmill at the gym, and its rattling around half-finished on the floor of every minivan in America. Fiji Water shows up on the ABC show, Brothers and Sisters, Poland Spring cameos routinely on NBC’s, The Office. Every hotel room offers bottled water for sale, alongside the increasingly ignored ice bucket and drinking glasses. At Whole Foods, the upscale emporium of the organic and exotic, bottled water is the number-one item by units sold.

Thirty years ago, bottled water barely existed as a business in the U.S. In 2006, people spent more on Poland Spring, Fiji Water, Evian, Aquafina and Dasani than people spent on iPods or movie tickets — $15 billion. It will be $16 billion in 2007.

Meanwhile, one out of six people in the world has no dependable, safe drinking water. The global economy has contrived to deny the most fundamental element of life to one billion people, while delivering to us an array of water “varieties” from around the globe, not one of which people actually need. That tension is only complicated by the fact that if people suddenly decided not to purchase the lake of Poland Spring water in Hollis, Maine, none of that water would find its way to people who really are thirsty.

A chilled plastic bottle of water in the convenience-store cooler is the perfect symbol of this moment in American commerce and culture. It acknowledges our demand for instant gratification, our vanity, our token concern for health. Its packaging and transport depend entirely on cheap fossil fuel. Yes, it is just a bottle of water — modest compared with the indulgence of driving a Hummer. But when a whole industry grows up around supplying with something that people don’t need — when a whole industry is built on the packaging and the presentation — it is worth asking how that happened, and what the impact is. And if you do ask, if you trace both the water and the business back to where they came from, you find a story more complicated, more bemusing, and ultimately more sobering than the bottles people tote everywhere suggest.

In the town of San Pellegrino Terme, Italy, for example, is a spigot that runs all the time, providing San Pellegrino water free to the local citizens — except the free Pellegrino has no bubbles. Pellegrino trucks in the bubbles for the bottling plant. The man who first brought bottled water to the U.S. famously failed an impromptu taste test involving his own product. In Maine, there is a marble temple to honour our passion for bottled water.

And in Fiji, a state-of-the-art factory spins out more than a million bottles a day of the hippest bottled water on the U.S. market today, while more than half the people in Fiji do not have safe, reliable drinking water. Which means it is easier for the typical American in Beverly Hills or Baltimore to get a drink of safe, pure, refreshing Fiji water than it is for most people in Fiji.

At The Peninsula hotel in Beverly Hills, where the rooms start at $500 a night and the guest next door might well be an Oscar winner, the minibar in all 196 rooms contains six bottles of Fiji Water. Before Fiji Water displaced Evian, Diet Coke was the number-one-selling minibar item. Now, says Christian Boyens, the Peninsula’s elegant director of food and beverage, “the 1 litre of Fiji Water is number one. Diet Coke is number two. And the 500-milliliter bottle of Fiji is number three”.

The marketing of bottled water is subtle compared with the marketing of, say, soft drinks or beer. The point of Fiji Water in the minibar at the Peninsula, or at the centre of the table in a white-table cloth restaurant, is that guests will try it, love it, and buy it at a store the next time they see it. Which is not difficult, because the water aisle in a suburban supermarket typically stocks a dozen brands of water — not including those enhanced with flavours or vitamins or, yes, oxygen. In 1976, the average American drank 1.6 gallons of bottled water a year, according to Beverage Marketing Corp. In 2006, each drank 28.3 gallons of bottled water — 18 half-litre bottles a month. They drink more bottled water than milk, or coffee, or beer. Only carbonated soft drinks are more popular than bottled water, at 52.9 gallons annually.

Gustave Leven was the chairman of Source Perrier when he approached an American named Bruce Nevins in 1976. Nevins was working for the athletic-wear company, Pony. Leven was a major Pony investor. “He wanted me to consider the water business in the U.S.,” Nevins says. “I was a bit reluctant”. Back then, the American water industry was small and fusty, built on home and office delivery of big bottles and grocery sales of gallon jugs.

Nevins looked out across 1970s America, though, and had an epiphany: Perrier was not just water. It was a beverage. The opportunity was in persuading people to drink Perrier when they would otherwise have had a cocktail or a Coke. Americans were already drinking 30 gallons of soft drinks each a year, and the three-martini lunch was increasingly viewed as a problem. Nevins saw a niche.

From the start, Nevins pioneered a three-part strategy. First, he connected bottled water to exclusivity: in 1977, just before Perrier’s U.S. launch, he flew 60 journalists to France to visit “the source” where Perrier bubbled out of the ground. He connected Perrier to health, sponsoring the New York City Marathon, just as long-distance running was exploding as a fad across America. And he associated Perrier with celebrity, launching with $4 million in TV commercials featuring Orson Welles. It worked. In 1978, its first full year in the U.S., Perrier sold $20 million of water. In 2008, sales tripled to $60 million.

What made Perrier distinctive was that it was a sparkling water, served in a signature glass bottle. But that is also what left the door open for Evian, which came to the U.S. in 1984. Evian’s U.S. marketing was built around images of toned young men and women in tight clothes sweating at the gym. Madonna drank Evian — often onstage at concerts. “If you were cool, you were drinking bottled water”, says Ed Slade, who became Evian’s vice president of marketing in 1990. “It was a status symbol”.

Evian was also a still water, which Americans prefer, and it was the first to offer a plastic bottle nationwide. The clear bottle allowed us to see the water — how clean and refreshing it looked on the shelf. Americans have never wanted water in cans, which suggest a tinny aftertaste before you take a sip. The plastic bottle, in fact, did for water what the pop-top can had done for soda: it turned water into an anywhere, anytime beverage, at just the moment when people decided they wanted a beverage, everywhere, all the time.

Perrier and Evian launched the bottled-water business just as it would prove irresistible. Convenience and virtue aligned. Two-career families, over-programmed children, prepared foods in place of home-cooked meals, the constant urging to eat more healthfully and drink less alcohol — all reinforce the value of bottled water. But those trends also reinforce the mythology.

People buy bottled water because they think it is healthy. Which it is, of course: every 12 year old, who buys a bottle of water from a vending machine instead of a 16-ounce Coke is inarguably making a healthier choice. But bottled water is not healthier, or safer, than tap water. Indeed, while the U.S. is the single biggest consumer in the world’s $50 billion bottled-water market, it is the only one of the top four — the others are Brazil, China and Mexico — that has universally reliable tap water. Tap water in this country, with rare exceptions, is impressively safe. It is monitored constantly and the test results made public. Mineral water has a long association with medicinal benefits — and it can provide minerals that people need — but there are no scientific studies establishing that routinely consuming mineral water improves your health. The FDA, in fact, forbids mineral waters in the U.S. from making any health claims.

And for this healthy convenience, people are paying what amounts to an unbelievable premium. They can buy a half-litre Evian for $1.35–17 ounces of water imported from France for pocket change. That water seems cheap, but only because they a...

Table of contents

• Cover page
• Title page
• Copyright page
• Dedication
• Preface
• Table of Contents
• Introduction to Case Analysis
• Part 1 Consumer Behaviour
• Part 2 Branding
• Part 3 Marketing Communications
• Part 4 Retailing
• Part 5 Marketing Programming
• Part 6 Strategic and Global Marketing
• Index