Using the bottled water market as an example is a great way to demonstrate the value of marketing. After all, the whole idea of this product is that the number one ingredient across all brands is the same, it’s almost tasteless and completely transparent. However the staggering similarity in the end-product seems to matter very little, with popular bottled water brands spanning a whole spectrum of price points from ‘supermarket own-brand’ to ‘luxury / premium’.
In theory, this means that it is largely marketing that differentiates each brand and, given that there are more than 25 major bottled water brands sold in the UK and countless other smaller brands, there’s plenty of marketing going on.
The bottled water market has plenty of hurdles to overcome using marketing too. For starters, bottled water is on average ~300x more expensive than water from the tap, consumers are becoming increasingly conscious of plastic waste and several scientific studies have reported that bottled water is not as safe as tap water, as it is not subjected to the same stringent tests.
Despite all of this, 19% of us buy bottled water every day, the 25+ major brands are thriving and the bottled water market in the UK alone is worth more than £2.4bn each year. By 2022, Zenith forecasts that the total market for UK water drinks will reach 5.3 billion litres, 32% above 2017 levels. In other words – the marketing is working. In this blog we take a look at factors influencing the purchase decision process for bottled water.
Applying bottled water marketing to the buying funnel:
The most well-known water brands in the UK (in order) are as follows (Statista):
- Highland Spring
With that, it will come as little surprise that these are also the top 4, best-selling bottled water brands in the UK. So how does the number 1, best-known and best-selling water brand in the UK spend its marketing budget? Answer: digital marketing.
Over the last 12-months, Evian has circled 80% of its total marketing budgets to be spent on digital channels, placing its bets on search marketing, Snapchat, Instagram and influencer marketing in order to gain an edge and reach an increasing number of millenials.
It’s a significant change of approach for the brand, which used to be focused on how “pure” its water was. Commenting in 2018, Olivia Sanchez, vp of marketing for Evian parent Danone Waters noted: “We are trying to steer away from traditional marketing channels… “We have evolved to lifestyle moments: Evian is served at high-end events, restaurants and hotels,” she said. “A bottle of water is an extension of who you are and what you talk about.”
Changing its tactics to focus on digital marketing channels allows Evian to drive awareness across different platforms. Platforms used at home, on-the-go, at work, at the gym and more.
The more aware a customer is of a brand, the more familiar they become and this will all play into the customer’s mind when making a purchase decision.
When considering a brand or product, all of the awareness and familiarity built over time (this can be built quickly or over the long-term) will play a part in the shortlisting of products for a purchase decision.
For example, a customer may know of Evian and this brand may be established in their mind, but equally there may be a ‘new-kid-on-the-block’ that a customer has recently been introduced to – either by someone they know or something they have seen. This means that even for a simple, relatively low-cost (and often impulse) purchase like choosing a bottle of water, there are multiple brands in the customer’s mind when making that decision.
In fact, when you think that Tesco alone stocks 19 different water brands for customers to choose from in one location, awareness, familiarity and the ability to persuade shoppers to purchase a particular brand is critical to success.
This means that it’s not as simple as ‘the most-known brand wins’. At the consideration stage, there is almost a countless number of things that will play a part in the consideration stage:
- Awareness / familiarity – how aware of familiar a customer is with the brands available
- Loyalty – any existing loyalties to a brand
- Purchase Context – how much time is there to make a decision (e.g. train station vs. selecting a bottle at leisure as part of a meal deal)
- Experience – previous experience (whether positive or negative) when trying known brands available to choose from
- Customer Image – who the customer is with at the time of purchase or where they are heading / will be seen with the bottle that day
- Price – reaction to the price points of the products and response to offers or deals (e.g. two bottles for £2)
- Mood – current state of mind
- Product Appearance – shelving position, available quantities, packaging, on-product messaging
- Location – we may make different decisions about brands within different spaces – for example choosing a lower price point product in a corner shop vs a more premium option in a luxury food hall setting)
- Other Shoppers – the behaviour and choices of other shoppers can influence our own (e.g. feeling pressure to select a premium product if this is how others are shopping around you)
- Ethical Shopping – Eco-conscious shoppers may choose a brand that contains its water in a more eco-friendly material than a plastic bottle, such as a can or a carton
- Mineral vs Spring – preference on mineral or spring water. Some customers feel spring water is more ‘natural’ than mineral water.
It’s possible that we never even begin to think about all of the things that influence us when making a purchase decision – particularly one that seems as straightforward as a bottle of water but the wider context around decision making is exactly why so many brands thrive when selling such a similar product at very different price points.
Once the above factors (and more) have been taken into account we make our purchase decision – whether consciously or subconsciously.
This purchase decision could be a one-off, or one of many and so we will review the purchase (subliminally and privately in the case of bottled water) and take this experience into account when faced with a similar decision again.
Given that one-in-five of us buy bottled water every day, the potential value of securing a customer as loyal to your brand is extremely high, which is where the marketing process starts again to drive further ‘awareness and familiarity’ with the brand.
The above is just a summary of how complex the customer journey is for a very simple purchase decision in a market that is extremely competitive. These brands have to think very hard about how they price, position and market their brand to secure either a strong foothold as a mainstream brand (such as Evian) or carve out solid niche as a premium brand (such as Voss or Fiji Natural Artesian Water) within the market.
If you need help to understand more about how your customers make purchase decisions, then get in touch to find out how we can help.