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Running head: VIRAGO WATER MARKETING PLAN
Virago Water Marketing Plan
William Jenkins
Prof. Alexander Onukwugha
MKT500: Marketing Management
November 28, 2016
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Virago pricing strategy
Virago has to adopt a pricing strategy that will ensure its success in the market. The
bottled water industry has made it difficult for consumers to buy the product on a daily basis.
Despite the need for water, bottled purified water is a commodity that people consume on
various occasions. The low consumption can be attributed to higher prices and competition from
other substitute products (Freling, & Forbes, 2013). People rarely buy bottled purified water for
family consumption. Only those that can afford consider such a consumption trend. Virago
water will target a pricing strategy that ensures that individuals can consume the water on a daily
basis. Besides, Virago water has a brand extension that targets sports individuals and athletes.
The pricing strategy under the brand extension will consider other companies in the same
industry (Hollensen, 2015). Virago purified water has two main targets with its pricing strategy.
It targets families back at home and any other places.
The firm will be a price follower since other firms are established in the industry.
Firms such as Dasani and Aquafina will be considered as the price setters for Virago water.
However, Virago purified water will closely follow the trend that Dasani water applies in the
pricing of its water. Virago purified water will try to attract individuals that buy water for home
consumption. The firm will conduct a pricing strategy that will consider higher quantities of
water. The firm will package its water that targets families in five, ten, fifteen, and twenty-liter
plastic or can packages. The prices will be lower than those used by firms such as Dasani. For
example, if the 500ml pack for Dasani purified water costs $ 2.00 Virago water can set its 500ml
pack at $ 1.95. If Dasani does not package the same quantity, the firm will be the price-setter of
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the quantity. The firm can consider price differentiation to be able to fight off competition from
already established firms such as Dasani.
In its brand extension, the Virago sports special will be a price setter. The price for the
brand will be higher than any other sports drink to provide the brand with a special or high-class
appearance (Freling, & Forbes, 2013). Since it is associated with sports, it will be common at
sporting events and prices be differentiated according to packaging sizes.
Distribution strategy
For bottled water, distribution costs can be higher than the production costs. Virago
water will seek to develop some depots in major cities in the country. The depots will support
the firm in its distribution to retailers, supermarkets, and other wholesalers. The firm can also
consider distributing the brand to individual homes through an ordering system. It can develop a
system where a individual orders water for home consumption and the firm delivers the water
from a nearby depot to reduce the transport costs (Jaffee, & Newman, 2013).
Bottled water covers a large volume despite it being a low-value product. Therefore, for
success, Virago water distribution strategy has to ensure that the transport costs are limited.
Despite the production costs, the firm has to deliver good quality products. Apart from the
quality, the firm can gain a good rapport with its consumers from a personal level through the
distribution of water to households. The firm will have to divide its distribution strategy into
zones and sub-zones (Smith et al., 2016). The division of the market into zones will help reduce
the distribution costs. The production and distribution staff will be different. Further, at this
level, Virago water can consider employing additional marketing strategies that aim at ensuring
that it distributes the water to more households.
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The firm can distribute water to households or community levels by ensuring that its
representatives in the different areas have personal interactions with people (Jaffee, & Newman,
2013). Such interactions can be done online through social media. The representatives can talk
about the quality of water and the importance of offering clean and hygiene water. The matrix of
distributing water at a community or household level can begin with twenty-liter cans. The
packaging can continue depending on the orders provided. Smaller volumes that include 500 ml
bottles can occasionally be offered.
Major competitors
Dasani water
Dasani water is among the best companies in the business of bottled water. In the
market, Dasani is an established brand. The firm is owned by Coca-Cola and has more than 9.9
% market share in the United States. The firm has been in business since it was launched back in
1999 (Carroll, 2016).
Strengths
The firm is a brand of Coca-Cola; therefore, the brand awareness used is similar to that of
Coca-Cola. The firm provides quality products and has sustainability efforts. Dasani has
convenient packaging that most of the firms cannot easily emulate. The firm uses bottles that
can be recycled. Further strengths can be attributed to the firms’ consistency and the availability
of the material that it uses for production.
Weaknesses
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Dasani’s weaknesses can be attributed to the firms’ prices. The firm charges high prices
for its bottled water. In the United States, brand loyalty is not easy in the bottled water industry.
There is a lack of awareness in some areas of Dasani brand. There is also the perception that
purified water by the firm is from tap water (Carroll, 2016). There is a negative connotation that
is associated with the firm. Finally, there are substitutes for bottled water.
Aquafina
Aquafina brand produces purified bottled water that consists of flavored and unflavored
water. The brand is produced by PepsiCo. The firm first distributed its water in Kansas in the
year 1994. Since then, it has been expanding both locally and globally. Currently, the firm
controls about 9.6% of the United States market share (Carroll, 2016).
Strengths
The firm has an excellent advertising and branding through print ads and television. The
firm has an established distribution that is always available at groceries, retail stores, hotels
among others. There is value added due to the Peps brand name. The firm has diversified
products. The firm also sponsors sporting events and has friendly bottle packaging.
Weaknesses
The brand name has been misused by local mafia’s that use it through refilling bottles. It
affects the brand name. The industry has a lot of players that package the water. Therefore,
there is a limited market share.
Nestle Pure Life
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Nestle Pure Life has established itself in more than forty countries, across five continents.
The firm delivers pure bottled water to its consumers through various distribution means. It was
formed in the year 1998 in Pakistan and spread to Europe in 2000. The firm expanded into the
US in early 2002. Currently, it controls more than 8.3 % of US market share (Wright, 2015).
Strengths
It is an established firm with experienced business units. The firm experiences high
revenue and profitability. The firm experiences major barriers to market entry in some countries.
It has an existing competent sales and distribution network.
Weaknesses
The firm experiences brand portfolio problems. There are claims that the bottles are of
low quality as they swell when exposed to sunlight. The company has weak TV commercials
(Wright, 2015).
Virago's pure water vs. Dasani, Aquafina, and Nestle pure life
Virago water will bottle purified water in almost the same quantities that the other
competitors have been bottling. As a new company into the market, Virago will face stiff
competition from these already established firms. Virago aims at battling the three firms in
gaining the United States market share. The pricing strategy to be adopted by Virago water has
been mentioned above.
The strengths that can aid Virago water in the competition with the three leading firms
include:
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Virago is a new brand, unlike the other firms that have been accused of various scandals
such as selling tap water (Carroll, 2016). Virago water will aim at ensuring that it captures the
sporting scene through sponsorship of some teams with the extended brand of Virago sporting
water. Its advertising strategy is expected to be a strength as the firm will indulge social media
marketing. The firm will use Twitter and Facebook to introduce and advertise the product
locally.
Virago's weakness can be attributed to the following:
It is a new firm on the scene; therefore, the other firms are ahead regarding market share.
The other firms have already established marketing channels, distribution channels, and loyal
customers.
Differentiation strategy
Virago water will associate its packaging and quantities with Dasani. Besides, its pricing
strategy will adopt a price follower strategy that will consider Dasani’s prices. The firm aims at
making its packages and quantities to be the same as Dasani, for example, 500ml bottles, 1 liter,
1.5 liters, 5 liters and 10 liters among others. However, in between, the firm can establish
different quantity differentiation such as 350 ml, 750ml, and 1.25 bottles. Virago water will also
consider the extended sports brand that will be differentiated in the same quantities. The firm
will be delivering household water in large quantities from the established depots. It is a
different differentiation strategy that the firm adopts. In delivering water, the firm will be
competing against Nestle pure life that sometimes delivers pure water to households. However,
the firm will focus its differentiation with the customer bases. Further differentiation strategies
can be obtained from distributors and suppliers.
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Social media marketing
To promote Virago products, communication and marketing will be conducted through
Facebook and Twitter. People today have embraced social media, and Virago water will utilize
this opportunity. Virago Water Company will open its Facebook and Twitter accounts and carry
out online promotional events. The promotional events will help the firm boost its popularity
status. The firm can introduce the importance of having clean water and how consuming water
is important. The information on the accounts will involve the importance of having clean water.
After a while, people interested in sharing their stories through these sites will be allowed. By
using these social media sites, we intend to provide a consistent, updated flow of information to
the public and develop a two-way communication system (Stelzner, 2012).
There are over 229 million Facebook users in the United States and Canada. On the other
hand, Twitter has over 67 million users (Cawsey, & Rowley, 2016). Virago Water Company can
target half of these population with the help of social media marketers. Social media, Facebook
and Twitter in mind, are cost-efficient methods that can increase business visibility and syndicate
content. Social media ensures that inbound traffic is not limited to the normal customers only.
Social media helps a business reach anyone outside the loyal customer circle. Facebook and
Twitter act as communication and networking platforms. They create a voice for the company as
they humanize the firm. Customers can appreciate the comments on the pages through likes,
comments and retweeting. They are the best as the firm can further obtain the feedback of
customer’s experiences (Stelzner, 2012).
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References
Cawsey, T., & Rowley, J. (2016). Social media brand building strategies in B2B
companies. Marketing Intelligence & Planning, 34(6), 754-776.
Carroll, C. (2016). 1 The Dasani Controversy: A Case Study of How the. The Crisis of Food
Brands: Sustaining Safe, Innovative and Competitive Food Supply, 3.
Freling, T. H., & Forbes, L. P. (2013). An empirical analysis of the brand personality
effect. Journal of Product & Brand Management.
Hollensen, S. (2015). Marketing Management: A relationship approach. Pearson Education.
Jaffee, D., & Newman, S. (2013). A more perfect commodity: bottled water, global
accumulation, and local contestation. Rural Sociology, 78(1), 1-28.
Smith, A. E., Lincoln, R. A., Paulu, C., Simones, T. L., Caldwell, K. L., Jones, R. L., & Backer,
L. C. (2016). Assessing arsenic exposure in households using bottled water or point-ofuse treatment systems to mitigate well water contamination. Science of The Total
Environment, 544, 701-710.
Stelzner, M. A. (2012). 2012 social media marketing industry report: how marketers are using
social media to grow their businesses. Social media examiner.
Wright, K. F. (2015). Is Your Drinking Water Acidic? A Comparison of the Varied pH of
Popular Bottled Waters. American Dental Hygienists Association, 89(suppl 2), 6-12.