Marketing Management Instructor: Prof. Aharon Hibshoosh Group 8: Georgi Petrov ID# 8538 Dan Hong Cao Chaldas Kamila Samuthphong Kornravee Ruslan Kyzy Dinara Assignment–Case Study-Perrier Synopsis Perrier is globally known for its quality due to low mineral content (particularly sodium). Perrier plans being perfect anytime by providing the best tasting sparkling water on the market. They are not only marketing for the rich and/or famous, they want to be an everyday thirst quencher.
Perrier vision is to be the number one sparkling mineral water in the world. Perrier’s mission is to offer bottled water to meet consumer needs anywhere, anytime. In May of 1989 in an issue of Fortune the company was depicted as one of six companies that compete best. Fortune quotes, “These are companies you don’t want to come up against in your worst nightmare. In the business they are in, they amass crushing market share. ” Perrier controlled 24% of the total US bottled-water business.
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Even competition like Coca-Cola, PepsiCo, and Anheuser-Busch was hardly affecting the sales of Perrier. After all we can conclude that Perrier is a competitive business that also understands the importance of how business is conducted. In February 1990 news reached Perrier’s executive suite that traces of benzene had been found in its bottled water. Ronald Davis, President of Perrier Group of America ordered an intensive recall of all Perrier bottles in North America. Few days later Perrier S. A. expands the recall to the rest of the world.
At first the excuse given by Perrier officials was that the contamination occurred because an employee mistakenly used cleaning fluid containing benzene to clean the production-line machinery that fills bottles for North America. Perrier now finally admits that benzene naturally occurs in Perrier water but the problem was now visible because the workers forgot to replace the filter. Then Perrier faced a big problem. Due to this drastic recall Perrier was completely out of the market for a total of 5 months.
Ronald Davis, President of North America Perrier, later pointed out that the company didn’t have to recall all 70 million bottles of U. S. inventory. It was too late for that. By the end of 1990 it was very obvious that Perrier was not going to regain its market position. Perrier’s sales had only reached 60% of pre-recall levels. We can easily notice that Perrier have had great success when first got to the US market. However, after this tremendous success its sales get decreased dramatically.
When you’re running a business in a high competitive environment as in Perrier’s case you have to be more flexible and not to depend on word-of-mouth advertising. That’s why in this situation the right move according to us is to let the advertising agency to launch its advertising campaign and try to regain company’s “newsworthiness”. We think that the initial success of the company is not only due to that it’s a nice quencher, but because it is a naturally carbonated spring water which consists small bubbles and that’s what distinguish it of the other spring waters.
One of the biggest problems for the company is the plan for shifting their distribution from gourmet shops to the soft drink section of supermarkets. Also another issue is their vision that their product would be sold as a “price special”. 1. S = Strength – Part of a large corporation, Nestle water corp. – Almost 1 billion bottles, almost 50%of sales abroad, almost 1000 members of staff at the Vergeze site, Present in 14 countries; Good advertising reaching young people; Elegant, sparkling and refreshing, with just a hint of zaniness.
A unique story: The love story between water and gas began 120 million years ago. 120 million years ago, on the Languedoc plain in southern France, rainwater seeped into the ground as volcanic gas rose up to the surface. When the water and gas met, they both forced their way up through the open fissures in the limestone and gushed With the release of the carbonic gas, the water bubbled as if boiling, earning this place the name, “Les Bouillens”, meaning ‘boiling waters’ in French; A natural mineral water: The origins of the spring.
To the north of the Vergeze bottling facility is the “Garrigues de Nimes,” which is made up of limestone rock formed during the Mesozoic era. This limestone developed fissures through ages, allowing the passage of water. Thus limestone was initially covered with Plaisancian marls from the Tertiary era, then by Quaternary alluvium formed of siliceous sand acting as a filter. This sand was covered more recently by an impermeable layer of clay, which still provides excellent protection for the PERRIER water site.
Carbonic gas formed either by volcanic activity or by thermal decarbonation of the limestone travels through the chalky subsoil by means of the fissures that have opened up. As the gas makes its way up to the layer of impermeable marl, it becomes trapped. Due to cracks in the layer of marl directly above the PERRIER spring, the gas is able to pass through, creating bubbles on the surface of the water which flows out at this site, at a place called “Les Bouillens”; 3 commitments to the planet: 1) Protecting purity – Mining water goes hand in hand with the management of its immediate environment.
In order to maintain the quality of the natural mineral water and protect the environment, PERRIER operates within a protective zone of 8,649 acres. The company also owns 2,471 acres of farmland around its spring on which local farmers grow organic produce under the “Agriculture Biologique” eco-label, using no artificial fertilizers or pesticides. Protecting the territory and its ecosystem preserves the richness and purity of the water.
Managing the environmental footprint – PERRIER carried out a BilanCarbone® (Carbon Assessment) in 2008 in order to take effective measures to reduce greenhouse gas emissions, in accordance with guidelines developed by ADEME, the French Environment and Energy Management Agency. Taking it one step further than the Bilan Carbone®, PERRIER uses a tool specifically designed for the Nestle group, which analyses the entire life cycle of the end product and provides a multi-criteria environmental assessment: the Global Environmental Footprint (GEF ISO 14044 accredited tool).
By 2010, this method had already enabled the company to carry out a detailed environmental assessment of the PERRIER range. As a result, an analysis is always carried out before the development of any new product or packaging changes in order to ensure their eco-balance. 3) Promoting responsible behavior – For many years, PERRIER has been developing environmental initiatives in the region and raising public awareness about the ecological use of water. In particular, PERRIER supports Project WET, an international training program for teachers, which has brought together 400,000 educators and several million children over the past 20 years to educate new generations about the vital need to preserve water resources. 2. W = Weakness – Wrong placement strategy; After benzene threat lost popularity, and other brands came up; Not everyone could afford it due to its higher price compared to the other competitions. 3. O = Opportunity – Everyone is more health conscious, water bottles are back in the game; getting back to gourmet shops; In the channels, it could transfer senior stores to supermarkets in general, advertising, it is not only for young people as their favorite drink, but also for working-class.
From the high-grade mineral water brand image into a mass of mineral water, expanding the coverage of the brand, promoting the brand, shaping of healthy brand image, enhancing the consumer’s trust and dependence, the consumers acceptance ability have become higher and higher. The promotions and sales to a series of public activities, attracted the public participation, not only attracted the attention of the public, but also closer to the public distance, enhancing brand reputation, and promoted to enhance the brand’s positive influences. 4. T = Threats – Highly competitive environment; Federal regulations; Water sustainability. If the resource is exhausted, could they find another source of water instead? On the other hand, the company has taken some viable decisions as well. The marketing and advertising campaign, for instance, including – showing the product on society pages, T-shirts and beach towels, nationwide fitness program included sponsorships of athletic events are good move. Sometimes some companies prefer to lose their reputation rather than trying to fix it as create a new identity.
Most people don’t even notice it’s the same company rather they think it’s a new company all together. In our opinion, if Perrier comes up with a new identity they will gain more popularity faster than trying to clean their old one. We think that Perrier will succeed under this latest marketing strategy, because water is the drink all young people are into, with the fad of being in shape and getting ready for the summer, Perrier can grasp a lot of attention.