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Fiji Water Strategic Plan
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Fiji Water Strategic Plan



Graduate school thesis by Kulin Marketing founder Liz Kulin. Email Liz@kulinmareting.com to purchase a printed version of this marketing plan.

Graduate school thesis by Kulin Marketing founder Liz Kulin. Email Liz@kulinmareting.com to purchase a printed version of this marketing plan.



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  • My name is Elizabeth kulin, and I will be talking about strategic issues that Fiji water is facing, some options and my recommendation of best steps moving forward to resolve the company’s problems raised by such issues.
  • History: -Fiji Water was founded in 1993. -Its product is bottled water that is sourced from the Artesian region of the Fiji Island. -In 2004 it was acquired by Roll International Corporation for $50m. -RIC is a private, $2b corporation with over 4.000 employees in industries such as agriculture, consumer packaged goods, floral services and more   Industry: -The beverage industry, the bottled water category -has grown to be worth $39b However, used to increased steadily at an average of 53% yearly (between 2005-2007) in 2008 it only grew 9% in value. Segment: -There are 3 major segments: major manufactures which account for 70% of beverage sales, private labels, and small -Fiji Water is in the small manufactures segment.
  • Positioning: -Fiji’s water positions as an affordable high quality Fijian water Branding: -Fiji Water has created a brand image of tropical, exotic water by its packaging of palm tree images. ---The brand has high brand awareness in pop culture gained from media placement in TV and movies   Competition: -indirectly with all other beverage’s including major manufactures and private label. -Direct with all other small bottled water manufactures, especially Evian.
  • Economy: -Since the beginning of the current recession in 2008, sales of bottled water has been in decline Environment: -Concerns about the environmental footprint that bottled water leaves on the planet. -Fiji water started www.FijiGreen.com , offset their carbon shipping footprint, they help save the Fijian rainforest, reduce packaging materials, and promote recycling. -Have won awards for their green actions. -But the public responded with mixed reactions and question their transparency. -Mother Jones article claimed that 57% of consumers think Fiji Water is detrimental to the environment Health: -Obesity, and related diseases attributed by obesity (such as diabetes) have caused a phenomenal increase in health conscious consumers -Non-alcoholic beverages account for 22% of the total calorie intake per day for average Americans, -Additionally, consumers are increasingly interested in foods and beverages that are absent of artificial additives and preservatives. -So consumers look for healthy beverages, and predominantly bottled water -But there have been growing concerns about the health safety of bottle water. -Chemicals in water (the Environmental Working Group tested 10 popular US bottled water brands and found evidence of bacteria, Tylenol, and chemicals in the water. -BPA a chemical found in plastic, has been linked to coronary heart disease, heart attacks, and Type 2 Diabetes Socio-economics: -Reports claim that the source location of Fiji Water is poor, underdeveloped, and lacking of enough clean drinking water for the entire population and that 1/3 of the Fijians are without access to clean water and suffering from typhoid and other diseases related to contaminated water -Multiple consumers have commented in the Fiji Green blog that Fiji Water is “stealing the local communities water and money”
  • These issues have resulted in the raise of some new competition for Fiji water. -Economic issues have lead to an increase in consumers buying the 30% cheaper private label – 1% gain in market share. -Envinmental issue and concerns has lead to in crease in the 500-1000 times cheaper tap water, which is now as safe convenient as bottled water with new product developments such as filters and reusable bottles.   This has negatively affected Fiji Water financially and in December of 2008, the company laid off 40% of its employees (Palmeri & Byrnes, 2009).
  • But this is a category issue, not only a problem for Fiji Water. -For example, Between 2006-2008, top brands Aquafina, Dasani and Poland Springs reported a combined volume growth of 2% while private label reported 44% growth in volume sold -Also, for the year ending May 17, 2009, only private label bottled water and Galceau Smartwater posted gains”All other flat or decline. Reduced prices -water companies have been forced decreased prices to try and stimulate demand and grow future sales New products – -Enhanced: Coca-Cola Vitaminwater, PepsiCo Propel -Coconut Water: With expected wholesale sales of $35 million this year, up from $20 million a year ago Coca-Cola bought a minority stake in coconut water company ZICO Beverages LLC in 2009 (less than 20% for $15 million) -Thin PET: PepsiCo is now positioning their Aquafina brand as the “thinnest plastic bottled ever” -CO2 Emissions: Evian is transporting its bottled water by train instead of truck to lesson CO2 emissions.
  • At this time, Fiji water must review is S.W.O.T. before drafting their strategic options and action plan to solve their issues. STRENGTHS: -CEO $ could be used to create new products for current or new markets. -Green image/position due to green awards -High brand awareness. -Distribution chain is diverse and strong. -Strong marketing staff team. -high quality positioning justifies higher price   WEAKNESSES: -consumers publically write negative comments on the internet about the company. -Located is far from selling point (USA) -Layoffs; less resources to work with -the bottled water category of the beverage industry has not gained sales this year -Higher priced could hurt sales during a recession OPPORTUNITIES: -Prismo bottled water company has been selling well (PLA plastic) -Smart wart, enhanced still clear water, posted sales gain (only company in 2009) -Bottled water is forecasted to grow in the future, post 2009 as consumer still want healthily beverage options.   TREATS: -tap water and private labels -The recession end is not in forecasted sight -The green movement end is not in forecasted sight – consumer will want green products over non green - Consumers can say whatever they want on the internet and it can damage brand image and be time consuming to manage
  • As Igor Ansoff in, “Strategic Diversification” claims, there are 4 options that any company has when it is contemplating growth strategies. Companies can either try to: -Develop new products for new -Present current products to current -Present current products to new market -Develop new products for current market For Fiji Water, these options look like this: -1. develop a new product unrelated to water, such as juice or a hotel resort. -2. make minor improvements without changing the core product or market, such as price, packaging, safety testing and additional cause marketing. -3. Reposition the current product in attempt to target new consumer segment, such as by increasing the price. -4. Learn from competition & what is gaining sales (Smartwater) and create a product for the bottled water market, such as enhanced water All of these options would require leveraging the Fiji Water brand and resources in order to implement, execute and succeed in growth. In the article “Finding your Next Core Business”, Chris Zook says that businesses should look for hidden assets that are untapped and could offer growth opportunities (Zook, 2007). Each of these 4 strategic growth options would require Fiji Water to leverage it current assets, either its brand and/or resources, and create a solution out of them. Doing so will hopefully overturn the negative financial and brand equity losses it has experienced.
  • Develop a new product for a new market: Juice : As a beverage bottling company, Fiji Water could research other types of beverages that it could manufacture. PROS: Manufacturing juice would require targeting a new market, as it is in a different beverage category than bottled water, however it is a rational brand extension since juice and bottled water are in the same industry (beverages). Also, Fiji Water could leverage its existing resources, making the production switch and requirements easy. CONS: In 2008, fruit juice sales declined -.3% in the U.S. (see table 6) and its overall category value declined -8%. Additionally, Mintel reports that juice manufactures face competition threats from other, healthier, beverage segments such as bottled water and energy drinks. Furthermore, the forecast for juice is negative; market value is expected to drop from $15.4 billion in 2008 to $14.4 billion in 2013 (mintel fruit juice, 2009).   Hotel : Fiji Water’s original founder, David Gilmour, developed Southern pacific Hotel Company and grew over 50 hotels in Fiji. PROS: the brand have experience in the industry, and was successful, it could leverage these advantages and build differentiation. It could also leverage its branded position of country of -Fiji culture, friendly people, beautiful eco-system and privacy. CONS: The travel and tourism industry in Fiji is declining. The industry experienced a loss in Q1 of 2009, of 13.2% (or $25.4m). * This recent decline, which may be due to the current global recession However, unforeseen potential recurring macro-economic shifts in the future could negatively affect this industry again.   Present current product to current market : A strategic option that Fiji Water could consider is to focus on improving its current product for its current market; in order to please consumer demands and respond to context issues. The current issues that Fiji Water would need to respond to with changes are: the economic recession, consumer environmental concerns, consumer health concerns, and consumer socio-economic concerns.   Economic recession response : Fiji water could lower the sales price of its bottled water. PROS: A decrease in price should encourage a spike in consumer demand. CONS: Lower price could threaten the brand image and positioning of Fiji Water, which has historically priced higher than other bottled water brands, to portray an image of higher quality water. Furthermore, this could be a short-term solution that in the long run hurts the company’s revenue and overall net income. Additionally, this may not been seen as a solution by consumers, but a desperate response to the competition who are decreasing the sales prices of their bottled water brands, after all, prices fell 2.9% in 2009 across the board, according to the Wall Street Journal (First Research, 2009).   Environmental Concerns response : Although many bottled water companies are responding this consumer demand shift by manufacturing the packaging of their water with thinner plastic bottles, not many have actually solved the consumer want 100% by changing the packaging to a biodegradable material. Fiji Water should research the possibility of switching packaging material from petroleum-based plastic to corn or plant plastic. PROS: By offering a completely environmentally safe plastic for its bottled water, Fiji Water would truly fulfilling consumer wants and needs that are not being met (Shapiro, 1988). CONS: PLA is about $.12/lb more than PET.   Health concerns response : To prove that Fiji Water is clean, and healthy for consumers to drink, Fiji Water should conceder having their spring artesian water tested by a 3 rd party, and publish the (positive) results. PROS: This could prove to consumers that Fiji Water is a clean, safe, and healthy beverage. CONS: Consumer may not believe the test results, which could bring even more negative criticism to the brand’s image.   Socio –economic concern response : PROS: By affiliating with more charities, events and initiatives (such as ones that incorporate customer involvement in charity raising, giving, donating, etc.) that counteract the negative accusations on Fiji Water, a new and more positive brand image could potentially be created. This positive image could boost sales, as consumer could feel good about drinking Fiji Water. CONS: Cause marketing can often be seen as a dishonest way for brands to attempt to increase sales among consumer segments, instead of transparent interest in supporting a needy cause. This could potentially damage the Fiji Water brand even further.  
  • Present current product to new market: target the niche, high-end income, and consumer segment like Voss, Berg, and Bling brands. Which are priced exceptionally higher than Fiji Water and position as the most trendy and exclusive bottled water consumers can drink. PROS: An increase in sales price of the current product would result in greater revenue, at no/or little cost increases; resulting in greater profits CONS: The economic recession has negatively effected the majority of consumer’s willingness to spend more money on bottled water based on their brand alone. and, by repositioning without improving the quality of the product itself, consumers may not accept/believe the new position.   Develop a new product for current market: Enhanced bottled water has experienced positive growth of 367% over the past 5 years (beverage industry, 2009). PROS: Smartwater, grew 464% in sales 2008, -this segment is forecasted to increase sales about 1% in next 3 years. CONS: Smartwater is a very large competitive -The two Coca-cola brands together (VitaminWater and SmartWater) control almost 2/3rds of the enhanced water segment sales. -Also, enhanced flavored sweetened waters like Vitaminwater and propel have seen a sharp decline in sales this year
  • But there may be a opportunity in this enhance segment for Fiji water. -Smartwater is selling. The non flavored, non sweetened, enhanced water is selling. -Fiji water could follow their lead and develop a non flavored, non sweetened, enhanced water -However, to avoid the treat of heavy competition from Coca-Cola concolumerate, Fiji water could just position differently, so a different consumer market instruct. -This chart shows how all enhanced waters position. -As you can see, there is no non flavored, non sweetened, enhanced water in the Health segment category! -As we leaned earlier, health, and the health of bottled waters, is a consumer concern.
  • Therefore, I purpose that Fiji Water develop a non flavored, non sweetened, enhanced water, and position as the healthiest bottle of water. -This would allow Fiji Water, to remain in the bottled water category, which is forecasted to grow -It also leverages current resources and brand equity, -provides solutions to consumer’s wants and needs by adding functional benefits for consumers (vitamin health). -differentiate is positioning in order to not compete head-on with market leaders, such as Glaceau. Additionally, I am also recommending that Fiji water strengthen the position of healthiest by -switch to non-plastic packaging material -publish results from a 3 rd party water test.
  • Fiji water wants to become the best selling enhanced bottled water, and use the lowest cost still effective marketing to build positioning, brand equity, and active consumer purchases.   Promotion Tactics - PR – Outreach to health and green reporters of newspapers and magazines who share a similar audience as the consumer target market that Fiji Water Complete it attempting to reach. Outdoor Advertising – Post print ads on bus stops, near retail stores that sell Fiji Water Complete, by health food stores, by health clinics and organizations (yoga studios, etc) and neighborhood parks. Print Advertising – buy ad space and promote new positioning in health, green, and food & beverage related magazines and newspaper sections that share a similar target market. Social Media – This is a free tactic where Fiji Water Compete can engage with consumers, and encourage a viral spread of the new brand. This can be attempted by creating a presence on twitter, facebook (a facebook page), youtube (post internet commercials that promote the positioning), and participating in blog outreach (attempting to get bloggers with large audiences to talk about the Fiji Water Complete brand in a positive way).  
  • Branding – the new brand elements should help build brand equity and positioning among the consumer segment. Recommendations of specific new brand elements:   Brand Name – “Fiji Water Complete”; -Transfers brand value (established awareness and image) -But consumers will know that this is a different product; related to total, not lacking, organic and whole. Slogan – “Get Pure”; consumer is buying pure, and becoming pure. Its descriptive of positioning. Logo – Healthy for people and the world. – likable and memorable. Tagline – “Healthy water for EVERYbody”; this tagline supports the new Fiji water position “the healthiest bottled water” -descriptive and meaningful  
  • an estimated 50 billion bottles of water are consumed per YR in the US Fiji water is 1% of these sales which is 500,000,000 (in the US) That means that just in US sales, Fiji Water would be facing a $6.5 increase in cost for this product. However, there are options to offset this monetary loss: Eat the cost and make lower gross profit margins - From 92.971% to 92.556% = -0.415% Transfer additional costs into sales price - From $3.1300 to $3.1430 = + $0.0130 or + .424% Sell more bottles – to reach same profit as Fiji Water (estimated $150m) Recommend #1, but if detriment the company (more layoffs), then option #2 becaue it is so low that end consumer may not notice it, and their demand will force retailers to carry/buy it.
  • Manufacture -Buy vitamins and PLA. -Train staff about vitamins and PLA and how to use them in production. -Fix Equipment to work with new ingredients. -Produce bottles and prepare cases for shipping. Schedule promotion and launch with resources Take to market -promote using marketing tactics -distribution management with transportation and retailers. -Manage and sell
  • MEASURE -sales, market share, brand awareness in comparison to past and competition. -customer feedback, consumer based brand equity/image IMPROVE -Use Quantitative results to benchmark and improve sales. -Use Qualitative feedback to improve product and consumer relations.
  • Best case – The best case scenario for this Fiji Water new product plan is that the company will be successful. The new product will sell, and revenue will be more than cost. The generated profits could be used to rehire staff, invest in consumer wanted cause marketing, and saved for future potential recessions and customer trend changes   Worst case – The worst case scenario for this new product is that it will not be accepted by consumers, will not archive strong brand equity, or competitive advantage in the enhanced water segment of bottled waters. In this case, sales would not generate enough revenue to cover costs, and the project would have to be revamping, or canceled. At this worst case point, Fiji Water would have the option of returning to their core product, exiting the industry, or attempting to reposition with a different new product.

Fiji Water Strategic Plan Fiji Water Strategic Plan Presentation Transcript

  • Fiji WaterStrategic Plan By: Elizabeth Kulin December 2009www.KulinMarketing.com
  • COMPANY OVERVIEW History Industry Segment• 1993 • Beverage • Major Founded industry manufactures• RIC (worth $39b (Nestle, coca- acquisition in 2007) cola, PepsiCo, 2004 for • Bottled water crystal $50m category geyser; 70% (valued at 9% of category in 2008, from sales) an average of • Private 53% past Lables years.) • Small manufactures (Fiji water)
  • CURRENT SITUATION • Affordable High qualityPositioning • Location - Fiji • High awareness (marketing and media placement advertisement) Branding • Brand image – tropical, exotic water • All other beverages on shelfCompetition • Small manufactures (Evian)
  • STRATEGIC ISSUES Fiji Water•  conomics = sales and consumption in decline E •  nvironment = Consumer do not believe www.FijiGreen.co E •  ealth = Consumer want clean & safe beverage options H •  ocio-economics = socially concerned consumers S
  • AFFECTS ON FIJI WATERPrivate Labels New competition 40% of staff
  • THE CATEGORY AFFECTS AND REACTIONSAll bottled waters sales have declined(Except private label & Smart wart) Reduced prices (9.3%-41%) Trying to find new opportunities • Different types of water • Green Products
  • SWOTSTRENGTHS WEAKNESSES•  inancially stable CEO F •  nstable brand image U•  as won Green awards H •  emote source location R•  igh brand awareness H •  0% less staff resources 4•  trong distribution S •  s in a declined category I•  trong marketing resources S •  igh priced H•  igh quality positioning HOPPORTUNTIES THREATS•  iodegradable plastics are B •  ew, lower priced competition Nselling well •  nstable economic environment U•  nhanced still water is selling E •  nvironmental movement Ewell (Smartwater) •  ocial Media S•  ategory is forecasted to Cincrease in future (post ‘09)
  • STRATEGIC OPTIONSNew Product; Current Product; Current Product; New Product;New Market Current Market New Market Current Market• Develop a new • Improve only some • Change positioning • Develop a different product unrelated to characteristics, of product to target type of water water without changing new customer product segment• Juice or Hotel Resort • Lower price, new packaging, clear • Increase price to • Enhanced water water test, more target high income cause marketing market
  • OPPORTUNITY PROS & CONS Option Details •  uice J •  ational brand R •  ategory in C extension & use of decline (-.3% 2008 resources sales) & negative New Product; forecast New Market •  otel H •  everage location •  iji T&T in L F and past resources decline (13.2% in Q1 2009) Current Product; •  ower sales L •  ould spark C •  urt brand H Current Market price demand image •  se PLA U •  upport green S •  ncreases cost IRespond to Issues: plastics claim •  onsumer C•  conomic E •  rd party test 3 •  rove that water P disbelief•  nvironment E water is healthy •  onsumer C•  ealth H •  ncrease I •  oost brand B disbelief•  ocio-economics S cause image marketing
  • OPPORTUNITY PROS & CONS Option DetailsCurrent Product; Increase price to Higher revenue EconomicNew Market target high at no cost recession can not income market increase = guarantee a automatic profit successful sales increase volumeNew Product; Develop an Consumer StrongCurrent Market enhanced bottled interest in this competition from water segment & Smartwater positive forecast (hydrating sports water) & declining sales of enhanced sweetened, flavored waters (FE: Propel & Vitaminwater)
  • POTENTIAL OPPORTUNITY Soda Flavored Subs. /Juice Country of Trendy/ Subs. Health Sport/ Origin Private High energy Label Priced•  Aquafina •  Aquafina •  Enhanced •  Gatorade •  Fiji •  Trader •  Voss sparkling flavor Propel •  PowerAde •  Evian Joes •  Bling•  Poland splash (Pepsi) •  Enhanced •  Poland •  Whole •  Berg springs •  Enhanced •  Enhanced Propel Springs Foods sparkling Propel VitaminW (“recharge flavored ater when on •  Enhanced (Coca- the go”) VitaminW Cola) •  Aquafina ater •  Enhanced Alive (Coca- Dasani •  Cola) Plus (0 Smartwate •  Nestle calories) r (tom Purelife •  Sobe Brady) Lifewater
  • RECOMMENDATIONDevelop a new product for current market: Learn from Smartwaters success Can use No direct existing competitor resources Healthiest Enhanced Water Respond to Can leverage consumer brand demand
  • MARKETING STRATEGY: PROMOTION • Become #1 selling enhanced bottle of water Goal • To use cost efficient and effective marketing tactics Objective to position, build brand equity and active sales PR Advertising Social MediaGreen & Health reporters Outdoor, Online, Print Encourage viral spread
  • MARKETING STRATEGY: BRANDING Brand Name Transfers brand value while describing Fiji Water Complete differentiation Slogan Portrays purity of the water, bottle, and Get Pure brand Logo Easy to remember recognize, and visually Heart shaped globe descriptive Tagline Descriptive of positioning and valueHealthy water for EVERYbody proposition
  • FINANCIAL PROJECTIONS FOR FIJI WATER COMPLETE Variable Costs: Fixed Vitamins - $.00625/bottle Rent Plastic - $.80/lb Staffing Shipping - $.037/bottle Equipment Cost increase of $.013/1 liter bottle (If $150m Profit, ~-$.7m loss) CHOICES: Increase Sales Increase Sales Less GPM Price Volume• -.415% less • .013 or .4% • 231,309 more (92.6% from (from $3.13 to 1lt bottles (to 93%) $3.143) reach $150m)
  • IMPLEMENTATION PLAN • Buy enhancers • Train staff • Program equipmentManufacture • Produce & prepare for shipping • Promotion strategy execution • Distribution Schedule • Prepare customer service team launch • Promote • Distribute Take to • Sell market
  • CONTROL & MAINTENANCEMeasure• Quantitative Sales• Qualitative customer feedback Improve • Use Sales results to benchmark and build quotas for increasing brand awareness • Use customer feedback to improve product & brand image
  • CONTINGENCY PLAN  Worst case   No sales   Return to core product or search for new strategic options  Best case   Win sales and market lead   Re-hire staff   Use profits to counter future threats:  create loyal relationships with customers  green projects to strengthen brand image of positioning  cause marketing in Fiji