Evian Water in the U.S.
1. Why has Evian’s U.S. market share continually decreased since the emergence of the cola giants’ bottled water brands in the late 1990’s?
Evian’s U.S. market share has continually decreased since the emergence of the cola giants’ bottled water brands because Evian failed to foresee competition from the likes of Coca-Cola in the bottled industry. Evian also failed to realize that selling bottled water in the U.S. is completely different from selling bottled water in Europe. In Europe, consumers are more knowledgeable of the differences between purified and glacial spring water, prefer the glacial spring water and are willing to pay more for glacial spring water brands like Evian. In the U.S. consumers are indifferent to the types of bottled water and make purchase decisions based solely on price. Evian ‘s average cost per case is about 80% higher than that of Aquafina and Dasani because of the additional handling and transportation costs of bottling water from Evian’s French/Swiss Alps glacier source. Because purified water is cheaper than imported glacial spring water, consumers in the U.S. prefer purified water brands like Aquafina and Dasani.
2. In evaluating Danone’s strategy for gaining U.S. market share, present the positives and negatives for remaining a single enterprise entity and “going it alone”.
Positives for remaining a single enterprise entity:
• If Danone continues to operate the Evian brand as a single enterprise entity, Danone will have to accept Evian water as a niche product rather than a leading product. However, if Danone pushes Evian’s pristine qualities and positions the brand and as a high-end premium beverage with a healthy edge via marketing and advertising, Evian may be able to provide Danone a higher profit even with smaller volume sales.
• Remaining a single enterprise entity will preserve the national, historical and family pride of the company.
Negative for remaining a single enterprise entity:
• As a single enterprise
Evian’s U.S. market share has continually decreased since the emergence of the cola giants’ bottled water brands because Evian failed to foresee competition from the likes of Coca-Cola in the bottled industry. Evian also failed to realize that selling bottled water in the U.S. is completely different from selling bottled water in Europe. In Europe, consumers are more knowledgeable of the differences between purified and glacial spring water, prefer the glacial spring water and are willing to pay more for glacial spring water brands like Evian. In the U.S. consumers are indifferent to the types of bottled water and make purchase decisions based solely on price. Evian ‘s average cost per case is about 80% higher than that of Aquafina and Dasani because of the additional handling and transportation costs of bottling water from Evian’s French/Swiss Alps glacier source. Because purified water is cheaper than imported glacial spring water, consumers in the U.S. prefer purified water brands like Aquafina and Dasani.
2. In evaluating Danone’s strategy for gaining U.S. market share, present the positives and negatives for remaining a single enterprise entity and “going it alone”.
Positives for remaining a single enterprise entity:
• If Danone continues to operate the Evian brand as a single enterprise entity, Danone will have to accept Evian water as a niche product rather than a leading product. However, if Danone pushes Evian’s pristine qualities and positions the brand and as a high-end premium beverage with a healthy edge via marketing and advertising, Evian may be able to provide Danone a higher profit even with smaller volume sales.
• Remaining a single enterprise entity will preserve the national, historical and family pride of the company.
Negative for remaining a single enterprise entity:
• As a single enterprise