VOSS Case Analysis

VOSS Case Analysis

VOSS, though only in business for roughly ten years to date, has done an exceedingly well job on identifying their target consumers. The chosen cliental for VOSS Water as stated in the VOSS Artesian Water from Norway Harvard Business School case study is that of “high-end restaurants, hotels, and clubs.” VOSS originally received its “big break” from a manager at the high-end hotel of the Four Seasons in New York, who stated the possible desire of high-end retailers wanting to sell high-end bottled water in their establishments. With that, the VOSS concept and target market was chosen.
The flagship product was that of VOSS Glass. The target consumer in this case was aimed at top hotels, restaurants, and clubs around the world. These consumers did not mind spending the large amount of money it took to bring in the bulk orders of VOSS Glass. The perceived value and the fact that the establishment could mark-up the price five to eight times for what they purchased it for, made doing business with VOSS well worth the expense.
The secondary target market for VOSS is focused on high-end hotel mini bars. VOSS Silver was brought into production because of the power of the purchasers. VOSS’ consumers in the high-end hotel market needed a version of VOSS Water that was easier for stalking mini-bars and was in packaging that was allowed around pool areas. Though VOSS Silver went against the original “look” of the product, the company had to meet the needs of their consumers and create what they were demanding.
The newest cliental VOSS is trying to reach is that of the high-end gourmet retail segment.  The introduction of VOSS Red into the off-premise market will mainly be in affluent neighborhoods in states such as New York, Florida, and California. Once again the consumers will be paying a fair percentage more for the prestige of owning and drinking VOSS Red, but that is essentially what the consumer is looking for. Selling VOSS Red gives the gourmet retailer a certain level of stature, and the end consumer feels an amount of superiority by purchasing it.
The following table is a basic analysis of the three types of customers VOSS is currently holding accounts with:
Benefit Segment
Favorite Brands
High-end hotels, restaurants, clubs
Highly successful professionals, trust-fund babies
Their customers go out often, enjoy the finer things in life, like to see and be seen
Status oriented, hedonistic
VOSS Glass, Bling H20,
Canaqua, Glacial, Tau
High-end hotel
Bar-hoppers, young professionals
Their customers enjoy
the night life
and hanging poolside
Status oriented, active
VOSS Silver, Evian
Gourmet retailers
Affluent families and single people
Enjoy status and the finer things in life
Status oriented
VOSS Red, Fiji, Evian
Dare to be different. This is the mantra that Christian Sandberg, founder of VOSS of Norway has upheld when it comes to creative decisions regarding this artesian water. The idea of a high quality, expensive water came to mind when he noticed people began carrying water around as a fashion statement. Sandberg saw this as the perfect opportunity to build a high brand image of water that the world had yet to see. VOSS was one of the world’s purest drinking waters from the Norwegian Valley and Sandberg wanted it to be known and displayed throughout the creation of VOSS. The water is sold at an ultra-premium price in a sleek cylindrical glass bottle as shown in exhibit one from the text, and is the original bottle most known. The design of this bottle was created with the belief that it conveyed “a new way to think about water. Beyond refreshing…to beautiful.” VOSS’ first market was in New York and was to only be sold at high-end accounts such as restaurants, clubs, and hotels. The main goal was to establish a high quality brand image that was only sold exclusively to the best places, with the price that resembled that. In order to appeal to different markets and create the profits Sandberg had desired for his company, they decided to launch brand extensions and create new packaging sizes. When it comes to water, many different trends have occurred throughout the water industry. Sandberg took notice of this and hoped to achieve the same ideas, but in a more sophisticated manner all while keeping the high-end, exclusive image of VOSS. The different extensions that have become popular are flavored water, energy and diet water, mini-size water bottles for kids, enhanced water with sports caps for athletes, and recycled environmentally friendly water bottles. This was a course that was difficult for the VOSS Company to take because they worried about their image being lost or altered in the market. However, they remained adamant that with their high-end accounts, unique value proposition, and the fact that they did not give away products or discounts, they would continue to grow.  In addition to the VOSS Glass, two more product lines were introduced: VOSS Silver and VOSS Red. VOSS Glass is the original and considered the icon of the brand and was primarily sold on-premise locations and exclusive to the top locations around the world. VOSS Silver was introduced specifically for hotel mini-bars, packaged in a PET plasticbottle with a silver stripe that was more convenient for the hotel workers and people consuming them on vacation and around pools. VOSS Red is the most recent that was introduced for the off-premise gourmet retail segment in a limited number of states including New York, Florida, and California. The main reason for the PET plastic bottle was that VOSS did not want to take the iconic glass bottle off-premise, so they developed new packaging to protect the image and price point. Even after the release with these brand extensions, VOSS was still not seeing the profit they needed. Sandberg learned that the U.S. high-end market for glass on-premise was a smaller universe than expected, and it is just not that profitable. The only option Sandberg saw was to follow market trends in the water industry and develop a series of flavored waters for off-premise distribution. Along with this, VOSS is considering enhanced versions and packaging extensions such as multi-packs of VOSS Red and small-size bottles that can easily fit into a woman’s purse. VOSS has many developments in the works, and throughout their progress in the market they have maintained their goal of high-quality water that people are willing to pay for.

The market for bottled water is very broad. It ranges from flavored to sparkling, and includes enhanced, diet, and still. Many of these categories overlap with company’s hopes to expand and differentiate their products. Bottled water is also sold in many distribution channels. Some companies focus their product on selling in convenience and grocery stores. Others concentrate on being exclusive to hotel chains and upscale restaurants. Pairing a specific product with the correct distribution channel is very important when trying to achieve and uphold a particular brand image. For VOSS, it is also important for consumer justification of premium pricing. In the premium bottled water market, there are many competitors. Some include Perrier, Evian, San Pellegrino, and Fiji. These consist of sparkling and still. These companies careful positioning has allowed them to stay competitive in this premium market.
France’s Perrier was introduced to the United States in 1976 and by 1988 was responsible for 80% of the imported water market. It is a sparkling water that was acquired by Nestle in 1992. They use their traditional green glass bottles as a strength for brand recognition, only recently converting to some green plastic bottles and adding flavors to expand their line. Evian is also originated from France, and has the strength of being distributed by the popular brand, Coca Cola. This still water was one of the first to launch plastic bottles nationwide, but still produce the classic glass product. Evian is considered a “cachet” brand, producing designer styled bottles for high-end nightclubs. San Pellegrino is also part of the Nestle group. This Italian sparkling water was naturally aimed for fine dining, great for Italian restaurants. This brand’s market has expanded to more common restaurants, hurting its original premium image. The most recent to the market is Fiji, an exotic still water from the Fiji Islands. Fiji has the broadest of distribution channels ranging from convenient stores to resorts. From its widespread availability, it has grown to be the second largest imported water in the market. On the other hand, its accessibility may be a weakness for their brand image in the long run. Their heavy promotions of discounts and give-a-ways make Fiji a tough competitor.
The context that is associated with VOSS affects its total success as a company. Though, in the material given there were some factors that contribute to the context, they were factors that were out of the control for VOSS to manage. Therefore, as a company they had to play around the external conditions and adapt their internal decisions on how the context of the industry is.  Context that affects VOSS from an external point are the environment, society trends, and the technology.
The external environment that VOSS operates in has reacted well with the products that they offer. Though they are in a niche market that provides premium water, countries around the world are still consuming bottled water. The top total water consumer is the U.S. with 4.73 billion gallons in 2000 and 7.54 billion in 2005. The second consumer is Mexico with 3.28 billion in 2000 and 4.96 in 2005. The last total water consumer is Spain with 1.11 billion in 2000 and 1.56 in 2005. As we can see from the numbers stated, water is a product that people purchase; even though, it may be smaller amounts in different countries. On the other hand, the consumption per capita is highest in Italy with 42.2 gallons in 2000 and 50.5 in 2005. The second is United Arab Emirates, with 30.1 gallons per capita in 2000 and 47.7 gallons in 2005. In last place is the U.S. with 16.2 gallons in 2000 and 26.1 gallons in 2005. As a result, the U.S. is the top total consumer, but is the last per capita consumer when it comes to bottled water. This represents that even though people are consuming less water individually in the U.S., they are still consuming more bottled water overall. Moreover, for the water bottle industry companies they rave to sell in the U.S., but they are not the top per capita consumer and companies like VOSS still manage to make large revenues.
To continue with another external factor, the society trends and fashions contribute enormously to the bottled water market. As stated in the case study, they are college students that walk around campus with French Evian water bottles as if they were fashion accessories. Let’s face it, college students and other fashion conscious consumers know that if they have a hard-to-get product such as VOSS premium water, they know that people will believe they are wealthy. Moreover, even though the consumer may not have a large amount of money, they still want to perceive themselves to be ahead of the crowd and be cool, because they are walking around campus or streets with exclusive water. By having a product that is as sleek and unique like French Evian or VOSS, people’s heads turn and wonder, “What is that? Water or alcohol?” The consumer of premium water in the bottled water industry are people that like to be fashion savvy and want to make a statement.
Technology also takes a role in the bottled water industry. Innovations that have recently been added to water have been flavored varieties, functional varieties, and sports packaging. These ways of technology have enhanced the ways to satisfy the consumer’s needs. For instance, there are consumers that do not like to drink water and would prefer a flavor added to the water, so that they consume it more. By adding flavor to the water, it meets the need of the consumer. There are also waters that have functional varieties, which are waters that have vitamins, nutrients, stimulants and other enriched additives. By doing this, consumers who do not have the time to take their vitamins or nutrients can drink these types of water and it will fulfill their dietary need. Another is sport packaging, the technology that creates water bottles friendly to fitness people. An example would be to have an easy to squeeze bottle with a sport cap to drink the water easier while running or being active in a sport. In regards to the external conditions of the water bottle industry, there are many contributing factors that affect the way companies can run their business. Factors such as environment, society trends and technology all affect the designs, sales and distribution of a product.

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