Jay Kharvar

08176298

Global Marketing Ethics and Culture

Global Marketing Ethics and Culture 6BUS0297

Assignment: Global Ethics of Bottled Water

Name: Jay Kharvar

Student No: 08176298

Module Leader: Adrian Goodsall

Word Count: 2016

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Jay Kharvar

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Global Marketing Ethics and Culture

Bottled water consumption has grown exceptionally over the past ten to fifteen years. This growth has taken place globally, especially in Europe and North America. The UK bottled water market grown from 580 million litres to over 2.1 billion litres over a period of 16 years from 1993 to 2009. Americans consumed roughly 8.6 gallons averaging 28.5 gallons of bottled water per person in a year. Within the bottled water industry there has been many notorious opinions as to whether bottled water is ethical or not. Within this essay I will be exploring relevant ethical theories along with extensive research to find out why and how this particular subject is questioned. Also I am going to use the Global marketing mix to explore as to how bottled water became one of the biggest in the food and beverage industry by far. Global marketing mix focuses on four areas which are product, price, promotion and place. Each aspect of the four ps relies and depends on each other, looking at the product part of the marketing mix, which is the key element, as the product must have a certain amount of demand from its consumers for the product to become a success. The costs of bottled water are relatively low, but on the other hand its completely overpriced, as water is free, originally coming from the taps and then diversified into bottled water. There is such a huge demand for bottled water that competition between different countries has become so tight because they all want to obtain a certain proportion of the bottle water market share. The introduction of Perrier water in the 1970s changed the face of bottled water industry as there was never a demand for bottled water. Slowly consumers decided that is were an essential product to have in their homes (BBC video). Ethical relativism refers to the fact that morality is context dependent and subjective in simple terms this means that there are no universal rules or morals. But it depends on the culture and the individual making the certain decision. This form of ethical decision making is a well known method in the world of global business. In terms of this view, the ethics of bottled water can be explained in

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Global Marketing Ethics and Culture

terms of the fact that the cultures of the western society have become immune to it and will carry on demanding it. The positive to this is that it is reducing health problems like obesity. Also, it has become normality for the multinational organizations form the western cultures to gain a decent profit from the overpriced goods that they sell. This brings up the question that why should bottled water be any different? In the society of today, it has been made clear that consumers are no longer buying for the value of the product but are buying the item completely on what it represents e.g. revitalising and freedom. Nowadays bottled water has become a statement than anything else. It has become a symbol of our everyday lifestyle and living status. With Perrier water it was a symbol of class and maturity (BBC video). But now if an individual obtains a bottle of water it is a complete sign of health, vitality and also for a person to be on the go often. Things have evolved from the competition between multinational companies. It has now lead to the competition between consumers and their preferences, consumers have a wide range of different bottled water brands e.g. Volvic, Evian, Perrier, Dasani, Aquafina etc. As a result from this view, you can see that it is perfectly fine for the bottled water industry to carry on the way they are as they are acting ethically. The ethical theory of Utilitarianism introduced the idea that all business based decisions should abide by the statement the greatest amount of good for the greatest amount of people (Crane and Matton 2007). The theory is based on the positive results of an action against the negative and if either side has a longer list would win. This theory is parallel to a cost benefit analysis as it explains the means. Many business executives use this theory a lot as it is based strictly on net assets and later hoping to maximise on profits and all stakeholders interest must be considered (Murphy 2005). Looking from a Utilitarian view, the ethics of bottled water would take a pretty long time to think about as the bottle water industry is such a huge industry and is effective across the globe. On the

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Jay Kharvar

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Global Marketing Ethics and Culture

other hand looking from this perspective it is normal for companies in the western region to be making a high profit on goods that are sold overpriced. This is good for the economy as the water industry employs 20,000; this provides consumers with the supply that they demand (Times online 2008). Also it gives consumers the supply for their demand and if it were not these companies it would just be another company to provide the product. The companies within the bottled water industry are becoming more environmentally friendly, and are portraying a positive brand image for example, volvic 1 for 1. Volvic helped to build 443 wells providing water to 240,000 people. From this the industry is starting to help those in need of water and to look after the environment while doing it (BBC Video). Guidelines have been introduced to assist the industry by the World Health Organization; this was to drink 8 glasses of water every day. This shows that consumers are becoming or going to become highly health conscious. Bottled water is more convenient to drink on the go due to this the sales of bottled water have increased highly. Going back to the global marketing mix, there is another vital element which is place; this refers to the allocation of bottled water. This causes key issues for environmentalists as supplying bottled water is leaving an enormous carbon mark. Evian water is a perfect example of this as its only produced in one part of the globe and it has to be transported all over the world (Food that makes billions 2011). On the other hand, products of the Nestle brand can be produced anywhere in the world therefore this reduces the severe strain on the environment (BBC video). The distribution channels have to be taken into consideration as it can sway the preference of transportation. Also, if you look at the ethical issue of pollution you can see that it is caused by the whole industry as the PET bottles they use, are not only causing pollution in terms of recycling but they are using oil, the worlds most rare item to produce them.

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Jay Kharvar

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Global Marketing Ethics and Culture

Another ethical theorist I can explore is Kantianism which was introduced by Immanuel Kant. His ethics are deontological revolving strictly around duties rather than emotion or end goals. This lead to the important part of Kants ethics, which was the formulation of the categorical imperative which is the measure for whether a maxim is good or bad and that they should be following a criteria of three different maxims and the outcomes must act in accordance with all three. The first maxim is consistency, which means that all decisions that are made must be ethical across all cultures and everyone must follow the same principles (crane and matton 2007). Taking this into consideration, selling bottled water is not ethical across all cultures as many countries obtain this product without charge. If you compare this to developing countries that have a population of over one billion people that do not have the ability of accessing clean water, it is obvious that thousands of people are dying from the lack of clean water (BBC video). Ethically this is unacceptable as international companies such as Nestle and DANONE should be giving a helping hand to those who are unfortunate rather than extorting an existing resource that is scarce in some parts of the world. The second maxim states that all humans must be treated with dignity and that they should never be treated as a means. If you apply this maxim to bottled water you would be able to see that it treats people with dignity as the bottle water industry employs over 20,000 people (Times Online 2008). On the other hand the water industry is not treating people, in non developing third world countries such as Somalia and Ethiopia, with respect or dignity as they are the countries that are being made to suffer the most by dying at the expense of contaminated water. Instead of helping the current situation they are maximising profits by selling the products to people that already have access to it for no price at all. The third and final maxim is Universality; this means that the decision or action made should be accepted by everyone, this would rule out any kind of prejudice in the decision. The decision to sell bottled water would not be accepted globally, the first to object would by the environmentalists.

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Jay Kharvar

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Global Marketing Ethics and Culture

Their argument would be that the bottled water industry is creating more pollution and adding to the carbon footprint by using materials that create difficulties when recycling. As a result, the water industry has become a nightmare to the environment and from the view of Kant; the decision to make bottled water is unethical, as it does not meet the criteria for all three maxims. Market segmentation is the identification of portions of the market that are different from one another. Segmentation allows the firm to better satisfy the needs of its potential customers. Market segmentation plays a vital role when the bottled water industry considers their target consumers. Evian and Volvic attempted to obtain the male consumer market. Evian used the method of promoting health and fitness; they used men leaving the gym. Volvic on the other hand used a different approach which was the 14 day challenge. The aim for that was to attract the male segment and in return it increased sales by due to this campaign (BBC video). Market segmentation can help the industry in a very beneficial way through the different groups e.g. Social status, gender, age, occupation etc; in result this would help the industry build a larger consumer base. Despite the unethical behaviour of the bottled water industry, there are elements that show that they can be ethical too. The water company one life shows a positive brand image, and also the consciousness of corporate social responsibility is visible. To introduce these strategies it would not cost the company a lot and would influence there consumer market as it separates the company from the rivalry. This would enable the company to act more ethically as they would be helping the unfortunate people that do not have access to the water. More water companies have started to follow this trend. If it stays this way then the industry would not be judged in terms of its morals and ethics.

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Jay Kharvar

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Global Marketing Ethics and Culture

In conclusion, it has come to my knowledge that there are a lot of debates in regards to the ethics of bottled water that need to be made clear. The global bottled water industry is in a very powerful position, but is also under increased scrutiny and criticism. I believe that bottling companies have too much control and are uncontrolled in most places globally. The process of making bottled water is efficient but companies need to make an effort to help the environment and also help the suffering countries that do not have the access to clean drinking water. It is very important that bottled water companies around the world need to be aware of the issues that are neighbouring the industry. In all kinds of industries there are negative and positive aspects but as long as the demand is visible for bottled water then they should carry on producing and selling their products. Bottled water has vastly helped consumers in terms of health as they are most likely to purchase water over the not so healthy carbonated drinks such as Coca Cola or Pepsi.

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Jay Kharvar References Books

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Global Marketing Ethics and Culture

Murphy P, Laczniak R, Bowie N and Klein T (2005) Ethical Marketing: Basic ethics in action., Pearson publishing Crane, A and Matten, D (2007) Business Ethics, 2nd edition, United States: Oxford university press Inc

Ferrell O.C., Fraedrich J and Ferrell L (2000) Business Ethics: Ethical decision-making and cases, 4th edition, New Jersey: Prentice Hall Graham J and Cateora P (2007) International marketing, 13th edition, and international edition: McGraw-Hill/Irwin

Goodsall A (2009) Global Marketing ethics and culture, the custom book edition, Harlow; Pearson custom publishing

Muhlbacher H, Leihs H and Dahringer L (2006) International marketing: a global perspective, 3rd edition, London: Thomson Learning

Websites Waters vital statistics: industry data (2009): http://www.britishbottledwater.org/vitalstats2.html (Accessed on Sunday 4th April 2011)

Bottled water industry is bordering on the immoral (2008): http://www.timesonline.co.uk/tol/news/environment/article3378791.ece (Accessed on Sunday 4th April 2011) Bottle water industry and its effect on the environment (2010): http://www.buzzle.com/articles/bottled-water-industry-effect-environment.html (Accessed on 5th April 2011) Bottled water statistics (2011): www.bottledwater.org/content/statistics (Accessed on 5th April 2011)

is bottled water a waste (2011): http://business-ethics.com/2011/02/26/1739-is-bottledwater-a-waste/ (Accessed on 5th April 2011)

Video

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Jay Kharvar

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Global Marketing Ethics and Culture

The food that make Billions part of the liquid gold series BBC 2 (11:20pm, Wednesday 24th November 2010)

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