The question has been asked whether Jeju water can be exported to other markets and the simple answer is of course it can, but there are things to consider for expansion into the European bottled water market.
One of the fundamental characteristics of the European bottled water market that is different from elsewhere is the high propensity of carbonated water alongside still water. Any product offering in the European bottled water market needs to consider both still and carbonated options.
The bottled water market in Europe is relatively well-established and there has been some success in establishing European brands as international brands, such as Evian. The European bottled water market grew rapidly in line with other water markets in the early 2000s and that growth has either reached a plateau or is in decline. The decline is more accentuated in markets where natural mineral water is seen as a premium product as opposed to an everyday item added to the shopping basket.
Health and wellbeing is an increasingly important marketing concern for major food brands and so promoting water brand awareness has become aligned to the need to hold onto market share and major players have aligned themselves with a number of high-profile sporting events. It is probably relevant for Jeju water to raise brand awareness by aligning itself with relevant local sporting events that get international coverage, such as triathlons, which is the fastest growing sports category.
Marketing and brand awareness can raise Jeju’s profile but will not in its own right sell bottles of water. The real challenge is developing sales channels and routes to markets and for this some serious market research is needed. One possible channel is the expatriate community and in Europe the number one destination for South Koreans is the U.K. The U.K. bottled water market is worth about $1 billion and the average consumption is 34 liters per person per year. The last census indicated that there were 40,000 South Korean’s in the U.K. so although not a particularly large market, those consumers already know of Jeju.
Whilst this is a potential first channel for Jeju water to approach, there are important to consider prior to the introduction of any new water brand within a market:
• Points of difference: It is really important that these are identified up front - what makes Jeju water different from all the other existing brands? Clearly the volcanic nature of the island and UNESCO recognition is valuable, as is considerable research about the mineral qualities of Jeju water. Price will not be a differentiator as the cost of sourcing and transporting the product, even by the most cost-effective methods, is going to be very real. There are opportunities to look at packaging to see if it can be an effective point of difference.
• Sustainability: This is an increasingly important consideration in the eyes of both the consumer but also major businesses. Debates about water resources have been going on for many years, global warming (and the carbon footprint of extracting water) has entered the fray in recent years and packaging is another important consideration, as there is good tap water in many European markets including the U.K. Transporting Jeju water to an overseas market is going to require at the very least a strategy that supports any claims with regard to sustainability.
• Funding: This is not just about the money needed to create brand awareness or for additional shipping costs, but the very real launch and ongoing marketing funding which is required to enter a new market. Effective launch funding will be significant in terms of above the line spend (advertising) but more significantly for below the line support required to provide promotional launch funding to suppliers.
Marketing Jeju water abroad is not an exercise to be undertaken lightly and, as with all commercial ventures, the returns have to look far more attractive than the costs. Considering that the U.K. bottled water market has been declining for a number of years, a more viable route for expansion could be Asia rather than Europe.
The writer is managing director of a marketing consultancy in the U.K.
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