|
|
The Price To Pay For Thirst
Bridgette Gregory
|
Most people have access to tap water, yet most people will still buy bottled water in some form whether for the taste, convenience or the brand name.
“Why do people buy it at all, instead of taking it out of the tap?” said Ron Fisher, an economics professor at Michigan State University. “That’s the really interesting question.
“Water is essentially free.” Yet people are still willing to pay for a bottle of water. “It is easier to pick up a bottle that is packaged,” Fisher said, instead of filling a plastic water container in the morning.
“Somebody’s made an interesting market,” Fisher said. “(It) can’t just be companies out there trying to make money.”
Meijer, like most companies, is trying to make money. The company has three considerations for pricing water.
“What product costs us, what competition sells for, and consider what advertising there is on it,” said Greg VonEschen, bottled water buyer for Meijer.
Meijer also uses consumer studies to determine what kinds of water will be bought and what types should be on the shelves, VonEschen said.
VonEschen said there are about 6 to 7 brands depending on the store.
“I like spring water better than purified water,” said Elyse Hodges, a retailing student. She said the price of a single bottle does not matter because she usually buys a 24-pack.
There are many different brands of bottled water, including Ice Mountain, Aquafina and private labels. Private labels are priced less because it costs less, VonEschen said.
“Generic anything (costs) less than brand name,” Fisher said. “People are willing to pay higher price for brand name.”
“People (will) find out about price differences for some things,” Fisher said. But the price differences between water brands are so insignificant, people do not pay attention.
Not only are people forgetting about tap water, but they are leaving the soft drink market struggling as well, according to Beverage Marketing’s 2007 Market Report Findings.
“Much of the impetus behind bottled water growth, interestingly enough, comes from the leading carbonated soft drink companies,” according to a May 2003 news release from Beverage Marketing.
Two major soft drink producers, Pepsi and Coca-Cola, produce Aquafina and Dasani respectively.
The reason for the high popularity of bottled water is explained in Beverage Marketing’s April 2004 news release: “Americans increasingly appreciate the convenience, taste and calorie-free benefits of bottled water.”
So, convenience and health are outweighing not only tap water but soft drinks as well.
Questions? Comments? Contact Bridgette Gregory at grego110@msu.edu
|
|
