Harmonie Water Marketing Mix Paper There are two documents, one is a case study and the second one is instructions. For the exclusive use of D. Todorova, 2

Harmonie Water Marketing Mix Paper There are two documents, one is a case study and the second one is instructions. For the exclusive use of D. Todorova, 2018.
9-917-527
JUNE 16, 2017
JOHN A. QUELCH
JOHN L. TEOPACO
Harmonie Water: Refreshing the World Naturally
China is different from the rest of the world. It’s tough to overcome cultural differences.
—Shiu Zhou, Harmonie’s China country manager
In July 2016, Antoine Comeau, Marketing Director of Harmonie Water, was reviewing market
research for Harmonie, the second-best-selling bottled water in both its home country of France and
worldwide. Comeau planned to use this research as part of a campaign that would combine event
sponsorships and television advertising with newer, interactive, online media. One task force, Project
Unify, had identified characteristics that consumers universally associated with Harmonie. The second,
Project Aqua, extended the results of Project Unify. It proposed “revitalizing” and “refined” as
Harmonie’s core themes.
Comeau also had to decide how much to standardize Harmonie’s brand image and advertising.
Shiu (Steve) Zhou’s response when Comeau had told him his goals had stayed with him: “China is
different from the rest of the world. It’s tough to overcome cultural differences.” Comeau’s response,
“Steve, we need a cohesive global brand as we attempt to leverage synergies across markets and
enhance new adopters’ interest in Harmonie,” did not convince Zhou, who replied, “I must respond to
my local market’s needs.” Zhou’s reservations underscored the potential difficulty of implementing
his initiatives, but Comeau felt he had to act soon because the industry was globalizing rapidly.
The Global Bottled Water Industry
Consumption Trends
Bottled water was first sold in Western Europe, but was now consumed worldwide. Total global
consumption in 2015 was 81.5 billion gallons (308.5 billion liters),1 or 11.2 gallons per capita, up 33%
1 One gallon equals approximately 3.785 liters.
________________________________________________________________________________________________________________
HBS Professor John A. Quelch and Fisher College Professor John L. Teopaco prepared this case solely as a basis for class discussion and not as an
endorsement, a source of primary data, or an illustration of effective or ineffective management. Thanks to Stacy Baum Taffet (MBA 2007) of TM
Pepsi for her assistance. Although based on real events and despite occasional references to actual companies, this case is fictitious and any
resemblance to actual persons or entities is coincidental.
Copyright © 2017 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-545-7685,
write Harvard Business Publishing, Boston, MA 02163, or go to http://www.hbsp.harvard.edu. This publication may not be digitized,
photocopied, or otherwise reproduced, posted, or transmitted, without the permission of Harvard Business School.
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917-527 | Harmonie Water: Refreshing the World Naturally
between 2010 and 2015. Worldwide sales revenues were $95.7 billion. Table 1 presents consumption
volumes and compound annual growth rates (CAGR) for bottled water by geographic region in 2015.
Table 1
Consumption of Bottled Water by Region
Volume (%)
CAGR (%)
2010–2015
PCC (gallons)a
CAGR (%)
2010–2015
28.3
0.3
5.4
15.3
17.9
13.5
19.3
9.7
5.6
1.5
4.8
9.7
3.4
1.9
5.7
7.9
13.4
19.9
10.5
13.8
31.9
9.7
4.0
1.5
3.7
7.2
2.6
1.4
Asia Pacific
Australasia
Eastern Europe
Latin America
Middle East and Africa
North America
Western Europe
aPCC = per capita consumption
Consumption of bottled water also varied considerably within geographic regions. For instance,
although the Asia Pacific region had the lowest per capita consumption (PCC) in the world, some
countries in the region, such as Indonesia and the Philippines, consumed far more than neighboring
countries did. Exhibit 1 lists PCC for selected countries.
Consumers in developed nations drank more bottled water to avoid sugary drinks. For them,
bottled water was a source of both hydration and vitamins, minerals, antioxidants, etc.—so-called
“functional” water. In contrast, consumers in many developing countries used bottled water as an
alternative to unsafe tap water; lower-priced purified water had spurred growth in these countries.
Global Fragmentation and Consolidation
Local brands often dominated their home markets. Top brands in the United States, for example,
included Aquafina, Dasani, Glacéau Vitaminwater, and Poland Spring. In China, the top brands were
Nongfu Spring, Master Kong, C’estbon, and Mizone.
Global bottled-water producers, such as Nestlé (Nestlé Pure Life), Suntory Water Group, Danone
(Evian), Coca-Cola Company (Dasani), PepsiCo (Aquafina), VOSS, Icelandic Water Holdings, and the
Harmonie Group, owned many leading brands. Nestlé owned 64 bottled-water brands, including Pure
Life, Perrier, and San Pellegrino; Nestlé Pure Life held the number one market share worldwide.
Premium Segment
The premium segment of the market was growing due to new segments such as “enhanced/water
plus.” There was, however, no definitive or technical definition of premium bottled water. Marketers
typically differentiated premium waters by focusing on mineral levels, purity, pH levels, and
presentation. Distinctive packaging could elevate water to premium status in some consumers’ eyes.
A few ultra-premium waters, such as Iluliaq, sold for over $50 per bottle, although most popular
premium brands, such as Perrier, Evian, Fiji, VOSS, and Harmonie, sold for less than $5 a bottle.2
Other aspects of marketing premium water varied widely. Some brands used high prices to signal
prestige, while others used low prices to gain market share. Different perceptions about when it was
appropriate to consume a premium water also affected marketing campaigns. In some countries, for
2 http://www.businessinsider.com/ultra-premium-water-is-on-the-rise-2016-1, accessed May, 2017.
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instance, the few consumers who drank premium water did so only on special occasions, when “the
best” was necessary. In other countries, consumers drank premium water daily.
Most premium water was sold in Western Europe and North America. However, the rising middle
classes in emerging markets would pay for the status of imported premium brands. In such countries,
the consumption of premium water was growing more quickly than it was elsewhere.
Harmonie Water
Harmonie’s water started off as rain or snow high up in pristine mountain peaks, which then
traveled through a natural sand filter within the mountains before it emerged at a protected spring.
The process took over a decade and was essential to Harmonie’s purity. The company took daily
samples at over twenty different junctures between the protected catchment areas and the on-site
bottling plant to ensure consistent quality from the source to the consumer.
By 2015, Harmonie Water was sold in over 130 countries, with sales of $7.1 billion. It was heavily
advertised, with approximately $100 million dedicated to this purpose. In 2015, Harmonie’s sales
volume was 3.5 billion gallons, a decrease of 3% from 2014. In France, Harmonie held the number two
position, with an 8.5% market share. In the United States, Harmonie’s share was 0.2%. The top U.S.
brands included Nestlé Pure Life and Dasani. Table 2 shows Harmonie’s volume distribution and PCC
by region. Harmonie’s global market share, 4.3%, multiplied by the global PCC for bottled water,
equaled a worldwide PCC of 0.48 gallons.
Table 2
Harmonie Natural Spring Water Consumption by Region, 2015
Volume (%)
Asia Pacific
Australasia
Eastern Europe
Latin America
Middle East and Africa
North America
Western Europe
Market Share (%)
53.65
0.01
2.50
18.83
4.21
0.60
20.20
8.2
0.2
2.0
5.3
1.0
0.2
4.5
PCC (Gallons)
0.47
0.02
0.27
1.05
0.11
0.06
1.44
Advertising
Before recommending which of the company’s standard advertising campaigns should be deployed
in a country, Comeau used a country’s PCC of water to gauge that market’s maturity, as well as
Harmonie’s market share in that country to gauge Harmonie’s competitive position there. In a country
where both PCC and Harmonie’s market share were low, for instance, Comeau focused primarily on
convincing prospective consumers that bottled water was worth paying for and that Harmonie was
the best bottled water to buy. In contrast, when both PCC and Harmonie’s market share were high,
Comeau wanted both to ensure that Harmonie’s name had a prominent profile and to promote new
occasions when Harmonie might be used.
Harmonie’s country managers also had considerable latitude to create their own advertising, so
long as they positioned Harmonie as a premium water. These managers argued they needed this
freedom because they were closest to their markets. For instance, Mexico’s marketing director declared,
“I need to be agile, tactical, and responsive to local tastes and preferences. Standardization would
hamper my effectiveness.”
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Project Unify
Concerned about the potential conflicts between the many country-specific adaptations Harmonie’s
managers engaged in and the globalization he saw the industry undergoing, Comeau proposed a team,
Project Unify, to decide how to convey a consistent image for Harmonie as “the world’s best water”
and to capitalize on the broader market awareness that he believed would result from this consistency.
The team concluded Harmonie’s brand meaning should highlight “revitalizing” and “refined” because
of its purity and unique origins, as well as the company’s commitment to and pride in producing a
water that appealed to discerning palates.
The team recommended purity as the baseline attribute for “revitalizing.” It believed claims that
revitalizing attributes could be positioned as “enhancement,” in which consumers desired the highestquality water to augment their health. Further, it argued a positioning that emphasized physical wellbeing would make Harmonie more attractive to a wider variety of potential adopters. For “refined,”
the team emphasized “aspirational” attributes, where potential adopters would desire to be like the
individuals depicted consuming Harmonie in the company’s advertisements.
Project Aqua
Before positioning Harmonie in line with the recommendations of Project Unify, Comeau wanted
market data that verified what “revitalizing” and “refined” meant in diverse country markets. In early
2016, Harmonie thus initiated Project Aqua in France, the United Kingdom, Mexico, Brazil, the United
States, and China to understand how bottled-water drinkers used these terms and how Harmonie
could capture their meanings in its advertising. Table 3 identifies elements the Project Aqua team was
most interested in verifying.
Table 3
Elements of Harmonie’s appeal as revitalizing and refined
Functional/Revitalizing
Aspirational/Refined
Uniquely pure source
Crisp, clean taste
Energy giving
Special usage occasions
Casual sophistication
Affluent individuals
Consumers in the “revitalizing” group provided their perceptions of strong or weak indicators of
this quality in bottled water. Consumers across all countries identified “taste” as a strong indicator, but
disagreed about the value of other attributes, such as the quality checks that Harmonie undertook and
Harmonie’s origins.
Most consumers in the “refined” groups agreed that special occasions would be appropriate for
enjoying premium water. They also agreed that portraying affluent individuals at such occasions
would contribute an image of refinement that potential consumers could aspire to, but disagreed about
whether showing glamorous locales would make Harmonie seem more refined.
Global Brand Planning and Implementation
Beyond shaping views of “revitalizing” and “refined,” Comeau had to decide how to address
differences in these perceptions. Could he communicate a global brand identity for Harmonie, yet also
allow for local market customization?
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Comeau contacted key country managers to gauge their reactions to his initial thoughts on building
a consistent global brand identity and advertising campaign. The field’s responses came quickly.
We’ve been marketing effectively here in Spain because we have conscientiously tailored brand
positioning, ad strategy, copy, and executions to the target market that we have selected. Why would you
want to change that to a one-size-fits-all approach?
There are large income differences in Brazil. Having one global brand meaning will not account for
these disparities.
We’ve always customized our media selection to maximize our reach in the Argentinean bottled water
market. If we standardize the advertising strategy, our local media strategy will become suboptimal.
Japanese bottled water drinkers look at Harmonie very differently than the Mexicans and the French
do. Here, the brand is about being French and classy. Having one brand positioning might not work here.
Establishing the brand worldwide would help us in the United States because when tourists and
visitors come here, there will be no confusion in their minds as to what Harmonie stands for.
Having once been a country manager, Comeau understood where these responses were coming
from. As he told his boss, “Every country manager thinks his market is unique, and that he knows
best.” Nonetheless, he emphasized the rationale for a global brand to the field executives, trying to
change their point of view to one more like the U.S. country manager’s. He explained this in a
conference call with his country managers:
With the Internet, social media, satellite TV, and increased travel across national borders,
consumer tastes are converging. Many progressive companies have recognized this trend by
globalizing their strategies. With a global brand campaign, we will achieve cost savings from
scale economies. Further, the quality of our advertising will be superior to that of locally
produced campaigns. Let headquarters forge ahead with developing a global brand, and local
management can drive sales via local media buys, public relations, sales promotions, and the
like, if these campaigns are consistent with the brand strategy.
Because the Harmonie organization had long operated as a decentralized company, deciding the
respective roles of headquarters and country managers in implementing the communications
campaign was critical. As their feedback reflected, country managers would resist perceived challenges
to their authority. Comeau knew he had to strike the right balance of field autonomy and head office
control, and this balance would vary across countries.
Conclusion
As Comeau reflected on the work ahead, he wondered whether the marketing or organizational
aspect of establishing global brand identity would be more difficult. Zhou’s comment kept playing
through his mind as he considered what to do next.
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Exhibit 1
Bottled Water PCC and Harmonie Market Shares for Select Countries
PCC (gallons)
Mexico
Spain
France
Germany
United States
Argentina
Poland
Indonesia
Philippines
Brazil
United Kingdom
Japan
China
South Africa
India
6
50.3
40.0
38.4
37.6
32.1
31.5
21.7
19.0
13.9
12.1
10.5
8.7
8.1
2.2
1.2
Harmonie Market
Share (%)
7.2
5.6
8.5
1.6
0.2
10.4
9.8
28.2
0.0
1.0
10.3
1.5
3.0
0.3
0.0
Harmonie Market
Share Position
2
2
2
6
8
1
1
1
0
4
1
6
5
9
0
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BCO211
STRATEGIC MARKETING Task brief & rubrics
Task
The midterm exam is an individual case study analysis of the attached Harmonie Water case study. The expected document should contain answers in an essay
format. Please answer the following questions:
1. Identity and discuss the 4Ps of the Harmonie Water marketing mix. Your discussion should demonstrate the importance of the 4Ps as a central
element of a marketing plan.
Formalities:
•
•
•
•
•
Wordcount: 2000 – 2500 words (Title, Introduction, Discussion, Conclusion)
Cover, Table of Contents, References and Appendix are excluded of the total wordcount.
Font: Arial 12,5 pts.
Text alignment: Justified.
The in-text References and the Bibliography have to be in Harvard’s citation style.
Submission: Week 4 – Via Moodle (Turnitin). Due by Jun 16, 23H59 CEST.
Weight: This task is a 40% of your total grade for this subject.
It assesses the following learning outcomes:
•
•
•
•
Outcome 1: Understand the place of the marketing plan in the overall business plan and apply the knowledge on practice.
Outcome 2: Apply the analytical frameworks used to assess the decisions facing marketing managers as they attempt to harmonize organizational
goals and resources with market needs and opportunities.
Outcome 3: Illustrate how to monitor the dynamic changes in the external environment.
Outcome 4: Analyze and forecast the future needs for resources in the internal environment of corporations.
Rubrics:
Knowledge &
Understanding
(20%)
Application (30%)
Critical Thinking
(30%)
Communication
(20%)
Exceptional 90-100
Student demonstrates
excellent understanding of
4Ps, internal and external
environment, and global
brand strategy vs local
market adaptation and
uses vocabulary in an
entirely appropriate
manner.
Student applies fully
relevant knowledge from
the 4Ps, internal and
external environment, and
global brand strategy vs
local market adaptation
topics delivered in class.
Good 80-89
Student demonstrates
good understanding of 4Ps,
internal and external
environment, and global
brand strategy vs local
market adaptation and
demonstrates use of the
relevant vocabulary.
Fair 70-79
Student understands the
task and provides minimum
theory and/or some use of
vocabulary.
Marginal fail 60-69
Student understands the task
and attempts to answer the
questions but does not
mention key concepts or uses
minimum amount of relevant
vocabulary.
Student applies mostly
relevant knowledge from
the 4Ps, internal and
external environment, and
global brand strategy vs
local market adaptation
topics delivered in class.
Student applies little relevant
knowledge from the 4Ps,
internal and external
environment, and global
brand strategy vs local
market adaptation topics
delivered in class..
Misunderstands are evident.
Student critically assesses
in excellent ways, drawing
outstanding conclusions
from their analysis and
observations.
Student communicates
their ideas extremely
clearly and concisely,
respecting word count,
grammar and spellcheck
Student critically assesses
in good ways, drawing
conclusions from their
analysis and observations .
Student applies some
relevant knowledge from
the 4Ps, internal and
external environment, and
global brand strategy vs
local market adaptation
topics delivered in class..
Misunderstanding may be
evident.
Student provides some
insights but stays on the
surface of the topic.
References may not be
relevant.
Student communicates
their ideas with some
clarity and concision. It
may be slightl…
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