VOSS Bottled Water Voss Inc. is a company established in 1999 which bottles and distributes Artesan water. The source of this water is a pristine aquifer in South Norway. It is packaged in a uniquely designed and patented cylindrical shaped glass bottle and sold at a premium price. Some of the Hollywood actors and celebrities have been spotted using this premium bottled water. Its close competitors are Fiji and Perrier who offer pure water at a premium price. Differentiation Based Strategy
The founders of Voss, Christian Sandberg and Chris Harlem, recognized enormous potential for ultra premium bottled water from Norway after doing an extensive around the world research. Artesan water is the most purest form of water available and thus used as a unique value proposition to target the ultra premium segment. Differentiation point 1 : Purest Water It is recognised as the purest form of water by FDA and has recorded the lowest TDS of any bottled water ever tested by FDA. So, in a way it is a unctional product that is uniquely different from any other product in the market. Differentiation point 2 : Unique and patented packaging – Luxury Image According to a study, in the ultra premium bottled water segment, when people buy water it is for image and not just water. Voss roped in Calvin Klein’s former creative director Neil Kraft to design the packaging. He came out with a sleek cylindrically designed glass bottle when everybody else was offering plastic bottles in traditional bottle shapes. The design was later patented by Voss.
Voss, through its product offering, provides a unique value (purest water and image of Luxury /Exclusivity) which other competitors were not able to offer in the ultra premium segment. Value Creation and Delivery (Mechanisms) Value 1 – Product offering : Purest water drawn from Artesan well in pristine South Norway. No human intervention. The water is drawn from an aquifer by pressurizing the impermeable layer of rock and ice without the use of mechanical pumps. Product Quality and consistency is unquestionable since no mechanical/manual process is required to purify water.
Customer is always certain to get purest water when they buy VOSS. Value 2 – Luxury Image/Exclusivity : It is a market driving product. The strategy is to create exclusivity and associate luxury with the product. This is achieved by aligning all the marketing processes in a way that this value of luxury and exclusivity is delivered effectively. Price – Ultra premium pricing helps in targeting the right segment i. e. rich and affluent (exclusivity). Patented Designer Glass bottle – Unique packaging gives it an edge over others and helps in positioning and targeting the ultra premium segment
Controlled Supply – Sold almost exclusively through high-end hotels, restaurants, clubs and speciality stores (VOSS Red PET bottle). Voss‘s exclusivity is derived from the fact that Voss is served on the tables of the finest restaurant and lounges in the rooms of the most luxurious hotels and beachside at the trendiest resorts around the world. Voss is not available at retail outlets like 7-11 or corner convenience stores. Promotions – No discounts or giveaways to maintain its brand image of luxury. Advertisements – Heavily relies on PR activities and viral promotion which further reinforces its positioning of unique brand.
It does not engage in run of the mill advertising like other water companies and stays away from the crowd. Associations with Ultra premium brand ambassadors like Madonna, George Clooney, Lindsay Lohan are used as promotional activities. The product offering as well as the aura of exclusivity/luxury gives customer a feeling of pride to consume Voss water and pay a premium price for the same. Key Resources that create value Source of Water : The source of water in Norway is a unique and sustainable resource in itself.
Target Segment : Targeting the ultra premium segment is a key to the strategy as the product has most value to this segment. The competition in this segment is not as intense as it is in the bigger mass market. This means less investment in promotions / discounts / advertisements. This is a sustainable strategy as this segment will always value a quality product that gives them image value as well. Distribution Channels : Controlled distribution follows from its strategy of targeting. By availing its product in upscale restaurant / bars / peciality stores gives them advantages as under: 1. Signals that it is not part of the crowd (mass market) 2. Developing strong relationship with the premium restaurants and bars 3. Helps in controlling the price Bottle design: They have a first mover advantage in introducing a patented designer bottle in the market. This is patented and hence cannot be copied. Advertisement/promotions/brand associations: No TV advt. and no discounts. Brand associations and viral campiagns are a very important part of the strategy and that is the only promotion method that VOSS uses.
Run of the mill advt. will put in the same league as other bottled waters in the market. Strategic Alignment: It is critical to note that the strategic alignment of all elements of strategy is what makes the marketing strategy of VOSS extremely successful. The strategy driven by differentiation (purest water and associating it with image – great design) is ably support by targeting/segmentation of premium segment. This combined with premium pricing and controlled supply helps in positioning. This then followed up with appropriate promotional strategy makes their mkt strategy work.
This alignment gives them a distinct advantage which is sustainable and difficult to copy. As rightly pointed out in Business strategy, the competitive advantage emanates from management of the core resources of the firm and VOSS seems to be doing it pretty well. Opportunities and Challenges Growth is one of the biggest challenge for VOSS as the ultra premium segment is not a very fast growing segment. Some options for growth are :- Expand internationally in Emerging markets : The ultra rich segment is growing very rapidly in emerging economies like India and China.
It may be a good opportunity for VOSS to enter these markets. Though there are challenges of imitation and localisation. Also, will that mean that it will affect its brand as may be people may start doubting its exclusivity? Enter the lower end of market : This is a tricky one. This is the fastest growing and biggest segment of the market. However, capturing this means going against its core segment and strategy. Though it may choose to develop its separate brand (VOSS Red) and push it in the Retail channel.
However, before doing that it has to do a proper study and research on whether this will impact its premium brand (VOSS silver) or not. Flavoured Water : This is another option where it can do product enhancements and enter the flavoured water market. However, this may put it in the same league as other flavoured waters (no differentiation point-cannot claim it as purest flavoured water) Whatever is done, one thing is for sure that it is very difficult for VOSS to deviate from its core strategy of superior product offering which right now sets it apart.