RESEARCH REPORT ON

“MEASURING CONSUMER BRAND PREFERENCES FOR

BOTTLED DRINKING WATER”

BASIM KHAN

INSTITUTE OF MANAGEMENT SCIENCES

March, 2009
 RESEARCH REPORT ON

“MEASURING CONSUMER BRAND PREFERENCES FOR

BOTTLED WATER”

Research report submitted to the Institute of Management Sciences in Partial

fulfillment of the requirements of the Degree of Bachelors in Business
Administration

March, 2009
 INSTITUTE OF MANAGEMENT SCIENCES

RESEARCH REPORT ON

“MEASURING CONSUMER BRAND PREFERENCES FOR

BOTTLED WATER”

Supervisor:

Signature:

Name: Mr. Imran Wazir

Designation: Faculty Member, IMSciences

COORDINATOR RESEARCH & DEVELOPMENT DIVISION:

Signature:

Name: Mr. Shahid Ali Nawaz

(Coordinator R & DD)
 PREFACE

“Leaders aren't born, they are made. And they are made just like anything else,
through hard work. And that's the price we'll have to pay to achieve that goal, or any
goal”
Vincent Lombardi
All the knowledge learning and procedures are useless without observations and practical
experience. The purpose of this research is to acquaint the business graduate with
empirical business practices.
As a requirement for Bachelor’s Degree in Business Administration, I opted to conduct
my research on “Consumer Preferences of Bottled water”, to fulfill my degree
requirement. The reason for choosing bottled water was to get practical knowledge about
consumer behaviour, so as to provide myself an opportunity to cope with the real life
situation.
This research covers the aspect about consumer’s preferences regarding usage of a certain
brand of bottled water. The research focuses on the fact that why a consumer uses a
specific brand of bottled water. Is it taste, health consciousness, fashion or any other
aesthetic factor that makes a consumers use a specific brand of bottled water. The main
idea for this research came from the observation, that why a consumer is using only a
specific brand of bottled water, regardless of the fact that all the bottled water brands are
providing “pure and clean” water.
I felt that the knowledge that I have gained through this experience is an excellent way to
think analytically for finding solutions to problems of day-to-day life. The study of
consumer behavior and their preferences itself is a massive study comprising of different
factors involved. It is impossible to study each one in detail and include everything in the
report. However, I studied the consumer behaviour from preferences point of view.
I am thankful to all my colleagues and higher ups for their valuable guidance in preparing
this report in a presentable fashion. I am also thankful to my parents, teachers and all my
friends for their cooperation.
 ACKNOWLEDGEMENT
All prayers are for Almighty Allah, Merciful to His mankind Who created the universe
and made all things possible.

By the grace of Allah I am able to complete my research report.

I pay thanks to Hazrat Muhammad (P.B.U.H) from the core of my heart as He provided
guidance in every field of life and taught me the lesson of courage, struggle and hard
work, no matter how difficult the task is.

The research is dedicated to my parents who have given me so very much I couldn't even
begin to list it all. I owe an immense debt to the below noted patrons who paid full
attention and provided extraordinary help, cooperation and guidance to complete this
difficult task. Amongst these first of all I am highly indebted to my supervisor,
Mr. Imran Wazir, who was very kind and gracious to provide me all opportunities of
guidance, direction and assistance whenever required, I pay him heartiest thanks for
offering me expert advice and valuable suggestions in the documentation and
organization of this report.

I pay my gratitude to all my teachers, senior staff members of IM|Sciences. I am also

thankful to the Director of IM|Sciences Dr. Nasser Ali Khan for his efforts and hard work
in making IM|S a reputable institute.

Special thanks also to all my graduate friends, Raheel, Haifa, Zainab, and Saeed, who
were always there for me, not forgetting Jooji, without whom support and encouragement
this research would not have been possible.

In the end I would like to owe a lot of love and gratitude to my beloved family; for their
understanding & endless love, and also to all those who remembered me in their prayers.

Basim Khan
Title Page number
Preface
Acknowledgment
1 Chapter-1 Introduction to report
1.1 Background of the study

1.2 Purpose of the study

1.3 Research Questions

1.4 Scope of the work

1.5 Limitations of the study

1.6 Research methodology

1.6.1 Sample unit

1.6.2 Sample population

1.6.3 Sample size

1.7 Sampling procedure

1.8 Data collection

 1.8.1 Primary data

1.8.2 Secondary data

1.9 Scheme of the report

2 Chapter-2 Literature Review

2.1 Introduction

2.2 Water – Global Trends and Pakistan’s Struggle

2.3 Water – A Global but Scarce Good

2.4 Poverty and Access to Water in Pakistan

2.4.1 Access to Water in Pakistan

2.5 About bottled waters

2.5.1 Industry Definitions

2.5.2 What is Distilled Water?

2.5.3 Packaging

Bottled water market trends and planet’s health

Bottled water market in Pakistan
Bottled water consumption: a certain way of life
Consumers care for their health and safety
Changes in ways of life

3 Chapter-3 Consumer Trust, Confidence and Customer Preferences

for Drinking Water
Overview
Consumer trust and confidence: an overview and customer preferences for
drinking water
3.1 Consumer Preferences and Related Concepts

3.1.1 Consumer Satisfaction

3.1.2 Consumer Acceptance

3.1.3 Consumer Concerns

3.1.4 Consumer Preferences

3.1.5 Consumer Expectations

3.1.6 Consumer Awareness

3.1.7 Consumer Attitudes

3.1.8 Consumers and the Public

3.2 Water Quality – Taste and Odour and other Aesthetic Judgments

3.3 The false perception

3.4Introduction to Bottled water companies in Pakistan

3.4.1 Nestle

3.4.2 Aquafina

3.4.2.1 Steps of Purification

3.4.3 Kinley

4 Analysis and Findings

5 Conclusions & Recommendations

References
Annexure

List of Charts

Chart 4.1 32
Chart 4.2 33
Chart 4.3 34
Chart 4.4 35
Chart 4.5 35
Chart 4.6 36
Chart 4.7 36
Chart 4.8 37
Chart 4.9 37
Chart 4.10 38
Chart 4.11 39
Chart 4.12 40
Chart 4.13 41
Chart 4.14 42
Chart 4.15 43
Chart 4.16 44
Chart 4.17 45
Chart 4.18 46
Chart 4.19 47
Chart 4.20 48
Chart 4.21 49
Chart 4.22 50

“MEASURING CONSUMER PREFERENCES FOR BOTTLED

DRINKING WATER”

CHAPTER 01: INTRODUCTION

1.1 Background of the study:

Bottled water consumption has been steadily growing in the world for the past 30 years.
It is the most dynamic sector of all the food and beverage industry: bottled water
consumption in the world increases by an average 7% each year, in spite of its
excessively high price compared to tap water and although industrialized countries
consumers have, in principle, access to cheap good quality tap water.

Bottled water is often an alternative to tap water. Consumers often object to the taste of
chemicals, particularly chlorine, used to purify tap water. In France, nearly half of them
don’t usually drink tap water because of its bad taste (IFEN, 2000), as opposed to only
7% in United States (Olson, 1999).

Consumers also drink bottled water because they care for their health. In Europe, there is
a long tradition, dating back to Roman times, of spas and of drinking mineral waters for
medical purposes. In the 19th century, this activity developed with the fashion for upper
classes to go to spas in order to improve their health. Spas owners weren’t long in
understanding that they could increase the wellness of their customers and their own
benefits directly supplying them their water in bottles. Until the 1950s, mineral water was
sold in drugstores as a health product. It has now become an everyday product. Natural
mineral water, now sold in supermarket, doesn’t carry along anymore this medical image.
People now buy bottled water to feel well, responding to advertising campaigns based on
well-being, energy, slimming, fitness etc. Bottled water is a healthy alternative to other
beverages. It is calorie-free and attractive for people willing to lose weight: “one of the
sparks that ignited the bottled water fire was the fitness craze that skyrocketed in the
early 1980” (Sullivan, 1996).

Increasing urbanization can also explain this trend for bottled water consumption. In
Increasing standards of living and greater use of cars enabled people to buy water in
supermarkets and to bring home higher number of bottled water, without difficulty. The
use of plastic makes bottles lighter and easier to carry than when they were made of
glass. The expansion of shopping centers, outside city-centers, provides consumers with a
greater choice in bottled water brands. The explosion of bottled water consumption also
reflects deep changes in working habits in industrialized countries, with the decline of the
agriculture and industry sectors. In these countries, most people have office works and
the bottle of water is now a common element on a desk, next to the computer and the
telephone. Drinking expensive bottled water (compared to tap water) is a sign of a rise in
the social scale. In addition, bottled water is the result of a huge marketing success.

The bottled water market in Pakistan is witnessing annual growth rates nearing 40
percent. Bottled water in Pakistan is not considered a ‘beverage’. Beverage processing
includes carbonated soft drinks – where Pakistan has the lowest per capita consumption
in the world, fruit juices, syrups and juice flavoured drinks. Drinking water – and also
bottled water – is not considered an important commodity either. The Government of
Pakistan described the market for bottled water, with 33 million liters of consumption per
annum in 1999, as small but growing. It furthermore estimated the consumption for 2003,
as 70 million liters or 0.5 liters per capita. The bottled water market in Pakistan has
witnessed annual growth rates of 40 percent, and after the introduction of Nestlé’s ‘Pure
Life’, it had the fastest worldwide growth in bottled water in 2000, at 140%. Recent
figures estimate a yearly consumption of about 2 liters per person bottled water.

Bottled water is not a solution to inadequate water supplies as it is simply not affordable
for poor people who lack access to water. A bottled water culture which turns drinking
water into a status symbol is not justifiable from the human rights perspective. The
Pakistan government is obliged to adopt measures to provide access to safe and sufficient
water supplies even if that means restraining corporations from turning water into a status
symbol to make profits, or from polluting or extracting already depleting groundwater
resources.

1.2 Purpose of the Study:

This report/study is meant to:
1. Understand what factors are influencing the consumer preferences to make them
purchase different brands of bottled water.
2. Identifying that what are the factors which affect the purchase of a specific bottled
water brand.

1.3 Research Questions:

1. What do people expect from their water utility in the context of drinking water
services?

2. What are consumers’ priorities?

3. What do customers consider acceptable in terms of the product and the service they
receive?
4. What are they willing to accept for the current price they pay?
5. Why do people prefer to use a specific bottled water brand in terms of their priorities?

1.4 Scope of the Work:

Scope of this report is limited to businessmen, professionals and students of Peshawar
and Islamabad who are well users of bottled water.

1.5 Limitations of the Study:

Expected limitations of this research can be:

• Unavailability or Lack of data

• Response from people
• Limited time
• Resource constraint
1.6 Research Methodology:
The methodologies used for the research are as follows:

1.6.1.: Sample Unit:

The respondents selected were belonging to different social backgrounds and different
professions.

1.6.2: Sample Population:

The study was conducted in Peshawar and Islamabad only.

1.6.3: Sample Size:

A total sample size of 100 respondents was fixed for the research.
1.6.4: Sampling Procedure:
Because of the limitations, convenient sampling has been selected, as the name implies,
the sample is selected because they are convenient. This non probability method is often
used during preliminary research efforts to get a gross estimate of the results, without
incurring the cost or time required to select a random sample.
The sampling was on the basis of Judgemental Sampling i.e. Non-Probability Sampling
Method was used.

1.6.2: DATA COLLECTION:

Both primary and secondary methods of data collection are used in the study.

1.6.2.1: Primary Data:

The data-collecting tool for primary data was the questionnaire. The questionnaires were
compromised of questions about personal preferences of the respondents along with
questions on the subject of study. The questions used likert scale and category scale.
This enabled the respondents to answer questions by marking most suitable answers.

1.6.2.2: Secondary Data:

The most important source of secondary data for the study was articles from different
websites and previous researches done on internet. Also different books and some related
articles in different magazines and journal of marketing served as a source of secondary
data.

1.7 Scheme of the Report:

The report will comprise of following sections:

Chapter 01: Introduction

Chapter 02: Literature Review
Chapter 03: Consumer Trust, Confidence and Customer Preferences for
Drinking Water
 Chapter 04: Analysis and Findings
Chapter 05: Conclusion and Recommendations

CHAPTER 02: LITERATURE REVIEW

2.1 Introduction

The global water shortage of affordable and safe drinking water is manifested in Pakistan
with an estimated 44 percent of the population without access to safe drinking water. In
rural areas, up to 90 percent of the population may lack such access. As one indication of
the magnitude of the problem, it is estimated that 200,000 children in Pakistan die every
year due to diarrhoeal diseases alone (UN Systems in Pakistan, 2003). Drinking bottled
water reflects not just a certain way of life in the rich North but a necessity and the only
option for safe water in the South. Beside official figures, there should be no doubt that
the majority of the Pakistan’s population is exposed to the hazard of drinking unsafe and
polluted water. In an effort to improve this situation, many consumers in Pakistan have to
turn to bottled water as a first alternative to drinking unfiltered tap water or contaminated
water of other sources where no public drinking water service exists (GOP, Pakistan
Environment Protection Agency, 2003).
However, bottled water is a very expensive alternative and not always healthy because of
infrequent testing for contaminants and sporadic inspection of processing plants. Bottled
water should not be considered as a substitute to a sufficient service with drinkable tap
water, but it is due to lack of access to water services or to bad quality of available
resources (WHO, 2000). Bottled water consumption has been steadily growing in the
world for the past 30 years. It is considered as one of the most dynamic sectors of all the
food and beverage industry, where consumption in the world increases by an average
12% each year, in spite of its excessively high price compared to tap water (UNESCO,
2003).
Bottled water consumption has been steadily growing in the world for the past 30 years.
It is the most dynamic sector of all the food and beverage industry: bottled water
consumption in the world increases by an average 7% each year, in spite of its
excessively high price compared to tap water and although industrialized countries
consumers have, in principle, access to cheap good quality tap water. This research report
aims to provide background information on bottled water, the use of bottled water in
order to understand the reasons of a trend that goes beyond a simple fashion and turns to
be a real social phenomenon. It will first identify existing types of bottled water: although
they seem very much alike, bottles of water don’t contain the same product. The increase
in bottled water consumption has boosted the bottled water industry and market trends
show very promising perspectives for the future. This report will then identify the major
reasons why consumers choose to buy specific expensive bottled water rather than drink
tap water. It will finally analyze the impact this industry has on the environment.

2.2 Water – Global Trends and Pakistan’s Struggle

Water is essential for human beings to survive and develop. At the same time, water is a
scarce good, and shortage sometimes results in crises. Both facts lead to the simple
conclusion that lack of water hinders development and a dignified life. This can be
assessed from global trends, as well as from Pakistan’s national and local struggles for
better access for people to safe and sufficient drinking water.

2.3 Water – A Global but Scarce Good

According to figures published by the United Nations, subsidiary organizations and other
international organizations, 1.1bn people are without a sufficient access to water, and
2.4bn people have to live without adequate sanitation. Under current trends, the prognosis
is that about 3bn people of a population of 8.5bn will suffer from water shortage by 2025.
83% of them will live in developing countries, mostly in rural areas where even today
sometimes only 20% of the population have access to a sufficient water supply (Guissé,
El Hadji, 2004). This actual lack of water is opposed to the theoretical conclusion that
there is enough ground water existing in all regions of the world to guarantee an adequate
water supply for all people. According to international law, in the case of concurring
water users, the socio-economic priorities have to rest on human development and social
interests of the people (UN, 1997). However, only 6% of global freshwater is used by
households, while 20% is utilized industry and another 70% by agriculture. The
conclusion drawn from these framework conditions is that water shortage and the unequal
distribution of water are global problems rather than regional problems that require
international solutions. Insufficient supply of drinking water is the main cause of diseases
in developing countries. Already in 1997, the United Nations Commission on Sustainable
Development concluded that 2.3bn people suffer from diseases rooted in insufficient
water provision and quality (UN, 1997). More than five years later, it was estimated that
2.4bn people were suffering from water related diseases, and the World Health
Organization reckons that 80% of all infections are traceable to poor water conditions.
5,483 people die daily of water caused diarrhoea – 90 percent are children under five.
Taking into account all water related diseases and deaths, international organizations
estimated in 2001 that 2,213,000 people died because of inadequate water supply – ten
times more than the tsunami disaster caused in December 2004 (UNESCO, 2003).

2.4 Poverty and Access to Water in Pakistan

It is acknowledged that lacking safe and sufficient drinking water – as with other basic
needs such as food, shelter and education – is not a geographical but social problem.
Being poor or rich is mainly decided by birth, and poverty perpetuates itself from
generation to generation. Development strategies should be judged by their effort to
break through this vicious cycle. Single indicators, such as literacy rates or households
with access to water, are a litmus test for such an assessment.

2.4.1 Access to Water in Pakistan

Pakistan is an Islamic Republic, whose aim is to enable its Muslim majority “to order
their lives in the individual and collective spheres in accordance with the teachings and
requirements of Islam as set out in the Holy Quran and Sunnah” (Constitution of the
Islamic Republic of Pakistan, 1973). Water is recognized in Islamic teachings as a vital
resource, of which everyone has the right to a fair share. Following the Hadith, it is
reported that the Prophet Muhammad (PBUH) said: “Muslims have common share in
three (things): grass, water and fire” (Abu-Dawood 3470). Furthermore, the Holy Quran
warns human beings against unfair distribution of common goods and the majority of
scholars agree that Islam forbids speculation, manipulation and unbalance profit with a
common good such as water (Faruqui, Naser I, 2001). In 1995, UNDP counted Pakistan
as country having among the highest water potential per person out of 130 countries that
should dramatically improve its water situation to overcome the current crisis and prevent
future ones (IRIN, 2001). Obviously, Pakistan failed to make any improvement. In 2003,
the United Nations dropped Pakistan’s ranking, because its total renewable water
resources per capita per year have been estimated as 114th out of 180 countries (UN,
2003). Only three percent of Pakistan’s sweet water resources are used for household
purposes and drinking (GOP, Pakistan Ministry of Water and Power, 2002). Therefore
the debate about access to water in Pakistan is dominated by irrigation disputes, mega-
projects of dams and canals, and climate change. The focus is on water for agriculture
rather than for people (UNDP, 2003). This production oriented perspective continues in
the debate about groundwater use and extraction. It is estimated that surface water meets
only 75-80 percent of crop water requirements. As a result, groundwater is merely seen as
a reserve water source for irrigation and food production, as well as the major factor for
the growth of agricultural production in the late 20th century (World Bank, 1996).
With regard to the availability of safe and sufficient drinking water, Pakistan lacks
reliable statistics. While data about the availability of water and field studies about water
quality exist, there is no sufficient data that take both into account. Official data about the
access to drinking water vary between 60 and 90 percent of households. In rural areas –
where a decline of households with access to water is documented – figures about
availability differ between 10 and 53 percent. Differences in these statistics mainly
emerge from the inclusion or exclusion of households that rely on privately owned wells
and supply systems (Pakistan Mouza Report, 1998).
In addition, having access to water in Pakistan is not similar with having access to safe
and sufficient water supply. Pakistan’s water quality ranks as 80th out of 122 nations.
Pipe water in Pakistan is contaminated either because of leakages with all sorts of
bacteria or due to geological conditions and insufficient purification, with abnormally
high levels of arsenic and elevated fluoride (IRIN, OCHA, 2004). Water, extracted by
hand pumps – the major water source in rural areas – is mainly brackish water and not
sufficient for drinking and cooking. The Pakistan Council of Research and Water
Resources (PCRWR) estimate that almost 50 percent of urban water supply is insufficient
for drinking and personal use (GOP, Pakistan Council of Research and Water Resources,
2004). According to a research which took data about availability and quality into
relation and concluded that an average of 25.61 percent of Pakistan’s 159 million
inhabitants has access to safe and sufficient drinking water (Nils Rosemann, 2005). This
calculation shows that in rural areas only 23.5 percent and in urban areas approximately
30 percent can use their source of water without jeopardizing their health. These findings
come close to a conclusion by independent experts who predicted that already in 2001,
with prevailing consumption rates and a population growth of 4 million people per year,
one out of three people in Pakistan would face critical shortages of water, "threatening
their very survival". The Government of Pakistan estimated with regard to diarrhoea that
this mainly water related disease accounts for 14 percent of illnesses for children under
five and for seven percent of all disease in people age five and older (GOP, Pakistan
Ministry of Economic Affairs and Statistics, 2004). The Pakistan Council of Research
and Water Resources (PCRWR) assesses that 40 percent of all reported illnesses are
water-related. It is estimated that 200,000 children in Pakistan die every year due to
diarrhoeal diseases alone (UN Systems in Pakistan, 2003). Unsafe water affects mainly
rural and urban poor, who suffer above the average from sickness and water related
diseases. (GOP, Pakistan National Human Development Report, 2003).

2.5 About Bottled Water

The term bottled water seems to tell that any bottle containing water, however there are
important differences: all bottles don’t contain the same product. There is very little in
common between natural mineral water and purified water, as the chemical compositions
or the treatments these waters can undergo respond to very different criteria that can
change from one country to another. In some cases bottled water is merely bottled tap
water.

2.5.1 INDUSTRY DEFINITIONS

Several terms are commonly used to describe the products of the bottled water industry,
including some of the following:

• Artesian water – bottled water from a well that taps a confined aquifer (a water-
bearing underground layer of rock or sand) in which the water level stands at some
height above the top of the aquifer.
• Fluoridated Water - often used as a health focused drink for growing children, it
contains fluorine within permissible limits.
• Ground water - obtained from underground sources, pumped out using pressure that
is equal to or more then atmospheric pressure.
• Mineral water - An extremely specific product that must meet certain criteria.
Defined as water with at least 250 parts per million total dissolved solids. The source
of water is either ground water or a spring.
• Purified water or drinking water - is water taken from rivers, lakes or underground
springs that has undergone some form of treatment. It can be produced by
 “distillation, deionization, reverse osmosis or other suitable processes. It can be
chemically treated in order to have some components disappear. It is basically de-
mineralized water from public sources. Purified water is actually a manufactured
product.
• Sparkling water - water injected with carbon dioxide
• Spring water - water obtained from an underground formation from which water
flows naturally to the earth’s surface.
• Sterile water - water that meets the requirements specified under government or
other "sterility tests".
• Well water - water from a hole bored, drilled or otherwise constructed in the ground
which taps the water of an aquifer. (IBWA, 2000)
If these waters contain the minimum required mineral content according to US standards,
they can be called “mineral waters”. So many different categories of bottled water,
changing from one country to another, are not easy for consumers to differentiate.
2.5.2 What is Distilled Water?
Distillation is a process that leaves water free of minerals. Distilled water has been
brought up to a boiling temperature. The steam is captured and is cooled, which
condenses it back into a liquid form. When the water turns to steam, anything heavier
than water (like minerals, or unwanted organic matter) is left behind.
Thus, distilled water only contains water. Distilled water is good to use in appliances
such as coffee makers because since it contains no minerals it does not leave behind lime
scale.

2.5.3 Packaging
Packaging used for water can have very different shapes and colours and are made of
different materials. For a long time, bottled water was only available in glass, a very good
but heavy material. At the end of the 1960s, bottlers started to use packaging made of
PVC (vinyl polychlorure). In the 1980s, a new kind of plastic started being used: PET
(polyethylene terephtalate). PET is progressively replacing PVC because of its numerous
advantages.
Plastic, either PVC or PET, is the most frequently used material to make bottles of water;
about 70% of the bottles used for natural mineral water are made of plastic. Bottles
usually contain 33cl, 50cl, 1 litre, 1.5 litre, 2 litres or 5 litres. The biggest packaging for
bottled water is a 5-gallon carboy (about 20 litres).
Packaging is an essential part of bottled water marketing strategies. “The packaging
makes the brand. The brand makes the packaging. A product must have visibility to sell
its presentation refers to notions such as service, security, hygiene” (Miquel, 1999). In
some cases, such as Kinley, it is even possible to recognize the brand of the bottled water
thanks to the shape and colour of its packaging. Some brands have reshaped their bottles
in order to make them look like the marketing message they are supposed to carry. Many
bottles, for instance, now figure high mountains not only on the labels but also on the
plastic itself.
The packaging is an important part of the bottled water marketing success. All types of
bottles coexist and are regularly reshaped in order to better catch consumers’ attention.
Marketing and advertising campaigns are essential to differentiate the product and attract
consumers. Brands tend to associate with specific activities: sport, fitness, slimming,
fashion, etc. For the last 50 years, Evian has been the water of babies, emphasizing that
its low mineral concentration is suitable for them. The brand’s marketing strategy
capitalizes on infants, from the pink colour of its labels to advertising campaigns.

2.6 Bottled water market trends and Planet’s Health

The world bottled water market amounts to an annual volume of 89 billion litres, which
represents an average 15 litres of bottled water drunk yearly per person (Danone, 2000).
Western Europeans are the major consumers, drinking nearly half of all the world bottled
water, with an average of 85 litres/person/year (Sollberger, 1994). In United States, 54%
of Americans regularly drink bottled water (Olson, 1999). More than half (59%) of the
bottled water drunk in the world is purified water, the remaining 41% being spring or
mineral water (Belot, 2000).
Bottled water is an extremely competitive market; hence companies need to develop
diverse marketing strategies.
But according to campaigners, the planet's health may be suffering as a result.
A new report warns that people's thirst for bottled water is producing unnecessary
garbage and consuming vast quantities of energy, even in areas where perfectly good
drinking water is available on tap.
The report, released by the Earth Policy Institute (EPI), says global consumption of
bottled water doubled between 1999 and 2004, reaching 41 billion gallons (154 billion
liters) annually.

2.7 Bottled Water Market in Pakistan

Before focusing on Pakistan in particular, one should note that bottled water consumption
has generally grown around the world in the past 30 years, despite its high price
compared to tap water. Lured by the potential for huge profits, multinational companies
have been trying to create an international market for bottled water.

The bottled water market in Pakistan is witnessing annual growth rates nearing 40
percent. Bottled water in Pakistan is not considered a ‘beverage’. Beverage processing
includes carbonated soft drinks – where Pakistan has the lowest per capita consumption
in the world, fruit juices, syrups and juice flavoured drinks (Pakistan Investors Guide,
2004). Drinking water – and also bottled water – is not considered an important
commodity either. Water supply and prices for drinking water and bottled water are not
considered under the items in the Sensitive Price Indicator, Consumer Price Index or
Wholesale Price Index. From this perspective; it is obvious that Pakistan has low
consumption of bottled water. The Government of Pakistan described the market for
bottled water, with 33 million litres of consumption per annum in 1999, as small but
growing. It furthermore estimated the consumption for 2003, as 70 million litres or 0.5
litres per capita. The bottled water market in Pakistan has witnessed annual growth rates
of 40 percent, and after the introduction of Nestlé’s ‘Pure Life’, it had the fastest
worldwide growth in bottled water in 2000, at 140% (The Bottled Water Industry of
Pakistan, 2004). Recent figures estimate a yearly consumption of about 2 litres per person
bottled water (Nils Rosemann, 2005). Compared with Thailand’s 43 litres and
Philippine’s 15 litres per capita consumption, this seems relatively low. But taking
Pakistan’s population into account, one has to estimate an annual consumption of 318
million litres. While, sufficient figures are not available to prove this 964 percent
consumption increase in five years, one is able to conclude that Pakistan is a highly
dynamic and lucrative market.
Market expectations are as high in the retail market of bottled water as in the household
and operations sector for bulk water. Besides these market expectations, the production of
bottled water is also considered quite profitable. It is estimated that a bottle of 1.5 litres
has production costs of PKR 12.51 while it is sold for PKR 22 (Nils Rosemann, 2005).
The profit is shared between producing corporations, with PKR 0.66-0.83, and
middleman, with PKR 6.66-7.08. By this standard, the producing corporation makes a
profit of 4-5 percent while the middleman makes a profit of 27-30.55 percent. In
Pakistan’s water market, there are approximately 20 permanent players. Official figures
show an estimated number of 26 corporations, while in summer time, this number
increases up to 70 (Nils Rosemann, 2005). But from the perspective of quality control,
PCRWR is witnessing a fluctuation in the market of 50 percent, e.g. half of the brands
disappear and are replaced by new brands yearly (PCRWR, 2003). In 2005, PSQCA
admitted that 200 companies are selling bottled water in Pakistan, but only 27 are
registered as maintaining standards stipulated for the product (Hoti, Ikram, 2005). Nestlé
itself estimates approximately 150 water brands, with only 15 registered under the
PSQCA scheme (Hoti, Ikram, 2005). Regardless of this data, it is unquestioned that
Nestlé controls the majority of the market (over 50 percent) with its brands ‘Pure Life’,
AVA and Fontalia, while Danone’s subsidy 22 “Sparkletts” holds 12 percent and another
local brand “BSW” has an estimated five percent market share (Nils Rosemann, 2005).

Bottled water is not a solution to inadequate water supplies as it is simply not affordable
for poor people who lack access to water. A bottled water culture which turns drinking
water into a status symbol is not justifiable from the human rights perspective. The
Pakistan government is obliged to adopt measures to provide access to safe and sufficient
water supplies even if that means restraining corporations from turning water into a status
symbol to make profits, or from polluting or extracting already depleting groundwater
resources.
2.8 Bottled water consumption: a certain way of life
Some consumers choose to only drink bottled water; we can identify several reasons for
drinking bottled water.

2.8.1. Consumers care for their health and safety

Bottled water is often an alternative to tap water. Consumers often object to the taste of
chemicals, particularly chlorine, used to purify tap water. In France, nearly half of them
don’t usually drink tap water because of its bad taste (IFEN, 2000), as opposed to only
7% in United States (Olson, 1999).
Consumers also look for security, in emerging as well as in industrialized countries. They
often mistrust their tap water, because of previous bacterial contamination for instance,
and perceive bottled water as being safer than tap water. In India, the suspicion of bad tap
water quality, in addition to general and seasonal shortages of tap water, lead people to
turn to bottled water. In Pakistan, only three percent of the nation’s sweet water resources
are used by households, for various purposes including cooking and drinking. In
industrialized countries, they fear faecal contamination or high nitrate levels in areas of
intensive agriculture and cattle-breeding. Recent food scandals probably had an important
impact on consumers’ attitude. “People are scared of water running in rusty urban water
pipes” (Lenzner, 1997).
However, bottled water is not necessarily safer than tap water. In 1986, an EPA survey of
25 bottlers showed that none of them had ever had a complete analysis of their water.
Bacteriological surveillance was inadequate in most cases.
Consumers also drink bottled water because they care for their health. In Europe, there is
a long tradition, dating back to Roman times, of spas and of drinking mineral waters for
medical purposes. In the XIXth century, this activity developed with the fashion for
upper classes to go to spas in order to improve their health. Spas owners weren’t long in
understanding that they could increase the wellness of their customers and their own
benefits directly supplying them their water in bottles. Until the 1950s, mineral water was
sold in drugstores as a health product. It has now become an everyday product. Natural
mineral water, now sold in supermarket, doesn’t carry along anymore this medical image.
People now buy bottled water to feel well, responding to advertising campaigns based on
well-being, energy, slimming, fitness etc. Bottled water is a healthy alternative to other
beverages. It is calorie-free and attractive for people willing to lose weight: “one of the
sparks that ignited the bottled water fire was the fitness craze that skyrocketed in the
early 1980” (Sullivan, 1996). Indeed, bottled water consumption is closely linked to the
way consumers face their nutrition, i.e. the current trends for healthier eating. In United
States, the bottled water industry openly admits that “it has substantially benefited from
labelling requirements for beverages such as diet soda, which have caused concern
among many consumers about the ingredients in these drinks. The IBWA's primary
spokeswoman recently noted that "the more people realize what's in some of these drinks,
the more they turn to water for what it doesn't have..."” (Olson, 1999). Bottled water is a
more female and adult market than sodas.
However, according to the United Nations Food and Agriculture Organization (FAO),
bottled waters haven’t got greater nutritive value than tap water. “There is almost a craze
to drink “natural” or “spring” waters, either aerated or still. Many consumers believe that
these waters, coming from springs, lakes, rivers or wells, have near-magical qualities and
great nutritive value. This idea is false. Bottled water may contain small amounts of
minerals such as calcium, magnesium and fluoride, but so does tap water from many
municipal water supplies. A study comparing popular brands of bottled water showed
that they were in no way superior to tap water. They have only the advantage of being
safe in areas where tap water may be contaminated. However, for low-income people
bottled water are very expensive and boiling local water renders it safe at a much lower
cost” (Latham, 1997).

2.8.2 Changes in ways of life

Increasing urbanization can also explain this trend for bottled water consumption. In
Increasing standards of living and greater use of cars enabled people to buy water in
supermarkets and to bring home higher number of bottled water, without difficulty. The
use of plastic makes bottles lighter and easier to carry than when they were made of
glass. The expansion of shopping centres, outside city-centres, provides consumers with a
greater choice in bottled water brands. The explosion of bottled water consumption also
reflects deep changes in working habits in industrialized countries, with the decline of the
agriculture and industry sectors. In these countries, most people have office works and
the bottle of water is now a common element on a desk, next to the computer and the
telephone. Drinking expensive bottled water (compared to tap water) is a sign of a rise in
the social scale. In addition, bottled water is the result of a huge marketing success.
Marketing and advertising are of primary importance to make the difference between
brands selling such a similar product, a product that is colourless, (nearly) tasteless and
odourless. Advertising costs are covered through the price of bottled water, comprising
10% to 15% of the price of one bottle of water. “Bottled water marketing seeks to
emphasize the supposed purity of bottled water, in many cases contrasting "pure" and
"protected" bottled water with "inconsistent" or unpredictable tap water quality. In the
words of a leading industry consultant, "Water bottlers are selling a market perception
that water is 'pure and good for you'...." ” (Olson, 1999). In France, sales of Evian water
have grown by 5% in 1999, thanks to a successful advertising campaign.

CHAPTER 03: Consumer Trust, Confidence and

Customer Preferences for Drinking
Water
3.1 Overview

Today, when fresh water supplies are stretched to meet the demands of industry,
agriculture and an ever-expanding population, the shortage of safe and accessible
drinking water will become a major challenge in many parts of the world. In the wake of
a boost in the general awareness about health and hygiene, there is growing concern for
the safety and quality of drinking water. A solution to this problem has come in the shape
of bottled drinking water which is widely available in both industrialized and developing
countries. No doubt this bottled drinking water represents a significant cost to the
consumer, but the consumers buy it for various reasons such as taste, convenience or
fashion, emergency or necessity, but for many consumers, safety and potential health
benefits are important considerations.

This report takes an overview of the research that addresses the following general
questions in relation to drinking water:
1. What do people expect from their water utility in the context of drinking water
services?
2. What are consumers’ priorities?
3. What do customers consider acceptable in terms of the product and the service they
receive?
4. What are they willing to accept for the current price they pay?
5. Why do people prefer to use a specific bottled water brand in terms of their priorities?

Water is in many senses unique among consumer products and it has a number of
features that mark it out as different from other consumer goods or services. First, access
to clean drinking water is now a human right. When the Universal Declaration of Human
Rights was first drafted water and air were omitted as they were regarded as necessary
preconditions for all other human rights and so were not explicitly mentioned. In
November 2002 the UN Committee on Economic, Social and Cultural Rights finally
affirmed that access to clean water was indeed a fundamental human right. Second, safe
water supplies are a prerequisite for stable healthy societies. While wealthy consumers
can choose to drink bottled waters to avoid health risks, this is not an option for large
portions of the citizens of even in the most developed nations. The current large
population and the success of the growing economies of our country are fundamentally
dependent on the existence of safe drinking water supplies and thus government is
motivated to ensure its continued existence and success. Unlike electricity or gas
supplies, which are increasingly the subject of competition between privatized suppliers,
most Pakistani consumers have little choice over their tap water supply. If they desire a
better or different water supply they have to either purchase water in bottles or seek
private well supplies if such are available locally, and this is not a market in the
traditional sense.
In common with other utilities like gas and electricity supplies, Pakistani consumers
generally take these for granted until there is some disruption in supply or price rises are
proposed. However, unlike gas and electricity, humans have an intimate physical
relationship with their water and any health risks it might pose can vary over time.
Given these special features of water much of the general literature on the behaviour of
consumers exercising preferences in markets is of questionable relevance. In this report
the focus is primarily on consumer’s preferences in selection of bottled water.

3.1.2 Consumer Trust and Confidence: An Overview and Customer Preferences

For Drinking Water
Researching preferences in the water sector is a far from straight forward task.
Consumers often cannot articulate their preferences or indeed may not have considered
preferences for a product or service which they take for granted and rarely think about. In
some situations they may even be motivated to misrepresent their preferences to
researchers especially if they believe that their answers will have an effect on the prices
they pay for their water.
The discussion includes consumers’ taste and odour preferences but do so only in the
context of these as triggers for consumer complaints and use of bottled waters. This
research do not discusses particular threshold levels of contaminants as there are large in
number and are already embedded in the Pakistan Standard Specification for Bottled
Drinking Water Directive’s and WHO standards. Most suppliers conduct their own
sensory research relating directly to their own waters and supply circumstances and
should be well aware of this aspect of consumer preferences.

3.2Consumer Preferences and Related Concepts

As with much research on consumers, and indeed social science in general, there is a lot
of terminological confusion. The following definitions of key terms are provided in the
hope of clarifying the following discussion of the literature.

3.2.1 Consumer Satisfaction

Consumer satisfaction and acceptance are often considered in the literature to be closely
linked yet these are distinct concepts. Satisfaction is the fulfillment and gratification of
the need for a stated good or service, here, bottled water.

3.2.2 Consumer Acceptance

Acceptance describes consumer willingness to receive and/or to tolerate. For example, a
customer might accept the occurrence of a certain number of yearly supply interruptions
given a certain price. Consumer acceptance and satisfaction are related, as the first is a
precursor of the latter. However, despite the fact that satisfaction and acceptance can be
thought of as lying on a continuum, acceptance does not automatically lead to
satisfaction. Weighing needs or preferences against provided product or service attributes
results in the balance of satisfaction pointing in a negative or positive direction,
depending on whether interests are conflicting or corresponding. This determines the way
in which people evaluate companies’ or utilities’ performance. Only when a consumer’s
needs for a stated good or service are met, i.e. when the service provided corresponds
with their preferences, will they feel satisfied. Customer satisfaction can be enhanced
when their needs are met (in terms of both quality and quantity) and accord with their
preferences. At the other end of this dimension, where the service provided conflicts with
the prevailing needs or preferences, customers may experience feelings of dissatisfaction.
3.2.3 Consumer Concerns
These are expressed anxieties or unease over an object broadly defined, e.g. discoloured
tap water.

3.2.4 Consumer Preferences

This is used primarily to mean an option that has the greatest anticipated value among a
number of options. This is an economic definition and does not tap into ‘wishes’ or
‘dreams’ (for e.g. that safe drinking water was free, that there should be world peace) but
for all practical purposes is an appropriate definition. Preference and acceptance can in
certain circumstances mean the same thing but it is useful to keep the distinction in mind
with preference tending to indicate choices among neutral or more valued options with
acceptance indicating a willingness to tolerate the status quo or some less desirable
option.

3.2.5 Consumer Expectations

The distinction between expectations and preferences is often blurred though the
concepts are distinct. Expectation is used in three slightly differing senses in the
literature. One is the act of expecting or looking forward – a belief about what will
happen in the future. Most consumers in Pakistan expect that clean and safe water will
come out of their taps the next time they turn them on. A related but more technical use
of expectation is to denote a more formal estimation of the probability of an event
occurring. These first two definitions can be distinguished from preference in that
preferences refer to some desired state and, as in the above definition, imply that more
than one state is possible and that there are some options. Unfortunately expectation is
also used more loosely to mean a requirement or demand for something and in this sense
is a kind of strong preference. When reading the literature it is important to ascertain
which definition is being used.

3.2.6 Consumer Awareness

Consumer awareness is the level of knowledge about, in this case, water which includes
the water company, regulatory framework, supply system and service, or the water itself.
In most research the adequacy or otherwise of this awareness is anchored against the
service provider or regulator’s perspective on the supply. Where consumer awareness
does not equate with this industry perspective this is often termed a consumer
(mis)perception. However, it should be noted that there is a distinction between holding
factually incorrect knowledge about the supply system (for e.g. that the water comes from
a river when it comes from an aquifer) and differing perspectives on, say, the safety of
the supply. In the latter example assessments of safety are judgements made under
uncertainty about the future and thus have a legitimately contestable truth status. What is
acceptably safe is a matter of judgement (potentially based on ‘good science’ but a
judgement under uncertainty nonetheless) and may or may not be a mis-perception’.

3.2.7 Consumer Attitudes

An attitude is a positive or negative evaluation of a social object or action. A ‘social
object’ in the present context might mean the water company, water regulations, supply
system and service, or the water itself. Many theories of attitudes (e.g. the well-known
theory of planned behaviour, Ajzen, 1985) have attitude as a factor involved in
determining behavioural choices, however there is considerable continuing debate about
when, and in what circumstances, attitudes are important determinants of behaviour. An
attitude toward something should thus not be taken to imply that attitude consistent
behaviour will automatically follow.

3.2.8 Consumers and the Public

While discussing definitional clarity it is worth acknowledging that ‘the consumer’ is not
a representative of a single homogeneous group, ‘the public’. Social scientists prefer to
use the term ‘publics’ to reflect the idea that not all members of ‘the public’ share the
same goals and values nor have the same relative power status within any society. A
crude example we will return to later is that the poor/unemployed are unable to pay for
some services and it would be a mistake to ignore the importance of this different status
when studying preferences.
In the case of water consumption, all members of the population have to consume water
from some source but some are the direct payers of water bills (customers), some pay
indirectly (e.g. those living in care homes, or some forms of rented accommodation) and
others are dependents of customers. These differing groups will have differing
relationships with suppliers and may well have different preferences (Dr. Chris Fife-
Schaw, Dr. Tanika Kelay, 2007).

3.3 Water Quality – Taste and Odour and other Aesthetic Judgements
It will come as no surprise that most studies show that consumers’ primary expectation is
that their supplier will provide safe, clean drinking water (Bates, 2000). Burn, Tucker,
Rahilly et al (2003) for example found that in the context of water companies’
management of Australia’s state water resources, the main priorities set by the consumers
is, quality of water supply.
Research carried out by the UK’s Drinking Water Inspectorate also explored consumer
preferences and issues of concern about drinking water. They found that consumers
prioritised safe clean drinking water. For example, the UK’s Drinking Water Inspectorate
(DWI, 2000) demonstrated that most respondents were relatively satisfied with their
drinking water. Similarly, Dutch research has demonstrated that consumers are not
particularly concerned about water quality issues (Martijn, de Rooy & Piriou, 1998) and
this seems to be a general finding across the EU. But in Pakistan, this might not be the
case. Pakistan lacks reliable statistics on water supply for human consumption.
Researchers point out that the varying estimates often overlook whether available water is
safe or sufficient. Available piped water in Pakistan is often contaminated due to leakages
or geological conditions or insufficient purification. And that is the reason why people in
Pakistan are mostly concerned about drinking water quality issues.

Consumers’ sensory perceptions of their water are quite well tuned (cf. Falahee &
MacRae, 1995) and thus aesthetic estimations of tap water quality (e.g. taste and odour
and colour) will have an impact upon judgements of apparent quality and safety. Taste
and odour while being interlinked, tend to relate to different factors, with the sense of
taste being most attuned to the inorganic constituents of water, with the sense of smell
relating more to organic constituents of water (Health Canada, 1995; WHO, 1997). Much
lower concentrations of substances can be detected by odour than can by taste, with taste;
odour and temperature all contributing to complex sensation of flavour (Health Canada,
1995).
McGuire (1995) reported that, if consumers detect an ‘off-flavour’ in their drinking
water, they are likely to believe that it is unsafe to drink. Thus changes in the system
and/or water source can have a large impact upon perceived water quality and resultant
levels of expressed concern. Sensory perceptions of tap water which may or may not
relate to the underlying quality or safety of the water, can lead to modifications in
behaviour and in some cases individuals may seek alternative sources. For example, in
the DWI (2000) study some participants who felt concerned about the physical properties
of their tap water modified their behaviour by filtering their tap water before drinking it.
Others opted not to drink the water at all on the grounds that it looked, smelt or tasted
unpleasant. Many studies find that consumption of filtered or bottled water reflects
aesthetic preferences (e.g. taste and odour) rather than overt concern for risks associated
with tap water (DEFRA, 2002; IFEN, 2000; Means et al, 2001; DWI, 2000), although
some studies (Doria, 2006; Dupont, 2005) find both aesthetic preferences and health
concerns can lead consumers to opt for bottled water, with consumer trust in the water
company also influencing consumption choices. Some consumption of bottled water may
also occur because of consumer preferences for water that is chilled or sparkling.
Certainly the growth in bottled water consumption in developed countries is largely
independent of objective tap water quality (UNDESA, 2006). A survey of 1846 people
across England and Wales found that, compared with the risk of consuming food items
such as chicken and beef, drinking tap water was perceived to be of low risk (DWI,
2000). The study found that 69% of respondents were satisfied with their tap water
quality. The main reasons cited for dissatisfaction were related to aesthetic qualities of
the water. Eighty-six percent of those surveyed said they regularly drank tap water, whilst
only 6% drank bottled water only. Here, bottled water consumption was attributed to a
dislike of the taste and odour of tap water. Consumers have a finely attuned sense of taste
where water is concerned. Falahee & MacRae (1995) carried out a study using untrained
members of the public to evaluate preferences for different types of drinking water. They
found that bottled waters were preferred to distilled or tap waters by the majority of
assessors, with waters of higher mineral content being preferred. Similarly Koseki and
colleagues (Koseki, Nakagawa, Tanaka, Noguchi, & Omochi, 2003; Koseki, Fujiki,
Tanaka, Noguchi, & Nishikawa, 2005) found clear preferences for alkaline electrolysed
waters over tap waters (and, indeed, some bottled waters). These kinds of findings lend
some credence to consumers’ claims to be choosing bottled waters because they can taste
the difference.
In slight contrast to the above, a survey conducted amongst 400 residents of Georgia,
USA (Adote Abrahams, Hubbell, & Jordan, 2000) found that consumers who were
dissatisfied with the taste, odour, and/or appearance of tap water were willing to pay for
bottled water but claimed that they were also doing so to avoid health risks from tap
water. These authors found that use of bottled water tends to be higher amongst
consumers who had experienced problems with their municipal tap water. People who
felt their water was ‘unsafe’ were also more likely to use treatment devices, whereas the
aesthetic qualities of water did not feature as significant determinants of use of these
devices though they were significant in the case of bottled water use. They state that the
use of water filters is an averting behaviour undertaken to reduce the risks associated with
drinking tap water. Bottled water use in this study seems to be both a risk avoiding and
taste enhancing behaviour.

3.4 The False Perception:

A bottle of spring or mineral water has become the lifestyle accessory of the health-
conscious, no longer a luxury item, the beverage has become a common sight worldwide.
In Pakistan, the core proposition of bottled drinking water lies in hygiene because the
quality of tap water is bad and is rapidly deteriorating due to the aging of the water and
sewerage pipes. This is in stark contrast with the West where 'mineral water' indicates the
attendant minerals present in the water. Mineral water in Western countries is obtained
from natural springs and is, generally, named after those springs. Most of the bottled
water passed off as mineral water in Pakistan, however, is filtered, boiled or purified by
other means such as chlorination, deionization and reverse osmosis. A better description
of bottled drinking water sold in Pakistan therefore, would be “purified bottled water”.
The non-existence of strict norms on bottled drinking water in Pakistan has led to the
mushrooming of many small-scale units producing bottled water under different brand
names.
A 1997 United Nations report concluded that bottled water has no nutritional advantage
over tap water, so why do so many people think otherwise.
Co-op America advises consumers “to be wary of words like ‘pure,’ ‘pristine,’ ‘glacial,’
‘premium,’ ‘natural’ or ‘healthy.’ They’re basically meaningless words added to labels to
emphasize the alleged purity of bottled water over tap water.” The group points out that,
in one case, bottled water labeled as “Alaska Premium Glacier Drinking Water: Pure
Glacier Water from the Last Unpolluted Frontier” was actually drawn from Public Water
System #111241 in Juneau.
The Natural Resources Defense Council, which carried out a four-year review of the
bottled water industry, concluded "there is no assurance that just because water comes
out of a bottle, it is any cleaner or safer than water from the tap."
The New York City-based action group added that an estimated 25 percent of bottled
water is "really just tap water in a bottle—sometimes further treated, sometimes not."
In Great Britain the Chartered Institution of Water and Environmental Management
recently published a report questioning the quality, labeling, and environmental cost of
bottled water.
"Branding and bottling of water where there already exists a wholesome and safe supply
of … drinking water cannot be seen as a sustainable use of natural resources," said Nick
Reeves, the institution's executive director.
He says the perception that the bottled product is purer than tap water is unfounded.
"For example," he said, "the high mineral content of some bottled waters makes them
unsuitable for feeding babies and young children."
Meanwhile, in many developing countries, tap water is either unavailable or unsafe,
making bottled water a better option.
Although there are relatively few regulations on what bottled water can contain, people
have very differing opinions on possible benefits and drawbacks of bottled water.
Currently there are multiple studies showing numerous bottled water brands containing
harmful substances. According to a four-year scientific study by the Natural Resources
Defense Council, over a third of the tested brands contain contaminants such as arsenic
and carcinogenic compounds. This study of 103 different brands encompassing over
1,000 bottles showed that one-third of the water in these bottles exceeded state or
industry safety standards.
An earlier study by Ohio State University (found at Common Dreams News Center)
found that 39 out of 57 bottled water samples did indeed have "purer" water than tap
water. However, 15 samples had significantly high bacteria samples. The scientists
agreed that all of the water was safe to drink, but the study clearly showed how claims of
bottled water purity can be misleading. While one can evaluate the chemical contents of
water, most consumers choose bottled water for its taste. A large majority of bottled
water consumers drink bottled water because they believe it has better health benefits,
and many consume such large quantities due to its taste. Globally most people associate
bottled water with tasting better. There have been few quality studies regarding health
effects of drinking bottled water. Many researchers believe that the benefits of bottled
water are based mainly on a common ideology.
More than a quarter of bottled water is just plain tap water. Coca-Cola bottles water from
municipal sources in Calgary and Brampton for its Dasani brand. Pepsi bottles water
from municipal sources in Vancouver and Mississauga for its Aquafina brand. In October
2007, in the US, Pepsi was forced to admit the truth: It must label its Aquafina bottles as
"tap water from a public water source." (Larsen, 2007)
Kahlown and Tahir (2001) conducted a research study on quality analysis of
bottled/mineral water. A sample of 21 available bottled water brands was collected and
analyzed. Aesthetic and physical quality of most brands was found acceptable, whereas
many brands of mineral water were found to be bacteriologically contaminated.
Bottled water brands do not ease the identification of the product, often showing
misleading images on their bottles’ labels, such as lakes and mountains when the water
actually comes from municipal networks.

A 2001 World Wildlife Fund (WWF) study confirmed the widespread belief that
consumers associate bottled water with social status and healthy living. Their perceptions
trump their objectivity, because even some people who claim to have switched to bottled
water “for the taste” can’t tell the difference: When Good Morning America conducted a
taste test of its studio audience, New York City tap water was chosen as the heavy
favorite over the oxygenated water 02, Poland Spring and Evian. Many of the “facts” that
bottled water drinkers swear by are erroneous. Rachele Kuzma, a Rutgers student, says
she drinks bottled water at school because “it’s healthier” and “doesn’t have fluoride,”
although much of it does have fluoride (Brian C. Howard, 2007)
The number one (Aquafina) and two (Dasani) top-selling brands of bottled water in the
U.S. both fall in the category of purified water. Dasani is sold by Coca-Cola, while
Aquafina is a Pepsi product. As U.S. News & World Report explains, “Aquafina is
municipal water from spots like Wichita, Kansas.” The newsmagazine continues,
“Coke’s Dasani (with minerals added) is taken from the taps of Queens, New York,
Jacksonville, Florida, and elsewhere.” Everest bottled water originates from southern
Texas, while Yosemite brand is drawn from the Los Angeles suburbs. (Brian C. Howard,
2007)
Over the past few years the displays of bottled water in supermarkets and other retail
outlets have grown to occupy anywhere from a single shelf up to one complete aisle of
sales floor space containing brands of table, still, sparkling and flavoured water. The
rapid increase in sales of bottled water to the general public in spite of its high costs
compared to tap water may be due to a variety of reasons, including: an increased
awareness of the need to consume regular quantities of fluids in order to maintain good
general health, the questionable quality of reticulated water systems in relation to disease,
convenience, fashion or other as yet unidentified reasons. (MacKenzie et al., 1994)

3.5 Introduction to Bottled water companies in Pakistan

Bottled water in Pakistan is not considered a ‘beverage’. Beverage processing includes

carbonated soft drinks – where Pakistan has the lowest per capita consumption in the
world, fruit juices, syrups and juice flavoured drinks. The bottled water market in
Pakistan has witnessed annual growth rates of 40 percent, and after the introduction of
Nestlé’s ‘Pure Life’, it had the fastest worldwide growth in bottled water in 2000, at
140% (The Bottled Water Industry of Pakistan, 2004).

3.5.1 NESTLE:
In regard to the dynamic prospects of Pakistan’s bottled water market, it is not surprising
that Nestlé wanted to take shares of it. In its mission statement, Nestlé concludes that its
brand ‘Pure Life’ is the “base of operations to meet the need of the continent's emerging
nations for clean, good-tasting water in convenient sizes and packages to satisfy a
family's daily requirements”. The development of Nestlé’s market share, in the bottled
water market in Asia, is closely linked to its leading world-brand ‘Pure Life’. It is now
available in 17 countries and highly successful in Uzbekistan, Turkey, Jordan, Thailand,
Philippines, Argentina, UAE, and Saudi Arabia. But this worldwide business began in
1998, in Pakistan.
In April 2002, Nestlé renamed its water business as Nestlé Waters, which now represents
10 percent of its sales. Today, Nestlé Waters is established in 130 countries and markets
about 77 different brands.138
Nestlé’s operations in Pakistan go back to the merger with Milkpak Ltd. in 1988,
renamed as Nestle Milkpak Ltd. Nestle Milkpak Ltd. continued and enlarged operations
in the production of UHT milk, butter, cream, desi ghee and fruit drinks. Between 1990
and 1998, 21 branded product lines were added, including Nestlé ‘Pure Life” bottled
water. Nestle Milkpak Ltd. now operates the largest, as well as an extremely efficient,
milk collection system in Pakistan. In the social sector, the company provides over 1,100
job opportunities for skilled, unskilled and professional workers. It constitutes a major
factor in the rural economy by disbursing over PKR 1.37 billion annually through milk
purchases from approximately five million household members of dairy farms.

3.5.2 Aquafina:
Aquafina is a bottled water brand of PepsiCo. It was first distributed in Wichita, Kansas
in 1994, and was distributed across the United States, Canada, Turkey, Saudi Arabia,
Vietnam, Pakistan and India. As of 2003, it had become the United States' top-selling
bottled water brand in measured retail channels. Aquafina is sold in 1-liter, and 1.5-liter
bottles. Pepsi Cola’s beverage brands in Pakistan include Pepsi, Mountain Dew,
Aquafina, Sierra Mist, Tropicana Twister Soda, and Tropicana Juice Drinks.
Aquafina uses PepsiCo's own seven-step purification system, which it calls HydRO-7,
which includes charcoal filtration, reverse osmosis, and ozonation. PepsiCo states in
marketing material that this system removes substances that may be in other brands of
bottled water. As of July 27, 2007, PepsiCo put a disclaimer stating the water comes from
a "public source" (meaning tap water) on each bottle. Aquafina uses the term "Purified
Drinking Water" on its label. In Canada the current 1.5 L bottle of water displays
"Demineralized Treated Water".

3.5.2.1 Steps of Purification:

Aquafina water is municipal water that has undergone their trademarked HydRO-7
process. Distillation is not included, so Aquafina water is not considered distilled water.
The Aquafina water purification process is as follows:
The first step is pre-filtration, which removes all the small particles in water, then a
polishing filter removes even smaller particles. Then the water gets exposed to ultraviolet
radiation, which eliminates organic material including bacteria and viruses.
The fourth process is reverse osmosis (RO). In this process, water is forced through a
membrane and impurities are left on the other side of the filter.
The activated carbon filter, which is the fifth step, removes trace minerals such as copper
and magnesium from the water. Another polishing filter removes any particulate matter
left after the previous three steps and makes the water clear.
The final purification stage consists of exposing the water to ozone, which will remove
any residual chemical or biological products that remain in the water.

3.5.3 Kinley:
Kinley is a brand of purified or carbonated water owned by The Coca-Cola Company and
sold in many Central European countries and Pakistan. Its carbonated forms are used for
mixers, and also available in a variety of fruit flavors.
The new Kinley bottle has been made in an ‘easy-to-hold shape' with transparent labels.
The new packaging innovation is design based on consumer needs to offer a more
convenient grip and is in keeping with the ‘Spirit of Purity' along with reaffirming the
company's commitment to purity.
Kinley uses reverse osmosis to purify its water, and with a Coca Cola brand image, it is
considered to be one of the foremost bottled water brands of the world.
Chapter 04: Analysis and Findings

The questionnaire was designed to measure the consumer preferences of bottled water in
Peshawar and Islamabad. Questionnaire was filled by a sample size of 100 people which
included businessmen, professionals and students.
The findings are as follows;

Q1. Name the brands of bottled water you remember?

 Chart 4.1

In the first question respondents were asked to recall bottled water brand names, and it
was analyzed that surprisingly more than half of the respondents only knew about Nestle
and no other brand name. It was also analyzed that most of the respondents knew about
Nestle, Aqua Fina and Kinley only. While other brand names which were recalled
included Sparkletts, AqWah, Aqua Bara and Spring.
 Chart 4.2

When the respondents were asked about the last purchase of their bottled water, the result
showed that maximum respondents bought Nestle on their last purchase, which shows
that people are more exposed to Nestle, and it’s their first choice. It was also seen that
Aqua Fina was the second most bought brand amongst the respondents.
 Chart 4.3

When the respondents were asked to tell which brand of bottled water had the largest
market share, it was analyzed that every respondent had a view that Nestle was the most
famous brand and it had the largest market share. This result showed that Nestle Pure
Life is the most favourite and common brand amongst consumers.
Rank according to your preferences;

Q4. You use bottled water because;

Options 1 2 3 4 5 6
A. Trendy, Part of 29 25 8 19 6 13
Fashion

B. Convenience 41 17 18 9 14 1
C. Care about my 71 23 5 1 0 0
Health and safety

D. Worried about tap 51 25 11 9 3 1

water

E. Substitute for other 4 8 13 21 37 17

beverages

F. Tastes fresh and 13 13 6 15 16 37

good

Chart 4.4
Above mentioned factors are represented in the form of following charts, according to the
preference of the respondents mentioned in the above table.

Chart 4.5
Chart 4.6

Chart 4.7
Chart 4.8

Chart 4.9
 Chart 4.10

The respondents were asked to rank six factors according to their preferences i.e;
1. Trendy, 2.Convenience, 3.Care about health and safety, 4.Worried about tap water, 5.
Substitute for other beverages, 6. Tastes fresh and good
It was observed that in general, maximum respondents ranked “Care about health and
safety” as their 1st preference, proceeded by Worried about tap water, Convenience,
Trendy/Part of fashion, Tastes fresh and good, and Substitute for other beverages
respectively. The study can be referred to the study of Sullivan, 1996 which stated that
“Consumers also drink bottled water because they care for their health”.
 Chart 4.11

The respondents were inquired whether they would prefer using routine tap water with a
possibility that it might be clean or not, or they would switch to bottled water. As
Lenzner, 1997 clearly mentioned in his study that people often mistrust their tap water.
And the responses showed that maximum number of respondents were likely to switch
towards bottled water or opt for a safety measure. A reasonable amount of respondents
were also observed who did not care about water quality and keep on drinking water from
any where, regardless of the fact that it might be clean or not.
 Chart 4.12

Maximum respondents agreed to the fact that advertisement plays an important role in the
purchase decision of the consumers and act as a driver towards the buying behavior of
bottled water. As Oslon (1999) in his study mentioned, that bottled water is the result of a
huge marketing and advertising.
It was also noticed that 18% of respondents were indifferent about the fact that
advertisement plays an important role in purchase decision.
 Chart 4.13

A dramatic result found was that, irrelevant of the fact that Nestle was the famous brand
amongst people, Aqua Fina’s advertisement was remembered by most of the respondents,
which clearly shows that Aqua Fina is highly concentrating on its advertisements and
creating awareness through advertisement in consumers. This favours Aqua Fina, and it
would be fruitful for it in the long run.
 Chart 4.14

Another factor that was noticed amongst respondents was that people do not consider
taste as an issue; they only prefer water which is pure, natural and healthy. As Bates
(2000) in his study said, “It will come as no surprise that most studies show that
consumers’ primary expectation is that their supplier will provide safe, clean drinking
water”.
It was also observed that people are also conscious about taste while drinking bottled
water. They expect the taste should be fresh and not unfavourable to them. But according
to WWF (2001), “Even some people who claim to have switched to bottled water “for the
taste” can’t tell the difference”.
 Chart 4.15

Respondents, when asked about the claims of bottled water being clean, pure and healthy
gave a result that maximum people agree to the claims. Oslon (1999) says, “Water
bottlers are selling a market perception that water is 'pure and good for you”.
But according to Co-op America “Consumers should be wary of words like ‘pure,’
‘pristine,’ ‘glacial,’ ‘premium,’ ‘natural’ or ‘healthy.’ They’re basically meaningless
words added to labels of bottled water to emphasize the alleged purity of bottled water
over tap water.”
 Q10. Usingthe given scale pleaseindicate how
stronglyyou feel about your favoritebottled
waterbrand for the followingstatements.

YourFavouriteBrand:____________

1. Drinkingmyfavouritebrand makesmefeel
healthy.
1%
11%

44% Disagree
Neither Agree nor Disagree
44% Agree
Strongly Agree

Chart 4.16

When asked about respondent’s favourite brand, the result indicated that 91 out of 100
respondents preferred “Nestle Pure Life” as their favorite brand.
Respondents were indifferent about the healthy factor of bottled water. The respondents
also agreed to the fact that bottled water makes them feel healthy. Indeed, bottled water
consumption is closely linked to the way consumers face their nutrition, i.e. the current
trends for healthier drinking.
Sullivan (1996) said, “People now buy bottled water to feel well, responding to
advertising campaigns based on well-being, energy, slimming, fitness etc. It is calorie-
free and attractive for people willing to lose weight: one of the sparks that ignited the
bottled water fire was the health and fitness craze that skyrocketed”.
 Chart 4.17

Maximum respondents were of the view that their favourite bottled water quenches their
thirst. This shows that people tend to buy bottled water just to quench their thirst and
nothing else.
 Chart 4.18

When respondents were inquired whether their favourite bottled water tastes bad, the
sowed that maximum number of respondents disagreed that their favourite bottled water
brand taste bad. It was also observed that consumers select bottled water as their choice
because it tastes fresh, and tempting.
 Chart 4.19

It was seen that a maximum number of respondents always look for their favourite
bottled water brand before buying. This shows that consumers are brand conscious
towards bottled water and select bottled water having a good brand image, because they
associate brand image with purity and health.
 Chart 4.20

The result showed that people consider their favorite bottle water brand to be the better
amongst all other brands, and they feel comfortable when using their favourite brand.
 Chart 4.21

The result clearly shows that maximum respondents strongly agreed to recommend their
favourite brand to others also. This shows that people tend to have brand loyalty in
bottled water also.
 Chart 4.22

A dramatic result seen was that, maximum respondents simply did not know the
difference between bottled mineral water and bottled pure water. Most of the respondents
were of the view that both are the same thing. This shows that most of the consumers
simply do not know what they are drinking, and have a misperception that there is no
difference between mineral and pure water.
Chapter 5: Conclusion & Recommendations

Conclusion:
Drinking bottled water has become a trivial habit in many people’s everyday lives. Bad
tap water taste or quality, fitness objectives or safety purposes, numerous reasons lead
consumers to buy bottled water. In Pakistan, the core proposition of bottled drinking
water lies in hygiene because the quality of tap water is bad and is rapidly deteriorating
due to the aging of the water and sewerage pipes. Bottled water may even be necessary,
for instance in case of temporary tap water contamination. The trend toward consuming
more and more bottled water will keep increasing in the coming years. This flourishing
market is profitable for a high number of companies, and employs thousands of people
world-wide.
Bottled water quality is generally good, although it can suffer from the same
contamination hazards as tap water. In Europe, natural mineral waters quality is
frequently tested, both by independent labs and by companies’ internal services. These
latter controls may not be fully reliable. Yet, it is not in the interest of the companies,
who base their marketing strategies on the purity of their products, to hide away
occasional and traceable contamination. We need to identify the key service quality
dimensions that are specific to the water sector. Some of these are evident from the
literature (aesthetic qualities, customer relations responsiveness etc.) but there will be
others and these need to be identified.
Increasing urbanization can also explain increased trend for bottled water consumption.
In Increasing standards of living and greater use of cars enabled people to buy water in
supermarkets and to bring home higher number of bottled water, without difficulty. The
use of plastic makes bottles lighter and easier to carry than when they were made of
glass. The expansion of shopping centers, outside city-centers, provides consumers with a
greater choice in bottled water brands. The explosion of bottled water consumption also
reflects deep changes in working habits in industrialized countries, with the decline of the
agriculture and industry sectors. Most people have office works and the bottle of water is
now a common element on a desk, next to the computer and the telephone. Drinking
expensive bottled water (compared to tap water) is a sign of a rise in the social scale. In
addition, bottled water is the result of a huge marketing success. The bottled water
culture's recent explosion in the last decade is due to many corporations' advertising
efforts to promote the need to drink "healthy" bottled water rather than tap water.
Multinational companies across the globe are racking in billions of dollars with very little
effort. Marketing and advertising are of primary importance to make the difference
between brands selling such a similar product, a product that is colourless, (nearly)
tasteless and odourless.
Drinking bottled water is essentially a part of our culture today. We can look at any local,
national or international sporting event and see the prevalence of bottled water.
Apparently regular tap water in a bottle or cup has slowly begun to be looked down upon.
Although many individuals will carry a reusable water bottle such as a Nestle, most
bottled water containers are thrown away after just one use. This may be due to the
convenience of bottled water, as it is almost more readily available than tap water.
Currently there are multiple studies showing numerous bottled water brands containing
harmful substances. Many researches show that bottled water has no nutritional
advantage over tap water, a large majority of bottled water consumers drink bottled water
because they believe it has better health benefits, and many consume such large quantities
due to its taste. The research analysis also showed that people mostly rely on brand
names and feel comfortable using top brand bottled water. Nestle Pure Life was the
consumers foremost choice of bottled water and they consider Nestle as the best option
available. Slowly and gradually other brands are also creating awareness in consumers
mind such as Pepsi’s Aquafina and Coke’s Kinley. These brands are already established
top brands in the world, but Nestle is the key operator in this market and consumers
consider Nestle as their first and favourite choice. It was seen that consumers were
unaware of the fact that there is a huge difference between bottled mineral water and
bottled pure water, and they consider both of them as same.

Recommendations:
• To make sure bottled water quality is as good as it is claimed to be, companies should
release their quality tests on a day-to-day basis and make them available to a wide
number of people, for instance through the internet. It is essential that consumers
have access to major information, directly on the bottles’ labels, i.e., the “type” of
water (natural mineral water, purified water, etc.), its mineral composition, and the
location of the spring or the treatments this water may have undergone.

• International companies locally investing in bottled water businesses should make

sure that the products are of good quality and packed is hygienic conditions,
particularly in emerging and developing countries. They should also be careful to the
additional pressure they put on local water resources.

• To solve the water crisis and lack of drinking water the Government of Pakistan,
international agencies, and NGOs must play an active role. First, of all the
Government of Pakistan should acknowledge a water crisis and start to collect
sufficient data.

• Bottled water is not a solution to inadequate water supplies as it is simply not

affordable for poor people who lack access to water The Pakistan government is
obliged to adopt measures to provide access to safe and sufficient water supplies even
if that means restraining corporations from turning water into a status symbol to make
profits, or from polluting or extracting already depleting groundwater resources.

• Specific areas in a locality should be installed with water purification plants, so that
residents can have access to clean water.
• To avoid the expense and danger of bottled water it's best to purchase a home water
system.

• The citizens of every nation in the world need to stop purchasing bottled water and
replace these containers with more durable and reusable containers, and make our tap
water of higher quality so we can rely on it for our drinking supply.
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• http://www.researchwikis.com/Bottled_Water_Marketing_Research
 Annexure

I am a graduate student at the IM|Sciences, Peshawar. I am conducting this survey on

consumer brand preferences for my research report, which is my degree requirement. It
would mean a lot to me if you would take a part in the following survey.

AGE: GENDER: PROFESSION:

Q1. Name the brands of bottled water you remember?

• _____________________

• _____________________

• _____________________

• _____________________

Q2. The last time you purchased a bottle of water, what brand did you purchase?
• Nestle
• Aquafina
• Kinley
• Any other (Please specify_______________________ )

Q3. Which brand of bottled water is most famous and has the largest share of market?

• Kinley
• Aqua Fina
• Sparkletts
• AqWah
• Nestle

Rank according to your preferences;

Q4. You use bottled water because;

1. Trendy, part of fashion _____

2. Convenience _____
3. Care about my health and safety _____
4. Worried about tap water _____
5. Substitute for other beverages _____
 6. Tastes fresh and good _____

Q5. Would you prefer using routine tap water whether it may be clean or not, or you
would likely to switch to bottled water?
• I drink water from any where, whether it’s clean or not.
• No, I would prefer using bottled water, or opt for other suitable measurements.
Q6. Do you think the advertisement plays an important role in purchase decision of
bottled water?
Neither Agree Nor
Strongly Disagree Disagree Agree Strongly Agree
Disagree
1 2 3 4 5

Q7. If AGREE, in your opinion which advertisement of bottled water brand is

remembered by you?
• Nestle
• Aquafina
• Kinley
• Any other( Please specify______________ )

Q8. In your opinion, do taste matters to you while selecting bottled water or you drink
any bottled water which claims it is pure, natural and healthy?
• Yes, taste does matters.
• No, taste is not an issue; the water should be pure, and healthy.

Q9. Do you think the claims by bottled water brands are true, that they provide clean,
pure, natural, and healthy water?

Neither Agree Nor

Strongly Disagree Disagree Agree Strongly Agree
Disagree
1 2 3 4 5

Q10. Using the given scale please indicate how strongly you feel about your favorite
bottled water brand for the following statements.

YOUR FAVOURITE BRAND: _____________________________

1. Drinking my favourite brand makes me feel healthy.

Neither Agree Nor

Strongly Disagree Disagree Agree Strongly Agree
Disagree
1 2 3 4 5
2. It quenches my thirst.

Neither Agree Nor

Strongly Disagree Disagree Agree Strongly Agree
Disagree
1 2 3 4 5

3. It tastes bad.

Neither Agree Nor

Strongly Disagree Disagree Agree Strongly Agree
Disagree
1 2 3 4 5

4. I look for my favourite brand when purchasing bottled water.

Neither Agree Nor

Strongly Disagree Disagree Agree Strongly Agree
Disagree
1 2 3 4 5

5. My favourite brand is better than any other bottled water.

Neither Agree Nor

Strongly Disagree Disagree Agree Strongly Agree
Disagree
1 2 3 4 5

6. I would recommend others also to use my favourite brand?

Neither Agree Nor

Strongly Disagree Disagree Agree Strongly Agree
Disagree
1 2 3 4 5

Q11. Do you know the difference between bottled mineral water and bottled pure water?

• Yes
• No

Thank you for your participation!