WRITING YOUR ASSIGNMENT: · This assignment must be completed individually. · You must use Harvard referencing system. · Your work must indicate the number of words you have used. Written assignments...

MOD003327

The Task
Supply and demand analysis allows us to investigate and understand the operation of markets or sometimes the failure of markets.
Using supply and demand analysis identify which you believe to be the main factors in determining the price of bottled water in the UK.
The bottled water industry in the UK has been thriving on the growing public concern over the health and safety problems, a large number of people are now more health conscious and are switching over to bottled water, increasing the sales of bottled water in the country at the expense of the soft drinks and carbonated drinks. Increased marketing and extensive health awareness campaigns have convinced consumers to shift from the tap water to actually pay for products. It is predicted by expert analysts that the industry will grow by a Compounded Annual Growth Rate (2013 – 2018) of 6.9 % to reach an industry wide sales of £ 2.7 billion. (Ibisworld.co.uk. (2018))
In 2017 there was a reported increase of bottled water consumption to the tune of 10 % owing to widespread public fears and concerns over the contamination of tap water. There were fears that the tap water is contaminated by various contaminants, lime scale & micro plastics. The industry has been majorly investing in more environment friendly technologies to supplement their current production methods. Various events and promotions such as sports and activities have supported the industry demand in past few years as well. The industry is cautious though as few believe that the demand from the various on-trade establishments could somehow decrease or have a negative impact on the consumer spending behaviour and put a limit on it. It has also been predicted the sale of functional and flavoured bottled water products will increase in the years to come. (TAPPWater corp., T. (2018))
But the industry drama does not end here as the Children’ Food Campaign from United Kingdom has accused the British Soft drinks Association of spreading false rumours and lies about the contamination levels & safety concerns of Tap water. The United Kingdom is among those few countries where the sale of bottled water at city functions has been banned. The other countries to implement this to various degrees are United States, Canada and Australia. The Brexit will also have an increased and detrimental impact on the sale of bottled water in the United Kingdom in off trade volume terms according to Euro Monitor.
Consumption of Bottled Water in the United Kingdom
Year    Value of Market in millions Great Britain Pound (£)    Growth rate
2011    1099    -
2012    1139    3.64%
2013    1251    9.83%
2014    1368    9.35%
2015    1485    8.55%
2016    1602    7.88%
(Statista. (2018))
To understand the impact of supply and demand of we take a look at separate studies conducted by Ferrier (2001) and Doria (2006) show that there is a relationship between the sale of bottled water and the public perception that exists on the quality of tap water. (Doria, M.F., 2006) (Ferrier, C., 2001)
To create a framework to understand the consumer buying behaviour in the bottled water market in the United Kingdom we refer to a study conducted by Durga (2010). (Durga, M.A.N.I.S.H.A., 2010)
Among all the independent factors mentioned above, the demographic factors influencing the purchase behaviour of the consumers in regard to the consumption of bottled water the hypothesis was created for each individual factor. The hypothesis were based on a 2 tailed T test and an ANNOVA table, which gave the following results; (Ferrier, C., 2001)
There exists a relationship between the gender and the consumer buying behaviour
There exists a relationship between the age and the consumer buying behaviour
There is no relationship between the education level and consumer buying behaviour
There exists a relationship between the income class and consumer buying behaviour
There exists a relationship between the season and the consumer buying behaviour
The influence of marketing factors in the consumption behaviour were as follows;
There is no relationship between the Brand Recognition and consumer buying behaviour
There is no relationship between the quality of products and consumer buying behaviour
There is no relationship between the convenience factors and consumer buying behaviour
There is no relationship between the health concern and the consumer buying behaviour
There is no relationship between the price of the product and the consumer buying behaviour
There exists a relationship between the source of information (Marketing Strategy) and the consumer buying behaviour
The influence of the perception of bottled water with respect to tap water (better quality & standards, safety, more healthy, reliability than that of tap water and convenience) was found to be as follows;
There exists a relationship between the perception of bottled water & consumer buying behaviour
The influence of location and source in the consumption behaviour were as follows;
There exists a relationship between the location & sources of water and the consumer buying behaviour
Delving in deeper into the factors that affect the consumer purchase behaviour and thereby influencing the demand of bottled water in the United Kingdom we examine the...