THE BUCHAREST UNIVERSITY OF ECONOMIC STUDIES

FACULTY OF MARKETING

Consumer behavior final project

Launching a start-up based on consumer trends

Student: Măgurianu Eduard

BUCHAREST
2020
 1. Insights on the water filter global market

The global water filters market is forecast to reach USD 18.50 Billion by 2026, according
to a new report by Reports and Data. The market is rising rapidly in the global market due to
the high demand for water filters owing to the extreme increase of waste disposal into rivers
and regulations with safe drinking water by different regulatory bodies globally. Potable
water is becoming increasingly scarce not only due to rising consumption by a growing
population but also because the unchecked discharge of sewage and industrial waste into
surface water, declining ground water levels due to overexploitation, poor maintenance of
drainage systems resulting in wastage of water due to leaks and contamination of water due
to rusting of pipes which has resulted in a sharp decline in the quality of water that is supplied
through public networks. As the quality of water continues to deteriorate, diseases such as
diarrhoea, cholera, dysentery etc have spread rapidly due to the consumption of contaminated
water. In addition to making the water unfit for drinking and cooking, contamination of water
limits its usefulness in irrigation, commercial activities and industrial operations adversely
affecting economic productivity. As a result, residential households, commercial enterprises
and industries are increasingly installing water purifiers to treat the contaminated water
supply. 

The Municipal segment had the highest market share of 22.5% in the year 2018 as
municipal corporations mostly conduct great safeguarding for their water supplies to ensure
the safe drinking and other safe usage of water for the habitants of major cities and urban
outskirts. They incorporate a different type of filtration and follow the highest level of safety
treatments for their supplied water.

Asia Pacific region is forecasted to generate the highest revenue of USD 7.36 Billion in
the year 2026, owing to its extensive market penetration coupled with the rising population
mostly in China, India, and Philippines. 

The penetration rate of water purifiers is anticipated to increase in the near future, due to
rise in concerns of health and wellness among people in the LAMEA and Asia-Pacific
regions. However, the North American and European markets are expected to witness slower
growth during the forecast period, as these markets are nearing maturity.

In 2018, based on technology, the RO water purifier segment occupied the largest market
share of 65.4%, followed by UV segment with 20.7%, and is expected to grow at the highest
CAGR of 9.9% from 2019 to 2025.

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 The end users of water purifiers include residential and commercial users. The residential
users segment occupied a significant water purifier market share of 74.7% in 2018 and is
expected to grow at a CAGR of 8.9% from 2019 to 2025. This is attributed to the fact that
water purifiers have gained increased popularity among residential users, due to deteriorating
water quality, rise in urbanization, and surge in incidence of waterborne diseases. However,
the commercial segment accounted for 25.3% market share in 2018 and is expected to grow
at a CAGR of 10.4% in the near future, owing to rise in the number of offices, schools,
restaurants, and hotels all around the globe.

Based on distribution channel, the water purifier market is segmented into retail stores,
direct sales, and online channels. The retail stores segment held a major share of 73.8% in
2018. This was attributed to higher affinity of consumers toward physical stores, as they are
perceived to be safe and allow consumers to try the product before purchase. Moreover, retail
stores have the added advantage of immediate gratification, which further boosts its
popularity

Region wise, the water purifier market is analysed across North America, Europe, Asia-
Pacific, and LAMEA. Among these, Asia-Pacific accounted for around 63% of the overall
market share in 2018, in terms of value, owing to increase in urbanization, surge in income
levels, and rise in health awareness among people in this region. However, the LAMEA
region is expected to witness the highest CAGR of 14.5% from 2018 to 2025. This is
attributed to rise in penetration level of water purifiers, upsurge in population, and
deterioration in quality of water. Europe and North America are among the region leading
toward maturity and have witnessed increased penetration of water purifiers. Europe water
purifier market size accounted for a sales revenue of $5,085.4 million in 2018 and is
anticipated to grow at a CAGR of 7.1% by 2025. However, the North American market is
expected to exhibit a CAGR of 5.7% during the forecast period, accounting for $6,883.5
billion by 2025.

Key Findings of the Water Purifier Market:

 By region, Asia-Pacific is expected to lead the water purifier market, growing at the
highest CAGR of 10.0%, in terms of revenue, from 2018 to 2025.
 By technology, the RO segment is expected to grow at a CAGR of 9.9%, in terms of
revenue, from 2018 to 2025.

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  By end user, the commercial segment is expected to grow at a CAGR of 10.4%, in
terms of revenue, from 2018 to 2025.
 By region, Japan is the largest country, in terms of revenue generation, in the water
purifier market, and is expected to grow at a CAGR of 10.0% from 2018 to 2025.
 Based on food type, the meals segment occupied around 45% the water purifier
market share of the total market in 2018.
2. Insights on consumer trends in the water filtration industry

GOOGLE TRENDS search results

Clean Water

Water Filter

Water Filtration System

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Water Purifier

There is clearly a growing interest in water filtration solutions. Taking into consideration
all the graphs that are presented above, we can observe an ascendant trend in this market,
consumers showing more interest in their overall well-being.

3. Launching a start-up

Purify, is the company that will enter on the global market, but with focus on the
LAMEA due to the fact that this area is forecasted to have the highest CAGR, but also
because it is able to offer better, cheaper and more reliable water filtration systems in order to
meet everyone’s needs.

The company will offer their products and services to both individual, legal entities and
also to multinationals that want to live a healthier, long-lasting, happier life.

3.1. Product

At Purify, there are different types of drinking water filtration systems for our customers
to pick such as reverse osmosis, ultraviolet, filtration and distillation. They may be
considered as under sink water filters and or countertop water filters too.

Reverse Osmosis: Is a process for the reduction of dissolved ions (such as salts) from
water in which pressure is employed to force liquid (water) through a semi-permeable
membrane, which will transmit the water but reject most other dissolved materials. When
forced against the membrane surface, the dissolved materials are repelled, while the water
molecules are diffused through the membrane molecule by molecule, forming purer water on
the other side.

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 Ultraviolet: Sunlight has long since been known to kill micro-organisms. The rays from
the sun contain the UV *spectrum used in Ultraviolet Water Treatment Systems – although at
much lower intensities. It is also referred to as either the Germicidal Spectrum or Frequency.
The frequency used in killing micro-organisms is 254 nanometres (nm). The UV lamps used
are designed specifically to have the highest amount of UV energy at this frequency.

Filtration: A process in which water passes through a water system that may include one
or more filters for the purpose of removing turbidity, taste, colour, iron or odour. The design
can be loose media tank-type systems or cartridge devices. In general, the process may
include mechanical, adsorptive, neutralizing and catalyst/oxidizing filters.

Distillation: Is the process in which a liquid such as water is converted by heating, into a
vapor state, and the vapor cooled and condensed to a liquid state and collected. It is the
process of removing the liquid (water) from its constituents or contaminants; as compared to
other processes where contaminants are removed from the water (liquid). Distilled water is
water that has been purified by passing through one or more evaporation –condensation
cycles and contains essentially no dissolved solids. Distillation requires a lot of energy to
produce a small amount of purified water.

3.2. Price

The importance of a good price strategy is crucial due to the fact that this specific element
from the marketing mix, is the only one that produces money for the company. Purify price
strategy is to adopt a second-degree price discrimination strategy by criteria such as
geographical location, medium income and demand, in order to make the best of the
consumer surplus.

3.3. Promotion

From the point of view of the promotion strategy, Purify will invest in 2 main pillars,
namely online and offline, in order to be able to cover the entire target market and offer
visibility regardless of the channel chosen.

3.4. Distribution

In order to make the most out of the current situation and the market and also to keep up
with their competitors, the company should adopt both the direct and indirect channels.
Direct channel will allow the company to have a better control on the quality of the product

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and the way that the product gets to the customer. But at the same time, by using indirect
channels Purify will make sure that their products will reach to as many customers as
possible.

4. References
1. Google Trends. (2020). [online] Available at:
https://trends.google.com/trends/explore?date=all&q=water%20purifier [Accessed 15
Jan. 2020].

2. Market Research Reports, I. (2020). Water Purification. [online] Market Research

Reports® Inc. Available at: https://www.marketresearchreports.com/water-
purification [Accessed 15 Jan. 2020].

3. MarketWatch. (2020). Water Purifier Market Analysis, Size, Share, Growth, Trends

and Forecast To 2025. [online] Available at: https://www.marketwatch.com/press-
release/water-purifier-market-analysis-size-share-growth-trends-and-forecast-to-2025-
2019-10-21 [Accessed 15 Jan. 2020].
4. Allied Market Research. (2020). Water purifier Market by Technology (UV, RO, and
Gravity based), Distribution Channel (Retail Sales, Direct Sales, and Online),
Portability (Portable, and Non-portable), and End User (Commercial and
Residential): Global Opportunity Analysis and Industry Forecast, 2019-2025. [online]
Available at: https://www.alliedmarketresearch.com/water-purifier-market [Accessed
15 Jan. 2020].