BUSI 520 Week 3 MMGP: Market Analysis Example

Marketing Management Group Project, Market Analysis: Who Buys Canned Water With a Skull on It

Questions Addressed

• What factors shape consumers' purchases of the product?
• What are the product's main market segments, and which are most attractive?
• Who are the business buyers that stand between the firm and its consumers?

The Consumer Market

Kotler and Keller (2016) group the influences on consumer buying into cultural, social and personal factors. For a commodity like water, those factors decide almost everything, because the product itself gives buyers little reason to prefer one brand. Liquid Death's appeal operates mainly at the cultural and social levels. Its imagery draws on heavy metal, punk and skateboarding subcultures, and its humor mocks conventional advertising, which signals membership in a group that does not take marketing at face value.

Research on identity explains why that matters. Escalas and Bettman (2005) found that consumers form connections with brands whose images match those of groups they belong to or aspire to join, and avoid brands associated with groups they reject. Berger and Heath (2007) showed that people are more likely to diverge from others' choices in product domains that signal identity, such as music and clothing, than in domains that do not. Liquid Death's achievement is to turn water, a product that normally signals nothing, into one that signals who the buyer is. A can of Liquid Death carried at a concert says something that a plastic bottle of a national water brand does not.

Market Segments

Kotler and Keller (2016) describe geographic, demographic, psychographic and behavioral bases for segmentation. For this product, psychographic and behavioral bases explain buying best. The group identified four segments; the descriptions below are our analysis of published information about the brand rather than company data.

The first segment is young adults who identify with music, skate and alternative culture. They are the brand's original audience, reached through its online videos and its large following on social platforms, which in 2023 included 5.3 million followers on TikTok and 3.3 million on Instagram (Kirichanskaya, 2024). They value humor and irreverence and are skeptical of conventional marketing.

The second segment is moderate drinkers and non-drinkers in social settings, people at concerts, bars and festivals who want a drink that fits the occasion without alcohol. A tallboy can looks like beer, and the brand's partnership with Live Nation places it in exactly those settings (Clark, 2025). The segment appears to be growing. Pape et al. (2018) reviewed research from many countries showing a substantial decline in adolescent drinking since around the turn of the century, which suggests that the cohorts now entering adulthood include more people for whom a non-alcoholic option in a social setting is a regular need.

The third segment is shoppers trying to reduce their use of plastic. The brand's aluminum cans and its anti-plastic messaging appeal to them, although, as the group's promotion section will discuss, the environmental advantage of aluminum over plastic depends on recycling rates and is open to debate.

The fourth segment is mainstream convenience buyers, people who pick up a cold drink at a convenience store or supercenter and may know little about the brand's culture. The brand's spread into national chains such as Target, Walmart and the 7-Eleven convenience network, with well over a hundred thousand doors by 2024, now puts the product in front of them (Kirichanskaya, 2024).

Evaluating the Segments

Kotler and Keller (2016) recommend evaluating segments by size and growth, structural attractiveness and fit with the company's objectives and resources. By those criteria, the first segment has the strongest fit but limited size, since the brand already reaches much of it. The second segment combines good fit with growth and with occasions, such as concerts, where buyers pay premium prices. The third segment fits the brand's messaging but is shared with many sustainability-focused competitors and is sensitive to any doubts about the environmental claim. The fourth segment is the largest but the weakest fit, since mainstream buyers choose largely on price and convenience, where a premium-priced brand is at a disadvantage. Smith (1956) observed that segmentation lets a firm adjust its offering to the demands of particular groups rather than competing for the whole market on price, which argues for focusing on segments where the brand's meaning is valued.

The Business Market

Consumers can only buy Liquid Death where distributors, retailers and venues have agreed to carry it. Kotler and Keller (2016) describe organizational buying as a process involving a buying center of people with different roles, from users and influencers to deciders and gatekeepers. For a grocery chain, the decision to give Liquid Death shelf space depends on its sales per foot of shelf compared with established brands, its margins and its ability to bring in shoppers. The brand's early success at Whole Foods, and the participation of major distributors in its 2024 funding round, suggest that it has persuaded these business buyers that it drives sales (Clark, 2025; Kirichanskaya, 2024). Keeping them persuaded as growth slows will require continued evidence of strong sales per store.

Recommended Target

The group recommends a concentrated focus on the first two segments, with the second, moderate drinkers in social settings, as the main source of growth. Those segments value what the brand offers that competitors cannot easily copy, its identity, and they buy in occasions that support its price. Mass retail can remain a channel for these consumers rather than a separate target, so that the brand does not dilute its meaning to compete for buyers who choose on price.

References

Berger, J., & Heath, C. (2007). Where consumers diverge from others: Identity signaling and product domains. Journal of Consumer Research, 34(2), 121-134. https://doi.org/10.1086/519142

Clark, B. (2025, July 22). MicroVentures' portfolio company: Liquid Death's history and milestones. MicroVentures. https://microventures.com/microventures-portfolio-company-liquid-death-history-and-milestones

Escalas, J. E., & Bettman, J. R. (2005). Self-construal, reference groups, and brand meaning. Journal of Consumer Research, 32(3), 378-389. https://doi.org/10.1086/497549

Kirichanskaya, N. (2024, May 16). 'We are still in the early innings': Liquid Death's SVP of strategy. Inside FMCG. https://insidefmcg.com.au/2024/05/16/we-are-still-in-the-early-innings-liquid-deaths-svp-of-strategy/

Kotler, P., & Keller, K. L. (2016). Marketing management (15th ed.). Pearson.

Pape, H., Rossow, I., & Brunborg, G. S. (2018). Adolescents drink less: How, who and why? A review of the recent research literature. Drug and Alcohol Review, 37(S1), S98-S114. https://doi.org/10.1111/dar.12695

Smith, W. R. (1956). Product differentiation and market segmentation as alternative marketing strategies. Journal of Marketing, 21(1), 3-8. https://doi.org/10.1177/002224295602100102