Overview presentation about the role of water utilities from a macromarketing perspective

1. Water Utilities & Society

2. Water utilities & Society
What is a water utility?

3. What is a water utility?
● Whole set of
– Organization, processes,
activities, means and
resources
● necessary for
– Abstracting, treating,
distributing or supplying
drinking water
– Collecting, treating and
disposing of wastewater
– Providing the associated
services
Water utilities in Monopoly
board game.

4. Coliban Water

6. Water Utility Value Chain
Water Services Sanitation
DistributionRetail
Ocean, rivers and groundwater (natural environment)
Raw Water
Distribution
Customers
Drinking
WaterDistribution
Harvest
Treatment Recycled
Water
Distribution
Treatment Waste
Water
NaturalWaterCycle
CollectionTreatment
Treatment

7. Water Services
● Core
– Water supply
– Sewerage services
● Enhancing
● Billing & payment
● Information provision
● Facilitating
● Developer support
● Complaint handling
● Information provision
Core service for water utilities is the
supply of safe drinking water

9. Porter's Five Forces
● New entrants
● Supplier power
● Customer power
● Substitute services
Porter, M. (1979). How competitive forces shape
strategy. Harvard Business Review, 57(2).

10. Water utilities & Society
Sustainability

11. Environmental Sustainability
● Nature as an
economic
externality
● Ecosystem services
● Water as
commodity
● Tragedy of the
commons
Economics
Ecology
Equitable Viable
Bearable
Sustain-
able
Society
Source: World Conservation Union

12. Sustainability in water
“sustainable use of water requires the
development and maintenance of a required flow
of benefits to a particular group or place,
undiminished over time without reducing benefits
to other groups or ecosystems”
Gleick, Peter (1998), Water in Crisis: Paths to Sustainable Use, Ecological Applications
8 (3), 571–579.

13. Climate Change
Source: CSIRO

14. Victoria's Water Crisis
2000 to 2011 overall annual water
consumption in Melbourne dropped
by approximately 30 per cent.
Source: Office of Living Victoria
2000 to 2011 overall annual water
consumption in Melbourne dropped
by approximately 30 per cent.
Source: Office of Living Victoria
Dramatic reduction of reservoir
inflows..
Source: Coliban Water

15. The Utility Death Spiral
Source: freese.com

16. Water: ᾿need᾽ or ᾽want᾽?
● Needs
– State of felt deprivation
– Innate
● Wants
– Shaped by society
– Learned
Source: timvandevall.com

17. Beyond Needs & Wants

18. Demarketing
● Lowering demand
through marketing
– Social marketing
– Price increase
– Restrictions

19. Water utilities & Society
Social Corporate Responsibility

20. Social Responsibility
The one and only
obligation of business
is to maximise is
profits while engaging
in open and free
competition without
deception or fraud”
Milton Friedman, Capitalism and
Freedom

21. Affordability
● Financial hardship
● Empathy
● No total
disconnection
Vulnerable customers require
protection.

22. Public Health
● Walkerton Tragedy
– E.coli contamination
from farm run-of
– 2500 people ill
– 7 deaths
p
Walkerton Tragedy: E.coli
contamination from farm run-of.
2500 people ill. 7 deaths.

23. Is water a public good?
Excludable Non-excludable
Rival Private Common-pool
Non-rival Club Public

24. Water utilities & Society
Summary