The competitors Spa Fruit, Crystal Clear and Vitamin Water aim for the target segments who do want healthy drinks, but do not want to pay a high price for it. The main differences between the competitors and This water, is that the Competitors have a relatively lower price per bottle, and their name is well known all over the country. This water provides healthy drinks, with a low amount of sugar. Its prices are relatively high compared to the competitors’ prices if it uses the same price as in the I-J.
To be successful, This water has to Implement excessive objective is to obtain 10% of Dutch soft drinks market share in the coming two years. Operational objective is to Identify the size of the tag market for “This water” in the Dutch market at the current year. This Water currently focus on a target market consisting of people within any age ranges looking for a healthy substitute for soft drinks, and without having to spend fortunes on drinks and still acquiring the best health benefits associated with healthy living. This Water is trying to tap into the Dutch market which might be a bit hard for them to accomplish but through Coke a
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Cola having a 58% share with Innocent they allow this water to tap into extra resources focusing on positioning themselves to the most competitive level possible. Also by focusing on the unique selling points of their products their products they manage to focus on capturing the 10% market share they want to achieve within the Netherlands. External Analysis Customer Analysis Market Segmentation: Geographical Segmentation: Innocent is a UK based company who started off selling fresh fruit smoothies to various customers, but managed to expand into European Markets and also into other various international locations.
Demographical Segmentation: Innocent with their vast variety of products have managed to cater to a large variety of customers, their focus is to promote healthy living to people of all ages, by having products for all age groups. Kids, Parents, Youths, Families and anybody who wants to reap the rewards of healthier living is targeted with their products allowing full demographic coverage.
Product 1 Smoothies: Prime Target Market Kids Smoothies (little and big cartons) – Children of all ages Little Bottles Big Cartons 2 Super Fruits: Little Bottles 3 Vega Pots 4 Fruit Tubes 5 Thickset 6 This Water – All Age Groups – All Age Groups (More Family Focused) Woman Aged 25 – 35 – Children Cryptographic Segmentation: As a brand Innocent is targeting people with a busy lifestyle who are interested in getting the healthiest living opportunities available, therefore they based their product on families and people focused on getting all the right nutrients.
Customer Needs Healthier options were needed by customers to offer variety within the soft drink market and offer a healthier living to customers. Innocents’ customers needed a healthier option when it came to drinks, not Just for parents but also for children, this promote healthier living and ensuring you to meet your recommended 5 fruit a day oration. Customers also need a fast easy to use product which they can consume on the run and use within their busy hectic lives without slowing them down, and this has been met with Innocents’ ready to use health focused products, which also added little impact to nature.
Customer Behavior Innocents’ customers tend to be; hard working, health conscious and time spent consumers who are CEO-conscious and do not have the necessary time to produce their own healthy products. We can’t forget about the kids and parents who want to offer their kids healthier options than Just the regular soda or soft drinks. Competitor Analysis This Waters main competitor are Tropical, Happy Money and other related sports drinks, these brands are in direct competition due to offering soft drinks with health benefits.
The following strategies are offered by This Waters competitors Tropical: currently hold 29% of the market and offers the biggest competition, they offer products of similar nature at a lower price. Tropical advertises their products on the health basis of their products and vibrant packaging, they do however not focus on the core idea of environmental protection like Innocent (This Water). Tropical also offers a higher quantity of advertisements with a more aggressive strategy with loads of television campaigns, creating more brand loyalty and larger market shares.
Happy Monkey: Is a new company which emerged in March 2009 with a prominent market share when it comes to kids smoothies. Their main focus has been their healthful and nutritional value of their products, with a keen focus on the quality of their natural content and high ethical principles. Other Major Sport Drink Brands: Main Advertisements focus on Television campaigns showcasing the best qualities of their products and focusing on sponsorship of big stars to ensure higher intention to the fruit based drink providers. Up’s: Product, Price, Place, Promotion Tropical: Product: Tropical offer a fruit Juice made from 100% pure fruits, every oz glass contains 2 of you daily fruit servings, and each product offers a wide variety of health benefits through vitamins captures within the dine Price: Their price varies from different products; IL Fruit juice – E. 28 IL orange juice – E. 50 mill Bottles – El . 20 Kids packs – E. 9 Promotion: Being owned by PepsiCo, gives Tropical a huge advantage when it comes to advertising and marketing, this gives them access to bigger promotion campaigns ND also larger budgets spent on generating brand awareness and loyalty. Place: Due to great logistical power and being aligned with PepsiCo have allowed Tropical world and offers direct competition to Innocent and This Water. Happy Monkey: Provides a product for kids who are specifically designed, according to these guidelines.
No added Sugar No added Sweeteners No Preservatives No Bits Lunch Box Sized 100% pure Fruit 1 Portion of Fruits Price: 4 pack (mill) – 2. 99 Happy Monkey follows the same strategy as most of the other guys, focusing the health factor of their products but have a purely kids concentrated marketing tragedy, surrounding contests and games on with a kids friendly atmosphere on their website. Place: As of yet Happy Monkey is solely based and operational within the I-J with their products being shipped throughout the larger supermarket chains.
Market Analysis Looking at the above data you can see that Innocent have managed to capture and maintain a good market share over the past few years. This will lead for them to expand into different markets, even by doing a brand extension to tap into potential profitable areas (using This Water). This is a good reaction to the current market trend which has been showing a decline in luxury items. This will ensure them an opportunity to partake in the current growth rate for health based products that won’t cost you an arm and a leg.
This can be achieved with a new health based drink with a lower production cost and also lower overall cost prices. Focusing on their cost and distribution structures you will see that by being aligned with Coke a Cola, Innocent have managed to tap into a fantastic distribution and cost structure, allowing them to launch a new brand into a global market and trying to tap into the growing health factor trends.
They already managed to capture a great market share wrought previous products; this will allow them to capture new growing trends in future areas whilst facing stiffer competition. Macro environment (Porter 5 Forces) Bargaining Power of Suppliers: Number of Suppliers: This Water is a potential brand extension of an already existing company named Innocent; Innocent has currently merged with Coke a Cola and is in partnership in creating the best cheapest most beneficial product to their customers, by aligning capitalize on the production costs of their products.
Size of Suppliers: Coke is the largest soft drink provider in the world at this stage and has managed to future the prominent market share when it comes to supplying soft drinks, Coke a Cola’s Wakefield Plant Wakefield is the largest soft drinks plant by volume in Europe. We have ten manufacturing lines and two pre form injection lines We can produce 6,000 cans of soft drink every minute that’s 100 per second. We can also produce 3,200 PET* bottles every minute.
Our site covers an area the size of 33 football pitches. Since 2007, we’ve invested over EYE million to make Wakefield one of the fastest producers of soft drinks in the world. Since 2007 we’ve reduced our water consumption by ten per cent. Wakefield produces 100 million plus cases per year. Switching Costs: Due to having aligned with Coke a Cola there would be a large sum of costs involved when it comes to switching suppliers, this would not be a good idea for Innocent with their This Water product.
Ability of Substitutes: This Water will always have the ability to look into different suppliers and find substitutes for their supply on produce used within the production process of their water, but the focus will stay on finding the best nature friendly supplier with high quality produce, this will be able to be achieved through new partnerships they entered earlier in the existence of the company.
Bargaining Power of Customers: Number of Consumers: The number of possible consumers This Water is hoping to tap into, consist of a global market due to the support structure they have in place and also through having emerged out of an already successful brand. Buying Volumes: According to Lament there is a huge growth potential if they manage to get the right consistency with their products and manage to find the right flavors and natural produce. Differentiation: This Water has done a lot of differentiation away from the Innocent brand as to not infuse customers with Innocent being solely focused on fruit and fruit based drinks.
They have managed to ensure an 88% growth within the “water plus” category, this is alongside Coke a Cola’s Glace Vitamin Water. The product still contains the same image and bottling as Innocent but only to bear resemblance to Innocent and allowing customers to formulate the idea of “old and new’. Price Elasticity: This Water offers their Juicy water drinks at a reasonable market price which competes well with all their competitors, selling their mill Bottles at a Recommended Retail price of El . 50 Brand Identity:
This Water stuck to similar packaging and branding as Innocent’s Smoothies and other products, this is to ensure their customers to associate themselves with Innocent and capture the same image in their customers minds, (an image associated with health and environmental protection) this is a great opportunity for them to venture into, and will ensure them good brand recognition within the market Cost of Entries: Due to the high volumes already produced by big players within this market there is a relatively high entry cost into these markets, this is due to the major players already having predominant market share.
Luckily This Water is associated with some of the bigger marker players (Coke a Cola) and will be able to overcome these costs and move into bigger market domination. Technology: The Existing technology to the disposal of This Water through Coke has allowed it hard for new entrants to enter the market, taking into consideration the Wakefield bottling plant which is able to produce and bottle 6000 cans of soft drink every Minute, this makes the technology quite expensive and hard for competitors to invest into.
Barriers: Barriers of entry are really steep and make it tricky for new entrants to get passed, hey have to first pass health barriers and ensure all legal requirements are met and these barriers are hard to get past and will take a lot of time to ensure you meet all demands, but it is possible to achieve them and be in competition with other water based health drinks.
Threats of Substitute products: Substitute Performance: Buyer Willingness There has been a big decrease on general spending on expensive products and this has forced a general cut on the spending on expensive drinks, This Water has a good idea of launching a cheaper product into the market with customers still willing to Penn money on drinks boosting health benefits but also looking at saving expenses where they can.
Internal Analysis Past & current strategies Innocent Drinks is a company who targets health conscious, consumers who are cash rich and short on time, who’s are willing to pay premium prices for products which promotes healthier living. Innocent drinks oversees a wide variety of products to various aged consumers with a range of products consisting of smoothies, Vega pots and also this water. They offer their products at local convenience stores in different flavors which ensure them a phenomenal growth rate.
Innocent smoothies in quantities of IL is estimated at a reasonable price value position, although innocent smoothies mill is positioned as a price value perception which is considered as over expensive by their customers. This is due to the production cost on smaller quantities being really expensive but by aligning prices on their smaller batch items. Innocent has a competitive advantage through offering a product advantage by having a wide variety. They offer 25 different recipes consisting of a selection of 21 types of fruits.
They also packaging which consist of recycled materials. Innocent also donates 10% of their profits to the Innocent Foundation, and also currently holds 70% of the Auk’s smoothies market. Innocent was bought over by Coke a Cola which currently owns a 58% share, Innocent also realized that due to current economic setbacks consumers are less willing to spend on luxury items. Therefore Innocent decided to tap into new target market by introducing a new brand extension, into the areas of Healthy Flavored Waters and try to capture a bigger market share.
Innocent introduced this water into the I-J market and is looking at expansions within Dutch markets. This product does not carry any brand recognition, but still carries Innocents’ brand essence. Being owned by Coke a Cola offers This Water a strong opportunity of tapping into foreign markets. This is due to Coke a Colas distribution networks and capital investments. Marketing Mix (Four AS) Innocent offers the following product mix 1 . Smoothies: Kids Smoothies (little and big cartons) 2. Super Fruits: 3. Vega Pots 4. Orange Juice 5. Fruit Tubes 6. Thickset 7.
This water Price Kid’s smoothies Little Big Smoothies E 1. 75-1. 99 3. 29 Superfluities Vega Pots Juice Fruit Tubes Thickset This Water Place ????3. 49 El. 49-1. 69 El . 49-??E. 69 stores and super markets ensuring fresh products with easy access and minimum effort. Innocent sells through delicatessens, Sandwich shops, supermarkets, and local convenience stores. By 2006 Innocent has been selling from 6000 different retailers. This Water also follows the same distribution methods to reach possible target markets, and therefore has a good opportunity to sales revenue.
Promotion Innocent has been aware that when It comes to marketing and advertising of their brand they would need a true reflection of what the company really was, they started advertising through TV and ensured sticking to their witty and quirky. Due to European Law changes Innocent got a warning from the Advertising Standards Authority for having unsubstantiated claims about the health properties of their products and ordered Innocent not to repeat these properties. Innocent also managed to reap in the rewards of clever marketing campaigns where they have opportunities of interacting directly with customers.
They also managed to launch a festival named “Fruit Stock” which is a free music festival to thank their customers for their support, and also improve the way customers perceive their brand. The Branding of their products, the cow print along with grass covered vehicles, interactive websites and the launch of free music festivals have has allowed innocent to maximize the impact they portrayed through their brand and designs. This also strengthened their customer relationships as well as having increase consumer growth on an annual basis.
They use a broad variety of direct marketing, to reach a large number of consumers. They use T. V, Radio, Billboards, and events such as the “Fruit Stock” as their primary mean of advertising and have managed to ensure a instant price in the market on their products due the expensive nature of fresh fruit. Sales, profits Sales: Innocent started with IEEE worth of fruits in 1999, sold 1 million a week in 2006 and about 2 million in 2008. The sales of smoothies is going up and the market grew by up to 38%.
The sales of smoothies is 86% of the times planned and 14% is being bought on impulse, when consumers buy on impulse shops are making the difference. When shops will do more marketing on smoothies it will be likely their sales will increase. Profits/Loss: The turnover of Innocent was grooving until 2008 together with their market share. In 2008 Innocent went a little down. Their market share dropped with 7% and their turnover with almost 12% where competitors maintained or increased their market share. The smoothies market is looking good with an annual market growth of 37. % per year this was the fastest growing sector. In 2008 Innocents dominant position suffered a little bit, since it all went in a downward spiral. Their market share dropped, revenues are down and in the end an operating loss of Ell. 893. OHO. Innocent costs rises where the revenues dropped. Their administrative expenses almost doubled and the staff costs increased by E. OHO. OHO(number of employees went down). We can say that their profits are under pressure in the last years and a less attractive than a year ago.
Looking at Innocents Balance sheet, we can simply conclude that their net current assets have decreased in the last year. Their debtor days have decreased as well, which is positive. Also positive is their stock turnover, which has increased from 5. 1 to 8. 1 due too less stocks. At the end of the day we can conclude there are some positives and negatives. Where their market share & revenue have dropped over time, cost have increased Innocent managed to get a hire stock turnover. Their financial position has decreased but is still holds a good prospect for the future.
Problems Consumers demand more from brands and smoothies are considered as a luxury non-essential product by consumers. Smoothies also got damaged by negative publicity around the health credentials of their products, also an increase in consumer choice has made it hard for Innocent to ensure penetration into the soft drink market, this has lasted for more than 5 years now and a key factor in this is the energy/sports drinks. The economic downturn has also hindered the sales in products like Smoothies, Bottled Water and premium Soft drinks.
This Water is an unknown brand to the Dutch community and might not draw as many customers as they did within I-J markets which are really familiar with the Innocent brand and who can realize the connection between the two brands. S. W. O. T Strength Launching This Water creates brand extension which buyers of previous Innocent products might attract. The appealing and trendy packaging. The wide range of flavors. The pricing is a strength as Innocent has been more favorable to retailers since they have been more profitable in the past. Innocent is a market leader in the U. K. Which is promising for This Water.
Weakness The product might look to much like Innocent Juices which can result in confusion for consumers. Innocent drinks do not have a global presence compared to other firms such as PepsiCo. This Water contains a certain amount of sugar which was said to be damaging to the teeth. Furthermore the amount of sugar which is in one bottle of the beverage is not stated on the label. Opportunity Social media creates more brand awareness combined with different incentives (such as the opportunity to win a so-called perfect summer). There is a need for sportiveness which can be combined with the concept of This Water.
This Water would have another feature which adds value in stead of only being water with a flavor. The collaboration with McDonald’s (which can also be perceived as a threat). Use of renewable resources will help Innocent to market themselves as CEO friendly and also lower production cost substantially. Threats Competitors such as Crystal Clear focus on a clear target market, such as women. This Water does not attract one specific group of people(this remark can be interpreted as a weakness combined with a threat). The collaboration between McDonald’s and Innocent has arisen a discussion among the loyal customers of Innocent smoothies.
McDonald’s does not fit the image of Innocent according to the need for energy beverages combined with the declined sales in fruit drinks. Recommendations: This Water might look to much like the other existing beverages of Innocent, this might be a good thing as well since all drinks have an appealing and trendy packaging. Furthermore, Innocent does not have a global brand awareness such as other firms like PepsiCo. This can be turned around by getting the best out of social media and positive word to mouth promotion. The fact that This Water contains to much sugar can be changed by adding more artificial sweeteners in stead of sugar.
The other biggest threat is that there is a current decline in fruit drinks, more people tend to buy energy drink. This Water could change its brand image by focusing more on athletes for example by creating a healthy energy drink with fruit in it. On the other hand Innocent is one of the few brands that take social responsibility into account. Therefore This Water might as well focus on buyers who care about the environment. The collaboration with McDonald’s is quite contradicting with the abovementioned points, penthouse Innocent can reach a completely different target market which can result in a bigger market share.
Objectives Strategic Objective It is also known as strategic goals, this is a board statement that describe where the organization wants to be in the future. These objective is set for the entire organization rather to specific department. As the case have mentioned the management team decide to research the possibility of introducing “This Water” on the Dutch market. As state in the case innocent is hoping international sales to reach more than 30% by 2010. As a result one of the strategic objective for “This Water” to enter to the Dutch market will be Obtain 10% of Dutch soft drinks market share for he coming two years.
Objective set must be SMART otherwise it creates difficulties for the company to achieve the objective set. This objective has been set according the SMART technique. The objective is set to be specifically targeting the Dutch market. Furthermore, within the objective also specifically state how much percentage will obtain and the time line for the objective. This objective is also measurable within the parameter. Within the objective it is also stated clearly the amount that has to achieve. Also the objective is very realistic since the firm need to obtain 10% in 2 years.
The time available for the firm to achieve this objective is 2 years. This isn’t a very long period of time but in term of this objective it became a recyclable time frame for the firm to achieve the objective state. Operational Objective Operational objective are short term goal that moves an organization towards achieving its strategic goals. Operational objectives varies from daily to monthly project. In order for the firm to achieve their strategic goal, firms must able to complete their operational objectives. The aim of operational objective is to set out to