Our sample paper on Innocent drinks marketing strategy explores Innocent market share, business model, positioning, campaigns, and other aspects. Learn more about Innocent marketing strategy with the help of our sample!
Executive Summary
Innocent Company sells its fruit smoothies at one point five million (1.5M) rate yearly and has conquered sixty percent (60%) of the United Kingdom market. The company has spread its wings to various countries such as the Low Countries and France. It has also advanced into Germany, Australia, and Scandinavia. From the company’s humble start, it has rapidly grown into an international brand with a 76 million pounds turnover. Sustaining and developing an extremely creative culture among its employees has enabled Innocent Drinks to celebrate its principal brand values through expansion and growth for extended periods.
The company’s founders were Adam Balon, Jon Wright, and Richard Reed, who saw a need to make people’s lives a bit healthier. The company came into being as a result of a simple idea that each and every product contains one hundred percent (100%) fresh, pure ingredients without food concentrates. The company’s target market is young and urban professionals. From its humble beginning, Innocent has excited its clients with its straightforward business approach. It uses down-to-earth, simple communication techniques highlighting its products and brand honesty. The company’s market strategy is imperfect as it does not take care of the needs of the elderly population. Therefore, the company must identify a target market to satisfy its needs.
Through various means of Integrated Marketing and communication strategies promotion mix such as advertising, public relations, and sales promotion, the company has created awareness among its customers on the health benefits of its products. It is evident that the company has done much to keep the product’s brand competitive in the current market. The present brand image of Smoothies has to be sustained throughout the inflationary market using various market strategies. Consumers typically have meager income to dispose of during a recession; hence they become more price sensitive. Therefore, the worth of their money needs to be emphasized. Innocent Company is faced with aggressive competition from its rivals, but the good thing is that the competitors seem to be imitating Innocent’s brands.
It is a relief to the firm since consumers know how to distinguish between the brands (Kemsley, 2006). Despite the recession, the Smoothies company is still experiencing growth. Last but not least, the company has just embarked on its tactic to target the aging population, with more advocacies for healthy lifestyles, enabling them to produce more non-alcoholic products. Online advertising has also been instrumental in the promotion of the products. The Integrated Marketing Campaign aims to reposition the Innocent smoothies in the UK market through various IMC promotion mix with a budget of ten million pounds within one year. Therefore, the project will be divided into two main parts. Part A will comprise the project’s rationale, and the other part will be the integrated marketing communication plan.
Introduction
Overview and Clarification of the Topic
This paper documents the supporting evidence and rationale for the Innocent Industry in the United Kingdom. From the macro extensive review of the industry, the paper will provide an extensive analysis of the Innocent Smoothies brand. The principal idea of the project will be to reposition the brand to change the existing consumption behavior of the company’s target market. This will be made possible by encouraging the brand consumers to incorporate the product into their daily endeavors. The rationale of the company is to increase both revenue and volume sales. In addition to that, it aims to increase consumer interaction with the brand.
The budget proposed to make the communication campaign successful is ten million pounds (10M). The budget will be equitably distributed above the line of traditional advertising and also tactical below the marketing line activity. Given the target niche audience relativity, and in light of the objective of the communication, it is estimated that approximately 60% of spend will be utilized on the latter.
Having experienced an exponential growth of one hundred and fifty-nine percent (159%) sales volume between the years 2005 and 2007, the market for Smoothies saw a fortune dramatic reversal with a thirty-six percent (36%) decline between the years 2007 and 2009 due to the squeezing of consumer’s spending. The three years have been extremely tough for the Innocent brand, whose value has decreased by one-third. As a matter of fact, this has been triggered as a result of the recession. Furthermore, the brand equity has experienced a lot of hits making it extremely difficult for it to recover in the long run (Smoothies, 2011, p.6). Despite the brand losing its revenue, Innocent market share has increased significantly by eighty percent (80%). By repositioning the Innocent brand in the United Kingdom Market, Innocent Company aims to change the consumption patterns among its target group of 18-34 years old. This is in order to increase its volume sales and revue.
The Host Organization
Innocent Company sells its fruit smoothies at one point five million (1.5M) rate yearly and has conquered sixty percent (60%) of the United Kingdom market. The company has spread its wings to various countries such as the Low Countries and France. It has also advanced into Germany, Australia, and Scandinavia. From the company’s humble start, it has rapidly grown into an international brand with a 76 million pounds turnover. Sustaining and developing an extremely creative culture among its employees has enabled Innocent Drinks to celebrate its principal brand values through expansion and growth for extended periods.
The company’s founders were Adam Balon, Jon Wright, and Richard Reed, who saw a need to make people’s lives a bit healthier. The company came into being as a result of a simple idea that each and every product contains one hundred percent (100%) fresh, pure ingredients without the presence of food concentrates. The company’s target market is young and urban professionals. From its humble beginning, Innocent has excited its clients with its straightforward business approach. It uses down-to-earth, simple communication techniques highlighting its products and brand honesty. Uncommonly, this approach is also utilized by retailers who get Innocent regular communications. The communication techniques include newsletters that integrate fun stories with product information. With this method, Innocent Company has expanded its partners and customer network.
Crucial to the success of the company is its strategy of employment. The company is trying to employ relevant expertise in various fields, from web design to ethical procurement. Guardian newspaper ranked the company as the top employer in the industry. In the same year of its ranking, it reported a turnover of thirty-eight million pounds (38M) (Innocent Drinks, N.d). In the United Kingdom, the company’s biggest competitor is PJ Smoothies, purchased by the giant PepsiCo. To conquer the UK market, Innocent has joined Jamie Oliver (Marketing Smoothies, 2006).
Innocent Company Values
“Make natural, delicious food and drink that helps people live well and die old” (Sweeney, 2009). The mission statement helps the company to reinforce its brand values. In addition, it makes it a hundred percent clear what the company’s purpose is. For instance, the company aims to give people a reason and a goal to put all their energy into their work. The company’s products are often 100% delicious, natural, and nutritional. As a result, people are mentally and physically well after consuming Innocent products.
Scope of the Business Activities of Innocent Company
The company aims to equip its consumers with healthy eating habits by providing natural foods. The objective of any business is to maximize profits and become a leader in the market when it comes to products, and so does Innocent Company. In addition to profit maximization and becoming a product leader in a highly competitive environment, the company’s key objective is to provide employment. Employment creation is for the farmers supplying the company with raw materials and the company’s workers.
Corporate Objective
The company takes responsibility for its business impact on the environment and society. The company shifts the business effects from negative to neutral. Innocent Company’s principal objective is to create a sustainable business by using healthy, renewable, and natural ingredients for its drinks. In the year 2007, the company started measuring its carbon footprint. It started from the firm to the fridge and ended with the recycling bin. By the end of 2007, the company had reduced its smoothies’ carbon footprint by fifteen percent (15%). Another area of its focus was to ask its suppliers to go green (Innocent Annual Report, 2007, p.6).
Financial Performance
With significant dominance in the United Kingdom market, the company has extended its markets by entering the Danish market and consequently targeting Australia, Germany, and Sweden (Anonymous, N.d, Innocent Drinks). Innocent Drinks exhibit the largest market share in the United Kingdom’s smoothie industry. Various factors have significantly contributed to the most significant share of the market. First is the change in consumption patterns among the United Kingdom citizens. It has dramatically triggered the high demand for the company’s products.
Furthermore, the company’s brand awareness and marketing strategies have increased its market share. The company makes use of a variety of strategies to market its products. The marketing strategies are such as traditional marketing and Internet marketing. This has made it easier for people to have a wide range of information concerning the company and its products (Solomon et al., 2009).
A great deal of effort has been diverted to product marketing to maintain its market share. In 2010, the company’s profit was almost one hundred and twenty-eight million pounds (128 million pounds). The highest amount of profits recorded by the company is associated with the quality of the products and perfect marketing strategies. The majority of the population in the UK prefers smoothies to other products, which has made the company significantly increase its profit margins. In 2007, as highlighted in the table above, the company’s revenue almost reached the one hundred and thirty-eight million pound mark. On the contrary, in 2008, the company’s revenue dropped due to the country’s economic crisis. The crisis impacted the smoothies demand in the UK and other parts of the globe where the company has its stores (Aaker & McLoughlin, 2010, p. 235).
Research Sources
Various kinds of literature have been reviewed for the IMC research purpose to get information about the smoothie industry sector trends. Various library websites such as Proquest and Ebscohost and internet articles have been reviewed to get adequate information regarding Innocent Smoothies, consumption patterns, and planning the media vehicles and communication strategies to support it.
Campaign Rational
The company’s macro and microanalysis (external and internal analyses) will be performed through PEST and SWOT analyses to find its position in the UK market. In addition, the findings summary, recommendations, and conclusion will be produced from the micro and macro analyses to answer the company’s future plans.
Competitors Current in the Market
The major competitors of Innocent Drinks are Tropicana and Pepsi-owned companies. Pepsi owns approximately twenty-nine point three percent (23.9%) of the UK market share. The Innocent Drinks competitors use a similar marketing strategy focusing on their products’ health benefits. In addition, various marketing strategies, including packaging appealing artwork, have been used by these companies to improve their brand loyalty. In comparison to Innocent smoothies, Tropicana smoothies are a third cheaper. Therefore, attracts more customers who are more concerned with the price rather than the process used to manufacture the products.
Extremely aggressive tactics have been applied to the brand, triggering the creation of products aimed at the smoothie kids’ market. As such, the Tropical company has set low prices to maintain its competitive advantage. Since the launch of Tropicana smoothies in 2008, the company has achieved its principle objective of strengthening its market presence by various means, such as using broad television advert campaigns. Its ethical values regarding environmental sustainability, its fruit sources, and the use of renewable energy to increase its brand loyalty further are similar to those of Innocent (“All about smoothies”). Hence, Innocent needs to utilize the 10 million pounds allocated in the budget to improve its integrated marketing campaign.
Micro (SWOT Analysis)
Strengths
The company (Innocent) drinks have distinct capabilities that have enabled it to survive in the highly competitive smoothie industry. How the company’s products are packaged has made contesting with its competitors easier. For example, the packaging is done to combat environmental issues. The bottles used for product packaging are always transparent. Similarly, the bottles contain succinct information about the product.
Moreover, the packaging bottles have one color. Numerous customers have easily identified Innocent Company’s products in supermarkets and restaurants because of their uniqueness. The unique packaging is the company’s differentiation strategy to distinguish its products from other products. The packaging bottles undergo recycling after being disposed of by the consumers.
Apart from the effective packaging, Innocent Company has adequate resources. For example, the company has enough financial and human resources. The company’s employees have a wide range of capabilities and expertise. It has significantly impacted the company’s innovativeness and creativity. The company’s competitive advantage is provided by its human resources. The company’s financial resources have made it highly competitive, enabling it to invest in new technology (Leeman, 2010, p.35).
The company exhibits a powerful brand. As such, the brand makes it to compete effectively with its competitors in the industry. The development of the brand has been done perfectly to create awareness of the brand. Just like other companies, Innocent Drink offers its consumers unique products that are of high quality. The company’s smoothies are produced from natural fruits rather than chemicals. With its unique products, the company has easily targeted a wide range of consumers like the elderly and young children. This has increased the company’s profits and maintained its market share (Leeman, 2010, p.50).
Innocent company has good communication with its retailers and consumers. The company keeps routine communication with its suppliers, giving them direct support. In addition to that, its retailer’s database is the best. The database helps the company manage its communications with smaller corner shops and large supermarket chains. As for consumers, the company keeps in touch with them via letters, emails, and postcards, among others. In addition, the company possesses a “banana phone” where consumers can air their opinions regarding company performance and products (Hutton, 1996, pp. 155-162).
Weakness
Innocent Drinks face challenges in response to prices. It is tough for the company to smoothly adjust its prices to meet the consumer’s changing needs. For example, in case of low demand, the company cannot lower the product prices. It is because when the company lowers the price, it will significantly impact the company’s brand and lead to losing clients. As such, the company’s sales have been greatly affected during the recession. It is because the company cannot adjust its prices accordingly.
Furthermore, the entire market is the company’s target as it does not possess proper strategies to separate its market according to the consumer’s needs. For example, the elderly consumers’ need has made it difficult for the company to split its market. As a result, it has been challenging to concentrate its resources and efforts on a single market segment. As a matter of fact, the company needs to review its marketing and segmentation strategies if it wants to meet the expectation of its consumers. Without the two, the company is easily prone to aggressive competition since the majority of the firms in the industry have market segments and a single target market (Westwood, 2002, p.65). In addition to the above, Innocent company exhibit a low customer base. In comparison to its competitors, its customer base is relatively smaller.
Threats
Like Innocent Company, numerous companies also supply the market with soft drinks and smoothies. The companies have come up with brands that are unique to achieve competitive advantage. Some of the Innocent competitors have brands similar to its brand. This makes it extremely difficult for the company’s customers to distinguish its brand from its competitors despite being clearly packaged and correctly labeled. As a result, the company’s sales have been affected as some individuals confused the brands and end up purchasing brands that other firms offer.
Another threat is that customers keep changing their tastes regarding product variety and range. Another threat is in terms of cultural differences. The success of Innocent Company has primarily relied on language. Differences in terms of culture might create a barrier for the company while expanding to other continents in the world. Brand susceptibility is another challenge. Given that the company is expanding, the value of its brand will be subjected to greater scrutiny regarding its actions. For instance, it received much criticism when it collaborated with McDonald’s.
Opportunities
There exists a trend in the global market that encourages individuals to be health conscious. As a result, people have diverted their attention to naturally produced foods such as Innocent smoothies and drinks. It is because of their natural characteristic and their market reputation. Most people in Innocent markets such as Australia have been forced to stop drinking alcohol and sugary and fatty foods. The main reason is to improve life quality and prevent chronicle disease incidents among the population. These individuals have been coerced to take natural foods such as vegetables and fruits. Most people prefer non-carbonated drinks and smoothies because of their lower harm to the body compared to fast foods. Despite its green credentials criticisms and tie-up with McDonald’s fast food chain, Innocent is good at balancing ethics and size.
Increased market share: The market being occupied by Innocent is continuously increasing as customers are becoming more and more health conscious. It presents an excellent opportunity for the company to conquer more and more markets.
Macro Analysis (External Environment)
Analyzing the external environment is significant to the Innocent Company as it helps it understand the external environment. For instance, the company can understand how various social changes and policy affects it and how it helps it achieve its objectives. Macro analysis helps the company plan well to achieve its goals. Just like other companies in the smoothie industry, Innocent Drinks needs to analyze its external environment to make the right export decisions (Keller, 2001, p. 820). In that case, the company must analyze its legal, economic, and political environment. Other things that need to be analyzed are social and technological factors. For purposes of analyzing Innocent company’s macro environment, PEST will be used.
Political Environment
The United Kingdom’s trading standards ensure the safety of the consumers. In addition to that, quality and fair trading standards are maintained by the UK. Office of Fair Trading is in charge of enforcing legislation. Various pressure groups such as ASA (Advertising Standards Agency) and Pepsi have raised complaints concerning Innocent to ASA.
Economic Environment
The United Kingdom’s economic conditions have not favored numerous businesses for years. It is a result of the country’s economic recession. The recession impacted many businesses’ growth and the country’s gross domestic product. In addition, the consumers’ purchasing power was also affected by the recession period. As a result, the consumers could not purchase services and goods, lowering the demand for services and products. In addition, the United Kingdom’s economic trends and situation have affected the company’s costs, such as the cost of ingredients and energy.
Social Environment
Ethics of the business: Ten percent (10%) of the company’s profit is channeled to Innocent Foundation, which empowers the community through various activities, including post-tsunami regeneration. In addition, the company ensures that its fruits are grown ethically in acceptable work conditions.
Health: Health awareness has grown tremendously in the United Kingdom via NPO advertisements. As a result of the advertisements, consumers have become more health conscious. The Innocent Company has capitalized on this advertisement by highlighting its products’ principal health benefits.
Consumers’ attitude: Consumers have become more health conscious. As a result, the Innocent Company is making its smoothies using pure natural fruits to meet the consumer’s demands. As such, consumers are willing to pay high prices for the company’s products because of their high quality. In order to increase the choice of consumers, the company has developed a variety of products.
Brand image: Innocent developed a trust with diverse health benefits. In addition to that, the brand is affirmed with unique and subtle humor communication. The communication strategy is identified easily with products containing natural ingredients. Finally, poster and television adverts have helped in the strengthening of the brands’ image and growth of the company.
Technological Factors
The company utilizes green technology to carry out its operations. Furthermore, the company recycles its products. For instance, its packaging bottles are recycled after they have been used. The company has also advanced in terms of manufacturing.
Environmental Factors
The company has come up with ways to reduce the wastage of resources. The company’s founders allow the company’s employees to work in their expertise areas. The attitude of the company’s staff is in the brand value testament, being good to the environment and the people. The morale of the staff has been boosted by the company’s rewarding and friendly environment. The Innocent Company also offers healthy products and diverts all its effort towards interaction and communication. For example, they have a blog membership website enabling the company to get valuable consumer feedback.
In the current highly competitive market, Innocent Company should understand perfectly well the environment in which it operates. In addition, the company should focus on the external factors that impact its performance. The external factors impact the business’s internal factors and marketing strategies or objectives. Therefore, it should devise ways to deal with all its macro and micro environment to remain competitive in the market (Anonymous, N.d, All about innocent smoothies, n.d).
Strategic context
Ansoff Matrix
The Innocent company will determine smoothies market growth through the Ansoff growth matrix given the aggressive competition from Tropical Smoothies, PepsiCo, Happy Monkey, Locozade Sport, and Red Bull, just to mention a few. The company can develop its business strategy direction through market development and market penetration, diversification, and product development (Watts et al., 1998, p.101). Through product development, the company should come up with new types of product flavors, added value, or improvements, increasing its market share in the current market. In addition, the company should strive to exploit the existing market opportunities over competition without adding any value to its existing products. Segmentation strategy is the main issue affecting the Innocent Company. In that case, the company needs to expand into new markets by considering developed segmentation strategies. As such, they should satisfy the needs of both the young and the elderly population. It can also be achieved by the company going global. Furthermore, as shown in the figure below, the company needs to reposition itself into additional or other industry sectors or diversify into new markets and products.
The Ansoff product-market matrix output is a series of growth strategies suggested that set business strategy direction.
Porter’s Strategies
What strategies firms choose and how they compete are significant economic questions. Answers to these questions help explain a firm’s successful and unsuccessful competitive positions and moves. Moreover, it helps a firm understand the causes of its worst and better performance. A firm’s improved competitiveness understanding serves as an input in improving policies regarding competition and related challenges. Improved policies provide support that is valuable in developing markets and businesses. Given the competition significance, businesses need to identify more competitive strategies such as Porter’s 1980, 1998, and 2004 models. The model focuses on three generic competitive strategies: cost leadership, differentiation, and focus (Ormanidhi & Stringa, 2008, p.55).
Porter (1980, p.11-15) argues that the strength of a firm falls into one of the following headings: differentiation and cost advantage. The Innocent Company uses product differentiation to remain competitive in the market. Through a product differentiation strategy, Innocent has developed products that offer its consumers a unique attribute. Its customers highly value the unique attributes as they view them as better off than the company’s competitors. The unique attributes are such as the use of natural fruits and packaging designs. As a result of the unique attributes, the company has been able to charge premium prices for its products. Through the allocated budget, the company should be able to access effective scientific research, recruit and train a creative team in product development, and build a solid sales and marketing team to communicate the products’ perceived strengths successfully.
The IMC Campaign
The IMC Role in marketing management
The Concept
IMC (Integrated marketing communications) emphasizes the advantages of harnessing synergies across various media types to build product and service brand equity. Practitioners and theoreticians have embraced the IMC concept firmly well-established in marketing. The American Association of Advertising Agencies defines IMC as a marketing communications planning concept recognizing the comprehensive plan’s added value. The comprehensive plan helps in evaluating the strategic roles of various communication disciplines. For instance, direct response, general advertising, public relations, and sales promotion. The IMC joins these disciplines to provide consistency, clarity, and maximum impacts on communication (Schultz, 1993, p.17).
IMC is a tool that is extremely powerful in reaching a company’s target audiences with persuasive messages. There exist debates among academicians concerning IMC’s scope and nature (Gould, 2000, p.25). Over an extended period, marketers have had the privilege of selecting the perfect combination of various elements of the promotion mix to be successful in specific competitive situations. The combination is done based on the following elements: personal selling, advertisement, publicity, word of mouth, sales promotion, and other significant tools that attract awareness, attention and create an image.
The greatest strength that IMC has is its flexibility. A finely crafted IMC helps influence target audiences that, in most cases, are unreachable (McCarthy, 2005). In addition, if handled well, IMC can reflect a combination of unique elements depending on the promotion situation. It is because of its effectiveness and versatility. The new millennium came in with an era of unparalleled choice of consumers and marketers unparalleled challenges. Despite the marketers’ recognition of the broadcast entertainment industry fracturing, current events have pushed boundaries that are traditional beyond their expectations. The widespread availability of cable television offers hundreds of entertainment channels that cater to various tastes. As a result, traditional television networks have been significantly humbled.
In light of the above, marketers no longer exhibit effective and reliable ways of reaching mass markets. On the contrary, the situation might not be catastrophic since they can still hit their niches. The availability of various television channels in numerous locations provides opportunities that are narrowcasting and have the potential to reach specific audiences interested in specific topics. For instance, audiences are not only interested in sports but also in specific sports, like soccer and tennis. However, commercial avoidance by viewers diminishes specificity benefits. Hence, marketers are pursuing ways that get the attention of the consumers outside events being deemed as effective. Consumers attending various events, such as sports, get immersed and participate actively in the experience.
In comparison to broadcast media encounters, events are quite distinct. For instance, they are always interactive, as the crowds can complain, cheer, or catch a foul ball. Such event interactivity illustrates that consumers experience an involvement heightened by the situation. As such, they may attend to advertising stimuli or cues at the event that are marketers programmed. Involvement is extremely significant to any marketing communication that wants to be successful. The principal reason word of mouth and personal selling are more effective than publicity and advertising is their perceived involvement (Digital Strategy Consulting, 2009). Flexibility and effective use of elements by IMC provides promotion managers with a wide range of valuable applications. Due to the increased growth effects of environmental factors, marketers need to exploit IMC’S flexibility to reach their target audiences (Pitta et al., 2006, p.156).
In light of the above, marketing communications plays a significant role in maintaining and building stakeholder relationships. In addition, it helps promote these relationships with reference to channel and brand equity. Promotions and advertising of brands help drive sales volume and traffic, while marketing outcomes and efforts are managed and measured at the brand level (Dawar, 2004, p.31). As a matter of fact, in response to competitive moves that are short-term, various firms use their brand. For Integrated Marketing and Communication to be successful, there is a need for an organization to understand the relationship that exists between market orientation (MO), brand orientation (BO), and IMC, as shown in the figure below.
According to the figure above, the organization’s culture is represented by market orientation through market concept adoption and processes and systems that underlie the market being oriented (Harris, 1998, p.110). The business unit or functional unit is represented by brand orientation. This section focuses on the company’s brands strategies and brands. The brand strategies often support stakeholder and customer relationships regardless of the state of the brand (Bridson & Evans, 2004, p.403). In this model, IMC represents the establishment of integrated marketing communications to achieve stated communication and brand objectives and provide the bridge between the brand’s strategy and actions to build essential stakeholder and customer relationships.
In summary, IMC involves a couple of processes. Thereby indicating that all departments in an organization that interacts with strategic stakeholders and customers must work collectively and share a similar understanding to develop long-term brand relationships. The IMC should shift its focus from customer target audiences to the involvement of principal stakeholders such as the social community, the media, distributors, suppliers, investors, and employees. Effective and successful IMC should have the following characteristics: it should be more strategic in comparison to execution, should not only focus on promotional messages, sales, and advertising but also include one-way as well as two-way communication. Furthermore, it should be result oriented.
Despite the significance of implementing IMC procedures, most companies’ organizational structure restricts or burs its successful implementation. According to Percy (1997, p.225), the existing organizational structural barriers to integrated marketing communication concepts are such as the absence of horizontal communication, decentralization, functional specialization, lack of expertise and IMC planning, inadequate budget, fear of change, corporate culture, and absence of database technology. In that case, these barriers need to be assessed by various firms and clearly understood to facilitate the implementation of IMC within an organization.
The IMC Changing Nature
Marketing communications and ongoing global changes in the business environment drive the IMC focus. There is a need to improve the effectiveness of marketing communication strategies. The changes include sophisticated customer database development, mass media fragmentation, new customer acquisition costs, customer defection, the correlation between above and below lines of activities, and consumer response changes to traditional approaches and tools of communication.
The Concept Applied to Innocent Company
Integrated Marketing Communication has been viewed as an emerging communications philosophy and a process of strategic management of various companies. The IMC is used to manage the development of strong brands. Consumers tend to specify their demands when they become aware of smoothies varieties, styles, and regions. As such, their demands correspond to a range of consumption and lifestyle situations. Consumers who are informed have a greater capacity to trade between brand labels and brands’ price that offers superior value. On the other hand, un-informed consumers rely more on brand label cues and communications to make their smoothies choices amongst competitive level high activity.
The Innocent Company faces aggressive competition from other companies in the industry. However, through the use of web technology, print media, and traditional advertising method, the company has strategically coordinated company messages and brands based on consumers’ understanding of value perception (Kitchen and Schultz, 1999). In the global soft drinks and smoothies industry context, understanding consumers’ views of value requires a wide range of professionals in marketing communications. The professionals should have a greater understanding of the company’s target consumers and how sales activity and brand building are supported by marketing communications. The Innocent Company does not have a target market because they have been unable to split the needs of the elderly population. However, its employees possess various expertise, thus making the company increase its sales volume.
The increasing retail power and brand competition have triggered the need for the company to adopt IMC. Worldly, competition is increasingly becoming more fierce as brand-new products get into the principal markets and the traditional and existing producers improve on product quality, viticulture practices, and of great significance, brand communication and marketing skills. In summary, Innocent Company marketers must focus more on competitive marketing strategies. The strategies will be essential in providing the company with a sustainable advantage in the globally competitive environment (Howley, 1990; Spawton, 1990). Appropriate application of IMC will enable the company to achieve a superior market position. In addition to that, it will facilitate the competitive market strategies implementation. The Innocent Company’s adoption of IMC will enhance the development and creation of strong brands. Consequently, it will be able to access both channels of partners and customers and brand positioning to deliver a superior value to more knowledgeable and assertive consumers.
IMC Performance Objective
The IMC objective is to develop a range of Innocent smoothies. Given the fact that this is a highly successful product in the UK market, the scope of the product to grow through the development of the market, such as new customer acquisition, is limited. Therefore, the IMC objective is to focus on product growth via product penetration amongst the existing targets. Specifically, the IMC’s role is to shift consumers’ perceptions about occasions they might take in smoothies. This is done with the overall aim of encouraging people to incorporate the drink into their daily activities. The objective needs to be fulfilled in one year after repositioning the product in the UK market.
Consumers Profile
The Means-End Approach
The 20th century is characterized by technological, social, and cultural change and innovation. This is a mixture of communication means, the internet, interpersonal interaction space, shopping, and business. The significant growth of customer value in marketing literature is nothing new. The application of customer values has always been related to brand and product strategies such as positing and differentiation, which helps a company such as Innocent gain a competitive advantage over its rivals (Dibley & Baker, 2001; Gutman, 1981; Vriens & Hofstede, 2000). This has been used to establish segmentation strategies as a tool that is extremely powerful in creating communication strategies and constructing a powerful explanation of the behavior of consumers and their attitudes determinants.
The means-end theory argues that the manner in which customers relate to a product can be portrayed by using three interconnected levels of a hierarchical model. The three levels are personal values, product attributes, and consequences of its use. The model helps interpret and analyze how consumers perceive a company’s product or service as self-reliant and how it impacts their daily lives, such as the Innocent smoothies, which improves their life as it is healthy and made from natural products rather than food concentrates.
The basic structure of a means-end chain
Decision-Making Process
Consumers often undergo various stages before they purchase Innocent smoothies. The decision-purchasing processes are shown in the figure below.
Need for recognition: Company marketers often try to make consumers see the need to purchase their products.
Searching for information: Through print and electronic media, customers search for information to find out if the products offered adequately satisfy their needs.
Evaluation of product: Since it is not the Innocent Company that produces smoothies, a consumer may design an evaluation criterion that might aid him or her in choosing the product that satisfies her needs. For instance, the product may be evaluated in size, price, contents, and packaging material. After evaluation, the customer decides which product to purchase and from which store. The next step is post-purchase use and evaluation. This is the stage where the consumer has already acquired the product and finds out if it matches his first-hand information. The majority of companies try very hard not to disappoint their customers. This is through offering the warrant and having sales and marketing persons help the consumers in case of any need in terms of the product. The last process is product disposal. The Innocent Company, being environment conscious, recycles its products. After being used, the smoothie bottles are recycled and reused again, thus minimizing the company’s production costs.
Segmentation Strategies
Various segmentation strategies can be used by Innocent market to segment its market. A market segment consists of people with similar characteristics. In addition, product demand always depends on the functions and price of the product. A perfect market segment should exhibit specific qualities, such as being distinct from its competitors, and be accessible using a variety of market interventions. The target group for Innocent Drinks is adults and young children in the market. The company has not yet established strategies that target individuals who are old. Therefore, the company is required to segment its market for age. This will enable it to provide its consumers with adequate services.
For example, Innocent Company needs to offer smoothies to adults aged forty-five (45yrs) and above years. Innocent Company currently does not have a specific market segment. As a result, it is extremely difficult for the company to meet its client’s needs. The market segmentation concerning age will enable it to develop products that satisfy the needs of various customers in distinct segments. Customers who are elderly require products that are distinct from those offered to young populations. In that case, the company needs to align its products with the elderly customers’ expectations by adopting the right segmentation strategies (Dunbar & McDonald, 2004).
Branding Issues
Positioning Strategy
Innocent Company must use distinct positioning strategies if it needs to target its products. To begin with, the company can use the product’s features to position its products. A company is supposed to identify the product’s best features and use them in product positioning. Therefore, Innocent Company should select the smoothies’ nutritional features to sell the products. The company should also take a step to create awareness among the public on the smoothies’ health benefits.
Moreover, it should use IMC strategies to make individuals acknowledge that Innocent smoothies are hundred percent (100%) made of fruits and are non-carbonated. As such, they are from high fat and sugar content. In addition to that, the company can make use of the consumers in product positioning. Thus, the company has to design products for specific users. For instance, elderly people should have smoothies that satisfy their needs.
Similarly, young people and children should be provided with their own smoothies. The company applies a user strategy for product positioning in the United Kingdom. This is because the company produces products for adults and young kids (Luther, 2001).
Communication and Campaign strategy
Smoothies of Innocent Company has an extensive assortment of campaign objectives. The firm aims to extend its product line. As the chief product for the company, more product lines are being innovated. For example, guest smoothies and seasonal smoothies. Going by the name seasonal goes to the different seasons. Presently, the firm aims at young adults and children.
Furthermore, the firm plans to extend the product line to satisfy the needs and preferences of other individuals in the community, such as the elderly. Another goal is to attain a rival advantage. The firm desires to promote Smoothies’ brand to be in a position to rival other companies in the industry (Aaker & McLoughlin, 2010; p. 123).
Likewise, Innocent Smoothies has plans to take some of its products to foreign markets. The most preferable foreign market is the Australian market. This will enable the company to improve its sales revenue and its production by approximately 68.5 % in the subsequent four years. Consequently, the firm intends to export about 60% of its Smoothies product to Australia in the four ensuing years. The firm’s marketing strategies and objectives align with the company’s mission of involvement in innovation as the unsurpassed tradition in the industry of foods and drinks. Implementing this will involve proper product communication through an efficient promotional mix, including advertising, sales promotion, and proficient public relation.
Communication Messages
The main aim of introducing Smoothies in the market is to reduce the risks associated with unhealthy lifestyles. Hence the campaign dubbed ‘here to save the peckish’ intends to inform potential consumers that the product can improve their diet content, especially during seasonal celebrations such as Christmas. The main objective is to capture about 66% of the existing market share and improve its real fame while staying genuine to its brand image. As a result, the company intends to invest over £2.7m in the marketing campaign that will run throughout the year.
Promotional Mix
Advertising
The firm intends to employ various advertising media such as TV, posters, and digital adverts anchored by a developed website, on-pack, and in-store and iPhone usage. In a move instigated in the year 2000, Innocent UK found that the Smoothie product brand with a market segment of 75% and intends to grow by a further 14%. Compared to the previous growth of 11% in 2010, the firm intends to sustain the brand’s market as the chief player in the food & drinks industry. The target market for the adverts on various media will be mainly kids, hence the launch of the Innocent Kids website. The website will promote various initiatives to reach out to millions of children in planting and harvesting their fruit farms. Easy-to-grow seeds will be distributed to the kids, a platform for kids to upload their photos of progress for their plants and greenhouses to host a variety of competitions and gardening tips. In addition, Innocent uses the phrase ‘Super fruit’ to imply its unique range of fruit juices and its legacy of un-eddy advert.
Public Relations
The company has one of the most popular brands, attracting so much constructive publicity that it is remarkable. The public relation team comprises two members who have built the reputation of the firm’s products to great fame in the country. There is a huge connection between the size of the internal affairs of the company and the level of publicity by the organization. Suppose the company adopted principles of public relations in the entire firm. In that case, the role of the existing public relation team will only have to handle the engagements by the media. This might involve reacting to questions raised and organizing interviews and other press events. The two members of the company are doing great in this area to enhance positive public opinion of the company. On the contrary, it might be ill of them if they would share the corporate level of opinion on a daily basis regarding public relations. It would be detrimental to the company as well as a lack of transparency.
Sales Promotion
The company has devised various sales promotional activities to boost new markets of its products. Innocent Smoothies will use restaurants, supermarkets, and other appropriate entertainment places to promote the sales of its products. The supermarkets will display smoothie products in convenient, visible places to ensure potential target customers see the products. This method of product promotion will increase the awareness of its product brand among potential consumers. Restaurants will have their menus structured in such a manner as to hasten the marketability of the products. More to the point, the smoothie brand could be used in meal offers to increase awareness and create customer loyalty to the product brand. For example, the firm’s strategy could be based on offering clients smoothies at a lower price if they buy a meal.
In sales promotion, the element of place is very significant. All firms must ensure their product and services are accessible to consumers at an appropriate time and place. Innocent Smoothie must place its products in convenient places, such as restaurants and supermarkets. For example, Innocent Smoothie should aim at supermarkets and chain stores where its target consumers frequently visit. In fact, where adults, old aged, and children shop from time to time. It will ease the accessibility of the products by customers. Proper positioning and placement of products enable the firm to upgrade its positioning strategy. It assures the firm places its products in the right location for easier accessibility (Weisten, 2004; p.71).
Marketing Proposal to Venture in Australia
By evaluating the major events and strategies of Innocent Drinks firm, it is now feasible to conduct an innovation for a marketing strategy that can be used to distribute product brands in Australia. Since the company has a positive brand image, sustaining the strategy in a recession is possible. Besides is apparent that the depression has molded consumers into a sense of being more responsive to pricing mechanisms which demand that Innocent firm must push their worth for money. Moreover, the company is experiencing hardships in stiff rivalry with other firms in the United Kingdom. In addition, the Australian firm Nudies has similar products to Innocent’s production. In this line of thinking, various strategies have to be applied in entering the Australian market, which must be considered by Innocent Smoothies production.
Strategies to be used by Innocent Drinks Smoothies
Apart from pricing strategies, Innocent Drinks Smoothies can make use of the preceding tactics:
Worth for money
Apparently, consumers who lack well-paying jobs possess very little cash to use because of their low income. As a result, their buying behavior is restricted to their income level. To trigger an increase in their buying behavior, Innocent Smoothies must use Buy-One-Get-One-Free. Through this strategy, the firm will minimize its level of holding inventory and further reduce the height of price sensitivity among consumers. Since the worth of their money has been provided to them, their buying behavior will be improved even with the little income at their disposal. A similar tactic can be used in the Australian market, which will increase demand for Innocent Smoothies tremendously (Cottrell, 2008; p. 37; Brassington & Pettitt, 2006).
Exceptional Flavors to Premium Supermarkets
Innocent Drinks can invent new products with exceptional taste to stand as products of constricted flavor. Upon establishing this product, the company should therefore proceed to invent good deals with various premium superstores in Australia. An excellent example of the superstore is the Coles Superstore, where Innocent Company can inquire about a suitable position to place their products for sale. This tactic would increase the sales revenue in the supermarkets, enhancing the product brand penetration in the competitive market. This tactic increases the awareness of the product brand by Australian consumers, which then boosts the level of sales. It is not a must for supermarkets to be premium stores. This tactic can also be used for non-premium supermarkets. For target consumers who can afford the products, this tactic is instrumental in boosting sales for the company.
Investing in New Products for the Elderly
According to the Australian Bureau of Statistics (2011; p. 517), the country is currently in fundamental transition due to the increasing population of the elderly, which impacts the policies in the economic and social sectors. Therefore, this is the right moment for Innocent to invest in this type of market environment. The invention of drinks which suits the elderly is essential in promoting the products among the old aged in Australia. First, the firm’s products can be tested in the United Kingdom market and, later, driven to Australia.
According to Mintel Group (2008; p. 61), a preposition had been provided concerning the population of people between 45 to 54 years of age being projected to go up. Therefore, Innocent Firm must heavily consider new products appropriate for ages beyond 34. For instance, the company might invent an Innocent Ancient Smoothie product. The flavors injected into the product could be those that foster the level of memory among the old. It is because most old people prefer recipes with traditional flavors such as ginger, artichoke, sage, or rosemary, which helps them remember their youthful life.
Investment in Restaurant and Resorts Menus
Innocent can consider forming alliances with numerous famous restaurants in Australia. Such restaurants include Y Bar, Two Wheeler Creek, Sage Café, Bistro, Bluestone, Best, De Groots, and Marron. This implies that the company can enter into several agreements with the various links of restaurants to have their products incorporated into their menus for accessibility by the consumers. The customers can obtain the products from the restaurants accompanied by meals through different offers, which may be deemed appropriate by the two parties in the agreement. For instance, the firm can bargain with the hotels to offer half the cost of the drinks which go along with the meals. Eventually, the company will boost healthy living through nutritious meals such as vegetable salads and fruit salads. An improvement in sales would then be observed, which will also mutually promote the level of sales in the restaurants (Dodds, 2009; p. 89).
Innocent Alcohol-Free Cocktails
The invention of new product brands without alcoholic flavors but with other flavors can be intrinsic to the company. The primary benefit will be to capture the market segment comprising non-alcohol consumers. Besides, the varying tastes and preferences have a hand to play in this invention. Even though it might be challenging to incorporate this into the smoothies’ products, most customers who think the company promotes healthy living will be more than delighted by this development. Cocktails with Smoothies without alcohol will be more than important if the consumers are elderly because non-alcohol content is essential for their health.
Conclusion
Innocent Smoothies are a company that can make maximum use of its marketing strategies without necessarily interfering with the cost of the products. The attention is shifted towards the unmentioned demographics, picking an appropriate channel such as restaurants and superstores and new product creation. With efficient execution of these tactics in the European and Australian market base, the company can benefit more from being victors and attaining a very efficient rivalry advantage in the long run. Therefore, all stakeholders are required to join hands in making the brand a success in the foreign and local markets as it calls for collective responsibility in the success of the brand.
Campaign Delivery and Recommendations
Innocent Smoothie Promotional Financial Details
Innocent products have the largest market share in the food and drink industry in the United Kingdom. A variety of factors have a part to play in the market share. First and foremost, the variation in eating habits among the nationalities of the United Kingdom has resulted in a surge in demand for the firm’s products. The significant market share is owed to solid marketing strategies and brand awareness in the firm. The company uses different market strategies to trade its products, such as the Internet and ancient marketing. This has fostered many consumers to be aware of the product to sustain the big market share.
Consequently, the reported net income in 2010 was about £ 128 million. This is the highest profit ever to be achieved which is linked to ample marketing strategies in the firm and top-quality product brands. Most consumers prefer smoothies over other rivals’ products, which has triggered the trend of making more and more profits for the firm. For instance, in 2007, the firm recorded sales revenue equaling £ 134 million. Nonetheless, the revenues slumped in 2008 due to the country’s extreme financial crisis. Most companies were highly affected by the economic crunch, and the Innocent Smoothie was not left out. Its volume of sales went low due to lower demand (Aaker & McLoughlin, 2010; p.59).
Marketing Strategies
Market strategy is a step taken by a company that helps it to evaluate how it applies its handy resources to mold the variations within the marketing background from which it carries its functions. A firm should repeatedly execute and mold various market strategies to benefit and sustain a rival upper hand over its competitors. Examples of market strategies may involve the capability of the firm to form a consumer product that is more eye-catching and enticing to the final customers at the focus of other comparable and cut-throat products.
The current world business is increasingly becoming very competitive, which demands that companies adapt to the revolution by developing marketing strategies aligned to the environment in which they conduct their activities. Modifying the environmental changes comprises executing marketing strategies critical to the business’s success and the company’s perpetuity. These strategies are built via effective organization and planning on the factors which would control the company’s operations in marketing plans. A company has to make efforts to find ways of using the resources available to ascertain that these resources are proficiently applied for the betterment of environmental adaptation under which the firm operates.
A section of marketing strategies comprises variations in the promotional mix, modification of pricing techniques, a strategy of distributing products, branding plans, creation of products and distinction strategy, and variations in the sales plans, among other strategies. These strategies are harmonized for the objective of fulfilling the company’s goals of marketing. The plan/pattern of management and the marketing strategies collectively rely on factors that aim to replicate the firm’s makeup. This, therefore, implies that any company that is product based has a propensity to accustom to the tactic in line with the goods being offered.
Marketing Strategy Analysis for Innocent Smoothies
A huge number of organizations globally, whether big or small, are tirelessly searching for strategies that can bring about dependable promotion, which is booming the business. This one element has made Innocent firm a maker of smoothies to attain high rivalry and strong categories. It should be noted that the strategies applied by Innocent are not that mysterious, and neither are they unattainable. It is because these are procedures that any firm can emulate to innovate brands of fresh labels. The traditions and ethics of the firm it to give goods established from pure and new fruits to the customers. It has been an element of the organization that has constituted Innocent Smoothies. The notion of the company is that any product it produces must have tastes and provide the customer with a pleasant emotion. The firm also pays attention to the dangers of chemical additions, additives, and concentrates in the drink brands.
Smoothies are the primary product brand for Innocent Drinks firm. Nonetheless, the life of Innocent Drinks has not been an easy affair. The firm has encountered different challenges, like variations in the consumer’s tastes and preferences. The firm has experienced these problems since its initiation. The company’s local market share is 65%, with a formidable labor force of 278. The top senior management in the United Kingdom has a market turnover of over £ 100 million. Another main challenge the firm faces is the new competitors’ entry threat. Therefore, the firm has focused on discipline, recruitment, extension of the product line, and sustenance of its workers.
The firm’s initiators have devised marketing tactics that will enhance its ability to compete perfectly with the upcoming rivals. The most critical element is the way the company does its product packaging. The packaging is so attractive, leading to more constructive responses from consumers regarding its attractiveness. The furtive lying behind this packaging method is that, in general, humans are always attracted to good and interesting items. Therefore, Innocent has used this strategy to stay connected to the existing market. The firm’s reasonability is to create a significant product line found on the consumers’ health and items individuals are fascinated by.
Segmentation Strategies
In segmenting their market, companies are exposed to a variety of segmentation strategies that do exist. A segmented market consists of individuals with similar descriptions but different buying behavior. For example, in the energy sector, we have the domestic and industrial distribution of energy, though we need the energy for more or less similar uses. Moreover, the insurance market has individuals with the same needs for products and services. However, the product’s pricing is found on the individual’s capability and the use of the products. There are certain features that an actual market segment must have.
First and foremost, the segment must be distinct from the other market segment. The segments must be accessed via different interventions in the market. In this respect, Innocent Smoothies aim to reach adults and young children in the market. Currently, there are no clear-cut strategies to reach the old population. The firm is then needed to fragment the market in line with age to be in a position to provide efficient services and products. For example, the firm can decide to provide smoothie products and soft drinks to consumers above 45 years of age.
At present, the firm lacks a particular market partition, and this has resulted in poor satisfaction of customer needs. The market segmentation strategy will allow the company to fragment its market share into various parts. In turn, the company will be able to improve its product growth; hence the customer’s needs will be met due to awareness. Old-aged customers will require products that are unique from the young consumers. Therefore, the firm must connect the firm’s product line with the anticipations of old-aged consumers. Ultimately, the organization must embrace an appropriate segmentation strategy (Dunbar & McDonald, 2004; p.93).
Targeting Strategies
Aside from segmentation tactics, target strategies can be used to develop rivalry benefits and acquire the customer’s needs. Upon identifying the market segmentation, the firm has objectives to discover the target tactic to apply. This strategy helps the firm reach out to the market segment that requires fulfilling the customer’s needs. Different strategies exist for which the company can make use of in aiming for their target market segment. One of the strategies is the concentration strategy of marketing, selective marketing, and undifferentiated marketing strategy. Innocent Smoothies can use the concentration strategy to aim for its market. The niche strategy is one way of permitting the firm to aim for one market. For example, the firm can choose young consumers as in the past.
A variety of benefits do exist for niche strategy. One of the benefits is that it fosters sales increase in the organization. There is a general presumption by the company that consumers’ needs are the same. Nevertheless, this kind of tactic can impact the sales and the satisfaction of many consumers. This is because most consumers might not really go for a standardized product, but they go for a product that satisfies their needs. Currently, the firm uses an undifferentiated strategy, making it challenging to meet customers’ demands. The best tactic for Innocent product brands is the niche and differentiated strategy. The company will be in a position in a specific niche. The firm will then achieve the ability to understand customers’ needs (Luther, 2001; p.61).
Positioning Strategy
The firm requires applying various market positioning strategies to aim its products. The firm might use the features of a product to position its products. A firm is under jurisdiction to ensure its products are positioned in the household. In this scenario, the firm must pool its nutritional characteristics of smoothies to make a rational decision to sell or not educate its customers on the benefits and health hence using this as a platform to position its products. A range of health gains compared to other product brands distributed in the market. The products are not susceptible to risks health for the elderly due to their low level of sugar and fat content. Therefore, the product is more appropriate for old-aged consumers. Besides, the products do not use carbon and other additives to preserve the products hence healthy for every consumer. In addition, the firm can use the consumer to position its products. Thus, the firm must design so that it is specific for different uses.
Marketing Mix
Every firm needs to have an efficient marketing mix. It enables the company to sell its products and services successfully. The type of marketing mix applied in a company dictates the level of productivity and consumer satisfaction. Organizations that can use elements of the marketing mix in an affluent manner make it easier to gain more customers and retain the existing cliché of customers. Conversely, those organizations that do not use the elements of the marketing mix better will find it hard to acquire more customers and grow their level of productivity. Most organizations, such as Innocent Drinks, have recently found it difficult to incorporate marketing mix elements in their operations. Therefore, the company finds it challenging to distribute products, upgrade its products, and sustain its customers. It can be noted that Innocent Smoothie only uses one of the 7 Ps of the marketing mix elements. That is the product.
As a result, the organization has always maintained the quality of the product and its uniqueness. In so doing, an exceptional marketing proposition by promoting the goods’ production and packaging. The goods produced by the firm are specifically fresh fruits manufactured; hence the term used by the firm is always 100% fruits. The packaging of the smoothies is done using a transparent package that is unique from the rivals. (Sengupta, 2005; p.159). Therefore, the company should use the 7Ps to upgrade the products manufactured and ascertain the firm’s ability to attain its marketing objectives. The 7Ps of marketing mix comprise place, product, price, process, promotion, people, and physical evidence. Notably, most companies use price, promotion, place, and product; otherwise, what they term the 4Ps of the marketing mix. The 4Ps have enabled organizations to produce constructive outcomes because positioning strategies are enhanced.
Synchronizing on the elements, one of the Ps refers to people. Companies have a duty to hire the right people to guarantee efficient services and better-quality products. Moreover, companies must provide their staff with appropriate training to upgrade their level of competence and expertise. Hiring the right staff and proper training enables the company to acquire a competitive advantage. It is due to increased innovation and creativity among the employees. Thus they are in a position to improve on their promotional tactics and positioning tactics. Consumers make judgments based on the product’s quality, which the employees instill. Therefore, the employees need to possess appropriate attitudes and skills to promote customer satisfaction. Innocent Drinks must therefore adopt the other Ps by recruiting the right staff to promote creativity and innovativeness. It will sum up the value of the products being provided and ensure a better quality of the products. It will also enable the firm to improve its sales revenue.
Another P stands for the processes used in the company. The process is used to recognize the structure and systems that are applied by the firm offering its products and services. Innocent Drink, like any other company, has in place systems that are applied in producing smoothies and other soft drinks for its consumers. Therefore, the firm must upgrade its processes to provide the best quality services and goods. Developing the processes in the company will enable it to achieve its corporate objectives, such as improving the sale revenue and establishing an awareness of the brand. The organization must be able to provide faster services in different outlets where its goods are being marketed. For example, the restaurants promoting their smoothies must receive the products at the right time to guarantee customer satisfaction (Sengupta, 2005; p.121).
Physical evidence is another element of the marketing mix. It is used to connote the location where the products are being produced. Most companies are judged by consumers based on physical evidence. Those companies with relevant physical evidence find it simpler to pool in more customers since the consumers rate the company highly. In contrast, companies that do not have better physical evidence normally find it complicated to entice more customers because the consumers do not prefer buying from them. In turn, this has an impact on the level of productivity of the companies. Most consumers anticipate the locations where the goods and services are being presented for sale to be friendly and tidy.
For example, consumers expect restaurants and other eating places to be tidy and friendly to buy goods from the place. In this respect, Innocent Drinks must focus its attention on the physical evidence to be in a position to attract more customers. The supermarkets must also be tidy and have an appropriate product purchase environment. In keeping the restaurants and supermarkets tidy, the firm will advance on its positioning tactic enabling it to position its products and services appropriately. Besides, the organization will be able to improve its sales revenue and perception of the firm as the consumers will perceive the organization positively (Weisten, 2004; p.11).
What is more, there is pricing as another significant marketing mix element. Through pricing, profits are generated in any company. Pricing is also meant to promote other marketing mix elements, such as product design and product promotion. Coming up with a price for a commodity is not usually easy; hence it must always reveal the connection between the supply and demand for that commodity. There are elements that the pricing mechanism must take into consideration. These include the company’s goals and the positioning tactic used in the firm. Besides, the customers willing to purchase the product must be considered, and the level of competition present in the market. Innocent Drinks lacks efficient pricing mechanisms as the product being offered are affected. This goes to an extent where the product price cannot be modified to achieve the customers’ expectations, affecting sales revenue. Therefore, the firm must use the newly adopted pricing tactic to promote the reduction of cost for the smoothies during low demand for the product (Lamb et al., 2008; p. 51).
Enhancing the product in the organization will enable the firm to achieve the wants of the consumers in the market segment. The firm will aim for various types of customers in the marketplace. For instance, elderly customers who fall in the bracket of over 45 years will be targeted. Besides, market segmentation will also target children and adults who fall below 45 years. The firm must therefore provide smoothie products suitable for children and elderly segments of customers. For example, cocktails can be given to consumers below 45. On the other side, through innovation, the firm should find ways to modify its products to suit the elderly. It must be cautioned that elderly customers must not have their smoothies designed with alcohol, as this increases their vulnerability to heart illness. Packaging must also be done in such a manner to suit the two markets segment: elderly and children.
Eventualities and Controls
In the campaign delivery process, various factors might negatively affect the execution process. These might, to a large extent, influence the marketing objectives and the company at large in the elements discussed earlier. Implementation of the marketing plan is impaired by inadequate resources within the company. It might, in turn, affect the results of the marketing strategy. For instance, inadequate resources prevent Innocent Drinks from expanding and penetrating foreign firms. Apparently, most companies prefer to form mergers and alliances with foreign organizations to minimize the impact of financial risks involved in expanding into export markets. Through mergers, companies ease the methods of venturing into foreign market segments. Elimination of financial risks through mergers ensures the proper execution of marketing strategies. However, it is necessary for the company to have alternative sources of money and a wide assortment of investments. Investments and ventures are usually sources of funds for an organization which can enable the organization to obtain loans from banks in an ample way.
The process of execution can also be affected by inadequate skilled and expert employees. Adequate skills and expertise are needed in marketing strategies, specifically designing and positioning tactics. Therefore, employees must possess the necessary skills and expertise to implement. Competency is required in the exportation and handling of documents and overcoming challenges. Inadequate technology is also another factor to be put into consideration during the process of implementation. Innocent Drinks Company needs technology to invent the right product in the right quality. Thus, the organization must venture heavily into the level of technology to attain the satisfaction of customers (Weisten, 2004; p. 33).
The Campaign Budget
The estimated cost for the various product promotion mix is as follows:
Advertisement for the Product
The estimates projected above were determined through reference to the previous budget. Inflation was provided due to the recent economic crunch that ripped through the country in 2008. The timeline for the product promotion has been provided in Table 2. As can be clearly seen, the strategies of creating a new product brand and promoting its packaging began last year in mid-August. As indicated in the table, the strategy is expected to be through by early December this year. The estimated cost for the activities will be about £1000 for the entire period indicated.
Sales Promotion
Sales promotion to enhance the company brand will cost about £500 and run for about 11 months. The process began on 10th November 2011 and is expected to end on 12th October 2012. Trained and qualified salesmen and salesladies will be used to market the products and paid based on commission. Other avenues to use include proper displays in supermarkets and restaurants for easy access and brand awareness by potential target customers. The restaurants will have smoothies on their menus to create brand awareness among the target consumers. The firm expects that the company’s products will achieve customer loyalty to guarantee adequate sales revenues. Designing the pricing strategy is also essential in the calendar of events of the firm. It is expected to last about ten months to determine a price that will be favorable for either segment of the market. It is expected to cost the company a further £600.
Public Relation
Various activities to enhance public relations will attract a total cost of £600, driven towards the public press, media interviews, and other activities that can enhance the company’s image in the general public. In fact, the two primary personnel behind this are currently working towards a one-year project that will see to it that the reputation of Smoothies is high to promote its sales and customer loyalty. This will involve media relations, guiding the human resource department on the qualities of employees they recommend would be appropriate to build the firm’s image on the product brand. Cooperation among key players in the organization is required to trigger this project to its highest level.
Total Cost for the Budget
The total cost for the promotion activities will be approximately £2700. It comprises cumulatively the cost of the entire promotion mix. The cost will be funded majorly by the investment the company has put in the firm and associated other firms.
Recommendations
The table below summarizes the essential recommendations and results derived from the recommended strategies.
UK Smoothie Market
The graph shows the effect of inflation on the sales revenue of smoothies in the UK market. The estimates reveal a gradual and steady increase in sales revenue over the years. Besides, the trend in market growth can be seen to dwindle in the year 2010 though a steady increase is estimated from 2011 onwards. The slight drop may result from competitors’ influence, who are flooding the market at an alarming rate.
Competitor Analysis
The following summary briefly compares the major competitors and their share in the current market.
With respect to the current reports, the present market share for Innocent is around 80% (IRI Infoscan, 2009). Despite the market dipping, the yearly revenues are constantly on the increase. The growth for the sector, which is the fruit industry, is substantial, which benefits more Innocent Smoothies despite the looming harsh conditions in the market. The company grew 60% in 2008 compared to the close competitor’s 17.4%. It can be noted that the competitors are very few though they impact PJs and their label giving a substantial sales volume into the existing market. Though Tropicana is very small, it is just a matter of time. It plans on growth where a stiff rivalry will be presented in the market segment.
The consumers are all aware of their favorable brands and the location where they can access them. Innocent brands are well known globally, enabling them to have an external influence.
Growth Opportunities for Innocent Smoothies
The brand is currently at the growth stage hence better chances of further growth in the market. The company has an opportunity to expand its product line. Due to the high production costs and the search for proper logistics, Innocent is generally perceived as a premium brand; hence its image is always high in the market. Besides, key government policies such as promoting the product as a healthy option are very instrumental for the growth of the firm. After modification for the economic downturn, further growth in the market share still stands at 66%. However, to ensure continued growth, the firm must deal with the potential mentioned earlier in this paper. The potential threats include stiff competition and recession as an economic factor.
Conclusion on the Integrated Marketing Strategies
It is evident that the company has done much to keep the product’s brand competitive in the current market. The present brand image of Smoothies has to be sustained throughout the inflationary market using the mentioned market strategies. Consumers usually have a meager income to dispose of during a recession; hence they become more price sensitive. Therefore, the worth of their money needs to be emphasized. It can also be noted from the discussion that own label has brands that are rivals with Innocent, but the good thing is that the competitor seems to be imitating Innocent’s brands. It is a relief to the firm since consumers know how to distinguish between the brands. Despite the recession, the Smoothies brand is still experiencing growth. Last but not least, the company has just embarked on targeting the aging population with more advocacies for healthy lifestyles, enabling them to produce more non-alcoholic products. Online advertising has also been instrumental in the promotion of the products.
Campaign Performance Evaluation
The smoothie market in the United Kingdom has declined despite the numerous campaign strategies used in promoting the product. This results from the 30% downturn of the UK economic environment. A report assessing the UK smoothie market share provides the way forward for the falling market share in the UK for the preceding three years. The main aim is to provide alternative options in the present climate to enable the company to grow its sales volume.
The Extent of Economic Environment in the United Kingdom Market
UK’s gross domestic product (GDP) has been on the decline since the year 2004, as can be seen from the diagram below. However, the GDP is expected to rise from 2009 to the next five years, owing to the stability observed in the current market.
From the diagram, there was a slight fall in GDP between 2-3% in the year 2008 to a low down of -5.5% in 2009, which was the climax of the economic crisis. The demand for products declined considerably in the United Kingdom and other parts of the world. The consumer’s confidence went below the expectations of the business entities. This, in turn, affected the level of business performance in the entire state. Innocent Drinks was not spared either. Its products were considered a luxury; hence the buying decisions were greatly hampered. It is because the consumers shifted their attention to fundamental goods such as fuel, clothing, and food.
The level of individual debts went down since consumers did not have confidence in their own employment market. The Bank of England (2009) intervened by reducing interest rates on personal loans. However, the consumer’s confidence still did not resurrect because most of them were unwilling to splurge their cash on luxuries. Despite the plans to recover, the consumers were unwilling to take loans to buy ‘unwanted goods’; hence the interest rates remained low, and the level of unemployment remained high. This damaged Innocent Drinks Smoothies as it could not achieve the required sales volume; its profits were remarkably declining.
In these circumstances, recession remained the primary reason Innocent’s sales and market share declined. Consumers shifted to affordable brands such as personal brands from supermarkets and other cheaper juices. Most of them were unwilling to strain their finances into buying the most expensive brands from Innocent Drinks.
Competitor firms began producing cheaper brands to gain from the fall in demand for the high street. Other firms, such as Waitrose, had to initiate into the market lower-cost brands to compete with the existing expensive brands. Since Innocent is a premium product brand, the only remedy available was to review the strategies used to adapt to the varying market background and sustain its more significant market share. However, as the GDP grew once more, consumer confidence has been reviving steadily but gradually.
The Growing Age of the UK Population
The graph presented below shows the population age distribution of the United Kingdom. From the graph, it can be observed that in the middle of 2008, the optimal age of the population was about 39 years. It was an increase from 37 observed in 1998. The age distribution is set to increase from 45 – 54 years in the near future. It then underlies the significance of modifying the marketing strategies for Smoothies to appeal more to the older age (Mintel Group, 2008; p. 69). Promoting the products should shift from the younger generation to widen to a broader consumer base. The coming segmentation and marketing must be diversified to attract this group of customers who tends to have much disposable income. To boost sales revenue, the company must also fast-track its marketing mix to adapt to the aging population. Evaluation of the brand image is also necessary to shift the attention from the younger population, even though some who grew old with the products might continue consuming them.
Socio-Cultural Move Towards Healthy Eating Habits
The last decade has been characterized by a significant push in the media and government strategies concerning a healthy living style. Customers are becoming more informed hence changing to healthy options. The products brand produced by Innocent are better placed to satisfy these needs. Most consumers believe that there will be an increase in the intake of purposeful health products. Hence marketers are required to have a look at the present opportunities and effectively change their design of products to suit the current healthy lifestyle being advocated (Kemsey, 2006; p. 33). Therefore, packaging may need transparency to enable consumers to judge the products effectively. It will also improve the choice of healthy products since they can be seen clearly.
Horizontal Integration
Owing to the stiff competition presented by Innocent Drinks, Coca-Cola bought a major stake in the firm (Sweeny, 2009; p.1). As a result of the takeover, the brand’s ethics are at stake due to the level of hostility from the giant Coca-Cola. Any alterations to the lineup of the product or its marketing must be done in consideration of Coca-Cola’s venture to ascertain that consumers do not perceive Innocent’s value. It means that decisions cannot be made without consultations with the interested parties. The method used in this strategy is a practical defense tactic by the Coca-Cola Company. The firm found out that Innocent was making considerable steps in capturing the largest share of the market, which would otherwise endanger the firm’s sales revenue in the long run. Nevertheless, in the United Kingdom, it is stipulated by the competition commission (CC) that the companies involved in merging must not take a stake of more than 25% of the shares of the takeover.
Conclusion
The smoothie brand of the Innocent Company is quite unique. Each and every brand they manufacture is made from natural fruits. The company does not add preservatives and additives to its smoothies. They are the perfect choice for individuals who want to remain healthy. Innocent company segmentation strategy needs to be rechecked as it focuses on the whole population instead targeting a specific segment. Therefore, the company needs to segment its market in terms of age. The company only offers its products to young children and adults. The older segment of the population has not been well represented. Thus, to remain competitive, the company needs to identify a market in which it can adequately satisfy its needs.
The company must invest in integrated marketing communications to develop its online marketing strategies. Given the fact that the business environment is becoming more complex and competitive, there is a need for Innocent to invest in integrated marketing communication (IMC). Integrated marketing communication will help Innocent Company in informing, persuading, and reminding the company’s target customers about the services and products’ unique benefits available in the market. The IMC comprises processes such as evaluating, executing, controlling, and planning the utilization of various promotional-mix elements to communicate effectively with the company’s target audience.
The adoption of IMC by Innocent Company will help it generate product awareness, thus creating potential customers. Ideally, IMC helps deliver a consistent unified message via various channels that attract customers’ attention in the current era of commercialization. The IMC mix includes media advertising, personal selling, public relations, sales promotion, and publicity. It also incorporates sponsorship, Internet, database, and direct marketing. Thus, investing in IMC will enable the company to convey information that touches all marketing mix elements, such as promotion, place, price, product, physical evidence, and people.
Bibliography
Aaker, D.A.,& McLoughin,D 2010, Strategic Market Management; Global Perspectives, John Wiley and Sons. London.
Anonymous (N.d), All about innocent smoothies, Web.
Anonymous, (N.d), Innocent Drinks, Creative culture and strong brand, Web.
Australian Bureau of Statistics 2011, Aging population projection, Web.
Bank of England 2009, strategies of curbing with recession, Web.
Brassington, F., & Pettitt, S 2006, Principles of Marketing, Pearson Education Limited, New York.
Bridson, K., & Jodie, E 2004, ‘The secret to a fashion advantage is brand orientation’, International Journal of Retail and Distribution Management, vol.32, no.8, 403-411.
Cottrell, S. 2008, The Study Skills Handbook, Palgrave, Macmillan, London.
Dawar, N 2004, ‘What are brands good for’, MIT Sloan Management Review, vol.46, no.1, p.31-37.
Dibley, A., & Baker, S 2001, ‘Uncovering the links between brand choice and personal values among young British and Spanish girls’, Journal of Consumer Behavior, vol.1, no.1 77-93.
Digital Strategy Consulting 2009, UK Advertising Spend, Web.
Dodds, A 2009, Recessionary Strategies for Food and Drinks Companies, Business Insights. N.p.
Dunbar,I & McDonald, M 2004, Market segmentation, How to do it, how to profit from it, Butterworth-Heinemann. California.
Gould, S.J. 2000, ‘The state of IMC research and applications’, Journal of Advertising Research, vol.30, no, 1, pp. 22-30.
Gutman, J. 1982, ‘A means-end chain model based on consumer categorization processes’, Journal of Marketing, vol.46, no,2, 60-72.
Harris, L. C1998, ‘Cultural domination: the key to market-oriented culture?’, European Journal of Marketing Communication, vol.5, 97-106.
Hutton, J.G 1996, ‘Integrate marketing communications and the evolution of marketing thought’, Journal of Business Research, vol.37, p.155-162.
Innocent Annual Report 2007, The first annual report, Web.
Innocent Drinks (N.d), Financial Performance, Web.
IRI Infoscan 2009, Innocent Press Release. Epos sales four weeks to Innocent, London.
Keller, P.J 2001, ‘Mastering the marketing communications mix: Micro and Macro perspective on integrated marketing communication programs’, Journal of Marketing Management, vol.17, p. 819-847.
Kemsley, D 2006, Targeting the Healthy Consumer, Business Insights, London.
Leeman, J. J 2010, Export Planning, Person Publishers, New York.
Luther, W. M 2001, The marketing plan, How to prepare and implement it, AMACOM Div American Mgmt Assn.
Marketing Smoothies 2006, Milking it for all it’s worth, Web.
McCarthy, E 2005, The Washington Post, Business Margarzine, London.
Mintel Group 2008, Smoothies – UK – 2008 – Brand Communication and Promotion, Web.
Mintel Group 2009, Market Re-Forecasts: Food and Drink: 2009: Smoothies, Web.
Ormanidhi, O & Stringa, O 2008, ‘Porter’s Model of Generic Competitive Strategies’, Business Economics, vol. 43, no. 3, pp. 55-64.
Percy, L 1997, Strategies for Implementing Integrated Marketing Communication, NTC Business Books, Chicago, IL.
Pitta, D. A., Weisgal, M. & Lynagh, P 2006, ‘Integrating exhibit marketing into integrated marketing communications’, The Journal of Consumer Marketing, vol. 23, no. 3, pp. 156-166.
Porter, M.E 1980, Competitive strategy, Techniques for analyzing industries and companies, Free Press.
Schultz, D.E 1993, ‘Integrated marketing communications: maybe definition is in the point of view’, Marketing News, Vol. 27 No. 2, p. 17.
Solomon, M. R., Marshall, G. W., Stuart, E. W., Mitchell, V., & Barnes, B. 2009, Marketing, Real People, Real Decisions, Pearson Education Limited. London.
Spawton, T 1990, ‘Development in the global alcoholic drinks industry and its implications for the future marketing of wine’, European Journal of Marketing, vol.24, no.4, p.47-55.
Sweeney, M 2009, Innocent drinks sell stake to coca cola, Web.
Vriens, M., & Hofstede, F. T 2000 ‘Linking attributes, benefits, and consumer values’, Marketing Research, vol.12, no.3, 4-10.
Watts, G., Cope, J. & Hulme, M 1998, ‘Ansoff’s Matrix, pain and gain Growth strategies and adaptive learning among small food producers’, International Journal of Entrepreneurial Behaviour & Research, vol. 4, no. 2, pp. 101-101+.
Westwood, J 2002, The marketing plan: A step-by-step guide, Kogan Page Publishers, New- Jersey.