Top 5 Background Readings:
Marketing Management: First European Edition by Philip Kotler, Kevin Keller, Dr Mairead Brady, Malcolm Goodman, Mr Torben Hansen
A Book About Innocent: Our Story And Some Stuff Weve Learned by Dan Germain
Strategies for Cutting Company Costs: Leading CEOs on Establishing Spending Priorities, Ensuring Quality While Cutting Costs, and Positioning the Company for Recovery by Thomson Reuters
Porter's generic strategies by Gerardus Blokdyk
Cognitive Differentiation: A Structural Variable Underlying the Fishbein Attitude Model by Richard Miller Durand
THE PROJECT RATIONALE
1. The Relevance of Innocent Smoothies
As researched by Medders (2013), “a smoothie is a thick drink made in a
blender”. Components of smoothies, in general are different fruits, and can
comprise of ingredients like those of blunt or cream milk, soy-milk, ice cream,
yogurt or some nutritional supplements with varied flavours. In past few years,
smoothies are getting much attention for being healthier than any other drink.
Medders specifies that developments of smoothies around the world gets noted
since the mid of 20th century.
Following
the thread of popularity, in 1999, Innocent Drinks emerged with its
specialisation in making smoothies. In a report by Walis (2007), Reed (one of
the founders) confirms that all these years lots of transformations are adopted
by the company, yet the founding values are all kept intact. The products were
kept largely the way they were in the year of inception. Amidst enormous
challenges the company still remains as one of the most preferred and
celebrated brands in the UK. Reed further adds that with a continuous mode of
expansion and extended workforce of more than 187 employees, the company
attains 65% of the UK domestic market. Above all there is the turnover of £100m
and room for further growth in the European marketplace.
Thus, the most relevant element is still the concerns of values and ethics as maintained by the company and the added aspirations of making itself more genuine by meeting consumer-oriented demands. This has been authenticated well as the site declares –
Thus, the most relevant element is still the concerns of values and ethics as maintained by the company and the added aspirations of making itself more genuine by meeting consumer-oriented demands. This has been authenticated well as the site declares –
“Our delicious
tropical juice has won gold prize at the 2013 Grocer Awards.
It scored a
stupendous 49 out of 50 for taste, based on votes from actual real people, as
well as a panel of experts.” (Official Site,
2013)
2. Historical Entity of Innocent
Drinks
It
was in the year 1999, Innocent Smoothies, categorised under the brand of
Innocent Drinks; was established by three graduates from Cambridge University.
These graduates were, Richard Reed, Jon Wright and Adam Balon. The firm spent a
total amount of £500 over fruits that were transformed into smoothies and
apparently sold the smoothies at a small music festival in London the same
year. These founders were very keen in maintaining "socially and environmentally-aware" attitude and as such
the company maintained the same throughout the process of its developments
(BBC, 2009). The company concentrated in the making of different smoothies,
flavoured juices and varied veg pots. These products were sold in different
supermarkets, various outlets and coffee shops. In the early decades of 21st
century, the company sold more than 2 million smoothies every week and attained
a sustainable business atmosphere.
2.1 Structure of Innocent Drinks
The
company has a strong growth rate every year till 2012. The company is currently
at a stage of horizontal expansion towards new regional markets targeting
Europe. Coca-Cola has very ambitious expansion plans of global expansion and
preparing for expansion in to the US market. Presently Innocent Drinks has
eight offices and a total number of around two hundred and fifty employees working
for the company. The organisational structure of Innocent Drinks consists of
the essential stake holders – the people, Information Technology and
environment, and finance; their United Kingdom teams – commercial, business
delivery and marketing; operations – production, technical, fruits and
ingredient suppliers, and logistics; and the other extended offices – Alpine,
Benelux, France, Germany, Ireland, and Scandinavia. The Innocent Drinks recognises every element of
the company as an organ and for this very reason all of the minor and major,
operational as well as managerial elements have been recognised as the organs
of the particular company. Richard Reed,
Adam Balon and Jon Wright are the founding directors of the company – Innocent
Drinks.
2.2 Business-oriented Scopes of
Innocent Drinks
The company started with Smoothies
products, which is the main product so far, and is currently innovating and
expanding their product ranges to “veg & noodle pots”, “fruit tubes” and
“fruit juices”. The company has a strategy of differentiating their Smoothies
products by being 100% natural and by using only natural components for
Smoothies and fruit juice products. The success and failure of a company and
the scope of its business has a lot to do with the products or services it
offers. In some or more cases, the product could be sold in huge quantity but
that does not hold true for most of the products and company. Good and
efficient marketing plan helps in making great sale and in certain cases
becomes the sole reason for the sale but it is the product that decides the
scope of the business. In this case, that is, “Super Smoothies” by the Innocent
Drinks, it is their smoothie that is going to decide their business success or
failure.
The
performance of the company has made it the leading company. The product slated
to be introduces has been very popular with the mass so much so that it made
the juice and smoothies industry as a multi-billion dollar industry by the beginning of this millennium. According
to the observations made by the research and going by the past record of the
smoothies with the mass and the popularity of the company which is going to
launch it as their new product, it could be said that it has a great potential
for making a good business endeavour. It has a great scope for business.
2.3 Financial positioning of
Innocent Drinks
Innocent
Drinks enjoys being the market-leading company with the production and selling
of Smoothies controlling 72% market share (Asimons, 2013). Coca-Cola acquired
18% share of the company in 2009 and further 38% in 2010 as part of a deal to
hold 90% share of the company (Neate, 2013), Coca-Cola’s current stake is 56%.
As an overwhelming majority holder, Coca-Cola took over the management bringing
on board their expertise and long history in the soft drink industry. According
to a report by Reynolds (2013), the sale of Innocent Drinks was valued at
£213.5m in 2012. The reports analyses the sale to be higher than the previous
year by 36.6 per cent.
Figure
1 Comparison of Price between Innocent and Homemade smoothies
Source: Johnston (2008)
The
performance of the Innocent Drinks is believed to have taken this huge leap in
sales after it shifted to the production of pure fruit juices. Innocent Drinks
has been one of the most popular drink brands in the United Kingdom. It
captures the attention and wishes of the customers and designs their drinks
accordingly. The young ideas and concepts did give it a fresh and innovative
touch that was needed for the country which was mostly exposed to hard
beverages. Financial success and popularity among the mass is a product of such
innovative ideas and great products. The shift of the Innocent Drinks’ to the
production of pure fruit juices has added to its financial gain. With
increasing awareness on having healthy food and drinks the trend has shifted to
being natural and healthy. Such a scenario makes the rise in sale of the
Innocent Drinks, all the more promising and simultaneously assures the financial
growth of the company.
2.3.1 Financial Performance of Innocent
Smoothies
Innocent Drinks’ main
products are the Smoothies and the fruit juice, which is a differentiated
segment from the general soft drink industry. According to the “The Fruit
Juices and Fruit Nectars (England) Regulations, 2003”, the legal definition of
fruit juice or pure juice is 100% juice however the Smoothies are a whole
crushed fresh fruits within a short shelf life. It is important to go through
industry analysis for better understanding of rivals and forces affecting the
company within the industry, and to draw a conclusion about how attractive the
industry is, how much profitable it is and whether it is strategically
sustainable or not. The conclusion will be a starting point for the campaign
and could be vital for a good integration aligning all objectives to the
marketing opportunities and objectives.
Under the pressure of on-going recession and economic downturn could be the reasons for such a market condition. The Smoothie segment is considered part of the fruit juice industry representing 5% of it.
Figure 2 Amount of Juice Content in Smoothies
Source:
British Soft Drink (2011)
A study by Datamonitors (2010)
showed a profound decline in the segment by £212.7m since 2007, falling down by
49 per cent. The report showed that the decline is due to changing habits of
consumers who were switching from expensive brands of health drinks and juices
to a
substitute juice brand and soft drinks. (MarketLine,
2011).
Figure 3 UK Smoothie Value Segment for 2005-10 (UK Pounds in
Million)
Source: Marketline (2011)
At
the same time, the soft drink segment has grown in the same period by 4.5%
according to BSDA Soft Drinks Report (2009), meaning that the decline in the
Smoothies and juice drink was substituted by cheaper soft drinks which confirm
the economic factor as a major force, which should be a temporary effect
(KeyNote: Manley, 2009). On the other hand, soft drink is not a sustainable
product on the very long run, given that Prime Minister David Cameron has been
discussing plans, similar to Danish and finish laws, called “Fat tax” presented
October 2011 (Keynote, 2013) which impose taxes on soft and carbonated products
given that they have high sugar and additives that is not good for health, such
tax will make Smoothies products more competitive. Also the EU wide voluntary
scheme campaigning to banns me additives and conducting awareness campaign
around EU schools. The trend in the market is for the “natural” and “Healthy”
as a slow but effective market driver on the very long term. It is for this
very reason that the sale of smoothies and other Innocent Drinks’ have once
again plummeted high.
2.4 Core
Vision and Mission of Innocent Drinks
The core value of the
company – Innocent Drinks, resonates in the very sentences that they strongly
believe in, “Create a business we can be proud of". It is the founding
principle and core value of their business venture that grew to become the
Innocent Drinks. As the research delved into the depth of the company, the
story of its emergence, its journey till 2013, its achievements and effect on
the market, there have been this very belief that seemed to have resonated
through every phase. It is the demand of the young minds and firm belief of
making substantial money out of selling smoothies and juices that the three
Cambridge University graduates resigned from their secured jobs and landed in
the uncertain ground of business. They took a chance and a leap of faith with
their core belief of being a part of a proud business house. The other values
of Innocent Drinks are firstly, being natural, which means producing completely
natural, delicious and healthy products every time. Secondly, being creatively
entrepreneur and challenging the present condition in order to rise above it
and excel in the due course. Thirdly, being responsible to the consumers,
customers and the environment so that they situation improves and never
deteriorates. Fourthly, it believes in being fairly commercial because it is
indeed a business house that needs profit for the survival of the company
itself, people associated with it and even for the society. Lastly, it believes in being generous through
charity for the needy.
3.
Methodological Approach
The
methodological approach makes a wide ranged analysis of a particular research,
through both qualitative and quantitative tools, and thereby offers necessary
authentic information about the selected topic (Kumar, 2010). The methodology followed here, is based on
the models from theoretical derivations that are empirically proved well.
Further the resources are declared with specifications to the concerned
position of IMC, advertising, coomunication in general, and Innocent Smoothies
in particular.
3.1 Analysis
of the Status
In order to
analyse the status of Innocent Smoothies through the analysis of PESTEL,
Porter’s Five Forces, BCG Matrix, SWOT Analysis, Ansoff Model, Porter’s Generic
Strategy and Marketing Mix 4Ps.
Model
|
Relevance
to the Research
|
PESTEL
Model
|
This
model aims in analysing the political, economic, social, technological, legal
and environmental issues related to Innocent Smoothies for better
understanding of its business structure (CIPD, 2013)
|
Porter's
Five Forces
|
This
model inspire in looking into the bargaining power of the consumer and
suppliers, threats created by new company and substitute products for
Innocent Smoothies (Porter, 2008, p.86-104)
|
BCG
Matrix
|
This
analysis offers scope to understand the performance of Innocent Smooties with
secial reference to marketing growth of the company (BCG, 2013)
|
SWOT
Analysis
|
This
analysis makes an inherent inspection over the status of Innocent Smoothies
and gives the strength, weaknesses, opportunity and threats related to the
company (Menon, A. et al. 1999)
|
3.2
Justifications for Campaign
Model
|
Relevance
to the Research
|
Ansoff
Model
|
This
model offers the outline of market expansion and scopes for further
development of Innocent Smoothies with futuristic success format (Ansoff,
2006)
|
Porter's
Generic Strategies
|
This
model shows the competency and scope for Innocent Smoothies in the market and
creates path for expansion (Murray, 1988, p. 396)
|
Marketing
Mix 4Ps
|
This
approach is meant to offer the company with necessary knowledge about all
those features and properties that must be adopted for a better status in the
market (Needham, 1996)
|
3.3 Campaign
Developments as by IMC
Model
|
Relevance
to the Innocent Smoothies
|
Marketing
and Promotion
|
the
concentration here is on the application of marketing communication by
Innocent Smoothies for marketing success
|
Inverted
Pyramid
|
the
marketing communication gets well demonstrated by the inverted pyramid and
offers Innocent Smoothies the basis of attaining awareness about the product
and consumer related domains
|
VAL
Segmentation
|
through
this approach the compnay can attain growth by analysing the behavioural
aspects of the consumers and pave ways for appropriate marketing strategies
|
Chain
of Means-End
|
this
is a step by step model that permits the company in getting perceptions of
the consumers, along with their goals and attitude
|
Branding
|
through
this model the company can attain a unique identity in the market, as against
the competitors
|
Brand
Equity Model
|
|
Fishbein
Model
|
the
company can follow this model and can comprehend the attitude and belief as
followed by the consumers
|
Decision
Making
|
it
highlights the process of making decision in the consumer
|
Conditioning
|
it
will offer the Innocent Smoothies with the framework of understanding the
consumer and further enhance its position among them
|
Reference
Group
|
this
group is about the consumption pattern that can make a consumer take the
decision for buying a particular product. This is an indirect motivational
way towards buying of a product
|
Positioning
Model
|
it
shows the company, its position in the mind of the consumer and manage in the
process of realizing attributions against the competitors
|
3.4 Methodological
Resources
1.
Marketing Communication Sources
Ansoff,
I. H. (2006) The Secrets of Strategic Management:: The Ansoffian Approach.
BookSurge Publishing
Belch,
G. and Blech, M. (2004) Advertising and promotion An Integrated Marketing.
Fill,
C., (2011). Essentials of Marketing Communications.
Kumar,
R. (2010) Research Methodology: A Step-by-Step Guide for Beginners. SAGE
Publications Ltd; Third Edition
Needham,
D. (1996). Business for Higher Awards. Oxford, England: Heinemann
Pickton,
D. and Broderick, A., (2005).Integrated Marketing Communications. 2nd ed.
Porter,
M. E. (2008) The Five Competitive Forces that Shape Strategy. Harvard Business
Review
Shimp.
T. (2010). Integrated marketing communication in advertising and promotion. 8th
ed.
2.
Journal Articles
Journal
of Marketing from American Marketing Association
Academy
of Management Review
Pickton,
D. and Broderick, A., (2005).Integrated Marketing Communications.
Journal
of Marketing Communications
Solicitor
Journal, 2013
4. Sources of Research
Newslinks
from BBC 2013
Department
of Health, 2013
Office
of National Statistics 2011
Official
Website of BCG 2013
Data
from CIPD 2013, PESTLE analysis.
Data
from Housing Industry Association (HIA). 2011
Officil
Site (2013) of Innocent Drinks. 2013.
News
from The Telegraph. 2008
5. The Relevant Market
The
market of the UK for Innocent Drinks has faced all kinds of situations. Taking
advantage to the high exposure of the company – Innocent Drinks introduced
smoothies in the year 1999 and received a good response almost instantaneously.
In the UK, the company is very popular with a high brand value. As a result it
was comparatively easy for the company to include new products under the same
banner. It even makes enough donations, as £473,000 to Age UK during 2008 to
2010 (Ball, 2011)
5.1
Determined UK Market
The first and only financial report
issued officially by Innocent Drinks 2008 showed a very strong and steady
growth of revenues since 2004 with an average growth rate of 50 per cent per annum (innocent, 2008). In the years 2009
and 2010 revenues growth seemed to have eased from its sharp growth to an
average of 25per cent (Zuke, 2012). The financial downturn of the world economy
and world recession have slowed the performance and growth of the market. The
economic climates have affected the consumer confidence and expenditure habits
slightly toward value products (international market bureau, 2011). It was not
only the Innocent Drinks but also other companies were affected by the economic
downturn. The net profit/loss results is quite worrying because the company reported
a considerable loss of £ 6m in the year 2010 followed by further loss of £9.8m
in 2011 (Zuke, 2012), Co-founder Jon Wright (2012) justified the loss to be due
to investment planes in Europe. But the
market has recovered from the previous situation and Innocent Drinks has
registered a sale value of £213.5 million in the year 2012. The following chart
shows the sales and the growth trend for the last 8 years.
Figure 4 Innocent Annual Sales Report 2005-2012
Sources:
Zuke, (2012) and Wright (2013)
6. Macro Analysis
Macro
analysis is about noting results derived from interactions about the economy
and diversified resources with larger population (Ronald and Meyer, 2011).
6.1 Analysis of Industrial
Popularity
Political Analysis: At a governmental level, one of the political challenges facing
Innocent Drinks is the level of calories and sugar in their products. Given that its 100 per cent natural there is
little or no control over their ingredients, the government has targets and
audit standards. Surprisingly the sugar and calories are at very close levels
to soft drink such as Coca-Cola. Innocent Drinks along with 480 main brands in
the UK have signed a deal with the government to curb calories and sugar in
their drinks (Joseph, 2013); Public Health Minister Anna Soubry (2013) pledged
to cut calories and sugar by up to 10 per cent in leading brands including
Innocent Drinks.
Economic Analysis: Since 2008, the
economic climates were not in favour of any company but it did not affect the
sales of Innocent Drinks as compared to other companies. Instead it resulted in
a bank of England reducing its borrowing cost up to 0.5% which was an
opportunity for the company to raise a cheap finance to fund their expansion
investments in Europe and internationally.
A major economic challenge that the company is facing is that the
global commodity prices for fruits is soaring since the company launched 15
years ago. Extracting and analysing data from the Global commodity index
“Mundi” it was found that the price of Banana and Orange, as they are the main
components in Innocent products, the following chart is showing the trend;
Commodity
Index (2013)
Social Analysis: From social and
environmental perspective the company has a strong and sustainable competitive
advantage among rivals given that the company and brand’s core competences lie
within the strong social message delivered to society across their marketing
and media campaign. The picture of the brand demonstrates healthy, natural, 1
of 5 a day, environmentally friendly, never from concentrate, 100 per cent
recyclable etc.
Overall the social factors are in favour of the company and will
be a major growth factor if the company managed to keep control over prices to
be within affordable limits. One of the challenges that the company is facing
at the moment is Coca-Cola acquisition of the company and more than that
including it in the happy meals for children in McDonald’s menu (Telegraph,
2007). Coca-Cola and McDonalds are perceived to be the complete opposite
strategy and image which was a major social negative image to InnocentDrinks
blowing away millions of pounds of advertisement and imaging cost. It seemed to
have affected the trust of the company, more importantly it got the attention
of the press with many writers calling it “not very innocent” (Simmon, 2007).
Technological Analysis: Getting
support from technology still seems to be in a far-fetched distance. Getting
connected to public through social media is yet to get well explored. The
company need to get direct information about the increasing
health-consciousness among the target consumers. Even in terms of
advertisement, the company is hardly adding techno related equipments to the
marketing campaigns. It needs to create more awareness and consciousness about
the quality of consumer’s choice and the downside of soft drinks in comparison.
The company’s over ambition has affected their image which is not easy to
recover. Most negative implication seemed to have happened after Coca-Cola
climbed the top of the hierarchy, which, in the long run, might be a threat to
sustainability of the image of the product, which is the main asset the company
owns. All these aspects still can be handled well if the company prefers to
take support from the technologically balanced marketing tools and software.
Environmental Analysis: The company has adapted the (GCTTF) policy which helps make sure their supply chain is all environmental friendly and ethical especially with labour forces to be in compliance with international labour organization standards. The company’s donate 10% of their income to help fair trade farming thought their charity “innocent foundation” (innocent, 2008) which is a good factor to improve and sustain the image of Innocent Drinks. The company had been customizing the product to be environment friendly and 100 per cent recyclable was a good start and image influential from a marketing view, until recently in 2011 when it became 35 per cent recyclable. As a result the company had to try hard to fight for cost cut, which is a challenge that opens the door for customers who are willing to pay premium for organic products.
Legal Analysis:
The company is also following some minor law cases
for and against the company. For instance; a business tried to imitate the
company’s name such as Innocent Vitamins (Salkeled, eccles, 2011), such cases
are within the normal course of operation given that most international
corporation have legal department following daily cases. None is threatening at
a corporate level except one case, which is a major threat to the company, it’s
a law case lost against “Deepend Fresh Recovery Limited” regarding the
ownership of their trademark (solicitorjournal,2013), the company suffered a
major blow being unable to provide evidences of their complete ownership of the
trademark, the threatening challenge of this case is not only the ownership, it
also has a third party power of control over a brand that they have been
developing since 1999. More importantly it can easily affect the image of the
product given that their slogan was “how to do it right”. Also the company
regards itself as an ethical company producing an ethical product.
6.1.2
Porter's Analysis
In
accordance to the Porter’s Five Forces (Porter, 2008), for long term profitable
sustainability in the market, it is necessary for a company to have right
assessment of all those aspects that are related to the domain of industrial
rivalry. In reference to Innocent Smoothies, the competitive edge needs to
check the following aspects-
Threat
created by New Entrants: As the market
of smoothie gets popular in the UK and people prefer more health oriented
drinks, the competition is increasing for Innocent Smoothies. Companies like
McNeil and Ella’s Kitchen are creating issues of retaliation, sinking and
switching of costs, loyalty of the customers, etc . for Innocent Smoothies in
the market.
Threat
created by Substitute Products: Innocent
Smoothies is also facing enough competition from other products that are
manufactured by Innocent Drinks. These are like kids’ apple and orange juice,
and Kids’ fruity water. These products are switching the younger generation
from smoothies to juices within the brand.
Customers’
Power to Bargain: Under this
specification, the consumer’s ability to pressurise a company get highlighted.
In case of Innocent Smoothies it shows the need to revise the price and
implement loyalty programs for the customers, like ‘Buy 1 Get 1 Free’. Sensitivity of the buyers towards price
remains the core concern.
Suppliers’
Power to Bargain: The suppliers are
directly related to the inputs of the market. The distribution channel of
Innocent smoothies relie a lot on the suppliers and thus needs to take care of
labour unions, competitiveness among the suppliers, strengths of the channel of
distribution, etc.
Intensity
towards Competitive Rivalry: For Innocent
smoothies being aware of the increasing competition is very important. It must
take care of the old competitors and at the same time keeping a keen eye upon
all the new entrants in the same market or product line. Implication of
powerful strategies and significant transparency within the firm are additional
elements ot be added to meet the competitive hurdles.
6.1.3
Competitive Edge
Innocent
Drinks was the first to present the Smoothie Juice in the United Kingdom as a
specialized brand, therefore has the “first mover advantage”, since its launch.
It has maintained a superior relationship with the customers through a
consistent appearance and style, product design, package, appearance and price
that suited the positioning of the product as a high quality healthy product
and made it difficult for new market entrants to compete. Innocent held a
leading position in the market and succeeded to expand the market from very
niche limited market into a significant one. The company has successfully
increased its market share from 35 per cent in 2005 to 79 per cent in 2013
(Kantar, 2013). The brand “innocent” was valued at £320m early in 2013 when
Coca-Cola acquired a stake of the brand (Evans, 2013). The brand has a clear
purpose; a 100% natural 100% healthy made from fresh squeezed fruits without
any additives. The design, look, price and image helped in delivering and
positioning the brand across the customers successfully. The company’s
contribution in bringing health awareness among the audience helped in
expanding the market rapidly. The brand gained its trust thought consistency
and meeting consumer’s expectation with quality.
The brand has
always been supported by a generous advertisement budget; the company spent
about £16m in advertisement in 5 years which is 80% of the overall advertising
spending of the industry. The graph below shows the marketing spending compared
to its competitors.
Figure 5 Marketing
Budget- 2006-11 (in millions)
Source: KeyNote (2012)
Thus,
quality of the product relies on advertisement and publicity, as against basic
products that peruse cost leadership strategy. In the words of Reed (Sibun,
2008),
"We're
going in with a promise of taste, quality and ethics, while Pepsi is about
cheaper prices...It gives us an opportunity to dramatically widen the
demographics of the brand. A litre of smoothie is £2.99, a litre of orange
juice will be £1.89. People can buy into the Innocent ideals at a lower price
point."
It
can be well noted from the figures that the product cycle is heading toward
maturity; therefore advertising budget will gradually decrease however it is
wise to keep it at high level as a competitive advantage and to prevent new
competitors to enter the market. The following graph shows the decrease in
marketing budget for each competitor
Figure 6. Comparative status of Competitive Brands (in millions)
Source: KeyNote (2012)
Given
that innocent is the dominant in the market it will always be the most able by
far to spend on advertisement to keep enjoying the competitive advantage.
.6.1.4
Primary Competitors
Status
of Pepsico: The competition of
Pepsico with Innocent Drink is like a competition of a SME with an
International giant. With coverage over 200 countries with a developed annual
profit margin of $43.3 billion revenues in the year 2012, is a definite
challenge for Innocent drinks (York, 2012). However, the essence of credibility
in Innocent seems to give this giant enough space for competition.
Status
of McNeil: There are tugs between
Innocent Smoothies and McNeil Nutritionals in terms of offering the healthiest
options to the consumers. In most cases people prefer both a thee companies
offer different kinds of products. Mc Neil gives competition to Innocent by its
selected range of products like, Viactiv, Lactaid and branded sucralose
sweetener that is named as Splenda. Further there is the addition of monk that
is fruit-based sweetener named as Nectresse and is making the market for
Innocent smoothie more stricted (Adams, 2012).
Status
of Ella’s Kitchen: The entrants of
Ella’s Kitchen in 2006, created the competitive threat of being organic in the
process of manufacturing. Since Ella’s Kitchen is comparatively new and smaller
than Innocent Smoothies, it created the competitive niche of offering quality
organic products against more justified price. The company acquired 20% share
of entire baby food domain of the UK and attained a wide ranged global turnover
of estimated revenue of $100m in the year 2011 (Loveless, 2011).
Status
of Boost Juice: With its
international presence in the countries of Europe, Asia, Russia and Middle
East, Boost Juice is much supported by Nestle (Easier, 2007). It turned
extensively competitive to Innocent Smoothies as in the year 2008 Nestlé
launched its fruit smoothies in collaboration with Boost Juice Bars. It was a
head on fight for marketing space and gave Innocent Smoothies enough
competitive edge.
7. Micro Analysis
Micro
analysis is about smallest units of analysing aspects of social sciences in
relation with the individual and the possible social setting where he lives
(Ronald and Meyer, 2011).
7.1 About Innocent Smoothies
The basic brand image
of Innocent smoothies relies over its demands related to validity, authenticity
and most importantly the matter of being genuine. Anyone can pick up any label
from the products of Innocent Smoothie and can check the following unique
declarations-
Further, there is the instance of double-dip crises had a
remarkable effect on turnover as showed in the chart below; the effect is more
obvious in the Smoothies meaning the better quality, the more expensive, the
more sensitive to income and crises.
Figure 7 Comparative Consumption of Juice and Smoothies in the UK
Source: Zenith International, 2013
8. Selection of Scopes and
Strategies
1.8.1 New
Developments in Innocent Smoothies
Innocent’s is
adopting differentiation strategy and core competences and the competitive
advantage comes mainly from three dimensions: Innocent Brand and Character,
Consumer health consciousness given the healthiest product in the market, and
the quality of the product. Given that the brand and health consciousness are
the two main reasons, the conclusion is that marketing campaigns and annual
substantial marketing budget is the sustainable competitive advantage of the
company that will ensure that the Innocent Drinks always be the market dominant
and expand the sector further.
8.2 Current Marketing Strategies
The company has been incurring loss in the last two years which
has affected their advertisement budget,
inflation in raw material prices reflecting in their the product price to be
overly expensive. The law case lost for “Deepend Fresh Recovery Limited” is
affecting the image of the company and should be closed very quickly.
8.3
Goals of Product-line
As Innocent is well
experienced in creating the Smoothies market, the objectiveis to create a new
unique and totally differentiated product and create a totally new market for
it. The product is called “Super Smoothies”with super food 100% natural
ingredients, the base product is the Acai Berry Smoothie made from Acai Fruit
is a Brazilian Berry fruit, The idea of this product is that it is not only
Smoothie, it’s a new different type of Smoothie with super food, an antioxidant
product which lower the risk of heart and cancer diseases, it also reduce blood
pressure and is a very effective anti-aging nutrition. It will also help reduce
weight for diet programs, the notion of “Super Smoothie” contrary to “Smoothie”
as a new product line.
8.4 Goals of Marketing
To launch “Super Smoothies” in bottles of 250ml as a starting
point. Targeting professionals at age range of 25 to 45 in the United Kingdom,
starting from Greater London and south areas.The product will group the
benefits of the super food and the Acai-Berry Smoothie as a special product and
will be available in all selling points and stores.
***
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