The report describes the marketing plan for the repositioning of the product “This Water” offered by “Innocent Drinks”. Company was founded in 1999 and offers smoothies and flavoured spring water in Super markets, coffee shops, cinemas and other outlets in UK and other countries.
Company has decided to re-launch its existing product “This Water” in the cinemas in the UK with the new name “This Water Plus”. This report covers the marketing plan and marketing strategies to reposition the product. The period for the marketing plan is set from 2nd January 2011 to 1st September 2012. All the effecting factors are consider while planning the plan including current world and specifically UK economic position after recession as UK economy is still in process to gain its recovery position.
Innocent Drinks has improved the design and packaging of its product to make it more attractive and focused on the corporate social responsibility. They used recycled material for the packaging and also contributes portion of the profit towards charitable work. They have targeted the UK cinemas to offer this product.
Innocent Drinks is a UK based company established in 1999 by three Cambridge graduates. Its main business is producing smoothies and flavoured spring water. Company sells its products in supermarkets, cinemas and coffee shops. It has branches in UK, France, Austria, Denmark, Amsterdam, Brussels and Germany. Company enjoys 71% of UK smoothie market and sells around two million smoothies a week [This water. 2010].
Company’s head office Fruit Towers, is based in Shepherds Bush. Innocent Drinks was appeared number 40 in Sunday Times Fast Track 100 in 2007 in UK fast growing companies. Innocent Drinks is only company appears in the list for ever year in last five years (Innocent drinks, 2010).
1.2. Products range
Primary product of the Innocent Drinks is Smoothies. They use fresh fruits in the preparation of the smoothis. Some of the drinks also contain carrots and ginger. Company started new product “This Water” in 2007 and offered it in three different packaging real fruit quenchers plastic bottles, new big quenchers and glass bottles. Company is selling its “real fruit quenchers plastic bottles” with the name “This Water” with three different flavours in the UK cinemas and retail stores and “new big quenchers” and “glass bottles” in the retail stores (Innocent dinks, 2010).
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1.3. Competitors
The refreshment drink is jumbled with the competition in US Odwalla and Naked are strong competitors, in UK market Innocent Drink has competition with The Feel Good Co. and P&J Smoothies. Every company claims its products are made up of fresh, pure and natural ingredients. Since 2004 PJ smoothes lead the market but in 2007 they lost their market share and Innocent Smoothies are leading the market with 72% market share (Taylor, 2007). In 2010 rivals in this industry are acting more aggressively as compare to 2007 and level of competition is high.
1.4. Controversy
It was reported in 2007 that Innocent smoothies are exploding. It was cause of the natural fragmentation of the ingredients it contained. Company recalled around 100,000 bottles from the market. It also affected their brand name but company has restored it very quickly (Hickman, 2007)
Innocents Drinks sold a 20% stake to the Coca-Cola Company for £30 million. It left a disappointment for the loyal customers and they registered their protest through website and other forums and it encouraged people to boycott the company (BBC News. 2007).
2. Project objective
The objective of the new project is to reposition the existing product “This water” with the new name “This Water Plus” in 420ml plastic bottles in the cinemas to increase the company’s market share and building our brand environment friendly and reflecting the social corporate responsibility.
Objectives of the Product launched are set using the SMART principal (Haughey, 2002):-
Specific: 10% increase in the sales from existing “This Water” products through “This water Plus”.
Measurable: Revenue would be generated by selling the product in the UK cinemas and would be reviewed after 3 months.
Achievable: Availability of infrastructure and technology for the production of the product and availability of “This Water Plus” in cinemas all over the UK
Realistic: We have set realistic targets as there is enough demand for the Smoothies. The natural products like “This water Plus” are more attracted to the people who have good effect on health.
Time-bound: Marketing campaign would start from 2nd January 2011 to 1st September 2012.
3. Analysis
3.1. External analysis (PEST analysis)
After the adjustment of cost and capital all firms should obtain similar results, but in practise the performance of one firm as compared to other differs a lot. Firms exist in an environment where many external factors affect their performance. These outside factors are not in the control of firm and are divided into broad macro environment for analysing there effects on the firm’s performance (Anderson et all, 2002).
3.1.1. Political
There are certain rules and regulations set by the government which the firm has to follow. In 2007 Advertising standards Authority warned innocent for making unconfirmed claims about the health benefits of their super foods. They ordered Innocent not to repeat those types of claims. Controlling of macro environment is not possible for the company in contrast to micro environment which is in the hand of a company.
3.1.2. Economical
Economic environment has a great effect on the business of any organization. Gaining of position and power of consumer of UK economy after the recession is still in question. So there is need to offer the products by Innocent which are economical and has valued of money.
3.1.3. Social
Sustainable development is easy to achieve by social analysis which revels the social system. As “This Water Plus” would be offered to all type of social, cultural and demographic classes, so while designing the packaging and forming the slogan this point should be kept in mind.
3.1.4. Technological
Innocent Drinks presence is low on the web but they are utilizing the technology. They used net for the advertisement purpose. In production they have very good technology but there is need to implement a recycling plant.
4. SWOT analysis
The following SWOT analysis looks at Innocent drinks which are operating in water and soft drinks industry. The analysis shows the company’s Strengths, Weaknesses, Opportunities and Threats. Clear picture of the business environment can be seen by the help of SWOT analysis (Fine, 2009).
4.1. Strengths:
The well doings and positive elements of a business are called their strengths. The strengths of a company are the something which gives it edge over its competitors. The following section will outline main strengths of Innocent Drinks.
Innocent drink has strong position in the market with high market share that could help the company to attract customers to its new product.
Although company is facing strong competition but overall market share is high that can boost the repositioning campaign.
Competitive pricing is considered as one of the major element of Innocent Drinks and it plays main role in its success. It helps it in keeping itself in line with its competitors.
Marketing strategy is also a one of the strength of the innocent Drinks. It helps in rising of profits and profiles.
An experienced employee is another speciality of the success of Innocent Drinks, which helps to steer them forward with expertise and knowledge.
High quality machinery, offices, staff and equipment shows that the work is going to the utmost standard, and is strength of Innocent Drinks.
Reputation of Innocent Drink is also very good among people. They believe in its standard and respect it.
Financial strength helps Innocent drinks to tackle any problem and dip in profits and outperform their rivals.
No compromise on quality helps Innocent Drinks in catching the returns from the consumers.
Innocent Drinks always indulge in innovations, which is a key element in the overall performance.
Supplier’s relationships are also very good at Innocent Drinks, which is their great strength.
4.2. Weaknesses:
The things which need to be improving are the weaknesses of the organization or a firm. These weaknesses stop the organization to work at its full and keep it behind its competitor. This section will present main weaknesses of Innocent Drinks.
Business alliances are a major problem for the Innocent Drinks as they are lacking in it. So that’s why they struggle hard to get deals.
They have maximum market share but need to attract the non buying customers to increase the sales and profits.
Customer base is limited, which means they have less people to sell and market to.
4.3. Opportunities:
The external changes, needs and trends which help in enhancing the business strategic position are the opportunities. This section will outline opportunities that Innocent Drinks is currently facing.
Technological advancement can enhance the overall turnover of the company.
Expending of online presence can enhance the benefits of the company.
Changes in the way of customers buying and spending style can help Innocent to explore.
Financially strong firms like Innocent Drinks can take risks in investing in the new projects.
Can attract non buying customers to capture the new customers segment.
New market opportunities should be discovered in order to increase the revenues.
Innocent Drinks can maximize its profit by the Formation of strategic alliances and joint ventures.
4.4. Threats:
The business and organization can face many problems in the future and have different type of risks called threats. These are the external factors and company cannot control them. While making the contingency plans and strategies these threats should be kept in mind. This section will outline main threats Innocent Drinks is currently facing.
Change in the consumer lifestyle could result in the less demand of drink.
Demographic changes are also a big threat for the Innocent Drink.
New products from competitor firms could lead to Innocent Drink’s products being less in demand.
Using of old technology can also slip the Innocent Drink behind its rivals.
Entering of new companies is a big threat for the Innocent Drink.
Financial slowdown and slow economy could affect the performance and profits of the innocent Drink.
Growing power customers should be kept in mind while setting the price of products and services.
Substitution of a product is one of the major threats for the company, which should be kept in mind.
5. Planning
5.1. Porter’s five forces
Porter’s five forces are used to form business strategies and analyse the industry. Michael E. Porter developed five forces in 1979. It helps to determine the intensity of the competition and attractiveness of the industry and market (Porter, 1979).
Figure- 1.1. Porter’s five forces
http://itstrategyblog.com/wp-content/uploads/2008/01/porters-five-forces.JPG
Source: Value based management (2010)
5.1.1. Rivalry
Refreshment drinks has competition and rivalry. As the number of competitors is large to for the achievement of competitive advantage it is needed for the Innocent Drinks to bring the new innovative ideas in their products. PJ smoothes and Feelgood are their close competitor.
5.1.2. Power of buyers
Level of awareness in buyers and competition influence the buyers to force company to set prices according to their demand. Less number of buyers can affect the product price. Soft drink market is competitive and number of buyers are high but it still affects the level of competition and price decision.
5.1.3. Power of suppliers
Less number of suppliers also influences the price of the product. But this is not the case in the water and soft drinks industry.
5.1.4. Threat of substitutes
For any industry substitution for the products in a big threat now days. So there is needed to keep this in mind during R&D and product launching. There is need to bring innovations and improvements in the product with a regular interval of time. There are many refreshment drinks available in the market so there is need to bring the difference in our product.
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5.1.5. Threat of new entrants
In water and soft drinks industry many new companies are entering, consumer goods are well attracted for the companies. Many big companies such as coca cola and Pepsi co. are biggest threat for our products. There are few barriers in this way, although it demands continue Research and Development R&D but related business always looks into the other areas to offer new products.
5.2. Marketing mix strategies
According to Winston (1985), marketing mix is based on the combination of 4 Ps. It suggests the ways a company can use price, product, People and promotion strategies for the marketing and sale of the products.
5.2.1. Product
Product is anything that fulfils the need or want of a customer in a marketing environment. Following product with its feature is chosen for re-positioning:-
Product Name:
This Water Plus
Product type:
Natural Refreshment drink
Ingredients:
17 blackcurrants, 1/3 of apple, ½ of pomegranate, sugar, juice of one dash lemon and Spring water
Nutrition (per 100mg):
Protein 0.02g, Fat 0.04g and Carbohydrate 8.7g, total energy is Energy 148kJ (35 kcal),
Packaging:
420ml recycled plastic bottle with dark red and orange label
As people do not wants to carry heavy bottles during the movies so only standard 420ml bottles would be offered.
5.2.2. Price
Price is set by bearing in mind the objective of the project to capture maximum market share by offering high quality product.
Pack
Qty (ml)
Cost/Unit £
Promotion (25%)
(£)
Total (£)
Net profit (£)*
G.Total (£)
Our selling price (£)
Plastic Bottle
420
3.20
0.80
4.00
0.80
20%
4.80
4.64
* Company will contribute 5% of the profit on each bottle to “Pump aid” charity that is engaged in clean water supply in Africa
5.2.3. Promotion
The promotional activities will convey the clear message that the product is made from all natural ingredients and has no side effects.
Advertisement campaign would start on 2nd January 2011 and end on 1st September 2012. It would be reviewed on the quarterly basis. The slogan written on the product and used in the advertising campaign is “Real fruit quencher”.
The following tools will be used for Promotion of the products:
Special offer on the certain movies and advertisement during those movies in the cinema. Advertisement campaign specifically highlights the availability of the product in the cinemas.
Online Marketing by own website and advertising on other sports and health related websites
Sponsorship in the sporting events
Public Relation and Press Release
Advertisement in Newspaper and Magazines and TV.
5.2.4. People
Target customers are from all the demographics, cultures and age groups. As this product is made up of natural ingredients and does not have any artificial material, it is healthy and attractive for all sorts of customers. As Cinema audience are the major target so product would be offered in the cinemas specifically.
5.2.5. Place
As product is already offered in the retail stores and cinemas, but due to increased competition and low demand company will re-launch it in the cinemas all over the UK with new attractive packaging and environment friendly message.
“This Water Plus” would be distributed all over the UK cinemas using existing distribution network.
6. Implementation
6.1. Availability
“This Water Plus” would be offered in only one size of 420ml packaging
It would be available in cinemas all over the UK
Product would be available in the market along with the start of the marketing campaign to capture the market share in the ending of winter and lead in the summer and later throughout the plan period.
It should be available in vending machines to make sure the availability in the rush hours at cinema
6.2. Services
Providing specialist advice service to customers queries.
Offering refunds or replacement on damaged products on companies cost.
7. Control
According to Kotler (2008), to keep track of the progress of the marketing plan it is essential to have an effective control system that should be reviewed on regular basis. The following procedures will be used starting at the beginning of the marketing plan from 2nd January 2011 and continue until the completion of the marketing plan till 1st September 2012.
Director marketing would be responsible to oversee the implementation of the plan. For the implementation of the final plan marketing teams must have prior approval from the director marketing. If any individual or group has any idea they must bring it in knowledge of director marketing. Team has a whole will determine the feasibility of the required changes.
Director marketing will keep the costs in control and report any differences or changes in the budget.
In the scheduled meeting to analyse the progress of the plan director marketing will brief the board members and suggest any changes required to make it more effective.
One the six monthly basis director marketing will prepare a comprehensive report about the plan’s progress and present it to the board.
7.1. Operating and Strategic Control
7.1.1. Operating Control
Keep track of the ongoing operations on the daily basis prepare monthly reports and review it on the six monthly basis, need to take corrective actions accordingly
Keep track of the production, demand, sales and targets and review it on six monthly basis. Determining the profitability of different products, territories, markets & channels.
7.1.2. Strategic Control
Looking at the aspects that companies activities are well matched with the corporate objectives and goals. Matching strategies with organisational goals. Making sure plan is going on the basis of the organisational goals.
8. Conclusion
In this report the plan determines the different strategies which are specifically aimed at targeting customers. It also analyses the reasons behind targeting the customers and they needs. One way in which changes was implemented was through re-position the existing product “This water”.
These new changes which were now being introduced were offers that were not being offered by other competitors. Another method that was implied by Innocent Drinks is targeting the customers in the cinemas in the UK. It would help to keep and maintain the loyalty of the existing customer those are already using our existing product. Keeping in mind the existing customer it was identified the need of them being the first priority. The report also identifies various ways in which the plan should be implemented. It also evolves the ways to launch the product and achieve the marketing plan objective by coordinating all the steps of the plan.
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