Marketing Strategy of Innocent Drinks Essay

1: Introduction Every organization needs to have a marketing strategy so that they know who are their competitors, which market they need to target, do they have resources to compete in that market and what strategies they need to adopt to gain competitive position in the industry. The most important thing is with the help of marketing, company is able to make people aware of its product. This report focuses on how the company innocent drinks developed their marketing strategy in terms of brand positioning and marketing mix and with the help of SWOT analysis, what further actions they can take to maintain their market share. 2: Innocent Drinks 2.1: Profile After starting the business in 1998 in a friendly way, innocent drinks have become a very established brand now. Innocent has become ten years old this year. It is now the largest smoothie brand in UK and the fourth largest overall. The company has achieved a sale of over 100m pounds within a span of ten years and it has now around 250 employees. The company has won many awards from the year they have started. Its main competitors are Tropicana and own label brands which are still quite behind in terms of market share. 2.2: Company products Innocent drinks has a long range of products which they claim to be made up of pure and fresh fruit and which are free from any kind of preservatives. Their products include smoothies, yogurt drinks, thickies, kids smoothies (taking account of those fruits which children like the most), pure fruit squeezes. Their products are available in different sizes and shapes. The  company developed their logo required for a brand in an unconventional manner and now it is famous as dude. 3: Marketing strategy and analysis 3.1: Marketing objectives The company has highlighted the importance of their smoothie by injecting in peoples mind that drinking smoothie is part of their healthy lifestyle. The company’s objectives are that their product should be delicious, healthy and sustainable and their vision is to make world healthy by providing their products. 3.2: Analysis People are becoming more health conscious and that is what the Innocent highlighted among its consumers to increase its customer base and loyalty. â€Å"95% of our marketing strategy is what goes in the bottle,† as said by Reed. The company is not using latest marketing strategies, they are upbeat with the fact that their customers are happy. The company has restricted its marketing and branding to its packaging. The company didn’t involve in heavy advertisements in the beginning, instead they use their product as a mean to communicate with their consumers. The owners were in favor of print to advertise their product so they had it on the bus sides which will move everywhere in the UK. Innocent has a mixture of both market orientation and product orientation. Developing a user friendly website, publishing a book, inviting people to visit the company’s headquarter, banana telephone where customers can give suggestions and view are clear signs of market oriented co mpany. Secondly, they are quality conscious. They consider their product a fruit and not made of fruits and that is what they want to see in the eyes of their customer. The prices of their product are high but they justify it on the basis of quality by saying that preservatives and concentration reduces the cost and they want the best thing for their consumers. But the company’s over confidence regarding its product being the best and healthy one may divert its attention from customer needs and demands. Because the competitors may come with same nutritional values but better taste, it can then be a threat to a company. The company has a marketing team which is  involved in analysing competition and come up with new ideas regarding the products and strategies. And there is a communication team also which make an effective communication link with its consumers by website, news and feedback. 3.2.1: Brand strategy and positioning Branding creates value for the product and it influences everyone directly or indirectly. Innocent made their brand stand out from the crowd by adopting innovative ways of marketing and that was their beginning in differentiating their product from their competitors Brand name is very critical and it should be consistent with what the company is trying to deliver and how it wants to be perceived by customers. By establishing brand name as â€Å"innocent†, the company is trying to convey the message of being pure. Branding has been effectively used as a strategic tool for marketing by innocent smoothies and that helps the company to maintain its share in the market or in keeping its competitive position. Innocent has developed its brand image by providing excellent satisfaction, by being genuine, healthy and socially responsible in the eyes of their consumers and once the image is developed, they were able to attract the customers. It is because of brand and its perceived value that consumers are loyal and committed to the Innocent products and they do not look for any substitutes (Ginden, 1993). Customers also perceive it less risky in buying a brand product with which they are emotionally attached. It is more important for products like innocent drinks which the customers have to consume and which has direct impact on their health and body. For keeping a brand alive, it is very important to go for heavy promotions and advertisements and innocent drinks have used their resources very affectively in promotion (O’Malley, 1991). Innocent drinks have also taken a move to stay in touch with its consumers by making a family section. It is a method of communication and reminding the consumers about the products and also to get feedback from customers. The company is using family branding policy as all of its products use the company name. This reduces the cost of having different brand policies for different products. The key to positioning is to make it important in the eyes of consumer that you are incomplete without the product and on the  basis of this, innocent smoothies has kept their customers intact with them. Innocent smoothie is considered a premium brand by its consumers as they relate high cost and high quality with the product as compared to its competitors. The following figure is as perception of customers about Innocent drinks. 3.2.2: Marketing mix To make the product successful, company needs not only the products but a mixture of elements which is called marketing mix. The marketing mix is usually designed with the help of marketing research and it is also based on judgment. Every element of marketing mix compliment each other so efficient integration is required to make it successful. Innocent company has used the marketing mix quite efficiently and effectively. Product: Innocent produces fresh and healthy drinks for its customers. The company has a lot of product range including juices, smoothies, thickies, veg. pots and some of their drinks target specific customers as drinks for the kids. The drinks are available in different sizes and in different packings. Their main focus is to keep things natural and they are also very much conscious about the fruits and the farms from where it comes. Innocent smoothies distinguish themselves from other brands on the basis of purity and being 100% natural without preservatives, concentrates and colorings. The company has also described the negative consequences of concentration and that a product loses its quality, taste and nutritional value and it is done just to reduce cost and making more money. The company makes its drinks with little carbon impact. Same is the case with the recycling. Most of their packing is 100% recyclable and they are making efforts to use minimum material and that too with little carbon footprint. Some people are also fascinated from the product just because of the labeling and packaging. Labeling helps in promoting a brand and provides useful information about the product. So innocent drinks made their labeling very different and the kind of which can amuse and make people to give a second look at it. Innocent drinks is enjoying product width from smoothies to veg. pots as well as product length in terms of different flavors which are available to  consumers and that has really helped the company to maintain its market share and a protection against the current uncertainty occurred in the economic environment. Price: There are number of factors that can have an impact on the price. The company is charging high prices as compared to its competitors and still has the largest market share. It has been possible only because of the brand name and positioning. Since the company justifies its high cost with the high quality they are providing to its consumers, so their prices are also at premium level. People paying a premium price because now they have an emotional attachment developed with the brand But since the economic crunch has affected everyone so people are becoming more price sensitive and that is the reason that innocent drinks has lost some market share this year. The company emphasized that it is less expensive to purchase innocent smoothie than to buy fruit and make it at your own. Promotion: Innocent is carrying out various activities to create awareness about the product among the new or potential consumers and to remind and convince the current purchasers to go for the product. The company uses different methods of promotion from advertisement to personnel selling. They have done advertising and sales promotion very effectively. Innocent has used different approach for its marketing by targeting consumers of different products with different advertisements and campaigns. Website is always an effective method to communicate, promote and making relationship with the consumers. Banana phone is used to get feedback from the customers. Customers are allowed to visit their offices. This strategy is used to develop strong relationship with them. Innocent has also taken support from television commercials and they are using it since 2005. Moreover, to make people aware about their products, the company once made a very big compaign on the television and it regularly arranges festivals as well. Innocent used all the leading newspapers for their advertisement. Online advertising such as on facebook has also been used by innocent as a strategy for promotion. Innocent has also developed public relations. The company has been engaged in certain social projects such as giving money to charity, providing drink for homeless etc which are important for long term sustainability of business and to have a good image in the eyes of your consumers. Place: In the beginning, Innocent used the local shop for its products but as the popularity of products multiplied, the company gradually gained a great market share. The company has found a unique method of selling and distributing their products using cow vans. Innocent drinks use intensive distribution strategy by placing their product in as many places and outlet as possible. The company strategy has been shifted from push to pull as being the largest seller in UK and successful brand name, consumers demand the product. It is now available in more than 7000 retail outlets including the big names as Sainsbury, Tesco, Asda and coffee shops like Starbucks. Export has already been started by the company in Europe and Ireland. Children also got greater access to smoothies after the company made a contract with the company offering catering services to school. After the investment by the coke in the company, innocent will now have more distribution channels and will have access to new places as well. 3.2.3: SWOT analysis SWOT analysis has been carried out to evaluate where the innocent smoothies is standing with respect to the market position. It also helps innocent to analyze how strength can be used to exploit opportunities and how weaknesses can be overcome to avoid possible threats. Strengths * brand name / value already developed * company image * customer loyalty * market leader * distribution channels * investment by coca cola * wide product range and substitutes for breakfast / fruits| Weaknesses * high prices as compared to competitors * lower take up among old people * not popular in evening times * can be made at home and even in cafes and shops| Opportunities * new products for evening which enhances night sleep * emerging markets showing increase every year in market growth * global expansion| Threats * competitors (Tropicana) and products by supermarkets as Tesco * new entrants because of market potential * price sensitive people * credit  crunch can affect demand | Why are concentrates so rubbish? We believe that food companies should do everything they can to get food to people in its natural state. A concentrated orange juice is OJ that has been boiled, then evaporated in a vacuum and then homogenised, resulting in a thick tar. This is then frozen and shipped to countries where it is defrosted, reconstituted with water and has ‘add backs’ added (to enhance flavour and aroma). The concentration process not only affects the nutritional value of the juice but also the taste. All the good stuff gets boiled away and you’re left with a sugary syrup which then has to have lots of horrid stuff added back afterwards to make it taste like fruit again. Basically, concentrated juice tastes cooked, has virtually no nutritional value and that’s why we won’t ever use concentrates. It has to be pure fruit for us. How should I look after and store your drinks? Please please please keep our drinks cold. We can’t stress that enough. Because we don’t use any preservatives or other artificial stuff that might make them last a bit longer, they need to be well cared for. They should be stored between 0-5 ° C, which, luckily enough, is the temperature of your average fridge. So stick them in the chiller as soon as you get home from the shops, or if you’re saving a bit for later, don’t leave it on your desk – pop it back in the fridge for a while. Once opened, we reckon our drinks are best drunk on the same day, although as previously mentioned you should refrigerate them between sips. If you leave them out of the fridge, they will eventually start to ferment. This is a completely safe, natural process but it means the smoothie goes fizzy. It normally causes tiny bubbles in the drink. Click here to find out more about fermentation. If you suspect a drink to be fermented, please dispose of the contents of the bo ttle and contact us at hello@innocentdrinks.co.uk or call the banana phone on 020 8600 3939 with details about the bottle or carton and its enjoy by date. So, please do keep our smoothies nice and cold. ^ back to top How long do they last? Our drinks are made from 100% pure fruit and nothing else. Because we don’t use preservatives, stabilisers or additives they generally last about as long as a pint of milk. Please always keep them chilled and drink them on the same day you open them. Can I freeze your smoothies? Our smoothies are made of nothing but whole crushed fruit and pure juices, so it’s completely safe to freeze them. However, we don’t really recommend it because they taste much better fresh. To be more specific, bananas don’t freeze well; when they defrost they go brown and a bit slimy. Check out this picture of a fresh banana and one that’s defrosted. We know which we would rather drink. If you do decide to freeze one of our smoothies, please make sure you defrost it in the fridge so it stays chilled at all times and note that this might take as long as 3 days. You should also drink it on the day of defrosting. What is love? Baby don’t hurt me, don’t hurt me, no more. Do you have any drinks that don’t contain banana? Our kiwis, apples & limes smoothie (also available in 1 litre cartons) and yoghurt, vanilla bean & honey thickie are both completely banana free. Are your products organic? No they’re not organic. We want to minimise pesticide and other agrochemical usage on our fruit, and this is one of the requirements of both the Rainforest Alliance and also the innocent minimum standards for our fruit growers. Both sets of standards also ban the use of any of the ‘dirty dozen’ pesticides as listed by the Pesticide Action Network. To ensure the safety of our drinks we conduct independent tests on our ingredients, at an  accredited laboratory, throughout the harvest calender. Of the test results with anything being detected at all, these detections fall well within the Maximum Residue Limit (MRL) that you are allowed. Each year our policy will be reviewed and testing procedures will be updated. And what about all of those plastic bottles? Since January 2008, all our smoothie recipes are in 100% recycled PET* plastic. We’ve been working on this project for quite a while. In 2003 we started using bottles made from 25% recycled plastic and in 2006 improved it to 50% recycled. All the time, people told us that it would be impossible to get to 100%, but we tried and tried and tried again. And now we’re here. 100%. It means a 20% reduction in materials (we’ve made the bottle lighter) and a 55% carbon reduction in terms of the bottle’s manufacture. It’s a big step for a little company. We’re very proud. *PET stands for ‘polyethylene terephthalate’. Clear plastic, in other words, said our Stu, who knows about these things. So can I recycle your plastic bottles and tetra pak cartons? We’ve got a whole section on our website dedicated to this. You can check it out here. ^ back to top Are your products suitable for vegans? Smoothies – We’re afraid as we can’t guarantee that our drinks are shellac free, due to the small chance that tiny amounts of shellac do make it into our drinks, we can’t class our drinks as being suitable for vegans. Thickies – no (they contain dairy produce and honey). Are your products suitable for pregnant women? Yes. Although we’ve heard that some of them prefer coal. Can infants and children drink your products? Infants under 12 months shouldn’t drink our vanilla and honey bean thickies. The Food Standards Agency says that honey should not be given to infants under 12 months old because of the small risk of botulism. Infantile  botulism occurs when honey contains Clostridium Botulinum spores, which infect the infant gut that then produces the toxin. This is not a problem for anyone aged more than 12 months. Regarding children in general, our smoothies, thickies and juices are OK – they contain nothing but crushed and juiced fruit (and low-fat bio yoghurt in the thickies), so the health properties should be welcome for kids who quite like sweets and crisps too. But it should be noted that our smoothies and juices contain a large amount of naturally occurring fruit sugars. For this reason you can add water to dilute them if you like. The FSA also recommends that for children, you should try to keep fruit juice to mealtimes. In general, look on the ingredients panel and check the amount of fruit in each bottle. If it seems like a reasonable amount of fruit, then it will be OK. If you don’t usually give your child this much fruit, then adjust the amount accordingly. We make a range of drinks specifically for children which you can find out about here. They’ve got less bits in them, as children seem to prefer their smoothies that way. Do you think I should dye my hair? No. I’ve always thought that blonde suited you. Why do you always use apples, oranges and bananas in your smoothies? These three fruits are a bit like the salt and pepper of the fruit world, except there are three of them. We use them for natural sweetness (apples), natural sharpness (oranges) and natural thickness (bananas). It beats using artificial stuff. So why don’t you call your mangoes and passion fruits smoothie â€Å"apples, mangoes and passion fruits†? We name our smoothies according to whichever flavours you can taste the most. So we feel if we were to start calling the smoothies â€Å"apples, mangoes and passion fruits,† it would be a bit misleading, as what you really taste when you take a mouthful are the mangoes and passion fruits. All of the ingredients are printed in full on the label, so it’s not like we’re trying to be sneaky or anything. Do your products contain nuts? Our veg pots may contain traces of nuts but our smoothies and juices contain no nuts whatsoever (which keeps the squirrels happy). Are your drinks GM-free? Yes they are. How do you make sure your fruit is from ethical sources? Our ultimate aim is that we are proud of every piece of fruit that we use. We want to buy our fruit from farms that look after both their workers and the environment. To achieve this we have created our own set of minimum standards, that detail our expectations for all the relevant social and environmental issues. We are in the process of rolling out these standards with our suppliers, and will work together with them to implement the agreed action plans. We feel that it is really important to understand the issues relevant to each country, and the pressures faced by our farmers, so we are meeting with more and more of our growers. As our fruit comes from all over the world this is a huge task, but one to which we are passionately committed. We know that there is no point recreating the wheel – so we also work with established international accreditation organizations such as the Rainforest Alliance. We first met them at a banana plantation in Costa Rica, and were so impressed with the work they do, that we now only buy banana from Rainforest Alliance approved plantations. The Rainforest Alliance works to conserve biodiversity and ensure sustainable livelihoods by transforming land-use practices, business practices and consumer behaviour. It not only looks at farm workers rights and wellbeing, but also protects ecosystems on the farms, which encourages bio diversity. We believe this sustainable approach is the best one. A well run farm with motivated workers means better quality fruit and better productivity, which means we get nicer fruit and the farms are more profitable. Are you going to move all your fruit to Rainforest Alliance approved sources? No, it just isn’t applicable for certain countries and certain fruits, like those that we source from the UK. But as the Rainforest Alliance expands into new certification territory, like pineapple, we’ll be keen to keep on building our relationship with them. As they develop new standards for new  fruits, we will assess their suitability for our growers. Whilst we don’t like to boast, it turns out they quite appreciate the work we do and they showed their gratitude last year with this rather fetching trophy. Outside of the world of fruit they certify all sort of things including coffee, cocoa and forestry. Find out more here: www.rainforest-alliance.org ^ back to top Why don’t you buy fairtrade fruit? We take the ethics of our supply chain incredibly seriously and took great care to find the best independent certification scheme that matched our values, and suited our needs the best. Fairtrade’s primary focus is on the prices paid to the farmers and social issues for small farms and cooperatives. It’s a great scheme but we felt that Rainforest Alliance looked at a broader spectrum of issues (both social and environmental), which we thought was a better fit with our own ethos. Also, the Fair Trade scheme predominantly certifies cooperative and and family run small holdings – not all of our fruit is available from these types of farms, so Fairtrade isn’t always applicable to our growers. Articles like this one from The Observer Food Monthly debate the key differences between Rainforest Alliance and Fairtrade (this one’s about coffee). What is the innocent foundation? The innocent foundation is a grant giving charity that was set up in July 2004 with the idea of bringing nature and communities closer together for mutual benefit. innocent donate 10% of our profits each year to charity, primarily to the innocent foundation, which funds rural development projects in the countries where our fruit comes from. Find out more here. Do your drinks actually contain shiny trumpets/pebbles/cricket pavilions/small churches? No. Can I have some free drinks for my event please? We get lots and lots of requests for our drinks and as much as we’d love to help everyone out, it would just be impossible. Instead, we give any excess drinks we have to the homeless through the charity, Fareshare. You can find out a bit more about the good work they do here. Okay. But it’s for charity. Does that make any difference? Generally, we feel it’s better to be able to offer a significant amount of support to one cause rather than a little backing to lots of different ones. With that in mind, every year we donate 10% of our annual profits to the innocent foundation. Its remit is to fund Non-Governmental Organisations (NGOs) that work to bring nature and communities closer together. You can see a bit more about the projects we support at www.innocentfoundation.org. Hope that all makes sense. I’m running a marathon/ climbing Everest/ shaving off all my chin hair for charity. Can you sponsor me please? Again, whilst we applaud anyone who gives up their time to sit in a bath of baked beans or run further than the corner shop to raise money for charity but if we sponsored everyone who wrote to us, we’d be living off beans and no toast. Instead, we make sure that we give something back to the countries where we buy our fruit, via the innocent foundation. Can I borrow your car? The clutch has gone funny, the fan belt’s shot and there are no windows. Plus I’ve forgotten where I’ve parked it. Lend us a fiver. No. 4: Conclusions and Recommendations 4.1: Conclusion Innocent’s success has been made possible just because of effective and innovative way of marketing which they adopted. Innocent used every kind of channel, big or small in carrying out its promotion. They used every kind of that marketing strategy in which low cost was involved but its impact was high. The company updates the website and labels regularly. Innocent changed the label quite frequently to maintain the attention of its consumers Innocent made the customers loyal by doing little things but they made huge difference for them. Innocent was of the view that making their drinks easily accessible to customers is very crucial and success of the company depends on it. The innocent also arranged a free event for its customers as a means of giving thanks to its customers for using their products. Innocent always remained active in interacting with its customers. The owners of the company didn’t have much idea about how things should be done and no strategic plan was involved in making the brand name, its packaging and process of launching it but surprisingly their idea was welcomed by the consumers as it was different and something they can amuse or laugh at. Innocent dominance has been affected in 2008 after the introduction of Tropicana in the market. In April 2009, investment by Coca-Cola is seen as a wise step because as a result of decrease in sales, it was necessary to maintain the brand value. Since the company is facing severe competition from rivals such as Tropicana so funding was required to be in the competition. Coke will increase the distribution channels and give access to more markets by making customer aware of the product. Innocent’s premium positioning is a key advantage and it also has developed a strong connection with its consumers over the passage of time. Brand loyalty is good but they have to look at their prices if they want to sustain their position as people are becoming more price conscious. It is more difficult to retain the customers than to attract new customers 4.2: Recommendations Innocent drinks should closely monitor the environment and conduct market research to identify issues as consumer behaviour, competitors’ strategies which can have an impact on their brand or positioning (O’Malley, 1991). This will help the company to be proactive in their approach rather than reactive. As the market is becoming more global, there will always arise new opportunities but also threats as consumers also have access to variety of products from different countries with different tastes and nutritional values so innocent drinks must consider what their consumers want, their preferences if they want to survive and be successful in the long term. SWOT analysis has identified the threats and weaknesses which innocent should  consider and the opportunities which they should exploit by using their strengths. There are some strategies which can be adopted by innocent smoothies as market leaders. They should try to expand the market either by market penetration or by exploring new potential markets. Innocent can also try to protect their current market share which has fallen because of Tropicana by introducing new products into its line. More aggressively, they should try to increase their market share by reducing their prices which are quite high currently and by further increasing promotion. Innocent should also make good use of collaboration with the Coke as it can provide the company with lot of distribution channels. Innocent must focus on strategies which help them to attract new consumers and in retaining the existing customers. Different promotional strategies can be adopted. The company can offer discounts, free samples for new customers to try, free gifts, coupons for customer loyalty, tickets for different events etc. innocent should also ensure that its product is available in as many places as possible. They can increase the availability of products on train/bus stations, petrol pumps and a lot more health clubs. Customer satisfaction is very important because that will encourage them to buy the products of the company again and they will also become a source of advertisement by referring the companys’ product to others as well (Gilson, 1986). It is the least expensive method of advertisement and promotion. Innocent can adopt some defensive strategies against Tropicana as well. Innocent can reduce the prices in the market in which the rivals have greatest share. Secondly, it is good to have information about competitors’ move in advance so that appropriate actions can be taken. Diversification can also be done if the markets are becoming more vulnerable. The research has also shown that smoothies are not consumed in later part of the day so the company can make some drinks which are light, easy on stomach and which help the consumers in getting better sleep at night. Innocent should make use of its brand name by launching new products like ice cream. Sometimes, new products help in compensating the loss of failed products but the company must remain conscious in launching a new product because it is difficult to develop, have to carry out rigorous market research and there are also long lead time involved and if it fails, it will bring bad image to the brand and will affect the brand equity so the company must use all the processes of product development from idea generation to commercialization in order to mitigate the risks associated with new products. References Baines P., Fill C., Page K.,(2008). â€Å"Marketing†. New York: Oxford University Press, Pg 374-382 Ginden, R. (1993), â€Å"The name game†, Cheers, pp.59-62. Innocent drinks. http://www.innocentdrinks.co.uk (accessed 02/12/2009) Mintel. http://academic.mintel.com/sinatra/oxygen academic/my reports/display (accessed 03/12/2009) O’Malley, D. (1991), â€Å"Brand means business†, Accountancy, 107, pp.107-8.