Own Labels In The Uk Smoothies Market Marketing Essay

Own Labels In The Uk Smoothies Market Marketing EssayFor the purposes of this constitution a beguiler will be defined as a drink that is made with pure crushed fruit, but which may also hold a small amount of fruit juice or pure, yogurt, milk or soymilk, and is smooth in texture (Mintel, 2010).1.2 The UK Smoothie MarketAlthough the smoothies commercialise in the UK enjoyed a period of exceptionally strong growth of more than 150% between 2005 and 2007, this has now been stalled by the impact of the recent economic recession and consumers shift key their loyalty to alternative, cheaper pure fruit drinks. As well as suffering from unfavourable economic conditions, smoothie manu accompanimentures urinate failed to convince UK consumers that the drinks ar not large of calories and are not bad for their teeth., despite strong contradictory evidence from the British Nutrition Foundation. The result of all of this is that the smooothies market declined by some 36% between 2007 and 2 009 (Mintel Report Sales Brochure, 2010).The filth leader in the smoothie market, Innocent, has largely been responsible for fuelling the growth in the market and despite the general market downturn, it still commands an 80% market treat. However, Innocents market share has been boosted, not vertical by its own performance, but also by the decision taken by PepsiCo to remove its PJs brand in early 2009. PepsiCos rationale for removing the brand was that it enabled it to focus on its best selling Tropicana brand, which added a smoothie to its range in February 2008 (Lewis, 2008).The smoothie market is now showing signs of a fragile recovery and Mintel forecasts that improved economic conditions, together with the increased penetration of the childrens market, will see the smoothies sector returning(a) to growth soon see Figure 1 below (Mintel Report Sales Brochure, 2010). systema skeletale 1 Trends and Forecast for Volume Sales of Smoothies, 2005-2015Total powerfulness% annual changem litres20052766+69200652127+93200770171+35200860146-14200945110-252010 (est)41 degree Celsius-92011 (fore)44107+72012 (proj)48116+92013 (proj)53130+122014 (proj)58141+82015 (proj)64155+102.0 The Importance of Branding in the Smoothies MarketWith consumers becoming increasingly sophisticated and confident in being able to differentiate between the offerings of various suppliers in a marketplace, the value of a strong brand has never been more critical (Mitchell et al., p.201. 2003). According to Aaker (p.95, 1996), to be successful, brands should offer consumers a value proposition, which constitutes serviceable, emotional and self- expressive benefits.Branding is critical in the soft drinks market as a whole. For example, Coca-Cola (a stakeholder in Innocent) believes that 96% of its total worth as a business can be attributed to its brand (Knox, 2004). In the smoothies market the brand leader, Innocent, has demonstrated the value of a strong brand. The name Innocent positio ns the brand as simple, pure and safe thus delivering both functional and emotional benefits within its brand value proposition.There are a number of reasons why branding is critical to success in the smoothies market, namelyConsumers are cynical about manufacturing businesss claims of the health benefits of smoothies.Consumers believe smoothies are too expensive compared to other fruit drinks.Because smoothies are a relatively new product in the market they do not resonate with the 45+ age group which is a potentially significant market segment for smoothies.The distribution of smoothies relies too seve commit on the big supermarket chains leaving them open to competition from supermarket own brands.Smoothies brands have largely recognised the value of branding in the marketplace and this is attest by a three fold increase in total advertising spend in the sector in 2009/10. The leading brands have build up a lot of brand equity as a result (see Figure 2). However, despite this t he leading brands have not been able to rely on their brand reputation and equity to boost sales, rather they have had to discount the price of their products extensively in 2008/9, which may impact negatively on the equity of the brands in the longer term.Figure 2 Personalities of Various Smoothie Brands, May 2010BenecolInnocentEllas KitchenTropicanaAverageBase internet users aged 16+ who have heard of the brand1,5171,7956741,718%%%%%Authentic1019101614Boring92434 dispassionate621101614Delicious935102821Engaging512688Exciting41991111Fun526121514 echt1423122017Healthy4249193636Natural2343183129Refreshing930113421Special92281112 devolve41333Traditional8781910Unappealing114546Unhealthy11222Vibrant41881311 bloodline GMI/Mintel3.0 The Threat from Own Labels in the Smoothies MarketThe growth of supermarket own tick off brands is having a big impact on the sale of manufacturer branded, fast-moving, consumer goods (Veloutsou, 2004). Supermarket own label brands are no longer just the low er quality and lower priced alternatives to manufacturer brands that they once were as since the late 1990s they have been offering a genuine quality option for consumers (Burt, 2000).Porters (p.49, 1989), includes the threat from substitute products as one of the five forces in his model of industry competitors see Figure 3 below.FIGURE 3 Porters Five Forces Model of Industry CompetitorsSubstitute products, in the form of own labels, pose a significant threat to established brands in the smoothie marketplace. The leading brands, such as Innocent, are suffering from consumers switching to own label smoothie and fruit juice products, in the shorter term, due mainly to price considerations. The extent of this switch is evidenced by the fact that the large supermarkets now dominate the fruit juice drinks market with their own brands (Keynote, 2010).4.0 The Brand Position of Tropicana in the UK Smoothes MarketBest known for its fruit juice products Tropicana launched its smoothie in 2 008 supported by a 4.5 million promotional campaign. Owners PepsiCo intended that the Tropicana smoothie would withdraw the gap left by its withdrawal of the PJs brand. However, despite the huge investment in promotional support and PepsiCos knowledge of the soft drinks market, Tropicana has failed to deliver. Although it is now the second largest of the manufacturer brands, in terms of market share, it is a long way behind the brand leader, Innocent. Its sales and market share have also taken a nosedive from its peak of 2008 see Figure 4 below.Figure 4 Trends for Take-home Market Share of Smoothie Brands, 2007-20092007200820092007-09m% sharem% sharem% share% point differenceInnocent1507112071 hundred80-33PJs*2512106nananaTropicana Smoothies8415932-63Ellas Kitchen1.512.212.5267Sub-total185881478710684-43Others425343Own-label221018101612-28Total210100170100125100-40* brand discontinued in late 2008Despite its poor sales performance in 2009, Tropicana is not a bad performer, in ter ms of its appeal to consumers, with just over two-thirds of those surveyed by Mintel saying that they liked it and would buy it again. However, most consumers still regard Tropicana as a juice and not a smoothies brand.5.0 Summary and ConclusionsFollowing a significant period of growth, the smoothies market has declined in the last two years and is only just showing signs of recovery. The market is dominated by Innocent and other brands, such as Tropicana, have failed to establish a meaningful foothold despite vast marketing spends. Brand reputation and equity is key to the success of smooothies and Innocent has successfully established its brand in the consumer psyche.In terms of leveraging its brand then Tropicana has an inherent problem inasmuch as it is still best known as a fruit juice, not a smoothie, brand. It needs, therefore, to build its reputation as a smoothies brand by delivering a value proposition targeted specifically at smoothie drinkers and supported by its brand strength in the juices market. The fact that consumers generally like its smoothie product and would buy it again are a good foundation for future growth. Also, considering the brand personality scores shown in Figure 2, where Tropicana is generally in second place, there are opportunities to build on the brand attributes of authentic, cool delicious fun and genuine, in future promotional activity.The short shelf life of all smoothies makes it difficult for them to penetrate the on-trade. However, smoothies have not really targeted themselves at the impulse purchase consumer and, consequently, this is a potential discipline of growth as is the largely undeveloped childrens market.-