Question 1:
How does SoBe’s position in the marketplace differ from that of conventional soft drinks?
First of all, if we think about ‘conventional’ soft drinks we immediately get the impression of drinks such as Coca-Cola, Pepsi and Red Bull.
SoBe’s position in the marketplace of ‘soft drinks’, however, seems, at least at first, absolutely different from the well-known soft drink industries.
Coca-Cola and PepsiCo, for example, are the leading companies in the soft drink sector highly outselling the competition. With an ‘ever-new-launching’ strategy of actually very little differentiating products they try to touch many different target groups – the ‘size’ itself, makes them ‘main-stream’.
Strictly speaking, SoBe does everything it can to remain the opposite, precisely by being a market nicher in a fast growing and innovative segment with a special entrepreneurial culture. Its main competitors really are companies build up on a similar idea, namely ‘Snapple’ and ‘Arizona’, number two and three in the market sub-segment of ‘New Age’ drinks in the US, respectively.
SoBe is in a very narrow, sensitive, competitive and fast-growing segment of ‘lifestyle’ soft drinks, and therefore, entirely different from the mainstream-driven conventional soft-drink producers.
Question 2:
What mechanisms and associations does SoBe use to position itself in the customer’s mind?
Grass-roots sampling and marketing, aiming at the younger generation visiting extreme sports events is supported by SoBe to attract the target group of fancy extreme sports fanatics. Click on ‘Team Lizard’ on the interactive website of SoBe and you will find their sponsored events and professionals. Providing these events with fridges and the very popular, reg...
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The acquisition will not harm SoBe’s performance as long as each company, giant PepsiCo and nicher SoBe, will stick to what they can best; SoBe has to attract the youth, Pepsi the mass. My experience shows that many acquisitions are done quietly; on a ‘hidden level’. This should be very important to hold the young customers of SoBe. If the fickle target group of SoBe not even take in what happened their loyalty is given to a 100%.
Sources:
• http://en.wikipedia.org/wiki/Grassroot
• http://en.wikipedia.org/wiki/SoBe
• http://www.sobebev.com
• http://www.beverage-digest.com/editorial/001030s.html
• http://en.wikipedia.org/wiki/Hedonism
• http://www.bevnet.com/bevblog/2008/02/pepsi-takes-shot-at-vitaminwater-calories/
• http://money.cnn.com/2000/10/30/deals/sobe/index.htm
• http://www.usatoday.com/money/smallbusiness/2004-02-04-entre-feb-one_x.htm
Being in the business of producing healthy drinks, SoBe even has a sugar-free product line called SoBe Lean. This line appeals to diabetics and all health-conscious consumers who want to avoid sugar. These drinks are sweetened with a blend of sucralose and ACE-K. The company boasts many different recipes for health drinks and there are currently over 200 different cap slogans in production.
As stated in the case, “the market for energy drinks was growing; between 2010 and 2012, the market for energy drinks had grown by 40%. It was estimated to be $8.5 billion in the United States in 2013 [and] forecasts projected that figure to reach $13.5 billion by 2018” (pg 5). However, much of this market’s revenue -- 85% in fact -- is dominated by five major brands, while the remaining 15% is split between approximately 30 regional and national companies. (pg. 5). With this saturated market, it might not be best for Crescent Pure to enter as a completely new product to the industry, as there is the possibility that it will be squeezed out of the profit shares by more established brands -- especially if it is not properly secure in its identity. In addition, while the market for energy drinks appeared to be growing at an exponential rate compared to the market for sports drinks -- which increased only 9% in five years and would be at approximately 60% of the rate for energy drinks in 2017 (pg 6) -- the consumers appeared to be wary of partaking in the market for several reasons, which would potentially harm the reach of Crescent Pure. These concerns included rising news reports discussing the safety of energy drinks (pg. 5). Taking into consideration the data provided in the case that concerns reasonings of why consumers choose specific drinks over others, there
The soft drink industry in the United States is a highly profitably, but competitive market. In 2000 alone, consumers on average drank 53 gallons of soft drinks per person a year. There are three major companies that hold the majority of sales in the carbonated soft drink industry in the United States. They are the Coca Cola Company with 44.1% market share, followed by The Pepsi-Cola Company with 31.4% market share, and Dr. Pepper/Seven Up, Inc. with 14.7% market share. Each company respectively has numerous brands that it sales. These top brands account for almost 73% of soft drink sales in the United States. Dr. Pepper/Seven Up, Inc. owns two of the top ten brands sold. Colas are the dominant flavor in the U.S carbonated soft drink industry; however, popularity for flavored soft drinks has grown in recent years. The changing demographics of the U.S population have been an important factor in the growing popularity of these flavored soft drinks. The possible impact of this factor will be addressed later in the case.
The Holland Sweetener Company (HSC) is planning to enter the low-calorie, high-intensity sweetener market which is currently dominated by NutraSweet. Below we first analyze our target industry. Next we look at what kind of response should HSC expect from NutraSweet upon its entry into this market. We will also analyze few likely scenarios that could play out and we will try to estimate the likelihood of each scenario. Based on our analysis, we will give a recommendation for HSC to plan their entry into this market.
Currently, BBC’s objectives include a national price increase between 1 and 2 percent; an increase advertis-ing, promotional and selling expenses; and to increase its investment in its brands commensurate with the opportunities for growth that it sees (Boston Beer Co., 2016). These objectives are clearly supported by BBC’s mission, which seeks profitable growth. Moreover, the vision is sup-portive, as BBC plans to continue creating high-quality and innovative products, while still fo-cusing on existing, successful brands complimented by a robust portfolio of alternative brands. Lastly, BBC’s core values are the commitment “to careful financial management and to offering the highest quality products. We abided by Jim’s “String Theory”, which says that teamwork and creativity outperform abundant resources.
It has grown to be a high profile business, being the number one cola, water and sports drink brand in Australia
Red Bull has becoming hugely successful and operates within the global soft drink marketplace. Within the soft drink industry its niche is the ‘energy drink’ market, of which Mateschitz was largely responsible for creating. Red Bull currently is the leading energy drink across the entire globe. It holds 70% of the market worldwide (Gschwandtner, 2004). Once the drink was passed by health ministries, Red Bull entered the Austrian market, soon thereafter then moved into Germany, United Kingdom and the USA by 1997.
The beverage industry is highly competitive and presents many alternative products to satisfy a need from within. The principal areas of competition are in pricing, packaging, product innovation, the development of new products and flavours as well as promotional and marketing strategies. Companies can be grouped into two categories: global operations such as PepsiCo, Coca-Cola Company, Monster Beverage Corp. and Red Bull and regional operations such as Ro...
Mateschitz’s secret to creating a $1.6 billion worldwide stampede for Red Bull lies in a highly ingenious “buzz-marketing” strategy that herds consumers to exclusive and exciting events that get high media coverage. Red Bull supports close to 500 world-class extreme sports athletes that compete in spectacular and often record-breaking events across the globe. Mateschitz explains, “We don’t bring the product to the consumer, we bring consumers to the product.”
1.Red Bull differentiates itself in not only the soft drink industry by focusing on energy drinks solely, but also in the business industry, seeing how their strengths, weaknesses, opportunities for improvement, and threats all seem to blur together . The fact that Red Bull is seen as a luxury and sports drink is a strength, weakness, opportunity, and threat within itself (Kansara, 2); being labeled as such sets Red Bull apart from their competitors, pushing them into one field and industry to prosper in and be associated with, leaving them opportunity to determine the way that industry will grow as they are the pioneers but also threatening their hopes for expansion. In a nutshell, in order for Red Bull to truly work towards their mission
The “Top Challenge Trend” is likely that of “Faster Pace of Innovation” causing increased competition due to lower barrier of entry. (Carpenter, Bauer, & Erdogan, 2012) With the increase competitors from both major competitors like PepsiCo vs generic branding of sodas at cheaper rates. The market is flooded with new flavors and new competitors all the time.
Key success factors in the industry are a strong brand presence, maintaining customer loyalty as exploring new markets and distribution channels as well as offering a diversified product line. Implications of these factors are strong competition and dependency of company’s behavior and marketing strategies on competitors’ behavior. This is especially true for Coca-Cola and PepsiCo since their flagship products are very much alike in look and taste.
This competitive advantage has been rendered sustainable as other players have found it difficult to catch up with the company's competitive strategy. In spite of this clear advantage, it was noted that the company faces some challenges being the world leader in soft drink distribution. The canning and bottling of the product which is done in many countries have now fallen into the hands of independent companies, thus it becomes hard for a given company to control the quality of the packaging
... it’s a buyer’s market, therefore instead on focus on push advertising and trying to compile prospective customers to buy their product, Pepsi is trying to make Pepsi a part of the consumers life so, whether consciously or unconsciously, if a customer goes out to buy soda the first thing that comes to his/her mind, is Pepsi. I find this especially intriguing, because as an aspiring entrepreneur I hope to one day market my products with the same if not better technics as Pepsi.
The soft drink industry is a highly profitable industry and its success is due to the large consumption of non-alcoholic beverages through which both concentrate producers and bottlers are profitable. Given the U.S. Industry consumption Statistics, Exhibit 1, it is clear that, after deducting beer and wine, soft drinks account for about 90 % of the total liquid consumption, while Coke and Pepsi account for about 75 % of the soft drink industry. The high consumption of CSDs is related to the soft drink industry selling to consumers through five principal channels: food stores, convenience stores, vending, fountain and other. Out of the five channels the case describes vending as the most profitable channel for the soft drink...