Marketing Innocent Smoothies and the Potential Threats.

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21066054

Marketing and brand management

Assessment one

Market Sector: Concentrated soft drink

Brand: Innocent Smoothies

Task: 2) Brand

Word count: 1000

Date: 05/03/12

Student’s number: 21066054

Student’s name: Christopher Mills

Introduction

This report will focus on a particular niche of the soft drinks market, smoothies. Innocent Smoothies is the brand chosen to be evaluated. Innocents brand and the threats from own label will be discussed in this report. The soft drinks market is very competitive with similar products being sold. Therefore there is great need to market your product effectively so that to gain significant market share. Innocent Smoothies are currently the market leaders with 80% of all value sales in 2010, this was followed by own-label versions, which made up a further 13% (Mintel, 2010).  Innocent has a presence in 13 European countries and is Europe's number one smoothie brand (Stodell, H. 2010).

Own Label threats         

Competition has increased a lot, with particular pressure from own label brands such as Tesco, Sanisburys and Asda. Own label smoothies are designed to try and stand out alongside the colorful and vibrant brands, this is done to give the consumer the perception of a better quality product. They’re also cheaper than the branded equivalent giving them the competitive edge in price, this makes them type two own label. These brands are positioning themselves as low cost alternatives, thus a major threat to Innocent’s premium position that consumers may not be able to afford. With own label taking up 13% of the market share, they’re an encroaching threat to the innocent brand.

Own label have gained market share since the financial crisis in 2007 (Levey, A. 2011). Due to the recession and declining consumer confidence, disposable income has decreased, therefore sales have been affected negatively, leading to consumers buying cheaper shelved products. The smoothies category has seen its exponential growth driven by the success of Innocent checked in the past three years, with the economic downturn seeing many consumers switching to cheaper alternatives such as own label and fruit juices (Mintel, 2010) (See appendix A, for price positioning and appendix B, for brand consumption compared to their competitors). Therefore own label capitalized on the market share with their cheaper smoothies.

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Own label has also encroached upon the available shelf space for Innocent smoothies. Supermarkets prefer to stock their own label because it generates more revenue. This means they will charge branded products more for the shelf space if their own label is in competition. However own label is not normally the desired choice for customers, this is due to brand loyalties, awareness, associations and perception of quality. Customers shopping at Sainsbury’s may go in especially to pick up an Innocent smoothie, if they were not stocked by the supermarket then those customers will go to a rival supermarket instead. ...

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