feel good? That I'd like people to see me choosing it?
Store Choice- Health H2Owill be available at every possible convenient
location in all kiosks, health stores, delis, petrol stations and supermarkets.
Post Purchase – important and often ignored. The best outcome is for the
consumer to repurchase the product. According to Dolak, the Marketing
Manager of the Brandchannel, if consumers perceive there is a low risk to trying
something new, they will do it once. But if the new product does not live up to
its promise the consumer is more than likely to switch back.
Playing off the basic “Maslow Hierarchy” (Dann 109:2004) offers a point of
positioning. Health H2O is a basic physiological needs is the foundation
messages which will be the core of the social marketing pitch.
BCC Research recently did a study on the various market influences of
functional foods & beverages ,foods and beverages that perform specific
functions that are categorized as being vitamin or herb fortified, or offering
functional benefits. Health H20 is an example of a functional beverage.
The report outlined what various market influences were exerted on consumers
and their subsequent buying decisions. These influences included consumers’
interest in self-care, as well as consumer age and gender influences tastes and
preferences for certain health foods and beverages. The study suggests that
functional product industry has great potential in overseas markets like Japan
(www.bbcresearch.com).
2) Overview of Environment & Competitive Analysis
Understanding the environment the corporation operates in is of critical
importance. Wider changes with respect to the social, cultural, technological or
political environments influence what is wanted and demanded in the
future (Study notes).The biggest environmental impact on Health H20 are from
social/cultural trends. Health is becoming increasingly influential factor in
consumers' choice of beverages. Whilst bottled water has gained positively from
this focus on wellbeing, other soft drinks, most notably carbonates, have been
criticised for at times, high sugar content. In particular, the rising issue of obesity
is a major challenge for the soft drinks industry(Food & Drink Weekly,2001).
Consumer demands and preferences of beverages are becoming more
sophisticated, addressing a wide range of consumer needs, both functional
and emotional().
There are a number of heath conscience beverages on the market but unlike other
diet beverages on the market, Health H20 is completely free of artificial
sweeteners and chemical preservatives. Our current primary competitor
is a product called “Propel” from the producers of Gatorade.
SWOT Analysis of “Propel”
Strengths
Weaknesses
- Poor media mix, no marketing messages or in-store advertising.
- Mainstream range of flavors and the appearance of the product looks like
water. Distribution undersupply problem.
Brand positioning is significant factor, identifying with the brand at the
top of the scale is the highest level of benefit, to which the others contribute. The
proper structure of benefits adds up to the ultimate goal: reinforcement of the
consumer's self-esteem, confidence and sense of well being, via identification
with the brand (Dann 83:2004). Nestle is a brand recognized globally, this is
the ultimate driver, the determinant of the product's standing in the consumer's
regard. A study involved in the consumer’s taste and image evaluation of four
competing brands of commercial beverage showed significant results. When
individuals were asked to evaluate each beverage in terms of 17 taste attributes
identified that segments of the population showed that the image of a brand
differs considerably from the actual taste perception (Gensch:1978). It’s obvious,
the successful brand, is the brand that stands for something.
That's the brand that not only attracts consumers, but holds them fast, that makes
it difficult or impossible for a competing brand to be removed (Dolak,2005).
Governmental behavior has power over the marketing mix – Health H2O will be
labeled with the ingredients as regulated by Australian standards.
The Corporate Objective:
Use the Nestle association as a conduit for entry into the market place.
Provide guaranteed demand, market penetration, nationwide
distribution, and an opportunity to gauge market acceptance.
3) Market Segmentation
Market segmentation will enable us to develop an individual, tailored marketing
mix to our group (study notes). The bases of segmentation for Health H2O will
be a combination of demographic/lifestyle segments. This will be most effective
as different demographics can have the same interests but more importantly, not
all demographics have the same demographic profile. The combination of
variables are consistent with the image of the target market. (Dann74:2004). This
target segment will be teenagers through to adults both sexes who are
health conscience about the products they consume. Messages of fun, enjoyment
and convenience will be transmitted primarily via the packaging and the
marketing mix. Health H2o will be perceived as a flavorsome, healthy
alternative to water.
Pepsi Max Sports Drinks
Red Bull Gatorade/Powerade
Diet Soda Fruit Juice
Health H2O
Bottled /Canned Tea Water
Perceptual Map of Drink Products on the Market
4) Market Research Brief
Latest research indicates that the global wellness drink market raced ahead by
10% in 2005 to 9,718 million litres, according to Zenith’s new report on this
diverse market. Growth was driven by new brands, brand and flavour
extensions and novel product concepts (). These are
promising statistics but we still want to conduct our own market research to
guarantee there is a demand for Health H2O in the current marketplace.
The customer profile of the target segmentation ranges from teenagers to
middle aged professionals, who are health conscience about what beverage they
consume. In order to collect primary data for market research a focus group of
the target segmentation will be interviewed. The primary qualitative data from
the focus group will enable us to gather greater depth of information than
standard questionnaires and surveys (Dann,163:2004).The common element of
our target segmentation is healthy lifestyle. The potential participants of the
focus group will be recruited from a facility such as the gym or yoga studio and
consist of 6-12 people. The focus group will last approximately two hours and
will be held at the local community centre as to not intimidate the participants. A
skilled moderator will manage the focus group(Dann163:2004). Questions
regarding consumer behavior, promotion, price and distribution will be
addressed and sample questions would include:
What motivates your preferences for the beverages you consume?
How can we best reach our current customers?
What is the specific process that potential customers use to select a source for our type of products or services?
Who makes the buying decisions? When? Where? How?
How do we change our products or services to better meet customer needs?
How do customers perceive the quality and reliability of Health H2O?
Does the price effect your decision to when it comes to your beverage choice?
What we are hoping to achieve from the data obtained is to see how our target
segmentation will respond to our product.
5) Distribution Plan
The first major decision Nestle has to make is with regard to the use of channels
is whether it will manage the process itself outsource this part of the mix to
others. Nestle being a global organization has established relationships with
companies that we will outsource the mix to that we have always used. A
transaction cost analysis will be completed to ensure that this is the most
economically viable decision(Dann 218:2004).Channel Structure that will be used
is Two-level distribution channels(producer/distributor/retailer/consumer).
This will be the most effective form of distribution channel as a large number of
retailers that will supply Health H2O are small independent businesses like delis
and petrol stations that do not have the storage capabilities of larger franchises.
(Dann: 221, 2004). The success of Health H2O and the image it portrays will
be determined on the basis of its channel of distribution and the level of
marketing exposure it receives (Dann222:2004) Creative use of in-store
distribution, placing the product close to the register for easy accessibility will be
a good tactical strategy for such impulse purchases.
One of the most important factors is convenient location compared to other
variables such as price, environment, and variety. Health H20 is a no-
involvement product /impulse purchase, so convenient location and in-stock
supply is imperative. If supply lines are unpredictable this can prevent
repurchase or create product shifting to a comparable product to satisfy the
need (Dann 221:2004).
6)Pricing Plan
Price influences the demand for a product but also determines organizational
revenue (Study Notes). Health H2o is priced competitively at $1.99. This pricing
strategy is high enough to convince customers that they are purchasing an
effective high-quality product but not over $2.00 which consumers may perceive
too expensive. The pricing policy implemented when the product is initially
launched will be Penetration Pricing – The price will be initially reduced to
$1.50, the lower price will hopefully alleviate adoption risk and motivate early
attention of Health H20 (Dann 306;2004).The lower price will be clearly marked
as an introductory offer in the instore promotion this will avoid consumer
criticism when the price goes back to the market rate. The price was not lowered
too low so that once consumers have tried the product and like it, there is not a
huge price leap (Dann: 306,2004). Nestle, a well established global organisation
has the luxury of setting the initial price at a below-average margin, whilst
smaller organisations may not. The Penetration method will be most effective as
Health H2O is a fast moving consumer good in a cutthroat market where
recognized brand loyalties govern the sector. The product , a low emotional
product, not holding significant importance and consumers are not prepared to
pay $5.00 for health drink. The retail price $1.99 fairs well with comparative
products on the market. If a competitor reduces their price by 10% we wouldn’t
match the price difference, it would be too costly over extended periods of time
and it would depreciate the brand position.
7) Sales, Promotional & Advertising Campaign
Highly targeted and sharply focused communication must take place within the
framework of an integrated marketing communications (IMC)plan that will
include a number of factors in the promotional mix : personal selling, promotion,
direct marketing, advertising, and public relations. (Study notes). Health H20
and it’s functional benefits must be communicated clearly and consistently over
all chosen communications channels.
The Promotional Mix is about communication. The most effective form of
medium to letting consumers know about Health H2o is through the One-to-
Many communication method. This broadcast style form of communication is
ideally suited to addressing our broad range of target market (Dann253:2004).
The initial phase of the promotional campaign will commence with a $5 million+
budget. Nestle being a large company with large resources, enough to employ an
aggressive selling and a “pull” strategy for the introductory marketing program,
relying on heavy campaigns of advertising (Borden).
The money will be spent behind all applications of the campaign, billboards,
phone kiosks and wall postings all featuring the colours of the Health H2o & the
slogan “the healthier choice”. The campaign will be promoted throughout major
metro markets, the incorporate campaign images will include:
The vehicle marketing program, which will include 10 high-tech cooling trucks
resembling television news vehicles (decorated with several creative
images & the four bright colours of the product) that travel around major
markets "broadcasting" information about the products to consumers, and
providing samples.
The retail sampling program, which will include more than 100 high-energy,
company-trained sales representatives spreading the word of Health H2O at
creative sampling stations in key retail outlets like supermarkets & health expos.
The in-store promotional program will include more than 50 executions of
display racks, banners, table tents, and information pamphlets will be displayed at designated outlets.
Advertising -print publications will commence shortly after been launched –
including a full page colour advertisement of the product, the slogan, the
flavours & health benefits. This will be advertised in such magazines “Self”,
“Running”, &“Health & Fitness”. These publications are likely to be read by our
target segment.
Website - will be launched with information of
the product’s functions, ingredients and health benefits.
Sponsor exhibitions and trade show – Health H2o will be promoted through
sponsor exhibitions and trade shows like health expos. To reach a large
audience through marketing connected to high-profile events or broadcasts, and
regional markets through cable television broadcasts or certain sorts of
sponsorships, to achieve and protect sales opportunities, to create brand
identities and to increase visibility in general.
Conclusion
The enhanced water market remains small compared to the $7 billion
bottled water market. But whilst plain bottled water has been growing
at 10% - 15% annual rate, the enhanced water market more than quadrupled
between 2000 and 2001, to $85 million from $20 million.... ().
Health H2o will thrive in this already established soft drink market where
consumers are looking for innovative products that provide added value and
nutritional content. Furthermore, every indication suggests that this trend and
pattern of consumer demands will continue to grow even more insistent, and
that it constitutes an essential consideration in positioning a product or a
brand.
References
Text – Introduction to Marketing Dann & Dann – Wiley J & Sons
Milton, QLD Australia 2004
Article :Image- Measurement Segmentation – Journal of Marketing Research
By Dennis H Gensch (August 1978)
Article : Soft drink industry refutes new report linking their products to child obesity ,
BBC Research GA-109 Functional/Nutraceutical/ Wellness Foods and Beverages Dorothy Kroll Published March 2000
The Concept of the Marketing Mix – Borden, Neil H
Some Practical Considerations in Market Segmentation
Shirley Young, Leland Ott, Barbara Feigin
Journal of Marketing Research, Vol. 15, No. 3 (Aug., 1978) , pp. 405-412
the global information Inc. “Global Bottled Water”
Publication 12/5.
“How To Brand and Market a Commodity” By Dave Dolak 2005
