Marketing brand product - Marketing Essay Example

Introduction

 

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This paper seeks to answer three sets of questions about foundation of marketing by analysing in the case of Innocent Company.

 

Questions and Answers

 

1. To what extent do you believe that Innocent is a product orientated company? (35% of marks)

 

Before we answer this we should know what is meant by product oriented company.     Product orientation means that a company concentrates more on its product strategy among the other Ps of marketing in trying to sell its product to its customers  (NetMBA.com, 2006). To be product oriented should have product focus, product research and product testing (The Times 100, n.d.).  Based on the said definitions, I believed that Innocent is a product-oriented company and below are the proofs:

Foremost to prove product orientation of the company is its philosophy.  Case facts say, “Our philosophy remains that the best investment is in the product; 90% of our marketing strategy goes into the bottle.”  By admission, management put much emphasis on its product strategy.

The second proof of product orientation is the belief and policy that the company’s product should contain nothing but fresh fruits. Case facts say, “Part of the problem was the founders’ insistence that the product should contain nothing but fresh fruit… Each bottle of Innocent contains around 3/4lb of fresh crushed fruit and nothing else, allowing the company to claim that its product is fruit rather than ‘being made with’ fruit as many other brands are.”  The company simply pursued what it believed on its product to be part of their non-negotiable product strategy.

Another evidence of product orientation is the company’s growth through product introductions. Case facts say that sales in increased in so short a time when the company found their products in the supermarket. With the few sales at the start in April, 1999, it recorded sales of £L30 in 2002, £69m in 2004, while it predicted sale in 2008 to be £150m.  Introduction of new brands and the marketing activities of brands such as Innocent have succeeded in shifting the smoothie from being a trendy London-style sandwich bar niche product to being a much more national, mainstream product appeared to have really attained its target.

Another proof of product orientation is the large number of recipes for same fruit juices which implied product innovation.  With 17 different recipes on sale through 4,000 retail outlets, ranging from large supermarkets to small independent sandwich shops, one could imagine how many innovations are made. Innocent may claim to doing a biased for product strategy but it could also be said that it is using its product innovation to test the market. This is of course with the premise that they will continue to product the same recipe if patronized by customers. In this sense, its effort of doing product testing may the equivalent of market testing.

 

 

2.  Summarise the ways in which Innocent uses/has used the 4Ps to create an integrated marketing mix? (40% of marks)

 

The four P’s are the variables that a marketing manager can control in attaining the marketing objective or reaching the target market where said manager must consider also the internal and external constraints of the marketing environment (NetMBA.com, 2006) (Paraphrasing made).  Using 4Ps to create an integrated marketing mix must mean how the company made the right combinations of the variables to reach target market.

By having the philosophy of investing heavily on the product using 90% of its marketing strategy on the bottle, putting ¾ pound of fresh fruit per bottle, growth through product introduction, making large number of varieties for the same fruit juices, and its product innovations and product differentiation, Innocent company effectively concentrated with product strategy. As to how the company integrated its product strategy to other 3Ps (Place, Price and Promotion) of marketing could be described as follows.  On its promotion strategy Innocent Company makes known its products as ‘fruit juices’ containing proper amount of fresh crashed fruits. Its product strategy of putting 3/4lb of fresh crushed fruit and nothing else per bottle is aligned with said promotion strategy. It gave evidence to its claim that its product is fruit rather than ‘being made with’ fruit as many other brands are per bottle. Applying or combining with price strategy, the company was able to price to its products higher than competitors.

The price strategy did help the company to attain desired profits since selling price assumes a great part of the revenues but in competitive environment one could not just make the price high.  In case of Innocent, the company was able its products to sell at premium price.  This is supported by case facts which state, “Innocent doesn’t come cheap: according to the company, its recommended retail prices (as at October 2004) are as follows: £1.69 – £1.99 for Smoothies and Thickies; £1.49 – £1.69 for Really Lovely Juices; £1.49 – £1.69 for Juicy Waters.  According to Carter (2004), the average price of smoothies is around d £3.70 a litre.  Thus Innocent’s £6.76 per litre is significantly higher than average in a market that is premium priced in the first place.  Innocent justifies this in terms of the product quality, for example the high fruit content and the lack of additives.”
To complete the integrated marketing mix, after combining product strategy, promotion strategy and price strategy, we need to know how Innocent connected it with the remaining P of the 4Ps, which is the ‘place’ of distribution strategy.  In applying place strategy, the company used product differentiation as part of product strategy to increase number of recipes and the increase number of sales outlets. This is supported by case facts which state: “All in all, there are 17 different recipes on sale through 4000 retail outlets, ranging from large supermarkets to small independent sandwich shops, generating an annual turnover of around £35m.” By differentiating its product which is a product strategy, the company was able to increase retail outlet enabling it to have bigger market share.

In further integrating product strategy with distribution or place strategy, case facts say, “Innocent is already exporting to Ireland, France and Belgium. At the moment, however, the company only wants to sell to countries where it can easily make overnight deliveries and is resisting enquiries from the USA, Middle East and Australia.” Basic in a in a distribution strategy is making the products available to customers, hence selling only to place where it could deliver is a deliberate plan to attain previously set target market.

 

As to integrating its promotion strategies, the company became a market leader within its sector by innovative promotion efforts by creating a slightly ‘hippy’ brand image that does not take itself too seriously. Case facts say, “Innocent has become the market leader within its sector, holding around 60 per cent share. This has largely been built on a relatively small marketing budget in which advertising played a minor role. A lot of emphasis has been put on creating a slightly ‘hippy’ brand image that doesn’t take itself too seriously. This is reflected in the company’s website (http://www.innocentdrinks.co.uk – highly entertaining and informative) and the product labelling.”    In addition to such brand image creation (Woodside, 1996), the company also conducts community project (Stephens, 2005) and tree planting schemes (Robinson, 1997) and festival about fruits.

Its expenses for advertising are also a great part of the expenses of promoting better sales. In fact the company advertises more than competitors as case facts say that the company spent around £2.5m in 2004 compared with £100,000 in previous years including TV advertising for the first time (Brassington and Pettit, 2006).

 

3.  Richard Reed has said, ‘we do believe that Innocent has got a very, very strong set of principles that are non-negotiable’ and Adam Balon has said ‘at the root of it we’re just a bunch of people who make nice drinks and hope that anyone who buys them likes them.’ What are the risks and rewards of this sort of approach? (25% of marks)

The statement made by Reed carries the meaning of staying with the Innocent Company’s above product strategy, despite what the customer feels and thinks.  Case facts say that its product constitutes 90% of its marketing strategy and by stating that its product principles in relation to its product strategy are non-negotiable, the company would seem to imply that all other part of its strategy would just be secondary. Hence, the question could be restated as to knowing the risks and reward of such hard line position on concentrating too much on product strategy.

As to the risks to this approach, it could be said, that any thing that violates the 4Ps of marketing would likely suffer the necessary consequence.  One obvious risk (Brigham and Houston, 2002) of this approach is that it assumes its product to be not capable of losing its appeal by reason of changing tastes (Anderson, M. and Meethan, 2002) and preferences. This is dangerous for there are many possible causes of changing market.  (Cao, 1995). This may be found in cases of  products having their own product cycle (Jerrard, et.al., 1999) whereby a point in time will come in the future when customer will find better products (USA Today, 1999) or product substitutes (Samuelson and Nordhaus, 1992) for the existing products. It cannot be that the company will just produce products which management believes to be just superior to others without understanding the customers who have changing needs and wants.  The company could not just impose that the market should buy its products. By saying that anyone who buys its products hopefully likes them implies that the customer will either leave it or take it. It would sound that the argument could mean that Innocent’’ product is indispensable to society. The risk is great because before products are needs which must be defined, studied and analyzed. Products are just means to satisfy needs and wants. But before they will reach the customer, the seller must also price it correctly, make it available when needed and that the products be made known to exist to customers who will make the final say on whether the product really meet their changing needs and wants.

To undertand further the risk of the company’s approach; it necessitates us to compare Innocent Company’s product oriented company with a market oriented one.  We can thus say that to be a market oriented company is better than a product oriented one. The Times 100 (n.d.) said “A market orientated company is one that organises its activities, products and services around the needs and requirements of its customers. In contrast, a product orientated company produces exciting and interesting products and seeks to interest the market in these products. It is possible to be successful with either type of orientation, but it is harder to be successful with product orientation alone. It is all very well coming up with exciting and innovative products but you have to find a customer for them. Hence the importance of marketing orientation – because here you make sure that you have interested and enthusiastic customers first.” The analysis could be better appreciated in Figure I below:

Figure I – Analysis of Market Orientation with Product Orientations (Reference: The Times 100, n.d.)

Despite the risks that were discussed for Innocent Company, product orientation worked well for Innocent because it was able to integrate product strategy with the rest of the 4Ps of marketing.  Its proof of success is reflected in increasing revenues since it started in 1999. It was able to reach tremendous increase in sales, indicating effectively of the strategy. It does not mean however, that the companies forget the other Ps marketing.  If it will neglect the other P’s of marketing, it intentionally increases its risks which may cause its downfall.

Of course there are rewards or advantages to such hard line position on product strategy. The rewards include capability to build competitive advantage because of the focus on resources as what happened in the case of Innocent Company. But it should be made clear that Innocent did have integrated marketing mix which may appear to not fully the statement of reed not caring for the customer. (This is already explained earlier.)
By putting strong investment in product, it should include understanding the customer. Hence to say that customer hopefully likes it means foregoing market research, market testing and market focus.

 

Conclusion:

 

The success of Innocent although biased in favour of product strategy as against the other P’s of the marketing mix does not mean that company did not apply price, promotion and place strategies.    It only concentrated however where it can create competitive advantages enabling it to sell its products at premium prices.  There are proofs that company had integrated marketing mix in reaching its target market. The company advertised higher than competitor and sell only to place where it can deliver the goods and hence preserving the freshness of its fruit products. It was able to price its products higher than competitors while making it sure that it fulfilled its representation that the company sells fruit juices by really putting at least ¾  pound of fresh crushed fruit per bottle of its product.

 
References:

 

Anderson, M. and  Meethan (2002), The Changing Consumer: Markets and Meanings, Routledge, 2002

Brassington and Pettit, (2006), From Principles of Marketing by. Fourth edition. 2006

Brigham and Houston (2000), Fundamentals of Financial  Management, Thomson South-Western, US

Cao, K. (1995) The Changing Capital Markets of East Asia; Routledge

Churchill, Jr. and Peter (1995) Marketing, Creating Value for Customers., IRWIN,  Syney Australia.

Jerrard, et.al. (1999) Roger Newport Managing New Product Innovation: Proceedings of the Conference of the Design Research Society; Taylor & Francis

NetMBA.com (2006) The Marketing Mix  {www document} URL http://www.netmba.com/marketing/mix/, Accessed November 25,2006

Robinson, G.  (1997) Community-Based Planning: Canada’s Atlantic Coastal Action Program (ACAP) , The Geographical Journal, Vol. 163, 1997

Samuelson and Nordhaus, (1992) Economics, McGraw-Hill, UK

Stephens, P. (2005) Community Bridge: A Participatory Public Art Project , Magazine article by Pam Stephens; School Arts, Vol. 105, December 2005

The Times 100 (n.d.) Product and Market orientation, {www document} URL http://www.thetimes100.co.uk/theory/theory.php?tID=211, Accessed November 25,2006

USA Today  (1999) (Society for the Advancement of Education Customers’ Demand for Better 21st-CENTURY PRODUCTS Vol. 128.

Woodside, A. (1996), Measuring the Effectiveness of Image and Linkage Advertising: The Nitty-Gritty of Maxi-Marketing,  Quorum Books, 1996

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