Marketing Challenges: Developing a New Soft Drink for Teenagers - Essay Example

?Introduction Following the BMA report published in 2009, teenage alcohol abuse has been acknowledged as a major concern in the UK. One of the ways suggested to deal with the crisis is by making soft drinks acceptable by teenagers. The introduction of a new soft drink in the market will be faced by many challenges including harsh reception by competitors (State University.com 2009). The best way to deal with this is by producing quality soft drinks to compete with alcoholic drinks. The development of new products is an important component of a market strategy as it acts as a means of securing the future and corporate renewal as explained by Stone and Desmond (2007). This report analyses the introduction of a new soft drink in the light of increased alcohol consumption in the UK. It outlines important aspects the company should consider while developing the new product including target market, marketing mix among other promotional elements. Target market Any given product in a market cannot appeal to everyone. There are different levels of income, desires, tastes and lifestyles the target market (Kotler and Keller 2006). After establishing market segments, the company has to position itself through product differentiation as explained by Kotler and Keller (2003). The target market for the new soft drinks is teenagers and an in-depth study should be conducted to establish their buying trends, desires and tastes. Teenagers remain loyal to a specific brand based on a number of reasons. They are perceived to be an influential market segment since they set the trend for the market in totality (Doeller 2010). The purchasing decisions made by teenagers are affected by the knowledge and alternatives in the market. They mainly purchase products that are ‘cool’ since they want to appear trendy. The packaging, marketing and advertising should consider ‘cool’ aspect which can capture trendy, young and fashionable effects. Teenagers tend to purchase image-based brands contrasting to other factors including price as suggested by Doeller (2010). Their income level is low and they spend it to purchase comparatively few soft drinks. They form a primary market for the purchase of disposable goods including soft drinks. This leads to the conclusion that image branding is an important aspect while introducing the new soft drink. Teenagers are more image conscious than other segments in the market. The development of the new soft drink should acknowledge that teenagers are the future consumers and their preference remains deep-seated into their adulthood. The marketing should take their tastes into consideration hence they establish repeat consumption and increase loyalty. Teenagers are known to establish a trend of choices influencing their peers and families on brand selection (Doeller 2010). The marketing strategy should take these into account while developing the new soft drink brand. The marketing strategy should also target other audiences including school going children, the youth and parents. Children are the future teenagers and it can be observed that they make up a substantial part of the global economic system (Dransfield, Richards and Dooley 2004). This segment also influences purchasing decisions made by their families. Parents are influenced by their children’s choices and this can change their purchasing preferences. The other considerations of the target market should include demographics (people aged between 16 and 29), psychographics (people who are tired and stressed) and behaviour (young professionals who need to maintain high levels of energy). These groups of people are potential markets for the soft drink and they should be considered in the marketing strategy. Marketing Mix – product, price and place elements The marketing policies and decisions can be classified into four categories which are product, place, price and promotion. The discussion below gives a snap shot of how the management decisions will be implemented to make the new soft drink appealing to the target market. The soft drink sector accounts for a fraction of the sales in the food and drink market in the UK as explained by Myres and Shaw (2004). The sector has been growing over the years and soft drinks have become some of the most advertised products globally. The soft drink will address one of the major challenges facing the sector which is the perception that they contain high content of sugar resulting to obesity (Mazzocchi, Trail and Shrogen 2009). The product will include a sugar free variant due to the increased fears regarding obesity and overweight teenagers in the UK and globally (Mazzocchi, Trail and Shrogen). The soft drink will stand out from its packaging, ingredients, benefits, flavour, marketing to its distribution as suggested by MMC Learning (2010). Packaging is quite important since it is what draws the customers’ attention and this is referred to as image branding according to Kotler (2003). The drink will be packaged in a sleek silver can and will not have script lettering like other brands in the market such as Pepsi and Coke. The 500ml will be in plastic bottle with a label on it. Drinks packaged in small cans boost sales and profits and as such most will be packaged in the 250ml cans. The cans will be supplied by a different company. The 330ml will be packaged in six packs which are fancy and appealing to teenagers. The twenty four packs are convenient for parties and huge events. The soft drink will also be available in dozens which is convenient for a relatively small group of people. The major reason why teenagers prefer alcohol to soft drinks is because of the assumption that one becomes more of an adult. The new product will contain ingredients that leave one feeling energized and stimulated (Mazzocchi, Trail and Shrogen 2009). These include caffeine, taurine and glucuronolactone. These components stimulate body metabolism and improve on vigilance, physical activity, reaction speed and concentration. These aspects will make the product more appealing to the teenagers. The ingredients used are healthier unlike other brands that use preservatives, artificial colourings and flavours. The brand portfolio will include various types differing in flavour and ingredients. The first will be the sugar free variant that is the most popular given the current lifestyles (Dransfield, Richards and Dooley 2009). This type is characterised by low calorie levels and nil sugar level. The other brand is going to be purely an energy drink that increases metabolism hence increased physical activity. The other brand contains sugar and this is for the teenagers who are not weight conscious. The other brand is going to be an energy drink that contains caffeine, glucose and special additional ingredients such as coffee beans and Guarana. This is going to be the leading brand to compete with other major brands including Pepsi, Coke and Red bull (Myres and Shaw 2004). Other brands will be fruit flavoured to cater for the diverse tastes of teenagers. With such a wide and appealing array of soft drinks teenagers will be more attracted to them as opposed to alcohol. After the soft drink has been fully developed the next step is to avail it to the market as explained by Brink and Berndt (2009). The distribution chain is maintained by distributors and wholesalers. Local, regional and national wholesalers will be purchasing the soft drink in large quantities and then sell it to large institutions and retailers. The soft drinks will be distributed to various points by the transportation department. The internet will be widely used in the sales and distribution process as associated costs in warehousing, inventory and book keeping. The distribution network will be well established across the country to ensure easy accessibility to all its customers. The soft drink will be available in majority of outlets ranging from local convenience stores, supermarkets to retail shops countrywide. It will also be available in bars and restaurants for those who will prefer it to alcoholic. Vending machines will be widely used by placing them in places where teenagers frequent. This will make the soft drink readily available resulting to increased sales. Baker and Hart (2007) state that setting the price of the soft drink is an important factor in marketing. The company should set the price based on the cost incurred in manufacturing, packaging and marketing. These costs have to be recovered through sales. The company will need to consider the pricing of major competitors in the sector. The prices of the soft drink should be at the same range with their competitors. The soft drink will be available in different packages and sizes including 250ml, 330ml and 500ml. The table below shows the prices for the different packs: Pack size Price 250ml ?0.75 330ml ?0.96 500ml ?1.45 There are will be many differences in the new soft drink and other brands in the market. The most observable difference is the packaging. Ingredients will also be different from those of other brands in the market. The target market is different and therefore should be its contents and branding. The prices will also be different from those of other brands to attract more customers from the onset (Smith 2003). Adverts will target teenagers and will aim at reducing their alcohol intake. The soft drink market in the UK is highly competitive since it is dominated by global companies including 7up, Pepsi, Coke, Red Bull and Ribena (Review centre 2010). The new soft drink will consider the prices set by these companies and set a price within this range. The prices of other soft drinks in the markets are stated in the table below: Drink Size and quantity in a pack Price per pack in Euros Tango cans 330ml*24 8.49 Vimto cans 330ml*24 8.49 Tango cherry cans 330ml*24 8.49 Sprite cans 330ml*24 8.49 Rubicon cans 330ml*24 8.49 7 up cans 330ml*24 8.49 Pepsi cans 330ml*24 8.49 Dr Pepper cans 330ml*24 8.49 Fanta cans 330ml*24 8.49 Ribena cans 330ml*24 9.99 Coke schweppes small cans 150ml x 24 7.99 Coca diet small cans 150ml x 24 7.99 Ribena black currant 500ml*1 1.47 (Bristore 2010; Drinks-wholesale 2010) Marketing Mix – Promotions (Communications) element This is an important element in the marketing mix as it involves communication by the business to its customers. Baker and Hart (2007) state that it provides customers with information that assists them in making purchasing choices. The cost of promotions is usually high especially for a new product. The company should come up with an intensive campaign to create awareness in the target market. Advertising tools range from TV, radio, posters, press, sales promotion, sponsorship, public relations and online tools as explained by Stone and Desmond (2007). The company will use all available avenues to market the new soft drink. TV and radio advertising Through TV and radio the company can reach a high number of consumers. Advertisements will use actors, celebrities, action figures and cartoons to promote the new soft drink. The use of a celebrity in an advertisement is appealing to the teenagers as they tend to idolize them thereby hooking them to the product. Over the years, this form of advertising has proven to be effective among different market segments as stipulated by Dahlen, Lange and Smith (2009). The company buys airtime when certain programs are on air and uses existing demographic information concerning the audience to establish a lasting connection. This is seen as a good way of capturing the attention of the target market. The company should choose the programs that are popular with teenagers before deciding to air adverts. However, critics argue that despite the success of TV advertisements, the method is becoming less influential. The company can explore more options as discussed below: Online advertising This is the newest, most efficient, fast and cheap mode of advertising. It is widely used by companies globally since it reaches the highest the number of people as stated by Doole and Lowe (2008). Teenagers spend most of their time on the internet. The advertisements are in form of electronic banners that move across pages of the internet and pop-up adverts. These are highly interactive as the potential consumers can click to find all the information needed concerning the products. This form of adverting can be placed in social network sites that are popular among the teenagers. Print media advertising (posters, billboard and banners) This is the oldest form of advertising that can be used to reach many consumers as proposed by Smith and Taylor (2004). This is done through posters, banners, newspapers, magazines, fliers and billboards. There are specific magazines in the market that target the youth and the company should place adverts in them. Although newspapers are not common among teenagers, they can be used to reach other target audiences. Billboards along highways and major roads can be used. Posters and fliers can also be used but they should be done in a catchy and attractive manner as they are easily ignored. Sales promotion Most companies in the contemporary world spent most of their money on advertising but disregarded sales promotion (Koekemoer and Bird 2004). This includes all other strategies that are not included in the promotional mix. Some of the sales promotion tools to be used include Buy One Get One Free (BOGOF) which is also known as premium sales. The other tool used is customer relationship management (CRM) which includes incentives such as money off coupons and bonus points that are awarded to those who purchase the new soft drink product (Marketing Teacher.com 2010). It can also be done through merchandising of point of sale, product demonstrations and dump bins. Free gifts and discounted prices act as effective sales promotional tools. Competitions, prize draws and free samples will be used by the company to attract customers. Sponsorship The company will create awareness about the new soft drink by sponsoring activities whereby the target group (teenagers) are involved as suggested by Hackley (2009). The new soft drink will be advertised during events including sporting activities like skating, proms and music concerts. The soft drink will follow trends by major companies in the industry that have parks named after them and being their sole sponsors. Direct mail The company will use direct mail advertising to target their prospective customers. The company will send mails to certain individuals in particular areas (Wise Geek 2010). This mode is appropriate for small and new enterprises in the market to create consciousness in the target market. The company will then follow up this by making calls from salespersons. This method can also be used to reach a high number of customers and it is a cheap way advertising. There are ethical issues and restrictions when advertising for the new soft drink in the market as stated by Hackley (2010). Teenagers are exposed to numerous advertising messages on a daily basis according to recent studies. The main issue facing advertising in the current world of business is reliability and truth. Information in the advertisement should be true and reliable as the opposite can lead to legal action against the company and its advertisers as explained by Hackley (2009). The advertisement should not contain erotic content as children will also be target audiences for the new soft drink. The company should avoid negative adverts that critique their competitors. This is common among huge competitors in the market including Pepsi, Coke and Red Bull according to Doeller (2010). Ethical issues in advertising are in respect to morality and the company should take this into consideration in developing the new product’s brand. Conclusion Marketing a new product in the market can be challenging since the company needs to conduct a market research and find the marketing mix to apply in order to position itself (Solomon 2007). The development of new product should identify the target market audiences and analyse their tastes and preferences and take them into consideration in developing the new product. The product should be more appealing than the already existing brands. The packaging will be attractive since teenagers are more interested in image branding. The pricing will be within the range that is charged by similar brands in the market. The product will be available in all major outlets ranging from retail outlets to supermarkets. The soft drink will be advertised through the major advertising tools to create awareness in the market. The soft drink will gain popularity among the teenagers and this will result to a reduced alcohol intake. 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