GlaxoSmithKline Healthcare Company - Case Study Example

CONTEXT ANALYSIS by Student’s Name Code + course name Instructor’s Name Institution of Learning City, State Date Abstract GlaxoSmithKline healthcare company is the main founder of the brands lucozade and Ribena. The company founded the brand Ribena drink in the 1938 and it has continued to evolve over the years. Since its establishment the company has been serving an estimated 20 million consumers daily around Europe. Ribena has been used as a vitamin C supplement since the 19th century up to date. The ever increasing competition in the cordial and squashes market has resulted to a sharp decline in sales. As a result, GlaxoSmithKline was forced to sell some of its brands including Ribena to other companies. In particular, Ribena brand was bought by Suntory corporation a Japan-based company in September 2014. Since then, the brand has registered a decline averaging to about 8% in its volume of sales in the UK (Mintel, 2014). The sharp decline has been attributed to a range of factors including; disruption from change of ownership and lack of double concentrate in the Ribena brand. In addition to this, there had been allegations in Australia that GlaxoSmithKline has been misleading consumers by telling them that Ribena contains four times Vitamin C as compared to pure blackcurrants. Moreover the allegations have caused mistrust among the consumers and also failed to uphold the company’s motto. Currently, advertising campaigns have been stepped up in a bid to help the brand regain its lost glory. Introduction A context analysis involves the evaluation and examination of collected information during a market research. The main focus of a context analysis is to determine the internal and external factors that may influence how the system of an organization works. During the process of context analysis, detailed information about the target market, market size and market trends are critically analyzed. The organization identifies tools that play a critical role in supporting them reach their goals. Physical and technical environment, in which the product of the organization is to thrive, is put to test. Immediate and technical constraints associated with the organizational background and are bound to interfere with the production levels are immediately dealt with (Peter and Olson, 2004, P.22). Promotional Objectives To increase market awareness by 10% within 12 months of campaign launch in the under 30's category. Hefty investments on TV and ad campaigns, aimed at repositioning the brand in the market place and make it the most popular drink among 99% of the UK market. To create awareness of the different varieties of Ribena, and get rid of the notion that it is only a child’s drinks. To support the launch of double-concentrate options and make it a favorable brand among adults in the UK. Customer Context To attain its objective of increasing the market awareness by 10% within 12 months of campaign launch in the under 30's category, Suntory Corporation needs to use pull strategy to the youthful generation below the age of 30. There should be an intense focus on use of social media which is a common platform used by the youthful generation. Leading cordial and squash brands had the highest social media engagements (Mintel 2014), implying that intense focus on social media will boost the brands image. Marketing communications ought to be based on the behavioral characteristics and needs of the consumers. Therefore it is crucial to understand the needs and general characteristics of the target audience. Moreover the organization is also prepared for the emergency of any new trends that will affect the supply and demand of their products or services (Johnston and Clark, 2012, P. 30). Awareness Ribena has the same level of awareness of 97% with the best selling Robinsons brand (Mintel, 2014) (Table 1). However, Ribena fails to clinch equal market share with Robinsons owing to other factors such as trust. While 66% of the respondents trust Robinsons brand, 59% of them trust Ribena. This will imply that increase of brand awareness should not be a priority to Ribena but rather boosting the brand image. Awareness* Ever drunk* A brand that I trust** This is a favourite brand** Recommendation*** % % % % % Robinsons 97 90 66 13 84 Ribena 97 85 59 9 79 Bottlegreen 37 19 36 8 78 Vimto 92 64 34 6 68 Jucee 54 30 24 4 62 Table 1 Source: Mintel, 2014 Business Context According to the published study, Cordial and Squashes-UK, by Emma Clifford, “cordial and squashes tend to perform extremely well during hot weather conditions as compared to winter”. During the year 2013 Ribena ownership rights were sold to Suntro. The change in the brand ownership seems to have highly affected the market responsiveness. Consequently the decrease in the value of sales by Ribena is also attributed to the lack of double concentration options in the Ribena portfolio. The decline in sales could also be as a result of poor financially planned advertising campaigns and increased competition by other brands. Time and money should be invested in rigorous advertising activities in order to change a brand’s image perception by consumers (Pickton & Broderick, 2005). For instance the new ribena campaigns launched by Suntro in September 2014 marked the introduction of new ribena brands into the market. The launch of these ads was one of the main advertising activities carried out by Suntro since it took over from GSK. Thus increasing consumer ratings on the product, and although the brand still need to improve on the brand image, Ribena’s fame is still more favorable as compared to other attributes. Suntro invested an estimated £2.5 million in the media coverage advertisement. In order to remain relevant, overcome the challenges of introducing different Ribena brands into the market and maintain brand loyalty, Ribena also focused on strong communication skills. On the other hand its core competitors, Britvic, invested a whooping £4.8 million in support for the launch of Robinsons. The advertisement included PR, digital and POS activities that worked favorable in creating awareness. The TV ad incorporated a different strategy by acting in support of children tennis sports. Additionally, the brand was the main sponsor of the Wimbledon Tennis tournament; this was a great way for the brand to remain relevant and a great platform to advertise. Robinson’s ad campaigns, received an exceptionally positive reception by consumers. Their strategic move in advertising beat Ribena in brand ratings by consumers. Robinsons was perceived as the most trusted and consumed brand around the UK in July 2014, while Ribena came second followed by the rest of its competitors. The management team at Britvic, by involving iconic figures in their ad campaigns, attracted the attention of millions of consumers towards the brand. Moreover, the key focus of the brand was mainly on its convenience. This favored the consumer perception of the brand, as the advertisement virtualized how easy one could consume the product while on the go anywhere. The strategic advertising plans my Britvic, increased the level of competition between Robinsons and Ribena by offering alternative cordial and squash drinks. Thus Ribena should focus on rebranding the brand image and change consumer perception towards it through involving more outdoor activities as part of their campaigns. Internal context Ribena is a reputable brand in the UK market in terms of its level of popularity among consumers and the number of sales. In the UK the company continues to play a close attention on involving more consumers among the adults in the ages of 30years and above. The company also maintains a keen interest on increasing their revenue income from the sales made through Ribena. Ribena attributes its success and triumph the management, staff members and the support received from their investors. However, since its acquisition by Suntro, Ribena marked several challenges in its administration and marketing plans. The basic rules governing the theme of management in any organization is centered on discourse and corporate analysis. According to Fill, 2005, P. 14 the management aspect of marketing on the other hand recognizes the problem with performance of a product early and swiftly puts in place a strategic response plan. Poor management of a brand will lead to the collapse of the brand within the market place. Consequently the negative outcome of a brand in one regional market risks the reputation of a multinational organization worldwide. In the case of Ribena one can vividly note that corporate strategies and marketing strategies often intertwine. Therefore in order for Ribena to beat its competitors and dominate the UK market, it is vital for the marketing management to include strategic planning aspects. These aspects should involve developing, pricing and supplying of the brand. Meanwhile focusing on the corporate analysis of the brand; Ribena should maintain a steady focus on both the profitability and initiatives of a product and its development. Percy, Rossiter & Eliot, (2001), affirm that corporate strategies should avoid focusing solely on the profits of the brand and instead view the focal point of Ribena’s success which narrows down to marketing strategy. External context In conducting the external factors affecting the performance of Ribena, PEST analysis stands out as the most effective way. This analysis requires examining the political, economic, social and technological factors impacting the success of a brand or organization Payne & Whittaker, (2006). Political Government policies greatly influence the direction in which the brand takes. Certain movements may profit the company but the government has a part to play in pushing for the brand to succeed in the market place. The ministry of health should support the intake of Ribena as an alternative supplement of Vitamin C among children between the ages of 5-17 years and also in adults with health complications. Economic The economy has a very big potential in influencing the market. Specific factors such as values in prices and wages, affects various areas of the company. This is because consumers may be forced to cut back on their spending habits and prioritise on more basic needs especially when cuts are being made on their disposable income. Suntro’s strategic plan should therefore be based on the long term objectives of Ribena. Thus, involving tactics which create a positive brand perception among consumers. This can be done by creating standard prices that create positive perceived value and sell the brand in both upscale and low scale market segments. This corporate and marketing strategy will ensure that the brand, Ribena, competes favorable in the UK while maintaining high profit margins. Social The change in the way of living and lifestyles, such as growth in more convenient alternative drinks and foods, has resulted in more sedimentary lifestyle. For instance, among the adults there in an increased intake in alcohol and energy drinks which most adults find convenient to help them deal with their problems. Moreover in today’s culture there is an increased pressure for people to live better and healthy lifestyles, this influences people to want to look and live better by hence will ingest healthy foods. Hence this will increase the number of consumers who will purchase Ribena since it is perceived as an immune boosting and healthy drink full of Vitamin C. Technological It is important that in the 21st century companies equip their organizations with up to date resources so as to compete with the consumer needs. Technology can be used by Ribena by creating an online platform that allows them to interact with their market target and gain immediate feedback. The company can use the internet to advertise the launch of new brands and also create brand awareness and improve its image. Opportunities Adult prospects of the brand within the market place say that they would increase and recommend the intake of Ribena if it is recommended by experts. The brand was popular only among kids and adults between ages of 18-25. The company should therefore concentrate on advertising the brand while focusing on the target market of the adults in the age brackets of 25 years and above. Threats There is a potential threat lurking from energy drinks and other beverages. There are a number of cheaper energy drinks and beverages which consumers tend to find more appealing and convenient. Another possible threat arises from the fact that consumers can easily purchase these alternative drinks from immediate local coffee shops and food outlets. Conclusion Through Ribena’s 2013 business year it can be noted that the company was faced with a negative issue of centralized administrative services. The company spent a lot of money on rebranding and advertisement which could have been easily avoided if the corporate and marketing teams worked together. In its corporate strategy Ribena needs to explain the ideas on how the brand could be successful to its senior and junior staff members. This step elevates and motivates the employees in performing exceptionally well in achieving the success of the brand. Communication within the organization seems to be one of the crucial issues in the management of the brand Ribena. Good communication skills between the board members and employees create a productive working atmosphere; this allows staff members to openly communicate their ideas in pushing the brand towards success. As stated earlier the change in ownership of Ribena, affected the success of the brand since the company had a new management team come in and take over from where GSK had left off. Suntro needs to establish a common working ground with its new employees so as to ensure that the whole organization had the same organizational goals in mind. The current social and economic dynamics provides consumers with an extensive choice of brands to choose from. Thus if Ribena wants to dominate the current market trends, it is essential that the company improves its advertising skills in improving consumer perception and the brand image. So long as consumers have a positive perception of the brand their needs are satisfied, therefore registering a significant increase in sales of the brand. In addition to this, employee commitment is very essential to ensure that there is quality in consumer output and brand productivity. Identifying the relationship between consumers and employee creates a great avenue for the success of Ribena. This is in accordance to the way in which the two respond towards the organization’s management and brand (Johnston and Clark, 2012, P. 32). Growth in sales and the popularity in brands are attributed to consumer satisfaction. Consumers who are satisfied with a brand will appreciate a product by remaining loyal and purchase the product. Additionally, satisfied consumers endorse the brand to other people therefore allowing the brand to thrive exceptionally well. Ribena can employ this tactics so as to beat its main competitor Robinsons while maintaining high revenue income and still satisfying consumer needs. References Clifford., E. 2014. Cordial and Squashes. UK- September, 2014. Fill, C. 2009. Marketing Communications, Ch1: Introduction to marketing communications; Ch10: marketing communications planning; Ch 14: Financial resources for marketing communications. Prentice Hall. Fill, C. 2005. Marketing Communications. 4th Edition. Prentice Hall Johnston., R. & Clark., G. 2012. Service Operations Management: Improving Service Delivery. New York: Pearson. Mintel. 2014. Cordials and Squashes - UK - September 2014: Brand Advertising, Perceptions and Social Media. Retrieved 10th November 2014. Payne E & Whittaker, L. 2006. Developing Essential Study Skills, 2nd edition, FT Prentice Hall Percy, Rossiter & Elliott .2001. Strategic Advertising Management. Esp. Ch 4: The Strategic Planning Process. Peter., J. & Olson., J., C. 2004. Consumer Behavior and Marketing Strategy (McGraw/Irwin Series in Marketing). Texas: McGraw-Hill. Pickton & Broderick .2005. Marketing Communications, Ch. 13: Marketing communications planning and plans, Ch18: Setting budgets and allocating resources, Ch. 19: Setting objectives, determining strategy and tactics. Read More