The Market Structure and Competitive Strategy - Case Study Example

Executive summary

Cranberry mainly deals in the production of fruit juice and selling of the dried cranberries. The company belongs to the agricultural industry that is owned currently by about 630 cranberry growers and 46 grapefruit farmers. The co-operative was formed with an aim of developing the cranberry segment. The company is considered the leading producer of the canned and bottled juice in North America with the best-selling brand name. The consumer’s buying characteristics are defined by various factors including the brand image of the company. The company has enjoyed a great success in the United Kingdom market; however, the emergence of various companies in the same sector has intensified the level of competition in the industry (Huang and Sarigöllü 2012, p.92). The company formed a strategic alliance with the Coca-Cola Company as a measure of improving market penetration. The strategic alliance in the Northern America and the agreement provided an opportunity for development for both the two companies. The agreement included opportunities for developing new products and innovation across the various channels of trade in the future.

The market structure and Competitive strategy

The Atlantic Quench signed a licensing agreement in 2013 with the Gerber to manufacture and distribute the juices and juice drinks using the Atlantic Quench brand in the UK. Gerber is the largest supplier of the private and branded juice in the United Kingdom. The statistics state that the annual sales in the company exceed 800 million liters. As a marketing strategy, the Atlantic Quench has negotiated with the supermarkets in the United Kingdom to sell their products.

The cranberry market has become very competitive with the emergence of new entrants who produce the blended cranberry juice products. Some of the competitors in the market include pomegranates, gogi, acai and the acerola berries. Atlantic Quench should also produce nutritionally enriched products that will enable them to compete with the new entrants considering that the production of the superfruits is driven by the increased awareness and interest for healthy living among the population. The company forms a strategic alliance with various partners including coca-cola and the Robertsons and Costa. Such alliances provide an opportunity for mutual benefits for the partners. It also increases the market strengths of the partners because of reduced competition. By venturing into such activities, the Atlantic Quench will increase their market coverage industry and will have an advantage over the new entrants in the industry (Hollensen 2015, p.21).

Market analysis

The Atlantic Quench creativity in the production of new products has been the main reason behinds its success in the U.K markets. The company encouraged supermarkets in the US to add the juice. There is the chance that the market of Cranberries will increase in future following the healthy qualities. The current society is characterized by various health problems and the consumers have become very sensitive to the issues of health. The consumers are always willing to purchase products considered healthy. The company has had a monopoly in the market for some time before the emergence of various players in the industry. The growth of the blended cranberry juice products and the growing consumer interests in the superfruit juices has intensified the competition in the industry.

Consumers consider the quality of the juice product by analyzing a number of ingredients in a given product. It is evident that the company experienced a lot of competition from the companies that produced juice which was claimed to contain a lot of nutrients and anti-oxidants. Some of the competitors in the market include Acerola, Acai berries, and pomegranates superfruits which have been introduced in the marker recently and this has led to an increase in the fruit juice sales by 20%. The increased awareness for heath living is a major factor that contributes to the increased consumption of the juicy products and as a result; various competitors have emerged in the market. The brand loyalty towards the blended cranberry has declined and the company must respond to such issues to enhance its survival in the industry.

Customer attitude

The company should focus on producing products that promote healthy living among the population. For instance, there are concerns about the carbohydrate and calories which are associated with obesity. The cranberries contain no sugar in their natural form; the company had to introduce sweeteners without watering down the flavor. The company should aim at targeting the dieters; therefore, the development of the five-calorie drink is a big step in the improvement of the market penetration. The superfruits contain a lot of ingredients and this gives them an upper hand in the market compared to the Atlantic Quench products, the company should increase the ingredients used in the production processes to meet the consumers demand and taste. Consumers believe that the more the ingredient are in a product, the more the product becomes suitable for health. The issues concerning obesity and health concerns may act as drawbacks to the success of the Atlantic Quench products. In as much as the company should increase the ingredient contents in their products, they should ensure that the ingredients have positive effects on the health status of the consumers.

The segmentation involves the strategies the company will employ in increasing the market penetration by dividing the consumers into various subsets. The company must produce products that meet different tastes of different consumers. The segmentation will take various forms including demographic, behavioral and psychographic segments.

Trends in the market growth

People consume the fruit juice products as a way of promoting their health status. Juice has become part and parcel of the people’s daily meal. Apart from the use of juicy products at homes, the restaurants are also good places where there is high consumption of fruit juice. There are various options of juice that are served in the quick beverage menu. This is a clear indication that the fruit juice market is expanding and the Atlantic Quench has a good opportunity for growth and expansion. The increase in the health awareness on the need to incorporate juice and fruit products in the daily diet is an important factor that contributes to the expansion in the fruit juice market globally. In as much as the number of players in the industry is increasing, the market also expands at a greater rate and this is an opportunity that the company can use to increase their sales revenue (Mayer, Melitz and Ottaviano 2011, p.60).

The National Nutritional Standards in British states that consumers have gained a lot of interests of knowing the healthy nutritional contents that they should consume on daily basis. For instance, the school lunches should be free from the crisps and other confectionary but rather the student should be served fruits and juice at every meal. The schools have been banned from selling the unhealthy snacks and carbonates. The changes in standards governing the sale of food and drinks in the schools favor the fruit juice industry. Various fortified juice has been introduced and the innovation in the juice production aims at adding ingredients to the juice fruits. The main targeted ingredients include omega-3 which is important for the brain functioning and the anti-oxidants which reduce the risk of cardiovascular diseases in the society. The fortified juice products focus mainly on the children’s lunch boxes within the grocery channel.

The Atlantic Quencher should embrace diversified production by ensuring they produce the fortified juice products and add the necessary supplementary nutritional elements that will attract people to consume their products. The lunch box sector expects a boost in the government that emphasizes on the need of improving the nutritional balance of the packed lunches. The marketing strategy in the Atlantic Quencher should involve liaising with the lunchbox sector to provide the nutritionally enhanced juice products that will be supplied to the students in schools. This provides a good market segment for the company and will increase a number of sales volume. The supply of fruit juices in the schools will be constant and this guarantees the company of the daily sales according to an order placed by the lunchbox sector. The government reinforces the need of providing nutritionally enhanced juice products to the students in schools as a strategy of promoting the health status and healthy living among the population (Kleiman and Popkin 2012, p.265). The company’s innovative approach to packaging provides an increased appeal to the Atlantic Quench products the company packs the products in recyclable cans and they label the ingredient content of the product on the side of the packet. The labeling of the nutritional content of the product on the side panel label is a feature that will promote the appeal of the product since consumers mainly focus on the information to purchase the product.

The analysis of the customer environment and Market segmentations

There are various consumers of the Atlantic Quench juice products and the needs of the consumer’s very from segment to segment. The segments are divided into the students, adults, the youth and the health conscious including the dieters. The company should design its products to meet the needs of each segment. For example, the adults consider factors such as nutrition, health and the price of the product. The same trend is evident in the other sectors. However, the dieters mainly focus on the ingredient composition of the fruit juice and they may care less about the price. In such a case, the consumers will buy only products having the recommended nutritional elements regardless of the price offered. The adult population constitutes people aged between 25 and 50 years. This segment mainly focuses on two aspects of the product which include the ingredient component and the price. The health conscious segment involves people who consume low-calorie products and other protect that protect them against diseases such as cancer and cardiovascular diseases (Kleiman and Popkin 2012, p.262). One of the nutrition supplements in the superfruit juices includes the omega-3 which protects against cancer and also promote proper brain functioning. The company should design products specifically meeting the requirement of this category to capture them in the market. The category is less conscious about the prices offered and they will be willing to purchase the products at a high cost because of the nutritional value that promotes healthy condition among the individuals. The other category includes the youth and the children in school. The category will focus more on the taste of the product. In addition, the company should pack the products on various capacities and with various prices based on the nutritional supplement in the product to capture all the market segments. Price differentiation is important since it ensures that people purchase what they can afford and give them a limited option for purchasing the other brands sold at a lower price (Chernev 2015, p.50).

Customers require proper packaging for various reasons, the juices should be packaged in both the large bottles and the lunch sized boxes. Taste is important for all consumers and this is one of the main reasons they purchase a given brand. The youth is the major segment in the consumption of the product offered by the company. In the production of nutritionally enhanced products, the main target will be the adults because they are very conscious about health issues and with all the benefits of the cranberry juice, there will be a great increased in the market share of the company in the industry (Sørensen 2012, p.36).

The fruit juice market in the United Kingdom increased with the greatest interest in healthy lifestyles. People consume a lot of vegetables and fruits on a daily basis and some have even prescriptions from the health providers advising them to eat a given amount of fruits per day. The juice sector has gained a lot of significance compared to the carbonated sector that experiences a decline in the popularity and has a poor image from the consumers (Bray and Popkin 2014, p.954).

Market mix and product differentiation

The Atlantic Quencher developed various juice boxes including the low-calorie cranberry drinks and the white cranberry drinks. Production differentiation and a market mix is an important concept in the marketing that will help the company increase their market share in the future. It is evident that various people have different tastes and the company should work at ensuring that they provide diverse products meeting the needs of the consumers. The Crantanas include the dried fruits snacks that are made from the husks and they used to be thrown in the past but are currently reinfused with the juice and have proved to be very popular. The other products produced by the company include chocolate covered Cratanas and the ready-to-drink mixed flavored juices and the energy juice known as Cranzeal.

Marketing objective

The marketing objectives will include satisfaction of the consumer’s needs and analyze the market trend. Measures should be put in place to increase the positive perception of the product among the consumers as well as increase the awareness of the Atlantic Quench juice products.

Marketing strategies

The primary target market in the fruit juice industry includes the adults and the health conscious people. The adults include people aged between 25 and 50 years; this is a working class and therefore, they have money to purchase the products. The secondary target includes the school children and the youth who like drinking cool staffs but manly depend on the finances from their parents. The distribution of the product to schools will be the main way of increasing the sales of the product among the youth and children (Sørensen 2012, p.38).

Product promotion

The distribution channel will involve selling the product direct to the consumers or using the sales agents. The company has already made agreement with the major super markets in the U.K who will help in the marketing of the products. Most of the products will be sold through the retailers who will act as selling agents of various juice fruit products. The other channel of distribution will involve direct supply of the products to the schools and hotels. These are some of targets in the marketing strategy.

The company will invest greatly in the product promotion campaigns through the TV campaigns among others. Advertisement is important since they keep the consumers informed about the existence of the product in the market. Through the TV advertisements, the company will manage to capture the attention of many people in UK. The most recently advertisement that featured had a new Diet Atlantic Quench Juice Drinks which embodied a simple sincere humor. The advert became popular and it was ranked the fourth best advertising age’s list among the top most recalled new TV ads. Using such measures will help the company gain popularity compared to the competitors in the market. Apart from the TV advert, the company should develop proper customer care services where they all customers to give their views concerning the products. The consumers will also have the chance to state what they want added to the products and other adjustments that will suit them. Customer care is one of the techniques of promoting consumers’ loyalty to a given brand. It is evident that many companies have emerged in the industry and they produce super fruity products. The Atlantic Quench can compete with such companies by promoting good customer experience through interaction. The main focus in the advertisements will be the health benefits of the products and affordability (Sørensen 2012, p.42).

Apart from the Tv advert, the investment on the adverts through magazines is also essential though the information reach is limited. The advertisement should target all people in the nation including the poor and the rich. The use of TV and magazine limits the information reach to the poor. The advertisement should also be made through the local Radio Stations. Also, the current generation spends most of their time on the internet and this provides a good avenue for advertising the products. Atlantic Quench should create an online platform where they can interact with consumers all over the nation through their website or a marketing link. The strategy will ensure a wide market awareness creation (Annunziata and Vecchio 2013, p.352).

Marketing models and theories

The marketing strategy in this case mainly focuses on the consumer’s behaviors and beliefs about the products. The consumers believe that fruits and vegetables are essential elements in the daily diet. In addition, the consumers prefer the superfruits containing enriched nutrients such as omeg-3. The Atlantic Quench should design their products to meet the consumer’s taste and preference. Based on increased health awareness on the need to take a lot of fruits, consumers have developed a liking attitude towards the consumption of the fruit products.

Effective marketing management requires proper understanding of the market and the consumer’s behavior. Market research is essential in the marketing process; the market analysis for the Atlantic Quench indicated that they have a good opportunity to thrive in the market provided they position themselves properly in the industry. Positioning involves designing the products in various packages that allow consumers to purchase what they can afford. There is stiff competition in the industry with the emergence of superfruits and this poses a great threat to the company. The understanding of the external environment helps in the quantification of the market size and the prevailing pressure the company is likely to experience (Bray and Popkin 2014, p.951).

Finally, Atlantic Quench marketing strategy will help it manage the emerging competition in the fruit juice industry. Consumers have rejected the juice and juice drinks containing a lot of sugar content with the increase health consciousness; therefore, there is an expansion in the fruit juice market globally (Bray and Popkin 2014, p.953). The strategic measures that will be used in promoting market penetration include proper packaging and pricing of the products and using appropriate channels of distribution. The consumer’s health continues to be a drive for the expansion in juice drink market in the future. The company should design the product to contain the targeted nutritional elements that consumers focuses on while consuming the drinks. There is stiff competition in the market; however, with proper strategies as outlined above, the company will reach a sustainable level of operation in the future. Proper product promotion strategies are essential in the marketing. The marketing should mainly focus on the nutritional content of the products.