Proposal and Marketing Plan Prepared By: Madeline Bergan, Marigrace Carney, Lizzie Woidat, Nino D’Acquisto, Tj Edwards, & Bieke De Bruijn
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SINKER’S SODA AGENCY PROPOSAL AND MARKETING PLAN PREPARED BY: MADELINE BERGAN, MARIGRACE CARNEY, LIZZIE WOIDAT, NINO D’ACQUISTO, TJ EDWARDS, & BIEKE DE BRUIJN NOVEMEBER, 30TH 2016 1 9 2 2 4 S I N K E R S R O A D M I L W A U K E E , W I 5 3 2 0 2 TABLE OF CONTENTS MARKET SUMMARY……………………………………………………………...……………3 COMPETITIVE ANALYSIS……………………………………………………………………5 PRODUCT DESCRIPTION…………………………………………………………………….6 TARGET MARKETS……………………………………………………………………………6 POSITIONING…………………………………………………………………………………10 DISTRIBUTION……………………………………………………………………………….11 BUDGET………………………………………………………………………………………..12 PROMOTION/MEDIA STRATEGY…………………………………………………………13 COMMUNICATION MOCKUPS……………………………………..………………………16 COMPANY PRESS RELEASE………………………………………………………………..18 CAMPAIGN EVALUATION………………………………………………………………….19 REFERENCES………………………………………………………………………………….20 2 MARKET SUMMARY Summary According to the Mintel executive summary, soda sales have decreased in the last few years. This is due to consumers feeling they need to be drinking healthier beverages than regular or diet soda. The summary has forecasted that soda sales, which were at $36.07 billion in 2015, will decrease to $35.59 by 2020 (Sisel, 2016). Within the current $36.07 billion sales, Coca-Cola Co., PepsiCo Inc., and Dr. Pepper/Snapple Group are dominating the market at 92% total coverage. Therefore, in order to stay either on top of or simply in the market at all, soda companies have been expanding their products to more low/no calorie beverages, waters, teas and sports drinks, or even across the market to food products. Scope and Forecast of the Market Due to the recent health kick the US population is experiencing, carbonated beverage companies need to think of new ideas and innovations to keep up with the demand of more health conscious consumers. Recently this has lead to a shift from regular carbonated soda to options like sparkling water and diet and natural sodas. (White-Sax, 2014) Increasing oil prices are predicted to cause a higher production price for carbonated soft drinks, in turn raising the sales price. It is projected that this increased price for carbonated soft drinks will further lower consumer consumption (Sisel, 2016). It’s also slightly advantageous to be a smaller company in this market. Large companies are finding difficulty keeping consumer trust, since they are drastically changing the product from the original, artificially sweetened product and experimenting with new items to draw more people in, whereas smaller brands are seen as more authentic due to the fact that they produce sodas in smaller batches with trusted local ingredients (Sisel, 2016). Other Market Leaders Coca-Cola has had issues in the past, specifically in 2006 involving relations with the independent bottling companies they would use to bottle their products (How coca cola has changed 2016). The company is also looking to rebrand. Coca-Cola Life, a soda made out of natural sugar and no artificial sweeteners, has half as many calories as regular Coca-Cola and therefore meets the demand for the growing health conscious consumer market (White-Sax, 2014). In addition, Zevia, a small craft carbonated soft drink brand, has seen a dramatic spike in sales recently, as it is another beverage that is sweetened with natural ingredients (Packaging & Converting Intelligence, 2016). To further appeal to consumer demands, Zevia has made their beverages color-free, non-GMO Project Verified, and have removed artificial ingredients that consumers have shown to dislike (Sisel, 2016). PepsiCo, another beverage market leader, has come out with the product, Sierra Mist Natural with two main objectives in mind; the first being to encourage consumers to buy a seemingly healthier beverage, and the second being to discourage consumers from buying their competitors’ products. One of the ads created for Sierra Mist natural involved a cutout of a can of Sprite, a Coca-Cola product, being knocked over by a can of Sierra Mist Natural, with the tagline stating: “If you're not fond of fake, try Sierra Mist Natural” (Zmuda, 2011). 3 Market Challenges Health concerns are always the trailing topic when it comes to discussion of purchasing and consuming soft drinks. These concerns do shed negative lighting on soft drink products, which the company will have to help the customer overcome. Consumers have been more interested in their well-being and general health, not just by exercising more frequently, but also watching what they put into their bodies. This decline of processed foods, added sugars, and artificial ingredients could be a strong cause of the steady decline of carbonated soft drink consumption. Some of these health concerns associated with soft drinks are highlighted in this extensive report from a study at Harvard University: • People who consume sugary drinks regularly—1 to 2 cans a day or more—have a 26% greater risk of developing type 2 diabetes than people who rarely have such drinks. • A study that followed 40,000 men for two decades found that those who averaged one can of a sugary beverage per day had a 20% higher risk of having a heart attack or dying from a heart attack than men who rarely consumed sugary drinks. A related study in women found a similar sugary beverage–heart disease link. • A 22-year-long study of 80,000 women found that those who consumed a can a day of sugary drink had a 75% higher risk of gout than women who rarely had such drinks. Researchers found a similarly elevated risk in men. (Soft Drink and Disease, 2016) Even if consumers have never had a craft or natural soda, many are willing to try for the flavor. According to a chart from Mintel, consumers are interested in the craft carbonated soft drinks to try something new and non-alcoholic. This is good, because they can market it towards any audience who enjoys carbonated beverages, not just adults over 21. People also are just curious about what it would taste like and how it would pair with their meals. Overall, while craft and natural carbonated soft drinks are not completely mainstream right now, nor have they shown to increase these beverage sales, they are keeping consumers interested and more importantly, loyal to the brands they love and use. As shown below in Figure 1, consumers have become much more interested in craft sodas with added health benefits. 4 COMPETITIVE ANALYSIS Primary Competitor There has been much innovation throughout the carbonated soft drink industry. Many new companies have entered into the market to change the unhealthy status of carbonated, high sugar content beverages. As an up and coming start up company, Sinker’s Soda will face many of these competitors in today’s market. The primary competitor to Sinker’s Soda will consist of other similar size craft carbonated beverage producers. The industry needs innovation as its volume has dropped from 12.8 to 12.6 billion gallons (Beverage Marketing Corporation, 2015). This has caused many smaller brands producing natural products like Sinker’s Soda to evolve. One of the main leaders in the craft carbonated soft drink industry is Zevia. Zevia is a zero calorie soda that is sweetened with natural ingredients. Zevia sales have recently been increasing steadily (Trends in the carbonated soft drinks market, 2016). Zevia is already well aware of what consumers want in their products and have adjusted their product accordingly. They have created a beverage that contains no artificial flavoring and is clear in color to give their consumers what they demand (Sisel, 2016). Zevia is knowledgeable about whom their target markets are and how to advertise to them effectively. Zevia has chosen to target female consumers as their target market. They have made their website very colorful and orientated to females to easily attract them to their brand (Sturm, Powell, Chriqui & Chaloupka, 2010). Sinker’s Soda will easily be able to compete in the same market as Zevia. The two companies are very similar in size as well as the kind of product they are selling. Sinker’s Soda will be able to create the same scope and thrive just as much as Zevia does. Sinker’s Soda will be marketed to a much wider range target market. It will be marketed to both men and women, which might result in Sinker’s Soda becoming a better- known brand. Zevia and Sinker’s Soda are both specialty soda producers. It will take more time but once they become better known throughout the carbonated soft drink industry, they will be able to compete with the larger soft drink brands. Secondary Competitor Competitors of Sinker’s Soda will not only be other craft soda producers but will consist of large, well known soda and other carbonated soft drink producers. These large producers, which consist of: Coca-Cola, PepsiCo. and Dr. Pepper Snapple Group, share 92% of the carbonated soft drink market. However, Sinker’s Soda’s secondary competitor would be Coca-Cola. Coca-Cola leads the carbonated soft drink industry’s sales by holding 40.1% of the market share with the other companies, PepsiCo and Dr. Pepper Snapple Group, following close behind (Sisel, 2016). Coca-Cola is one of the secondary competitors to Sinker’s Soda for many reasons. For starters, Coca-Cola is a company that is known worldwide. Sinker’s Soda on the other hand has a much smaller scope. Coca-Cola has been in the carbonated soft drink industry for a significant amount of time and has a large variety of carbonated beverages available. Coca-Cola, along with PepsiCo, both sell regular, diet and have introduced craft and natural products of their own to the market (Del Buono, 2016). Whereas, Sinker’s Soda is just now being introduced to the market and the company also only has two flavors of craft sodas available to consumers. Some consumers are not early adopters and may not find the added nutritional benefits of Sinker’s Soda’s craft sodas to be important to them.