Economic Market

1.0 Introduction

After about 30% decline in the United Kingdom smoothies markets and an important decrease in market shares, Innocent have bespoke a report analyzing the United Kingdom smoothie markets that advocates for Smoothies product range marketing plan concerning the subsequently two years. The objectives of this business report are to notify the status of the contemporary climate, and propose notions to grow market share and sales.

2.0 Methodology

The report is assembled mainly from secondary research reports. Quantitative data must be gotten from business databases for instance; qualitative data will be sourced from sources like the BBC Online. A PESTEL analysis has to be used, nonetheless, not in the acronymic organization. A SWOT analysis concerning the contemporary business must be considered.

The recommendations provided are deduced from the analysis of data (Brassington & Pettitt 2006).

2.1 Findings and Analysis (Part 1)

2.1.1 Economic Factors

2.1.1.1GDP (Gross Domestic Product) 2004 – 2009

Appendix 1 elaborates the advancement of GDP for the time Q3 2005 to Q3 2010.

The GDP decreases from a stable 2 – 3% into a quick fall in 2009 and to a squat point of -5.5% in 2010. This fall in GDP shows the decreased demand for services and goods both worldwide and in the UK.  The resultant increment in idleness as well as decline in customer confidence contributes to a negative effect on business recital. Consumer confidence makes a major gauge for every business as this will affect buying decisions (see appendix 2).

2.3 Main Points

Customer confidence is down despite actions to arouse recovery

Unemployment heights is still high

Interest rates have been lowered and probably will be low for the predictable future

2.4 Relationship with Innocent

Recession marks a key reason why Innocent is making loses in market shares and sales. High jobless levels and reduced customer confidence has resulted to switch to cheaper products, for instance, own product supermarket smoothies, and also, juices so in that they can manage to get their fruits, but cheaper (Dodds 2009).

2.5 Ageing UK population

In mid-2009 the standard population age shows 39 years, up from 37 years in 1999.”

Population Ageing is not a rapid moving procedure, though it is something that Innocent should deal with at some extent.

2.6 Socio-cultural shift towards balanced diet

In the last counted years, government campaigns and a main media push regarding the advantages resulting from a wholesome lifestyle has been rampant. “80.6% of the respondents approved that, over the next five years customers will increase uptake of functional wholesome products however, it will also prolong to indulge.” (Kemsley, 2006).

2.7 Coca Cola Investment

Innocent is a non-corporate manufacturer of juices vegetable pots and fruit smoothies, and has lost its innocence after promotion of a stake to US huge Coca-Cola for about £30m.” (Sweney, 2009).

2.8 UK Smoothie Market

While market share belonging Innocent has decreased, revenues are increasing every year. A growth of about 60% 2007 versus 2009 compares to their closest competitors of about 17.4%. The rivals are comparatively low with PJs and label delivering all material capacities into the marketplace.

2.9 Internal (SWOT) Analysis

2.9.1 Strengths

Market share

Innocent is currently controlling 80 percent of the market

Friendly and ethical product image

 Customers are aware of the product they are running for and where it originates. This is one of the Innocent’s big strength.

Smoothies is still in growth phases of brand lifecycle

 Therefore, there are good scopes for growth of smoothies, though line extension is also possible.

2.9.2 Weaknesses

Relative price inflexible

Because sourcing logistics and of high production expense, making cut of production expense unfavorable, either from sourcing new supplies or negotiation. Innocent is now considered as a premium product.

2.9.3 Opportunities

Government policy  

Promoting five a day campaigns thus, could bring in more interest

Growing market

2009 – 2010 growth predicted as 6.6% (Mintel Group, 2009) attuned for economic recession

2.9.4 Threats

Competition

Competition has increased, with specific pressure from own rival brands like the Asda and Tesco.

Economic factors

Because of declining consumer confidence and the recession, disposable income has reduced

 3.0 Implementation Key Points into Marketing Strategy from Analysis

Current product image requires to be retained throughout recessionary marketing strategy.

Customers have lower throwaway income because to recession. Value for money requires to be pushed.

Strong competition from rivals, mainly opposing on price but perhaps trying to replicate their brand images.

4.0 Marketing Proposal (Part 2)

4.1 Tactical offers, in its place of price strategy

Because consumers have lower disposable returns, money value is a main issue. Therefore, Innocent must consider using the principle of Buy One Get One Free (BOGOF).

This will assist Innocent avoid commoditization.              

4.2 Sell a sole smoothie flavor entirely to premium supermarkets (premium volume channel)

This could make innocent develop a new smoothie flavor as a limited edition brand. It should discuss an exclusivity contract with premium supermarkets, like Waitrose. This strategy can enable Innocent drive sales of their own exclusive products, and at the same time, raise awareness of the existing products because of Innocent being displayed prominently in the store (Brassington & Pettitt 2006).

4.3 traditional’ Innocent for older generation

Innocent could establish a unique product of smoothies targeting older persons.

The number of 45-54 year olds is prospected to increase, underlining the significance of extending the plea of smoothies past the main range of 16-34s (Mintel Group, 2008).

4.4 Establishing Innocent on a café menu

Another key consideration for Innocent should be considering smoothies into the café market. It could manage this by discussing an exclusive contract with the restaurant to introduce Innocent smoothies on their menu to accompany their meals

4.5 Innocent alcohol free cocktails

Innocent can consider introducing a smoothie product that direct replaces non-alcoholic cocktails. The product will remain a smoothie however, just in cocktail flavors like the Pina, Woo Woo or Colada (Mintel Group 2009).

5.0 Marketing strategy

5.1 Price

Pricing strategy has not been utilized to shun commoditization, which would finally damage the product irreparably.

5.2 Product

Innocent free cocktails alcohol

Here, they are creating new ranges of smoothies in styles of cocktails. This can be done by changing flavor and ingredients to duplicate famous cocktail.

5.3 Promotion

Unique smoothie flavor to a supermarket (premium volume channel)

This exclusivity gives Innocent’ prime positioning in stores

Innocent on a café menu

This uses in-store promotions within cafés. This must also raise awareness concerning the brand, and results to repeatedly sales in restaurants and supermarket sales.

BOGOF plan

Using the BOGOF (Buy One Get One Free) plan, it enables Innocent give consumers increased value for money.

5.4 Place

Sole smoothie flavor to a supermarket; premium volume channel

Exclusivity will offer premium shelf a placement. Supermarket should be famous with the ABC1’s that are more elastic to the depressions, and willing to use more money on Innocent’s brands.

Recommendations

Appendix 4 summarizes the main facets of every measures and proposals against chief criteria whose results are resulted from the analysis achieved in this report and escorts to more recommendations as detailed below. Thus, in terms of short-term plans, I would advocate notion 3 (premium supermarkets) and notion 5. I would advocate these notions since they would be rapid to realize, but will reach virgin markets with the core existing brands, potentially increasing Innocent’s customer base, growing market share and driving sales. Notion 2 for quite long term would be good as it loom a relatively unhurt demographic sections. This plan would take much longer to establish though, in the long run it could be much more profitable. On the other hand, I would recommend plummeting ideas 1 and 4 as they seems to be potentially harmful to Innocent’s valued ethical products image (Direct Gov. 2010).

Reflection

It has been an interesting activity to establish a business report for this company. In fact, I have enjoyed coming up with different business statements for the company. The activity has reminded me that I have to put extra efforts in these business statements if I need to pass in my examinations. The most interesting moment was when coming up with up with a budget for five years. It has been challenging to come up with recommendations for the company

Environmental impact

The company is likely to pollute the environment with chemicals from the production. Therefore, the company will use modern technology to decompose these chemicals. The company uses alcohol in the production. In this case, some workers might take the advantage and misuse them causing chaos and noise in the surrounding. To prevent such behavior, the company will implement policies and fines for staff that are found misusing alcohol (Mintel Group 2009).

Conclusion

Innocent is the market leader today and must search for partners where their branding and ethics is corresponding, with the objective of reaching customers with more disposable returns. Therefore, Innocent should also consider targeting sections that are currently not catered for which it could achieve by use of Innocent Traditional.