The beverage industry is one of the first to respond to the trends prevailing in the society. At present, in the developed countries, the main trend in consumption is the interest in high-quality drinks with new flavors in a convenient package. In developing countries, there is a growing interest in branded products with high value-added as a method to meet a certain standard of living (Hitt, Ireland, & Hoskisson, 2012). In order to evaluate the trends that are dominant in the international market, it is crucial to analyze the various management tendencies and the fast-changing practices that allow addressing the customer needs effectively. As a result, the present paper is devoted to the review of two articles that describe modern trends in the beverage industry and the analysis of their implications for managers.
Summaries of the Articles
The article by Berry (2016) is devoted to the upcoming trends in the beverage industry, including “better-for-you brands” (para. 1), which have been offering various products from ready-to-drink tea and coffee to carbonated and crafty drinks. The feature that unites all these brands consists of the way they are working towards avoiding excessive sugar and other potentially unhealthy ingredients and introducing ones that increase nutritional properties of the drinks, make them healthier, and offer new flavors. Berry (2016) states that these trends have been caused by consumer’s willingness to buy such healthy and otherwise useful products, implying that simple “thirst quenchers” are no longer popular (para. 39).
The article by Del Buono (2016) is similar in describing the trends in the beverage industry, but it primarily illustrates one particular fashionable feature: the use of plants and “botanicals,” especially in alcohol drinks. The article describes the way the function of botanicals in the beverage industry has changed from flavoring substances to healthy, nutritious, and functional ingredients that can be employed for their color or emulsifying properties. In the end, botanicals become multifunctional components that offer multiple benefits and are approved by the customers. Del Buono (2016) extensively describes the possible reasons for customer’s approval, which include their curiosity with respect to unusual and especially sophisticated flavors, the interest in healthy and nutritious products, the aversion to chemicals, and they wish to know what ingredients constitute a product and be knowledgeable about their effects. Finally, Del Buono (2016) mentions the challenges of botanicals that include inconsistent distribution of attributes, which depends on multiple factors of plants’ growth, as well as botanicals’ tendency to affect various product properties, including shelf life. Off-putting flavors are also a possibility, but when managed appropriately, as Del Buono (2016) and Berry (2016) prove, botanicals can become a multifunctional and popular tool for the beverage industry.
Beverage Industry Implications
Trends and Tendencies
Both of the analyzed articles have much in common in terms of the described tendencies, and they emphasize that the major trend in the global beverage market is health orientation, which is reflected in the reduction of sugar and artificial ingredients in the drinks (Berry, 2016; Del Buono, 2016). The sweet carbonated drinks have approximately 40% of the soft drinks market shares, but sweet soda loses its market position giving way to the sports and functional drinks. The market share of sports and energy drinks is to account for about a quarter of all the sales. Whereas, the share of the low-calorie drinks on the market is to reach up to 15%. Subsequently, there has been an evident shift in consumer behavior.
In general, according to the articles, the segment of healthy drinks with reduced calories and sugar that have natural ingredients is increasing steadily (Berry, 2016; Del Buono, 2016). For instance, most of the mineral water manufacturers extend their product range with lemonades based on natural ingredients (Ashurst, 2016). The health benefits remain the major, unrelenting beverage market trend in developing any new product; managers should consider the naturalness, health security, and useful properties when introducing new commodities and planning the marketing (Hitt et al., 2012). Needless to say that even in the positioning of alcoholic beverages, the producers emphasize their focus on the natural ingredients (Singh, 2012).
Attributes
It should be noted that successful innovations in the beverage segment should orient at such attributes as multifunctionality, useful properties, and fun (Pellettieri, 2015). Multifunctional drinks will be in demand due to a combination of multiple properties in a convenient format. Further, the intensive sales of useful beverages (in terms of health) are directly connected with the promotion of a healthy lifestyle, youthfulness, beauty, and sport. The notion of fun is one of the crucial aspects to consider when focusing on the younger target market (Pellettieri, 2015). It implies the introduction of new textures such as bubbles filled with special flavors and other. Due to the current trends, most of the beverage manufacturers adjust their productions to manufacture drinks that are functional and contributive to health and contain only natural ingredients to support the active way of life of people.
Conclusion
In order to stand out from the competition, companies need to monitor and analyze constantly the situation in the market and examine the company’s strategy in relation to the current tendencies. The consumer behavior undergoes a change under the pressure of different influences, and companies need to adapt to the needs and preferences of clients in order to remain relevant. The beverage industry is indeed volatile and is characterized by the high rivalry; therefore, managers need to regulate the alterations in the environment and transform the company’s activities in accordance with the changing trends, which include the use of botanicals and other healthy and multifunctional ingredients.
References
Ashurst, P. (2016). Chemistry and technology of soft drinks and fruit juices. Hoboken, NJ: John Wiley & Sons.
The name of the company should be changed to Columbia Roxx. The name has been suggested due to several reasons. First, the name echoes where the drink is coming from and will resonate with a specific group of people. Secondly, the name “Roxx” has been retained to highlight the best way to serve the drink. Thirdly, the company targets a regional market. In turn, the name suggests an inter-regional reach.
Mission
Roxx Water Company produces sparkling water which comes in specific flavors that target different consumer needs.
Vision
The company focuses on being a leading regional producer of flavored sparkling water. Quality, customer satisfaction, and strong corporate governance are the pillars of that inspire Roxx Water Company in its bid to climb into high echelons in the beverage industry.
Product
Roxx Water Company is a company that produces a line of sparkling water. The company products come in a variety of flavors, which range from vanilla to strawberry. Strawberry is the company’s signature flavor.
Marketing Methods
Roxx Water Company will rely on both digital and traditional (tradigital) marketing methods to improve its market share. Tradigital marketing methods are pegged on digital and traditional marketing methods. The former will involve using social media platforms and a fully customized company website that will be on the first page of the Google search engine. Traditional methods of advertising that will be employed include TV and radio ads, billboards, and posters.
Strategic Position
The best strategic position for Columbia Roxx is the low price strategy. To implement the strategic position, the company should revise the prices of their drinks. Currently, the pricing of the Columbia Roxx is higher compared to those of competitors such as Coca-Cola.
Beverage Industry Trends
The bottled water industry is a fast-growing industry and has grown by 6.4% in the last two years. The increase translates to 15 billion US dollars, and according to forecasts, the beverage industry is set to increase even further by 2020. As of 2016, bottled water was listed as the 2nd largest beverage category after carbonate drinks concerning sales volumes and revenue generated by leading industry brands (Statista, 2016).
The stated figure estimates that each person consumed 36.3 gallons. Further, analysts have predicted that shortly, bottled water will replace carbonated drinks such as soda in the not so distant future because most consumers consider bottled water as healthier alternatives to other forms of beverages (“Bottled Water Market,” 2016). Hence, bottled water is slowly overtaking the carbonated soft drinks (CSD) industry.
Methods of Distribution/User Reach
Roxx will employ three methods of distribution. The first process is the Direct Store Delivery system (DSD), which will involve the movement of the products from Columbia to the company’s stores in the North American market. The second method of distribution is customer warehouses, while the third mode of shipping will be the distributor networks.
Risks
Strategic risks – these risks will be mitigated by continuous revision of the strategic plan to include the different expected challenges that are affected by the industry. In so doing, the company’s production activities will evolve with the industry.
Regulatory risks – these risks will be mitigated through the adoption of the green gas emission and the purchase of the required emission permits.
Operational risks – The electricity fluctuations interfere with production activities, and the risk can be mitigated by securing other forms of power, such as solar power.
SWOT Analysis
Strengths
Strong company corporate governance and culture
Roxx will have reliable top management that will be complemented by an experienced board of directors. More importantly, the corporate culture will provide the employees with a positive and enriching environment, which translates into high rates of productivity and desirable professionalism.
Good company-customer relationships
Customers are the pillars of the company. Thus, Roxx will ensure that their needs are at all times met.
A reliable company brand is a critical cog of Roxx Water Company
This brand is a result of quality products that satisfy the target market’s needs.
Cheap and readily available labor in Columbia
This helps reduce the costs spent in production, thus, improve the company’s revenue generation.
Weaknesses
Revenue
Lack of sufficient income to implement all the company’s goals and objectives.
Human resources
Limited employee base which reduces the level of efficiency in the company and affects the rates of production
Shipping
High costs of shipping products from the production base in Columbia to the North American market. The North American market is instrumental to the company, and moving the products to this market involves a series of costs while significantly inflate the value of operations.
Opportunities
African and European markets are accessible to the company
The company has an opportunity to expand into these markets. Asian markets are also available, and this presents Roxx with a more significant target market ready for the taking.
Labor
The cost of labor in Asia, Africa, and Europe is relatively less than in North America. Penetrating these markets will, therefore, be cost-friendly.
Threats
Competition
The high levels of competition from established industry brands like PepsiCo and Coca-Cola. These two companies have a share of almost 50% of the beverage industry, which implies that Roxx faces a great challenge.
Political instability
The presence of rebels that agitate for the nationalization of the country (Columbia) lands profiles Roxx (“Overseas Business Risk – Colombia,” 2015).
A representative of Innova Market Insights, Lu Williams, stated that “’free from’ foods have all gained traction and moved onto the next level during 2015” (Beverage Industry, 2015). Today people tend to pay much attention to the things they drink and eat. A range of advertisements that appear on the screens or are printed affects the way people perceive the world around them and their choices. Clean eating seems to be one of the most popular trends, focusing on simpler products with the ingredient list as short as possible.
The percentage of organic products present in the Netherlands market, for instance, was registered to soar from 6.3% in 2013 to 9.5% in 2015 and continues to climb steadily (Beverage Industry, 2015). The consumers demand transparency in their foods, which means that clean labels are gaining momentum. Highly-processed foods and beverages are out of favor as the public opts for simplicity (Beverage Industry, 2015). For the beverage industry, the trend for cleanliness means the necessity to switch to non-artificial products to meet the consumers’ demand. This includes investing in organic ingredients, clean manufacture, and sustainability maintenance all the way from the supplier to the stores.
This necessity is complimented by another viral trend – the “free-from” food labeled as not containing dairy or gluten. This type of food product is beneficial specifically for persons with lactose or gluten intolerance, which is its target audience. However, the target consumer is a part of a larger community, which means that the adverts designed for gluten- and lactose-intolerant persons can (and do) include everyone who sees them. As a result, a wider community is constantly exposed to adverts marketing dairy- and gluten-free foods as healthier solutions. Thus, more people start to favor products containing no gluten or lactose even if they have no special need for them (Beverage Industry, 2015).
Some other aspects of applying to the beverage industry include non-GMO concerns spreading out to soft drinks and sodas as well as food. However, it is the “free from sugar” drinks that seem to concern the consumer; they will be discussed in more detail below. Healthcare professionals tend to emphasize the adverse influence of sugar. That is why a lot of representatives of the general public start to drink only sugar-free beverages regardless of the fact whether they refer to the vulnerable population or not. The majority of people are used to believing that the things they find in the media are true for everyone. As a result, the beverage industry needs to adapt to the changes and implement new trends.
During the last two years, healthcare professionals started to emphasize that the consumption of soft drinks increases risks to become overweight and face complications. Realizing a real possibility to suffer from obesity and diabetes, the representatives of the general public started to drink beverages that include less sugar. In this situation, organizations that used to offer them had to implement new products in order to meet client needs. Some of them started to provide sugar-free drinks, as they became extremely popular. Berman and Johnson (2015) proved this fact, stating that shipments of such products “increased 5.9% in fall 2012 and 15.7% in spring 2013”, which showed the tendency of buying a new beverage.
Ma, He, Hashem, and MacGregor (2016) focused on the UK population and revealed the connection between sugar-sweetened and sugar-free beverage consumption. They emphasized that the changes were made mainly on an individual level, which means that the whole industry is not affected greatly and managers should not implement any substantial changes. They may improve the advertising of drinks with reduced sugar level however there seems to be no necessity to add new products to the range of offerings.
A new promotion strategy is likely to be the best option. Still, in their work Berman and Johnson (2015) discuss the whole USA population on the example of university students. The scientists underline that having an opportunity to choose between bottled water, sugar-free, and sugar-sweetened beverages, the majority of the sample gave preference to calorie- and sugar-free options. All in all, their conclusions can be used as a suggestion for beverage managers to provide more bottled drinks. The most advantage can be received when offering the largest range of options for sugar-free drinks and the smallest of water.
The article prepared by Ma et al. (2016) focuses on the connection between health and beverage consumption while Berman and Johnson (2015) pay more attention to the general preferences of the population, as they initially wondered whether it was possible to decrease “the number of plastic bottles entering the waste stream from the university campus” (p. 1406). Even though the articles selected for this assignment seem to have little in common, the researchers discussed the most recent beverage tendencies in each of them. The connection can be observed when analyzing this information and aligning it with the ideas of Lu Williams. Having various reasons, people in the UK and the USA tend to buy “free from” drinks that are claimed to be healthier and better for a diet. Thus, beverage managers should ensure that their organizations can provide required products and advertise them to attract more clients and enhance income.
References
Berman, E., & Johnson, R. (2015). The unintended consequences of changes in beverage options and the removal of bottled water on a university campus. American Journal of Public Health, 105(7), 1404-1408.
Ma, Y., He, F., Hashem, K., & MacGregor, G. (2016). Gradual reduction of sugar in soft drinks without substitution as a strategy to reduce overweight, obesity, and type 2 diabetes: A modelling study. The Lancet: Diabetes & Endocrinology, 4(2), 105-114.
Factors, other than those internal, affect an organization’s strategic options. It is therefore important for every industry to build a picture of how these organizations affect the process of planning. The STEEP analysis provides a tool through which decision-makers can build the industry image and as such develop safeguards within its strategic objectives. The soft drinks industry although diverse is driven by a few strong players including coca-cola, Pepsi, and Cadbury Schweppes (Pepsi CO 1; Michael,86). To fully comprehend the soft drink industry, STEEP analysis is used in this paper to evaluate the key elements including Social factors, Technological factors, Economic factors, Ecological factors, and lastly, political factors.
Social factors
More and more people are getting conscious of healthy lifestyles (Berry and Ed 67; Courtney, 231). This is dictating the kind of shift that the industry needs to adopt in its product line. This is the factor behind various companies switching to bottled water and colas.
In most families, both spouses are increasingly involved in work and hence there is a need for time management. This amounts to increased demand for bottled water as well as soft drinks convenient and healthy to day to day lifestyles (Rankin 1).
The mature population (37-55 years) also experience increased concern for their nutritional intake. People want to increase their life span and this directly impacts the soft drink industry as demand for non-alcoholic and healthier beverages rises (Zee-Sun, Yuna. et al 208; Toops 56).
Various demographic patterns for instance age and gender also define the purchasing trends of soft drinks.
Technological factors
Technology is no doubt taking the world by storm. More and more people are relying on the internet for getting new information as well as purchasing of products (Howard, 19).
Advertisements, marketing as well as promotional activities are increasingly reliant on technology, including internet and television. Advertisement not only creates brand awareness but also makes the consumers get more knowledge and make decisions on what to buy (Hannaford 12; Howard, 21). Technology is therefore an important selling point for products.
Production is also dependent on technology. Additionally, as other factors of production rise and hence the overall cost of production rises along, the industry will be seeking new technologies that can lower production overhead (Courtney, 1997). This will help in keeping the product price within client reach.
Additionally, technology has allowed the introduction of easy-to-carry cans which make it easier for people on the move to buy soft drinks without having to pay for the bottle separately.
Economic factors
The recent past has seen the worst economic downturns in many years. The global recess as well as the financial crisis have hugely impacted consumer spending (Goldsberry et al., 86).
Fuel is a crucial factor of production. Sadly, its price has been on a constant rise of the recent past and hence impacting on production overhead.
Inflation concerning raw materials and other factors of production has the potential of directing impacting on the cost of production (Majumder 23).
Economic improvement in other countries, for instance, the BRIC countries have stimulated increased sales in these countries.
Ecological factors
Corporate social responsibility is a necessity in the current world. There is a need to adopt a manufacturing process that does not pose a threat to the environment (Corporate Bureau 56; George 102).
The packaging is also a key ecological issue. There is a need to entrench the use of recyclable packages within the production line.
Political factors
Soft drinks are regulated by the FDA, within food categories. The manufacturing process is closely regulated by the government and hence there is potential for fines for failure to fully abide by the standard regulations (Howard, 102).
Multiple jurisdiction operations subject the industry players to different legislation increasing the risk of legal actions, varying legal guidelines, tax rate changes, divergent legal interpretations, as well as different environmental legislation (Heaney & Rafferty 45). While developed countries have already established environmental laws, developing countries are yet to develop comprehensive laws and such susceptible to regular changes (Sicher 17).
Increased competition by existing as well as emerging players. New players are increasingly scrambling for the soft drink market (Duffey, et al., 423; Harvard Business School 34).
Political situations in international markets remain a possible challenge especially in the parts of the world considered volatile and prone to civil strife, changes in governmental regulations and restrictions as well as the ability to transfer capitals across the various national borders.
In general, the factors which influence the strategic decision within the soft drink industry are cross-cutting and diverse. Ranging from minor consumer behavior to the sophisticated aspects of meeting jurisdictional requirements, soft drink manufacturers find themselves having to carefully review the landscape of factors that impact their performance (Rainie 23). Innovation, technology, as well as politics also play an active role in dictating the direction to be adopted by players in the soft drink industry. With the major players already enjoying global presence, they find themselves having to deal with respective local players within the countries of operation and hence the need for strong marketing campaigns. The STEEP analysis breaks down the elements into chunks easily understandable and addresses within strategic plans of respective organizations.
Works Cited
Berry, John and Ed Keller. The Influential: One American in Ten Tells the Other Nine How to Vote, Where to Eat, and What to Buy. New York: The Free Press, 2003.
Corporate Bureau. Coke Sales fall 11% on Pesticide Controversy. 2003. Web.
Courtney, Harold. “Games Managers Should Play”.World Economic Affairs (1997): 91-102.
Duffey, et al. “Food Price and Diet and Health Outcomes”. Archives of Internal Medicine, 170 (5), 2010: 420–6.
George, Newton.Colas Called safe, but not at EU Standards. The San Diego Union, 2002.
Goldsberry, Klein. et al. Visualizing Nutritional terrain: A Geospatial Analysis of Pedestrian Produce Accessibility in Lansing. Michigan, USA, 2010.
Hannaford, Steven. G. Market Domination: The Impact of Industry Consolidation on Competition, Innovation and Consumer Choice. Westport, CT: Praeger, 2007.
Harvard Business School. Cola Wars Continue: Coke and Pepsi in the Twenty-First Century. Harvard: Harvard Business School, 2008.
Heaney RP. “Carbonated beverages and urinary calcium excretion”. American Journal of Clinical Nutrition, 74 (3), 2001: 343–347.
Howard, Peter. “Consolidation in the North American organic food processing sector, 1997 to 2007”. International Journal of Sociology of Agriculture and Food, 16(1), 2009: 13-30.
Howard, Peter. “Visualizing consolidation in the global seed industry: 1996–2008”. Sustainability, 1(4), 2009: 266-1287.
Howard, Peter. “Visualizing food system concentration and consolidation”. Southern Rural Sociology, 24(2), 2009: 87-110.
Majumder, Singh. “Indian State Bans Pepsi and Coke”. BBC News, 2006.
Michael, Frajow. Liquid Candy: How Soft Drinks are Harming Americans’ Health. Washington DC, 2005.
Pepsi Co. PepsiCo’s R&D Team Focuses on Health and Wellness Products. Beverage Industry, 2011.
Rainie, Lee. How the Internet is Changing Consumer Behavior and Expectations. Washington, DC: Society of Consumer Affairs Professionals in Business, 2009.
Rankin, Jocelyne. Think bottled water is harmless? 2011. Web.
Sicher, John. D. Beverage Digest/Maxwell ranks U.S. soft drink industry for 2004, 2005. 2005. Web.
Toops, Diane. The Trends: Another Cola War Brewing?Food Processing, 2008.
Zee-Sun, Yuna. et al. “Cultural influences on new product adoption of affluent consumers in India”. The International Review of Retail, Distribution and Consumer Research, Vol. 18, No. 2, 2008, 203–220.
The operational plan for Full of Life beverages will describe the structure of the organization and how each process will be carried out with regards to the strategies presented in the business plan for transforming a small family business into a large-scale beverage manufacturer. First, it is important to discuss the location of the production plant. Since the company has started operating as a family business, its location will include an office in the local area and the production plant located on the outskirts of the town to account for the effects of the manufacturing on the environment.
The advantages of the office location include the relative proximity to business offices of other companies; however, a significant disadvantage is a fact that the production plant will be located quite far from the central office of Full of Life. It is expected that the central office will be of approximately 100 square meters; the production plant will begin as a three-level building, which will be divided into production sectors for increased convenience.
The competitive advantage of the company will be associated with the increased attention to customer relationships and smart product development targeted at seasonality and variation regarding business-level strategies as well as the implementation of JIT inventory, efficient manufacturing and distribution regarding the functional level.
Supply and Inventory Management
The key aspect of the supply and inventory management will be associated with the control of fruit and vegetables provided by local farmers. It is noteworthy that the supply of products will vary depending on seasonality, so the Full of Life management should focus on the process of preliminary planning for future seasons to make sure that the production plant is stocked on the needed ingredients to produce beverages without any disruptions.
Just-in-time inventory is the most appropriate strategy for Full of Life since fruit and vegetables tend to spoil fast; the company’s inventory managers should keep in mind the production’s demand for certain ingredients and make sure to provide plants with the appropriate quantities. In such a scenario, immaculate relationships with suppliers are high on the agenda for Full of Life beverages.
As a green brand, the company will invest in collaborating with local farmers to buy seasonal vegetables and fruit for beverages’ production. When the order is received, it is expected that the Full of Life manufacturing plant will produce 100 items of beverages within twenty-four hours in the case when the needed supply of ingredients is available. If the supply is not enough, it is estimated that local farmers will supply fruit and vegetables within two business days, thus extending the turnaround time.
Production and Distribution
The production process of Full of Life beverages will consist of six key stages: the preparation of the simple juice mix, preparation of the final juice and vitamin additives (e.g., chia seeds, goji berries, spirulina, etc.) solution, preparation of the final beverage (final solution combined with water), bottle sanitation process, bottling of beverages, counting and sorting drinks into crates. The process of distribution will consist of dividing the stock of the freshly produced drinks into the most appropriate sales channels such as online sales, local grocery stores, specialized shops, and local markets.
Research and Development
As to new product development, Full of Life is currently working on releasing a selection of new beverage flavors for the upcoming season; moreover, the company is planning to start exploring the market of healthy energy bars to sell them in conjunction with beverages. Research and development activities in Full of Life are aimed at improving the existing product lines with the help of customer feedback and exploring new ideas for production through studying market demands and supply targeted at their fulfillment (“Research and development,” n.d.).
Reaching out to customers is the most valuable tool for the company; through getting feedback on what should be done and how to do it better, Full of Life will develop a deeper understanding of customers’ needs and will develop new products in alignment with these requirements.
Technology Plan
The critical technology needs of Full of Life can be divided into several distinct categories: software and hardware (including IT), telecommunication, production and distribution, and personnel. It is important to mention that meeting the company’s technology needs will be accompanied by the efforts to use green technologies that can significantly increase the efficiency of the manufacturing and distribution processes.
As a “green” brand, Full of Life is expected to focus its attention on those industry developments that will significantly reduce the adverse impact of the production process on the environment. Such developments and innovations include the installment of solar panels, recycling technologies, innovations for the reduction of CO2 emissions, electric vehicles for the distribution of products. Other technology needs of Full of Life are the following:
Software needs (on-premise and “in the cloud”): accounting software, e-mail, documentation software, Customer Relationship Management software, spreadsheets (Smith, 2010).
Hardware needs: desktop computers of laptops, external hard drives, network server solutions, a wireless router, and a laser-jet printer (Serbu, 2013).
Telecommunication needs: mobile access, the Internet, live chat capabilities, business email (Renee, n.d.).
Personnel needs: technologies for the management team and technologies for the manufacturing team. Documentation, accounting, CRM, and similar types of software will be used for inventory management, taking and tracking orders, customer service, and marketing. Manufacturing technologies will be used by the production team and quality control operators who will communicate with the management via telecommunication technologies. The stage of quality control in the manufacturing plant will ensure that each bottle aligns with the high standards of quality set by the company.
When it comes to the use of technologies in a beverage manufacturing company, extra attention should be paid to the equipment used in the process of production. The equipment used in the production of Full of Life beverages includes juice pressers, pasteurizers, cookers, conveyors, boilers, filters, freezers, mixers, packaging equipment, pollution control equipment, etc. It is expected that as the company grows, it will expand its product line and thus will need to get additional equipment for the manufacturing plants to cater to the growing demands of the market as well as the possibility of developing a completely new product (e.g., an organic energy bar).
Due to the lower budget, the manufacturing plant can include used equipment to cut costs; however, with the increased profit, Full of Life is expected to buy new and sustainable equipment to reduce the impact of the production on the environment. Also, the company is planning to invest in recycling technologies to minimize production waste. In terms of packaging, it will be outsourced to a local manufacturer that produces beverage bottles and other types of packaging made from recycled materials.
Business Organization: Employees and the Management Team
In the beginning, it is expected that Full of Life will not have an extensive management team due to low budget capabilities. The team will consist of the general manager (the company’s owner), inventory manager, sales manager, and marketing manager. The largest part of the company’s employees will be involved in the production of beverages; employees will weigh, measure, and mix ingredients, add vitamin additives to the beverage, operate heating, chilling, pasteurizing, and freezing of ingredients, monitor product quality, operate machines to peel, core, slice, and pit fruit and vegetables, clean equipment, regulate conveyor speed, move products from production lines into areas of storage and shipping, as well as packaging and bottling products.
The manufacturing plant will employ local workers either with or without the experience of working in a similar area of expertise. The company will invest in offering jobs to locals to align with the established Corporate Responsibility Objectives.
Since Full of Life has not developed as a fully formed team, the hierarchy in the company will not be as strictly defined as it could have been. The top management (the general manager, the role of which will be fulfilled by the company’s owner) will be responsible for guiding the middle management (inventory, sales, and marketing managers).
The rationale for the development of such a management hierarchy refers to the fact that Full of Life does not have enough resources to hire a complete set of managers with particular specializations. In the beginning, the general manager will be responsible for fulfilling multiple tasks such as negotiations with suppliers or collaborations with other organizations. Inventory, sales, and marketing managers will be directly tied to the process of production to make sure that customers receive a high-quality product to fit their demands.
At Island Beverage Co. Ltd. Operations in the production plant seems inefficient based on how they are carried out and the safety of employees. As shown in the film, one major problem is the manual system of cleaning, loading, and moving bottles of water in the plant. The root cause of inefficiency at the plant is a lack of coordination and automation of processes. In addition, employees are not provided with protective clothes to safeguard them from injuries. Moreover, containers are placed on the trolley in a horizontal position rather than facing up, creating a risk of rolling and possibly injuring the workers. The manual system in the production plant is likely to increase costs and waste a lot of labor hours, thus affecting production efficiency. In addition, employees seem to be overworked, thus creating a possibility of low productivity.
Operation Inefficiency at National Drilling Company
Operational problem
Safety performance in environmental drilling is usually influenced by the presence of right field conditions, effective planning, and practice safe work measures. Generally, environmental professionals and drillers clearly understand that it is very hard to understand and eliminate all safety problems that they can face while working in the field (Environmental Remediation Drilling Safety Guideline, 2005). At National Drilling Company, the main problem is employee safety, which has been affecting workers and the outcome of work. The company has failed to initiate corrective measures and legal practices that prevent harm on employees and this has led to many injuries, permanent disability, or other dangerous illnesses. Employees are usually allowed to work without protective gear even though the equipment used is heavy and dangerous. In addition, employees work beyond the recommended time, thus they become prone to injuries due to exhaustion, while at the same time they drink water at the site that is not hygienically stored.
the Root cause of the problem
The major cause of risks to employees at National Drilling Company is drinking water that is contaminated via blowouts, spills, naturally occurring fissures, radioactive contamination, and others. Employee safety has also not been taken into account when drilling project takes place. In addition, companies lack to provide necessary gear and equipment during drilling projects, thus endangering their employees’ lives (Health Risks from the Fracking of Gas Wells., 2014).
Impact of the problem
These risks that employees are exposed to come as a result of a company’s ignorance and lack of concern for employees, which tends to have a significant effect on their productivity. Contaminated water has also been affecting the health of employees causing them to skip work due to illnesses, thus affecting general operations in the company. In addition, lack of protective gear results in numerous injuries caused by drilling machines.
Potential Solution
proposed solution
To provide and sustain employee safety, the drilling companies need to develop and improve constructive behavior that would be generally based on safety culture by every member of the company, encouraging personnel to observe safety as a means of life and not just as an employment condition.
As a solution number one, National Drilling Company (NDC) intends to install the belief that all employee safety incidences will be prevented and a great effort will be directed towards the discovery of hazards, creating awareness to the employees about the hazards and controlling risks involved in employee security hazards. As it is clearly stated in the manual of the company, safety is a responsibility shared by every employee, and it is possible that concerted efforts would greatly help to create a culture that enhances safety in the working environment for all.
The second solution is for the company to play a big part in influencing the safety of employees in any drilling project. NDC will be required to come up with employee legislated rights such as the right to knowledge on hazards that they may face during their work, the right to refuse or say no to any unsafe work, and the right to take part in their health and safety. The safety and health representatives and the management of the company will also have to comply with the company’s safety manual as well as with the Employee Compensation Act and its laws and regulations. Since NDC is well recognized for providing quality services, this should be carried out in a process that enhances a safe and healthy place of work for workers, thus reducing the potential effect on the environment. The Company has decided to carry out its operations by complying with all important legislation on the environment, including environmental conservation and prevention of pollution in all its operations.
National Drilling Company will carry out certain environmental strategies to solve employee safety issues. Some of these measures include the integration of the environmental apprehensions and effects to all its activities. The company would also be involved in decision-making, training, giving information, and educating its employees on issues of the environment that can lead to a negative impact on their work. Other environment strategies will involve promoting awareness about the environment among the company’s employees and encouraging them to carry out work in an environmentally responsible manner, promote the use of renewable resources such as electricity and water, reduce wastage, cut unnecessary use of materials and products that are hazardous, and work towards continually improving the performance of the environment and reduce social effect and harm of their actions through evaluation of environmental strategies (Lyons & Plisga, 2011).
How solution increases efficiency
A well-trained employee on safety measures will enhance the efficient running of work. Proper solutions will improve efficiency by saving time and reducing costs, as employees will be aware of environmental risks and operations and thus they will be able to carry out their work carefully while avoiding any risks or dangers. Moreover, work would be completed fast, saving time and reducing the cost of production, since there would be no accidents reported that would otherwise cost employees more time and added costs. The above-mentioned solutions will be effective through safety and health exposure analysis and recognition at the drilling operational areas. This will reduce the number of risks and thus enable work to be carried out effectively in the drilling fields without any accidents. Less time will be used in each work done and the company will be able to increase revenue since more added work will be done. The solutions will also help in controlling measures of reducing dangers to employees. Moreover, the solutions will be effective in stating the policies of the company clearly and enhancing the management’s commitment. Thorough involvement of the management in solving these issues will lead to high productivity in the company (Smith & Comeskey, 2010).
How Solution increases the effectiveness
If the management puts stern concern on the safety of employees and ensures that all policies are followed, and there will be no doubt that effectiveness would be realized. A company that has effective and efficient leadership is always successful. The solutions will also influence effectiveness in the investigation of accidents, planning of emergency response, program administration, a program of inspection, and employee training and inspection. Training is an effective feature since it will give employees knowledge on areas of their safety and means of achieving solutions to issues of safety as well as probable hazards. Provision of positive, secure, and progressive surroundings for workers enhances a culture within NDC that will endorse a nonstop development through risk diminution and alertness.
The food and beverage industry is a critical part of the economics of some countries that show the importance and significance of following the trends of this field. Nevertheless, besides economic benefits, there is the cultural meaning of this industry. Undoubtedly, the beverage is an integral part of this industry with the multi-dimensional and multi-goal structure (Singer, 2018). Currently, it witnessed rapid growth due to an increase in population, improvement of manufacturing methods, and cold chain facilities. Globally, trends have a feature for constant changing that is critical for food and drink companies and manufacturing units. Changing the customer preferences is one of the reasons in advance of the food and beverage industry.
The Significance of the Color
Nowadays, beverages and catering establishments started to use color as a tool for social impact. Such a situation occurred because the influence of such social media as Instagram increased and today we live in such a visual culture. Color can be trivial and meaningful, but the most important is to catch the attention of the customer (Everitt, 2017). That is why color is power for manipulation of society in order to reach the aims. Specific shades of beverages are not so important, and the most essential is that color is an easy way to satisfy the demands of consumers desires, and in time it will become even more critical for success.
Waste Issue
The beverage industry has been trying in recent years to be increasingly environmentally responsible. Usually, there is a due to growing public pressure towards reducing waste (Everitt, 2017). It is unlikely that today another market power, apart from waste, can significantly change what we consume and how people drink it. Increasingly, such problems as plastic in the ocean and a possible shortage of food are raised, so the pressure from consumers will continuously grow (Everitt, 2017). The search for new solutions is a critical issue for the beverage industry.
Composition
If the previously high protein content in food was characteristic only of a segment such as sports and fitness food, in recent years, the demand for protein-enriched products leads to their appearance in plenty of sectors of the food market. Such a situation happened due to the growing popularity of fitness and the perception of protein foods as healthier and more useful (Singer, 2018). The most active development in recent years is the production of food that does not contain gluten, as well as products with a low content of salt and sugar. Nowadays, vegetables are beginning to be used in those segments of the market where vegetables were previously not used, or their share was minimal.
Conclusion
In conclusion, undoubtedly, the world trend was affected by plenty of factors in the restaurant industry. In particular, bartenders began to pay great attention to hospitality, and there was a trend of work on preforms and premixes, which significantly optimized the work of the bar and accelerated the preparation of cocktails, leaving more time for communication with guests. There are also trends that are connected with the changing of the costumer’s preferences, such as the color of beverages, their flavor, and taste. In particular, such changes are tightly connected with increasing choices of healthy food, as well as, the enormous impact of social media, such as Instagram, that provoke to use of beverages as a tool for self-affirmation.
References
Everitt, G. (2017). Food & Beverage Trends for 2018. Web.
Singer, C. (2018). Top 2018 trends for food and beverage industry businesses. Web.
Alpine Beverages is a multinational company with headquarters in Switzerland. It produces almost all possible soft drinks from carbonated to fresh milk ones. I will imagine that I am the Logistics Manager in the Dubai office. The purpose of this work is to decide which logistics service to choose to undertake warehousing and delivery. In the paper, several logistics companies will be discussed according to the conditions given in the task. Storage and delivery requirements will be taken into consideration. Then, it will be decided what online data should be available from the logistics service for Alpine Beverage to manage the process correctly. Finally, the appropriate third-party logistics service company will be selected.
Conditions
Firstly, the Dubai operation of Alpine Beverages needs 3400 pallet storage places. 3000 of them are required for hermetic cans, bottles, and cartons with long-life beverages that do not need cooling. 400 pallet places need cooling as fresh fruit juice, and flavored milk drinks are going to be kept in them. That is why the company needs an appropriate third-party cooperator that will be able to provide all the necessary pallet spaces.
Secondly, a company is needed that can deliver beverages to three regions of Saudi Arabia, namely Dammam, Riyadh, and Jeddah. Moreover, Alpine Beverages have contracts with sellers in Muscat, Oman, and, naturally, the Emirates, where the office is situated. Thus, the transporting company should be the one operating in the whole region of the Middle East. Deliveries are supposed to be on a daily basis.
Moreover, it is necessary to take into consideration that Alpine Beverages may acquire conditions that will enable it to expand the distribution network. It would not be very convenient to change the delivering and storing business partner because of that. That is why the third-party logistics service should be ready to satisfy the growing demands of Alpine Beverages. The company expects to increase its sales in the region by 50 percent in the next five years; that is why the logistics company needs to correspond to the expectations and, perhaps, also have clear plans for growing and development.
Thirdly, for the sake of safety, drinks are to be transported on wooden pallets. It means that the third-party company should have enough pallets that correspond to the actual safety norms. It should be expected that the losses while transportation will be close to zero. Of course, the conditions that the third-party company provides for storing and transportation should be thoroughly inspected by the logistics manager himself or by the logistics experts assigned by Alpine Beverages.
Finally, it is natural that Alpine Beverages would like to require information online at any time of day and night. It is necessary to establish better control of where and how the products move, how many of them have been delivered according to the plan, how many of them are in store, and the percentage of losses. This information may help analyze the effectiveness of the cooperation with the logistics company and recommend measures for improvement.
In the next sections of the paper, several logistics companies will be discussed according to the above-mentioned criteria: the sufficient number of pallets for storage (3000 with ambient temperature and 400 with cooling); the geographical scope (with perspectives for growth); wooden pallets; the data that may be provided by the service online; other useful information provided by the logistics companies’ websites. The services will be compared, and the most suitable one will be chosen for negotiations as a potential business partner in the field of logistics.
Storage Requirements
Al-Futtaim Logistics claims to be the leader of the logistics market in Dubai (Al-Futtaim Logistics 2015). As for warehousing, the company provides 100 000 square meters with ambient and controllable temperature conditions. If Alpine Beverages decides to choose this company, it will be necessary to find out how many square meters may be lent for storing long-life and fresh drinks. At least, according to the information on the website, the company is ready to satisfy the needs of both small and big businesses (Al-Futtaim Logistics 2015). Thus, in this respect, Al-Futtaim Logistics suits Alpine Beverages perfectly.
RAK Logistics is a company that presents itself as a global one (RAK Logistics 2017). As for warehousing, although it is not mentioned if they provide cooling or not, the authors of the website try to persuade the readers that the company is ready to satisfy absolutely any needs (RAK Logistics 2017). The requirements of Alpine Beverages are not that complex, that is why one may suppose that RAK Logistics will be able to cater to them.
International Logistics Services claims that it provides the whole complex of services in the field of logistics (International Logistics Services 2016). On the website, it is mentioned that they organize transportation by road, sea, and air. However, nothing is said about warehousing. That is the reason why the company does not suit Alpine Beverages’ storage demands at all. Thus, the possibility of business cooperation becomes unlikely before the logistics manager knows for sure if the company provides warehousing services.
The next company under consideration is AZ Logistic. Its headquarters are in Dubai, while the whole company operates in 48 countries (AZ Logistic 2017). It is necessary to find out about Saudi Arabia and Oman. On the website, they have a special section that presents their warehousing services. The company states that it is ready to meet any needs (AZ Logistic 2017). They have climate-control zones in their warehouses, that is why Alpine Beverages’ fresh drinks will be safe. In this case, AZ Logistic may be viewed as a future business partner.
For now, Global Shipping & Logistics seems to be the most suitable company for warehousing the drinks. Their stores contain cool and cold blocks (Global Shipping & Logistics 2018). Moreover, the system is managed and controlled every day around the clock. The warehouses are equipped with CCTV cameras that may prevent theft. The company claims that it is able to cater to any specific needs (Global Shipping & Logistics 2018). To add, the option of repacking is included in the list of services. Although it is still necessary to require details, on the whole, such a business partner makes a good impression.
The last company to discuss is Jenae Logistics. It is stated on their web resource that one of their fundamental operation principles is the combination of warehousing and distribution (Jenae Logistics 2014). For Alpine Beverages, it is quite important as viewing the two aspects of cooperation in a complex will certainly help reach a mutual understanding. However, at the same time, the site does not give any information about the storage conditions. One cannot learn from the given data if there are or are not coolers for fresh drinks. That is why for now, this company is under question and only partly suits the needs of the drink producer before more information about warehousing can be obtained.
Delivery Requirements
Further on, as for transportation services, Al-Futtaim Logistics states that it has the highest quality lorries to deliver any cargo (Al-Futtaim Logistics 2015). Moreover, one of the advantages of the company is that it delivers goods on the whole territory of the Emirates. This suits Alpine Beverages, but on the website, no other countries are mentioned (Al-Futtaim Logistics 2015). That is why there is a need to find out if they operate on the territories of Oman and Saudi Arabia.
Before it is known, the company only partly suits this criterion. Further on, there is no information about wooden pallets. However, by analyzing the information about the modern equipment the company uses to transport goods all around the Emirates, one may guess that Al-Futtaim Logistics does have this simple device or may purchase pallets if the agreement with Alpine Beverages is reached.
RAK Logistics provides not only lorries but also planes (RAK Logisiics 2017). That is rather convenient because this makes the logistics manager of Alpine Beverages more sure that the drinks will be delivered to Saudi Arabia and Oman in time and daily. It is also possible that drink distribution may involve transportation by sea, which is also available (RAK Logisiics 2017). In some cases, it may be needed because it will be cheaper, and in other ones, one means of transport may be used instead of another to avoid delays when they are predictable. That is why in this aspect, RAK Logistics is preferable to Alpine Beverages.
International Logistics Services works all around the world (International Logistics Services 2016). They claim that the Middle East is the main direction in which they operate. Even if they do not have an office and a warehouse in Oman or Saudi Arabia, it is possible that their broad network of business partners will help. However, this may bring about a number of difficulties. For example, using the services of a partner may cause an increase in the cost of shipping and warehousing.
Further on, they emphasize that their business policies are flexible (International Logistics Services 2016). Because of this, there is a reason to hope that they are ready to use wooden pallets if the cooperation with Alpine Beverages is profitable for them. Thus, the company may partly suit the needs of the drink-producing enterprise. It is possible to note that International Logistics Services promise that they are able to deliver cargoes within the period of 24 hours (International Logistics Services 2016). It is important especially for fresh drinks delivery, which may serve as a valuable bonus for cooperation and gaining profit.
As it has already been mentioned, AZ Logistic does not give any information about distribution services in Oman or Saudi Arabia. They state that the main sphere of their interests is the Emirates (AZ Logistic 2017). This aspect is to be cleared up. To continue, the company proposes flexible conditions for transportation. On the website, it is stated that they are ready to make necessary changes in their operation to meet the needs and interests of the customer (AZ Logistic 2017). It means that wooden pallets are quite possible as it is not a difficult or costly thing to do to buy them.
Global Shipping & Logistics’ head office and main warehouses are located in Dubai (Global Shipping & Logistics 2018). That is why it would be easier to reach an agreement with the company for them to distribute drinks not only around the Emirates but also in Oman and Saudi Arabia. It is quite possible that they will not have to use special storage on the territories of the latter two. If they have ones at their disposal, it is even more suitable, but the goods may be sent to the points of the distribution network by air or by sea from Dubai. This is also a good option as planes and ships (and in most cases, even trucks) are capable enough to deliver the cargo within one day. That is why in this respect, cooperation conditions are worth negotiating.
Finally, Jenae Logistics assures that they will do everything in their power to satisfy the interests of the customer (Jenae Logistics 2014). They state that their operation is directed at providing services to distribution networks. This is suitable for Alpine Beverages as a network for selling long-life, and fresh drinks is what the company wants to establish in the Middle East. As Alpine Beverages expects to increase its profit throughout the region by 50 percent within the period of five years, it is possible that Jenae Logistics will be the most valuable partner as usually, distribution networks (if they are successful) tend to develop and expand. Alpine Beverages is an enterprise that sees clear and well-grounded prospects of development. Thus, Jenae Logistics, with its flexible policy of supporting commercial networks, may be of great value and sufficient help.
Information Systems Requirements
Al-Futtaim Logistics offers a variety of services connected with tracking the products. On the one hand, there is the option of checking the movement route of the cargo (Al-Futtaim Logistics 2015). The system is called Web Track & Trace. On the other hand, there is a link to Stock Status Tracker that allows seeing whether the goods are in the warehouse or are being delivered. Both options are presented on the website, which is rather convenient. The logistics manager of Alpine Beverages may enter it all around the clock, simply insert a track-number and find out about the status of the goods. That is why in this aspect, Al-Futtaim Logistics is acceptable as a commercial partner.
RAK Logistics assures its website’s readers that the company uses a warehouse management digital system that allows tracking every item that is kept in the store (RAK Logistics 2017). Thus, the Alpine Beverages logistics manager or any other staff member (if he or she has access) may see and analyze all the goods’ movements. The service allows you to do it anytime. This option is valuable for Alpine Beverages as it enables the company to establish full control of every item.
On the website of International Logistics Services, there is no information concerning online information systems. However, on the source, it is stated that the company is ready to establish a system of cooperation that will be suitable and profitable to the customer (International Logistics Services 2016). That is why even if they do not usually practice online tracking, such an option may be requested, discussed, and adopted. If Alpine Beverages negotiate such an opportunity, both companies may reach an agreement.
AZ Logistic also uses an electronic system of monitoring and management (AZ Logistic 2017). However, unfortunately, the website gives no information on how it works and if it is possible for the customer to track the goods. This is a moot point, and the information should be required by the manager as the company meets the interests of Alpine Beverages and is likely to be among the preferable ones.
Global Shipping & Logistics offers no such services as tracing or tracking. However, on the website, there is information that they may provide date coding, barcoding, and labeling (Global Shipping & Logistics 2018). It means that the company uses special software to control the goods in the warehouses and on the road. That is why it may be reasonable to negotiate using a system through which Alpine Beverages will be able to trace their drinks. There may be hope that the installation of and operating of the software will be cheap enough not to prevent the cooperation of the two companies.
As for Janae Logistics, their website gives an opportunity to track the shipping online right on the source (Jenae Logistics 2014). On the one hand, it is convenient as the logistics manager of Alpine Beverages may insert a track-number anytime he needs and get the actual information about the cargoes. However, contrary to the system supported by RAK Logistics, there is no opportunity to track every item. Perhaps, the company provides such an option, but one cannot get any information about it on the site. That is why in this aspect, Jenae Logistics is certainly not a preferred business partner.
Other Information
As for Al-Futtaim Logistics, it has been operating for about ninety years so far (Al-Futtaim Logistics 2015). If the company has got such a long-term experience, it may be viewed as trustworthy. Moreover, in 2012, the company was certified by DNV on ISO 9001-2008. It means that Al-Futtaim Logistics has high rates in consulting and risk management. It adds to the advantages of the enterprise sufficiently.
The history of RAK Logistics is not that rich. The company was founded only four years ago (RAK Logistics 2017). However, its establishment was the result of ten smaller companies merging into one. It is certainly a benefit as the enterprise combines in its daily operation and strategies the experience of the merged businesses. Moreover, their experience was gained in different countries, which is of special value to Alpine Beverages as it operates on an international scale.
International Logistics Services have been working for ten years, which is a considerable period of time but cannot stand in the same line with, for example, Al-Futtaim Logistics (International Logistics Services 2016). Unfortunately, there is no data on the resource of International Logistics Services about their experience and the length of operation. As for AZ Logistic, it was founded twenty years that may be estimated as an impressive experience (AZ Logistic 2017). Global Shipping & Logistics have been on the market since 1975, which is not as considerable as the period of the existence of Al-Futtaim Logistics but rather close to it. Finally, Jenae Logistics gives no information on this subject.
The Most Suitable Service Provider
According to the discussed and analyzed information, Alpine Beverages will most likely choose Al-Futtaim Logistics as it corresponds to all the conditions required by the drink-producing company. Firstly, it has sufficient warehouses and equipment for storing and is able to keep both long-life drinks at the ambient temperature and the ones that need cooling. Secondly, it has a sufficient number of lorries that may deliver the products around the region within 24 hours, although it is still unclear if the enterprise works only in the Emirates or in the neighboring countries also. Thirdly, it has a well-developed and convenient system of tracing.
In addition, Al-Futtaim Logistics has the longest experience among the companies under consideration. That is why it may be called the most suitable company, which may be helpful when Alpine Beverages’ volumes of a production increase by 50 percent in five years as planned.
Alpine Beverages might also choose RAK Logistics as it satisfies the same demands as the former one. The only aspect that causes doubts is its probable lack of experience and organization as the enterprise has existed only for four years now. As for the other companies, they are not as suitable as the two that have just been mentioned because they do not completely satisfy or do not give enough information about the conditions which are significant for Alpine Beverages. That is why the latter needs to reconsider both options, contact the two chosen logistics companies, and hold official negotiations with them to learn more about the prices and other factors that may influence cooperation and prospects.
Reference List
Al-Futtaim Logistics 2015. Web.
AZ Logistic 2017, Experts IT, Dubai. Web.
Global Shipping & Logistics 2018. Web.
International Logistics Services 2016, Pandora, Al Ain, UAE. Web.
The Keurig Incorporated are spreading the spectrum of their products with the creation of the Keurig Kold. Kold is a recently developed machine for making cold drinks. So far it has only been sold on the Internet, but the company is working on its full launch. The benefits, factors for success and marketing strategies of the Kold machine are the result of an attempt to combine the benefits of Keurig coffee machines and consumers’ love for soda drinks.
Primary features and benefits
Considering that 12% of the Keurig Inc. belongs to Coca-Cola Co., the variety of drinks Kold can make includes not only iced teas, craft sodas, mixer, flavored waters, and seltzers but also all-favorite Coca-cola sodas. Such an assortment of drinks clearly has it benefits. Keurig’s CEO Brian Kelley work for the Coca-Cola Company and knows, that usually with soft drinks consumers have to make the choice and buy perhaps less different kinds of product than they wanted, because beverages take a lot of space in the fridge. Furthermore, the more vast assortment is, the more flavors consumers would want to try because the very slogan of the Kold is “Pick and Choose. And Choose. And Choose”. Moreover, the compact form of the product consents to it.
As for the Keurig Kold machine itself, it is rather minimalistic and exquisitely designed kitchen gadget. Unlike instant beverages that are associated with unhealthy living and are more oriented to lower class consumers, Kold is designed to fit into the modern understanding of privileged lifestyle. And it is not that cheap; therefore, it is branded like a fashionable fancy device, rather than a product for everyday needs.
Factors for success
The Kold machine is presented as a fashionable and modern product, mainly oriented to the consumers who want to be aware of technological trends. Apart from that, there is one significant factor for guaranteeing its success – it is the individualization. The Keurig Kold provides a room to customize the product. It makes it less routine and allows the customer to add some creativity.
The other factor is that whereas soda drinks are sometimes associated with something unhealthy, Keurig brands itself as an eco-friendly company, since the time they introduce single-serve coffee brewer. On the other hand, the creators of the machine may before long run out of their own creative potential to invent new flavors. Apparently, it would influence sales badly, if the consumers were mostly interested in the technological innovation of the product.
Motivation to develop new products
Keurig has been struggling to design a new type of product that would occupy its own niche. Firstly, they introduced the new coffee maker with a vast number of regimes and options but it was proved unsuccessful. This time, it is different due to the new CEO. Kelley tries to occupy an entirely new niche in the market. Therefore, if it is successful Keurig will be automatically leading company in this category.
The other reason is the rough competition among the producers of coffee machines. These products became the indication of fashionable lifestyle, and it became more challenging to meet the demands of the consumers. In the highly competitive business environment, it is hard to improve both functionality and the look of the product.
And eventually, the strategy with the Kold was to develop the new product on the basis of two products consumers already like. The purpose of its development is to add the stylish and exquisite note in design to the general public’s love for soda drinks. Therefore, for Keurig it is not so much a development of the innovation, as an improvement of two existing consumers’ favorites.
Marketing strategies
Like any other product, the Kold has its potential consumers. The first group of consumers is certainly people with the love to exclusive and innovation. Furthermore, the marketing strategy Kelley decided to use for them is already working. Keurig did not put the product on the shelf of the supermarkets at once. They started advertising long before the launch, and then the company only sold the Kold on the Internet to make it more rare and exclusive. This group of potential consumers is looking for innovation and novelty of the product rather than its functions.
The second group of potential consumers consists mostly of the young people, the Millennials, for whom the primary purpose of such a product would be the creative element of the Kold, the ability to make each drink authentic and to turn the process of its preparation into something less routine. This group of consumers is more interested in the functions of the product.
Conclusion
The decision to develop the Keurig Kold was not a spontaneous idea of the management but the thought-through launch of the product. The creators of the Kold developed bright marketing strategies; however, there are to be more approaches to potential consumers for the Kold to be as successful as other Keurig products.
The purpose of this report is to design a marketing strategy for “Drink it down” company. However, this report will focus on the number of issues such as online communities, reason to joining online communities, Wang and Fesenmaier (2003) model for member needs, the power of social networking, and target Audience for the campaign, effectiveness of the implication of social marketing in the campaign, key objectives and messages of this campaign, and so on.
Situational Analysis
“Drink it down” Company is going to launch a new cherry flavoured cola drink. Therefore, the marketer of this company will prepare a marketing strategy to promote this new product to the consumers. However, the company will use social media as the budget for the campaign is very low.
Online Communities
The company believes that the due to a number of features of online communities, the campaign would turn out to be quite successful and capable to generate substantial profits. Some of these features are:
Individuals connect in frequent, dynamic involvement and there are usually passionate communications, strapping emotional bonds and collective actions taking place amongst partakers;
Individuals encompass right of entry to joint resources and there are guidelines for influential admittance to those resources;
Trustworthiness of data, assistance, and amenities among individuals is essentially imperative in these communities;
A mutual circumstance of communal gatherings, verbal communication, and procedures exist in these communities.
Wang and Fesenmaier (2003) model for member needs
This report recommends the client “Drink it down” Company to use social networking sites considering four factors of the members need framework of Wang & Fesenmaier.
Target Group
This soft drink product of “drink it down” is suitable for all customer but the company should target mainly health conscious people who like to fresh drink those not contain excessive preservatives. In addition, the marketer of this company should target customers who regularly visit social networking sites.
Goals of the Campaign “Drink it down” Company
The prime objectives of this campaign project of “Drink it down” Company is to build brand awareness and create customers base;
The company is intended to reach break even point within first year of its operation;
It would promote its slogan “always ‘Drink it down’ Cherry Cola”;
It would like to increase its annual sales revenue from the new cherry cola drinks by 50% within next three years;
In addition, it would like to diversify its products range and carry on new IMC program.
Messages
The campaign ‘Always “Drink it down” Cherry Cola’ has persuade the objectives to convey the following messages to the target audiences-
Freshness of the new cherry flavoured cola product
Advertising in social networking sites would create knowledge of the product;
Like other large company, it will also sponsor many events in the future,
It convey message about the commitment of the company to the customers.
Environmental Analysis
Political: The political condition of Australia is quite stable to carry on the IMC campaign.
Social/Cultural: It is important to carry out the multimedia campaign by keeping in mind the social and cultural ethos of the country. Australian culture shows the country’s tremendous unification of diverse customs with intermingles of open-minded and all-inclusive society; both Europeans and natives live here is at harmony.
Technology: Australia is quite advanced in terms of technology most of the population uses social networking sites regularly. This technological advancement means that the multimedia campaign has huge potential for success as it has based on web marketing and Social Medias.
Demographics: As “Drink it Down” Company is going to introduce marketing campaign in Australia, it is essential for the firm to assess the demography of the country before undertaking the multimedia campaign.
Economic: The multimedia campaign would only be successful when the advertisements will persuade people to buy the cherry flavoured cola repeatedly, generating substantial revenues. The following figure shows the purchasing power parity of the Australian customers.
SWOT Analysis.Media Selection.Media Selection.
Website
Firstly, the marketer of “Drink it down” should develop an excellent website for the company in order to broaden all business function.
Ads and Other Multimedia Campaign Sample.Projected Marketing Budget.
