Naked Juice Corporation
The promotion strategy of Naked Juice Corporation involves advertising, public relations, personal selling, and sales promotion. The promotion is aimed at providing equally beneficial exchanges with the target market by educating, persuading, informing, and reminding them of the advantages of naked Juice’s products. Abate, & Peterson (2005) noted that good market promotion activities will help to facilitate better sales and establish long-term and loyal customer base.
Stage of the Product Life Cycle
Naked juice is at the growth stage of the product life cycle. The company’s products survived the introductory stage. Fuhrman (2007) noted that Naked Juice sales have typically grown at an increasing rate, many competitors are entering the market and large companies such as Coca-Cola are acquiring small start-up companies in the juice industry. The growth stage of Naked Juice encourages strong brand loyalty and competes with aggressive emulators of the product (Scott, 2010). Naked Juice is trying to strengthen its market share and develop a competitive niche by emphasizing the product’s benefits (Fuhrman, 2007).
The growth stage of Naked Juice entails that the company uses segmentation to achieve greater market penetration. Naked juice has so far developed 20 product variants coupled with a deeper product mix in order to satisfy the needs of people in several market segments (Ingram, 2006). The growth stage of Naked Juice is evident from its sales revenue which is above $150 million and a dependable and swiftly growing consumer base. Fuhrman (2007) says that as a result of its current growth stage, Naked Juice’s sales are increasing with a consequent improvement in the relationship between revenue and expenditure.
The Promotional Objectives for this Stage
The promotional strategy of the growth stage is based on aggressive brand advertising, selling, and sales promotion to encourage brand switching and continued trial. Fuhrman (2007) says that to improve its promotional services Naked Juice should add some extensions and accompanying services to the basic products and brands. Promotion changes in this stage from convincing a customer that they need Naked Juice products, to establishing the benefits of one particular brand versus another (Naked juice gets naked, 2009). Promotion expenditures will be slightly lower in the growth stage than during the introductory stage but are still quite substantial (Scott, 2010). As Naked Juice sales increase, promotion costs should drop as a percentage of total sales. This ratio will lead to significantly increased profits.
How they are Accomplishing Promotional Objectives
Naked Juice Corporation promotional objective culminates in the purchase of goods and services by the target market. The first method of accomplishing its promotional objective is through creating and attracting attention of potential customers (Ingram, 2006). After creating attention, the promotional activities spark interest in the product by demonstrating its features, uses and benefits. It is important to note that Naked Juice should move potential customers beyond mere interest in its products (Mendelson & Richard, 2005). Good promotion will stimulate desire by inducing potential customers of the products superiority and its ability to satisfy specific needs (Naked juice gets naked, 2009).
Promotional mix is the combination of different kinds of promotion tools which will be used by Naked Juice to sell its products and services. The main six promotional tools in this case include personal selling, advertising, sales promotion, publicity, and public relations (Blumenthal, 2012). Naked Juice will uses advertising as a form of impersonal, one way mass communication paid for by the source (Freedonia, 2011). Public relations are the function of promotion concerned with Naked Juice’s public image.
Naked Juice uses sales promotions to back up other components of the promotional mix by stimulating immediate demand. Blumenthal (2012) says that the company uses personal selling which involves direct communication, in person or by the telephone to initiate a purchase by informing and persuading potential buyers. The company employs personal selling through salesmen to obtain a quick feedback. Social media such as Facebook, Tweeter, MySpace, Google+, LinkedIn, and Beebo will play a major role in the promotional mix of Naked Juice products. Personal selling is the most precise from of promotion because it assures companies that they are in direct contact with an excellent prospect (Blumenthal, 2012).
Type of Promotional Mix
Push vs. Pull Strategy
Push and pull strategies are important factors in the promotional mix of Naked Juice Corporation products. McPhee& Washburn (2005) noted that in the push strategy, Naked Juice will use aggressive personal selling and trade advertising to convince a wholesaler or a retailer to carry and sell the company’s products. The wholesaler will in turn push the products forward by persuading the retailer to handle the products (McPhee& Washburn, 2005). The retailer will then use advertising, displays and other forms of promotion to convince the consumers to buy the pushed products.
On the other hand, the pull strategy will stimulate consumer demand to obtain product distribution. Rather than trying to sell to the wholesaler, Naked Juice using a pull strategy will focus its promotional efforts on end consumers. McPhee& Washburn (2005) established that consumers can respond positively to the campaign and begin demanding the product from the retailers. The retailer orders products from wholesaler who in turn confronted with rising demand orders from Naked Juice (Ingram, 2006).
Types of Media Used
Mass media advertising includes television, radio, the internet, newspapers, magazines, direct mail, displays and signs on mass transit vehicles. Although newspapers reach a large audience at the same time it entails high cost. Direct mail has a very low cost. Radio and television media requires high budget because of the high cost of airtime. Online strategies and public relations entail low cost because Naked Juice will rely on free publicity. Advertising affects the TV programs people watch.
Continuous media scheduling will entail a pattern of placing ads at a steady rate over a period of time. Naked Juice running one ad each for four weeks would be a continuous pattern. Flighting scheduling is achieved by scheduling heavy advertising for a period of time, usually two weeks then stopping advertising altogether for a period only to come back with another heavy schedule. Naked Juice should use Flighting for new product introductions or as a response to competitor’s activities. Pulsing is a media scheduling strategy that combines elements from continuous and flighting techniques. Naked Juice advertisements will be scheduled continuously in media over a period of time, but with periods of much heavier scheduling. Pulsing will be appropriate for Naked Juice because its products are sold fairly regularly during the year.
Strengths and Weaknesses of the Company’s Promotion Strategy
The promotional strategy used by Naked Juice creates one consistent message across multiple channels to ensure maximum persuasive impact on the company’s current and potential customers. The strength of the promotional mix is that the company reduces costs and increases efficiency (Vosburgh, 2007). The second strength is that Naked Juice is able to reduce and eliminate redundancies and waste in the overall promotional strategy.
Since Naked Juice was acquired by Pepsi the company’s promotional strategy enjoys the presence of enough funds to promote its products (Blumenthal, 2012). In addition, the brand value of Pepsi ensures that Naked Juice products are highly recognized in the market. Therefore, the company should utilize this promotional strategy as its competitive advantage to edge its major competitors and increase its global brand presence and dominance.
A distribution strategy is the process by which Naked Juice products reach customers via distribution channels. Naked Juice distribution channel comprises a subset of the entities involves, the functions they perform and their interrelationships. Product distribution closes gaps in location and time between Naked Juice Corporation finished products and consumers and end-user customers by completing many functions. Since the company’s juice products are highly perishable the distribution strategy must be effective to avoid loses. Naked Juice has over the years made strategic decisions that have optimized its distribution channel strategy (Naked juice gets naked, 2009). Optimization of channel strategy revolves around the length, width and number of distribution channels used.
Direct vs. Indirect Distribution
In direct distribution Naked juice deals directly with end user customers using the road sales forces, telemarketing, direct marketing, and the Internet as selling tools. Direct distribution means that Naked Juice will manage most of the contact with customers and end users (Blumenthal, 2012). This distribution strategy is ineffective for Naked Juice due to its rapid expansion and growth outside America.
In indirect distribution, channel intermediaries like the distributors, wholesalers and retailers play a key role in transferring Naked Juice products to consumers and end users. This is the ideal channel for Naked Juice because wholesalers and retailers provide physical location and time value. McPhee & Washburn (2005) argues that by constructing product assortments from many suppliers, the indirect channels reduce customers search costs and provide entire shopping experience. Distributors, wholesalers and retailers provide market access that would otherwise be very expensive or impossible for Naked Juice Corporation to secure (Blumenthal, 2012). Indirect distribution is essential for large potential customer base and for products manufactured in large quantities.
Types of Channels Used
Wholesalers play a key role in establishing solid relationships with naked Juice and retailers in terms of Just-In-Time production and movements of juices. Goldschmidt (2010) says that the wholesalers bind the producer to the customer by providing certain value added services like ferrying the goods produced, using their customer base and breaking down bulk for the retailer. Retailers purchases Naked Juice products once they reach the wholesaler (Ingram, 2006). For those retailers located near the company’s premises they can obtain products from Naked Juice. Goldschmidt (2010) noted that the smooth functioning of a retail business is critically dependent on the physical flow of juices from the company to the retailer.
Type of Channel System
Naked Juice Corporation uses vertical marketing system in which the company’s wholesalers and retailers act as a unified system. In this case one channel member own the other because he has more power that all others co-operate in sales, delivery and service. In a vertical marketing channel all the players act as a part of a unified system (Ingram, 2006). The channel manager owns the others or franchises them or has enough power to force others to cooperate with him. The channel manager at Naked Juice tries to control the behavior of other channel members and resolve conflicts arising due to independent behavior of channel members to pursue their own goals of profit maximization (Goldschmidt, 2010).
Naked Juice has a set of bottlers in London and Canada who have taken franchisee to market the Naked Juice brands through bottling and distribution to independent retailers. The traditional channel is not ideal for Naked Juice because the company does not have independent producers, wholesalers and retailers. In the traditional channel, no channel member has complete control over others (Vosburgh, 2007).
Intensity of Distribution
The intensity of the required distribution is important for Naked Juice because the company the products to be sold everywhere. Jargon (2011) noted that the company should therefore utilize an intensive distribution strategy so that its products can reach a big geographical location. The company should increase the number of distributors so as reach the growing market of consumers (Jargon, 2011). Intensive distribution is appropriate for Naked Juice because customers put little effort into searching, the company’s products. Intensively distributed consumer products include convenience goods like soft drinks and juices produced by Naked Juice Corporation.
Current or Potential Channel Conflict
Naked Juice’s strong distribution channels have over the time increased barriers for entrants which constitutes significant competitive advantage. Channels conflicts are not evident at Naked Juice Corporation. Ingram (2006) noted that channel members of the company’s distribution network do not perceive another channel members behavior as a barrier to achieve its business goals. Naked Juice has continually eliminated the existence of channel conflict by embracing relationship marketing paradigm, a strategy which emphasizes the importance of relationship building between different members of the channels.
Strengths and Weaknesses of the Company’s Distribution Strategy
The major weakness of Naked Juice distribution strategy is the difficulty of maintaining adequate market coverage. McPhee & Washburn (2005) says that the company does not have enough knowledge of various customer groups, such as clues to changing buying practices. Competitors such as Coca-Cola have superior access to distribution channels and resources to support its advertising efforts. The strength of Naked Juice distribution strategy is that the company has a good channel management which ensures smooth relationships between the producer and the various organizations that distribute the products (McPhee & Washburn, 2005).
Also, the company enjoys direct channels in such supermarkets as Wal-Mart, Target, and Tesco (Vosburgh, 2007). Other strengths include control of brand values, customer experience, corporate reputation and control of regulatory obligations. The company should take advantage of its indirect distribution enables it to focus on core competencies and products quality and costs. The Naked Juice’s indirect distribution strategy allows for rapid penetration of markets, nationally and internationally.