Atlantic Quench Cranberries Inc. Marketing Strategy Analysis

Situational Analysis (Marketing Audit)

According to the Public Health England (PHE) publication, “Soft drinks account for the main cause of sugar consumption between 2008 and 2012” (Keynote, 2015). Many legislative and non-governmental organisations, such as the National Health Service (NHS) and the Scientific Advisory Committee on Nutrition (SACN), are dedicated to decreasing the intake of sugar beverages by encouraging and ‘pushing’ the taxation of sugar (Mintel, 2014).

Because of market consciousness, consumers choose nutritious beverages with fewer sugar. Demand for healthier juice beverages is growing in the UK, leaving behind carbonated soft drinks because of the negative reputation generated in recent years (AQC, 2015).

Macro/Micro Environment Analysis

PESTEL

“PESTEL analysis is used to audit environmental factors that can influence the organisation and gathered information can be used to guide strategic decision-making” (CIPD, 2013). This proposal would use Political, Fiscal, Sociological, Technical, Environmental and Legal (PESTEL) analysis in order to conduct macro environment analysis for Atlantic Quench Cranberries (AQC).

Political

This may be described as an option for AQC depending on the changing legislation on the health and welfare of individual consumers, because of the low saturated sugar in cranberries, it has the ability to become the agreed substitute of a business in the sector for soft drinks. AQC has an edge over many giant soft drink companies (such as Coca Cola and PepsiCo) who are already spending vast quantities of money to grow fewer sugar-containing drinks while contemplating future taxes on sugar.

Economic

In terms of market share, the category of fruit juices decreased during the study era, declining year-on-year from a 37.4% share in 2010 to 34.5% by 2014. (Key Note, ). This may be understood owing to bad press due to the high saturated sugar industry that has impacted the fruit juice market (PWC, 2015).

Sociological

With the growing desire for less sugar, AQC demand is also rising. This will mean that AQC has a potential to obtain access to more buyers who are no longer loyal to carbonated soft drinks and are searching for items that can add value by selling healthy, more appropriate drinks. However, market awareness of juices containing large levels of sugar and the selection of substitutes such as filtered water that have not been synonymous with sugar are threatened.

Technological

The current trend is being referred as “Snacking on the go” this is as a result to the busy state of the people. AQC will benefit from this trend because they are able to access busy locations, such as train and bus stations, office buildings or even gyms and schools. In order to avoid high costs of developing and maintaining such technology AQC could potentially choose to “rent” these from already existing company

Environmental

Changes in climate pose a great threat to the growth of cranberries. Cranberries are mainly grown in regions of North America (PWC, 2015). It is expected that the rain patterns are predicted to continue changing (EPAGOV, 2015). It is therefore, a threat for AQC because all of their cranberries are grown in the areas. This potentially will affect the quality and quantity of cranberries which could lead to AQC fail to meet the demand for the end products.

Market overview

In the recent past there has been an increase in demand of fruit juice in the UK. Fruit drinks are deemed as health drinks and therefore, as a result of interest in living healthy lifestyle it has led to the high demand. Consequently the juice sector is increasingly gaining market share as a result of loss of popularity of the carbonated sector, which has a poorer image among consumers.

Market Size

The UK market for fruit juices increased over the review period, rising by 2.3% from £1.76bn in 2010 to an estimated value of £1.8bn in 2014, despite two consecutive years of decline in 2013 and 2014, of 2.2% and 1.1% (Key Note, ).

By volume, the fruit juices sector declined year-on-year between 2010 and 2014, despite rising market values in 2011 and 2012, falling by a total of 15.7% from 1.18 billion litres to 995 million litres. The annual rate of decline in the sector has accelerated over the period, from 1.7% in 2011, to growth of 5.2% by 2014 (Key Note).

Value sales of cordials and squashes are expected to fall by 2% year on year to £724 million (Mintel, 2014b). Volume sales are expected to have declined by 12% over 2009-14 to 450 litres, with four consecutive years of decline since 2010. This is could be explained due to formats, which cordials have been presented and directly linked to changes in concentrates now being double-concentrates (8% decline in 2010) (Mintel, 2014b).

Growth Rates

Hot summer conditions have proven to increase the consumption of carbonates, juice drinks and other beverages that are popular mixed with ice (Key Note).

Besides weather conditions, this ongoing decline in the fruit juices market is also attributable to the comparatively high price of products in this sector, with recent rising raw material costs pushing prices up further (Key Note), however this is not seen as a major threat for the industry as due to the raising economy is expected rise in consumer spending between 2014 and 2019 (Mintel, 2014).

The cordial and squash market is considered to be fluctuating, as has proven that the demand is rising in when the weather is warm (due to the warm weather conditions in the summer of 2013, increased the market value return by 1% (Mintel, 2014b).  AQC is presented with the opportunity, given that it is evident that the consumers are willing to pay more for the detoxing and healthier options and is exactly what AQC can offer to its customers.

Customer and Competitor Analysis

Customer Analysis and Market Segmentation

For fruit juices, consumption penetration in Great Britain was slightly higher among women than men, at 39.1% compared with 32.6% (Key Note, 2015). By age, consumption penetration was relatively similar across almost all age groups, ranging between 34.3% and 40.5% between the 15 to 19 and 55 to 64 age bands, with notably low penetration recorded among those age 65 and over, at 29.4% (Key Note, 2015). The highest level of penetration was recorded among those aged 25 to 34 and 20 to 24, at 40.5% and 40.3%, respectively (Key Note, 2015).

Competitor Analysis

Cranberry Juice has both direct and indirect competitors. The direct competitors are those organisations that are in the production of other verities of fruit Juices. One of the great direct competitors to cranberry juice is the super fruit juice. The company has brought about the introduction of other fruits such as gogi, pomegranates and acai into an industry that was traditionally dominated by the cranberries. The indirect competitors are the companies that are in the same industry, but are engaged in the production of other refreshment drinks. A good example is the Coca Cola Company. The juices blended from these fruits are believed by both Americans and the British to have a lot of nutrients, and they act as antioxidants. The uniqueness of these berries serves as strength for the competitors dealing in them thus the great impact they have created in the fruit juice industry. There has been a 20% increase in the volume of sales for the fruit juices.

SWOT Analysis

Mission

Make Atlantic Quench the leading producer of quality canned and bottled fruit juices in both North America and the U.K. To achieve the mission, the following objectives are going to be used in issuing directives for the marketing plan.

Remain Leading Juice Retailer in Both America and UK

Objectives

• To improve brand loyalty in America and introduce the loyalty in U.K also. This will be measurable through the increased sales that will be realized. Brand loyalty has helped the company remain at the top in U.S for many years.
• Product awareness: To create complete awareness of the differentiated products that the company has been introducing over the years, for example, the cantatas that have been recording increased consumption.

Market Penetration

Objectives

• To inform consumers of the lightest versions of juices the company is manufacturing so that weight-conscious customers do not shift to the low-calorie soft drinks produced by competitors.
• To further diversify the advertisement of fruit juices through creativity so that more gains can be made from the impulse buying of this product.

Maintain Healthy Living Standards

To continues with provision of non-sugar juice products to improve the health of the loyal consumer of the product. Through creation of awareness of the dangers imposed from consumption of carbonated drinks.

Strategies

For this marketing plan that is aimed at the company taking over the U.K market also, the choice of products being introduced in various markets is critical. Therefore, the Ansoff matrix can be used to illustrate the strategies that will be taken by the marketing agents (Hunt, 2006).

Ansoff Matrix

In market penetration, the company is going to target at selling more of the products it already has in the markets it operates at the moment. Better promotions for fruit juices is most likely to increase the sales of fruit juices among women aged between 25-34 who have been ranked as the best buyers in most regions of England (Mamula, 2012).

Under the product development, slightly differentiated products will be introduced that are going to be openly accepted by customers aged over 55. The company gets the little revenue from these customers since they prefer drinks that are highly natural. Therefore, Atlantic Quench will have to introduce cordial juice drinks that have a lot of natural and healthy ingredients.

Marketing Program

The target is to make the potential consumers aware of the alternatives of the high sugar content which are being offered by Atlantic Quench. The demand for natural and healthy drinks has been on the rise (Luther, 2001). Therefore, these light versions of fruit drinks offered by the company are going to take over the market if properly advertised.

Health oriented promotions also are part of the program that would see this fruit juice firm better their sales. Such promotions include free campaigns that alert the public of the increasing obesity cases in Europe. The benefit of this is going to be increased sales.

Implementation and Controls

Within the first two months of each business year, there would always be a market research to analyze and note what the consumers want. The costs incurred here include hiring of the market researchers and acquiring the necessary materials required to conduct the search. The marketing heads will be in charge of this phase (Michman, Mazze & Greco, 2003).

The other cost will be that of making differentiation and specifications to the products that the firm is already producing. The differentiation can be done within the next three to four months. The production manager will be held responsible at this level (Hanlon, 2013).

Finally, it is crucial to make advertisements and awareness about these new or improved products. There are costs that are going to be incurred at this stage. They include, TV adverts, social media knowledge, and publication of leaflets. The marketing department will be in control of this stage.

Marketing Expense Budget

Conclusion

With proper consideration of the customer and competitor analysis for the Atlantic Quench, the outlined marketing plan is expected to be successful in achieving the mission of becoming the best manufacture of health juice drinks across America and Europe. The strategies of market infiltration and product growth are also perceived to be the best option for making the objectives of the marketing plan achievable.