V8 V-Fusion® + Energy Marketing Plan
V8 V-Fusion® + Energy is a refreshingly new, vegetable- and green tea-based drink that promises genuine health benefits for its customers. Unlike offerings by its competitors on the US market, V8 V-Fusion® + Energy does not use sugar as a sweetener, artificial food additives (including preservatives, flavors, and colors), offers low calories per serving. Instead of sugar, the product’s source of energy is green tea, which is known to have health benefits, including but not limited to weight loss, prevention of cell damage, low blood sugar (Chacko, et al., 2010). The high caffeine content is meant to ensure consumers are active and further to cater to different tastes, it comes in five different varieties include pomegranate blueberry, diet cranberry raspberry, diet strawberry lemonade, orange pineapple and peach mango. Equally importantly, V8 V-Fusion® + Energy is owned by the Campbell Soup Company, known for authentic, high quality canned food products, and thus while it is important to push V8 V-Fusion® + Energy as a separate brand, the parent company’s brand equity, parity, loyalty, and value, is extremely important in establishing credibility.
V8 V-Fusion® + Energy’s value proposition lies in its natural and healthy serving of fruits and vegetables without artificial additives. With increasing concerns among consumers over lifestyle diseases and the effects of high energy/sugar foodstuffs on their health, V8 V-Fusion® + Energy will be branded as a genuine attempt by corporate America to address the public health problem. To build the brand’s credibility and culture, V8 V-Fusion® + Energy will draw on Campbell Soup Company’s reputation (stories, associations and images) at least at the outset, coupled by the product’s current branding before setting out to create its own image and artifacts through integrated marketing communications. To create an emotional connection to the brand, V8 V-Fusion® + Energy will associate itself with healthy eating, making a positive difference in life, authenticity, rejuvenation and peace with oneself. With regard to packaging, V8 V-Fusion® + Energy will be packed in single, six, dozen and two dozens, 500ml aluminum cans.
V8 V-Fusion® + Energy Differentiation
The environmental analysis reveals high competitive rivalry in the US energy drinks market, coupled with high industry power concentration, not least because the largest firms control more than 85% of the market share. The market power controlled by these firms means that they enjoy considerable influence over both suppliers and consumers, than it is possible for a start-up in the industry to change in the short-term. Even most importantly, it is critical for V8 V-Fusion® + Energy to adopt a single differentiation strategy and focus on it, for according to Nandakumar, Ghobadian, & O'Regan (2011), this results in better results compared to firms that are stuck‐in‐the‐middle of differentiation strategies.
Figure 1: V8 V-Fusion® + Energy will use a differentiated focus strategy
Cost leadership and cost focus differentiation would not be suitable since V8 V-Fusion® + Energy’s operates in an oligopolistic market structure, where strong competitors such as Red Bull are likely to retaliate in order to protect their market shares. Since V8 V-Fusion® + Energy is neither keen on a price war nor does it have the resources (financial, brand recognition, equity, and loyalty, etc.) comparable to its larger competitors, it will not use these two differentiation strategies. The high degree of differentiation already in the industry means that an outright differentiation strategy would not be very effective. Effectively, V8 V-Fusion® + Energy will use a differentiation focus strategy, targeting people who are both keen on prices and differentiation. The product will be hinged around its health benefits (natural ingredients, low-energy, natural sweetening), and authenticity (Campbell Soup Company, 2014; Porter, 2007). Even most significantly, the energy drinks and healthy drinks markets are expanding, and thus V8 V-Fusion® + Energy does not necessarily have to take the market for current players, but to tap into the new demand for healthy offerings. Once V8 V-Fusion® + Energy is established, the company’s other vegetable juices, and other products produced by the company would try tap into the market already created, by catering to a greater variety of tastes.
The leading players in the US market i.e. Monster Beverage Company, Red Bull, Rockstar International and Coca-Cola employ numerous distribution channels. The most important channel is the business-to-business channels. The biggest customers/distributors for these companies include supermarket and department store chains (e.g. Wal-Mart), and bottlers such as TCCC North American Bottlers. Monster Beverage Company and Rockstar International have distribution agreements with Coca-Cola, which allows them to reach a greater geographical market. V8 V-Fusion® + Energy will adopt a similarly multi-pronged distribution strategy, which should ensure the best possible utilization of its limited resources and effective market penetration. The company will seek partnerships with main retail outlets (including Wal-Mart, Safeway, and Target), and bottling companies with a national distribution channels, to ensure that V8 V-Fusion® + Energy reaches as may customers as possible.
While this is potentially difficult, but V8 V-Fusion® + Energy has an advantage, given the fact that its parent company, Campbell Soup Company, enjoys relatively good relationships with key distributors, and the company may leverage this to ensure V8 V-Fusion® + Energy is similarly distributed. The company will also engage agents that would help gain shelf space in major retailers in the country, besides selling directly to retailers, by creating incentives for them, including greater margins, and national advertising to drive demand. Equally importantly, V8 V-Fusion® + Energy’s website will be redeveloped to equip it with full e-commerce capabilities so that it can be used to sell directly to consumers.
Figure 2: V8 V-Fusion® + Energy distribution channels
Pricing and Promotional Strategy
V8 V-Fusion® + Energy is targeted at Americans aged between 15 and 50, the vast majority of whom are younger than 35 years. Those younger than 35 are socially, physically active and experimental, and thus are likely to comprise the innovators and early adopters groups. The promotional mix will depend almost exclusively on the product’s adoption curve and stage of the product in its life cycle. V8 V-Fusion® + Energy is currently at the stage where early adopters are interested in it, mainly driven by their curiosity and the product’s value proposition. This group includes the physically active population aged between 15 and 35, male, of Latin American or Pacific Islands extraction (Report Linker, 2013). Targeted promotional media such as social media and search engine advertising, coupled with free sampling, personal selling are critical. Other strategies comprise product placements, celebrity endorsements, traditional, social media and internet advertising, outdoor advertising and point of sale advertising.
This is a critical stage because there exists a chasm between the early adopters stage and the early majority, requiring considerable investments in promotion to ensure that the product is successfully adopted by the market. This will serve to excite public interest in the product, helping move up along the adoption curve, to the early majority stage, during which the company is expected to gain 33% more of its target market. This stage is expected to have been attained by the close of 2017. At this stage, the promotional mix will include television and newspaper (health and lifestyle magazines) advertising, social media advertising, point of sale advertising, outdoor advertising and events sponsorship.
Figure 3: V8 V-Fusion® + Energy’s adoption curve
Integrated Marketing Communication (IMC)
IMC refers to the careful application of promotional strategies using different media in such a way that they give a consistent and self-reinforcing message about the brand. To ensure, such consistency, all aspects of the marketing mix, the organizational culture, and other marketing communications will be designed in such a way as to create a unified understanding about product. For instance, the company y should advertise in media that is read by health-conscious populations in the target market, sponsor events that promote healthy living e.g. government campaigns against childhood obesity, and associate with celebrity brand ambassadors known to encourage similar values. The company’s mission/vision, values, leadership, events association must emphasize its commitment to healthy living, should all the marketing communications/activities through different media.
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