Product Strategy Zipz Juice for Generation Z Cath Connell 21369666 Shaheen Evans 12860646 Jodie...

Product StrategyProduct Strategy‘Zipz – Juice for Generation Z’Cath Connell 21369666Shaheen Evans 12860646Jodie Richardson 20196946Adeline Tang 21218471Liya You 21245517

Product Strategy – Group 3

AgendaAgenda

• Background• Market analysis• Idea generation

and screening• Concept testing• A new product!

• Business analysis

• Development and testing

• Launch strategy

BackgroundBackground


BackgroundBackground

• Part of the Australian psyche• Farmers as owners • More than just pineapple• Markets under threat


Environmental factorsEnvironmental factors

Demographic, social and economic• The new baby boom

– The highest birth rate in Australia since 1971

• Women’s workplace participation rates– Older mums (and dads)– Time poor / cash rich – The guilt factor

• Multiculturalism



Environmental• Waste and where to put it

– Reduce, reuse, recycle• A water crisis

– Effects on agriculture– What do we drink now?

• Global warming– Local product vs carbon miles– Employees are consumers



Health• Childhood obesity

– Sugars bad, fruit good– Making healthy food choices appealing

• Healthier lifestyles– Exercise and sports drinks– Nutrition awareness

• Organic and chemical free foods


RivalryRivalry

• Market concentration of major retailers, Coles and Woolworths– Buyer power being exploited with

release of premium Private Label brands– Potential barriers to entry

• Acquisition of competition by large multinationals e.g. SPC Ardmona


SWOTSWOT

Strengths• Australian• Brand• Experience• Innovation• Marketing success• Producer

relationships

Weaknesses• “Old fashioned”

perception • Lack multinationals’

market power• Lack multinationals’

capital• Environmental

status


SWOTSWOT

Opportunities• Healthy kids• Healthy and active

adults of all ages• New mums• Water products• Concentrates• Organics• Export

Threats• Nutritional

Guidelines – high sugar content

• Retail private labels• Dilution of

“Australian Grown” positioning

• Competitors being first to market

Idea ManagementIdea Management


Idea ManagementIdea Management

• Link New Product strategy, corporate strengths with Global Trends– Convenience– Health– Taste and Indulgence– Ethical


Idea GenerationIdea Generation

• Kids snacks• All natural fruit jellies • Fruit based lollies - compete

with Natural Confectionery Company

• Icy poles• Fruit strips/leathers• Snack packs - tropical & berry

flavours• Dried fruit bars• Shaped fruit snacks (e.g. US

Kelloggs Lego and StarWars)• Juice straw• Diluted Juice – ‘Kids Juice’

• Gourmet/Luxury ideas• Exotic flavoured jams• Alcohol infused fruit• Frozen fruit desserts• More exotic/healthy juices • Other• Frozen fruit juices (for cooking)• Squeezable Jams• Organically grown range (would

need forward planning - minimum 2 years for certification)

• Healthy snack packs with yoghurt

• Vending machine snacks - crackers & jam, pikelets & jam, adult fruit snacks

• Health/sports drinks


Determining the Need for Determining the Need for IdeaIdea

a. Types of Need– Health, Convenience, Indulgence, Ethical

b. Timing of Needs– Daily, repeat purchase, variety of contexts

c. Trial Risks– Variety of fruit flavours, low risk

d. Controllable Marketing Elements– Taste, flavour, colour, presentation, feel

e. Market Share, Conduct and Performance– New product in existing market– Generate brand awareness


Idea ScreeningIdea Screening

• Consideration of the Ansoff Product-market matrix

ProductsMarkets

Existing NewExisting Market

Penetration- Review distribution channels e.g. Golden Circle vending machines

NPD- Juice straw- Diluted kids juice- Athletic/medicinal rehydration

New Market Development- Teens- Young active adults

Diversification- Premium fruit products (pubs/café’s, use with alcohol)


Concept 1 – Kids JuiceConcept 1 – Kids Juice

• Diluted juice


Concept 1 – Kids JuiceConcept 1 – Kids Juice

• Rationale– Extending Junior juice concept to ‘Tweens’ (8-14

y.o.)– Convenience

• Cost saving– Taste

• Uniqueness is ‘Dilution’ Factor, with added vitamins• Variety of flavours• Appealing to Tweens

– Health• Threat from New Guidelines

– Unique packaged goods• Tetra and take home pack


Concept 1 – Kids Juice ScreeningConcept 1 – Kids Juice Screening

• Relative Advantage– saturated market, many competitors, focus is segment of

Tweens based on Health megatrends– Marketing opportunity considered limited, cool factor?

• Complexity– Developability simple, manufacturing – extension of current

process, therefore cost is considered marginal, developing low sugar, diluted juice to meet Australian Health Standards

• Compatibility– In line with strategy of increasing brand awareness

• Communicability– Simple marketing strategy of health, low sugar, low calorie

alternative, suitable for Tweens, mums and health conscience such as diabetics

• Trialability– Simple Process


Concept 2 – Juice StrawConcept 2 – Juice Straw


Concept 2 – Juice Straw Concept 2 – Juice Straw ScreeningScreening

• Juice StrawsRelative Advantage – – first to market – no direct competitor – cost advantage– mobile, convenient– healthy– environmentally

sound


Concept 2 – Juice Straw Concept 2 – Juice Straw ScreeningScreening

– Compatible with water or alcohol, can directly source fruit from Golden Circle range

– Complexity – simple idea, mechanism, consumable

– Divisible – can have different flavours, can tailor for consumers

– Communicability – easy to market, cool factor

– Trialability – using current product (Sipahh)

Concept TestingConcept Testing


Concept testing – 1 & 2Concept testing – 1 & 2

Tweens (kids aged 8-14) needs• Tasty • Cool - packaging design, product name, fad…

• Easy to carry and use – convenient

• Flavour variety

• Nutritious



Parent’s needs• Nutritious• Safe• Easy to carry and use – convenient

• Flavour variety

• Cheap• Environmentally sound


Product attributesProduct attributes

Concept 1 Kids Juice• Not cool• Variety• Bulky to carry• Heavily packaged• Followed nutritional

guidelines• Not good value for

money (buying water)

Concept 2 Juice Straw• Cool factor• Convenient, easy to

carry anywhere• Tasted good• Variety• Easy to use• Followed nutritional

guidelines• Cheap• Environmental

(reduced packaging)



Screening Map - Juice v Straw

0

20

40

60

80

100Fit with Engineering Know-how

Estimated Development Costs

Potential Market SizeAvoiding Large Competition

Fit with Distributors

StrawJuice


Concept testing - QFDConcept testing - QFD

Manufacturer desired product attributes

• Healthy– nutritious, organic & chemical-free

• Environmentally friendly• Maximum utilization of produce• Branding

– linking with awareness strategy


Concept testing - QFDConcept testing - QFD

customer needs healthyenvironmentally

friendlyutilization of

produce branding weighttasty 1 0 0 2 4.5cool 1 0 0 4 5

convenient 0 0 0 1 3.5

variety 1 0 0 2 3.5nutritious 4 0 0 1 3

safe 2 2 0 1 4cheap 0 0 4 1 2.5

environmental 1 4 0 1 3importance degree 36 20 10 52 118

normalised importance degree 0.31 0.17 0.08 0.44 　

A new product!A new product!


Zipz – Juice For Generation ZZipz – Juice For Generation Z

Business AnalysisBusiness Analysis



• Only one similar product in the dairy market – Sipahh– Sipahh’s selling price is 40 cents per

straw• Zipz’ selling price will be set at 40

cents per straw• Zipz is categorised as Reconstituted

100% juice market



• Assumptions:– Convenience Factor

• Can be used with tap/bottled/sparkling water– Alternative/Substitute

• Bottled flavoured water– People carry their ‘own’ water

• Tap water OR bottled water– Sales Volume

• Single Use• Multipak

– Technology is accessible via licence with Unistraw– Unistraw is keen to form partnership– Technology can be applied to fruit juice



• Cost Structure*– Purchases = 71.6%– Wages = 8.4%– Depreciation = 4.4%– Utilities = 1.3%– Rent = 0.3%

* IBIS Report, Fruit Juice Drink Manufacturing in Australia, 7 September 2007


Projected Profit & LossProjected Profit & Loss

2008 2009 2010 2011Revenue $14,033,565 $20,434,050 $24,946,740 $25,309,440

Gross Profit

$4,139,901 $6,028,044 $7,359,288 $7,466,284

Expenses $2,020,833 $2,942,503 $3,592,330 $3,644,559

Licensing fees

$421,006 $613,021 $748,402 $759,283

Marketing costs

$1,403,356 $2,043,405 $2,494,674 $2,530,944

Net Profit $294,704 $429,115 $523,881 $531,498


Projected sales vs fixed and variable Projected sales vs fixed and variable costscosts

$-

$5,000,000.00

$10,000,000.00

$15,000,000.00

$20,000,000.00

$25,000,000.00

$30,000,000.00

2008 2009 2010 2011

Total Fixed CostsLicensing feeTotal Marketing CostsStraw sales


Breakdown of Marketing Breakdown of Marketing CostsCosts

Projected Marketing costs

10%

35%

35%

20%

Market researchAdvertisingSales and PromotionPackaging and Distribution


Break Even AnalysisBreak Even Analysis

$0

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

0 10000 20000 30000 40000 50000 60000Unit ('000)

Sale

s ('0

00)

Straw sales

B/E $

Linear (Strawsales)

• Number of units to break even = 40,019,161• Number of packs to be sold to break even =

4,019,161 = $16,007,664


Awareness-Trial-Repeat Awareness-Trial-Repeat model model

Total family household with children* 2,400,000

% of those who became aware 50%

% of those who try the product 60%

% of those who will repeat 40%

Average number of ‘repeats’ per annum 47

Unit cost per bottle (after trade margins)

$0.12

* Euromonitor International, Consumer Lifestyle – Australia, June 2006


Return on Investment (ROI)Return on Investment (ROI)

• The return on Investment over the projected 4 years is 289%

Product TestingProduct Testing


The ProductThe Product


Product Testing - viabilityProduct Testing - viability

•Product Related Decisions– Holistic/component

• Realism – whole product, consumerable or convenience item

• Consider testing variants of fruit range to determine likely take up rate or modification to flavour/taste

– Disclosure of identity• Branded supported by full product mix – flavours of

Golden Circle– Explanation of usage

• Normal, with usual instructions – consumerable, simple and easy instructions


Product Testing cont…Product Testing cont…

Sample Decisions• Identification of testers• No need for expert panel

– Ad hoc sample, no need for experts or consumer panel• Large Sample size

– product is small, portable, quick to test, consume.• Sample segments

– Tweens and Mums – Phase 1– Athletic, sport and rehydration (Future – clubs/pubs) –

Phase 2


Product Testing cont…Product Testing cont…

Measurement Techniques and Questions• Closed and open questions

– Combination of closed and open– Closed/focus on flavour, taste, satiety,

presentation, convenience, cost, frequency of use, etc...

– Open questions – emotions – feelings of refreshment, intended use, what would make you use this product long term? Cool factor? etc...

• Diagnostic and PI questions– How likely are you to buy this product for

you/child based on cost?


Product Testing Cont…Product Testing Cont…

• Location of Test – given comestible product

– Initial alpha test – internal marketing with staff and their children – efficient, low cost exercise, initial litmus test

• Data Collection Methods – Structured and unstructured

• Questionnaires• Unstructured Recording of feedback

– Face to face interview at location of tests

CommercialisationCommercialisation


The ProductThe Product

• Final Product – Zipz - juice for generation Z

•Orange•Pineapple•Berry

• Estimated annual sales units = 40m


Revisit prior to launch:Revisit prior to launch:

• Technology improvements • Selling points/benefits• Improved packaging concepts• Production improvements • Warehousing and transportation• Competitive threats


Packaging – unit levelPackaging – unit level

• Base unit packaging– Individually sealed – Zip locked assembly if cost effective– Biodegradability – Ease of opening – Lightweight – Durable– Convenient – Eye catching design


Packaging – outer pack & Packaging – outer pack & SRTSRT

• Outer pack & Shelf Ready Tray (SRT)– Eye catching design– Easy to use– Fits with retailer shelving requirements– Environmentally friendly– Warehousing and transportation

efficiency– Meets NPC requirements


• Warehousing – Warehousing method (JIT, Trigger point)– Buffer stock requirement– Location – Environment required (ambient or chilled)

• Transportation– Top load or base load– Environment required (ambient or chilled)

• Existing Distribution Channels

Warehouse & Transport Warehouse & Transport NeedsNeeds


Packaging DesignPackaging Design

• Vibrant and “cool”• Easily recognisable • Easily understood – Zip, Sip & Go• Meets food packaging requirements • Brand awareness• Benefits• Concept tested


Launch StrategyLaunch Strategy

• Penetration strategy– Launch timing

• Summer during school holidays– Impersonal media channels

• Television• Teenage magazines• Viral marketing

– Personal media channels• Giveaways during concerts• Sporting events


Product MessagesProduct Messages

• Product:– “Zipz - juice for generation Z”

• Primary Message: – “Don’t be boring this summer – Zip it!”

• Instructions– Zip it, Sip it, Go!

• Secondary Messages (benefits):– Low sugar– Added vitamins– Free from artificial colours– Free from artificial flavours– Free from artificial preservatives


EndorsementsEndorsements

• Endorsements by upcoming starlets– Big Brother entrants– Australian Idol entrants– Justification:

• Fees will be lower • Need to be rotated frequently • Well known to majority who vote• Temporary cult status


AssumptionsAssumptions

• Short Life Cycle– Novelty factor may “wear off”– Due to competitor threats

• Sales require close monitoring– Identify change in sales volume to

identify growth and maturity phases– Prepare to launch Phase 2 – Monitor trend changes– Launch promotional strategy


Additional ConsiderationsAdditional Considerations

• Co-Branding opportunities – McDonalds or fast food chains– Sporting events– Concerts– Warner Brothers


SummarySummary

Zipz - juice for generation Z• Objective: increase profitability • Strategy: penetration marketing launch• Measures: Critical trigger point to reposition• Corrective Action: relaunch into new markets (Phase

2) and product extensions• Revisit customer needs and product benefits

ongoing• Determine trigger point for product deletion when

required.Don’t be boring this summer – Zip

it!

Product Strategy Zipz Juice for Generation Z Cath Connell 21369666 Shaheen Evans 12860646 Jodie...

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Transcript of Product Strategy Zipz Juice for Generation Z Cath Connell 21369666 Shaheen Evans 12860646 Jodie...