Jones Soda Project by Brenna Teichen

Marketing Plan Introducing Jones Buzâ&#x20AC;&#x2122;dÂŽ

Andrew Baldridge Brenna Teichen Tanya Zaragoza-Rosas

2011

Table of Contents Executive Summary.................................................................................................................3 Situation Analysis...................................................................................................................4 Internal Environment.....................................................................................................4 Customer Environment.................................................................................................12 External Environment...................................................................................................20 SWOT Analysis.......................................................................................................................26 Strengths.....................................................................................................................26 Weaknesses.................................................................................................................30 Opportunities..............................................................................................................32 Threats........................................................................................................................34 SWOT Matrix................................................................................................................37 Competitive Advantages........................................................................................................38 Strategic Focus......................................................................................................................40 Marketing Goals and Objectives.............................................................................................41 Marketing Strategy................................................................................................................43 Primary Target Market..................................................................................................44 Product Strategy...........................................................................................................44 Pricing Strategy............................................................................................................46 Distribution and Supply Chain Strategy.........................................................................49 Integrated Marketing Communication Strategy.............................................................50 Marketing Implementation.....................................................................................................53 Structural Issues...........................................................................................................53 Tactical Marketing Activities.........................................................................................54 Evaluation and Control..........................................................................................................55 Formal Controls...........................................................................................................55 Informal Controls.........................................................................................................56 Implementation Schedule and Timeline........................................................................57 Marketing Audits..........................................................................................................57 Financial Evaluation................................................................................................................58 Appendices............................................................................................................................59

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Executive Summary Headquartered in Seattle, Washington, Jones Soda Co® is a leader in the premium soda category and is known for its creativity, alternative personality, and support for local communities and the individuals that reside there. The company essentially markets and distributes products made by the consumer; by using their feedback to generate new flavors and personal photos to label their products, Jones Soda Co aligns itself with its customers to foster unique, long-term relationships, trust, and ultimately a valuable experience for every individual. At the present, Jones Soda Co currently provides Jones Pure Cane Soda® and Whoopass

Energy Drink® brands, and seeks to enter the flavored alcoholic beverage market with its new cooler line, Jones Buz’d, which it hopes to launch on April 1, 2012. The company aims to promote the coolers in time for the upcoming summer season in order to appeal to an older segment of their current as well as prospective consumer base, between the ages of 21 and 34, that may have a preference for alcoholic beverages rather than caffeinated ones. Their strategy includes the continuation of creative flavors suggested by visitors to the company website, personal photos submitted by consumers for the purpose of labeling the products, and unconventional as well as traditional distribution channels to cater to an alternative lifestyle that is representative of their target audience’s characteristics. Although Jones Soda Co has traditionally avoided the use of mainstream media for its integrated marketing communication efforts, it will buy space on MTV for the upcoming Jones Buz’d cooler line. However, this will not be inconsistent with the organization’s culture and image, for the company will advertise a customer-produced video. Therefore, all of the elements of the marketing strategy will be founded on the premise of customer intimacy. Jones Soda Co seeks to obtain a 5% portion of the market share in the alcoholic beverage industry within two years of the product launch as well as an awareness level of 75% within the first twelve months of the product being in the market. For the quarter ending on December 31, 2010, the company reported a net loss of $1.8 million, which is an improvement from a $4.5 million net loss for the fourth quarter in 2009. However, the company hopes that by diversifying their portfolio and satisfying another target audience’s need for an innovative, consumer-inspired flavored malt beverage, it will be able to increase its level of brand awareness, the size of its consumer base, and ultimately its bottom line. The biggest implementation issue would be the lack of sufficient funds to buy a cable television advertising spot on MTV. However, since the advertisements are essentially created by the consumer, this will save Jones Soda Co some expenses for video production costs. The increase in the level of awareness and the size of its consumer base would mean a significant improvement to the firm’s revenue, which would be an additional $22.08 million, if a market share of 5% is achieved; therefore, the expected outcome from this strategic initiative is positive.

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Situation Analysis The Internal Environment Marketing Goals and Objectives Jones Soda Co® has developed authentic, meaningful goals and objectives that have been proven successful based on the company’s lasting presence in such a highly concentrated and competitive industry of carbonated soft drinks (CSD). The primary objective is to build brand awareness, thereby leading to future sales growth and improved market share. Jones Soda Co engages in the development, production, marketing, and distribution of all of its products including Jones Soda®, Jones Zilch™, WhoopAss Energy Drink®, WhoopAss Zero Energy Drink®, in addition to the creation of a new product line in the flavored alcoholic beverage category to be launched April 1, 2012, Jones Buz’d®. Unlike many of its competitors, Jones Soda Co strives to foster unique customer relationships when developing, producing, marketing and distributing their premium beverages. Through collaboration, consumers can visit the company website to offer suggestions for future flavors, flavor names, in addition to rating and reviewing products and submitting personal photos for label creation1. Due to the strong support that Jones Soda Co has for the alternative lifestyles of their consumers, they actively engage with them through the sponsoring of sporting events, road trips to various destinations throughout the country, and through the support of emerging musical talents. The company has even set up a website called Jones Independent Music where visitors can record their own songs or listen to those created by their fellow Jones Soda fanatics. In addition, the Seattle-based company continuously seeks new ways to reduce their ecological footprint while encouraging others to take similar initiatives. Their goal is to employ manufacturing, distribution and everyday practices that reduce the negative impact on the earth and to actively solicit suppliers whose goods and services are environmentally responsible. Jones Soda Co has created an environmentally friendly package design and has decided to use greener materials and ingredients. They have made all of their bottles 100% recyclable, reduced the amount of material used in their 4-pack cardboard carrying cases by 7%, and make their trays from 35% post-consumer recycled material. When it comes to their co-packing,

Ariel, Jackie, Dina Berman, and Chelsea Boryca. "Jones Soda Brand Audit." 2006. Web. 20 July 2011.

<faculty.ithaca.edu/shamula/docs/studentportfolios/imcbrandaudit.pdf>.

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distributor, and retail partnerships, Jones Soda Co aims at reducing the total truck miles driven annually by one million miles by increasing its network of strategic locations around the country, thereby decreasing fuel and carbon emissions. Finally, the company has consistently encouraged all of their employees to walk, bike or use public transportation to work, as well as dispose of items in compost and recycling bins located throughout the office2. Lastly, Jones Soda Co seeks to become more socially responsible through the support of local communities and the businesses that operate there. The company has participated in charitable food and clothing drives as well as holding Free Soda Friday donations to various non-profits2. In addition, the company has donated $50,000 of all Holiday Pack sales to the Toys for Tots organization during the holiday seasons Other examples of their efforts towards social responsibility is their participation of the American Diabetes Association’s “Tour de Cure” in 2005, where a series of cycling events were held in more than eighty cities nationwide in an effort to support the association and to increase awareness of the growing epidemic of diabetes.3 The social activity of Jones Soda Co has been recognized on a national as well as international level, because of the company’s big heart and small wallet and their dedication to not only their consumers, but to society as a whole. These goals and objectives are consistent with Jones Soda Co’s mission of providing high quality, premium beverages while enhancing the customer experience through unique, longterm relationships. They are also consistent with the company’s aim of benefiting society through sustainable activities and through the contribution to a wide variety of charities across the nation. The Seattle-based company’s goals and objectives also align with the external environment, such as consumer demand for increased transparency, greater efforts towards sustainability, and improved social responsibility in addition to the trends relating to the customer environment, such as the desire for healthier products containing natural, unmanufactured ingredients. Due to the fact that Jones Soda Co has such a closely-knit relationship with its customers, it is able to maintain a more accurate picture of the marketplace and the evolving wants and needs of those who consume Jones Soda products.

"Socially Responsible | Jones Soda Co." Home | Jones Soda Co. Web. 1 July 2011.

<http://www.jonessoda.com/company/socially-responsible>. 3

Ariel, Jackie, Dina Berman, and Chelsea Boryca. "Jones Soda Brand Audit." 2006. Web. 20 July 2011.

<faculty.ithaca.edu/shamula/docs/studentportfolios/imcbrandaudit.pdf>.

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Current Marketing Strategy and Performance Strategy Jones Soda Coâ&#x20AC;&#x2122;s main objective is to increase sales by expanding the distribution of their products into new and existing markets, primarily in North America. Through the use of event sponsorships, point-of-sale materials, an interactive website, and through social media techniques, Jones Soda Co attempts to create and increase consumer awareness of their products in order to increase sales. Products are sold primarily in convenience stores, grocery stores, delicatessens, and retailers. Common retailers and convenience stores include Albertsons, AMPM, Bartel Drugs, Barnes and Nobel, Haggen, Walmart, Kroger, Target, Shell gas stations, Walgreens in addition to many other across the United States and Canada. Jones also uses unconventional distribution channels such as tattoos parlors and skateboard shops to effectively reach their target market. Therefore their distribution strategy aims at being more convenient for their consumer base and often times they even appear at popular local sites that parallel their target marketâ&#x20AC;&#x2122;s behavioral characteristics. The uniqueness of the relationship they have with their customers and the use of high quality raw materials make the price of their products high compared to their competitors. However, that uniqueness is what differentiates Jones Soda Co with other brands. Some of Jones Sodaâ&#x20AC;&#x2122;s current products other than their sodas are candy, carbonated water, tea, popsicles, energy drinks and other seasonal items. This distribution strategy is very effective in reaching consumers due to the direct correlation with their demographic, psychographic and geographic characteristics in addition to their lifestyle and behavior; the nontraditional promotional venues work well with their unique brand. Price strategy is functioning moderately well compared to the competition; those in their target market tend to be extremely brand loyal and are not as price sensitive. People who have not previously purchased a Jones Soda product are unlikely to become users, especially during times of poor economic conditions.

Performance Jones Soda Co reported a net loss of $1.8 million for the quarter ending on December 31, 2010, which is an improvement from a $4.5 million net loss for the fourth quarter in 2009. These improvements on the net losses show the effectiveness of their turnaround strategy, in addition to the expense reduction Jones Soda Co has implemented through the cost control measures

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that they started enforcing beginning in 2010. Therefore, business has stabilized and solid growth platforms have been created in order to expand their presence in the marketplace. As the full year review ending December 31, 2010 shows, Jones Soda Coâ&#x20AC;&#x2122;s overall revenue decreased 33% to $17.5 million for 2010 compared to $26 million in 2009. When it comes to gross profit, we see an increase of 4% of $4 million for the period ending in 2010, compared to $3.9 million in the end of 2009; this is greatly due to the $2.2 million charge in the end of 2009 of $1.8 million being for GABA inventory and $422,000 for impairment equipment for our Concentrated Soda Distribution (CSD). As for the operational expenses there was a decrease of 26% to $10.7 million due cost control measures including the workforce reduction of 2009. Also, there is operational cash decreased of $3.5million from $7.3 the previous year 4. Compared to its competitors like PepsiCo and Coca-Cola, Jones Soda Co significantly lacks some beneficial qualities, such as brand stability in the industry. One of the great factors that helps these firms is their strong brand recognition that they have created over the years. Since Jones Soda Co has not been in the market for long and is not well-known only among its target market, this proves to be a disadvantage. In addition, Coca-Cola and PepsiCo have a greater global presence compared to Jones Soda Co, which primarily focuses on distribution in North America. The Carbonated Soft Drink (CSD) industry as a whole has been declining by 4.3%, mainly because there has been a substantial decrease in demand which affects the total revenue. One of the main reasons for decrease in demand is that many of the consumers are switching to healthier drinks. Another factor that has affected the decrease in demand is the economical recession; high unemployment rates make consumers become more cautious when it comes to spending. Strong brand recognition allows major players in the industry such as Coca-Cola or PepsiCo have greater competitive advantage over other brands in the market, since consumers are more familiar with their brands. Industry revenue in 2011 is expected to decrease 0.9% to $17 billion, following a decrease of 9.3% in 2009 and 16.6% in 2008. Consumers are being more health conscious and are sensitive to economic conditions. Therefore, their food choices will influence on what or where they decide to spend their disposable income 5.

2010 Fisical Report. Rep. Jones Soda Co., 10 Mar. 2011. Web. 10 July 2011.

<http://www.jonessoda.com/invest/pdf_documents/2011/JSDA_Q4_Earnings_Release_3-10-11_FINAL.pdf>. 5 â&#x20AC;&#x153;Soda

Production in the US." IBIS World. July 2011. Web. 10 July 2011.

<http://clients.ibisworld.com/industryus/currentperformance.aspx?indid=285>.

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Strategy Modification Since Jones Soda Co has seen a decline in consumers in the carbonated soft drink category, it intends to expand its product line by creating flavored alcoholic beverages in order to appeal to more prospective consumers, thereby enhancing their consumer base. The addition of the new beverage line will give existing consumers the opportunity to have a wider selection of products, and will increase the purchase intentions of potential consumers who might prefer alcoholic beverages to carbonated or caffeinated ones. Using the marketing techniques that are currently employed, Jones Soda Co can continue to create awareness amongst this broadened target market. For example, if they promote their alcoholic beverages in sports events that they sponsor, they can reach target market members that are present; this provides a good opportunity to create awareness among potential and current consumers about their new product line. Another important modification that Jones Soda Co should take in consideration is price; for the new alcoholic beverage line, the firm should make the price reflect the quality of the product. Since Jones Soda Co strives to use only the best quality to make their product, their prices tend to be relatively high after considering how competitors, such as Mikeâ&#x20AC;&#x2122;s Hard Lemonade or Smirnoff, price their products. Even though the malt liquor industry shows improvements when it comes to revenues, the company should keep in mind that consumers may be price sensitive since the economy is has not been improving at a comfortable rate. Therefore, Jones should not price too high but not too low that the consumer may not get the right perception of the product.

Current and Anticipated Organizational Resources Current Relationships with Customers Jones Soda Co has been able to build unique interactive relationships with their customers that their competitors have difficulty in duplicating. This interactive relationship consists of allowing their customers to provide feedback on current product ideas, such as flavors and packaging. Then the company takes some of those ideas given by their customers and uses them to create new beverages, which shows that the company takes consumer feedback seriously. This unique relationship with its customers gives Jones Soda Co a competitive advantage over its competitors.

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Relationships with Suppliers Jones Soda Co also has great relationship with its suppliers, such as Flavorman, which has been the companyâ&#x20AC;&#x2122;s flavor manufacturer they started in 1996, and has plants in parts of Canada, California, Indiana, Kentucky, and Missouri. Beyond developing the flavors for Jones Soda Coâ&#x20AC;&#x2122;s products, Flavorman has created and maintained quality control for Jones Soda, Natural Jones and WhoopAss energy drinks. From start to finish, this credo shows the long term relationship that Jones Soda Co has with its flavor manufacturer, since they are actively involved in the whole production process over a period of ten years6.

Anticipated At this point, the resource levels are stable until the launch of the new product line of flavored alcoholic drinks on April 1, 2012. The reason for this is that after the new product line Jones

Buzâ&#x20AC;&#x2122;d is on the market, it will bring new opportunities and resources such as the shift in consumer needs and tastes. In addition, consumers are becoming more health conscious by incorporating exercise routines and by paying more attention to what products they consume. That is why consumers are looking for healthier alternatives when it comes to drinking, unlike beer that is known to create beer bellies. Another opportunity that is available for Jones Soda Co for the taking is globalization; due to the improved international distribution channels exports have continued to grow, primarily in Canada, Mexico and China despite the recession of 2008. The company has the opportunity to expand their products to other countries, appealing to other target markets and increasing their consumer base. Since Jones Soda Co lacks the brand awareness that its major competitors have in both the carbonated beverages and the malt liquor markets, the firm should focus on increasing awareness of their products and brands. A great way is to expand the media outlets that are currently being used, or perhaps by continuing the use of its competitive advantage; with the unique interactive relationship Jones has developed with its consumers it can differentiate itself from other competitors.

"Flavorman - Case Studies: Jones Soda Company." Flavorman - Your Beverage Product Development Partner.

Flavorman Company. Web. 21 July 2011. <http://www.flavorman.com/case_studies/jones.php>.

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Current and Anticipated Cultural and Structural Issues Overall Customer Orientation Jones Soda currently uses a 12 to 19 year old demographic as their primary target market, in addition to 20 to 34-year-olds based on specific psychographic characteristics 7. This group is characterized as independent, creative, and hip and could be defined as a niche target market. However, this could prove to be somewhat limiting due to the fact that the people in this target psychographic tend to be easily swayed from consumer products rather easily when the product is not closely associated with their style of living. However, these targets are what make Jones Soda the recognized brand it is to date.

Short-Term versus Long-Term Planning According to the latest Jones Soda Co annual report they state clearly their boundaries for operations so that their corporation can continue to thrive and prosper. These boundaries range from “the ability to use the net proceeds from future financings to improve our financial condition or market value,” to “Our ability to manage our inventory levels and to predict the timing and amount of our sales.” That being said, the Jones Soda Co tends to operate with only short term focus in mind. Each of Jones Soda Co annual reports holds these individual boundaries8.

Willingness to Embrace Change and Internal Politics Jones Soda Co gives the impression that their culture is fairly resistant to change. They have a very dedicated workforce in regards to the sales team and management team. They have changed CEO’s two times since the founding of Jones Soda Co in 1996 9. In 2007 Peter Van Stolk resigned as the CEO from Jones Soda co. and was replaced by Scott Bedbury on an interim basis. The CEO position was later filled by Bill Meissner 201010. With regards to the product lines, they are not resistant to change because they constantly retire product flavors and replace them with new ones based on the suggestions from their consumers. Seeing that Jones Soda Co is well known for being a laid back organization, there are very few, if any, power

Ariel, Jackie, Dina Berman, and Chelsea Boryca. "Jones Soda Brand Audit." 2006. Web. 20 July 2011.

<faculty.ithaca.edu/shamula/docs/studentportfolios/imcbrandaudit.pdf>. 8

"Jones Soda Annual Report." Web. 5 July 2011.

<http://www.jonessoda.com/invest/pdf_documents/2011/Jones_2010_Annual_Report.pdf>. 9

Jones Soda CEO to Step down. Web. 7 July 2011. <3. http://www.seattlepi.com/business/article/Jones-Soda-CEO-to-

step-down-1257761.php>. 10

"Jones Soda Management Changes." Web. 10 July 2011

Http://www.streetinsider.com/Management+Changes/Jones+Soda+%28JSDA%29+Appoints+William+Meissner+to+CE O+and+President/5509828.html. Web.

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struggles to note. As for the internal politics, they operate just as any other publicly traded company and have a CEO, CFO, and CMO, to name a few positions.

Overall Position and Importance of Marketing Function Jones Soda Co’s position is to provide refreshment to people in their target markets in an alternative fashion, hosting a bevy of unique flavors housed in a one-of-a-kind bottle. In addition, this main idea of embracing creativity is crucial to the marketing function that Jones Soda Co utilizes, and is so closely related to their product that it can be easily concluded that their marketing function is of the utmost importance to the corporation’s success.

Changes in Key Executive Positions Since the birth of the Jones Soda brand in 1996, the founder Peter Van Stolk has since moved on to bigger and better things, leaving the CEO position of Jones Soda Co in December of 200711. However, he is still the majority owner of the company, holding 7% of the company’s shares. The current CEO is Bill Meissner and the CFO is Michael O’Brien, which was held by Jennifer Cue until 2005 when she resigned12. The VP of operations is Eric Chastain, and the Operations Manager is Mark Clagg.

General Employee Satisfaction and Morale Jones Soda Co makes claims that they are dedicated to their employees, thus keeping the morale high. The company encourages mental and physical wellness for all of their employees by participating in local events and activities. They also encourage their employees to take part in the company’s philanthropic initiatives, such as donating to charities and actively seeking a greener style of life13.

Allison, Melissa, and Amy Martinez. "Retail Report | Jones Soda Founder Peter Van Stolk Moves on to New Ventures |

Seattle Times Newspaper." The Seattle Times | Seattle Times Newspaper. Web. 12 July 2011. 12

Web. 10 July 2011. <http://www.jonessoda.com/invest/pdf_documents/2005/management-change_2005.pdf>.

"Socially Responsible | Jones Soda Co." Home | Jones Soda Co. Web. 7 July 2011.

<http://www.jonessoda.com/company/socially-responsible>.

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The Customer Environment Current and Potential Customers Our target market consists of both men and women between the ages of 21 and 34, who have an annual household income of $40,000 or more. In addition, this segment consists of all races that have attended college or have achieved an even higher level of education, from all regions across the country. Product usage characteristics include both heavy and light users because some individuals will only consume Jones Buz’d coolers during warmer seasons, whereas others will consume the product year round. When it comes to psychographics, our target audience (those who drink coolers or flavored alcoholic beverages) is extremely family-oriented, has an active lifestyle, and is conscious of the image they project to those around them. Those in this segment are also adventurous, creative/artistic, faithful/spiritual, and care about the environment and the factors that have a negative impact on the natural world (Appendix 1). Current consumers consist of various age categories with identical psychographic and geographic traits as the potential customers that Jones Soda is hoping to attract with the introduction of Jones Buz’d coolers in the flavored alcoholic beverage industry. The only critical difference between current and potential customers is their legal ability to consume alcohol in the United States as well as in Canada. Those who purchase Jones Buz’d are at least 21 years of age due to legal restrictions (or 19 in Canada) and have at least minimal familiarity with the Jones Soda Co brand, especially since the level of awareness is so low compared to others in the industry. Those who purchase are individuals with an alternative lifestyle, who enjoy setting new trends, and who actively follow and participate with the Jones Soda Co brand, either through the company website or at the events that it sponsors. Those who purchase most likely engage with Jones Soda Co, because they are given the opportunity to suggest new ideas, flavors, and/or names for their products. Through this interaction, these purchasers feel empowered by taking ownership of the products they buy, especially with the addition of their personal photo as the bottle label. Those who purchase Jones Buz’d do not significantly differ from those who actually consume the product. Due to the fact that this product appears frequently among social scenes, it can be assumed that those who spend time together exhibit similar personality and lifestyle characteristics to each other. In cases where this product is distributed from the purchaser to the end user illegally, where a minor is involved in the consumption of our product, there is an obvious difference when it comes to age and legal ability to consume alcoholic beverages.

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The number one influencer of this purchase decision is peers. As mentioned earlier, this product is likely to be associated with social scenes and products deemed as “cool” amongst a peer group will be approved by its members. Therefore, those who are nonusers of the product and those unfamiliar with Jones Soda Co will most likely influence the purchaser to avoid buying

Jones Buz’d upon seeing the unconventional flavors and perhaps even product design. Another influencer is family members; although this product specifically targets a younger market segment that is legally able to drink alcohol, minors might be enticed to try the beverage with its appealing and “youthful” flavors, thereby making older generations opposed to having this product in their homes. People who are of legal age to purchase and consume alcohol are financially responsible for making the purchase of Jones Buz’d. These individuals include those who are purchasing the product for themselves and/or their social group as described in the paragraph above. In addition, family members or relatives may be financially responsible for making the purchase of this product, and may be doing so for a younger individual who is legally able to consume alcohol (or in some cases, those who are not of legal age).

Customer’s Need for Jones Buz’d® Satisfying Customer Needs Jones Soda Co’s products take the position of providing refreshment in a unique and highly creative fashion. As mentioned throughout the report, Jones Soda Co’s products strive to satisfy the psychological needs for their customer to be associated into their own unique clique. Again, this is done by heavy customer involvement of the production of the individual products by incorporating customer generated pictures on all of the bottles produced by Jones Soda Co. Ultimately, the consumer must want alcoholic refreshment in a form other than beer or from hard liquor from the major competitors in the market, such as Mikes Hard Lemonade and Smirnoff Ice. With regards to the benefits of Jones Soda Co products, they stress to their consumers that their products are made with high quality ingredients. Therefore, Jones Soda Co doesn’t partake in the use of high fructose corn syrup in their beverages. Instead, they stress to their customers that they use pure cane sugar to sweeten their beverages along with a number of other natural ingredients and very few artificial ingredients 14.

Web. 8 July 2011. <9. http://www.jonessoda.com/gifs5/labels/jul08/July-08%20Soda-F3.pdf>.

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How Products are Purchased Jones Soda Co primarily sells their products through a wide assortment of grocery stores, convenience stores, and many other venues including but not limited to tattoo parlors, skateboard shops, and other alternative-minded lifestyle locations. The product itself is sold in packs of four, for the glass bottles, and twelve packs for the aluminum can option. Also, they can be purchased as individual bottles. However, as of the end of last year, December 31, 2010, Jones Soda Co is planning to phase out the distribution and selling of the aluminum can option, and focus solely on the bottled beverages15. This of course, would include the Jones Buzâ&#x20AC;&#x2122;d line of beverages. Seeing that the product is an alcoholic beverage, it would be sold as an individual product. However, there is a myriad of complementary goods that can go along with an alcoholic malt beverage of this caliber. These goods could range from but arenâ&#x20AC;&#x2122;t limited to pizza, candy, and other comfort foods.

Product Consumption Since this is an alcoholic malt beverage, it should only be consumed orally and in careful moderation. Due to the alcohol content of Jones Buzâ&#x20AC;&#x2122;d, customers should consume these beverages slowly to avoid any risk of alcohol related illnesses. As for influences that alter purchase behavior, these would include, but not be limited to, major sporting events, holidays, celebrations, parties, and pure relaxation. Surveys prove, according to AC Nielsen, that the consumption of alcoholic beverages drastically increase in these instances which is revealed by the increased sales during these occasions16.

"Jones Soda Annual Report." Web. 5 July 2011.

<http://www.jonessoda.com/invest/pdf_documents/2011/Jones_2010_Annual_Report.pdf>. 16

"Nielsen | U.S. Consumers View Alcoholic Beverages As Affordable Indulgence For Holiday Season, Nielsen Reports."

Worldwide | The Nielsen Company. Web. 12 July 2011. <http://www.nielsen.com/us/en/insights/pressroom/2008/u_s__consumers_view1.html>.

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Product Disposal Jones Soda Co clearly states their green practices on their website and take pride in the fact that their products are bottled in 100% recyclable glass and are made from 15 to 20% recycled products17. Jones Soda Co is constantly striving to encourage green practices and tendencies throughout communities where it is affiliated. Also, constantly making improvements for their packaging and disposal methods further take heed to the socially responsible methods practiced by Jones Soda Co.

Customer Purchase Patterns Where Purchased Jones Soda Co products are currently purchased directly from the company website, where visitors may select a wide array of flavors suggested by other consumers and have the packs delivered to the address they provide. Individuals interested in making a purchase can also visit numerous retailers throughout the United States and Canada, including but not limited to: 7Eleven, Albertsons, AmPm, Barnes&Noble, Bartell Drug, Cost Plus World Markets, Haggen, Kroger, QFC, Shell, Target, Top Food and Drug, Walgreens, and Walmart 18. Due to the fact that existing products are sold at these and many other locations throughout the country, Jones Soda Co will be distributing Jones Buz’d to these same retailers under the same regulations and policies as competing products that contain a relatively small percentage of malt liquor. There has been a rapidly evolving trend in regards to e-commerce because of its time and place utility, thereby enhancing customer convenience. Through the Jones Soda Co website, consumers have the ability to choose from a selection of products including Jones Soda®, Jones

Zilch™, WhoopAss Energy Drink® and WhoopAss Zero Energy Drink® and coming soon Jones Buz’d® (with proper identification required upon delivery). Consumers can also personalize their order by uploading a photo for the front of the bottle label, and a customized message for the reverse side, which adds value to the customer by empowering them to make Jones their way.

"Socially Responsible | Jones Soda Co." Home | Jones Soda Co. Web. 7 July 2011.

<http://www.jonessoda.com/company/socially-responsible>. 18

"Product Locator | Jones Soda Co." Home | Jones Soda Co. Web. 2 July 2011.

<http://www.jonessoda.com/products/product-locator>.

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When Purchased Due to the ability that consumers have to make a purchase twenty-four hours a day, seven days a week by simply visiting the Jones Soda Co website, they are not constrained by the normal hours of operation by a retailer near them that carries these products. Those who want to make a purchase online can also enjoy promotional as well as quantity discounts. For customers who prefer going to one of the retail locations as mentioned above to purchase Jones Soda products, they can also be rewarded with point-of-purchase offers which can definitely influence their purchase behavior. The seasonality of Jones Buz’d does have an impact on the purchase behavior of those in the target market and is uncontrollable depending on the region 19. In regions of the country where sunny weather is not as prevalent, light users (those who drink coolers with warmer temperatures) are more likely to reduce their consumption significantly. On the other hand, heavy users (those who loyally consume coolers throughout the year), are more likely to maintain the rate of their consumption or are only slightly affected by decreased temperatures. There are also time-based demand patterns that influence when consumers will actually purchase Jones Buz’d coolers. In some states across the country, certain laws prohibit the purchase of alcoholic beverages depending on the time of day. In these instances, retail locations are unable to ring up alcoholic beverages because of liquor regulations, usually if it is before noon. In some cases, alcoholic beverages are not sold on Sundays for religious reasons. This can affect the purchase behavior of consumers who live in these locations of the country, by preventing them access to our products when they may do their other shopping during this time frame, thereby resulting in a lost sales opportunity. Another uncontrollable influence of purchase behavior is the activities of Jones Soda Co competitors. Since the company is a newcomer in the caffeinated alcoholic beverage (CAB) industry where its product Jones Buz’d is in the introductory stage of its life cycle, it is suspected that Jones Soda Co will not have a strong enough presence in comparison to its competitors who have been building brand awareness over an extended period of time. In addition, these competitors are building off of a strong brand image with a strong probability of having top-of-the-mind awareness with their consumers. It is expected that Jones Soda Co will experience a similar brand awareness level as they have in the carbonated soft drink industry, at least until Jones Buz’d picks up positive word-of-mouth among its target segment.

"Jones Soda Annual Report." Web. 5 July 2011.

<http://www.jonessoda.com/invest/pdf_documents/2011/Jones_2010_Annual_Report.pdf>.

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Why (and How) Purchased Unlike its competitors, Jones Soda Co will continue to utilize its effective and differentiated strategy of developing unique customer relationships through innovative flavors and product designs, gathered from the suggestions of their consumers. By allowing their customers to provide their input on creative flavors for Jones Buz’d in addition to customizing their own bottle labels, the company will be able to foster even more personal connections with those in their target audience, something that their competitors can’t match. Jones Soda Co fills the needs of its customers by giving them freedom of expression, a sense of empowerment, and the peace of mind that the company they support engages in transparent, sustainable, socially responsible activities and cares about others more than the bottom line. People who exhibit the personality and lifestyle characteristics of the target audience are most likely going to develop strong brand loyalty similar to the consumers of current Jones Soda products. They perceive this Seattle-based company as a personable one that possesses many humanistic traits such as the desire to make a difference in the world, express one’s individuality, and its focus on people as what they serve, rather than themselves. Although Jones Soda Co products may not be priced competitively, the value comes from its authentic brand image and personality, with the consumer’s well-being in mind.

Rationale of Noncustomers One of the reasons why noncustomers may not be purchasing Jones Soda Co products is for the simple fact that they are unfamiliar with the brand. The firm relies primarily on their interactive website for promotional purposes and does not have as strong a presence as its competitors through other media outlets like television. The company utilizes this strategy in order to appeal to its specific market niche, which is characteristic of heavy internet users. However, Jones Soda Co is missing other prospective consumers who may be members of the targeted audience who frequent other mediums more so than internet. Due to the fact that Jones Soda Co uses high quality ingredients in all of its products, such as pure cane sugar, in addition to its authentic brand image, its products are priced higher than those of its competitors. Jones Soda Co uses the flavor suggestions of their consumers and their personal photos for label creation, thereby making customization of every product another cause of an increased price. Price has been known to be a determining factor for whether or not a consumer actually goes through with the purchase decision, especially during periods of poor economic conditions.

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As mentioned earlier, Jones Soda Co collects suggestions from their consumers and transforms them into new product creations. However, by providing unconventional flavors such as Turkey and Gravy during the holiday season or Blue Bubblegum, some consumers may be turned off and may avoid making a purchase decision because the flavors donâ&#x20AC;&#x2122;t appeal to them. In addition, these products are continuously retired so that Jones Soda Co can incorporate new ones for their consumers. Therefore, prospective customers may avoid these products because of a perceived lack of consistent product offerings. The final reason why potential customers may not purchase any Jones Soda Co products is the inability to relate to the brand personality. In this day and age, many consumers choose brands based on how well they fit their personality, lifestyle, attitudes, opinions and beliefs. Due to the fact that this firm has a very strong, authentic personality that embodies individuality and alternative lifestyles, those who do not fit that description may feel that they cannot associate themselves with the Jones Soda Co brand. The features, benefits and advantages of competing products that may cause non-customers to choose their products instead include price, consistent product designs and flavors, stability of the brand or maturity in the industry, and their ability to identify themselves with the brand personality. Coca-Cola and Pepsi, for example, have had consistent flavor options, have been in the industry for decades, and also have a more general personality that many people can relate to. However, Jones Soda Co. has a specific, eccentric, and uncommon personality for a company, which can cause even those with similar characteristics to be hesitant to try their products. For those who are willing to pay more for products made by an authentic, philanthropic company that actively participates in the community and focuses on the triple bottom line, Jones Soda Co products will likely be purchased if these individuals can also identify with the brand. Although Jones Soda Co is increasing their awareness throughout the United States, it has not achieved as much as their leading competitors for lack of promotional activities. Most promotions take place on the internet through the use of a unique and very interactive website at http://www.jonessoda.com where contests, surveys, layout templates, and website development tools are located with discounts included after consumer participation. In addition, Jones Soda will use point-of-sale materials such as posters, stickers, table cards, shelf danglers and post cards. Although there are increasing trends towards marketing online, the use of television as a media outlet is still critical in improving brand awareness and leading to increased market share and sales growth for companies. When it comes to distribution, Jones Soda Co has a relatively wide presence in independent distributors and national retail accounts such as Barnes & Noble, Panera Bread Company,

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CostPlus World Markets, Walmart, Target, and more. The company also distributes to nontraditional beverage retailers such as music stores, skateboard and surf shops, comic book stores, and clothing stores that fit their brand personality. This may cause non-consumers to question the companyâ&#x20AC;&#x2122;s distribution strategy since they are not accustomed to seeing these products offered at these kinds of locations. Non-consumers may decide to look elsewhere because they have no desire to associate themselves with an eccentric, unfamiliar, and not widely available brand that is priced higher than competing products. In addition, competition offers a lower price, has a bigger presence among all kinds of communities and the stores that are located there, and has had a longlasting relationship with the non-consumers of Jones Soda Co products. In order to convert non-customers into lifelong consumers of Jones Soda Co products, the company must improve its brand awareness, its trustworthiness and the number of locations where people can access their products, and do so while maintaining its authentic brand image and company mission. Jones Soda Co must be able to reach more of its target audience through more promotional materials and media outlets so that it can adequately express the brand identity, what it stands for, and how it serves the consumers as more than a provider of refreshments.

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The External Environment Competition The firm’s major competitors for Jones Buz’d are Smirnoff Ice, Mike’s Hard Lemonade, Bacardi

Breezer, Seagram’s Cooler Escapes, and B&J (Bartles & Jaymes) for the wine coolers market. The major players in the industry have lead to the increase in competition due to their possession of a stronghold over the market by dominating distribution and limiting the access to raw materials.

Analysis of Major Competitors

Position Future

Product

Brand

Product

Generic

Total Budget

Category

Competitors

Coolers

Mike’s Hard

Beer,

Energy drinks,

Night clubs,

(refreshment)

Lemonade,

Whisky,

Punches,

House parties,

Smirnoff Ice,

Gin,

Mix drinks

Restaurant

Bacardi Breezer,

Brandy,

(Tequila sunrise,

(dining out),

Seagram’s

Vodka,

screwdriver,

Snacks

Cooler Escapes,

Tequila,

mimosa)

B&J (Bartles&

Rum,

Jaymes)

Liqueur, Sparkling Wines

Current

Soft drink

Coca-Cola,

Tea,

(refreshment)

Pepsi,

Orange juice,

Gum,

Cadbury

Bottled water,

Chips,

Schweppes,

Energy drinks,

Cookies,

Lemonade

Ice cream

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Tap water

Candy,

Smirnoff Ice Diageo, the company that owns Smirnoff Ice, is the producer of the world’s leading brands in the alcoholic beverage industry. In creating these different alcoholic drinks, the company actively considers the insight of their consumers very seriously and has differentiated every brand that they possess accordingly. They are committed to the marketing of their products and are willing to invest on the best quality of materials in production. One of the strengths that Diageo possesses is innovation, which is one of the crucial parts of the company’s growth strategy and helps to ensure that its brands are positioned to grow continuously. Some of the drivers of innovation are the depth and strength of the brands that Diageo has. In addition, the company has the ability to use shopper trend information in order to observe changes in consumer habits, and channel those findings towards product and packaging development. Diageo has successfully established its long history of innovation on products such as Bailey’s Irish Cream among others, with the use of over 180 innovator employees around the world, serving diverse markets20. Diageo produces fourteen strategic brands that are the primary leaders on the market for spirit, beer and wine; these include Buchanan’s, Bushmills, Captain Morgan, Crown Royal, Smirnoff Ice, among others. These strategic brands possess a rich heritage and continue to innovate and expand to emerging and new consumer markets across the globe. By globally investing and managing these strategic brands, Diageo focuses on providing marketing consistency throughout different countries. As seen in Impact Databank Top 100 Premium Spirits (2010), Smirnoff vodka is the world’s leading spirit by volume21. Out of Diageo’s product offerings, eight brands are classified as global priority brands including Smirnoff, J&B, Jose Cuervo, Taqueray, Johnnie Walker, Baileys, Captain Morgan and Guinness. These brands account for 54% of Diageo’s net sales, by being the central focus for the business and are the focus where the majority of marketing is spent. Other Diageo’s brands such as Crown Royal and Buchanan’s are also in leading positions, driving significant growth, but are in more narrow geographies compared to the global priority brands22.

"Innovation." Diageo. 2011. Web. 11 July 2011. <http://www.diageo.com/en-

row/ourbrands/Pages/Innovation.aspx>. 21

"Strategic Brands." Diageo. 2011. Web. 11 July 2011. <http://www.diageo.com/en-

row/ourbrands/Pages/StrategicBrands.aspx>. 22

"Annual Report 2010." Diageo. Diageo Plc., 2010. Web. 11 July 2011.

<http://www.diageo.com/Lists/Resources/Attachments/640/Diageo_AR10_full_report.pdf>.

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Diageo, similar to Jones Soda Co, takes the initiative in protecting and supporting the community as a whole by strategically employing a variety of measures, such as encouraging its consumers to drink responsibly through â&#x20AC;&#x153;Smarter Drinkingâ&#x20AC;? Campaigns with the collaboration of the national and local government and other companies. Diageo also shows its social responsibility by making sure to only market their brands to adults, as well as by supporting programs and practicing policies that create positive roles in society about misuse of alcohol, including drunk driving, overconsumption and underage drinking. Diageo also promotes environmental sustainability through production processes, supports the community by providing an environment that fosters growth for businesses, collaborates with their employees to ensure worker satisfaction and safety, and complies with their code of ethics on a continual basis23. One of the weaknesses that Diageo has is their lack of authentic brands, in comparison to Jones Soda Co. In addition, this competitor does not engage with their consumers to the same degree, and doesnâ&#x20AC;&#x2122;t pursue an interactive, unique relationship with them. Another weakness for Diageo is establishing high environmental goals and not apply enough efforts to achieve them; for instance, in water efficiency their goal is to improve it by 30% by 2015, based on an assessment of 2007 they have only improved it by 8.3%. For carbon dioxide emissions their goal was to reduce it by 50% by 2015, but in 2007 they had only achieved a 10.5% reduction 24.

Economic Growth and Stability Since the recession beginning in 2008, the economic condition for both the United States and Canada has been poor. Both countries have experienced the highest level of unemployment since the Great Depression, and the housing market rates have been consistently low. Based on the U.S. Bureau of Labor Statistics, the unemployment rate is 9.2% for 2011. Approximately 6.3 million people, who have been unemployed for more than 6.5 months, represent 44.4% of the population. The number of people unemployed for a period of 5 weeks or less, has increased to 412,000 since June of 2011, and 8.6 million people maintain part-time positions in this same time frame25. The economic situation has influenced the decrease in demand in the breweries industry in the United States. Since there are high levels of unemployment, people are more cautious on where they spend their money, which is why the demand for beer or malt liquor is low.

"Environmental Sustainability." Diageo. Diageo Plc., 2010. Web. 11 July 2011.

<http://ccreport2010.diageoreports.com/environmental-sustainability/overview.aspx>. 25

"The Employment Situation." Bureau of Labor Statistics. U.S. Department of Labor, June 2011. Web. 13 July 2011.

<http://www.bls.gov/news.release/pdf/empsit.pdf>.

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According to IBISWorld for the brewing industry, the internal competitors do not consider price as an important factor as much as the brand, quality and packaging. Most of the marketing efforts in this industry go towards the 21 to 35 year-old market, since is the largest market segment and is open to try new products. Smaller companies in this industry have great difficulty improving their market share due to brand loyalty that exists for well-known brands such as beer companies that have great level of regional influence. As for the external competition from other beverages and beer importers, they face a great decrease in revenue due to the recession, since consumers are being more cautious on how they spend their disposable income. The main difference between the internal and external competitors is that the internal competitors are local companies within the country and external competitors are importers from other countries. Both the internal and external competition is anticipating future sales growth over the next five years26. Regarding the barriers of entry in this industry, it all depends heavily on whether or not the firm is domestic or international, and if they are trying to enter the small or large-scale production. Another barrier of entry includes the sunk cost and other capital requirements, such as capital costs of manufacturing facilities and how well a firm can create a brand for their products. The significant economies of scale mean that the large producers, such as Smirnoff Ice and Mikeâ&#x20AC;&#x2122;s Hard Lemonade, can earn enough revenue to spend on branding, advertising and other promotions to attract new customers. Due to the strength of their brand images, these companies have been able to successfully build top-of-mind awareness, thereby creating a stable foundation for any endeavors that they will have in the future.

Political Trends From a political standpoint, the only issues that Jones Soda Co may experience would be the green revolution taking place around them. Jones Soda Co is an established green corporation, therefore not having to worry about political trends affecting business. Until recently, caffeinated alcoholic beverages have been a popular trend for the younger legal-aged drinkers in the United States. As of February 2011, the House of Representatives have voted to place a ban on the production and sales of these beverages27.

"Breweries in the US." IBIS World. May 2011. Web. 15 July 2011.

<http://clients.ibisworld.com/industryus/competitivelandscape.aspx?indid=288>. 27

"House Votes to Ban Caffeinated Alcoholic Beverages - SC Politics Today - TheState.com." TheState.com: South

Carolina's Source for News, Politics, Weather and Sports. Web. 11 July 2011. <http://www.thestate.com/2011/02/09/1686329/house-votes-to-ban-caffeinated.html>.

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Legal and Regulatory Issues In 2007 Jones Soda Co was taken to the U.S. District court for the Western District of Washington alleging that the corporation was publishing misleading numbers in regards to the common stocks offered by the company. The court ruled in favor of Peter van Stolk, the former CEO, and Jones Soda Co and dismissed the charges that were placed on the corporation. In addition, the 2010 annual report notes that Jones Soda Co may also be involved, from time to time, in other various claims and legal actions that may arise in an ordinary course of business; all of which are covered by insurance purchased by Jones Soda Co. There are also trademark, copyright, and other related claims, which is under management’s discretion to handle as they see fit28.

Technological Advancements In the not so distant past, the world of social media has grown into somewhat of a necessity for any business to be successful. This is, in fact, true with Jones Soda Co. The company has a Facebook page and informs customers of any new products coming to light in the near future; a brief information tab which informs people of the company’s founding year, CEO, and mission statement is also available. In addition, there are a number of comments produced by Jones Soda Co that generate quite a buzz from people who happen to “like” the Facebook page29. This technological advancement allows customers of events that have taken place, scheduled to take place, and even occurring in real time. Given that over 760,000 people are fans of Jones Soda Co’s Facebook page it would be safe to assume that consumers have embraced this technological advancement for the company. In addition to Jones Soda Co’s digital footprint, they also keep a Twitter page which happens to be syndicated with their other social media sites. Jones Soda Co has recent technological advancements that strive to make the company much more efficient in more ways than one. These advancements mainly include the area of distribution practices30. Jones Soda Co uses two distribution tactics. DSD (Direct Store Delivery) is used by Jones Soda Co by utilizing 160 distributors over the 50 states and 9 territories in

"Jones Soda Annual Report." Web. 5 July 2011.

<http://www.jonessoda.com/invest/pdf_documents/2011/Jones_2010_Annual_Report.pdf>. 29

"Jones Soda - Food/Beverages - Seattle - Wall | Facebook." Facebook. Web. 12 July 2011.

<http://www.facebook.com/jonessoda?sk=wall>. 30

"Jones Soda Annual Report." Web. 8 July 2011.

<http://www.jonessoda.com/invest/pdf_documents/2011/Jones_2010_Annual_Report.pdf>.

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Canada. This tactic reaches out to QFC grocery stores, 7-Eleven’s, and Target’s to name a few. In addition, Jones Soda Co also utilizes a DTR (Direct to Retail) tactic which gets the Jones Soda Co product delivered to retailers such as Costco’s and Starbucks’.

Socio-Cultural Trends In today’s health conscious world, any product containing high fructose corn syrup is perceived as unhealthy. People have become more health conscious, in particular with their intake of carbonated beverages and fast foods. As of 2006, surveys show that people consumers are making an effort to check labels for sodium, sugar, and fat contents of the products they are consuming31. In response to this trend, Jones Soda Co has decided to make all of their products using pure cane sugar, and as many all natural ingredients as possible as noted on any Jones Soda label, thus adapting to society’s wants and needs. Although the overall sales for Jones Soda have fallen as of late, according to their latest annual report, this could be assumed to be the fault of the economic recession not because of their ingredients32. Economic recessions cause people to not spend their money on goods that aren’t vital to their everyday well being. However, this will not cause the Jones Soda product to be affected in the sense of their brand image, benefits, or features. Although it may cause the pricing and distribution of the Jones Soda products to alter with the idea to generate as much revenue while moving little amounts of product. In addition, the established green mentality of the Jones Soda Co has taken fit to the socio-cultural green movement that has been taking place. Using recyclable products that come from recycled products solidify this 33.

"Food Standards Agency - We're Getting More Health-conscious, Survey Shows." Food Standards Agency - Homepage.

Web. 12 July 2011. 32

"Jones Soda Annual Report." Web. 5 July 2011.

<http://www.jonessoda.com/invest/pdf_documents/2011/Jones_2010_Annual_Report.pdf>. 33

"Socially Responsible | Jones Soda Co." Home | Jones Soda Co. Web. 7 July 2011.

<http://www.jonessoda.com/company/socially-responsible>.

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SWOT Analysis Strengths Unique Customer Relationships Meeting Customer Needs Jones Soda Co fosters unique customer relationships through their interactive website, thereby allowing visitors to make flavor suggestions, submit personal photos for the purpose of label creation, and participate in various promotional venues. For the consumers who aspire to partake in alternative music scenes, Jones Soda Co offers an online website for consumers to share their music and creative expression 34. In addition, the company proactively seeks sponsorships that fit their target market lifestyles. Consumers need to define themselves by the brands they purchase, which makes them desire this kind of interaction, which is satisfied by Jones Soda Co through their extensive consumer-oriented activities.

Differentiation from Competitors The main differentiating factor between Jones Soda Co and its competitors is the fact that it uses the suggestions of its consumers to determine what the products are, how they are named, and how they are designed. Although Smirnoff Ice utilizes social media sites like Facebook to engage their followers about new flavors, idea generation stems from the company and not from consumers themselves. For example, Smirnoff encourages their followers to â&#x20AC;&#x153;likeâ&#x20AC;? a photo posted on their wall in order to reveal their next flavor idea coming out this summer35. Although this may effectively produce connectivity amongst their consumer base, they do not foster unique customer relationships like Jones Soda does.

Established Green Practices Meeting Customer Needs There is a growing trend for companies to be more conscientious of their sustainable practices not only because of political pressures, but from individuals themselves. Consumers are beginning to hold businesses responsible for the materials or ingredients they use in products, whether or not they engage in ethical sourcing, their corporate social responsibility policies,

34 35

Welcome to Jones Soda Music. Web. 21 July 2011. <http://www.myjonesmusic.com/>. Smirnoff Ice. Web. 5 July 2011. <http://www.facebook.com/SmirnoffIce?sk=wall>.

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their efforts towards reduction of greenhouse gas emissions, and more. To meet the need that customers have towards greener practices, Jones Soda Co has developed more efficient packaging using recycled materials, made their bottles 100% recyclable, manufactured their products domestically, and uses more efficient forms of transportation. The company also has policies set in place to encourage their employees to engage in more sustainable practices such as being rewarded with a Seattle bus pass if they donâ&#x20AC;&#x2122;t drive a car to work. In the Jones Soda Co offices, they have recycling as well as compost bins available for everyone to use and have changed the fonts on the documents that they print in order to reduce ink cartridge use. In regards to their co-packing, distributor and retail partnerships, Jones Soda Co is proactively seeking to improve their strategic networking to reduce fuel and carbon emissions by cutting one million miles driven by their trucks. Finally, the firm even asks visitors of their website to give feedback on how they could improve their sustainability efforts even more, thereby further engaging with their environmentally conscious consumers 36.

Differentiation from Competitors Many of Jones Soda Coâ&#x20AC;&#x2122;s competitors do not engage in as many sustainable practices, unless they are guilty of green washing which is becoming increasingly common amongst organizations today. Competitors are beginning to make the shift towards recycled or recyclable materials, as well as the reduction of carbon emissions. However, many fail to focus on other aspects that hurt the environment such as water and electricity usage, ethical sourcing, proper disposal of toxic waste, and composting to name a few. Jones Soda Co differs from these organizations by interacting with members of their communities for feedback to become even more sustainable, training their employees to adopt green practices and rewarding them accordingly, and collaborating with their co-packing, distributor and retail partnerships to reduce truck miles. By working together with all ends of the spectrum, Jones Soda Co has been able to develop and execute consistent activities to reduce its carbon footprint, unlike many of those it competes with. However, one of the leading alcoholic beverage companies has been awarded for their high corporate social responsibility practices, which will present a challenge for Jones Soda Co to match upon entering this industry. Diageo, the owner of the Smirnoff brand and a future competitor for Jones Soda, received a top rating that was one of only three in the beverage sector and the only alcoholic beverage company to receive the Gold Class rating in the prestigious SAM Sustainability Yearbook 2011. This yearbook measures 2,500 of the worldâ&#x20AC;&#x2122;s

"Socially Responsible | Jones Soda Co." Home | Jones Soda Co. Web. 1 July 2011.

<http://www.jonessoda.com/company/socially-responsible>.

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largest companies based on their impact on the triple bottom line – economic, social, and environmental performance37. Although Jones Soda actively seeks new ways to enhance their corporate social responsibility practices by relying on consumer feedback, their strategy must be enhanced upon entering into the alcoholic beverage market in order to be recognized relative to this major competitor.

Philanthropic Initiatives Meeting Customer Needs Consumers are not only purchasers of products, but average individuals and members of an ever-changing, diversifying, and evolving society. Many companies underestimate the power that they can have on the perceptions of their consumers, and could improve these points of view by simply giving back. People are growing tired of companies looking solely at the bottom line, and doing whatever is necessary to make that figure grow. Instead, they are actively seeking organizations that give back to local communities and support causes that are in dire need of assistance. Jones Soda does just that; they have participated in charitable food and clothing drives as well as holding Free Soda Friday donations to various non-profits38. In addition, the company has donated $50,000 of all Holiday Pack sales to the Toys for Tots organization during the holiday seasons39. Other examples of their efforts include their participation of the American Diabetes Association’s “Tour de Cure” in 2005, where a series of cycling events were held in more than eighty cities nationwide in an effort to support the association and to increase awareness of the growing epidemic of diabetes. As shown in these few instances out of countless cases, Jones Soda Co cares about their consumers and the issues that are important to them.

Differentiation from Competitors Jones Soda Co is different from their competitors in that they still make significant contributions to communities across the United States and Canada despite their small size. Since this company frequently supports causes, sponsors aspiring athletes and musicians, and makes monetary as well as other forms of contributions to others, rather than focusing purely on the bottom line, they can be seen as one of the more philanthropic organizations in their industry. Although Diageo, the owner of Smirnoff, has been recognized for its outlook on the 37

"Gold Class Sustainability for Diageo." Mar. 2011. Web. 8 July 2011.

<http://www.diageo.com/Lists/Resources/Attachments/764/Sustainabilty%20Award%20for%20Diageo%20March%2020 11%20External.pdf>. 38

"Socially Responsible | Jones Soda Co." Home | Jones Soda Co. Web. 1 July 2011.

<http://www.jonessoda.com/company/socially-responsible>. 39Ariel,

Jackie, Dina Berman, and Chelsea Boryca. "Jones Soda Brand Audit." 2006. Web. 20 July 2011.

<faculty.ithaca.edu/shamula/docs/studentportfolios/imcbrandaudit.pdf>.

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triple bottom line40, it does not actively engage in community events, sponsorships, and other means of support as much as Jones Soda, thereby becoming a strength for this Seattle-based company.

Innovative Product Designs Meeting Customer Needs This Seattle-based company not only interacts with their customers, but allows them to customize Jones Soda Co products through flavor suggestions and personal photos for creating product labels. By doing so, their customers are provided with a sense of ownership and a feeling of empowerment by taking part in the production and marketing of a companyâ&#x20AC;&#x2122;s product. Therefore, Jones Soda Co meets the customer need for self expression and creativity by allowing them to take part in their business processes and be a part of the brand identity itself.

Differentiation from Competitors Many competitors interact with their customers through social media or the company website. However the majority (if not all) of them do not have the strategy of relying on the consumer to determine what the product is going to be. Jones Soda Co, however, takes the suggestions from their consumers and transforms them into actual products, thereby creating unique interaction, fostering long-term relationships, and providing a valuable experience for those who participate. Competitors may develop long-term relationships with their customers by having a presence on social media and providing consistent product offerings over an extended period of time, but does not involve their customers in the actual process.

Authentic Brand Image Meeting Customer Needs Due to the intense fragmentation of the media recently, consumers are growing increasingly confused by the advertisements that they are exposed to and often times cannot differentiate between one product and its competitor. For this reason, consumers respond favorably to brands that have distinct, authentic personalities that not only offer a unique value proposition, but make it easy for the consumer to make a purchase decision. In addition, consumers want to identify with a brand that exhibits similar personality traits, lifestyles, habits, attitudes, beliefs, and opinions because of their human need to belong and associate themselves with a group. Jones Soda Co satisfies this need by maintaining their sense of community, supporting local

"Gold Class Sustainability for Diageo." Mar. 2011. Web. 8 July 2011.

<http://www.diageo.com/Lists/Resources/Attachments/764/Sustainabilty%20Award%20for%20Diageo%20March%2020 11%20External.pdf>.

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artists, musicians, and athletes around the country and by having a consistent, lovable personality that consumers are proud and excited to relate to.

Differentiation from Competitors Many of Jones Soda Co’s competitors have an established brand image that has stayed consistent over the course of their history, providing valuable experiences with their consumers during this time. However, competing brands are not as interactive as Jones Soda Co, which relies on the consumer as part of its brand identity. Therefore, its brand image is more authentic than those of their competitors because it is based by those who consume their products, not the company itself.

Weaknesses New Entrant in Alcoholic Beverage Industry Meeting Customer Needs In going under the assumption that people don’t like to sway from brands that they are used to and have been loyal to for long periods of time, this could prove to be a sizeable weakness upon Jones Soda Co entering the alcoholic beverage industry. This skepticism would then lead to the Jones Soda Co’s Buz’d drinks not being able to satisfy the customer’s needs through lack of product consumption. Jones Soda Co would have to rely on the secondary target market for gaining brand popularity, stemming from the primary target market isn’t of legal drinking age.

Differentiation from Competitors In the alcoholic beverage world, having not established a strong brand presence in a particular industry, it would be difficult to get into desired markets. Therefore, the concept of Jones Buz’d could prove to have a rather large obstacle to overcome to avoid any negative differentiation from already established products in the alcoholic beverage markets such as Mikes Hard Lemonade or Smirnoff Ice. These brands, as well as Bacardi, have already developed a reputation for excellence for their product lines, which makes it difficult for a brand like Jones Soda to encourage brand switching of these consumers.

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Overly Innovative Meeting Customer Needs Jones Soda Co’s main target market consists of those in youth markets (12-19) and of those in an alternative lifestyle, of sorts. It would prove difficult to reach out to more mainstream or legal drinking aged target markets for the Buz’d product line, simply because of the established sense of creativity and uniqueness through their bottle labeling and flavors created and suggested by consumers.

Differentiation from Competitors With the direct competitors of the Buz’d product line being Mikes Hard Lemonade and Smirnoff Ice, this weakness differentiates Buz’d by directly competing with products that are established in the alcoholic beverage industry. Buz’d would benefit from having people refer to them alongside their major competitors then, perhaps, strive to establish a creative or unique name for their product. Jones Soda Co does possess the differentiation from their competitors by the labeling of their bottles and receiving suggestions for flavors of their beverages.

Appealing to Minors Meeting Customer Needs As previously stated, Jones Soda Co’s primary target market consists of youth markets ages 1219 and are involved in alternative or creative lifestyles. Since the Jones Buz’d product line is an alcoholic beverage, it obviously cannot be sold to minors. However, because current products contain appealing flavors, such as Blue Bubblegum, perhaps this segment might be encouraged to try the Jones Buz’d line before they are of legal age to consume alcohol. This could present a problem for Jones Soda Co upon entering the alcoholic beverage industry and therefore the firm should instigate certain measures in educating their current and potential consumers about the risks of their products and the importance of acting responsibly.

Differentiation from Competitors Mike’s Hard Lemonade and Smirnoff Ice don’t have a non alcoholic beverage line. Therefore, there is no problem with the competitors of Buz’d to market how they do. Smirnoff Ice and Mike’s Hard Lemonade can soley focus on marketing their products to people of legal drinking age. This is a clear weakness for the Buz’d line due to the fact that they would have to split in to two very diverse market segments, where their competitors would only remain in one and be able to divert all of their focus to their main product line. One split is for the primary target market (12-19) whom are consumers of Jones Soda. The other being that of the legal drinking age (21-30), Jones Soda Co’s secondary target market.

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Opportunities Shift in Customer Needs or Tastes Meeting Customer Needs In the United States, there has been a growing trend towards becoming healthier, not only by incorporating an exercise routine, but through the consumption of a wide variety of products available on the market today. Individuals are becoming more conscious of what they are consuming and the ingredients contained in them that can be potentially harmful to the human body. Due to this trend, consumers have adopted a taste for healthier alternatives, which primarily based on their perception of those particular products. One such product that has experienced a decline in demand happens to be beer, which is increasingly perceived as less healthy and exotic than its alcoholic beverage competitors, such as wine and spirits. In addition, bulk beverage sales have declined as a result of health-conscious individuals switching to highquality products in smaller quantities41. This trend presents an opportunity for companies within the breweries industry in the United States to produce their beverages either with healthier ingredients or through an improved production process that may reduce the negative impact on human health. Therefore, customer needs can be met by continuing to provide desired products that have been curbed to fit the healthier lifestyle that society has begun to adopt.

Time Horizon Since people have a growing concern about the products they consume, and will continue to demand that companies provide the safest, healthiest products as possible, it can be expected that this opportunity will persist indefinitely. However, this will not necessarily be a competitive advantage for long, since competitors may adopt this strategy within a short time frame of each other. Those who will not try to satisfy these customer needs will lose a significant amount of revenue the longer they resist this market and may also suffer from a damaged brand reputation if they do not comply.

New Technology Meeting Customer Needs The rapid growth of new technologies has not only enabled people from all of the world to stay connected with unlimited access to information, but has also given marketers a new way of

41 â&#x20AC;&#x153;Soda

Production in the US." IBIS World. July 2011. Web. 10 July 2011.

<http://clients.ibisworld.com/industryus/currentperformance.aspx?indid=285>.

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reaching the consumers within their target market. For example, there has been extensive use of social media sites for brands to interact with their consumers and a boom in the creation of tablets, smart phones, and other electronic devices that allow the user to stay connected; through these products, users can be exposed to marketing messages and apps from various companies, thereby creating an opportunity for marketers to alter their promotional strategies. Consumers can even make purchases in-store using their smart phones by scanning the barcode displayed on the screen. The opportunity of new technology relates to serving customersâ&#x20AC;&#x2122; needs because it allows them better accessibility to information, promotional materials and convenience is greatly improved, which only enhances their experience with the brand. Increasing brand awareness and image amongst consumers not only leads to brand liking and preference, but will also lead to an eventual purchase.

Time Horizon Since technology evolves so rapidly in such a short period of time, there will always be an opportunity for marketers to utilize new technologies to their benefit. Despite the fact that products are continually replaced with newer, updated and often times more advanced versions of the same brand or a competing one, marketers still need to take advantage of these avenues in order to reach their consumer base. Given that not every individual is an innovator or early adopter, it would be wise for companies to continue to use previous forms of technology as well as new ones.

Globalization Meeting Customer Needs Due to the weakening dollar and improved international distribution channels, the level of exports has grown despite the recession that began in 2008. During 2011, exports are expected to account for 11.8% of total industry revenue, or $3.2 billion, primarily due to the enormous growth in Canada, Mexico, and China42. Due to this heightened volume of international trade, Jones Soda Co has the opportunity to further expand their products to other countries, thus appealing to other target segments and increasing their consumer base. By making their products available abroad, Jones Soda Co will be able to satisfy the needs of prospective consumers by providing them with a unique experience and by forming a relationship with them through their authentic and personable brand.

42 â&#x20AC;&#x153;Soda

Production in the US." IBIS World. July 2011. Web. 10 July 2011.

<http://clients.ibisworld.com/industryus/currentperformance.aspx?indid=285>.

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Time Horizon Since the amount of revenue for the industry is increasing in regards to exports, in addition to economic growth in other countries such as Canada, Mexico, and China, it can be speculated that this trend will continue for at least another 3 to 5 years. Of course, the assumption being made is that global demand will either remain steady or continue to increase as other countries experience future growth.

Threats CSD (Carbonated Soft Drink) Competitors Enter Alcoholic Beverage Industry Meeting Customer Needs This venture would prove to be nothing but ideal for customers. Simply because there would be more products on the market for the consumer to potentially enjoy. However, this threat would, potentially, impose some serious cuts into the market share for the Buz’d product line. If the major soft drink competitors were to launch a successful product into the market that would result in less sales and or market share for the Buz’d line. It would be in the customer’s best interest if there were more product options on the market to choose from, however, considering the size of Jones Soda Co compared to its main competitors of Coca-Cola and PepsiCo, could deflate any attempts for Jones Soda Co to remain popular in the alcohol beverage industry due to the size and established market and product history that both PepsiCo and Coca-Cola hold.

Time Horizon Given the size and power of Coca-Cola and PepsiCo, this potential threat could prove to be imminent at any moment they feel they want to explore new ventures. It is quite difficult to neutralize such a potentially powerful threat without an innovative product line such as Jones Soda Co’s Buz’d, and their unique bottles and direct customer involvement for what goes on the bottles and what flavors of beverages they would like to partake in.

Mike’s Hard Lemonade and/or Smirnoff Ice Enter CSD Industry Meeting Customer Needs As creative of an idea this may be for Mike’s Hard Lemonade and Smirnoff Ice to enter the soft drink industry; it still gives added value to any or all customers. Simply because there would be more products on the market for the consumer to potentially enjoy. This could saturate the soft drink market with an innovative beverage from these well-known alcoholic beverage

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participants by incorporating some well-known alcoholic beverage vendors putting a seemingly â&#x20AC;&#x153;grown upâ&#x20AC;? twist on to the soft drink markets, only because they produce alcoholic beverages. However, there may be some hesitation from customers simply because they would be buying products from a well-known alcoholic beverage supplier. From the standpoint of the parents or guardians who are purchasing Jones Soda Co products for the target demographic of 14-19 year old people could influence their decisions to buy soft drinks from well know alcoholic beverage vendors. This may prove a difficult hurdle to jump for Jones Soda Coâ&#x20AC;&#x2122;s major alcoholic beverage competitors.

Time Horizon As established and well known as these competitors are, the time line could make this threat imminent or simply nonexistent. Meaning if Jones Soda Co were to be successful in the alcoholic beverage market as an established, well known soft drink vendor, their competitors could think that it would work the other way for them, thus making the timeline quite volatile and difficult to predict. Furthermore, these competitors may feel as if it is a smart move to enter the soft drink industry. However unlikely this may be with very established competitors already in place in that particular market.

Increased Government Regulation Meeting Customer Needs Until recently, the growing trend in the alcohol beverage industry was to include caffeine. They were deemed unhealthy by the government, thus leading to the products being regulated and in turn taken off the shelves of all markets sold in retail outlets43. For this reason, Jones Soda Co is not going to be taking part in caffeinated alcoholic beverages. These increased regulations could very well grow into a rather tedious uphill battle for companies trying to enter the alcoholic beverage industry, thus making it that much more difficult for the customer to get the products they desire. For example, the Four Loco brand has been pulled from shelves all over the country and has forced the company to drastically change the ingredients in their products. This has become an uphill battle for Four Loco to reinvent their brand to meet government regulations, and other brands of this kind will likely face a similar fate 44.

43 "House Votes to Ban Caffeinated Alcoholic Beverages - SC Politics Today - TheState.com."

TheState.com: South

Carolina's Source for News, Politics, Weather and Sports. Web. 11 July 2011. <http://www.thestate.com/2011/02/09/1686329/house-votes-to-ban-caffeinated.html>. 44 "The Rise and Fall of Four Loko - The Week."

The Week Magazine: Political News and Cartoons, Current Events and

Entertainment Online. Web. 12 July 2011. <http://theweek.com/article/index/209434/the-rise-and-fall-of-fourloko>.

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Time Horizon Given that it is the government that passes down regulations on corporations and their products, it is difficult to predict if or when it will actually take place. In some cases, it takes years for new regulations to get put into action, as such with the Four Loko case where it took five years from 2005 to 201045. Therefore, it is very difficult to predict any potential regulations that would be passed that might affect the Jones Buz’d product line or how long that process would take if such an event occurs.

Economic Downturn Meeting Customer Needs Economic recessions have lead to high unemployment rates which shape consumers into much more cautious spenders. Thus, major competitors in the industry like Smirnoff Ice and Mike’s Hard Lemonade have a competitive advantage that is greater than other products on the market, simply due to their familiarity and strong brand recognition. In addition consumers tend to be more health conscious when it comes to food decisions, therefore altering or placing heavy influence on what they decide to spend their disposable income on 46. Due to the effect of an economic downturn on target market’s disposable income, their needs fluctuate to accommodate their smaller budgets and needs to be acknowledged by firms in this industry in order for consumers to consider their products.

Time Horizon From an economics perspective, the typical business cycle occurs every 8 to 11 years, beginning with an expansionary period (growth) and ending in a recessionary period (decline) 47. However, economics is based on theories and trends; therefore it is never 100% accurate in predicting future market growth or decline.

"The Rise and Fall of Four Loko - The Week." The Week Magazine: Political News and Cartoons, Current Events and Entertainment Online. Web. 12 July 2011. <http://theweek.com/article/index/209434/the-rise-and-fall-of-four45

loko>. 46

Jones Soda CEO to Step down. Web. 7 July 2011. <http://www.seattlepi.com/business/article/Jones-Soda-CEO-to-

step-down-1257761.php>. 47

"Business Cycle." Wikipedia, the Free Encyclopedia. Web. 13 July 2011.

<http://en.wikipedia.org/wiki/Business_cycle>.

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SWOT Matrix

STRENGTHS

OPPORTUNITIES

Unique Customer Relationships

Shift in Customer Needs or Tastes

Established Green Practices New Technology Philanthropic Initiatives Globalization Innovative Product Designs Authentic Brand Image WEAKNESSES

THREATS

New Entrant into Alcoholic

CSD (Carbonated Soft Drink)

Beverage Industry

Competitors Enter Alcoholic Beverage Industry

Overly Innovative Mikeâ&#x20AC;&#x2122;s Hard Lemonade and/or Appealing to Minors

Smirnoff Ice Enter CSD Industry Increased Government Regulation Economic Downturn

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Competitive Advantages Through the fostering of unique customer relationships, innovative product designs and authentic brand image, Jones Soda Co has been able to continuously utilize feedback from their consumers to make improvements to their corporate strategies and objectives. These factors have become strengths for the firm because it allows them to listen to the consumer, have an accurate picture of what their wants and needs are, and has enabled them to take action accordingly. Since consumers are given power to make product suggestions, request healthier ingredients, and participate in the labeling and packaging of their products, the company is able to stimulate unbreakable brand loyalty and meet the demands of their customers. For these reasons, Jones Soda Co is able to match the shift in customer needs and tastes on a continual basis, thereby making it possible to beat competition by being the first mover. There have been several trends that have affected the industry, such as the move towards being greener and more health-conscious, and Jones Soda has responded to these demands by using pure cane sugar in all of their products rather than high fructose corn syrup and by modifying the materials used in the product design as well as in packaging. In addition, the company has established a regional network with suppliers to reduce the amount of carbon gas emissions through extra miles driven by their trucks. On the company website, they even allow their consumers to suggest other ways of improving their sustainable efforts in addition to healthier ingredients48. Through the rapid development of new technologies, companies are finding innovative ways of reaching their target customers. Due to the high interactivity that Jones Soda Co employs with its consumer base, these new devices can allow improved connectivity and brand loyalty amongst existing as well as prospective consumers. This opportunity to expose potential users to the firmâ&#x20AC;&#x2122;s marketing messages through electronic products such as iPads and smart phones will only improve Jones Soda Coâ&#x20AC;&#x2122;s brand awareness, preference and eventual purchase of their products. Due to the substantial increase of exports in the brewing industry, this provides an opportunity for Jones Soda Co to develop, market, and distribute Jones Buzâ&#x20AC;&#x2122;d on a global scale. As mentioned earlier, exports are expected to account for 11.8% of total brewing industry revenue this year, or $3.2 billion, primarily due to the enormous growth in Canada, Mexico, and China49. 48

"Socially Responsible | Jones Soda Co." Home | Jones Soda Co. Web. 1 July 2011.

<http://www.jonessoda.com/company/socially-responsible>. 49

"Breweries in the US." IBIS World. May 2011. Web. 15 July 2011.

<http://clients.ibisworld.com/industryus/competitivelandscape.aspx?indid=288>

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A greater presence abroad would allow Jones Soda Co an opportunity to expand their brand image and meet the needs of consumers in different countries for a refreshing product and unique, customer-oriented brand that they can identify with through similar psychographic, lifestyle, and behavioral characteristics. These capabilities and competitive advantages are grounded in the basic principles of customer intimacy, something that many companies fail to offer. These are made apparent to customers through the extensive interaction of the Jones Soda Co brand through multiple outlets such as the company website, social media, event sponsorships, support of aspiring musicians, and philanthropic initiatives throughout the United States and Canada. Although being a new entrant can be seen as a potential weakness for Jones Soda Co in the alcoholic beverage industry for lack of an established brand image and reputation, it can also be an appealing attribute. Brands that have been in existence for a long period of time have likely experienced difficulty in creating innovative products, promotions, and relationships with their consumers. They rely on their own ideas for beverage creation and have a less accurate picture of their customer wants and needs versus if they utilized Jones Soda’s strategy of incorporating the consumer ideologies in the process. Therefore, although Jones Soda Co is a new entrant into this industry, it will rely on its current consumers who are of legal age to drink alcohol, as well as prospective consumers who may be tired of the same old flavor offerings from the same competitors who lack a strong brand personality. Many of Jones Soda Co’s products consist of unconventional flavors, and although they are created based on consumer ideas, they could be a turnoff for potential customers of Jones

Buz’d. However, this weakness can be minimized by providing permanent flavors that are more pleasant to the human palate such as root beer and cream soda in both existing Jones products and the new Jones Buz’d line. Other permanent flavors can be selected by consumers based on majority vote through surveys or social media devices such as Facebook. Some of the firm’s distribution channels are potentially disconcerting as well, such as the presence in tattoo parlors which could affect how individuals perceive the brand. Those who go into such places do not always pertain to a particular lifestyle that is associated with those in Jones Soda Co’s target market. Therefore, although they do not pertain to the target market, they could potentially spread negative word of mouth to those who are. This aspect of the firm’s overly innovativeness could be reduced by modifying how Jones Soda Co products are displayed in such unconventional locations; perhaps providing the beverages in a vending machine would improve the perceived cleanliness of the product so that the rough environment would not overpower the brand image.

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At the present, Jones Soda Co’s products cater to a younger segment of their target market consisting of 12 to 19-year olds and offer trendy flavors such as Blue Bubblegum; this could mean that Jones Buz’d coolers might appeal to segment as well due to their flavor selection, thereby unintentionally encouraging under-aged individuals to consume alcohol. To minimize this weakness, Jones Soda Co should instigate programs to educate minors about alcohol, the consequences of their illegal consumption, and encourage them to be responsible and wait until they are of legal age.

Strategic Focus The ideal strategy for the Jones Soda Co marketing plan is based on opportunities that lie before us, using the company’s creativity infrastructure already in place by means of the labeling methods and flavor suggestions provided by and voted on by consumers. This diversification strategy is set out to introduce a new alcoholic beverage line to the alcoholic beverage markets, branching off from the already established soft drink market in which Jones Soda Co was born into. This diversification will benefit from a large young adult population between the ages of 21 to 30. For this launch, the product introduced will be named Jones

Buz’d. This name serves to be as creative as the Jones Soda Co brand currently strives to be. The overall strategic focus is to position Jones Buz’d to be the most desired alcoholic beverage due to the creativity and innovation of the Jones Soda Co labeling, bottling, and flavor creation methods. With regards to distribution and access, Jones Buz’d will readily be available for sale through traditional grocery stores (QFC, Haggen, Albertsons, and Trader Joes) and major retail outlets (Costco, Wal-Mart, and WinCo). In addition, Jones Soda Co will also aggressively pursue more nontraditional grocery store outlets such as Trader Joe’s and food co-ops. Being that Jones

Buz’d is an alcoholic beverage, it cannot be sold with regular Jones Soda products in the obscure venues such as tattoo parlors and skateboard shops because of the alcohol regulations that exist.

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Marketing Goals and Objectives With heavy regards to the SWOT analysis, the following marketing goals and objectives have been brought to light to provide a path for the Jones Buz’d line to follow in order to make a successful stake in the flavored alcoholic beverage market.

Marketing Goal A: To introduce Jones Buz’d in to the alcoholic beverage market utilizing the creative and innovative labeling, bottling, and flavor creation methods that Jones Soda Co currently uses. Jones Soda Co’s emphasis on creativity and customer intimacy are the driving forces of this marketing plan. One of the many demands by consumers is the presence of creative or innovative products in a market that is already filled with alcoholic malt beverages, thanks to competitors such as Mike’s Hard Lemonade and Smirnoff Ice. What lies in this demand is where Jones Soda Co will set themselves apart from their competitors through their direct involvement with the customers for the flavors of their beverages and the decoration of the bottles. In addition, the Jones Soda brand has the unique characteristic of having an established presence in the markets with regards to alternative lifestyle demographics by reaching out to them in obscure venues with like skateboard shops and tattoo parlors, for example. Although the company will not be able to sell the Jones Buz’d in these obscure shops, the brand name will still reach those in these locations thanks to the Jones Soda soft drink products.

Objective 1: Obtain a 5% portion of the market share in the alcoholic beverage industry, given the size and scope of the major competitors already in place, for example Mike’s Hard Lemonade and Smirnoff Ice, within a 2 year timetable from the product being launched on April 1, 2012. Since the main competitors, Mike’s Hard Lemonade and Smirnoff Ice, have a major presence in the alcoholic beverage industry and have little or no creative aspects to the marketing of their products in comparison to Jones Soda Co’s tactics, Jones Buz’d will be positioned to take advantage of this shortcoming. However, Mike’s Hard Lemonade has interesting marketing campaigns with regards to their humorous television commercials, and Smirnoff Ice has an interesting social media presence via Facebook. Therefore, Jones Soda Co possesses and holds in tight regard the notion of customer intimacy, by actively seeking customer involvement

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through outlets such as social media and direct mail, for input as to flavors of their beverages and the decoration of the bottles.

Objective 2: Obtain 75% awareness in the alcoholic beverage industry so that the majority of individuals recognize the Jones Soda brand name within 12 months after the product launch on April 1, 2012. As the presence continues to grow for the Jones Buz’d product line, the availability of these coolers will become more easily accessible for consumers to purchase and enjoy through increased brand awareness. The consumer will also correlate the unique refreshment of the Jones Soda products, in regards to the consumer involvement with the influence of the flavors and décor of the bottle, with the Jones Buz’d line. In addition, consumers will be aware of the Jones Soda Co’s unique value proposition balancing refreshment, customer intimacy, and social responsibility making the consumer aware of the Jones Buz’d product line. Using Jones Soda Co’s soft drink line as a foundation, the brand is already established and boasts unique refreshment, thanks to consumer suggestion, thus harboring customer intimacy by their direct involvement. In addition, Jones Soda Co is also well known for their green practices by using recyclable and recycled materials.

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Marketing Strategy Introduction Overall Marketing Goals

Product Strategy

Growth

Maturity

Decline

Transition Jones to

Increase product

Continually

Having gained

caffeinated alcoholic

awareness and

increase market

brand awareness,

beverage market;

market share

share through

maximize profit

position as a cooler

through sales to

increased online

through reduced

for creative

users of other

presence and event

promotional efforts.

refreshment.

coolers.

sponsorships.

Jones Buz’d will be

As sales increase

The product line

The most popular

offered in one classic

and positive

will be perceived as

flavors of Jones

flavor to be

feedback is

the cooler created

Buz’d will remain on

determined by

acquired, Jones

by the consumer

the market; other,

consumer

Buz’d will be

and will sustain a

less popular flavors

suggestions.

available in multiple

unique reputation.

will be dropped.

flavors.

Pricing Strategy

Penetration pricing to

Nonprice strategy

Promotional

Prices will stabilize

establish a presence

to emphasize high

discounting to

relative to

in the flavored

quality ingredients,

generate

competing flavored

alcoholic beverages

authentic brand

excitement

alcoholic beverages,

market

image, customer

amongst consumer

but at a lower level.

intimacy, and

base; sales will be

customization.

conducted

Gradually roll out

Intensify efforts to

Extensive product

Maintain a level

Jones Buz’d product

expand Jones Buz’d

availability; retain

necessary to keep

line to expand

reach and

shelf space; phase

brand loyal

availability

out unprofitable

customers of Jones

outlets or channels

Buz’d; continue

Distribution availability; get channel Strategy

intermediaries on

phasing out

board

unprofitable channels

Promotion Strategy (IMC)

Institutional

Aggressive brand

Stress differences

Reduce to a

advertising and PR to

advertising of Jones

of Jones Soda brand

minimal level

build awareness

Soda and sales

and its benefits;

promotions to

encourage brand

switching; keep

switching and

brand and Jones

continued trial

Buz’d product fresh

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Primary Target Market Previously stated in the situation analysis, the primary target market for Buz’d consist of both men and women between the ages of 21 and 34, who have an annual household income of $40,000 or more. In addition, this segment consists of all races that have attended college or have achieved an even higher level of education, from all regions across the country. When it comes to psychographics, our target audience (those who drink coolers or flavored alcoholic beverages) is extremely family-oriented, has an active lifestyle, and is conscious of the image they project to those around them. Those in this segment are also adventurous, creative/artistic, faithful/spiritual, and care about the environment and the factors that have a negative impact on the natural world (Appendix 1). The consumers in our target market value the means to express themselves in a unique fashion not only by the products they buy, but also by the way they live their everyday life. They have alternative types of lifestyles, meaning they place heavy value in the activities, events, art and music that comprise who they are as individuals. The people in our target enjoy partaking in socially responsible events and promoting green habits within their communities. In addition, they frequent major sporting events, surround themselves with people similar spiritual beliefs, and strive to find adventure in the world with people who have lifestyles close in comparison. In terms of alcoholic refreshment, the primary target market seeks a beverage that provides refreshment as well as a unique flavor and bottle decoration that has been influenced by them as well as other consumers. Another characteristic of these individuals is that they try to live within their means, and choose to shop at grocery stores which harbor a green and healthy array of products. However, when it comes to buying products, like Jones Buz’d that provides a unique sense of expression, they don’t mind spending a premium for a product that represents them and is a part of their identity. Finally, our target prefers to enjoy the beverage amongst friends, colleagues, and family since Jones Buz’d is associated with the social scene.

Product Strategy The company’s main objective with the product line is to increase brand awareness through its interactive relationships with consumers, in addition to its unique flavors, labels, and packaging methods. By utilizing this competitive advantage of customer intimacy and unique product differentiation, the firm strives to obtain more brand loyal consumers in both the flavored alcoholic beverage and caffeinated soft drink markets. Jones Soda Co has decided to name the new product line Jones Buz’d® in the flavored alcoholic drink beverage category in order to remain consistent with its brand personality that is already

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expressed through its current products. For example, the use of “WhoopAss!” as the name of its energy drink line and “Zilch” for its zero-calorie beverages, reiterates the brand’s unique and innovative nature. Therefore, the name “Buz’d” was strategically selected to inspire curiosity amongst prospective consumers who may be users of competing beverages, in addition to current consumers who would experience a heightened sense of connectivity with the Jones Soda brand. The labeling for Jones Buz’d will consist of the brand name “Jones” in similar copy as in the logo, with the specific name of the product “Buz’d” directly underneath. At the bottom of the label, the personal photos submitted by consumers will be displayed, as Jones Soda Co currently does for its current product lines. When it comes to the packaging, the company will continue to use environmentally friendly glass bottles and post-consumer recycled material in product manufacturing. Trays are also made from 35% post-consumer recycled material and have transitioned from 6-pack to 4-pack carriers in order to reduce cardboard use. The packaging will also emphasize the labeling of the bottles by having white copy on a black background in addition to personal photos submitted by consumers through the company website. By utilizing a consistent color scheme as well as package and product design, Jones Soda Co will be able to effectively communicate the brand to its current and prospective consumers. One of the features provided by Jones Buz’d is the innovative, refreshing flavors that are not offered by competing products, such as Green Apple, Strawberry Lime, Orange Cream Soda, and other flavors suggested by their consumers. In addition, the company will offer seasonal variations for Jones Buz’d coolers to maintain consistency with current product lines. Another feature of the flavored alcoholic beverages is the high quality ingredients including pure cane sugar, flavoring, and malt liquor. Jones Soda Co anticipates that the alcohol content will be between five and eight percent, based on its primary competitor Mike’s Hard Lemonade. 50 The primary benefit of Jones Soda products is psychological, and is provided to customers through the fostering of unique personal connections with their consumers. This is accomplished by allowing them to provide their input throughout the creation of their products, from cradle to grave. By giving them freedom of expression, a sense of empowerment, and the peace of mind that they are supporting a company that engages in transparent, sustainable, socially responsible activities, their psychological needs are being met. The final benefit of the 12 ounces of flavored coolers is the pleasant experience that is obtained in the social scenes where this product tends to be consumed, or the heightened relaxation after a long day of work.

"Mike’s Hard Lemonade Calories." AboutCalories.com. Web. 15 July 2011. <http://aboutcalories.com/mikes-hard-

lemonade-calories/>.

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Jones Soda Co’s product differentiation will consist of unique bottle labels and flavors as requested by consumers. By producing beverages with unheard-of flavors such as Beef Jerky and using personal photos from their customers for their labeling strategy, the company is able to position itself closer to individuals than its competitors, on a personal level. The degree of customer intimacy will be their competitive advantage and will allow Jones Soda Co to successfully break through the clutter amongst the marketplace today. This would make the brand more easily identifiable, even though it is a relatively small firm compared to Mike’s Hard Lemonade and Smirnoff Ice. The organization intends to expand to a new market, flavored alcoholic beverages, in order to expand their target audience to individuals between the ages of 21 and 35 in hopes of increasing brand awareness and improving brand image. A supplemental product that Jones Soda Co has is their music program called “My Jones Music,” which supports local, regional and national music scenes. The purpose of the independent music program is to serve as an alternative option for music lovers and musicians to network and share learning experiences from one another. The music site provides database, links and resources to assist upcoming artists in gaining a following and support from others that are representative of a similar lifestyle. The symbolic and experiential attribute is to not conform to what is known as mainstream, which is one of the valuable benefits provided by this product line. One of main core components of the Jones Buz’d is the psychological benefit through the use of personal connections their consumers receive through the website, as well as serving as a beverage that can help satisfy thirst and can be used for social experience.

Pricing Strategy Consumers of Jones Soda Co products have demonstrated that price is not the primary determining factor when deciding to purchase. Brand personality, reputation, and image are more important to this market in addition to the company’s actions regarding corporate social responsibility. By positioning Jones Buz’d as the innovative cooler designed by the consumers themselves and by securing a strong presence through the interactive company website, social media sites, and event sponsorships, the affordability of Jones Buz’d coolers will not be the primary focus of its appeal. Through the use of a nonprice strategy, Jones Soda Co will be able to emphasize the unique features, benefits, quality, customer service and packaging of Jones Buz’d. This will be done in order to make the product stand out against the competition, which will likely offer coolers or substitute products at lower prices. To be successful with its nonprice strategy, Jones Soda Co will continue to utilize the same bottling, labeling, and flavor idea generation techniques as it

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does for its current offerings. The firm is able to foster exclusive relationships with its customers by taking their suggestions and putting them into action. Through such an intimate connection, the company is able to provide an exceptional value proposition to every individual who can take the Jones Soda brand and make it their own through their feedback to the company, where they can enjoy watching their ideas come to life. A profit-oriented objective will be chosen by Jones Soda Co in order to maximize the price relative to the prices offered by competitors. The company will also aim at the product’s perceived value to its customers through the use of a strategically formulated value proposition as mentioned earlier. Jones Soda Co will examine the offering provided by their main competitors in the alcoholic beverage industry, Mikes Hard Lemonade and Smirnoff Ice, and then adjust their prices accordingly with regard to its brand image, brand reputation, and high quality. Therefore, the firm will emphasize quality and perceived value while simultaneously adjusting their prices to be relative to the competition.

Prices of Competing Products

(Appendix 2)

Competitor

Size Name

Case Size

Case Price

Unit Price

Mike’s Hard Lemonade, 6pk

12 oz

$29.99

$8.69

Smirnoff Ice, 6pk

12 oz

$29.99

$8.69

Bartles & James, 6pk

12 oz

$26.99

$4.89

Seagram’s, 6pk

12 oz

$24.99

$4.49

Bacardi Mojito, 6pk

12 oz

$30.65

$8.69

Due to the use of high quality ingredients, an authentic brand image, and the involvement that Jones Soda Co has with its customers in product creation, Jones Buz’d coolers will be priced higher than the competing products listed in the table above. However, they will still be priced relative to the competition as to not deter prospective consumers away from the new product line. For the reasons already mentioned, the 12 oz Jones Buz’d coolers will be priced 10% higher than its primary competitors, Mike’s Hard Lemonade and Smirnoff Ice as shown in the table below:

Jones Buz’d, 4pk

Size Name

Case Size

Case Price

Unit Price

12 oz

$32.99

$5.49

Ten percent was also chosen while keeping in mind the awareness of the Jones Soda Co brand relative to those of Mike’s Hard Lemonade and Smirnoff Ice, in addition to the brand loyalty that

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exists amongst consumers in this market. Therefore, a higher percentage would not be desirable as it would discourage many individuals from brand switching. Another point that should be mentioned is Jones Soda Co’s efforts towards reducing their environmental footprint. The firm continuously strives towards sustainability and does so through the development of a more low profile design by packaging their products in 4-packs. For this reason Jones Buz’d will be similarly packaged and priced at $1.38 per bottle, or 10% above the prices of Mikes Hard Lemonade and Smirnoff Ice (Mikes Hard Lemonade and Smirnoff Ice case price / case size = $29.99 / 24 = $1.25 per bottle * 1.10 = $1.38 per bottle of Jones

Buz’d). Due to the fact that a 4-pack is being used instead of a 6-pack for competing products, the unit price for Jones Buz’d is lower, which should not be confused with having lower overall price and quality than Mikes Hard Lemonade and Smirnoff Ice. Using the data presented for the breweries industry on IBISWorld51 and Jones Soda Co’s objective of obtaining 5% market share with the Jones Buz’d cooler line, the anticipated profit margin will be approximately 11.23% (Appendix 6). As mentioned earlier, Jones Soda Co will ultimately utilize a nonprice strategy with its new product line. However, it will only do so after engaging in a penetration pricing strategy at the launch of Jones Buz’d on April 1, 2012 in order to influence the purchase decision of prospective customers. By temporarily pricing the coolers below the competition, consumers will be prompted to try the new product line, and perhaps brand loyalty will be built after this initial purchase decision. Loyalty can be further induced if the customer seeks connectivity with the brand via the internet, when they learn of the company’s dedication to the people that purchase their products, in addition to their communities. Due to the fact that consumers are more price sensitive to this market during the introductory stage of the product life cycle, various pricing tactics are going to be conducted. By using oddeven pricing, the perceived cost to the consumer will be reduced, thereby giving them the impression that Jones Buz’d has less of an impact on their pocketbook. In addition, Jones Soda Co can use promotional discounting to get their customers excited about the new product line; this can be achieved by having sales before the warmer months leading up to summer, which would elicit positive feelings amongst consumers towards the Jones Soda brand. Due to the availability of many product substitutes, noticeable differences between competing products,

"Breweries in the US." IBIS World. May 2011. Web. 24 July 2011.

<http://clients.ibisworld.com/industryus/competitivelandscape.aspx?indid=288>.

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and the ease of price comparisons for customers, these tactics must be implemented to ensure a successful transition from the introductory stage to the growth stage of its life cycle.

Distribution and Supply Chain Strategy The distribution strategy for Jones Buz’d contains several approaches. For the product launch, there will be a need for ample shelf space to bring our product to better light. This space will be sought after in traditional venues like convenience stores (7-Eleven) and gas stations (Shell and Chevron) in addition to larger retailers such as grocery stores and food co-ops. Once the launch phase has passed and Jones Buz’d is in the growth stage of its life cycle, the distribution strategy will reach out to additional venues including sporting and concert events, and properly themed restaurants and bars that cater to the target market. Furthermore, while in the maturity stage of its life cycle, Jones Buz’d will aim to phase out the more unprofitable channels in their distribution. While in the decline phase, the remaining venues will either reduce the shelf space of Jones Buz’d or discontinue carrying it entirely. However, in convenience and grocery store outlets, a necessary level of the coolers will be available to continue product exposure in order to keep the loyal customers purchasing our flavored alcoholic beverages. Where Jones Soda Co differentiates its distribution strategy from their competitors is in their ability to reach out and gain heavy customer intimacy in the production of their beverages. By allowing their consumer base to contribute in product idea generation for Jones Buz’d as they do for their current product lines, the company provides individuals with a product essentially created by the consumer themselves. With regards to Jones Soda Co’s connection to value, it lies within their ability to provide and distribute a product to a multitude of previously mentioned venues, all the while providing a beverage that has been flavored by the customers’ influence. In addition, the beverage has been decorated by the customer in the form of the labeling of the bottles with their personal photos. To ensure marketing channel support for Jones Buz’d, we will rely on intensive distribution. This strategy makes the product line available at the maximum number of merchants or retailers in each area to gain as much exposure and as many sales opportunities as possible. Being that this is a convenience good, this strategy is the best fit for the Jones Buz’d. However, there is much competition when relying on intensive distribution due to the large amount of competitors distributing their products in the same manner, such as Mike’s Hard Lemonade and Smirnoff Ice. Due to the fact that Jones Soda Co currently distributes their products to many well-known retailers and other outlets across the country, it will not be difficult to encourage channel members to accept the new product line. Although additional fees may be incurred for

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taking up additional shelf space, Jones Soda Co has strong referent power over those within the supply chain and will likely be able to include Jones Buz’d through these channels. Jones Soda Co will be able to maximize the time, place, and possession utility of its customers through various retail outlets as well as grocery stores and convenience stores, some of which are open 24 hours a day. These locations will be dispersed throughout the country, thereby allowing individuals to pick up a 4-pack of the coolers as they do during their regular grocery shopping. Not only can customers enjoy purchasing Jones Buz’d in these physical locations, but on the company website as well. Therefore, every visitor to the website is able to make a product selection and then order their flavored alcoholic beverages to be delivered to the address provided. Given that the product contains alcohol, the person who made the order would have to verify that they are of legal age to consume alcohol upon receipt of their Jones

Buz’d coolers.

Integrated Marketing Communication Strategy (Promotion) The overall strategy for Jones Soda Co’s integrated marketing communications is to improve awareness of the brand through existing and new outlets, while maintaining the image of the company and continuing to cater to alternative and individualistic lifestyles of its target audience. Although the company has traditionally avoided mainstream media to differentiate itself from the competition with its indie, hip, and grassroots personality, there is an opportunity for Jones Soda in cable television advertising that would be consistent with their image while simultaneously making their brand more well-known amongst members of their target audience.

Cable Television Advertising When evaluating the results from MediaMark regarding the cable television media habits of adults between the ages of 25 to 34, it was discovered that these individuals are 70% more likely than average to watch MTV (Appendix 3). Since these results are for all people within this age segment, not including those who consume coolers, the data was cross-referenced to determine if this media selection was accurate for Jones Soda Co’s particular target audience. After evaluating the results from MediaMark Product, we learned that those who have consumed flavored alcoholic beverages in the past six months are 40% more likely than average to watch MTV (Appendix 4). Since Jones Soda Co has been struggling in the marketplace today with its current product lines, and the fact that the company is entering a new market with its Jones

Buz’d coolers, the firm cannot afford other cable television channels. Therefore, the company

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will rely on this outlet in addition to its current promotional methodologies such as its interactive company website, its social media sites, and myjonesmusic.com. During the introduction stage of the Jones Buz’d life cycle, institutional advertising will be utilized, thereby promoting the Jones Soda Co’s image, ideas and culture with the goal of maintaining overall corporate image for current customers. The firm will also be creating this persona for prospective customers who are within the company’s target audience who may not be aware of the brand. During the growth stage of the product line’s life cycle, product/brand advertising will be conducted to promote the image, features and benefits of Jones Buz’d. The goal of this approach is to increase customer interest and awareness for this particular product line over the competition’s offerings in the flavored alcoholic beverage category. Ultimately, Jones Soda Co hopes to build brand awareness to a level of 75% by April 1, 2013 or one year after the product launch, not only to be in the evoked set in the minds of their current and prospective consumers, but in the consideration and choice sets as well.

Overall IMC Budget In order to calculate the overall IMC budget, Jones Soda Co will utilize an objective and task approach because it would provide the best budget estimation in comparison to the other budgeting methods. For example, the percentage of sales approach assumes that sales creates advertising and may lead upper management to make the wrong decision to cut advertising when sales decline. When it comes to the competitive matching approach, the company would be under the assumption that its competitors have the same cost structure and could be misleading. Finally, the arbitrary approach is solely based on intuition, which lacks an objective and logical component. Their overall budget is $20,000 ($15,000 for the cable television advertisement on MTV, for 1 million views52).

Public Relations In addition to advertising through cable television, Jones Soda will continue to participate at a grassroots level by attending alternative sporting events like BMX, snowboarding, and skateboarding competition and sponsoring the athletes that compete in them. The company will also continue to tour the country in vans that have been painted to display the upcoming

Jones Buz’d coolers line, and will visit destinations pertaining to the target audience’s lifestyle characteristics, such as music venues where upcoming artists will be performing. Finally, Jones Soda Co will continue to support environmental efforts in addition to philanthropic initiatives,

Watt, Ian. "Strong Viewership Can Give MTV Leverage to Grow Ad Pricing - NASDAQ.com." NASDAQ Community Home. 19 Feb. 2011. Web. 22 July 2011. <http://community.nasdaq.com/News/2011-02/strong-viewership-can52

give-mtv-leverage-to-grow-ad-pricing.aspx?storyid=58438>.

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as mentioned earlier in the plan.53 Therefore, the public relations strategy is to continue to foster unique, long-term, value-added customer relationships by being actively involved in communities across the country, and catering to the alternative needs of the target audience.

Sales Promotions To ensure integration with its other promotional elements, Jones Soda Co will implement a contest for its customers, who will be asked to submit their personal videos for the purpose of becoming the companyâ&#x20AC;&#x2122;s advertisement on MTV. The videos will be available to all visitors to their Facebook page, and the one with the most votes will be selected to represent the brand on cable television. This will further emphasize the firmâ&#x20AC;&#x2122;s competitive advantage of customer intimacy, by allowing consumers to be involved with the brand with its new product line and providing customers with a sense of ownership and feeling of empowerment. Other than a contest, Jones Soda Co will engage in point-of-purchase displays, such as posters, stickers, table cards, shelf danglers and post cards that they utilize for their current product offerings.

Ariel, Jackie, Dina Berman, and Chelsea Boryca. "Jones Soda Brand Audit." 2006. Web. 20 July 2011.

<faculty.ithaca.edu/shamula/docs/studentportfolios/imcbrandaudit.pdf>.

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Marketing Implementation Structural Issues Overall Implementation Approach Jones Soda Co will utilize the Implementation as Organizational Culture approach for implementing the marketing strategy for Jones Buzâ&#x20AC;&#x2122;d. Since the company already exhibits an extremely decentralized structure, has a strong organizational culture and an overriding corporate vision, members of the firm will be able to continue to participate in the decisionmaking process in addition to fostering unique interactive experiences with all of Jones Soda customers; this will in turn help the firm reach its mission, goals, and objectives as mentioned throughout the plan. Although this approach is usually time-consuming for some firms, Jones Soda Co already has established their brand in the marketplace and has successfully gained a loyal following. Therefore, since it has already spent over two decades building their brand image, the organization has been rewarded with increased effectiveness, efficiency, and increased employee commitment and morale. The charge of implementing this marketing plan will be divided amongst all members of the organization; from the frontline employees, who actively participate with the community and current consumers, to upper management, who will assess the feedback from their loyal following and ultimately implement their strategic initiatives in accordance to the consumer. By implementing Jones Buzâ&#x20AC;&#x2122;d in this fashion, Jones Soda Co will be able to remain consistent with their current position in the marketplace by continuing to provide a product made and promoted by the people, while pricing and distributing it in a way that is supportive of their wants, needs, and alternative lifestyles. When it comes to internal marketing activities, there will not be any major changes to how the company currently implements its marketing strategy. For internal communication of the marketing strategy, Jones Soda Co will conduct planning sessions, workshops, and have personal conversations with all of their employees. In addition, the firm will provide newsletters of the upcoming Jones Buzâ&#x20AC;&#x2122;d product line in order to stimulate excitement amongst the Jones crew and to motivate them towards a successful product launch.

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Tactical Marketing Activities

Specific Tactical

Person/Department

Activities

Responsible

Required Budget

Completion Date

Marketing/R&D

$500

January – April 2012

Marketing/R&D

$1,500

January – April 2012

Product Activities Request customer feedback for possible

Jones Buz’d flavors, photos for labels Develop packaging

Pricing Activities (penetration pricing – no pricing activities conducted in the introductory stage when Jones Buz’d is launched)

Distribution Activities Obtain contracts with traditional venues already used, such as

Operations

$3,000

February-March 2012

Marketing/R&D

$15,000

April – July 2012

retailers, grocery stores, convenience stores, etc.

IMC Activities Use cable television advertising on MTV to enhance awareness, create consumer excitement about summer season

Total

$20,000

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Evaluation and Control Formal Controls Input Controls Since Jones Soda Co is only adding to its product line, it will not need to recruit new employees and does not need to worry about human resource allocations. When it comes to the allocation of financial resources, including research and development expenditures, it will be necessary to implement the marketing plan since they are essential parts for the launch of the new alcoholic beverage. For example, the research and development is vital to the understanding of Jones Soda Co’s target market in order to ensure that that their needs are being satisfied with the right product qualities. In addition, effective research and development can assist the company in expanding their overall business.

Process Control During the implementation process, the use of internal communication programs among all the employees, top management and members of the supply chain will be necessary to ensure a successful launch of Jones Buz’d. Another process control includes management commitment to the marketing plan and employees so that the company may effectively market the new product and achieve their marketing goals and objectives. Since consistency is an important aspect in production, it is essential that management is committed to their employees and makes sure that every worker is proud to be a member of Jones Soda Co.

Output Controls In order to ensure the proper implementation overall of the marketing strategy for Jones Buz’d, consistency with the company’s marketing objectives is required. The first objective is the acquisition of 5% of the market share in the alcoholic beverage industry two years after the product launch. In order to assess this objective, internal reports from the research and development group (marketing research team) will be conducted. The second objective is to gain 75% awareness in the alcoholic beverage industry within one year after the coolers are brought to the marketplace, and can be evaluated based on the sales record of Jones Buz’d. Product performance standards will be measured starting from the launch of Jones Buz’d to a later period, in order to determine the amount of sales generated in that time frame. These

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standards will be based on the quality of the ingredients used in the Jones Buz’d coolers in addition to its experiential qualities that customers will receive upon collaborating in the idea and product creation process. Price performance standards will be based on the revenue targets associated with the objective of achieving 5% market share in the flavored alcoholic beverage industry after two years of Jones Buz’d being in the marketplace, in addition to the balance between supply and demand for the product. Since Jones Soda Co will be distributing the new product line to retailers, grocery and convenience stores throughout the country, in addition to its e-commerce component, the company will be able to maximize time, place, and possession utility, which will be the basis of the distribution performance standards. When it comes to the IMC performance standards, brand awareness, recognition, and recall will be measured to assess the effectiveness of Jones Soda Co’s cable television advertisements on MTV; since this will be a costly investment for the firm, it is critical that these medium be evaluated. After these advertisements have been aired after the launch of Jones Buz’d, the reach and frequency will be assessed.

Informal Controls Employee Self-Control Jones Soda Co is aware that employee satisfaction can influence how much effort they put into their performance and how committed they are to the company. This is one of the reasons why the company conducts a lot of their decision-making processes while collaborating with its employees. This is a good attribute to have since the more involved the employee is with a company, the more likely the employee is willing to develop personal goals and objectives consistent with those of the company’s, thereby assisting in the overall implementation of the marketing plan.

Social Self-Control Jones Soda Co is able to achieve social control within the company by creating and utilizing a code of ethics, which includes the organization’s values as well as social and behavioral norms regarding what is acceptable in the firm. In order for the firm to make sure that all of its employees understand the code of ethics, they should establish programs that facilitate social interaction with employees, in order to test them on their ability to answer related questions about the company’s norms. For example, Jones Soda Co will use different scenarios to see how employees would react to specific ethical situations.

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Cultural Control Employees misunderstanding the organization culture and rituals can lead to problems when it comes with the implementation of the marketing plan, since the employees would not be completing their tasks according to the company’s brand image and its interactive relationship it has with its customers. In order to avoid misunderstanding, upper management should ensure that they establish shared values within the firm.

Implementation Schedule and Timeline Please see attached Schedule and Timeline in Appendix 5

Marketing Audits All of the marketing activities will be performed by the marketing manager for product, distribution and promotions. Product activities require a lot of research in order to make sure that the new product is a success after it’s launched, in addition to the distribution activities which include the availability of Jones Buz’d in retail locations, sport sponsorships, convenience and grocery stores. The promotional activities that the company is involved in are sales promotion through the implementation of a contest for its customers, in addition to point-ofpurchase displays such as posters, stickers, table cards, shelf danglers and post cards. Public relations will also be utilized through sport and music events, such as BMX, snowboarding, skating, and upcoming artists performing at local venues. Cable television advertising will be conducted on MTV in order to create more awareness of the product, which will include consumer-produced videos. After the first quarter of Jones Buz’d being launched, the company foresees a 30% increase in awareness, attributed to the plan’s promotional strategies, which will be measured through the total revenue sales in the quarterly report. If the marketing strategy does not meet the expected outcomes of increase of awareness in period anticipated, Jones Soda Co plans to improve their overall promotional strategies by increasing the amount of sales promotions and public relation initiatives.

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Financial Evaluation

(Appendix 6)

According to IBISWorld, the Breweries Industry Revenue for 2011 was approximately $27.6 billion. When examining the segmentation of the products and services, other malt beverages accounted for 1.6% of the total revenue for the industry, or $441.6 million. Therefore, if Jones Soda Co anticipates a 5% market share in this segment of the breweries industry, it would see an approximate revenue of $22.08 million from the Jones Buz’d product line. When it comes to the net profit for 2011, the breweries industry reached $3.1 billion, or $49.6 million for the other malt beverages segment. With an anticipated market share of 5%, the net profit for Jones Buz’d would be approximately $2.48 million. Therefore, the anticipated net profit margin for Jones Buz’d would be 11.23%.54

"Breweries in the US." IBIS World. May 2011. Web. 23 July 2011.

<http://clients.ibisworld.com/industryus/competitivelandscape.aspx?indid=288>.

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Appendix 1 Fall 2009 Product: Beverages Flavored Alcoholic Beverages/Coolers Drank in Last 6 Months Total Adults Total Proj Pct Pct '000 '000 Acros Dow s n 22588 2510 Total 7 4 11.1 100 Educ: graduated college plus 60806 7294 12 29.1 Educ: attended college 63023 7380 11.7 29.4 Educ: graduated high school 69801 7297 10.5 29.1 Educ: did not graduate HS 32257 3133 9.7 12.5 Educ: post graduate 20290 2202 10.9 8.8 10205 1043 Educ: no college 8 0 10.2 41.5 Age 18-24 28537 4514 15.8 18 Age 25-34 40349 6469 16 25.8 Age 35-44 42375 5746 13.6 22.9 Age 45-54 44155 5229 11.8 20.8 Age 55-64 33466 2098 6.3 8.4 Age 65+ 37006 1048 2.8 4.2 1098 Adults 18-34 68885 4 15.9 43.8 13408 1945 Adults 18-49 4 0 14.5 77.5 12687 1744 Adults 25-54 9 4 13.7 69.5 Men 18-34 34689 4529 13.1 18 Men 18-49 66843 7898 11.8 31.5 Men 25-54 62815 7248 11.5 28.9 Women 18-34 34196 6455 18.9 25.7 1155 Women 18-49 67241 1 17.2 46 1019 Women 25-54 64064 6 15.9 40.6 Occupation: Professional and Related Occupation 30311 4037 13.3 16.1 Occupation: Management, Business and Financial Operations 21717 2825 13 11.3 Occupation: Sales and Office Occupation 33214 4584 13.8 18.3 Occupation: Natural Resources, Construction and Maintenance Occupation 13444 1709 12.7 6.8 Occupation: Other Employed 39994 5000 12.5 19.9 HHI150,000+ 23605 2995 12.7 11.9 HHI$75,000-$149,999 64718 7709 11.9 30.7 HHI$60,000-$74,999 24815 2873 11.6 11.4 HHI$50,000-$59,999 18924 2105 11.1 8.4 HHI$40,000-$49,999 20241 2323 11.5 9.3 HHI$30,000-$39,999 21328 2074 9.7 8.3 HHI$20,000-$29,999 21550 2250 10.4 9 HHI<$20,000 30706 2775 9 11.1

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Inde x

100 108 105 94 87 98 92 142 144 122 107 56 25 143 131 124 117 106 104 170 155 143 120 117 124 114 112 114 107 104 100 103 87 94 81

Census Region: North East Census Region: South Census Region: Midwest Census Region: West MediaMarkets: Top 5 MediaMarkets: Next 5

41622 83038 49827 51401 47517 22899

County Size: A County Size: B County Size: C County Size: D Marital Status: Never Married

93183 68286 32762 31656 58619 12425 4 11083 43013 9017 8592 17038 41670 32266 42124 44996 36047 65308 12435 6 15803 3 16612 45233 48276 19099 8768 17313 1 26199 2545 5969 21576 17038 0 25505 30001

Marital Status: Now Married Marital Status: Engaged Marital Status: Widowed/Divorced/Legally Separated Child age: <12 months Child age: 12-23 months Child age: <2 years Child age: <6 years Child age: 2-5 years Child age: 6-11 years Child age: 12-17 years Years At Present Address: <1 year Years At Present Address: 1-4 Years Years At Present Address: 5+ Years Home: Owned Home value: $500,000+ Dollars Home value: $200,000-$499,999 Home value: $100,000-$199,999 Home value: $50,000-$99,999 Home value: <$50,000 Race: White Race: Black/African American Race: American Indian or Alaska Native Race: Asian Race: Other

Race: White only Race: Black/African American only Race: Other Race: /Multiple Classifications

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5173 7610 6579 5743 5474 2561 1111 3 7779 3594 2618 8815 1276 1 1720 3528 1104 1219 2275 5956 4943 5457 5921 5229 8336 1152 1 1631 2 1646 5311 4913 1757 815 1835 6 4139 204 468 2316 1806 4 4092 2948

12.4 9.2 13.2 11.2 11.5 11.2

20.6 30.3 26.2 22.9 21.8 10.2

112 82 119 101 104 101

11.9 11.4 11 8.3 15

44.3 31 14.3 10.4 35.1

107 103 99 74 135

10.3 15.5 8.2 12.2 14.2 13.4 14.3 15.3 13 13.2 14.5 12.8

50.8 6.9 14.1 4.4 4.9 9.1 23.7 19.7 21.7 23.6 20.8 33.2

92 140 74 110 128 120 129 138 117 118 131 115

9.3

45.9

10.3 9.9 11.7 10.2 9.2 9.3

65 6.6 21.2 19.6 7 3.2

93 89 106 92 83 84

10.6 15.8 8 7.8 10.7

73.1 16.5 0.8 1.9 9.2

95 142 72 71 97

10.6 16 9.8

72 16.3 11.7

95 144 88

Appendix 2 Price List : Beer - Malt Coolers Product Category : Beer Product Type : Beer - Malt Coolers

Special Price List | Regular Price List | Back | Size Name

Case Size

Bacardi Mojito 4/6 Bt

12OZ

30.65

8.69

Bartles & James Margarita

12OZ

26.99

4.89

Bartles & James Mojito

12OZ

26.99

4.89

Bartles & James Original

12OZ

26.99

4.89

13475

Mike's Cranberry Lemonade 23.5 Oz Cn

24 OZ

27.50

2.89

10578

Mike's Hard Berry 6pk

12OZ

29.99

8.69

1960

Mike's Hard Cranberry Lemonade 4/6pk

12OZ

29.99

8.69

10123

Seagram's Bahama Mama Orange Pineapple

12OZ

24.99

4.49

13024

Seagram's Escapes Calypso Colada

12OZ

24.99

4.49

14604

Seagram's Escapes Sangria

12OZ

24.99

4.49

1060

Smirnoff Ice

12OZ

29.99

8.69

9780

Smirnoff Ice Green Apple

12OZ

30.00

8.69

Smirnoff Ice Mango

12OZ

30.00

8.69

SKU

13534 8004 12575 8001

14286

Product Name

Case Price

Unit Price

http://www.capecodpackagestore.com/webupdate/beermaltcoolers.htm

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Appendix 3

Fall 2009 Media: Demographics - Respondent Respondent Age - Summary 25-34 Total Adults Total '000

Total

Proj '000

Pct Across

Pct Down

Index

225887

40349

17.9

100

Cable: MTV

36790

11182

30.4

27.7

170

Cable: MTV2

14393

4201

29.2

10.4

163

Cable: Vh1

30966

9093

29.4

22.5

164

7736

1652

21.4

4.1

120

Cable: Vh1 Classic * Denotes sample size is less than 50.

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Appendix 4 Fall 2009 Product: Beverages Flavored Alcoholic Beverages/Coolers Drank in Last 6 Months Total Adults Total Proj Pct '000 '000 Across Total Cable: CNN (Cable News Network) Any watching Cable: Comedy Central Any watching Cable: Flix Any watching Cable: Food Network Any watching Cable: MSNBC News Any watching Cable: MTV Any watching Cable: MTV2 Any watching Cable: TLC (The Learning Channel) Any watching Cable: Vh1 Any watching Cable: Vh1 Classic Any watching Cable: Vh1 Soul Any watching Cable: The Weather Channel Any watching * Denotes sample size is less than 50.

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Pct Down

Index

225887 77218 53058 3519 60801 49362 36790 14393 47370 30966 7736 3711

25104 8142 7071 675 7746 5453 5719 2148 6458 4744 1161 680

11.1 10.5 13.3 19.2 12.7 11 15.5 14.9 13.6 15.3 15 18.3

100 32.4 28.2 2.7 30.9 21.7 22.8 8.6 25.7 18.9 4.6 2.7

100 95 120 173 115 99 140 134 123 138 135 165

79195

8379

10.6

33.4

Appendix 5

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Appendix 6 Financial Projections55 after Implementation of Jones Buzâ&#x20AC;&#x2122;d

Other Malt Beverages (% of market)

Brewery Industry Revenue (2011) $27,600,000,000.00

1.6%

Other Malt Beverages (Revenue)

Jones Anticipated Market Share

Jones Anticipated Revenue

$22,080,000.00

$441,600,000.00

Other Malt Beverages Revenue = Brewery Industry Revenue (2011)*Other Malt Beverages (% of market)

$27.6 billion * 0.016 = $441.6 million

Jones Desired Revenue = Other Malt Beverages Revenue*Jones Desired Market Share

$441.6 million * 0.05 = $22.08 million

Brewery Industry Net Profit (2011)

Other Malt Beverages (% of market)

Other Malt Beverages Net Profit

Jones Anticipated Market Share

Jones Anticipated Net Profit

$3,100,000,000.00

1.6%

$49,600,000.00

$2,480,000.00

Other Malt Beverages Net Profit = Brewery Industry Net Profit (2011)*Other Malt Beverages (% of market)

$3.1 billion * 0.016 = $49.6 million

Jones Anticipated Net Profit = Other Malt Beverages Net Profit*Jones Desired Market Share

$49.6 million * 0.05 = $2.48 million

Profit Margin

Net Profit

Revenue

11.23%

$2,480,000.00

$22,080,000.00

Profit Margin = Net Profit / Revenue

$2.48 million / $22.08 million = 0.1123 or 11.23%

"Breweries in the US." IBIS World. May 2011. Web. 24 July 2011.

<http://clients.ibisworld.com/industryus/competitivelandscape.aspx?indid=288>.

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