Hawaiian Punch Essay
In July 2004, Kate Hoedebeck was promoted to director of marketing for the Hawaiian Punch brand. The CEO of the parent company, Cadbury Schweppes Americas Beverages, set a goal to create a premier marketing and sales organization that capitalizes on the terrific brand recognition. To reach this goal each brand is required to meet the desires of their customers; bottlers, distributors, retailers, and consumers. When creating the 2005 business marketing plan Kate faced a problem. The Hawaiian Punch brand had two manufacturing, sales, and distrution networks. Her objective was to determine the role each network played in the future sales and profitability of the company.
a. Product Positioning
Hawaiian Punch needs to clairify the positioning of its brand. The positioing statement needs to clairify its target markets, and focus on the values of its customers. The majority of the Hawaiian Punch juice drinkers ranged from 6 – 18 years of age. Adolescences purchase the drink most frequently from the soda aisle. Of cosnumers aged 6-12, the majority of the purchases were made in the juice aisle by parental/guardian figures. Including the fun consumption experience, its unique taste, and high viatim C content is the posotion the brand wants to own. To out perform the competitors it is necessary to establish these elements and clearly define where Hawaiian Punch sits. Its more than your normal juice, but healthier than soda.
Hawaiian Punch would benefit from launching new sizes and flavors. Retailers believed the potential of market growth hinged on creating new packing and flavors. Hawaiian Punch recently experienced slowed growth due to the decrease in the juice market. Hawaiian Punch maintained market share, and Trade Customers believed the market would rebound. To take advantage of the market portential, Hawaiian Punch should innovate its product size offering. Currently Hawaiian Punch is packaged in 1-gallon bottle, a half-gallon bottle, a 2-liter bottle, a 20-ounce bottle, a 6.75-ounce single serve standup pouch, and 12-ounce cans. According to customer insights, 77% of Hawaiian Punch buyers purchased only size. According to reasearch, 68% of buyers that purchaed the 1-gallon bottle and 53% of buyers that purchased the half-gallon size were exclusive in their size purchases. The 2-liter and 20-ounce bottle purchasers experienced the least amount of size loyalty.
Despite having customer enjoying the different size offerings the numerous amount of sizes caused distribution constraints and shelving issues at numerous locations. By eliminating certain size offerings with low size loyalty and creating new ones while maintaining variety will elliviate contraints and provide new opportunties for customers. The brand would also benefit from new flavor innovation. Hawaiian Punch currently has 11 product flavor offerings. The most popular and original flavor maintains to be fruit Punch. Out of the 11 product offerings there has been a wide variety of success. Hawaiian Punch needs to establish stable products in both their Finished goods and Direct-Store Delivery networks. Products that do not show profitabilty should be elimiated. Introducing new flavors to the Direct-Store Delivery will benefit because of the large market potential and smaller size offerings.
c. Allowances and Advertising
Hawaiian Punch should increase its advertising budget and allowances for marketing. Currently Hawaiian Punch spends $2.2 Million on advertising a year. This accounts for 1% of advertising by Hawaiian Punch’s competitve juice brands collectively. Their current advertising mix consists of only radio and magazine print ads. The largest amount of advertising dollars spent is in television which currently Hawaiian Punch does not participate. This media outlet accounts for roughly 82% of total media dollars by competitors. Increasing media dollars will help reach new customers, and enforce new flavors to the brand. Of the advertising dollars spent much should be included in recreating the “Punchy’ Image.
Past years have downplayed this aspect of the product brand, but still plays a large part in its recognition. By including Punchy in their advertising they should focus their attention on children between 8-18 years old. Punchys image will play a large role in delivery the benefits of the fruit drink and the position in the market.
It is recommended that Hawaiian Punch position their brand and maximize profit by increasing advertising and innovating their products. Having Dual distribution networks it is necessary to establish market segments. The Finished Goods Network buyer is mainly mothers/guardians. This segment presents the largest amount of repurchasing and brand loyalty. Focusing advertising on the energic times and healthy benefits will persuade mothers ino purchasing the drink because it offers
Entering into a licensing agreement is not a good decision in the European market, the three year agreement is too short and more importantly Baxton is allowing too much of the revenue to go to Bar Maisse, they need an arrangement where they receive a larger portion of the proceeds. At the same time, choosing to enter the European market is too risky and has too many unknowns. The expertise of Bar Maisse is needed for success to be likely; otherwise there are too many unknowns with where operations should be based on what markets are more likely to yield successful sales. While focusing on Europe and entering the market at this time does appear to be the correct decision, it should not be done at the expense of increasing growth in the United States. That market is under developed and is not being capitalized, as it should be.