Quench as World Leading Soft Drinks Brand - Case Study Example

 Identification of Problem From its foundation in 1998, Quench has become a world leading soft drinks brand with a global operation worth millions of pounds. Through a strategy that integrates brand image, strong advertising, and competitive pricing, Quench has managed to carve out a market niche, among consumers with a preference for healthy and sports-themed products. However, the entry of other soft drinks manufacturers in Quench’s specific market and the slow economic recovery after the recession has threatened their market share since 2012. They have also had to contend with a steep decline in soft drink sales after media reports linked the product, and specifically that made by Quench, as a major contributor to high obesity rates. Quench’s market position was particularly threatened by the media identifying their product as one of those with excessive levels of sugar. Given their customer base’s preference for healthy products, coupled to the focus on obesity as an urgent global health issue, Quench’s turnover has declined sharply and the company now faces an uncertain future. In this paper, solutions to the current problems faced by Quench will be identified and expert recommendation on how to regain lost market share given to Quench’s board of directors. Generation and Evaluation of Solutions The first alternative solution for Quench focuses on the company increasing their promotional and marketing strategies, specifically in consumer segments that are untapped. Quench could capitalize on their brand image within the sector, such as their good business practices and environmental initiatives and promote these to the consumers. By promoting their positive social and environmental initiatives, they could gain an advantage with consumers who may dismiss Quench as another corporate entity out for profits. Rotfeld (2011: p166) identifies comfort, simplicity, local sourcing, and going green as the food and beverage trend of 2013, which are aspects that Quench may use to advertise their environmental initiatives, in turn enticing consumers who are eco-conscious. With regards to comfort and simplicity trends, consumers are seeking to return to normalcy after the recent recession, as well as to resume pre-recession consumption habits. Quench could take advantage by re-energizing their brand and marketing its achievements in the social and environmental arena. However, this strategy has several limitations for Quench, including the magnitude of controversy around the company regarding unhealthy ingredients that may not be undone through promotion of its good deeds (Abdullah, & Asngari, 2011: p141). In addition, this strategy would not address health and obesity concerns raised by the consumer. A second alternative would be to create new demand in their existing consumer market through innovation of their existing soft drinks. Quench has relied on traditional marketing strategies based on their renowned soft drink products, which would inform their decision to remain in the sugar-based soft-drink market, as it is the market Quench, which is most familiar with. Moreover, attempts to over-differentiate their products and move away from the beverage industry’s soft drink sector would leave the consumer with an impression that Quench was abandoning its traditions and roots (Mooij, 2011: p39). One option the company could use to innovate on their existing soft drink products would be the use of healthy additives like vitamins, tea extracts, and antioxidants, as well as focusing on alternative sweeteners like stevia and cane sugar. Such innovations would address the health issues raised directly, while appealing to health-conscious consumers. However, this strategy faces a challenge in that the health-conscious consumer may never consider Quench’s current products beneficial due to the controversy surrounding their high sugar levels, while the strategy still does not address the high levels of sugar that have raised health concerns (Appleton & Jacobs, 2013:p45). While the two alternative solutions given above have focused on enhancing demand for Quench’s current soft drink products, Quench may also seek to strengthen their participation in the non-carb soft drinks market. PepsiCo CEO Indra Nooyi was faced with a similar problem to Quench’s issues with their product’s link to obesity, which led to a decline in the sales of soft drinks. In this case, Quench, just like PepsiCo, may decide to move into the low-sugar level market and to capture this market, rather than increasing market share with their current product (Datamonitor, 2012: p51). For example, Quench could reformulate some of the company’s soft drink products to compete in the functional and health drinks sector. They could focus on one of their already existing product that shows potential for demographic marketing, as well as the potential for improvement to meet current consumer wellness and health standards. A sports drink product, for instance, could capitalize on markets with health preferences like professional and college sports leagues (Bonnet & Requillart, 2011: p1017). By reformulating their sports drink line using an alternative sweetener rather than sugar, Quench may gain a competitive edge. Recommendations For Quench, the best alternative solution to retake the company’s market share and increase profits would be the third alternative, which involves moving to healthier demographic using reformulated drinks with alternative sweeteners. A new formula that will be promoted as all natural should be used to create a soft drink that attracts a target demographic with preferences for healthy and sporty products (Bonnet & Requillart, 2011: p1019). Such promotion should be aimed at igniting a wave of all natural, green-friendly sentiment in the consumer, which the consumer will associate with Quench products. The association between Quench and a healthy lifestyle should help in increasing the company’s sales with the new trends towards healthy living. This solution does not involve creating an entirely new brand, nor does it involve creating a new formula for the Quench drinks. While there will be modification of the current Quench formula, the actual recipe will not change with only the sugar sweeteners being switched for alternative natural sweeteners. The main goal involves making the same Quench drink that consumer had grown to trust and rely on, but using sweeteners that are less artificial. As this will only require minor alterations to the current formula, Quench will incur minimal costs and the return on investment will be high (Datamonitor, 2012: p54). References Abdullah, L., & Asngari, H. (January 01, 2011). Factor analysis evidence in describing consumer preferences for a soft drink product in Malaysia. Journal of Applied Sciences, 11, 1, 139-144. Appleton, N., & Jacobs, G. N. (2013). Killer colas: The hard truth about soft drinks. Garden City Park: Square One Publishers. Bonnet, C., & Requillart, V. (January 01, 2011). Does the EU sugar policy reform increase added sugar consumption? Empirical evidence on the soft drink market. Health Economics, 20, 9, 1012-1024. Datamonitor. (2012). AG Barr case study: Staying relevant in the UK soft drinks market. London: Datamonitor. Mooij, M. K. (2011). Consumer behavior and culture: Consequences for global marketing and advertising. Thousand Oaks, Calif: Sage Publications. Rotfeld, H. (June 06, 2011). The Public as the Problem for Public Health. Journal of Consumer Affairs, 45, 1, 165-168. Read More