M A R K E T I N G M A NAG E M E N T R E P O RT ON

BY: M.SALMAN SHARIF SEAT NO: P1091027

SUBMITTED TO: SIR GOHER RAZA

Drinks is a UK-based company founded in 1999 by three Cambridge University graduates Richard Reed, Adam Balon and Jon Wright, its primary business is making healthy food and drinks, including smoothies, juice and veg pots, sold in supermarkets, coffee shops and various other outlets nationally as well as in Ireland, Spain, Sweden, Norway Netherlands, Finland, Belgium, Germany, France, Austria, Denmark and Switzerland. Innocent has a 75% share of the 169m UK smoothie market and the company sells over two million smoothies per week. On April 6, 2009, Innocent Drinks announced on its website an its agreement to sell a small stake of between 10 and 20% to The Coca-Cola Company, with the three founders retaining all operational control for 30 million then in April 2010 Coca-Cola increased its stake in the company to 58% from 18% for about 65 million. The three founders continue to retain full operational control. Smoothies are Innocent's primary product. The Innocent smoothie consists of whole crushed fruit and juices, but other ingredients such as carrots and ginger have been used in some drinks. Innocent also makes smoothies in little bottles and bigger cartons; smoothies, fruit pures and juice for kids; not-from-concentrate orange, apple, tropical and apple + raspberry juices; and veg pots, a range of ready meals. Innocent has also created a charity foundation with the name The Innocent Foundation it is a UK-registered charity that gives grants to NGOs and other charities, typically in the form of three-year partnerships. It was set up in July 2004 'with the idea of bringing nature and communities closer together for mutual benefit'. This allows Innocent to donate 10% of its profits to charity. The majority of funding goes to support rural development projects in the countries where the fruit innocent uses comes from.

Our purpose
Make natural, delicious food and drink that helps people live well and die old Everything innocent makes will always be 100% natural, delicious and nutritionally net-positive, so people are physically and mentally better off after they have eaten our food than before. In other words, we want to be a Trojan horse in society, getting as much fruit and vegetables into people as possible, to help us all live well and die old.

Our values
When we're all old and grey and sitting in our rocking chairs, we want to be able to look back and be really proud of the business we all helped to create. We think the best way of achieving this is by living the values that are closest to our hearts. Our five values reflect what we are, how we do things, and where we increasingly want to be. And they hang above every loo in the building so we get to remember them every day:

be natural Not just our products, but being natural in how we treat each other and how we speak to the most important people - our drinkers

be entrepreneurial innocent began as a small, entrepreneurial company, and nothing much has changed. We aren't afraid to do things differently, and we've never given up on a good opportunity.

be responsible We keep our promises, are mindful of our impact on our community and our environment, and always try to leave things a little bit better than we found them.

be commercial We wouldn't be here if we didn't keep our eyes on the numbers at all times. Ultimately we want to deliver growth for us and our customers too.

be generous This means giving honest feedback to one another, taking time to say thank you, and where we can, donating our resources or money to those who need it more than us. It's that simple.

Our structure
At innocent, we are made up for four main teams, each of which is made up of several smaller teams. Here's a simple picture to show you how it all works:

essential

operations

and teams in:

alpine, benelux, france, germany, ireland, and scandinavia

being new Everyone was new once. So we've made being new at innocent the best 'being new' experience we can. After all, might as well start as you mean to go on. During your 2 week induction, you'll get a complete picture of how the business works by meeting experts from across innocent as well as seeing how your role fits into that, how you can contribute and, most importantly, where to go for the best sandwiches. learning & development We take the development of our people very seriously. Partly because we know it's a reason why great people want to join and stay at innocent - to further their careers, to become a better version of themselves, and to play a part in growing a successful business. Partly because it makes sense for us to have a team of engaged, talented, high performing people at the top of their game. So learning and development is win-win all round. horses for courses (and everyone else) We run quite few courses at innocent that enhance and develop skills, knowledge and behaviour that we believe are important for everyone in a business like ours to have.

Smoothies

Smoothies are Innocent's primary product. The Innocent smoothie consists of whole crushed fruit and juices, but other ingredients such as carrots and ginger have been used in some drinks. A smoothie also counts towards two of the 5 a day as a 250ml smoothie contains at least one portion of whole crushed fruit (80g) and one portion of juice (150ml). Innocent is currently offering seven different flavors of smoothies. To celebrate their role as official smoothie of the London 2012 Games, they have created a limited edition golden smoothie with oranges, carrots and mangoes.

Juice

Another fantastic product of innocent ranging six different flavors of juices with no sweeteners and never concentrated and contains one portion of fruit per every 150 ml serving.

Kids smoothies

Kids smoothie are offered in five different variants, it is made out of 100% pure fruit and fresh juices and contains no bit quite similar to the original smoothie but with different flavors keeping the taste buds of kids in mind innocent has delivered this robust product line.

Kids juicy drinks

Kids juicy drinks with two flavors orange and apple contains no sweetener or any artificial flavor it is 100% purely made from fruits like the other product lines offered by innocent targeting the kids predominantly.

Fruit tubes

Fruit tube is another product being targeted at the kids currently has only two variants containing pure fruit puree. The product line as usual contains no colorings, additives or weird synthetic flavorings. Just 100% pure fruit snacks for kids to add attraction in their lunchboxes keeping health benefits in mind as it has no artificial ingredients whatsoever.

Veg pots

Veg pots containing vegetables cooked with different flavors from Indian Bombay curry to the Mexican potato chili, each product contains three of the recommended five daily portions of vegetables less than 3% fat and covers 28% of fiber. Currently the product line offers 9 different variants.

Strawberries & Banana

Portfolio

Mangoes & Passion fruits

Oranges, Carrots & Mangoes Product Depth

Smoothies
Product line

Kiwis, Apples & Lime Black berries, Strawberries & Black currants

Product line

Product Width

Pineapple, Bananas & Coconuts

Product Length Product line

Pomegranates, Blue berries & Accai

Peaches & Passion fruits

Cherries & Strawberries

Kid's smoothies

Strawberries, Black Berries & Rasberries

Orange, Mangoes & Pineapple

Apple & Black Currant

Brand elements
Name: Innocent Drinks Logo: Tagline or Catchphrase: "Stay Healthy, be lazy Graphics: The Angel fruit face is the trademark of Innocent drinks UK.

Taste: Innocent Drinks has trademarked its special recipe of smoothies and juices. Packaging: Innocent products come in different packaging in size from Value pack to 150 ml all containing the innocent logo with different fruits.

The Brand with a storyline

The brand is everything. Innocent Drinks is the brand of smoothies and vegetable pots that has grown its turnover from 400,000 to 165m in 12 years. Everything in the office screams Innocent. From the AstroTurf carpets, through the brand messages, to the decorations and wall artwork and even the name of the corporate HQ (called 'Fruit Towers'). You always know where you are and why you're there. For the employees I can see it being a positive kind of brain washing. A way to live and breathe the brand! Show you're that immersed in the brand you can't help but sing its praises.[Miniclip.com review] Innocent smoothies are a unique type of brand. Every smoothie they produce is made from "fruit and only fruit". No additives, no preservatives, just fruit. They are the ultimate choice of smoothie for people looking to stay healthy as all their ingredients are fresh and direct from trusted source

Brand positioning and equity

The highly successful Innocent Drinks sells $2 million smoothies per week across Europe, building a 72% market share in the 8 years since they were founded in 1999. The brand is infused with curiosity, fun, and compassion, contributing 10% of their sales to charitable organizations. First and most importantly, Innocent Drinks provides a healthy, good tasting product that focuses on benefits that people are actively seeking. Natural is a key component of their positioning, but its a feature of the product that provides a reason to believe/support to the positioning rather than a benefit. In general, benefits resonate more strongly with customers than features because they link the product to customer needs. Green-ness is a core value of this company. Many would-be green brands are so focused on telling a green story that they forget that greenness isnt, in and of itself, a benefit, no matter how sincere or authentic their brand may be. The smart strategy is to first make sure that you have a product that your target audience wants to buy, and then communicate how being green contributes to its benefits. Company officials assured them that was not the case and provided opportunities for ongoing dialogue, illustrating that the more successful a company is in facilitating a brands development; the more engaged they will be with brand followers. BRAND ASSET VALUATOR

Innocents brand value can be measured by its brand vitality and brand stature using the brand asset valuator. Brand Vitality: Differentiation: Innocent products do not use any artificial ingredients, they are made of pure fruit and sprinkle water no concentrates whatsoever. This differentiates them from their rival products in the market like Tropicana, Happy Monkey, Seven Seas (MultiBionta) Relevance: Innocent products fit accurately into the smoothie market with their great taste, flavors, limited edition juices and smoothies and their purity factor for both kids and adults. Brand Stature: Esteem: Innocent products are highly regarded in the UK market and maintain a uniqueness of healthy, tasty and innovative drinks. And their promotional activities too are based on humor to let the audience get closer and closer to the products. Their market penetration is increasing continuously and has increased 18% more from the last year. Knowledge: The consumers are continuously turning into fans of the drinks as their fantastic flavors and the pure factor playing their big roles making them different and tastier than the other drinks in the market. The trust they have achieved as the pure fruit drink has been the most benevolent factor to them from the market.

BRAND DYNAMICS PYRAMID

Bonding: Innocent has created an everlasting relationship with their consumers maintaining the image of whole firm as the loving and caring brand, making the products more and more user friendly and fun with their colorful fruits and funny lines at the back of every products packaging introducing recipes to make eating and drinking more fun.

Advantage: The greatest advantage it maintains over its competitors is the purity factor. All the smoothies and juices are made of pure fruits and only fruits no artificial stuff at all.

Performance: Keeping the health factors in mind their smoothies and juices are hygienic and there is no addition of any chemical or artificial stuff like ascorbic acid normally in the other drinks of this category in the market. As they say it is the best juice for your breakfast and a treat for kids in the lunchbox too.

Relevance: Innocent products fit perfectly into the smoothie market with their great taste, flavors, limited edition juices and smoothies and their purity factor for both kids and adults.

Presence: The consumers are continuously turning into fans of the drinks as their fantastic flavors and the pure factor playing their big roles making them different and tastier than the other drinks in the market. The trust they have achieved as the pure fruit drink has been the most benevolent factor to them from the market.

Introduction 1998 to 2002

Growth 2002-2011

Maturity

Decline

Year Market Share

Innocent

2006 m 96

% 59

2007 m 141

% 66

2008 (est) m 154

% 63

% change 2006-08 +60.4

Introduction:
Innocent introduced their smoothies in the market for the first time on 28 th April 1999 selling only 3 cases at the local sandwich bar OUT TO LUNCH only 3 smoothie recipes were launched at first. Innocent launched thickies - delicious yoghurt drinks with added fruit and other good stuff in 2000 and were delivered via vans that look like cows. At the mid of 2000 overseas expansion started with the offices being opened in Dublin and Austria got trial listing in Waitrose superstores. Advertising campaign began in 2001 with different poster sites in supermarkets. In 2002 the first innocent recipe book was published containing different smoothie recipes and door to door marketing was started to introduce the product at the root level.

Growth
In 2003 first four fruit stocks were launched with a big hit and huge support from the fans then innocent created a charity foundation in 2004 and decided to give it a 10% of all the profit every year. Innocent expanded its business in Paris and Amsterdam the productivity was increased by 650% by 2004, line extension took place with the

Kids as the second target market launched smoothies for kids in 2005. First ever Television advertisement was launched in 2006, European expansion continued in Germany and Austria with innocent capturing 59% of the market share. Veg pots were introduced in 2008 and increased the market share further. The period from 2006-2008 was the peak point for them when the market share increased continuously by more than 60%. Currently Innocent has 80% (est.) of the smoothie market share with the investment by Coca Cola of about 65 million in 2010. Innocent has also got the honor of being the official drink of London Olympics.

Maturity
The growth is still more than persistent in the smoothie market and Innocent has not yet entered the maturity phase.

Decline
Innocent has not yet entered the decline phase.

Segmentation
Segmentation is the division of the market into different groups within which members share similar needs and requirements. Its aim is to allow customer needs to be focused on and design efficient marketing mix to fit different segments. It also helps unveil growth opportunities as they identify new customers. Innocent uses Demographic segmentation, it consists of dividing the market into groups based on variables such as age, gender, family size, income, occupation, education, religion, race and nationality. Innocents products are mainly for kids, young and urban professionals. One way in which Innocent exploits different market segments is by offering a range of products targeted at different age groups. (e.g. Kid smoothies, super fruit smoothies etc.

Customer base:
Over the last 18 months Innocents turnover has doubled (from 17m to 35m). Innocent tries to be appealing to the customer by offering high quality products, being ethical and by having an extremely friendly approach to the customer. Leading smoothie brand Innocent currently own 80% of the smoothie market. It has established itself as a premium brand by charging premium prices above its other similar specific competitors based on its unique selling point. It has also developed a resolute brand image by using light-humored communication cohesive with the brands value. The market Innocent operates in is still growing as more and more consumers are becoming cautious of the effects of processed goods. The consumers are continuously turning into fans of the drinks as their incredible flavors and the purity factor playing their big roles making them different and tastier than the other drinks in the market. The trust they have achieved as the pure fruit drink has been the most benevolent factor to them from the market and gathered quite an outstanding amount of loyal customers. Continuous growth rate shows the customer loyalty is on the increasing node.

Product
Product range consists of smoothies, juices and veg pots.All of these products possess an exceptional selling point of being 100% pure fruit without any concentrate or artificial flavors whatsoever. Limited edition smoothies are another good way of keeping the consumer interested in the product.

Pricing
The premium price of their products makes Innocent more beneficial to the retailers as they are more profitable. A premium price is charged for the product of 2(for 250ml).In contrast, the rival PJ smoothies retail for 99p,Innocent justify this pricing, as they use pure fruit juice whereas PJ use juice from concentrate.

Promotion
Innocent uses extremely friendly and humorous approach to the customer it uses narrative ways of attracting attention to the products, including an annual festival, the Supergran Campaign and regular newsletters and gifts to customers who have signed up to the Innocent family. They use of word of mouth as a promotional tool. An annual recipe book is published to gather more customer attention as well. Its total advertising expenditure in 2006 was 6m up from 1m the previous year.

Marketing & Distribution Strategy

Marketing Strategy: Main area of focus is high quality smoothies. The image innocent tries to give to the general public is of an ethical, environmentally and friendly business. Their products are of high quality standards, prices are therefore relatively higher than the competitors product.

Distribution Strategy: Innocent uses intensive distribution strategy for its products they are currently stocked in over ten thousand retail outlets including larger supermarket chains. As their products contain no chemicals or preservatives so they have a short shelf life of only 14 days so they require an exceptionally slick system of distribution. A level one channel distribution is typically followed. Today, Innocent drinks are sold by over 4,000 independent retailers, as well as all of the major supermarket chains. Innocent ensure good collaboration with its distributors the main ones being Asda, Tesco, Sainsbury's and Starbucks recently a trial for distribution has also been made with McDonalds, bringing up many controversial arguments.

PESTLE Analysis
Political: Innocents Trading Standards ensure consumer safety and that fair trading and quality standards are maintained. Legislations enforced by Office of Fair Trading (OFT) can have an impact on the production of the company. At the moment Innocent is doing exceptionally well in following the standards.

Economic: UK economy situation and trends affect companys costs e.g. energy costs and cost of ingredients. Inflation affects price of product. Industry factors - Innocent had to find manufacturers willing to forego the more logistically difficult and expensive process of making their drinks without added ingredients. Socio-cultural: 10 percent of profits go to the Innocent Foundation which carries out good causes such as post-tsunami regeneration. Innocent also ensures its fruits are ethically grown in acceptable work conditions for fruit pickers. Innocent capitalized on this by highlighting key health benefits to their products like their contributions to consumers Recommended Daily Amount intake and that they were 100 percent fruit. Consumer attitudes became significantly more health-conscious. Innocent recognized this and created their unique smoothies made of 100 percent fruit to meet consumer demands. Technological: Technology is also playing its vital role here as they have to stick to the basics when creating those smoothies to maintain the purity factor. A lower shelf life means they are required to be packed sealed tight maintaining the highest standards. Innocent

introduced the first 100 percent recycled plastic bottle. Their bottle labels are also 25 percent recycled.

Legal: Like every other firm innocent is also bounded by the laws prevailing in the country they have to conform to safety laws and the manufacturing processes are subject to pollution controls. Though there is no law against their production and consumption of pure natural juices. Environmental: Environment can have huge impact on the industry as they made their products from the fruits directly and no other artificial ingredients so they rely heavily on the supply of fruits and any natural disaster can interrupt it causing slower or no productivity at all.

Current Competitors in the Market

Tropicana (PepsiCo): Tropicana are Innocent Drinks main competitors and the Pepsi owned company currently holds 29.3% market share in the UK. Their marketing strategies follow a very similar pattern to its rival focusing efforts on and emphasizing the health benefits of its products using popular terms as GDA (Guideline Daily Amount) and the ever familiar 100% Fruit, phrases consumers have become well accustomed to. Other marketing strategies such as appealing artwork on packaging have been used to increase brand loyalty. Tropicana smoothies are approximately a third cheaper than Innocent, attracting the more price-conscious customers than those more concerned with the manufacturing process.

Happy Monkey: Although this brand is new to the market (launching March 2009) its performance has been exceptional achieving sales of over 1.3 million in its first year of trading. With its main focus on the kids smoothies market a market Innocent also concentrates on - it has established itself as a serious competitor rapidly creating brand loyalty supported solely by promotions. Like the competition, Happy Monkey stresses its healthful nutritional value, the quality of its natural content and its ethical principles to sway customers in their favor. Lucozade Sport: The Lucozade Sport brand is the market leader in the sports drink category. It has sustained this position by regular product innovation supported by heavy marketing campaigns, sponsorships and endorsements. Red Bull: Red Bull is an established energy drinks brand that also uses heavy TV ad campaigns as well as outdoor material to sustain a presence in the marketplace. It maintains the brand image by constant reinforcement of the slogan red bull gives you wings to which consumers and non-consumers alike have been familiarized with. Seven Seas (Multibionta): This multivitamin supplement brand satisfies the same consumer health needs by different means to Innocent. Kelloggs Cornflakes: This highly popular cereal is one of Innocents many distant competitors in the market of discretionary spend.

SWOT Analysis
Strength: Leading smoothie brand, High quality and natural products, Consistent growth, Weakness: High prices, lower and limited customer base. Opportunity: Expansion in the global market, more organic products like ice-cream. Threat: Increased competition, own brand products by Asda and Tesco which are typically lower in cost, Economic recession.

How Innocent is delivering the value to its customers?

Innocent is producing all of its products with pure fruits and no other artificial chemicals whatsoever. They are providing their consumers a hygienic product maintaining all the standards to deliver the best. Though they are charging premium prices which do not influence anything as the consumers are highly satisfied with the organic nature of product. Not just the health issue but the taste too that differentiates them from the other, the idea is to produce different flavors with newer and innovative recipes. The recipes for kids are different than the adults, there is always a limited edition flavor every season to keep the customers interested as well.

What are the future opportunities for the Innocent Company, product extensions, brand extensions, market extensions, and Growth strategy?
Innocent should increase its portfolio with some newer products as the current customer base of its market is very limited. As the expansion in international market is already taking place specifically the European region, they should have to introduce their smoothies in Asian region as well. They have conducted a survey about producing ice cream as well which gave them a very high response but they did not quite opt for it I think the brand extension should take place in the form of producing ice cream that should also follow the same pure and natural tagline. The extension of Veg pots have given them a fairly nice response from the market but again the geographic segmentation is too limited there are better chances to improve the profitability with productivity if they are to introduce them in newer regions.

Bibliography
Marketing Management 13th edition by Philip Kotler http://www.innocentdrinks.co.uk [theme and other images] http://www.innocentdrinks.co.uk/us/our-story http://www.innocentdrinks.co.uk/things-we-make http://www.innocentdrinks.co.uk/us/careers http://www.scribd.com/doc/54829336/Innocent http://www.brandeo.com/node/976 http://homeinsights.hubpages.com/hub/All-About-Innocent-Smoothies http://www.phil-hudson.com/example-business-report-innocent-smoothies/ http://www.marketingweek.co.uk/qa-with-innocent-marketing-director-thomasdelabriere/3023848.article http://en.wikipedia.org