The Use of Product Line Concept

Introduction

The business environment has witnessed increased competition in the recent past. In the wake of internalisation and rapid global commercialisation amid changing consumer behaviour, the debate on temporary competitive advantage has continued to intensify. Various scholars argue that competitive advantage is seldom and declining in duration, particularly in high-velocity business environments. In this vein, organisations have responded to this challenge with the use of product line concept in a bid to leverage the sustainability of their competitive edge (Sinapuelas, Wang, & Bohlmann 2015). Product management is a core function of the modern marketing management department of every organisation. The manner in which organisations lengthen or shorten their product lines with respect to their rivals is deemed as one of the vital strategies of copying with the competitive intensity (Sinapuelas, Wang, & Bohlmann 2015). This paper explores the theoretical framework of product line management with empirical evidence from the Innocent Drinks Company with a view of analysing its current product mix and providing recommendations to add a new product to the mix.

The Product Mix Concept

Product mix or assortment is defined as the totality of the product lines and individual products that a firm provides to the market (Fernandes, Gouveia, & Pinho 2012). The products can be fairly identical or different. Product mix comprises of four major dimensions including length, width, depth, and consistency. First, the width of a firm’s product mix entails the totality of the product lines that it offers to the market. A dual product line company shows that it has a double width. Second, length is the total number of products in a company’s product mix. For instance, a company having two product lines and four brands under each ends up having a length of 8. On the other hand, depth of a product mix refers to the total number of variations for each product.

According to Fernandes, Gouveia, & Pinho (2012), product variations can involve aspects such as flavour and size among others. For instance, for a company that offers juices its depth can be manifested by different flavours such as strawberry and ginger among others. A company that offers two different packaging of two flavours of smoothies has product mix depth of four. Finally yet importantly, consistency refers to the degree of close relationship that exists among the product lines of a particular company. Consistency is depicted in distribution channels, use, and production (Hawkins & Mothersbaugh 2009). The products might use similar production technology but have vastly different consumption, such as on being edible while the other is not. Similarly, two product lines may share the same distribution channel but have varied use.

Firms at varied levels utilise the concept of product mix. For instance, a well-established company might have an extensive product mix with large depths, width, and lengths. On the other hand, start-up and small and medium-sized companies always have limited product mix due to various factors. These factors include the risk of introducing an extensive product mix and limited resources to support product differentiation. As a result, there is a need to foresee the product life cycle with a view of generating profits (Hawkins & Mothersbaugh 2009). Sometimes firms might need to differentiate existing products or introduce new ones when penetrating new markets. This strategy enables them understand diverse consumer tastes that are necessary in the determination of the nature of good or service offered (Hawkins & Mothersbaugh 2009).

Theoretical Background of the Product Mix Concept

The major driving factor for product differentiation is the fact that customer consumption behaviour (Ataman, Heerde, & Mela 2010). An extant body of literature suggests that consumers have varied tastes that result in different preferences. For instance, one customer might prefer a mango fruit juice to passion fruit juice. Meeting these consumer needs offers firms a competitive advantage (Onyeocha 2015). For this reason, the concept of product mix gives the firms prime opportunities to employ innovative practice to differentiate their products (Ataman, Heerde & Mela 2010). A large product mix implies that the company serves a wider market as the varied preferences are taken into account.

Many authors have debated on the motivation of product line extension, particularly the product mix length (Onyeocha 2015). Several factors have been shown to influence the optimal length of a company’s product line and the decisions surrounding its increment (Ataman, Heerde & Mela 2010). The factors that underpin optimal product line increment include heterogeneity of customer needs, the life cycle of market demand, the market structure, and most importantly, the barriers to entry in the industry (Onyeocha 2015). Other factors associated with competitive position such as market share have also been shown to be highly significant. Furthermore, certain internal factors influence the product mix dimensions. These include the possible cannibalisation among brands of a similar product line and the costs associated with product line adjustments (Ataman, Heerde & Mela 2010).

Researchers show that having a wealth of knowledge of the firm’s rivals provides a viable basis for adjustments to its product line in a bid to gain a competitive advantage (Onyeocha 2015). The product mix helps firms to prevent further attack by competitors. The concept enhances the firm’s competitiveness through product differentiation in a manner that eludes close competition (Onyeocha 2015). For instance, a company offers a long length of product mix leaves little chance for competitors to offer such products since any new products that resemble any one of the products can be perceived as an addition to reputable product line of the subject firm.

Product line extensions have been closely related to brand awareness. A company is likely to introduce new products next to a reputable parent brand (Onyeocha 2015). A substantial body of research shows that extensions of strong product lines have a greater tendency introduced based on the strong brands’ reputation. Various reasons have been advanced to support this observation (Sinapuelas, Wang & Bohlmann 2015). First, a strong brands symbolise premium quality, have widespread awareness, familiarity, and positive perceptions on the part of consumers (Sinapuelas, Wang & Bohlmann 2015). Utilising the strong brands to extend the product line often reduces the risk of as it acts as a buffering factor as consumers feel more confident that the new product will provides the same quality as the parent brand (Zhu & Zhang 2010). Research shows that even when consumers have limited experience with the parent brand, new product line extensions attract positive perception (Zhu & Zhang 2010).

Researchers argue that important consideration should be attached to the full array of marketing mix effects when extending the product line. The availability of new product lines in the market has a profound effect on consumers’ choices. The consumer will always want to try the new products found at the stores (Zhu & Zhang 2010). The marketing mix variables play an important role in influencing the consumer purchasing behaviour for the new products (Sinapuelas, Wang & Bohlmann 2015). These variables include distribution, promotion and advertising. Empirical studies reveal that consumers’ access to distribution plays a rather more significant role in leveraging sales of a new product (Sinapuelas, Wang & Bohlmann 2015).

Research reveals that many retailers have been shown to limit product assortments due to limiting shelf space and the risk of stocking a surplus of new products that have little recognition by buyers (Sinapuelas, Wang & Bohlmann 2015). According to the retailer adoption theory, a favour is attached to new products that enhance product assortment portfolio (Zhu & Zhang 2010). In this vein, firms should consider undertaking innovative line extensions to find favour from retailers for their new products (Zhu & Zhang 2010). In addition, advertising and promotion strategies must focus on enhancing new product line awareness (Sinapuelas, Wang & Bohlmann 2015). Information on the benefits and access points for the new products can enhance sales and increase the firms’ competitive edge.

Product Mix of the Innocent Drinks

Rationale for Selecting Innocent Drinks

Company Overview

The Innocent Drinks Company, founded in 1999, has gained the United Kingdom’s trust amongst the numerous food and drinks companies (Frost & Judy 2013). Its headquarters is based in Shepherds Bush. The company’s central objective in its inception was to offer customers with flavoured smoothies and spring water to be distributed throughout the UK based coffee shops and supermarkets among other major outlets. Innocent Drinks Company began with a starting capital of $500. It first sold its fruit juice in a music festival in London, after which an overwhelming feedback provoked additional commitment to start the company. They obtained a $250,000 loan from an American tycoon, which helped the company greatly. Its initial advertisement for the smoothie products ranked number 40 among the top 100 drinks companies according to Times Fast Track (Frost & Judy 2013).

Over time, the company has grown and spread its wings outside the UK market. It has become a large enterprise, commanding the largest smooth market in the UK. Its products are sold in France, the Republic of Ireland, Copenhagen, Amsterdam, and Brussels. The company’s smoothies witness a skyrocketing trend with sales reaching over two million weekly. Today, Innocent Drinks is the leading smoothie brand in the UK market.

Innocent Drinks’ Product Portfolio and Target Customers

Fruit is the main source of Innocent Drinks’ success. Since the company’s inception, it has ventured into the production of premium quality drinks. A brand is the name under which company’s product sell. Innocent drinks’ product sell under the brand ‘innocent’ The product trades under the brand name ‘innocent’ to denote that they are fresh, unadulterated and completely pure, according to the information provided on the company’s website. Additionally, the company reassures its customers to obtain 100% natural drinks made from fruit juices and cow’s milk (Frost & Judy 2013). Its product brands range from delicious smoothies made from fruit and milk to the super foods made following the customers’ specifications. They include juices, coconut water, bubbles, and smoothies. The company sells super smoothie that is made up of a fruit blend, vegetables, botanicals, and crushed flax seeds and vitamins to provide the customer with a healthy product. This product line includes defence, super smoothie, super smoothie 750ml, energise, and defence 750ml.

The production is designed to appeal to the customers’ preferences and tastes. Other product brands include the juicy waters made of spring water and fruit juices and the thick probiotic yogurt made of cow’s milk. The products’ blending is designed to ensure customers’ satisfaction and stimulation of the quest for more. The company’s customers love the fun, creative content on the products’ packaging that has become the company’s key branding tool.

Innocent Drinks is a product-oriented company. In this regard, it ensures that every product is of the right quality for customers’ optimum satisfaction. Services such as product delivery are excellent and timely with the company investing in follow-ups to gather information in the way of customers’ feedback (Ali & Jinous 2014). This ensures that any pitfalls and mistakes are identified and rectified in time for further customer satisfaction. Its delivery vans are usually refrigerated to offer the supplementary service of cooling the products for customers. Innocent Drinks targets a large customer base including children, the youth population including athletes. The company won the 2012 bid to offer drinks for the Summer Olympic Games. The content on its packaging is refreshed after every six months to continue engaging customers with interesting stuff.

Current Situation Analysis

This section analyses the current smoothie product mix that Innocent Drinks offers to its customers. However, it is vital to have an overview of the industry in which Innocent smoothies fall. To that end, competitor overview, target customers, and the current product mix will be discussed in detail. This information is crucial as it provides a hindsight regarding the overall market before recommending a new product.

Competitors, Consumers, and Prices

With regards to smoothies, the close competitors for Innocent Drinks include Happy Monkeys, Pepsico, and Ellas Kitchen. These companies are likely to introduce the same product that is recommended for Innocent’s smoothie mix. They target the same customers whose health-conscious products seem appealing. Upon realising the success of Innocent Drinks in the smoothies sector, Happy Monkeys and Ellas Kitchen stormed the market years later releasing smoothie products that targeted children. Happy Little Monkeys utilises varied colour schemes to attract the attention of little children. Innocent smoothies are packed in small cartons that look attractive to the parents. The iconic art drawn on the boxes serves as a promotion strategy for the product. Happy Monkeys has imitated this marketing strategy thereby offering direct completion to Innocent Drinks.

Pepsico is another direct competitor that launched the Tropicana brand targeted to the same pursued by Innocent Drinks. The public’s perception of the Tropicana brand was highly leveraged by the government’s push for a healthy population. The smoothie subsector is highly saturated. In this regard, product differentiation is a viable strategy to increase competitiveness.

Innocent products are perceived to be of high quality. The pricing of the products in the company does not influence the consumers’ perceptions. Besides, various competitors who offer their products and services at comparatively lower prices do not pose significant threats to the company.

Innocent’s Product Mix

Currently, Innocent Drinks offers smoothies that have been differentiated into perfectly pink, mangoes & passion fruits, strawberries & bananas, kiwis, apples & limes, pineapples, bananas & coconuts, and pomegranates, blueberries & acai. Besides smoothies, Innocent Drinks offers different product lines including fruit juices, bubbles, and coconut water. The Innocent bubbles come in a mix of two including tropical and lemon, lime & apple. The coconut water is a refreshing drink made purely from coconut that naturally supports body hydration (Zhu & Zhang 2010). It is a recent addition to the company’s product mix. The company has been offering smoothies and seems to have neglected the water business. To this end, the proposed product adds to the water production line to add on to the coconut water.

Recommended Product (Innocent Water)

The success of a product marketing mix ensures the right product is availed to the right customers at the right time, in the right package, and with the use of the most suitable distribution channel. Just before introducing the new product (innocent water), it is critical to have an in-depth analysis of the market situation, particularly the presence of a similar product or close substitute.

Competitors

The UK market is saturated with smoothie producers and manufacturers of bottled water. Following the withdrawal of Coca Cola’s Dasani water that was reportedly found to contain a harmful substance, the water business has become a sensitive venture in the UK market. Many organisations have focused on fruit juices and smoothies and neglected the water product that is essential to customers. Therefore, there exists a gap in the market that Innocent Drinks can exploit and achieve success.

Target Customers

The new product, which adds to the innocent coconut water, targets the UK market’s general customers. Research has shown that water is a commodity that if well purified and packaged, is a fast moving product. The company can follow the example of the first biggest sale during the 2012 Olympics when it won the tender to supply fruit juices to fans and athletes. Such big events can provide an opportunity for easy penetration and exponential growth for Innocent growth.

Innocent water Marketing Mix

A key success factor (KSF) for market entry for the new product is the marketing mix that the company will adopt to introduce the innocent water. Key ingredients of the proposed marketing mix include product, price, promotion, placement, and values (Zhu & Zhang 2010).

Product Description and Pricing

The innocent water that will be a core consumer product intended to quench thirst for the UK market. It will come as a bottle of water augmented by contribution to charity for the organisation. The non-durable product will be intended for customers’ personal quick consumption. The product will sit side by side with innocent water and innocent smoothies at the retail stores. Innocent water will be an addition to the line of water, where the coconut water product finds itself. It is important to note that in comparison with other innocent products, the bottled innocent water will come in different sizes. Whereas it is intended for the UK upmarket, the product line length will stretch downwards since its pricing will be relatively lower than that of the innocent smoothies.

The lower pricing does not necessarily imply low quality, rather it will intend to gain a rapid market entry and add on the Innocent Drinks’ product profile. In fact, quality is a key strength that must be manifested in the new product. As a result, the water will be obtained from clean and fresh springs. There will be no additions whatsoever in a bid to distinguish the natural product from those offered by current competitors. Therefore, offering such a high quality product will enhance the company’s competitive advantage. A combination of lower price and premium quality will ensure that customer’s needs are met at a relatively cheaper price than the prevailing market costs. The company has an unbeatable reputation besides winning over 80% of the market’s customer loyalty. The loyal customers will definitely buy the innocent smoothies and innocent water due to the attached positive perception. The assumption here is that it is easy for a loyal customer to buy a product associated with a reputable brand name than those of competitors (Zhu & Zhang 2010).

Promotion and Placement

A link between the innocent water (new product) and its potential customers is essential for the successful entry into the competitive UK market. As such, the function of product promotion comes in to create awareness of the presence of the new product, its benefits over existing products, and its accessibility. A large advertising can help achieve these goals (Zhu & Zhang 2010). Again, the company can boast its strong brand name and utilise similar promotion campaigns used for other Innocent products. Combining high promotion and the middle-pricing strategy can propel growth and success of the new product. Indeed, Innocent Drinks will need to adopt robust strategies to penetrate the competitive market in the country. In this case, the promotion of the new product will be done through rapid skimming that will help to capture the market attention fast with the use of reasonable pricing and huge promotion campaigns.

On the other hand, the rapid penetration strategy implies setting the price lower than the prevailing market price and those of the competitors. According to Onyeocha (2015), rapid promotion should accompany rapid skimming to allow successful launch of innocent water. The company will adopt the weak theory of advertising. This way, it will promote the innocent drinks while maintaining awareness of the existence of the new product. It will also reinforce existing attitudes towards the strong brand and provide reassurance as to why innocent t water is much better as compared to those offered by competitors. The weak theory of advertising presumes that customers will repeat the same behaviour towards a new product same as those attached to a strong brand of the same company. The availability of highly differentiated products will in turn improve customer satisfaction (Zhu & Zhang 2010).

Another important aspect of product marketing management is placement. Innocent Drinks needs to employ a working strategy such as placing the new product next to its reputable products such as the innocent smoothies. Placing innocent water alongside the already established product line in the UK market will remind create awareness of yet a new high quality product from Innocent Drinks. Given that the water market in the UK is not highly saturated, the company can choose a location there to launch the product. Notable outlets that can leverage the impact through hosting the launch include Sainsbury’s, Tesco, Waitrose, and Starbucks. Customers attach a lot of importance to these retail outlets since they offer high quality products (Zhu & Zhang 2010). Hence, launching the products in these stores can have an exceptional impact on the perception of the new product. This situation develops a repeat business since customers gain more confidence in the products and services offered.

Consumer demographics have continued to evolve in the recent past. This evolution involves demand for high-end products such as those offered by Innocent Drinks. The company, therefore, will reap the benefits of sustaining quality in the new product given that its existing product mix continues to boast.

Conclusion

Product marketing is an important function of any business. As such, employing proactive strategies in product development and marketing is essential in winning the attention of the rather diverse consumers in the UK market. This paper has presented the tenets of product management including product line and mix that plays an important role is enhancing the overall success of a business. The product mix features four dimensions including length, width, depth, and consistency, which have been elaborately been discussed. The Innocent Drinks Company is the leading maker of smoothies and fruit juices in The UK market. Its industry has been discussed with its key rivals analysed. The introduction of the innocent water as new product along with the innocent coconut water can help the product to stretch its product line in the non-saturated UK market. Product mix and marketing theoretical frameworks have been integrated in the recommendation for the new product. Adding innocent water to the innocent coconut water will make the product mix of the length to be two. The new product will enjoy the company’s exceptional brand name that highly associated with high quality across the UK and Europe.

References

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