A Product Analysis Of The Product Mizone Marketing Essay

5435 words (22 pages) Essay

1st Jan 1970 Marketing Reference this

Disclaimer: This work has been submitted by a university student. This is not an example of the work produced by our Essay Writing Service. You can view samples of our professional work here.

Any opinions, findings, conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of UKEssays.com.

Research and development within any company is the engine that drives their innovation. It is a vital part of the production of a product. In 2000 Frucor produced and launched Mizone Formulated Sports Water in New Zealand. A year later it was launched in Australia and finally released in China in 2003.

Get Help With Your Essay

If you need assistance with writing your essay, our professional essay writing service is here to help!

Find out more

Containing one- third less sugar than other sports drinks, Mizone has been scientifically engineered to keep consumers active. Frucor produces three different Mizone sports drink product ranges. Mizone Active Water is available in Australia in lime, blackcurrant, mandarin and raspberry, while the range in New Zealand consists of lime, passionfruit, mandarin and crisp apple. Mizone differentiates itself from the numerous other flavoured water products as it is made with four B vitamins to unlock energy, electrolytes and carbohydrates to hydrate you faster than water and sports drinks and antioxidant vitamin C to unlock the energy in your body and maintain your health. Mizone Isopower on the other hand is only available in New Zealand in Silver Surge, Arctic Blitz and Citrus Blast. Isotonic sports drinks have a mineral salt concentration the same as normal body fluids, designed to rehydrate and deliver energy to working muscles [2] . Mizone isopower is also available in two low-carb flavours of Raspberry Rush and Lemon Lime Charge. Adding to Frucor’s list of innovations, Mizone isopower is New Zealand’s first low- carb sports drink range allowing the specific balance of four B vitamins and four electrolytes to deliver fast rehydration. The third and final range of Mizone sports drinks is Mizone Rapid, released in 2007 as Frucor’s first hypotonic sports drink. When the body sweats electrolytes are lost, Mizone simply replaces those electrolytes. However the hypotonic formula completes this replacement process faster.

In 2008 a Mizone study was conducted through an experiment of eleven cyclists and triathletes competing against each other. This study gained enough evidence to show that Mizone is absorbed up to 16 percent faster than leading sports drinks such as Powerade. Therefore the main targets of Mizone’s marketing efforts are athletes- mainly men aged 25 to 34, as well as young people (teens to late twenties) who are constantly active and enjoy a twist to their water.::Desktop:Screen shot 2011-05-21 at 9.36.51 PM.png

Mizone is available nationwide in 750mL clear blue plastic bottles. They feature a blue flip and flow cap that opens to a nozzle to simply release the flavoured fluid. The bottle is slightly curved with finger like grooves on the bottom half with the word ‘Mizone’ engraved within the plastic. The only colour on the bottle is featured on the wrap around paper, which includes the details of the product and a strip of colour varying depending on the flavour.

Frucor

Frucor is a private beverage company headquartered in Auckland, New Zealand, employing more than 900 people across New Zealand and Australia. Founded in 1962 by New Zealand Apple and Pear Marketing Board Frucor has launched a number of brands including Dilmah Ice Tea; energy drinks- V, Rockstar and Protein Revival; fruit juices and fruit drinks such as Just Juice, Fresh Up and G Force; popular soft drinks Pepsi, Pepsi max, Mountain Dew and 7Up; milk products Moccona, Wave and Up and Go Liquid Breakfast; and pure water and sport water including h2go, Mizone and Evian.

Frucor has made itself well known by following a strict set of quality standards, by listening to consumers’ ideas, constantly testing each drink to ensure it meets expectations and making it easy for consumers to find their products. This last step is achieved by distributing their drinks in countries around the globe such as New Zealand, Australia, South Africa, Japan and European countries including United Kingdom, Ireland, Amsterdam and Spain.

Frucor prides itself on constantly remaining in line with or ahead of changing trends within society. Their first invention began shortly after the company was established and the creative juices continue to flow to this day. In 1972, Frucor then known as ‘Fresh Up’ introduced the tear- tab can. A number of years later they became one of the first companies in the world to hot fill juice into plastic PET bottles. Soon after, this achievement was followed by the launch of New Zealand’s first jelly drink. In 2000 Frucor was listed on the Australian Stock Exchange, while it was delisted two years later. In 2009 Frucor was sold to Japanese international beverage company, Suntory. Though Frucor’s latest triumph is the production of their first hypotonic sports drink. Hypotonic drinks contain a diluted carbohydrate electrolyte solution that has been shown to be absorbed more rapidly than water and other sports drinks. It delivers energy to the muscles quickly allowing the individual to stay hydrated and perform at their best.

Marketing Mix

Marketing describes any activity designed to plan, price, promote and distribute goods or services. The terms product, price, promotion and place and are known as the four P’s. The marketing mix is a combination of these four P’s and how they blend together.

Product

People’s perceptions on Frucor’s brands vary depending on the product. Mizone is one of Frucor’s brands that is not as well known as others, although it does have a lot to offer to consumers. Customers do not want to buy a product so much as the benefits of the product [3] ; therefore Mizone offers tangible qualities such as the emphasis on its health benefits, while the intangible qualities include the positive reputation that Frucor has earned through its projects within the community.

Mizone was produced as a formulated sports water, scientifically engineered by a team of nutrition and sports experts. Its core purpose is to keep consumers active and hydrated. It achieves this through great tasting natural flavours and contains one-third less sugar than other sports drinks. Frucor’s intangible quality on the other hand is the positive reputation that it has gained through its work with the community in recent years. Since 2003 Frucor has sponsored ‘Life Education Trust’ mobile classrooms that shows two hundred and forty thousand kids a year how to make positive choices in life. They also donated a large sum of money to the staff, Red Cross Earthquake Appeal and the Disaster Relief Appeal during the New Zealand earthquakes, Japan earthquake and Queensland floods. As well as this Suntory, Frucor’s parent company donated one million bottles of mineral water to those without water during these tragedies as well as during the Pike River Mine disaster in order to keep the miners hydrated. Frucor also participates in fundraising events for causes such as the Starlight Children’s Foundation.

Positioning

Positioning is a perception that potential buyers have of a product compared with its competitors. When comparing Mizone to its competitors such as Powerade, Gatorade and Pump it does not stand out. Mizone is available in large supermarkets including IGA, Coles and Woolworths where it is not completely satisfying the criteria of attracting its target market of athletes. Therefore in the sports drink market Mizone is positioned relatively low as not many people are aware of or pay attention to the benefits or the purpose of this flavoured water.

Branding

A brand is a tool that a business uses to differentiate its products from its competitors. The Mizone logo is simply ‘Mizone’ written in bold blue writing with the letter ‘O’ standing out from the rest. Branding is closely linked to positioning. Through this logo the product looks like a manly, sports drink that wouldn’t usually attract females. By making it available in supermarkets females, who usually do the grocery shopping will walk straight past the product without a second thought. Therefore revisiting the idea that the people that are aware of this product are very minimal and in the wrong market segment.

Packaging

Packaging is both functional and participates in the marketing role of promoting the product. Mizone’s packaging features a bold logo that alone achieves the task of attracting its target market. The bottle is not simple or plain, consisting of a number of finger- like grooves where in some areas it is smooth and in others matte and rough. As well as this the brand name is imprinted into the plastic adding another feature to the bottle as well as a promotion technique if the paper were to be pulled off the bottle. Through this feature Frucor is working to improve Mizone’s competitiveness against other sports drinks in the market. Mizone’s packaging does not only attract the consumers eye but through its clear bottling it provides benefits to consumers who prefer to see what is inside their drink rather than drinking from an aluminium can where the contents is hidden. The flip and flow lid prevents waste through leakage and the bottle is recyclable therefore also benefiting the environment.

Price

Price is the amount of money that consumers are willing to pay for a product. The pricing methods used by Frucor are also a tactic to make their product more competitive. To price Mizone, Frucor uses a number of pricing strategies:

Cost of production

Frucor calculates the cost of production and sets a selling price where they are still able to make a profit.

Competition- based

This method requires the company to base their prices depending on what their competitors are charging. Based on Mizone’s low production costs Frucor is able to charge a reasonable price to make a profit and not be threatened by their competitors’ prices.

Price skimming

Although the price did not significantly change, Frucor charged more for Mizone when it was still new on the market. The price that consumers pay now is $2.14. The graph below shows the change in pricing in Coles over the past few months. This strategy allowed the business to recover from the products establishment phase and then it entered the growth phase at a slightly lower price.

::Desktop:chart-1.png

Penetration pricing

Compared to its competitors, Frucor charges a much lower price for Mizone; this can be seen in the table below. This strategy gives the company a competitive advantage in increasing its market share.

Brand

Price

Mizone

$2.14

Gatorade

$3.21

Powerade

$3.32

Pump

$3.53

Promotion

Promotion is about effective communication. Frucor’s main form of communication with consumers is through advertising.

Advertising

The purpose of advertising is to be persuasive. This form of paid communication creates a need within the consumer therefore encouraging them to purchase the product. As well as relying on Mizone’s packaging to attract consumers Frucor invests a large amount of time, energy and money on creating interesting TV advertisements to persuade consumers to buy their product. Though TV advertisements are short Frucor are able to rely on the power of this promotional technique because they include all the information that people want to hear and leave all the irrelevant information out. Included in their advertisements for Mizone rapid are four Olympic athletes who drink this product: Steven Ferguson, world number five champion kayaker; Alison Shanks, world number one track cyclist; Bevan Docherty, world number two triathlete; and Mahe Drysdale, World Rowing Champion.

The Communication Process .

Building customer relationships and gaining customer loyalty is another aspect of promotion. Frucor has found a way to communicate with their target market through what they believe will interest them. As the target market of Mizone are athletes, Frucor in association with Warner Music and Olympic Sports Psychologist Professor Peter Terry have created four play-lists to get athletes in their zone while they exercise. The campaign known as ‘Mizone Mitracks’ uses the catchy tagline ‘music, the last legal stimulant’. Each track is tailored to a different workout intensity, as the right music can dramatically increase sporting performance, reduce the perception of pain, decrease the amount of oxygen required and increase enjoyment levels [4] .

Frucor has also created brand awareness for Mizone by forming sponsorship deals with Olympic athletes Steven Ferguson, Alison Shanks and Bevan Docherty. As well as creating brand awareness Mizone has created community awareness for different sporting teams around the country. They held a campaign where teams would send in their photos and sponsorship pledge and Mizone would send out merchandise as their way of sponsoring this sporting team for a period of twelve months. Mizone also sponsors the Hills Hawks Rugby League Club.

Place

Place is concerned with working out the most effective way to get the product to the final consumer. Given the purpose of this product, the appropriate method of distribution needed to be chosen to reach the desired target market of athletes. Frucor, a subsidiary of Japanese based company Suntory, distributes Mizone. Although the distribution choice was previously intensive, Mizone’s status has decreased over the years since its release in 2001, therefore resulting in the business adopting a selective channel choice. This channel choice focuses on food providers such as milk bars and take- away food stores, but also supermarkets such as Woolworths and Coles.::Desktop:clean_up.jpg

Warehousing

Frucor produces and packages Mizone in bulk and stores them in their Christchurch warehouse until they are ready to be distributed (the photo on the right shows the effects of the Christchurch earthquake on this warehouse). This system is an effective way of saving energy and time, rather than constantly switching the machines on and off when businesses order the products to sell or for storage within their individual warehouses.

Transport

Technology has made it possible to transport goods at a cheaper price. Cost- reduction advances implemented by Frucor include a packaging system where containers are completely filled therefore minimising both the cost of transport and unnecessary pollution caused by trucks, trains and planes that transport the product. Frucor has also adopted a roll on roll off conveyor belt within their factories to reduce the amount of workers needed to load, unload and package the bottles within their pallets.

Environment

Recently Frucor New Zealand has been on the green path to being an energy efficient workplace. Their first steps in achieving this have included taking out unnecessary lighting, changing air conditioning controls to a more efficient option and putting insulation around hot water systems to hold in heat. Staff are also being encouraged to become more energy conscious by turning off lights and computers when they leave their office. Less Plastic is being used in the bottling of their products and they have adopted an in-house recycling system where since 2008 they have recycled around eighty- five percent of their waste each month.

Develop Marketing Strategies and Justify

Market Segmentation and Product/ Service Differentiation

Market segmentation is the process of breaking the total market into parts or segments based on individuals’ gender, age, income or lifestyle. The purpose of market segmentation is to satisfy the customers who have similar needs. Market segmentation is important for the marketing department to focus their efforts on because it is impossible to satisfy all individuals through one product because all customer needs are varied. Mizone’s target market are individuals in the 25- 34 age group. This focus is narrowed down further to athletes, mainly males. By focusing its efforts on these individuals within society Frucor’s marketing department is able to really understand the needs of these customers and continue to work to satisfy them.

Gender

Through Mizone’s packaging and its logo it is clear that mainly males will be attracted to this product. Although this focus is working for Frucor its is recommended that they expand their marketing focus on also attracting females in order to increase competitiveness against its male focused competitors therefore gaining more market share. Frucor has unknowingly achieved this goal slightly in two ways. Firstly they distribute Mizone to supermarkets where females do the grocery shopping rather than males. They have also focused one of their marketing campaigns on female track cyclist Alison Shanks by featuring her in one of their TV advertisements. This campaign shows that not only males are successful athletes but hopes to encourage young females to get involved in sport. Although in order to attract more females to purchase Mizone the packaging must be changed to become more eye catching. This can be achieved by introducing more, brighter colours on the bottle. It is also recommended that Frucor expand its Mizone products by producing a smaller size bottle that can be marketed especially towards females, as they are known to consume smaller portions than men.

Age

Mizone is targeted at the 25- 34 age group. This has been an effective target market for Frucor so it is recommended that they continue to focus their efforts on this group. The reason for this is because the benefits that Mizone has to offer to consumers is aimed at athletes in this age group, relevant to their body types. It contains enough sugar to satisfy their energy levels in order for them to work it off through their exercise.

Find out how UKEssays.com can help you!

Our academic experts are ready and waiting to assist with any writing project you may have. From simple essay plans, through to full dissertations, you can guarantee we have a service perfectly matched to your needs.

View our services

Even though it is not marketed towards teenagers, Mizone is a light, tasty social drink that is consumed by this age group. There is no rule that states they cannot consume it just because the advertisements are not aimed at them. Although there is a reason for focusing on this particular target market. Teenagers are becoming lazier and therefore the consumption of the salty electrolytes added to Mizone will not benefit their health, as they are not working it off like athletes are. So therefore it is recommended that Frucor continue with their current marketing campaigns because it is effective towards its intended consumers.

Income

Mizone is set at a price of $2.14 compared to its competitors that have an average price of $3.35. Through this low price it is clear that Mizone is not interested in the prestige that certain brand names have to offer but it is aimed at attracting regular consumers. It is recommended that this continue because more people are watching what they spend their money on due to the current recession. Consumers are looking for cheaper prices and will choose Mizone over its competitors due to its low price. This in turn will benefit the company because they are gaining more market share than their competitors.

Lifestyle

Each group in society has their own interests. Mizones target market falls into the 18- 24 age group who have a shared interest in a healthy lifestyle. Through the benefits that Mizone offers to its consumers to keep them active and hydrate them faster it is achieving this groups goal. The table below shows the rise in market share that different drinks on the market have experienced. It is shown that sports drinks have increased by approximately twenty- one percent. This is why Mizone should continue to do what they are currently doing because by considering all its factors including its health benefits, benefits its packaging has on the environment and its low price consumers will choose Mizone over its competitors.::Desktop:6.Sportsdrinks.JPG

Product Differentiation .

Differentiation is concerned with convincing the consumer that the product is different from others within the market. Mizone differentiates itself based on three factors:

Its low price compared to its competitors.

The continued effort that is put into its bottling- both in an environmental sense and physically, to attract consumers.

The health benefits that it offers to consumers such as hydrating them faster than other sports drinks and keeping them active.

Product and Service

The core product refers to the benefits the product offers to consumers [5] . Mizone was introduced into the market to hydrate consumers faster and keep them active. It is scientifically engineered to unlock the energy in your body and maintain your health. This factor is important and should not be changed because it is the reason of sales for Mizone and gaining its market share. The actual product is more concerned with the intangible benefits that the product offers. It is important for businesses to remember that ‘customers do not want to buy a product so much as the benefits of the product’ [6] . These benefits are categorised under:

Positioning

When comparing Mizone to its competitors such as Powerade, Gatorade and Pump, it does not stand out. Primary research shows that one in five people have heard of or purchased Mizone. Therefore in order to increase customer awareness it is recommended that a number of extra promotional strategies be enforced such as advertising and competitions so that consumers know exactly what Mizone is. Mizone is currently available in large supermarkets including IGA, Coles and Woolworths where it is not completely satisfying the criteria of attracting its target market. This explains why the positioning of this product is low. In order to change this and attract its target market Mizone needs to be available in sports arenas, sporting fields, swimming centres and gyms where athletes are located rather than in supermarkets where females tend to shop for their groceries. Although it is still important for Frucor to expand Mizones products to attract the opposite sex. Improving it’s packaging to make it more eye catching for female shoppers and improving its logo can do this. A change in Mizones logo will not be a major threat to the company but may be the exact competitive advantage that this brand needs. By improving the logo customers will see a new product on the shelves and will be influenced to try it. Therefore, increasing customer awareness results in higher brand positioning against its competitors.

Branding

Mizone is not a well- known brand. When being compared to its competitor’s consumers will constantly go for the latter option. In order to gain customer awareness and convince consumers to choose Mizone the marketing department needs to make some changes! To improve branding customers needs to be informed about the company that produces Mizone. Consumers do not know what Frucor is. Frucor’s other products such as Pepsi, Pepsi Max and Mountain Dew are very popular among consumers but it is not known who produces them. It is predicted that once consumers are aware that the same company produces these beverages Mizone will be associated with them and therefore gain more trust from consumers. This task can be achieved by increased advertising through in store posters that show the connection between the beverages, labelling on the bottle and informing customers through their TV advertisements.::Desktop:1.Running.png

Packaging

Mizone’s bottle is neither plain nor simple. It features a number of rough, finger- like grooves, the name of the drink imprinted in the plastic, as well as ‘Mizone’s’ bold blue logo on the wrap around information paper. It’s flip and flow lid makes it simple to consume while on the run and prevents leakage when stored in the fridge, cupboard or backpacks. The bottle promotes the product, attracts male consumers and is of a reasonable size for athletes. This packaging should not be changed unless the company decides to take on the earlier advice of changing the brand logo. Alterations regarding colour and size will also need to be made if Frucor is interested in attracting the female population in this age group. Although when attracting the male population Mizone is achieving its task with its current packaging.

Price Including Pricing Methods

Price Methods .

Cost

This is based on taking the cost of production for the product and adding it to an amount where the company is able to make a profit. This amount is then set as the selling price. The production of Mizone is both energy and cost efficient. In order for Mizone to be set at a selling price of $2.14 its production is obviously simple and does not require a large number of staff along the production line. All these factors have clearly impacted on the selling price and it is recommended that Frucor continue with the process that they are using. The reason for this is because as well as gaining acceptance from consumers for helping the environment Mizone’s low selling price is their competitive advantage against other brands in the market.

Competition- based .

This method requires the company to base their prices depending on what their competitors are charging. Although low prices are associated with the idea of a poor quality product Mizone should continue to charge their low price and use this factor to their advantage. Acknowledging their low price in their advertising can achieve this. Similar to the path that energy drink ‘Mother’ took, Mizone can acknowledge, address and set the negative comments straight by designing a catchy tagline that consumers can remember the next time they are out to purchase a sports drink.

Pricing Strategies/ Tactics .

Skimming Strategies .

Skimming is a strategy where the business sets a relatively high price at first and then lowers the price over time. Frucor did use this strategy in the establishment phase of Mizone’s life cycle, although the price was not altered significantly. When Mizone was originally released Frucor charged consumers about $3.00 while today the price decreased by 86 cents to $2.14. This strategy allowed Frucor to recover from the high costs of establishing, producing and marketing a new product into the market and was decreased to its current price when the product entered the growth phase, giving this business a competitive advantage. It is recommended that if Mizone re-establishes their logo they participate in this pricing strategy once again. They can price their product between $2.50 to $3.50 and then reduce their price to $2.14 when the company believes it has made enough profit to pay for their changes.

Penetration Strategies .

Penetration pricing is a strategy where a business sets a lower price than its competitors in order to increase market share [7] . Frucor is currently using this strategy for Mizone and should continue to do so. The purpose of this strategy is to gain market share at the expense of competitors. With more customer awareness and more intensive distribution of this product this strategy will definitely pay off for Frucor.

Loss Leaders .

These are prices set at a very low level to encourage consideration of a product newly introduced to the market or to encourage customers to consider other products [8] . Frucor is not currently using this strategy for Mizone and it is not recommended that they do so, for two reasons:

If this strategy gets out of control it can lead to bait advertising, which is illegal.

It is not predicted that Frucor will be able to make a reasonable profit from pricing this product lower than what it is already available at. This may result in a severe decline in sales and the product may need to be discontinued.

Price Points .

The price point is the psychological price reference in the minds of customers [9] . At the moment Mizone is priced at $2.14. Consumers see this as a very cheap price when comparing it to its competitors, but it is also seen as a price below $2.15. It is recommended that Frucor keep this as the selling price for their product. Though minor changes will need to be made if Frucor decide to recreate the Mizone logo. They will still be able to use the price point strategy if they accept and follow the earlier advice. The new price should be between $2.50 and $3.50, which by consumers is seen as either below $3.00 or below $4.00. This price will only be for a limited time while Frucor is able to make a profit to pay for the whole recreating process. Though it is clear that Mizone’s new price will still be cheaper than its competitors.

Promotion

Personal Selling .

Personal selling is becoming a partnership between the supplier and the retailer [10] . Frucor is not currently using this promotional technique, though it is recommended. Frucor should design a promotional display rack, stands and large posters, then train and send out an employee to popular gyms, large supermarkets and football stadiums in each city to display these promotional equipment. This will definitely gain customer awareness, which may in time result in increased sales.

Advertising

Advertising is paid communication with the target market with the purpose to persuade them to purchase a product. Frucor is currently advertising Mizone through TV advertisements and by sponsoring sports teams and Olympic athletes, though this is not enough! Most of the customers that Mizone has are in New Zealand and Asia, but the focus of this marketing advice is Australia. Frucor should double the TV advertisements, release full-page ads in various magazines especially those focused on sport as well submitting a smaller advertisement into the weekly newspaper. It is also recommended that Frucor take one step further and design billboa

Research and development within any company is the engine that drives their innovation. It is a vital part of the production of a product. In 2000 Frucor produced and launched Mizone Formulated Sports Water in New Zealand. A year later it was launched in Australia and finally released in China in 2003.

Containing one- third less sugar than other sports drinks, Mizone has been scientifically engineered to keep consumers active. Frucor produces three different Mizone sports drink product ranges. Mizone Active Water is available in Australia in lime, blackcurrant, mandarin and raspberry, while the range in New Zealand consists of lime, passionfruit, mandarin and crisp apple. Mizone differentiates itself from the numerous other flavoured water products as it is made with four B vitamins to unlock energy, electrolytes and carbohydrates to hydrate you faster than water and sports drinks and antioxidant vitamin C to unlock the energy in your body and maintain your health. Mizone Isopower on the other hand is only available in New Zealand in Silver Surge, Arctic Blitz and Citrus Blast. Isotonic sports drinks have a mineral salt concentration the same as normal body fluids, designed to rehydrate and deliver energy to working muscles [2] . Mizone isopower is also available in two low-carb flavours of Raspberry Rush and Lemon Lime Charge. Adding to Frucor’s list of innovations, Mizone isopower is New Zealand’s first low- carb sports drink range allowing the specific balance of four B vitamins and four electrolytes to deliver fast rehydration. The third and final range of Mizone sports drinks is Mizone Rapid, released in 2007 as Frucor’s first hypotonic sports drink. When the body sweats electrolytes are lost, Mizone simply replaces those electrolytes. However the hypotonic formula completes this replacement process faster.

In 2008 a Mizone study was conducted through an experiment of eleven cyclists and triathletes competing against each other. This study gained enough evidence to show that Mizone is absorbed up to 16 percent faster than leading sports drinks such as Powerade. Therefore the main targets of Mizone’s marketing efforts are athletes- mainly men aged 25 to 34, as well as young people (teens to late twenties) who are constantly active and enjoy a twist to their water.::Desktop:Screen shot 2011-05-21 at 9.36.51 PM.png

Mizone is available nationwide in 750mL clear blue plastic bottles. They feature a blue flip and flow cap that opens to a nozzle to simply release the flavoured fluid. The bottle is slightly curved with finger like grooves on the bottom half with the word ‘Mizone’ engraved within the plastic. The only colour on the bottle is featured on the wrap around paper, which includes the details of the product and a strip of colour varying depending on the flavour.

Frucor

Frucor is a private beverage company headquartered in Auckland, New Zealand, employing more than 900 people across New Zealand and Australia. Founded in 1962 by New Zealand Apple and Pear Marketing Board Frucor has launched a number of brands including Dilmah Ice Tea; energy drinks- V, Rockstar and Protein Revival; fruit juices and fruit drinks such as Just Juice, Fresh Up and G Force; popular soft drinks Pepsi, Pepsi max, Mountain Dew and 7Up; milk products Moccona, Wave and Up and Go Liquid Breakfast; and pure water and sport water including h2go, Mizone and Evian.

Frucor has made itself well known by following a strict set of quality standards, by listening to consumers’ ideas, constantly testing each drink to ensure it meets expectations and making it easy for consumers to find their products. This last step is achieved by distributing their drinks in countries around the globe such as New Zealand, Australia, South Africa, Japan and European countries including United Kingdom, Ireland, Amsterdam and Spain.

Frucor prides itself on constantly remaining in line with or ahead of changing trends within society. Their first invention began shortly after the company was established and the creative juices continue to flow to this day. In 1972, Frucor then known as ‘Fresh Up’ introduced the tear- tab can. A number of years later they became one of the first companies in the world to hot fill juice into plastic PET bottles. Soon after, this achievement was followed by the launch of New Zealand’s first jelly drink. In 2000 Frucor was listed on the Australian Stock Exchange, while it was delisted two years later. In 2009 Frucor was sold to Japanese international beverage company, Suntory. Though Frucor’s latest triumph is the production of their first hypotonic sports drink. Hypotonic drinks contain a diluted carbohydrate electrolyte solution that has been shown to be absorbed more rapidly than water and other sports drinks. It delivers energy to the muscles quickly allowing the individual to stay hydrated and perform at their best.

Marketing Mix

Marketing describes any activity designed to plan, price, promote and distribute goods or services. The terms product, price, promotion and place and are known as the four P’s. The marketing mix is a combination of these four P’s and how they blend together.

Product

People’s perceptions on Frucor’s brands vary depending on the product. Mizone is one of Frucor’s brands that is not as well known as others, although it does have a lot to offer to consumers. Customers do not want to buy a product so much as the benefits of the product [3] ; therefore Mizone offers tangible qualities such as the emphasis on its health benefits, while the intangible qualities include the positive reputation that Frucor has earned through its projects within the community.

Mizone was produced as a formulated sports water, scientifically engineered by a team of nutrition and sports experts. Its core purpose is to keep consumers active and hydrated. It achieves this through great tasting natural flavours and contains one-third less sugar than other sports drinks. Frucor’s intangible quality on the other hand is the positive reputation that it has gained through its work with the community in recent years. Since 2003 Frucor has sponsored ‘Life Education Trust’ mobile classrooms that shows two hundred and forty thousand kids a year how to make positive choices in life. They also donated a large sum of money to the staff, Red Cross Earthquake Appeal and the Disaster Relief Appeal during the New Zealand earthquakes, Japan earthquake and Queensland floods. As well as this Suntory, Frucor’s parent company donated one million bottles of mineral water to those without water during these tragedies as well as during the Pike River Mine disaster in order to keep the miners hydrated. Frucor also participates in fundraising events for causes such as the Starlight Children’s Foundation.

Positioning

Positioning is a perception that potential buyers have of a product compared with its competitors. When comparing Mizone to its competitors such as Powerade, Gatorade and Pump it does not stand out. Mizone is available in large supermarkets including IGA, Coles and Woolworths where it is not completely satisfying the criteria of attracting its target market of athletes. Therefore in the sports drink market Mizone is positioned relatively low as not many people are aware of or pay attention to the benefits or the purpose of this flavoured water.

Branding

A brand is a tool that a business uses to differentiate its products from its competitors. The Mizone logo is simply ‘Mizone’ written in bold blue writing with the letter ‘O’ standing out from the rest. Branding is closely linked to positioning. Through this logo the product looks like a manly, sports drink that wouldn’t usually attract females. By making it available in supermarkets females, who usually do the grocery shopping will walk straight past the product without a second thought. Therefore revisiting the idea that the people that are aware of this product are very minimal and in the wrong market segment.

Packaging

Packaging is both functional and participates in the marketing role of promoting the product. Mizone’s packaging features a bold logo that alone achieves the task of attracting its target market. The bottle is not simple or plain, consisting of a number of finger- like grooves where in some areas it is smooth and in others matte and rough. As well as this the brand name is imprinted into the plastic adding another feature to the bottle as well as a promotion technique if the paper were to be pulled off the bottle. Through this feature Frucor is working to improve Mizone’s competitiveness against other sports drinks in the market. Mizone’s packaging does not only attract the consumers eye but through its clear bottling it provides benefits to consumers who prefer to see what is inside their drink rather than drinking from an aluminium can where the contents is hidden. The flip and flow lid prevents waste through leakage and the bottle is recyclable therefore also benefiting the environment.

Price

Price is the amount of money that consumers are willing to pay for a product. The pricing methods used by Frucor are also a tactic to make their product more competitive. To price Mizone, Frucor uses a number of pricing strategies:

Cost of production

Frucor calculates the cost of production and sets a selling price where they are still able to make a profit.

Competition- based

This method requires the company to base their prices depending on what their competitors are charging. Based on Mizone’s low production costs Frucor is able to charge a reasonable price to make a profit and not be threatened by their competitors’ prices.

Price skimming

Although the price did not significantly change, Frucor charged more for Mizone when it was still new on the market. The price that consumers pay now is $2.14. The graph below shows the change in pricing in Coles over the past few months. This strategy allowed the business to recover from the products establishment phase and then it entered the growth phase at a slightly lower price.

::Desktop:chart-1.png

Penetration pricing

Compared to its competitors, Frucor charges a much lower price for Mizone; this can be seen in the table below. This strategy gives the company a competitive advantage in increasing its market share.

Brand

Price

Mizone

$2.14

Gatorade

$3.21

Powerade

$3.32

Pump

$3.53

Promotion

Promotion is about effective communication. Frucor’s main form of communication with consumers is through advertising.

Advertising

The purpose of advertising is to be persuasive. This form of paid communication creates a need within the consumer therefore encouraging them to purchase the product. As well as relying on Mizone’s packaging to attract consumers Frucor invests a large amount of time, energy and money on creating interesting TV advertisements to persuade consumers to buy their product. Though TV advertisements are short Frucor are able to rely on the power of this promotional technique because they include all the information that people want to hear and leave all the irrelevant information out. Included in their advertisements for Mizone rapid are four Olympic athletes who drink this product: Steven Ferguson, world number five champion kayaker; Alison Shanks, world number one track cyclist; Bevan Docherty, world number two triathlete; and Mahe Drysdale, World Rowing Champion.

The Communication Process .

Building customer relationships and gaining customer loyalty is another aspect of promotion. Frucor has found a way to communicate with their target market through what they believe will interest them. As the target market of Mizone are athletes, Frucor in association with Warner Music and Olympic Sports Psychologist Professor Peter Terry have created four play-lists to get athletes in their zone while they exercise. The campaign known as ‘Mizone Mitracks’ uses the catchy tagline ‘music, the last legal stimulant’. Each track is tailored to a different workout intensity, as the right music can dramatically increase sporting performance, reduce the perception of pain, decrease the amount of oxygen required and increase enjoyment levels [4] .

Frucor has also created brand awareness for Mizone by forming sponsorship deals with Olympic athletes Steven Ferguson, Alison Shanks and Bevan Docherty. As well as creating brand awareness Mizone has created community awareness for different sporting teams around the country. They held a campaign where teams would send in their photos and sponsorship pledge and Mizone would send out merchandise as their way of sponsoring this sporting team for a period of twelve months. Mizone also sponsors the Hills Hawks Rugby League Club.

Place

Place is concerned with working out the most effective way to get the product to the final consumer. Given the purpose of this product, the appropriate method of distribution needed to be chosen to reach the desired target market of athletes. Frucor, a subsidiary of Japanese based company Suntory, distributes Mizone. Although the distribution choice was previously intensive, Mizone’s status has decreased over the years since its release in 2001, therefore resulting in the business adopting a selective channel choice. This channel choice focuses on food providers such as milk bars and take- away food stores, but also supermarkets such as Woolworths and Coles.::Desktop:clean_up.jpg

Warehousing

Frucor produces and packages Mizone in bulk and stores them in their Christchurch warehouse until they are ready to be distributed (the photo on the right shows the effects of the Christchurch earthquake on this warehouse). This system is an effective way of saving energy and time, rather than constantly switching the machines on and off when businesses order the products to sell or for storage within their individual warehouses.

Transport

Technology has made it possible to transport goods at a cheaper price. Cost- reduction advances implemented by Frucor include a packaging system where containers are completely filled therefore minimising both the cost of transport and unnecessary pollution caused by trucks, trains and planes that transport the product. Frucor has also adopted a roll on roll off conveyor belt within their factories to reduce the amount of workers needed to load, unload and package the bottles within their pallets.

Environment

Recently Frucor New Zealand has been on the green path to being an energy efficient workplace. Their first steps in achieving this have included taking out unnecessary lighting, changing air conditioning controls to a more efficient option and putting insulation around hot water systems to hold in heat. Staff are also being encouraged to become more energy conscious by turning off lights and computers when they leave their office. Less Plastic is being used in the bottling of their products and they have adopted an in-house recycling system where since 2008 they have recycled around eighty- five percent of their waste each month.

Develop Marketing Strategies and Justify

Market Segmentation and Product/ Service Differentiation

Market segmentation is the process of breaking the total market into parts or segments based on individuals’ gender, age, income or lifestyle. The purpose of market segmentation is to satisfy the customers who have similar needs. Market segmentation is important for the marketing department to focus their efforts on because it is impossible to satisfy all individuals through one product because all customer needs are varied. Mizone’s target market are individuals in the 25- 34 age group. This focus is narrowed down further to athletes, mainly males. By focusing its efforts on these individuals within society Frucor’s marketing department is able to really understand the needs of these customers and continue to work to satisfy them.

Gender

Through Mizone’s packaging and its logo it is clear that mainly males will be attracted to this product. Although this focus is working for Frucor its is recommended that they expand their marketing focus on also attracting females in order to increase competitiveness against its male focused competitors therefore gaining more market share. Frucor has unknowingly achieved this goal slightly in two ways. Firstly they distribute Mizone to supermarkets where females do the grocery shopping rather than males. They have also focused one of their marketing campaigns on female track cyclist Alison Shanks by featuring her in one of their TV advertisements. This campaign shows that not only males are successful athletes but hopes to encourage young females to get involved in sport. Although in order to attract more females to purchase Mizone the packaging must be changed to become more eye catching. This can be achieved by introducing more, brighter colours on the bottle. It is also recommended that Frucor expand its Mizone products by producing a smaller size bottle that can be marketed especially towards females, as they are known to consume smaller portions than men.

Age

Mizone is targeted at the 25- 34 age group. This has been an effective target market for Frucor so it is recommended that they continue to focus their efforts on this group. The reason for this is because the benefits that Mizone has to offer to consumers is aimed at athletes in this age group, relevant to their body types. It contains enough sugar to satisfy their energy levels in order for them to work it off through their exercise.

Even though it is not marketed towards teenagers, Mizone is a light, tasty social drink that is consumed by this age group. There is no rule that states they cannot consume it just because the advertisements are not aimed at them. Although there is a reason for focusing on this particular target market. Teenagers are becoming lazier and therefore the consumption of the salty electrolytes added to Mizone will not benefit their health, as they are not working it off like athletes are. So therefore it is recommended that Frucor continue with their current marketing campaigns because it is effective towards its intended consumers.

Income

Mizone is set at a price of $2.14 compared to its competitors that have an average price of $3.35. Through this low price it is clear that Mizone is not interested in the prestige that certain brand names have to offer but it is aimed at attracting regular consumers. It is recommended that this continue because more people are watching what they spend their money on due to the current recession. Consumers are looking for cheaper prices and will choose Mizone over its competitors due to its low price. This in turn will benefit the company because they are gaining more market share than their competitors.

Lifestyle

Each group in society has their own interests. Mizones target market falls into the 18- 24 age group who have a shared interest in a healthy lifestyle. Through the benefits that Mizone offers to its consumers to keep them active and hydrate them faster it is achieving this groups goal. The table below shows the rise in market share that different drinks on the market have experienced. It is shown that sports drinks have increased by approximately twenty- one percent. This is why Mizone should continue to do what they are currently doing because by considering all its factors including its health benefits, benefits its packaging has on the environment and its low price consumers will choose Mizone over its competitors.::Desktop:6.Sportsdrinks.JPG

Product Differentiation .

Differentiation is concerned with convincing the consumer that the product is different from others within the market. Mizone differentiates itself based on three factors:

Its low price compared to its competitors.

The continued effort that is put into its bottling- both in an environmental sense and physically, to attract consumers.

The health benefits that it offers to consumers such as hydrating them faster than other sports drinks and keeping them active.

Product and Service

The core product refers to the benefits the product offers to consumers [5] . Mizone was introduced into the market to hydrate consumers faster and keep them active. It is scientifically engineered to unlock the energy in your body and maintain your health. This factor is important and should not be changed because it is the reason of sales for Mizone and gaining its market share. The actual product is more concerned with the intangible benefits that the product offers. It is important for businesses to remember that ‘customers do not want to buy a product so much as the benefits of the product’ [6] . These benefits are categorised under:

Positioning

When comparing Mizone to its competitors such as Powerade, Gatorade and Pump, it does not stand out. Primary research shows that one in five people have heard of or purchased Mizone. Therefore in order to increase customer awareness it is recommended that a number of extra promotional strategies be enforced such as advertising and competitions so that consumers know exactly what Mizone is. Mizone is currently available in large supermarkets including IGA, Coles and Woolworths where it is not completely satisfying the criteria of attracting its target market. This explains why the positioning of this product is low. In order to change this and attract its target market Mizone needs to be available in sports arenas, sporting fields, swimming centres and gyms where athletes are located rather than in supermarkets where females tend to shop for their groceries. Although it is still important for Frucor to expand Mizones products to attract the opposite sex. Improving it’s packaging to make it more eye catching for female shoppers and improving its logo can do this. A change in Mizones logo will not be a major threat to the company but may be the exact competitive advantage that this brand needs. By improving the logo customers will see a new product on the shelves and will be influenced to try it. Therefore, increasing customer awareness results in higher brand positioning against its competitors.

Branding

Mizone is not a well- known brand. When being compared to its competitor’s consumers will constantly go for the latter option. In order to gain customer awareness and convince consumers to choose Mizone the marketing department needs to make some changes! To improve branding customers needs to be informed about the company that produces Mizone. Consumers do not know what Frucor is. Frucor’s other products such as Pepsi, Pepsi Max and Mountain Dew are very popular among consumers but it is not known who produces them. It is predicted that once consumers are aware that the same company produces these beverages Mizone will be associated with them and therefore gain more trust from consumers. This task can be achieved by increased advertising through in store posters that show the connection between the beverages, labelling on the bottle and informing customers through their TV advertisements.::Desktop:1.Running.png

Packaging

Mizone’s bottle is neither plain nor simple. It features a number of rough, finger- like grooves, the name of the drink imprinted in the plastic, as well as ‘Mizone’s’ bold blue logo on the wrap around information paper. It’s flip and flow lid makes it simple to consume while on the run and prevents leakage when stored in the fridge, cupboard or backpacks. The bottle promotes the product, attracts male consumers and is of a reasonable size for athletes. This packaging should not be changed unless the company decides to take on the earlier advice of changing the brand logo. Alterations regarding colour and size will also need to be made if Frucor is interested in attracting the female population in this age group. Although when attracting the male population Mizone is achieving its task with its current packaging.

Price Including Pricing Methods

Price Methods .

Cost

This is based on taking the cost of production for the product and adding it to an amount where the company is able to make a profit. This amount is then set as the selling price. The production of Mizone is both energy and cost efficient. In order for Mizone to be set at a selling price of $2.14 its production is obviously simple and does not require a large number of staff along the production line. All these factors have clearly impacted on the selling price and it is recommended that Frucor continue with the process that they are using. The reason for this is because as well as gaining acceptance from consumers for helping the environment Mizone’s low selling price is their competitive advantage against other brands in the market.

Competition- based .

This method requires the company to base their prices depending on what their competitors are charging. Although low prices are associated with the idea of a poor quality product Mizone should continue to charge their low price and use this factor to their advantage. Acknowledging their low price in their advertising can achieve this. Similar to the path that energy drink ‘Mother’ took, Mizone can acknowledge, address and set the negative comments straight by designing a catchy tagline that consumers can remember the next time they are out to purchase a sports drink.

Pricing Strategies/ Tactics .

Skimming Strategies .

Skimming is a strategy where the business sets a relatively high price at first and then lowers the price over time. Frucor did use this strategy in the establishment phase of Mizone’s life cycle, although the price was not altered significantly. When Mizone was originally released Frucor charged consumers about $3.00 while today the price decreased by 86 cents to $2.14. This strategy allowed Frucor to recover from the high costs of establishing, producing and marketing a new product into the market and was decreased to its current price when the product entered the growth phase, giving this business a competitive advantage. It is recommended that if Mizone re-establishes their logo they participate in this pricing strategy once again. They can price their product between $2.50 to $3.50 and then reduce their price to $2.14 when the company believes it has made enough profit to pay for their changes.

Penetration Strategies .

Penetration pricing is a strategy where a business sets a lower price than its competitors in order to increase market share [7] . Frucor is currently using this strategy for Mizone and should continue to do so. The purpose of this strategy is to gain market share at the expense of competitors. With more customer awareness and more intensive distribution of this product this strategy will definitely pay off for Frucor.

Loss Leaders .

These are prices set at a very low level to encourage consideration of a product newly introduced to the market or to encourage customers to consider other products [8] . Frucor is not currently using this strategy for Mizone and it is not recommended that they do so, for two reasons:

If this strategy gets out of control it can lead to bait advertising, which is illegal.

It is not predicted that Frucor will be able to make a reasonable profit from pricing this product lower than what it is already available at. This may result in a severe decline in sales and the product may need to be discontinued.

Price Points .

The price point is the psychological price reference in the minds of customers [9] . At the moment Mizone is priced at $2.14. Consumers see this as a very cheap price when comparing it to its competitors, but it is also seen as a price below $2.15. It is recommended that Frucor keep this as the selling price for their product. Though minor changes will need to be made if Frucor decide to recreate the Mizone logo. They will still be able to use the price point strategy if they accept and follow the earlier advice. The new price should be between $2.50 and $3.50, which by consumers is seen as either below $3.00 or below $4.00. This price will only be for a limited time while Frucor is able to make a profit to pay for the whole recreating process. Though it is clear that Mizone’s new price will still be cheaper than its competitors.

Promotion

Personal Selling .

Personal selling is becoming a partnership between the supplier and the retailer [10] . Frucor is not currently using this promotional technique, though it is recommended. Frucor should design a promotional display rack, stands and large posters, then train and send out an employee to popular gyms, large supermarkets and football stadiums in each city to display these promotional equipment. This will definitely gain customer awareness, which may in time result in increased sales.

Advertising

Advertising is paid communication with the target market with the purpose to persuade them to purchase a product. Frucor is currently advertising Mizone through TV advertisements and by sponsoring sports teams and Olympic athletes, though this is not enough! Most of the customers that Mizone has are in New Zealand and Asia, but the focus of this marketing advice is Australia. Frucor should double the TV advertisements, release full-page ads in various magazines especially those focused on sport as well submitting a smaller advertisement into the weekly newspaper. It is also recommended that Frucor take one step further and design billboa

Cite This Work

To export a reference to this article please select a referencing stye below:

Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.

Related Services

View all

DMCA / Removal Request

If you are the original writer of this essay and no longer wish to have your work published on the UKDiss.com website then please: