‘An insight into how brand equity can be increased.’
Author: Lieke Visser Studentnr. 1274635 Rijksuniversiteit Groningen (RUG) Supervisor at RUG: drs. J. Berger 2nd Supervisor at RUG: drs.H. Ritsema
Constituent: innocent drinks Supervisor at innocent: drs. HJ. Beltman
June 2007
‘Did you hear about the rose that grew from a crack in the concrete? Proving nature's laws wrong it learned how to walk without having feet
Funny it seems but, by keeping its dreams It, learned to breathe fresh air Long live the rose that grew from concrete.’
Preface
I have written this thesis in pursuance of my graduation in Business Administration, with a specialisation in Marketing at the University of Groningen.
From September 2006 until March 2007, I interned at ‘innocent drinks’. innocent gave me the chance to experience an international company. Visits to London and Brussels contributed to my practical insight into how an organisation works across borders. Because of its small size, it gave me the opportunity to obtain a clear view of how an entire organisation operates.
It has made me aware of the different ways of doing business, while it has also given me practical experience in dealing with every type of organization a firm can get in to contact with; from governmental organizations to competitors, from suppliers to customers. Their informal way of communicating and doing business is unique. Walking through the grass on your bare feet, while you are in the office, sitting behind your desk on a Skippy ball and dress up like big Santa’s for Christmas in England gave me the feeling innocent is more of a family instead of a company.
I would like to thank several individuals who contributed to this research and this learning process. First of all, my supervisors at the University of Groningen, Drs. J. Berger and Drs. H.A. Ritsema, for their critical feedback and useful comments. I also want to thank my supervisor at innocent drinks, Henk Jan Beltman, and all the other colleagues who helped me find my way at the company.
Further, I would like to thank my family, who gave me the emotional and financial support and made it possible to graduate from the University of Groningen. Special thanks go to friends and my boyfriend, who commented me on my work, discussed big issues when I got stuck and helped me through this exciting period.
Thank you, I could not have done it alone.
Lieke Visser June 2007
Management summary...6
List of definitions ...10
Chapter 1: Introduction...11
§ 1.1 Introduction ...11
§ 1.2 Aim of the study...11
§ 1.3 The objective...11
§ 1.4 Research question ...12
§ 1.5 Motive for research...12
§ 1.6 Set market definitions ...12
§ 1.7 Boundaries...12
Chapter 2: Research design ...14
§ 2.1 Introduction ...14
§ 2.2 Branding...14
§ 2.3 The importance of brand equity ...14
§ 2.4 Brand equity, a conceptual model...15
§ 2.5 Explanation parameters...20
§ 2.6 Structure of the research ...25
§ 2.7 Research model ...28
§ 2.8 Summary...29
Chapter 3: Belgium and the Netherlands: a comprehensive market overview...30
§ 3.1: Introduction ...30
§ 3.2 A general overview...30
§ 3.3 Kotler’s segmentation, consumer demographics ...31
§ 3.4 Food and health trends...33
§ 3.5 Juice market performance ...35
§ 3.6 Sales channel opportunities...39
§ 3.7 Solid market definitions, identifying the segments. ...42
§ 3.8 Summary...45
Chapter 4: Competitor analyses ...47
§ 4.1 Introduction ...47
§ 4.2 Albert Hein puur fruit smoothie...48
§ 4.3 Chiquita ‘Just fruit in a bottle’. ...51
§ 4.4 Hero Fruit2day ...55
§ 4.5 Hero Fruit Full ...57
§ 4.6 Summary...58
Chapter 5: innocent drinks...59
§ 5.1 Introduction ...59
§ 5.2 History...59
§ 5.3 Mission...59
§ 5.4 Vision ...59
§ 5.5 Company background, product description and distribution...60
§ 5.6 Brand building and critical success factor ...61
Chapter 6: Method of the field research ...63
§ 6.1 Type of research ...63
§ 6.2 Obtaining primary data ...64
§ 6.3 Population and sample definition ...64
§ 6.4 Explanation questionnaire ...65
§ 6.5 Taste test method...67
§ 6.6 Summary...68 Chapter 7: Results...69 § 7.1 Market results...69 § 7.2 Consumer results ...71 § 7.2.1 Statistical methods ...72 § 7.2.2 Taste test ...73
§ 7.2.3 Descriptive statistics...75
§ 7.3 Statistical results: cluster and discriminant analyses ...77
§ 7.4 Competitor results ...96
§ 7.5 Summary...104
Chapter 8: Conclusions and recommendations...105
§ 8.1 Market...107
§ 8.2 Competitors...108
§ 8.3 Market strategy ...109
§ 8.4 Consumers...109
§ 8.5 innocent ...112
§ 8.6 Marketing strategy, strategic position/implementation ...112
§ 8.7 Summary...116
§ 8.8 Further research / reflection...117
Bibliography: ...118 Appendix
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Management summary
Purpose of the research
innocent is an English fruit juice company founded by 3 university friends, who one day quitted their jobs to start their own business. They started to produce smoothies out of 100% pure and fresh fruit and put it in all of their drinks.
innocent would like to receive a comprehensive market overview, a competitor analysis and an insight in the consumer’s needs that advices the company on market and marketing strategies that in the end support the way brand equity can be increased at innocent.
This has lead to the main research question:
‘How can innocent respond to the consumers’ need to increase its brand equity, compared to their competitors in the Benelux?’
Brand equity is the value of strong, favorable, and unique brand associations in the customers’ mindset and the willingness for someone to continue to purchase your brand or not. Increasing brand equity will strengthen your brand and gain profit in the end.
The following sub questions are derived from the conceptual model. These sub questions support the main question:
1. How can innocent respond to the market trends in order to increase her brand equity? 2. How can innocent have a competitive advantage on its competitors?
3. Is the consumer loyal to their brand within the chilled juice market? 4. Which quality do consumers expect in the chilled juice market?
5. Which associations do consumers have with the brands in the chilled juice market? 6. Are the consumers aware of all the brands in the chilled juice market?
7. What is the best target segment for innocent and does this correspond with their current target segment?
These questions are the core of the quantitative and qualitative research that will reflect a market insight, a competitor overview and the consumer’s needs concerning the chilled juice market.
Methodology
Secondary data, based on reports, literature and the internet, as well as on information from innocent and observations are used to answer the first two questions. The last five questions are measured through a survey method where information is obtained through information, which is based upon structured questioning of respondents. Aaker defines four variables that measure brand equity, namely: brand loyalty, perceived quality, brand associations and brand awareness. The questionnaire is based on these four variables. The interview is developed according to a structured data collection method, which means that a formal questionnaire is prepared and the
questions are asked in a prearranged order. The survey is executed on the internet, because this way delivers the most respondents.
Results
Market
Both the Netherlands and Belgium have highly developed market economies with an annually growing GDP. The prosperous economy stimulates people to buy a premium product.
The most remarkable market trends are the ongoing consumer health trend and the quality improvement trend. People are getting more aware of living healthy, but do not have much time for it. In the Netherlands the consumer is more aware of a healthy life style than in Belgium. The chilled juice market of both the Netherlands and Belgium show a growth in the total sales in volumes and in euros. innocent and its competitors are located in a growing market.
Competitive advantage
AH, Fruit2day, Chiquita, Fruit Full and innocent together form the chilled full fruit market.
AH and Fruit2day are market leaders, Fruit Full the market follower, Chiquita a challenger in the introduction phase and innocent is centered in the middle. innocent can have a competitive advantage on the following factors:
AH puur fruit smoothie:innocent has more possibilities in the distribution network of the chilled full fruit market than AH.
Fruit2day: Fruit2day is made from concentrate. From the taste test there can be concluded that innocent has an advantage on its fresh product.
Chiquita: innocent scores better on brand associations and brand awareness. With the additional ‘Super Clean Line’, innocent has a higher shelf life than Chiquita, which can be a plus point when broadening its distribution network. innocent and Chiquita are the most comparable brands in the chilled full fruit market.
Fruit full: innocent does not have to worry about Fruit Full. It scored much lower on perceived quality, brand awareness and brand associations.
Market strategy
innocent can be seen as the real market challenger. It has to challenge and fight the other competitors for a stronger market position. While some brands only focus on health, innocent can win an advantage by focusing on branding and image as well. innocent should focus on the consumer health trend which is a growing trend in the chilled full fruit market. Critical success factors like pricing, important characteristics and freshness in taste should get a higher awareness in the company.
Consumers
Three target segments can be distinguished in the chilled full fruit market, namely the ‘extrinsic segment’, the ‘indifferent segment’ and the ‘critical segment’. By means of a consumer questionnaire the four key parameters brand loyalty, perceived quality, brand awareness and brand associations are examined in the chilled full fruit market to, in the end, measure how innocent can improve her brand equity compared to its competitors.
Brand loyalty: the following conclusion can be made on brand loyalty: 1. As the age increases, people are getting more loyal.
2. When income increases people are getting more loyal as well. 3. People who are older have a higher income.
4. The ‘critical’ segment is the most loyal group, compared to the other two.
5. Neither the extrinsic nor the indifferent segment is loyal, where the last one is less loyal than the extrinsic segment.
The first three conclusions can recommend innocent that it should focus on some older people, with a higher income. The exact age category where innocent should focus on is determined by the extent of brand awareness in the different categories, which is between 25-45.
The last two conclusions recommend that the critical segment is the most loyal group and the indifferent segment is the most disloyal group. innocent should not focus on the indifferent segment, as this segment does not care about both intrinsic and extrinsic factors and are not loyal to their fruit drink. The critical segment fits best to innocent’s profile and they are loyal as well. innocent can as well focus on the extrinsic segment, but does not have to expect a loyal consumer when serving them.
Perceived quality: innocent has a competitive advantage on their competitors, because it scores best on taste and second best on attractiveness. From the five players, innocent, AH and Chiquita score best on taste. These are the 100% fresh products without concentrate or conservatives. The consumer might expect pure and fresh quality in the chilled full fruit market. innocent does not have to focus more on one gender with her marketing activities.
Brand associations: ‘Healthy’, ‘delicious’, ‘good quality’ and ‘really fresh’ are characteristics that the consumer finds important in a fruit drink. Overall, AH and innocent have the best scores. The extrinsic segment finds a ‘good image’, a ‘comfortable packaging’, an ‘appealing brand’ important and they do not care much what price they have to pay for these characteristics. When serving the critical segment innocent should focus on the healthiness and quality of the drink, for example by emphasizing the RDI on the label of the smoothie. In addition, it should focus on its branding as well.
Brand awareness: innocent scores second best on top of mind and recall and third on recognition. AH scores best on ‘top of mind’ and ‘recall’ and second on recognition. Remarkable
is that fruit2day scores low on ‘top of mind’ and on ‘recall’, but highest on ‘recognition’. This is due to their lack of focus to brand engagement.
innocent has a lead on Chiquita and Fruit Full, but sure has a lot to do for defending AH and Fruit2day concerning recognition. The recognition of Fruit2day is double as high as innocent. Spending more on marketing activities that reaches a broad scope is a good way for innocent to increase its brand awareness.
Marketing strategy
The marketing mix covers the five P’s, where the marketing activities can be attached to, namely price, product, promotion, place and persons.
Price: For the critical and the extrinsic segments, innocent should lower its price to keep up with her strongest competitors and invite consumers to switch easier to innocent. However, results show that the two segments do not care much about price. There has to be found a balance between the given results. The price of innocent should be lower, but not too low.
Product:As the consumer health trend evolves innocent should focus more on the healthiness on the brand. innocent should have a better focus on ‘Recommended daily intake’ of vitamins. innocent is already really focusing on the branding of the product. It has to keep on going with its way of labeling and branding to reach the most loyal target segment and try to fit into their image view.
Place:The sales channel opportunities are discussed in detail in chapter 3. innocent should focus on canteens, on the go channels and trendy on-the-move, fast-food, sandwich, and quick service formulas. These are the channels where there is a growth and an expected further growth with fit into innocent’s target segments.
Because the extrinsic and the critical segment have an overlap, they somewhat can be distributed to same distribution categories. However, there can be a difference between them on different formulas.
Promotion: At this moment, innocent has a focus on individual marketing. This guarantees brand engagement, but not much consumers are reached. innocent has to broaden its communication with a focus on health and branding. It can use other brands for co-branding. Further, it has to keep on branding its product the way it already does, as this is a strong way of branding compared to its competitors.
Persons: innocent’s staff should try to have one certain vision, which will be carried though the organization and to its customers. This will support an increase in brand equity as well.
List of definitions
Brand equity
The value of strong, favorable, and unique brand associations in the customers’ mindset and the willingness for someone to continue to purchase your brand or not.
Concentrated juice
A concentrate is a substance which has had the majority of its base component removed. Typically this is the removal of water from a solution or suspension such as the removal of water from fruit juice1.
Full fruit
A blend of whole crushed fruit and freshly squeezed juices without addition of water and sugar.
Juice
The liquid extract of the fruit.
RDI
Recommended Daily Intake of fruit.
Smoothie
A smoothie is a blended non-alcoholic beverage made from natural ingredients, namely whole crushed fruit and pure fresh juices.
Chapter 1: Introduction § 1.1 Introduction
innocent is an English fruit juice company founded by three university friends, who one day quitted their jobs to start their own business. They started to produce smoothies out of 100% pure and fresh fruit and put it in all of their drinks. Nothing else. No sugar, no water, no concentrate juices. In 1999, innocent drinks was established.
Their strategy for doing so is simple. Firstly, they only make 100% natural products that are 100% good for people. Secondly, they procure their ingredients ethically. Thirdly, they use ecologically sound packaging materials. And finally, they give 10% of their profits each year to charities in the countries where their fruit comes from.
After running the company a couple of years, growth started and revenues were gained. Prospect revenues for this year are up to £75 million.
Within 5 years they decided to expand to other European countries and innocent started in the Netherlands on the 6th of December, 2004. innocents’ vision is to make it Europeans’ most favorite little juice company. The word ‘little’ refers to continuing their individual marketing activities to consumers, regardless of becoming bigger and bigger.
§ 1.2 Aim of the study
In the Benelux, innocent is still a small company with little market share. The chilled juice market has to deal with severe competition and an increasing number of entrants into the market.
One of innocent’s goals is to recruit as many people as possible to try their smoothie. After this, their vision is that the strong, favorable and unique brand associations and taste of innocent will stay in the customer’s mindset. It is very important that consumers buy their product, but the most significant goal is that they keep on buying their product. That is why the research focus is to find out the customers’ needs to increase brand equity. To support this, innocent wants to get an overview of the smoothie market and its competitors. They want a primary and secondary overview of the market and its competitors. What are the general characteristics of the Benelux chilled juice market? Who are their competitors, what are they doing, where do they focus on and how can innocent have a competitive advantage on them?
§ 1.3 The objective
innocent would like to receive a comprehensive market overview, a competitor analysis and an insight in the consumer’s needs that advices the company on market and marketing strategies that in the end support the way brand equity can be increased at innocent.
§ 1.4 Research question
How can innocent respond to the consumers’ need to increase its brand equity, compared to their competitors in the Benelux?
§ 1.5 Motive for research
innocent is an English company that has over 60% market share in this country. However, in the Benelux it is still really small and the chilled juice market has to deal with severe competition. Many organization and marketing tools are carried through the Benelux from England. The question is if these countries are so much the same that everything can be generated to the Benelux.
A lot of research has been done on brand equity. Where they used to focus on product marketing the focus nowadays is more on branding. If a product creates brand equity, it will distinguish itself from its competitors which in the end results in more profit and a higher market share.
The research will give an insight in the Benelux market, its competitors and specific quantitative research that will reflect the consumer’s needs concerning the chilled juice market. In the end, recommendations will be given as to how innocent Benelux has to change its marketing strategy to increase its brand equity.
§ 1.6 Set market definitions
There are many differences between juices and smoothies. A juice is just a drink from the juice extract of a fruit. A smoothie is a whole crushed fruit and pure and fresh juices. There are differences with additional ingredients as well. A juice or a smoothie can contain extra sugars or preservatives. Besides this, a juice or a smoothie can be from a concentrate, which means the removal of water from a solution or suspension such as the removal of water from fruit juice. These facts are all important to identify a certain market segment where innocent fits in best. In this stage of research it is very hard to identify the market for innocent drinks. For instance, people are not very familiar with smoothies in the Benelux yet, so there will be few competitors in the smoothie market. But innocent drinks are more than just a juice, so there are too many straight competitors if you enclose innocent in the juice market. For now, I assume innocent drinks will best fit in the chilled juice market. In § 3.7, the market will be clearly defined. By means of strategic grouping, it will become clear in which market innocent drinks will fit best.
§ 1.7 Boundaries
- The research is based on an internship at innocent drinks which took place between the 1st of September, 2006 and the 1st of March, 2007.
- The research covers the Netherlands and Belgium, because innocent is not active in Luxembourg yet. So if the Benelux is mentioned only these two countries are meant.
- Because innocent has chosen deliberately to write its brand name as ‘innocent drinks’ without a capital, in every sentence the brand name is spelled without a capital, even when the sentence starts with the brand name.
Chapter 2: Research design § 2.1 Introduction
This chapter reflects the way why brand equity is so important, and how a conceptual model is developed to measure brand equity among innocent and its competitors. A short description of branding and its importance is given, followed up by the importance of brand equity. Additionally, a conceptual model is developed, which describes the factors that are influencing brand equity. These factors will be made operational into measurable variables.
Apart from the concept of brand equity, a research model is made to show how the market overview and competitor analyses fit into the total research.
§ 2.2 Branding
‘A brand is a desirable and exclusive idea embodied in products, services, places and/or experiences’2.
The chilled juice market is a good example of a market of low-involvement products. Besides the quality of the product, i.e. concentrated juices versus freshly squeezed juices, it is hard to differentiate your product from your competitors. Additionally, people are less involved with a low involvement product, so product switching is high. That is why branding is so important.
A brand is a distinguishing name and/or symbol (such as a logo, trade mark or package design) intended to identify the goods or services of either one seller or a group of sellers, and to differentiate those goods or services from those of its competitors3. In a low involvement market, the way to distinguish your product from another, is among other things branding. The brand is not the product but it gives the product meaning and defines its identity4. So a strong brand in a low involvement market will distinguish itself from its competitors. With this known fact, another problem arises. How do you create a strong brand? And how do you measure the strength of a brand? The outcome of a survey on the measurement of brand value is called brand equity.
§ 2.3 The importance of brand equity
Brand equity has been an interesting concept for decades, primarily due to the importance in today’s marketplace of building, maintaining and using brands to obtain strategic advantage5.
Brands are valuable entities, but increasing brand equity is becoming harder because of
2Kapferer, Jean-Noel, (2004), The new strategic brand management. Creating and sustaining brand equity long term, London: Kogan Page Limited (p. 13)
3 Aaker, D.A., (1991), Managing brand equity, New York: Simon & Schuster Inc. (p. 7) 4 Kapferer, Jean-Noel, (2004), The new strategic brand management. Creating and sustaining
brand equity long term, London: Kogan Page Limited (p. 5)
intensifying competition, greater customer sophistication and global challenges from internet-based activities6.
Increasing brand equity is becoming harder, but more important as well; it is a good way of distinguishing your brand from its competitors.
Brand equity not only delivers value for the customer, but also for the firm. The following advantages give value for the customer, which in de end will be beneficial for the firm as well. Brand equity assets can help a customer interpret, process, store and retrieve a huge quantity of information about products and brands. Besides this, the assets can also affect the customer’s confidence in the purchase decision; a customer will usually be more comfortable with the brand that was last used. Most of the time, this brand is familiar or is considered to have high quality. Additionally, the most important way that brand equity assets, particularly perceived quality and brand associations7, provide value to the customer is by enhancing the customer’s satisfaction when the individual uses the product.
The following advantages are the values which brand equity gives to the firm:
1. Brand equity can enhance the efficiency and effectiveness of marketing programs. 2. Brand awareness, perceived quality, and brand associations can all strengthen brand
loyalty by increasing customer satisfaction and providing reasons to buy the product. 3. Brand equity will usually provide higher margins for products by permitting premium
pricing and reducing reliance on promotions.
4. Brand equity can provide a platform for growth by brand extensions.
5. Brand equity can provide leverage in the distribution channel as well. Like customers, channel members have less uncertainty dealing wit a proven brand name that has already achieved recognition and has established strong associations.
6. Brand equity assets provide a firm with a significant advantage; a barrier that prevents customers from switching to a competitor8.
With these advantages in mind, a conceptual model is made to measure the brand equity of innocent compared to its competitors. The outcome of the research will support the recommendations given to innocent for increasing its brand equity.
§ 2.4 Brand equity, a conceptual model
In this paragraph, brand equity will be explored in depth to obtain a clear view about the research objective. Brand equity is receiving more and more attention of scientists, because it is a good measurement to strengthen your brand and gain profit in the end. Different scientists provide the following definitions of brand equity:
6Chernatony, de, L. (2001). A model for strategically building brands, Henry Stewart Publications, Brand Management, vol. 9(1), p.32-44
7 See explanation of perceived quality and brand associations in § 2.5.
- The differential effect of brand knowledge on consumer’s response to the marketing of the brand (Keller, 1993)9.
- A set of brand assets and liabilities linked to a brand, its name and symbol that add to or subtract from the value provided by a product or service to a firm and/or to the firm’s customers. Brand equity is the willingness for someone to continue to purchase your brand or not (Aaker, 199610).
- Understanding brand equity involves identifying the network of strong, favorable, and unique brandassociations in the customers’ mindset (Roedder, 2006)11.
The definition that will be used during this research will be:
‘The value of strong, favorable, and unique brand associations in the customers’ mindset and the willingness for someone to continue to purchase your brand or not’.
Because innocent was established two years ago in the Benelux, it is still in its introduction phase. innocents’ goal is to generate trial and to create a loyal drinkers base12. This means it is
important to improve its brand equity.
I will strengthen this by means of the ‘Product life cycle approach’ from P. Rajagopal and Romulo Sanchez. They developed a branding strategy in accordance with the different stages of the product life cycle. This product life cycle approach to brand management considers how the product’s stage affects the factors of the marketing mix as can be seen in table 1. The objective in the introductory stage is to establish the market position on the basis of qualities, price, application, and consumer preference. Larger efforts are necessary to build awareness, to introduce the product in the distribution network, and to create a pull effect with consumers. innocent fits best in this stage, because it is still developing its product; increasing the shelf life of the smoothie and introducing another recipes. Their main objective is to establish market position and assure high quality. innocent is busy with getting contracts with wholesalers to broaden their distribution network. Quality is guaranteed by searching for the best quality fruit it can get to put into their drinks. Apart from this, it is still working on improving brand awareness and increasing product availability, as mentioned before. Its pricing strategy is still in the introduction phase as well, but innocent applies neither a skimming nor a penetration strategy. innocent prices their products premium, and are not planning to reduce that price. To get innocent into the next phase of the product life cycle, it is important to increase brand equity.
9 Keller, Kevin Lane (1993) , conceptualizing, measuring, managing brand equity, Journal of Marketing,
Vol. 57 Issue 1, p1, 22p
10 Aaker, David A.(1996), Measuring brand equity across products and markets, California Management Review, Vol. 38 Issue 3, p102, 19p,
11 John, Deborah Roedder; Loken, Barbara; Kim, Kyeongheui; Monga, Alokparna Basu, (2006),Brand
Concept Maps: A Methodology for Identifying Brand Association Networks,.Journal of Marketing Research (JMR), Vol. 43 Issue 4, p549-563, 15p
Fig. 1 Product Life Cycle13
Brand strategies
PLC Introduction Growth Maturity Decline
Strategy options Brand
development Brand reinforcement Brand repositioning or modification Brand redesigning
Objectives Establish market
position
Expand target market
Secure new market segments
Prepare for re-entry
Product Assure high quality Identify weakness Adjust features Modify weak
features
Promotions Build brand
awareness
Provide information Communicate new features
Educate on re-entry features
Distribution Build distribution network
Strengthen channel relationship
Deliver all versions Smoothen re-entry problems
Pricing Skimming or
penetration
Challenge competition
Use good price deals
Reduce price Table 1: Product life cycle approach14
13 www.fao.org
14 Rajagopal, P. & Sanchez, R. (2004) Conceptual analysis of brand architecture and relationships within product categories, Journal of brand management, 11(3) 233-247
M ar ke tin g m ix
Aaker created a set of brand equity measures that could be applied across markets and products (Aaker, 1996). They are structured and motivated by the four dimensions of brand equity: loyalty, perceived quality, associations and awareness.
The four dimensions of brand equity form a reliable measurement system according to Aaker, which will be used during the research. Although the development of Aaker’s four dimensions is a little bit out of date, Aaker is seen as the guru of brand equity and is mentioned and used daily in referable brand strategy issues. For example, R. Riezebos based his brand value / brand equity model on Aaker, which he published in his last edition in 2003.15Although Riezebos makes
a good distinction between brand value (to consumer) and brand equity (to the firm), his model is more of a description rather than a measurement tool. That is why Aaker’s approach is more suitable for this research than Riezebos’ approach.
On the basis of these variables, a conceptual model can be made. The four variables can be measured by means of seven key parameters (see Fig. 2). The seven key parameters influence the four variables, which in the end influence brand equity. The model indicates the connections that influence the increase of innocent’s brand equity, seen from a theoretical framework. This framework has three different frames, namely market, competitors and consumers. The market and competitor research has to support the way innocent can increase its brand equity. Within the frame ‘consumers’ the variables and key parameters are shown, because these will be measured by means of the response of the consumers. After the variables are measured, a target group can be identified and actions and reactions for innocent can be formulated to increase its brand equity. Other factors like substitutes and new entrants will not be examined in this research, because this is not possible within the given time.
15 Riezebos, R., Brand management; A Theoretical and Practical Approach, Financial Times/ Prentice Hall,
Fig. 2 Conceptual model Market Competitors Consumers Brand personality Perceived value Satisfaction Brand awareness Taste Price Brand Loyalty Loyalty Perceived quality Associations Awareness Innocent’s brand equity Target segment
§ 2.5 Explanation parameters
In this paragraph, the four dimensions of Aaker will be explained together with the seven key parameters that are concentrated on innocent’s needs in order to measure innocent’s brand equity.
Brand Loyalty
‘The success of a brand long term is not based on the number of consumers that buy the product once, but on the number of consumers who become regular buyers of the brand’16. Brand loyalty
is one of the most important indicators of brand equity, because it directly translates into a profit stream. It is on a high degree determined by the switching costs of a brand. If the switching costs are low, people change very quickly to another brand. If the switching costs are high, people stick to the brand that they normally buy.
Brand loyalty can be influenced by the other major dimensions of brand equity; awareness, perceived quality and associations. Loyalty in some cases could be largely due to a brand’s perceived quality or attribute associations. It provides an important basis for brand equity that is sufficiently distinct from the other dimensions to be included separately (Aaker, 1992).
For any business it is also relatively more expensive to gain new customers, instead of keeping existing ones, especially when the existing ones are satisfied. Brand loyalty is a measure of the attachment that a customer has to a brand. It reflects how likely a customer will be to switch to another brand, especially when that brand makes a change, either in price or in product features. As brand loyalty increases, the vulnerability of the customer base to competitive action is reduced. It is one indicator of brand equity which is linked to future profits, since brand loyalty directly translates into future sales (Aaker, 1991).
In this research, the loyalty in the chilled juice market will be measured through brand loyalty, price and satisfaction.
Loyalty
As mentioned above, loyalty is an important measure for brand equity. In this research the loyalty parameter will segment the chilled juice market into:
1. Loyal buyers of the brand; does the consumer always buy the same brand?
2. Brand switchers; is the chilled juice market subjected to consumers who do not really have one brand they always buy?
16 Odin, Y., Odin, N., en Valette-Florence, P., (2001), Conceptual and operational aspects of brand loyalty,
3. Non-customers; how is the market comparatively divided into the awareness of the chosen competitors. How many brands do they know of and how many brand do they not know about (Aaker, 1996)?
Each group will have a very different perspective on the equity of the brand and it is important to know how the market is comparatively divided over these three groups.
Satisfaction
Customer satisfaction and repetitive buying patterns are often indicators of a healthy brand, and programs to enhance them, will build brand strength (Aaker, 1992). Satisfaction is a logical measure of loyalty. If a customer is perfectly satisfied about the product, s/he will buy the product on a regular base. Satisfaction mainly generates value by reducing marketing costs; it has been stated many times that retaining existing customers is much less costly than attracting new ones. It is also difficult for competitors to communicate to satisfied brand users, because they have little motivation to learn about alternatives.
A direct measure of customer satisfaction can be applied to existing customers, who can perhaps be defined as those who have used the product or service within a certain time frame such as the last two months. Another measure of satisfaction is customers’ repeating purchases.
Price
A basic indicator of loyalty is the amount a customer will pay for your brand in comparison with another brand offering similar benefits. The price premium measure is defined with respect to a set of competitors which are clearly defined in chapter four. A brand’s price premium can be determined by asking consumers how much they are willing to pay for the brand and for which brand they are willing to pay the most (Aaker, 1996). If they want to pay the most for a certain brand, it means that a consumer is satisfied with the brand, which is an indicator for brand loyalty as well.
Perceived quality
Perceived quality can be defined as the customer’s perception of the overall quality or superiority of a product with respect to its intended purpose, relative to alternatives17. Perceived quality
provides value by providing a reason to buy, differentiating the brand, attracting channel member interest, being the basis for brand extensions, and supporting a higher price18. It will differ among different forms and different types of industries. It will directly influence purchase decisions and brand loyalty, especially when a buyer is not motivated or able to conduct a detailed analysis. If a
17 Zeithalm, V., Consumer perceptions of price, quality and value: A means-end model and synthesis of
evidence, Journal of Marketing, July 1988, p. 2-22.
brand is well-regarded in one context, the assumption most of the time will be that it will have high quality in a related context.
Taste
Perceived quality is often really hard to objectively determine, because it is a perception and also because judgments are involved about what is important to customers. Aaker mentions three related concepts (Aaker, 1991):
1. Actual or objective quality, the extent to which the product or service delivers superior service.
2. Product-based quality, the nature and quantity of ingredients, features, or services. 3. Manufacturing quality, the extent of how the production process adds quality to the
product.
The quality of a smoothie is primarily the taste of the product. Taste is a feature which is possible to measure objectively. Therefore, a blind taste test will be executed during the research among innocent and its competitors, which can be categorized in the objective-based quality measurement.
Association measures
The associations of a product are all the characteristics and features which give an identity to the product. How does the consumer see the product and what does s/he find important? Brand associations include product attributes, customer benefits, user life styles, product classes and countries. It can help customers process or retrieve information, be the basis for differentiation and extensions, provide a reason to buy and create positive feelings (Aaker, 1992).
Measurement of associations can be structured around three perspectives: the brand-as-product (value), the brand-as-person (brand personality) and the brand-as-organization (organizational associations (Aaker, 1996)). The first two will be measured during this research. In a low involvement market, the organizations behind the products are not that important for the customer, so the last measure will not be taken into account. Although innocent is a sustainable company this will not be measured in the consumer questionnaire, but it will be discussed later in the research.
Perceived value
The brand-as-product perspective focuses on the brands’ value proposition. The value proposition, which usually involves a functional benefit, is basic to brands in most product classes (Aaker, 1996). Nevertheless in this research the intrinsic and the extrinsic features will be taken into account.
The perceived value measures the associations the consumer has with the brand, so which value do they perceive on the brand. First, there will be measured which values a consumer finds important in a fruit drink in general. After this the customers have to indicate if they receive these measures in an innocent drink and in its competitors. As mentioned before, the brand-as-product associations will be clarified by means of intrinsic features, such as ‘biological’, ‘freshness’, ‘good taste’ and ‘health’, and extrinsic features, such as ‘image’ and ‘appealing brand’. The variables have been selected together with innocent, who have done more research on this topic in the UK.
Brand Personality
This is the brand-as-a-person perspective. The brand personality can provide a link to the brand’s emotional and self expressive benefits as well as a basis for customers/brand relationships and differentiation. Lots of researchers have done research on this topic. Jennifer Aaker is the most prominent professor specialized in brand personality. She did an American study and developed five parameters that can be measured through several personal characteristics19. The Dutch
research agency from the University of Amsterdam, SWOCC, Stichting Wetenschappelijk Onderzoek Commerciële Communicatie based a whole study on Aaker’s findings and developed a Brand Personality scale which can be generally applied as a Dutch measurement tool20. I will
use this tool for my research. The Brand Personality Scale exists of six solid dimensions, which can be divided into 38 characteristics. These characteristics can be reduced to 18 (SWOCC, 2002). The six dimensions are competence, excitement, gentle, ruggedness, annoying and distinguishing. The consumer is asked to see the brand as a person and has to consider in which matter the characteristics fit to that brand. Afterwards, the 18 characteristics can be calculated and subdivided into the six dimensions. These dimensions give a good image of the consumer’s perceived value of the brand.
Awareness measures
Brand awareness is the ability of a potential buyer to recall or recognize that a brand is a member of a certain product category. Awareness, even at the recognition level, can provide the brand with a sense of the familiar and a signal of substance and commitment. People will often buy a familiar brand because they are comfortable with it. Or there may be an assumption that a brand that is familiar is probably reliable and of reasonable quality. A recognized brand will thus often be selected over an unknown brand. Awareness at the recall level further affects choice by influencing which brands get considered and selected (Aaker, 1992).
19Aaker, J.(1997), Dimensions of brand personality, Journal of marketing research, Vol. 34, August; 347-356 20Van den Berge, E., Merkpersoonlijkheid langs de meetlat; de ontwikkeling van de SWOCC
Awareness is an important component of brand equity. It can affect perceptions and attitudes. And in some contexts, it can be a driver of brand choice and even loyalty.
Brand awareness
There are several levels of awareness21, which include:
Top of mind
The first-named brand in an unaided recall task has achieved top-of-mind awareness. In a very real sense, it is ahead of the other brands in a person’s mind.
Recall
Brand recall is based upon asking a person to name the brand in a product class, so the respondent is not aided by having the names provided.
Recognition
Brand recognition is a set of brand names from a given product class. The consumer is asked to identify those names s/he has heard before.
These three levels will be verified during the questionnaire to measure the awareness of innocent and its competitors. If innocent scores high in the ‘top of mind’ and ‘recall’ categories, it means that the awareness is high and the company’s brand shall be selected more by a consumer than when it scores only on ‘recognition’.
The seven key parameters will be discussed in chapter six, together with how they are used in the consumer questionnaire.
Sub questions
The success factor of branding is that the consumer observes a difference between brands in a certain product category. For example differences that have to do with the product itself, but in other cases it can be related to the untouchable image of the brand. When consumers choose between alternatives, brands can play an important role. The most important key success factor is to convince the consumer that your product in a certain category is not the same as others and that there are significant differences between them. Besides that, it is very important that the right consumer is convinced. That is why a target segment has to be identified and a company needs to focus on the right consumer. By means of the seven conceptual variables, brand equity will be measured through a questionnaire and in the end has to support the way innocent has to position its brand to increase this brand equity.
21Keller, K.L., Strategic brand management; building, measuring, and managing brand equity, 2003,
The following sub questions can be derived from the conceptual model. These sub questions support the main question in the end:
1. How can innocent respond to the market trends in order to increase her brand equity?
2. How can innocent have a competitive advantage on its competitors? 3. Is the consumer loyal to their brand within the chilled juice market? 4. Which quality do consumers expect in the chilled juice market?
5. Which associations do consumers have with the brands in the chilled juice market? 6. Are the consumers aware of all the brands in the chilled juice market?
7. What is the best target segment for innocent, and does this correspond with their current target segment?
These questions will be the core of the quantitative and qualitative research that will reflect a market insight, a competitor overview and the consumer’s needs concerning the chilled juice market.
The first two questions will be answered by means of a comprehensive market overview and a competitor analysis, the last five by means of a consumer research. The first two researches will support the last one to discover how innocent can increase its brand equity. Together with the results from the three different researches, recommendations will be given in order to get a comprehensive advice. In the next paragraph an overview is made that reflects the structure of the total research.
§ 2.6 Structure of the research
The research will exist of a descriptive part and a survey part. To give a correct and complete answer to the sub questions and finally the main research question, the research is split up into three different phases. In this paragraph these phases are explained and finally, a designed research model is shown. These three phases will be based on the Segmentation Targeting Positioning (STP) model of Kotler (Kotler, 200522).
Fig. 3: Kotler, Principles of marketing Phase 1: Preliminary research
In the first phase, secondary data is gathered to get a generic view of the chilled juice market in the Benelux. The general characteristics and trends in the market will be relevant for the research to get a good insight of the market trends. In this phase, the goal is to get a perception in consumer demographics, the general consumer demands concerning food and health, the juice market performance, and sales channel opportunities. A solid market will be defined in which innocent fits best. In addition to this, both the competitors in the market and the inside organisation of innocent will be analysed. This is needed to see where innocent can have a competitive advantage on its competitors. This desk research will be based on reports, literature and the internet, as well as on information from innocent. Because innocent already has a vision of their target segment, the segmentation phase and the market targeting of Kotler will be evaluated instead of identified in this phase. This means the target market will be described and relevant facts of these segments will be added. After this, there will be a focus on whether innocent has chosen the right target segment; this will be accomplished in the next phase. In conclusion, the first four steps of Kotler’s model will be discussed in the preliminary phase with an extension of the target segment to the next phase. Apart from this, a plan will be constructed for the field research. From the conceptual model a solid questionnaire will be developed to measure innocent’s brand equity. Besides that, necessary appointments will be made, relevant for the field research in phase two.
Phase 2: Preliminary and field research
The second phase gets a more primary nature. During this period, the research focuses on gathering data in the field.
1. Identity bases for segmenting the market 2. Develop profiles of resultingsegments
3. Develop measures of segment attractiveness 4. Select the target segment(s)
5. Develop positioning for (each) target segment 6. Develop marketing mix for (each) target segment
The data is gathered here mostly by doing interviews and taste tests. This will be done by means of a trend research23; interviews at different points in time with different people. A certain amount
of respondents will be used from a certain population. This will be discussed in more detail in chapter 6. A differentiation within the questionnaire and taste test is made into three research categories:
1 A general questionnaire on the chilled juice market will be executed to get an understanding of the consumers’ needs concerning chilled fruit juice in a bottle. 2 A specific questionnaire will be designed to get a perception of how or if innocent is
positioned in the mind of the consumer, compared to their relevant competitors. 3 A taste sampling will be executed to get an insight into how innocent is positioned
compared to its competitors regarding the taste parameter. This will be supported by means of an association model with ten variables.
This phase is crucial for the last two steps of Kotler’s model; market positioning. To find out how innocent can increase brand equity it is useful to take these last two steps. Nevertheless, there will be another focus on whether innocent has chosen the right target segment regarding the consumer’s need. After the right segment is identified, tactical decisions can be made regarding market and marketing strategies. In paragraph 3.3, this will all be discussed in more detail. Paragraph 2.4 showed the conceptual model, which will cover these last two steps. Besides the interviews and testing, there will be continued on gathering secondary data relevant for the research.
Phase 3: Data interpretation and report
In the third and final phase, the data obtained from the preliminary and field research will be processed, so innocent can be provided with a clear overview of the chilled juice market. On the basis of the final report, innocent will be able to make better market and strategic decisions regarding the positioning of innocent drinks.
23 Baarda, D.B., and M.P.M. de Goede (2006), Methoden en Technieken, Houten: Stenfert Kroese,
§ 2.7 Research model
The model reflects the total structure of the research:
Fig. 4: Research model
Brand equity
External Internal
Market Competitors Consumers innocent
Trends market
Chilled juice market development
Critical succes factors
Business facts
Expected strategies
Taste
Juice market perception research Competitor perception research Business facts Competitive advantage for innocent Taste innocent Perception Research
§ 2.8 Summary: research questions that impact the innocent strategy performance
The following research questions can be derived from the research model. The first two sub questions of the conceptual are split into more specific research questions. This is needed to simplify the research and indicate boundaries. An overview of the inside organization of innocent is needed to answer the questions properly.
Table 2: research questions
These questions will finally support the way in which innocent can increase its brand equity. Market What are the trends in the market relevant for
the research?
What is the current situation of the chilled juice market? Is it growing or decreasing market? What are the critical success factors in the market?
Competitors How is the competition organized?
How can innocent have a competitive advantage on them?
Consumers Is the consumer loyal to their brand within the chilled juice market?
Which quality do consumers expect in the chilled juice market?
Which associations do consumers have with the brands in the chilled juice market?
Are the consumers aware of all the brands in the chilled juice market?
Which is the best target segment for innocent and does this correspond with their current target segment?
Chapter 3: Belgium and the Netherlands: a comprehensive market overview § 3.1: Introduction
For innocent, it is important to know in what kind of countries it operates and in which market it fits best. To get an insight of the chilled juice market it is important to know what the current trends are and how these will be in the future. This chapter contains the general characteristics of the Netherlands and Belgium that are relevant for the research. Besides that, an overview is made of the overall food and health trends of Belgium and the Netherlands. Apart from this, the juice market performance and sales channel opportunities are identified, the target segment is evaluated and a solid market is defined. These aspects can provide insight in:
- future trends to which innocent can respond - future distribution opportunities
- the identity of their exact target segment
- the exact competitors on whom it should keep an eye on
§ 3.2 A general overview
The Netherlands
The Netherlands has a prosperous and open economy that depends heavily on foreign trade. The economy is noted for stable industrial relations, moderate unemployment and inflation, a sizable current account surplus, and an important role as a European transportation point of interest. Industrial activity is predominantly in food processing, chemicals, petroleum refining, and electrical machinery. A highly mechanized agricultural sector employs no more than 2% of the labour force but provides large surpluses for the food-processing industry and for exports. The country is one of the leading European nations for attracting foreign direct investment.
At this moment, the Netherlands is the 16th largest economy of the world. Between 1998 and 2000, annual economic growth (GDP) averaged nearly 4%, well above the European average. Growth slowed considerably between 2001 and 2005 as part of the global economic slowdown, but the first quarter of 2006 showed a promising 2.6%. Inflation is 1.3% and is expected to stay low at about 1.5% in the coming years. According to the definition used by the Dutch Statistics Agency CBS24, unemployment is at 5.5% of the labour force. By Eurostat standards however, unemployment in the Netherlands in 200625 is at only 3.8% - the lowest rate of all EU member
states.
24 CBS - Statistics agency of the Netherlands, www.cbs.nl 25 Eurostat - EU statistics agency, http://epp.eurostat.ec.europa.eu
2005 led to a deficit of only 0.3% of GDP in 2005, coming from 2.1% in 2004. The shortage is expected to show a small rise to 0.5% in 2006, before nearing budget equilibrium. In 2006, the public debt was at 51% of GDP26.
Belgium
Belgium has a highly developed market economy, and with a population of just over 10 million covering a geographic area of 30,528 km² (ranked 148th in the world), its GDP level has placed it in the top 20 of all countries in the world. In 2004, the per capita income was $29,100.
Densely populated Belgium is located at the heart of one of the world's most highly industrialized regions and developed an excellent transportation infrastructure of ports, canals, railways, and highways to integrate its industry with that of its neighbours. One of the founding members of the European Community (EC), Belgium strongly supports deepening the powers of the EC to integrate European economies. Belgium became a first-tier member of the Economic and Monetary Union of the European Union in January 1999.
With exports equivalent to about two-thirds of GNP, Belgium depends heavily on world trade. Belgium exports twice as much per capita as Germany and five times as much as Japan. Belgium's trade advantages are derived from its central geographic location, and a highly skilled, multilingual, and productive work force.
In 2004, the Belgium GDP was 283,3 billion Euro, a growth of 2,7 percent compared to 2003. In the last two decennia, the GDP grew annually with an average of nearly 2 percent. This is comparable with most of the EU members. After a decrease of 1,4 percent in 2005 due to a lower consumer- and producer trust, the expectations for 2006 to 2009 are a growth around 2 percent27. The first Appendix shows the density of the two countries. These figures show a high density around the ‘Randstad’ in the Netherlands and Antwerp and Brussels in Belgium. innocent focuses on these areas.
§ 3.3 Kotler’s segmentation, consumer demographics
For running a sound business, one of the important aspects is defining a specific target segment where there can be focused on. In this paragraph, the four steps of Kotler’s market segmentation and market targeting will be discussed. These four steps in Kotler’s model are actually already defined by innocent drinks. Thus, in this paragraph an evaluation is made of these market segments and important facts relevant for the research are outlined. In the quantitative research, innocent’s target segment will be evaluated to examine if innocent has chosen the right target segment.
26 The free encyclopedia, www.wikipedia.nl 27 www.eci.com, (EIU Country Forecast July 2005)
Because innocent is a premium priced high quality product, the target segment is the population who are willing to try something new, they are willing to pay a bit more than normal and they are aware of the need of living a healthy life. innocent’s target market is namely ABC1. Terms like 'ABC1' as a definition of consumer types are often used to describe a profile of users or target customers. Demographical and social grade definitions enable the classification and measurement of people of different social grades and income and earnings levels for market research, targeting, social commentary, lifestyle statistics, and statistical research and analysis28.
Below a table is drawn with a division of these consumer types.
social
grade social status occupation
A upper middle class higher managerial, administrative or professional directors, politicians, high clerks, independent entrepreneurs.
B middle class intermediate managerial, administrative or professional: directors of smaller companies, middle-high clerks and office employees.
C1 lower middle class supervisory or clerical, junior managerial, administrative or professional: directors of small companies, specialists and technical professions.
C2 skilled working class skilled manual workers: lower clerks, technical and office employees, educated laborers.
D working class semi and unskilled manual workers: “the minima”, disabled to work, unemployed people and uneducated laborers
E those at lowest level of subsistence state pensioners or widows (no other earner), casual or lowest grade workers
Table 3 consumer types
The ABC1 in this table are the selected target segments for innocent. The following figures represent the amounts and percentages of people who cover these segments. The Netherlands and Belgium are discussed separately.
The Netherlands Amount Percentage Consumer type A 3130.000 23,2% Consumer type B 2.595.000 19,2% Consumer type C1 2.877.000 21,3% Consumer type C2 4.039.000 29,9% Consumer type D 857.000 6,4%
Table 4: consumer types in the Netherlands (profession category, amounts and percentages)29
Belgium Amount Percentage
Consumer type A 522.116 12.3%
Consumer type B 1.037.239 24.5%
Consumer type C1 1.649.150 38.9%
Consumer type C2 648.720 16.2%
Consumer type D 341.690 8.1%
Table 5: consumer types in Belgium (profession category, amounts and percentages)30
As can be concluded from these two tables, 75,7% from Belgium and 63,7% of the Netherlands cover the target segments of innocent. One thing one has to take into account that this is not a percentage of the total population but of the working population.
Total population Amount The Netherlands 16.334.210
Belgium 10.455.852
The working population is 40.4 percent of the total population in Belgium and in the Netherlands it is 83%. innocent has a really broad segment that it wants to approach. As mentioned in paragraph 2.6, the market research will have a focus on whether innocent has chosen the right target segment with regards to the consumer’s need.
§ 3.4 Food and health trends
In this paragraph, the general consumer demands concerning food and health is outlined. According to a comprehensive research of the Centraal Bureau Levensmiddelenhandel (CBL)31,
the Dutch population has permanently chosen for a healthy way of living. Supermarkets can hardly stand against the outrageous demand for chilled juices, drinks with extra vitamins and lots of cholesterol reducing products. In years, there have not been more vegetables sold than in
29 www.communicatiecoach.com 30 http://statbel.fgov.be/figures/ 31 www.CBL.nl
2006. Because people are continuously confronted with the increasing number of overweight people, they finally respond to it by consciously purchasing more healthy products.
Apart from this, the ‘Centraal Bureau voor de Statistiek’ (CBS)32 published that the number of
overweight is decreasing a little. Research of the ‘Erasmus Food Management Institute’ (EFMI)33,
shows that four out of five people prefer edibles full of healthy ingredients. They are also willing to pay more for these products.
Further more, the CBL showed that half of the Dutch population often buys light products. One third of the Dutch population regularly purchases cholesterol reducing edibles and one fourth often buys drinks with specially added vitamins in the supermarket. There is also a high demand for sugar free and diet products. Many things have changed in consumer behaviour over the last years. Another fact of the Dutch population is that they spent more on fruit during the last 6 months of 2006 than during the last 6 months of 200534.
Six out of ten citizens of Belgium eat healthy. In spite of several campaigns, the average citizen of Belgium is still consuming too little fruit and vegetables and too much meat and fats. Consumer organization ‘Test Aankoop’ showed these facts. Six out of ten of the Belgian population eats less than one piece of fruit a day35. Fruit juice consumption facts will be discussed in §3.5. At least one out of six eat five times a month in a fast-food restaurant. Four out of ten of the Belgian population is dealing with overweight. However, the Belgian population is slowly getting aware of healthy ingredients.
Research agency ‘Datamonitor’ published an article about the food trend of 2006 from. In the nine food trends they observed that ‘healthiness’ plays the main part:
1. The ‘omega-3-fats are getting more and more popular. 2. The year 2006 will be the year of the fruit.
3. Cosmetic food purchases are increasing. The awareness for tea and other drinks that might be good for your skin is growing.
4. Whole-wheat is good for your heart and helps to prevent diabetes. Manufactures are processing healthy graIns in soup, bread, chips and cereals.
5. The assortment of energy drinks, pills, bars and other products is expanding.
6. This year chocolate drinks will overrule the coffee drinks. Lots of exotic variations with antioxidants and caffeine will take over.
7. Smaller portions are better, so the supply of smaller packages will increase in instant products, but in alcoholic drinks as well.
8. Biological food is becoming common.
9. More and more consumers are sensitive for gelatin. Manufacturers and retailers are adapting to this fact.36
Table 6: food trends
32 www.CBS.nl
33 EFMI Food Trends 2006 34 www.distrifood.nl
35 http://voeding.web-log.nl/voeding/voeding/index.html
36 Het Financiele Dagblad, 2 januari 2006 in Voeding/ www.datamonitor.nl trends to watch in packaged goods 2006, 9th of December
EFMI Food Trends
The EFMI study of food trends in 2006 shows interesting facts. The four important food trends at the moment are:
A: Health B: Enjoyment C: Convenience D: Sustainability
Health and convenience are still the most important food trends. 76% of the consumers remark that they have a bigger need for edibles that contribute to a good healthiness. More than 40% is even willing to pay 10% extra for such health products. Consumers in general do not have much time so there is a growth in ready made food.
Relevant outcomes of the research and consumer demands:
Health Consumers want to escape from the hasty existence
and are looking for ‘quality time’. Losing weight will be popular in 2007.
Food is not only pleasant, but can also be functional. Consumers are buying relatively healthy products
Enjoyment Consumers want to enjoy as much as they can in
their scarce spare time.
Consumers buy more and more products to enjoy.
Convenience Efficiency is the keyword in this hasty society.
Consumers are more often buying convenient (ready to go) products.
Sustainability Consumers are more often buying ethical
(sustainable) products.
Consumer are becoming aware of the sustainability of products.
Table 7: EFMI’s four food trends
The overall conclusion is that people are becoming more conscious about their way of living and that this should be healthier. However, they do not want to spend much time to make their life style healthier. This can be favourable for innocent as the product is purely fresh, so people do not need to blend the fruit themselves.
There is, however, a slight difference between the Netherlands and Belgium. In the Netherlands, people are more aware of a healthy life style than in Belgium. innocent has to stimulate the Belgian consumers more to drink their smoothie than the Dutch ones.
Nevertheless, the macro food and health trend is beneficial for the chilled juice market. It is expected that the demand for healthy fruit drinks will increase over the years.
§ 3.5 Juice market performance
For innocent, it is important to know if the chilled juice market is growing in the Netherlands and Belgium or instead, decreasing. The previous paragraph concluded that people are becoming more conscious about their way of living, but are they doing that by drinking more healthy fruit
