Glaceau

Glaceau: Marketing Vitamin water

A Case Study

Submitted To:Ms. Shailja Manocha

Submitted By:Anand Sagar (20091103)Ashish K Rai (20091104)

Founded in 1996 by J. Darius Bikoff

Created the enhanced water market

Number one player in the enhanced water segment

Three products lines:

Vitamin water

Smart water

Fruit water

Glaceau Overview

Vitamin water range includes green tea and

polyphenol-based products

Products distributed in all US states

Visionary management team with proven

entrepreneurial skills and long-time industry

managers with experience in beverage

majors

Glaceau the brand

Glaceau Vitamin water is among the10 brands that have “rocked the world” as per Advertising Age, the authoritative marketing journal

Abstract of the case

• The case highlight the marketing strategy of US

based energy brand based inc, maker of the

Glaceau range of enhanced water product

• It’s product were different in various aspect

including packaging, appearance, labels and

ingredients; it was category creator

• It was promoted through vehicle marketing, retail

sampling, banners, posters & campus

ambassadors

• By 2006, several famous celebrities from sports &

entertainment arena endorsed Glaceau product

• Case also described its unique distribution strategies

• Notwithstanding the success of vitamin water, industry

expert felt that production may face stiff competition

from the established players like coca-cola & Pepsi,

which were launching their own enhanced water

product owing to there growing popularity

Abstract Continues…

Issues….

• Understanding the marketing mix adopted by

Glaceau for vitamin water

• Critically examine the promotion and distribution

strategies for vitamin water

• Analyze the factor that helped Glaceau carve a niche

for itself in a saturated beverage market in the US

• Examining the challenges Glaceau facing from

established player

Understanding Marketing Mix

• As vitamin supplements are attractive to health

conscious, vitamin water is using its name &

ingredients

• Bright colors & variety of flavors with each for

unique purpose (i.e. energy, clarity, increased

metabolism)

• Lined up on a supermarket, convenient store shelf,

drug stores, selected food service locations & on

internet

Product

• The Vitamin Water 20oz average unit price

range from $1.20 to $1.50 in the grocery

stores and the price for 32oz range from

$1.90 to $2.20

Price

Promotion

• It took Glaceau four years to launch a major

ad campaign for which company spent US $ 5

million

• The billboards of Vitamin water placed in

major metro markets

• Campaign aimed at educating the customers

about the features of vitamin water

• Glaceau launched 39 tasting vans, popularly

known as Glaceau testing vehicles.

• The endorsements with celebrities continued

& in 2005, several athletes and entertainers

were chosen to endorse Glaceau products

• Advertisements do not explain what the

product is about & feature athletes in some &

musicians in others which created confusion

Place

• Bikoff avoided supermarket chains till he could afford

the slotting fee and concentrated on mom& pop

stores

• From there vitamin water moved organic food stores

and retailers and later on to Albertsons and Safeway

food stores

• Instead of tackling several markets at once, it was

launched in one market at a time

• To establish a good market position in California, it

conducted a competition between two of their

distributors to see who can open up more accounts

• By 2004 Glaceau has identified 10 target markets

• Marketing managers were responsible for carrying

out sampling & coordinating media activities

• Bikoff believe in marinating personal touch with

distributors

Segmentation Variables

Demographic • Age: Young adult smoker 18+ • Gender: Female/Male

Geographic  • Region: World wide• Density: Urban /Semi urban

Psychographic • Consumer lifestyle: Fun, Risk Taker, Survivor• Personality: Compulsive , Authoritarian Benefit Mild stimulant

Target Audience

Before 1950:

Targeted women

Adventurous

After 1950:

Men ( To young adult )

Adventurous

Health conscious people

Positioning

Perceptual Map

Filter Cigarette

Non-Filter Cigarette

Low Tar

High Tar

MARLBORO

CBBE MODEL

Response

Judgement Feeling

Performance Imagery

Salience

•Ultimate social status•Loyal Customer•High Affiliation

•Self-satisfaction•Feeling of Macho•Ruggedness•Master of their own

•High Quality•Best Brand in World

•Convenience Product•Cigarette with Filter•Low Tar

•Classic/Independent Image•Social Cultural Image•Sporty Image

•High Awareness•Most Commonly Recallable Brand

• It is scoring in “hipness” market, with dozen

drinks in a rainbow of colors, each with a

name that promises more than thirst relief -

"determination," "focus" and "rescue“

• Advocated healthy living through low-calorie,

low sugar drinks, and non-carbonated water

with additional nutritional supplements

SWOT : Analysis

•Actual sugar content &•Serving size per bottle

is a major concern

• Balanced Flavors• Their motto is their strength•Their online presence reflect same brand outlook

•Pepsi formulating strategy to directly compete against vitamin water

• The “Trendy” beverages become most popular• Consumer looking for alternative beverages with health

Strengths Weakness

Opportunities Threats

Motivation

• Needs - Acquired

• Goal - Product specific goal

• Motive- Rational

Personality Traits

• Consumer Innovativeness : medium-high

• Dogmatism : Low

• Social Character : Inner directed

• OSL : Medium-High

Cognitive Personality factors:

• Need for cognition: High (verbaliser)

Perception

• JND - S2 > S1

• S1 is plain water/soft drink

• S2 is vitamin water

• Perceived Pricing - Efficient

Learning

• Learning - Intentional

• Cognitive learning is

applicable

• According to ELM model,

Central route is followed as

there is high level of

involvement by customer

Consumer Attitude

TRICOMPONENT ATTITUDE MODEL

• Cognition

• Affect

• Conation

Reference group appeals

• Celebrities- Britney spears,

Nicole Kidman,

Madonna

• Expert

• Employee spokesperson

Product Characteristics that Influence Diffusion

• Relative

Advantage

Adapter Category

• Innovators

• Early Adopters

• There is a Doubtful Positioning about the product,

they need to decide how to repositioned itself so

that its brand image & name are in line with its

actual product content

• It should offer extensions to its original enhanced

beverage line

• Packaging and copy styles would be consistent

with that of the current product

Recommendations

• It need to decide how to utilize other forms of

marketing, while still maintaining its humorous,

lighthearted image

• It has been able to capture consumers through its

previous promotional endeavors, a focus on building

loyalty is critical in order to keep theses customers

• Advertisements should include drive-to-site

messaging so that customers can learn & interact

with the brand

• It needs to be placed in amusement parks which

will give more market share & introduce product

as healthy alternative where soda is usually

served

• People tend to think of a product as lower quality

when it is priced lower than its competitors, so

Vitamin Water will be kept at a constant prices,

but slight increases due to inflation rate

• There should be no coupons for the products

since it will cheapen the product and lowers its

quality

• Sustainable growth follows the path of

constant product innovation

THANK YOU