Innocent as a product centric vis-à-vis a customer centric company
Traditionally companies end up having a product oriented approach, where first they develop the product/service, then figure out the target group and marketing (Michael John Baker, 2001). But Innocent can be seen as a strong example of a customer centric company. Right from its inception, its founders chose the route of first selecting their consumers and the existence of a particular need which exhibited a gap in the market that could be fulfilled by the creation of a product. Focusing on the psychographic pie of young, ‘busy in the fast city life’ individuals overdosed on unhealthy meals due to their convenience, there was a need gap of something healthy which is fast and delicious. With the target group and the need gap finalised, the founders then looked at the product package to be offered through the eyes of a typical customer from that niche. And from combining the natural freshness of the product with its convenience was born an Innocent smoothie. The simple but fun market testing technique applied by the founder’s exhibit how they used their niche of customers as their ‘mirror’ to determine whether their product was what the consumers would truly and continually pay for: and they succeeded.
Through the production processes and launch of their product they overcame hurdles while sticking to their philosophy of what makes a good product. Their goal was not just to make a good product but to change and augment the customers’ eating habits by offering them a good product. The founders have focused extensively on delivering value to customer, having overcome the initial product development challenges to meet their goals, and having used ‘out of the box’ research methods to gauge their customer values and shared their customer focus with the consumer (www.allbusiness.com (2007), Make your business plan customer centric)
Hence, Innocent can be safely tagged as a customer centric rather than a product centric company.
Marketing mix using 4 P’s
Right from its inception, Innocent has stressed the singularity and consistency of the main attributes of its product – namely quality and ‘naturalness’. This has aided a strong and positive connection of the consumers with this attribute, and remains its unique selling proposition or point (USP). All 17 recipes, complete with their packaging, speak in one language of being very good quality, close to nature, fresh product. The product labelling on the packaging maintains similar dialogue with its consumers, with innovative ingredient description making it all the more irresistible. Also, the company has maintained its attachment with nature with its constant and customer-focused efforts to improve packaging making it more environment friendly. Their PET bottles are the first 100% recyclable plastic bottles in the world (www.innocent.co.uk ), so ‘greener’ consumers will perceive it as a ‘green’, environmentalluy-aware company, whether it is or not. In short, this company is ‘cool’.
Maintaining the strategy of ‘all good things come at a price’ in spite of being in a small category when it started, Innocent has always been in the premium price band. And it has worked towards its overall imagery of being pegged as an everyday luxury. Today, even though the market has grown by more than 100%, Innocent still remains relatively high priced, and yet it remains the market leader, a strong reason being the consumers actually understand the rationale of the higher price and are ready to pay for the extra special product. This is an ideal position for a business to be in and leads to healthy profits and wide margins.
Placement of the product was a challenge as natural ingredients made it difficult for Innocent to obtain a strong shelf life. It thus had its modest start from a sandwich shop. But in the following years, as it got the product and the target group right, the market opened up. Today it has gained prominent shelf space amongst all top retailers across the country, Harrods and Harvey Nicholas to name a few, and all the major supermarkets: the key to healthy sales for any company. Innocent has taken the category from its local presence at elite sandwich shops to mainstream grocery stores and supermarket chain, growing in volume, day on day. Pegging itself as an everyday luxury has helped Innocent garner a slice of the pie of the diet of both middle class and the elite consumers. It just needs to be at a grabbing distance, which with its 4000 retail outlet distribution, ranging from large supermarkets to small independent sandwich shops, it successfully manages to do.
Promotions haven’t followed the norm at Innocent. It didn’t start with a traditional FMCG marketing spend allocation. But, through various aids, such as its website, product labelling, distribution trucks, interviews and the media image of its founders, it has successfully established a lively, fun, ‘hippie’ corporate image which plays well within its target group. Being still a nascent category, it gives due importance to sampling, and in this case, its product delivers more than its fair share of an efficient sales pitch with its USP and packaging. Also, its recent foray in above the line advertising with its innovative slogans and BTL activities like sponsoring ‘Fruitstock’ and supporting community projects in underdeveloped countries has added to its positive public image.
The product positioning is an example of integrated marketing communication. The product message is consistent in its recipe, logo and packaging. The founders have brought forward their product characteristics to the marketing communication and have successfully sold the premium positioning of the product by making the customer to agree to pay more.
Proposed Brand Extensions
Innocent has a very strong brand imagery established in the market with strong consumer associations to the brands goals and values. Brand extension, if in right directions, will increase its brand awareness also adding to profitability from offerings in varied product categories.
Desserts being an extension within the current domain of chilled food shouldn’t be much of a problem. Can be a winner on the ‘health’ peg of ‘taste’ aspect is sufficiently taken care of. Also shelf life will need to be worked out as desserts would move out as fast as smoothies and without preservatives, would be difficult to handle. But, it can be overall an appropriate brand extension.
Cosmetics being an extension in a non related category would have a host of issues to address. Cosmetics have different TG demographics and psychographics, dissimilar distribution requirements and surely diverse manufacturing. Although a related USP in beauty products adopted by Lush cosmetics from Dorset has been a worldwide sensation (Guardian, 2007 online).This does indicate the maturity of cosmetics market and hence, the extension of the brand character of Innocent to cosmetics can be bright. One way the company can work it out is by licensing the brand name to an established beauty player who will have the manufacturing, marketing and distribution girth to carve the market and feed it. Innocent can ensure there is no loss or dilution of the core brand imagery by being active in the line development process.
Holidays are again a case like cosmetics, non related category which can surely add to the brand equity of innocent. Licensed brand extension can be a good option.
Risks and rewards of similar marketing platforms
Bose Corporation, as a manufacturer of entertainment systems, is a company that believes in investing 100% of its profits in the company. Superior technology, backed by consistent research, is the philosophy behind the corporation. Bose products are known and respected for their high performing sound quality. Like Innocent, it too is premium priced amongst its category of products available. The risk of a strategy that Innocent or Bose follows is failing to communicate the brand ethos and successfully positioning it in the premium segment. Both of these are interrelated to a great extent as communicating brand ethos is in a way an attempt to position a brand. However, when the product is unique, there is significant research, and the value proposition is clutter-breaking, then it becomes imperative that all these things are communicated effectively. One could make a great product but what if no one knows about it? Honesty of brand and awareness minimises the dangers outline above.
There is a third risk of not estimating the demand correctly. There are some products that are way ahead of their time and don’t get enough buyers. The business model might require a certain amount of sale to make the model sustainable but, if the product happens to cater to a niche market, and if the market size estimation is flawed, then the business model risks failure.
The rewards of estimating demand correctly are customer loyalty and profitability. If a customer perceives a product to be of high quality and pays for the quality, he/she is likely to make repurchases and remain loyal, over a lifetime, which may be fifty years or more. The company can also build in its profit at a premium as high quality at times does not have a fixed value attached in the customers’ mind. It is the perceived value on which basis that the customer judges the attractiveness of the product, not its actual value. If a company is able to convince customers of a higher perceived value it can build a significant profitability in the pricing model, and this is the ultimate point of marketing: to sell more product, whether or not the product is worth buying.
References
Guardian (2007) ‘Lush couple with a shed load of ideas’ The Guardian, London, 13 April (Online), Available from
http://www.guardian.co.uk/business/2007/apr/13/retail2
Make your Business Plan Consumer Centric, Available from http://www.allbusiness.com/sales/customer-service-customer-relationship/3791222-2.html
Michael John Baker (2001), Marketing: Critical Perspectives on Business and Management, Routledge
Our Philosophy, Available from
http://www.bose.co.uk/GB/en/about-bose/our-philosophy/index.jsp
Sustainable Packaging, Available from http://www.innocentdrinks.co.uk/us/ethics/sustainable_packaging/recycling
Bibliography
M Tushman, P Anderson (2004), Managing Strategic Innovation and Change: A Collection of Readings, Oxford University Press, USA
DA Aaker (2004), Brand Portfolio Strategy: Creating Relevance, Differentiation, Energy, Leverage, and Clarity , Free Press