How PepsiCo is Leveraging Healthy Alternatives to Colas Case Study

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Naked Juice Case Study

Today, increasing numbers of Americans are choosing healthy alternatives for the cola drinks that have dominated the beverage market for decades. Some of these alternatives include so-called “super-premium” brands that place a high priority on providing consumers with the best quality ingredients available. One such firm is Naked Juice which leveraged its humble direct sales beginnings into a national enterprise that was subsequently acquired by PepsiCo. The purpose of this case study is to identify the strategies used by Naked Juice to reach its current position in the beverage industry and an analysis of PepsiCo’s current marketing strategies and their implications for Naked Juice in its portfolio of subsidiaries. In addition, a discussion concerning the optimal key marketing metrics that the parent company should use to evaluate the performance of Naked Juice and an assessment concerning whether these measures should be different from its traditional carbonated soft drinks are followed by an analysis of the marketing decision process and some of the major changes within the industry. Finally, an analysis of the marketing decision process and some of the major changes within the industry are followed by a summary of the research and key findings concerning Naked Juice’s current status and likely future in the case study’s conclusion.

Strategies used by Naked Juice to reach its current market position

Naked Juice (hereinafter alternatively “the company”) reached its current enviable market position by transitioning from its original personal direct selling strategy to network marketing using various regional distributors across the United States including grocery and club stores (i.e., Sam’s Club outlets), health food retailers and neighborhood markets (Rochford, 2007).

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This national network of sales outlets has created multiple opportunities for consumers to learn about the Naked Juice brand and its line of healthy products. Not surprisingly, Naked Juice’s parent company has recognized the marketing potential for the Naked Juice brand in its portfolio of products and these issues are discussed further below.

Analysis of PepsiCo’s strategies in its beverage business and their implications for Naked Juice in this portfolio

The company’s super-premium juice products occupy a significant growth niche in the beverage industry. According to Rochford (2007), the cola sector of the global beverage industry is at the acme of maturity in this product life cycle, and may in fact already be in decline. This point is also made by Bardzik and Ishdorj (2016) who cite the case of Naked Juice as a prime example of how parent companies competing in the beverage industry are acquiring super-premium juice enterprises to compensate for these declines. In this regard, Bardzik and Ishdorj point out that, “[Beverage] companies have seen slow growth and even declines in sales of their products in other, larger categories such as soda and thus have an incentive to increase sales in alternative healthier categories to compensate” (p. 564). While measuring increased sales is a straightforward approach for evaluating the performance of the Naked Juice brand, there are some other strategies that are available including those discussed below.

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References

Bardzik, A. & Ishdorj, A. (2016, December). Super-premium fruit and vegetable beverages: A retail sales analysis and demand estimation. Agricultural and Resource Economics Review, 45(3), 563-567.

Kaplan, C. (2017, August). Big soda: Too sweet to fail? Fordham Urban Law Journal, 44(4), 1267-1270.

Linden, K. (2009, February). Just Juice: All-natural choices avoid synthetic additives and refined sugar. E Magazine, 15(1), 42-44.

Marketing metrics. (2018). Klipfolio. Retrieved from https://www.klipfolio.com/resources/kpi-examples/marketing.

Rochford, L. (2007). Case D-22: Naked Juice: Strategy for growth. Duluth: University of Minnesota.

Walcott, S. M. (2012, July). Brewing a new American tea industry. The Geographical Review, 102(3), 350-355.

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