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OVERVIEW/HISTORY AriZona Beverage Companybegan in Long Island, New
York in 1992
John Ferolito and Don Vultaggio founded Ferolito,Vultaggio & Sons, originally a beer brewery
abandoned the beer business in favour of a venture into
the tea industry goal: create a high quality product in packaging that
stands out.
since become the #1 ready-to-drink tea in the UnitedStates
business philosophy centers on offering a gourmet,organic drink experience while keeping consumer costsat a minimum
AriZonasLemon Iced Tea, was invented through anemphasis on quality, all-natural ingredients, withoutnatural flavours, colours, or preservatives
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TOTALPRODUCT CONCEPT AriZona Lemon Tea is made from real black tea and
natural lemon flavor that help to create a slightly sweet,refreshing flavorof sun brewed tea style
provides a delicious, refreshing beverage
includes symbolic and experiential benefits association withAriZonas ties to the
underground/independent arts culture (music, design, etc.)
symbolic benefits are integral to the target market
all-natural benefits of tea: improve mental awareness
boost the immune system strengthen teeth
prevent aging issues
serve as an anti-allergic
lower blood sugar
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PRODUCT LIFE CYCLE
late-growth phase
costs reduced
sales volume increase profitability increase
competition increase
public awareness increase
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PRODUCT MIX
includes product width of 15 other product lines
besides iced tea
green tea
herbal tonic
energy drinks
juice blends
organic tea
tea water
bottled water
bagged tea
iced tea includes a depth of 10 different products
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ICED TEA PRODUCT LINE(EXAMPLES)
Peach Iced Tea
Raspberry Iced Tea
Half & Half: Mango
Half & Half: Lemonade Southern-Style Sweet
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PRODUCT & BRAND
cash cow forAriZona
significant share of market
no longer high-growth
convenience product
routinized-response purchase
increasingly valuable brand equity
brand preference
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BOSTON CONSULTING GROUP MATRIX
Star Question Mark
Arnold Palmer (iced tea +
lemonade)
Rx Energy Herbal Tonic
Bagged Tea
Tea Water
Juice Blends
Organic TeaHalf & Half
Cash Cow Dog
Iced Tea Powdered Mix
Market Share
Gro
wth
LowHigh
High
Low
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MARKET SHARE
32%
68%
Market Share: Iced Tea
AriZona
Competitors
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COMPETITOR ANALYSISStrengths Weaknesses
Lipton
- no preservatives, art if icial
colours or flavours- gluten-free
- can be used to make hot tea
- works with Pepsi
- diet versions
- currently trails behind
competitors in most developedmarkets
Nestea
- contains antioxidants
- works with Coca-Cola
- one of the worlds best-knownand best-selling brands of both
hot leaf and ready-to-drink tea
- represents around 10% of the
world market for tea
- rumoured to have watered
down taste
- synthetic tasting- expensive
- contains a lot of corn sugar and
fructose
Brisk
- marketed as the edgy tea by
Lipton
- focused on those that want
more of an extreme and
energizing/rejuvenating iced
tea- unique taste
- reviews suggest it lacks in
flavour
- mostly made-up of sugar
- not as available as other iced
teas in every market
Snapple
- very popular and readily
available almost everywhere
- Real Facts (interactive)
- diet and caffeine-free versions
- sold widely
- mostly available in glass bottles
- expensive
- competes with carbonated soft
drinks as well
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TARGET MARKETS
primary market: 18-24 year olds
secondary markets: 13-17 year olds
25-34 year olds segmentation variables:
demographic age segmentations
behaviouristic
product use geographic
primarily urban/commercial, not rural
psychographic personality, values, attitudes, interests, or lifestyles
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PRICING STRATEGY
low-cost pricing model
priced at 99
advertisement mechanism
competitive pricing
major bang-for-your-buck
pay just over 4 per fluid ounce
high-quality, low-cost
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DISTRIBUTION
intensive distribution
using all available outlets to distribute
dual distribution
independent wholesalers and directly to largechains
hybrid distribution approach
available in:
convenience stores supermarkets
superstores
warehouse clubs
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PACKAGING
functional purpose maintain freshness of the product
bright colours
attractive designs
unique product-by-product creations
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PROMOTION
focus on packaging
attractive packaging design
use TV ad money for packaging
word-of-mouth
independent arts culture
sponsorships
outreach
charity
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S.W.O.T. ANALYSISStrengths Weaknesses
- pre-existing unique can design- affordable cost
- recognition potential (through
packaging)
- marketing and sales flexibility
(independently owned)
- less than optimal awareness- lack of advertisement
- not top-of-mind
- not available everywhere
Opportunities Threats
- increasing awareness through
advertising- advertise to new target market
- creating new and different
flavours
- becoming top-of-mind
- competing iced tea brands that
have better recognition and alarger budget (due to being
owned by larger holding
companies)
- unique yet often inconvenient
packaging (large can)
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FUTURE OUTLOOK
company continues to grow
continue to expand iced tea flavours
mergers and partnerships diversify product mix
efficiently expand into new lines
seek to attain top-of-mind-awareness
maintain private, independent, grass-rootsapproach
enlarge customer base generate more word-of-mouth publicity
we make stuff wed like to drink ourselves
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THE END
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