How PepsiCo is Leveraging Healthy Alternatives to Colas

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). 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.

What key marketing metrics do you think PepsiCo should use to evaluate the performance of Naked Juice? Would these measures be different for its traditional carbonated soft drinks, and if so, how? The key marketing metrics that Naked Juice’s parent company should use to evaluate its performance that are the same as used for its traditional carbonated soft drinks include return on marketing investment, lifetime value of a customer, and marketing spent per customer (Marketing metrics, 2018).

In addition, PepsiCo should also consistently evaluate brand awareness levels to gauge the effectiveness of its marketing initiatives for the Naked Juice brand in engaging and securing new consumers (Kaplan, 2017). Include an analysis of the marketing decision process and some of the major changes within the industry. Consumers in the United States have increasingly exhibited preferences for healthy beverage alternatives to heavily sugared colas, including high quality natural juices and teas (Walcott, 2012).

Moreover, growing numbers of American consumers are able and willing to pay for so-called “super premium” juice brands provided they live up to their claims concerning taste and healthfulness (Bardzik & Ishdor, 2016). In this regard, one industry analyst reports that, “A dizzying array of ingredients and brands are available to consumers who are simply trying to find the healthiest juice. In your grocer's cooler today are energy drinks, smoothies, blends, ‘old-fashioned’ styles, herbals, all-natural juices and frozen juice from concentrate” (Linden, 2009, p. 42).

In response to these trends, Naked Juice’s parent company has unilaterally committed to reducing the sugar content of its traditional cola offerings while concomitantly promoting sales of its nontraditional beverages including super-premium juices (Kaplan, 2017).

While it remains unclear whether other major beverage producers will follow PepsiCo’s example in reducing the sugar content of its cola products, the growing concern over the health implications of heavily sugared beverages and their connection to the obesity epidemic that is sweeping the country will likely result in a gradual reduction in the sugar content of cola-based beverages, a trend that could further strengthen the market position of Naked Juice.

As Kaplan emphasizes, “As a major source of sugar calories, sodas alone account for one third of daily American sugar consumption (8) and, therefore, reducing soda consumption is a meaningful way to reduce sugar intake” (2017, p. 1268). Conclusion The research showed that increasing numbers of American consumers are turning to natural fruit and vegetable juice beverages as an alternative to conventional cola drinks. The research also showed that.