Competitive Positioning of Apple Melon

By defining the target market, a company specifies the segments they wish to reach (Abrams, 2014). To segment the market for Apple Melon drink, demographic information will be most appropriate. Under the demographic segmentation, consumers are categorized based on their age, income level, gender, ethnicity, level of education among others (Abrams, 2014). The non-alcoholic drink will target consumers located in Herndon, Virginia and its surrounding environs. According to statistics in 2010 from the US Census Bureau (American fact finder, n.d), Herndon has a population of 23, 292. Using demographic information as described by Abrams (2014, p.107), the segment for the beverage is as follows;

Age range-16-45years

Marital status-56.8% married couples, 28.6% single (American factfinder, n.d).

Income-per capita $39, 272-$44, 570, median household income of $97, 500-$108, 114.

Family size-3.54(American factfinder, n.d).

Gender-50.2% males, 40.8% females (Americanfactfinder, n.d).

Level of education-high school diploma 84.1%, college graduates 48.4% (Neighbourhood scout, n.d).

Ethnic group-White (50.7%), Latino (36%), Asian (17.6%), and African-American(8.7%) (American factfinder, n.d).

Occupation-scientific and technical services 19%, hospitality 12% and retail.8.6% (Neighbourhoodscout, n.d).

Therefore, the target market for Apple Melon soft drink is as follows” consumers residing in Herndon neighbourhood, both white men and women aged between 16-45 years, earning a median income of $97, 500- $108, 114, having a high school diploma and above, married or single, working in any profession and comprising of more than 3 family members.”

Market competition

Assessing competitive position

Competition in the non-alcoholic beverage industry is very high. Therefore, a thorough analysis of industry competitiveness will enable Apple Melon to devise strategies to overcome intense rivalry, increase its market share and profitability. Knowing one’s competitive position is instrumental in improving the financial performance of the company (Abrams, 2014). The major competitors in the non-alcoholic drinks industry are Coca-Cola, Pepsi, Dr Pepper Snapple, Red Bull To evaluate an organization’s competitive position, several factors have to be considered. These factors include customer perception and internal operation (Abrams, 2014, p.123). The table below shows the competitive assessment for Apple Melon;

Table 1: Customer perception factors

Factor

Maximum Points (1-10)

Apple Melon

Coca-Cola

Pepsi

Dr. Pepper Snapple

Quality

10

8

9

8

8

Product/service features

10

7

9

9

8

Purchase price

10

7

8

6

8

Social Consciousness

2

1

2

2

2

Customer relationships

8

5

8

6

6

Peripheral costs

1

-1

-1

-1

-1

Perceived value

10

10

7

7

10

Source: (Abrams, 2014, p.123).

Apple Melon Company is in a relatively weak position as compared to market leaders such as Coca-Cola and Pepsi. The target market for Apple Melon’s product is extremely sensitive to the purchase price, quality, product features, perceived value, social consciousness and customer relationships. Due to the presence of many substitute non-alcoholic beverages, the target market is very responsive to price. The company is pricing its drinks relatively cheaper than major competitors such as Coca-Cola while increasing its perceived value which has maximum points of 10. Since the consumers are socially conscious, Apple Melon ensures that its products have fewer calories and offer less damage to the environment. However, the company performs poorly in terms of customer relationships in relation to its rivals.

Marketing strategy for competitive advantage

Given the strong competitive position of rivals, Apple Melon needs to venture into niche markets to improve its performance. For instance, Red Bull and Monster venture into energy drinks and have managed to increase their market share and revenues, and therefore, Apple Mellon cannot compete them in such markets. Similarly, Pepsi and Coca-Cola have created a dual monopoly in the soft drinks market. Therefore, Apple Melon should strive for innovation to build a sustainable competitive advantage .Research shows that carbonated soft drinks continue to decline in 2016 due to their high calor ific value that is considered unhealthy (Beverage Marketing Corporation, 2017). However, the industry continues to experience significant growth in revenues for sports drinks, energy drinks, bottled water and value-added water (Beverage Marketing Corporation, 2017). Therefore, Apple Melon should steer clear of Carbonated Soft Drinks and focus on developing bottled and value-added water together with sports drinks. Differentiation will be crucial for the company gaining a stronger competitive edge over rivals.

Market share distribution

Coca-Cola, Pepsi and Dr Pepper Snapple have historically been the dominant market leaders in the non-alcoholic beverage industry. However, companies selling energy drinks such as Red Bull and Monster have been able to increase their market share substantially in the last three years than other companies (Beverage Marketing Corporation, 2017). For these reasons, Apple Melon Company needs to differentiate its products to experience growth and success in this highly competitive industry. Coca-Cola remains the leading company with 17.7% of market share and continues to dominate the CSD segment. Despite its low market share, Red Bull controls over 48% of the energy drinks market (Statistica.com, 2017). This shows that if Apple Melon can offer differentiated products in a niche market, then its share will increase significantly. The table below shows the market share distribution of market leaders in the beverage sector;

Table 2: Market share distribution of non-alcoholic beverage the industry

Competitor

% total revenues

% of total units sold

Total market share increasing or declining?

Coca-Cola

17.7%

45%

Stagnating

Pepsi

8.8%

26%

Declining

Dr Pepper Snapple

16.7%

20%%

Increasing

Nestle Group

8.6%

28%

Increasing

Red Bull

7.2%

30%

Increasing

Source: (Statistica.com., 2017).

Company messages

Successful marketing involves determining and defining the value proposition to be communicated to customers. Therefore, it is vital that one knows what the consumers want for the messages to be marketing messages to be effective (Abrams, 2014). According to Abrams (2014, p.161), the five F’s will help clarify to customers, the messages being communicated. They include the function, finances, freedom, feelings, and future (Abrams, 2014, p.161). In terms of functions, Apple Melon drinks help consumers quench their thirst, prevent dehydration and make them energized. Additionally, the products are cheap hence will not cause financial constraints on consumers. Apple Melon drinks can be bought at any convenient store near the consumer while making them feel good about themselves,

Marketing channels

Apple Melon will focus on selling their products online through social media, company website etc. Online marketing tactics are easy and cheaper to execute than traditional methods (Abrams, 2014, p.171).The main focus will be using social media platforms to drive traffic to the company website so that customers can make their orders. Majority of the company’s target market is young people who are tech-savvy and can access a smartphone, tablet or laptop and connect to the internet. Apple Melon will establish a social media office to run the firm’s Facebook, Twitter, YouTube and LinkedIn platforms.

References

American fact finder (n.d). Herndon town, Virginia demographic profile. Retrieved from https://factfinder.census.gov/faces/nav/jsf/pages/community_facts.xhtml

Abrams, R.(2014). Successful business plan: Secrets and strategies, 6th edition.

Beverage Marketing Corporation (2017). Non-alcoholic beverage trend analysis. Retrieved from http://beverageforum.com/images/2017presentations/W1_NonAlch_GaryHemphill.pdf

Neighborhood scout(n.d). Herndon, Virginia demographic data. Retrieved from https://www.neighborhoodscout.com/va/herndon/demographics

Statistica.com (n.d). Non-alcoholic beverages and soft drinks-statistics and facts. Retrieved from https://www.statista.com/topics/1662/non-alcoholic-beverages-and-soft-drinks-in-the-us/