History and Introduction In the early 1990’s, when Manhattan was hit by water contamination, Bikoff set out to buy bottled water and found that except for the brand name, there was very little difference between the different brands of bottled water sold. Bikoff was looking for additional nutritional value rather than plain water. Finding none, he started conducting an in-depth study about different companies making bottled water. He found that he could use vapor distillation to create an alternative to bottled water.
Bottled water was generally procured from springs and contained some dissolved minerals, which could be removed using vapor distillation. Bikoff then came up with the idea of starting a company that could offer a healthy alternative to soft drinks and plain water. He decided to name the company Glaceau; a combination of the words glace (ice) and eau (water) which signifies clean water. Bikoff started the venture in the year 1996, from his father’s office in Queens, New York.
He worked with R&D professionals to develop the company’s first product Glaceau Smartwater, which was sourced from glacial aquifers in Connecticut, vapor distilled, and supplemented with electrolytes. With his previous expertise on packaging, he asked his team to design a 20 ounce bottle instead of the conventional 16 ounce bottle. Another unique aspect of the bottle was its sport cap. With the popularity if the packaging, several beverage manufacturers started using caps on the bottles. Bikoff then got the bottle redesigned and the bottle was made available in half liter, one liter, and one and a half liter sizes.
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The next product was Fruitwater, introduced in 1999. This was Smartwater with the added flavor of fruits and it was sugar free. Fruitwater was the first non0carbonated water with a fruit flavor. The water was subjected to pasteurization due to which it had a long life though no preservatives were added. Fruitwater was available in several flavors including watermelon, mint, pineapple, and guava. It was in the year 2000 that Bikoff realized the potential of water enhanced with vitamins. What sparked the realization was a tiring yoga session after which he had a drink of water along with a Vitamin C wafer.
The water-Vitamin combination proved extremely refreshing and planted the idea of water enhanced with Vitamins in his mind. To devise the formula for water with vitamins, he started working on the product along with a team comprising a dietician, a microbiologist, and a food scientist. Bikoff felt that the name should reflect the fact that the product was not merely water but water with additional vitamins and nutrients. It was not long before he realized that he was creating a new category of product known as enhanced water.
It’s is defined as a category based on delivering value-added nutritional benefits in a hydrating beverage, so that people can drink more water with more usage occasions. Once the products were ready, the challenge was to get shelf space from vendors. These were problems in distributing this product through major retailers, as they were not willing to give expensive shelf space for new products. There were several small retailers who were ready to try out new products. These retailers were highly impressed by the fact that Bikoff was delivering and promoting the products himself and it was they who gave him a chance.
By initially targeting smaller stores, the company built up demand. The product’s unusual appearance and unconventional packaging attracted the customers. Initially companies like Pepsi and Coca-Cola dismissed the Glaceau product as a passing fad, but with the product gaining popularity and outselling their products like Dasani and Aquafina they were forced to take notice. In 2002, Coca-Cola introduced fortified water, Dasani Nutriwater, and Pepsi came up with Aquafina Essentials. However, neither of the two did well in the market and both products were later discontinued.
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By 2005, Glaceau’s products were being sold in all the 50 states in the US. The sales had grown 80 percent from January 2004 to January 2005. As of 2005, the company was selling around two million bottles per day, with VitaminWater accounting for 75 percent of total sales. Furthermore, in 2006 PepsiCo Inc. announced that it had agreed to change the packaging label, and cap of its SoBe Life Water, after the settlement with Energy Brands Inc, maker of Glaceau’s range of enhanced water products. In April 2006, Energy Brands Inc. ad filed a lawsuit against Pepsi, alleging that SoBe Life Water’s packaging label, and cap were similar to those if Glaceau’s VitaminWater and that Pepsi intended to confuse the consumers with its new packaging. Pepsi had resorted to trade dress infringement and dilution and its label and bottle resembled that of VitaminWater. It was also alleged that Pepsi had launched SoBe Life Water after it failed to acquire Energy Brand in early 2006. The lawsuit and its subsequent settlement indicated the growing insecurity of the soft drinks majors, which were facing threat from companies promoting healthy alternatives to soft drinks.
Energy Brands, the parent company of Glaceau, was one such company, which advocated healthy living through low-calorie, low-sugar drinks, and non-carbonated water with additional nutritional supplements. Glaceau’s line of enhanced water products comprised VitaminWater, Smartwater, and Fruitwater. Energy Brands was credited with created a new category of drinks popularly known as “enhanced water products. ” Inventory Research Identify all brand elements for product and services The main brand elements are brand names, URLs, logos, symbols, characters, spokespeople, slogans, jingles, packages, and signage.
Affiliated brand names: Glaceau => Coca-Cola => VitaminWater URLs: //www. vitaminwater. com/, //www. coca-cola. com/, www. drinkbetterwater. com Logos: VitaminWater is considered to have a strong word mark; no accompanying logo aside from the name. The word “Vitamin” is in bold letters whereas the word “water” is in normal font. Spokespeople: 50 cent, Kelly Clarkson, Shaquille O’Neal, Tracy McGrady, Brian Urlacher, David Ortiz, Kasey Kahne, Donovan McNabb, Ladainian Tomlinson, David Wright, Gilbert Arenas, and Allen Iverson. Slogan: “it works” is the slogan shown on the label of the product.
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Each spokesperson has their personalized slogan that essentially sets them apart from one another. For example: Shaquille O’Neal has a slogan which is “diesel power” whereas Allen Iverson’s is “the answer’s answer. ” Packages: The packaging contains bright colors to enhance the Vitamin Water logo. The colors used on the bottles compliment the various colors of the liquids themselves. Flavors: Vitamin Water comes in fifteen different flavors and varieties. Each product contains a different combination of vitamins and minerals, which the company claims are beneficial for things like energy, balance, endurance, and focus.
Flavors include Dragon fruit, Tropical Citrus, Fruit Punch, Lemonade, Kiwi-Strawberry, Orange-Orange, Grape, Raspberry-Apple, Green Tea, Peach-Mango, Lemon Tea, Cran-Grapefruit, Jackfruit-Guava, Lemon-Lime, Acai-Blueberry-Pomegranate. VitaminWater Mind Map Trendy The brand, Vitamin water is perceived as a trendy drink. The product it known for its wide mouth, bright color-coded labeling and vibrant designs. The Vitamin water site also takes the branding to the next level by bundling each flavor with its own expressive animated image.
Healthy According to the nutrition facts on the bottle, the product contains 98% water and 2% sugar. The extremely small amount of sugars is added through the natural fruit juices that are included in the ingredients to increase flavor. The product also markets the high amounts of electrolytes used to purify its water. Entertainment The company Coca-Cola was able to continue marketing the product through the use of celebrity tie-ins that allowed the customers to personalize each flavor by associating a celebrity with a flavor.
The technique exemplified brilliant brand marketing. High Quality In the market, this product is considered to be a luxury item. Energy Brands is the parent company of Glaceau water products, which sells water under the labels VitaminWater and SmartWater. The use of bright vibrant colors is one of the marketing tools used by the brand in order to reflect the refreshing quality of the product. 50 cent rapper The grape flavor Formula 50 vitamin water is 50 cent’s custom-made flavor with 50% of his daily choice of vitamins; therefore is specialized for those 50 cent fans.
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The grape-flavored drink’s label reads, “inspired by today’s most talked about artist, hottest record producer, and soon-to-be movie star, this not-so-hypnotic tonic contains 50 percent of many of the important vitamins that you need every day. ” Variety 50 cent is currently promoting the upcoming increase in the variety of flavors from 15 to 50. The product line already includes flavors such as Power C, Energy- Tropical, Revive, Multi V, Focus, Essential, Formula 50, Defense, Rescue, Endurance, Vital-T, Balance, B-Relaxed, and Charge. Innovative
The vitamin water bottles are especially designed in mind to fit-in-your-hand with ease. Each flavor offers a different taste experience for the new generation of bottled water lovers. Coca-Cola is known for its innovative platforms and by adding this new product to its line enables the company to capitalize on recent health and wellness trends. Coca-Cola With Coca-Cola’s recent purchase of Glaceau, the company obtains additional credibility, potential customers, and an enlarged distribution channel through its new affiliation with the Coca-Cola brand.
Through the use of these elements where is the brand positioned? Through the use of these elements the brand is positioned as trendy, innovative and entertaining mainly due to its unique graphics and imagery. Furthermore, when visiting the VitaminWater site it supports the company’s brand positioning; revealing a rather smart site, which opens on colorful splash pages. The site is based on Flash technology; it enhances the brand with a multicolored organ producing different tunes when the mouse passes over VitaminWater bottles. The site’s branding is perfectly aligned with
Glaceau’s brand positioning. It has the same look, same attitude, and same voice. Similar to label packaging, the text is full of confidence. VitaminWater states that “one sip, swing or gulp may result in boycott of other beverages. ” Color use is bright and vibrant, reflecting the refreshing quality of the product. The label maker is a cool feature, which again nicely reinforces the brand and allows VitaminWater to both collect information about its visitors and plumb for free ideas. Visitors can take a shot at making their own label of a vitamin drink complete with attitude, colors and minerals.
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To view your label, you have to supply an email address, giving the brand managers access to a mailing list of interested consumers. Glaceau provides an excellent example of website development aligned with its brand positioning. Rather than being a display of technological know-how, the Flash technology is deployed here to enhance the website and further promote the brand as trendy, innovative and entertaining. Exploratory Hierarchy of the Brand Survey Results (See Appendix) We developed a ten question survey in which we disseminated through email to our peers to assess the strength of Vitamin Water as a brand.
We paid particular attention to the consumers’ knowledge of specific brand attributes such as the spokesman and number of flavors. The survey was limited to 10 questions to ensure participation and valid responses. There were 40 respondents to our survey, and there were only 3 questions in which all 40 participants did not answer. Even so, for those 3 questions we still had 39 people respond. This means there was a response to 99% of the questions asked. We purposely did not ask demographic information since we only gave the survey to our peers.
Although this may appear to have skewed our results, we felt that since our peers are in the target population for Vitamin Water’s core marketing efforts, our conclusions are valid. Additionally, we did not generalize any of our conclusions for the total population. Question Analysis 1. 60% of respondents are very familiar with Vitamin Water. Only Gatorade had a higher number of respondents who said they were very familiar with the drink at 85%. Aquafina also had 60%, or 24 respondents say that they very familiar with the drink.
However, Aquafina had a higher rating average than Vitamin Water meaning that overall more people are familiar with the brand. Still, Vitamin Water is doing fairly well in the category considering that no one said they had never heard the drink before. 2. When asked to rate Vitamin Water based on knowledge and what they’ve heard about the brand, most respondents gave the drink an excellent rating. In other words they rated the brand a 4 out of 5, second only to Gatorade. Again, no respondents gave the brand a poor rating, and only 2 didn’t know enough about the brand to give it a rating at all. . Many of the respondents thought that Vitamin Water was the newest drink in the category, which was wrong. Sobe Life Water is the newest drink, but this lets us know that Vitamin Water is doing a good job of keeping its brand in the mind of consumers rather than letting a new drink capture some of its market share. 4. While most people did choose “enhanced water “when asked what category to place Vitamin Water, we feel that enough people answered other choices to conclude that generally there isn’t a strong association between the two.
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Considering the other answer choices on this question, many respondents may have chosen enhanced water through the process of elimination. As the brand inventory showed, people associate the drink with multiple categories because of the many different types of branding. 5. No one was able to recall that Brian Urlacher is a spokes person for the brand. This may mean that Vitamin Water is paying him for no reason, or it could mean that he is just not the person to reach the target population for survey respondents.
On the other hand, Kelly Clarkson wouldn’t be considered the best fit for a spokesman to reach our target population either, but a number of respondents recognized her as a celebrity endorser of the brand. Clearly 50 cent is the most recognizable spokesman for the brand. There is an overload of celebrities in the industry endorsing so many different products that people get lost. If people are associating the wrong person with your brand it might affect your image. This is where Vitamin Water runs into a problem. Having too many spokes people for your brand confuses consumers and they don’t get a true image association. . Most respondents knew that Coca Cola was the parent company of Vitamin Water. This is most likely due to the highly publicized sale. This publicity was very good because it increased awareness of the brand. Since Coke is such a strong brand, it is very beneficial for Vitamin Water to associate its self with the brand and company. 7. Most respondents correctly identified Vitamin Water’s distinctive characteristic: each flavor has a different set of vitamins. However, just as in question 4, we feel that many respondents may have chosen the correct answer through the process of elimination.
A quarter of the respondents identified incorrect characteristics with the brand. We believe that this is a sign that the company isn’t effectively distinguishing themselves from their competitors when it comes to brand attributes. 8. 67. 5% of respondents have tasted Vitamin Water before. 25 of the 40 respondents gave comments about what they thought about the drink. Most of the comments were favorable, and there was only one very negative comment about the taste. Many consumers said that they thought the drink was “Ok. ” 9.
People don’t know that there are 15 flavors of Vitamin Water offered. Only 3 respondents (7. 7%) knew that there are 15 flavors. Although we did not get to ask the question, chances are that most respondents haven’t visited the brand website because all 15 flavors are vividly displayed. The problem is that no one sells all 15 flavors (as discussed in the brand inventory).
This is a differentiating characteristic of the brand and consumers don’t know about it. If variety is what sets you apart and people don’t have access to it, it doesn’t help the brand. 10.
The last question tells us that most of the respondents have purchased Vitamin Water before, which is very good. We would have liked to get into brand loyalty and find out who purchased Vitamin Water a second or third time. There were some people who have tasted the brand but haven’t purchased it yet. This could be due to price or just due to the fact that they didn’t like the taste. Gap Analysis While the brand seems to be doing pretty well, we have determined that there are some gaps in the company’s message which will affect Vitamin Water’s image in the future.
The main hindrance we see with the brand is its consistency. It’s very difficult to tell what type of image the brand wants to have because they use so many different spokes people in commercials and advertisements. Consumers aren’t getting a consistent message about the image of the brand because they are seeing everyone from athletes, to actors, to singers. For the first couple of years after a new product release it’s important not to confuse consumers. For instance, now we see well known actors in Hanes underwear commercials, but in the past it was just Michael Jordan.
Another reason consistency is such an issue with Vitamin Water is because consumers don’t know exactly what type of drink it is. When Vitamin Water hit the market it made its own category, “enhanced water. ” Most consumers don’t even know what enhanced water is. This is where associations can be very useful. Some of Vitamin Water’s top competitors such as Crystal Light, Gatorade, and Crystal Light are very particular about the type of people that are associated with their brands and making sure that there are consistent associations. Crystal Light. Gatorade is has defined its self as a sports drink.
The company understands that people may drink Gatorade at other times, but that is their niche so they only feature athletes in their commercials. Red Bull doesn’t use athletes from main stream sports such as basketball, football, and baseball because they pay particular attention to the brand image they portray through the use of extreme sports and activities deeply rooted in culture. Branding Strategy Vitamin Water has tried to market its self as a “Lifestyle” drink. This has worked thus far because the drink is new and there’s not a lot of competition.
The “Lifestyle” category may work in other product categories such as clothes and shoes where there is such a thin line between categories. For instance, plenty of people by athletic apparel and wear them as every day clothing. However, in the beverage industry it’s necessary for a brand to distinguish its self by selecting a more specific segment of the market. Recommendation and Implementation We recommend that Coca Cola pick a specific market for Vitamin Water and concentrate its marketing efforts toward that category. This will help them to obtain a consistent message in their marketing strategy and advertisement.
The most logical options for further segmentation in the beverage category for Vitamin Water are health, sports, and energy. Health- The name of the drink does imply that it’s healthy, but we don’t recommend that Vitamin Water take that association any farther. Being healthy isn’t one of the most important factors in choosing a drink for Vitamin Water’s target market. Young, hip individuals are more concerned with the way a drink tastes and added benefits. Sports- The only drawback we see with having Vitamin Water in the sports drink category is that there are so many competitors is that specific market segment.
Energy- We recommend that Vitamin Water develop its marketing and branding strategy as an energy drink. Vitamin Water contains ingredients such as vapor distilled, deionized water, taurine and crystalline fructose, all ingredients that are seen in other energy drinks. Coca-cola should focus on establishing the drink as an energy beverage opposed to being a health drink. Advertising its flavor as energy enhancing beverages will fit more closely with its endorsers and the “Lifestyle” branding.
Rappers and singers do need energy to perform, so Vitamin Water using 50 Cent and Kelly Clarkson as spokes people makes sense. While athletes also need energy, we recommend that Vitamin Water cease its contracts with athletes such as Brian Urlacher and Peyton Manning. These associations may confuse consumers into thinking that Vitamin Water is a sports drink. Other recommendations for Vitamin Water include cutting back on the number of flavor options it offers and the number of people that they use as endorsers of the brand. The company should implement new flavors slowly.