Jones Soda Marketing Analysis

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the beverage industry as well as where Jones Soda stands. Jones Soda is in the carbonated

and new age beverage industry, with the decrease of demand of carbonated drinks being a major

problem. Not only is demand decreasing due to the promotion of healthy lifestyles, but the availability

of the product is also a concern. With our survey indicating that a large sample of consumers choose not

to buy Jones Soda due to poor availability, this is a problem we must resolve. Thirdly, brand awareness is

lacking as many consumers are not (Howard, 2010)aware of Jones Soda. With that in mind, it is difficult

to promote Pure Cane Jones Soda, when consumers are unaware of the brand.

After analyzing the major problems, we are interested in achieving our overall goal of increasing

Jones’ market share. To do this, we would recommend Jones Soda to set two objectives: 1) To increase

net profit margin by 12% within 24 months, and 2) To increase the number of distributors by 8% in 24

months. We will strive to obtain objective one by focussing on health conscious lifestyles, promoting

environmentally friendly packing, and implementing a market penetration strategy. In order to increase

the number of distributors, we will motivate distributors to increase their sales on Jones Soda and set

goals for our sales workforce.

Along in our report, we have drafted a timeline which Jones Soda should consider in order to

achieve these strategies and tactics in a timely and realistic manner. Jones Soda will also need to

monitor the effectiveness of these tactics in order to assess the results. By implementing these

recommendations, we believe that Jones Soda will be able to increase market share in the competitive

beverage industry.

II. Situation Analysis

A. Category/ Industry

With the first marketed soda sold in the 17th century, the soda pop industry has grown

immensely since. The soft drink industry has grown to have a market share of 46.8% in the non-alcoholic

drink industry, with the next leader, bottled water, having an 18.4% of the market. In 2009, the soft

drink market value reached $440.3 billion. By 2014, it is projected to reach a value of $511.6 billion

(Deichert, Ellenbecker, & Klehr, 2006). Clearly this is an extremely large and potentially profitable

market.

Currently, the soft drink industry is segmented into two groups: carbonated soft drinks (CSD) and

the new age beverages (NAB). NAB, which is also known as alternative beverages, consist of fruit

beverages, bottled water, sports drinks and the like. Jones Soda is categorized as an in between drink,

because although it is carbonated, Jones has NAB traits, such as the use of natural ingredients in its

recipe.

In this already highly saturated market, there are currently three brands that hold share an

oligopoly. These three companies are Coca-Cola, Pepsi, and Dr. Pepper Snapple group. Along with their

flanker brands and other brands that they have ownership of, these three companies hold an 89% of

sales in the United States soda pop industry in 2008 (Deichert, Ellenbecker, & Klehr, 2006). With such

large and established brands, it is much harder for smaller soda companies such as Jones to penetrate

the market, as they do not have the same distribution channels, brand recognition, and cheap

production costs due to economies of scale. Due to higher cost per bottle produced, Jones also needs to

price their product at a higher cost as to compete with these larger conglomerates. In order for

consumers to buy their product, Jones needs to find points of differentiation and use them to their

advantage.

As the market is mature and there is little room for growth, Jones soda has taken a different

approach to catching a market segment. With the many soda brands that catered toward mainstream

consumers, Jones founder, Peter Van Stolk thought of providing “alternative” products into the

beverage industry (About Jones Soda, 2012). His goal was and still is to reach the many people who do

not associate with mainstream products. The main age demographic for Jones is from 12 to 19 years of

age. The reason for this target market is because there is the highest concentration of consumers who

are progressive and individualistic. As well, people in this age category are most likely to feel the urge to

express themselves in an “alternative” way, such as through extreme sports or indie music. Another

target market are trendsetters from the ages 20-34 who see supporting the underdog, Jones soda, as

being hip. Generally speaking, Jones Soda targets consumers who are a part of the “alternative” stream.

B. Industry analysis

i) Aggregate Market Factors