What is the offering concept free essay sample

An offering consists of the benefits or satisfaction provided to target markets by an organization. It consists of a tangible product or service (a physical entity) plus related services (delivery and setup), brand name(s), warranties or guarantees, and packaging. Focusing on the term offering rather than just the product or service forces the marketer to go beyond the single tangible entity being marketed and to consider the entire offering, or extended product or service. When the focus is on the benefits and satisfaction offered it establishes a conceptual framework. Marketers can then potentially use this framework to analyze competing offerings, identify the unmet needs and wants of target markets, and develop or design new products or services. Offerings illustrate not only the buyer needs served, but they are also the types of customer groups sought and the means for satisfying their needs. Dr. Pepper/Seven Up are consistently ranked among the top-ten soft drink brands in the United States as measured by market share. We will write a custom essay sample on What is the offering concept? or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Their biggest competitors are Coca-Cola and Pepsi-Cola. Within the citrus-flavored soft drink category Squirt competes with; Coca-Colas Mello Yello and Surge, Pepsi-Colas Mountain Dew, and Sundrop marketed by Dr. Pepper/Seven Up. The Squirt Brand, a product of Dr. Pepper/Seven Up, Inc. , has had a recent dip in case sales volume. Some potential causes of this dip could come from a growing Hispanic community in markets where Squirt was popular. This issue means that Dr. Pepper/Seven Up, Inc. , should review their current offering and determine what the unmet needs or wants are of the target market. In this case, the research has shown that a potential problem could lie in the recent growth of the Hispanic community and maybe the advertisement of the Squirt Brand is not reaching this market. Once the unmet needs or wants are identified the organization will need to develop a plan to get the awareness of the brand out there and show the target market how the Squirt Brand will benefit the consumer. This not only includes the packing and distribution but, the Squirt brand management team should find a way to create an emotional link through advertisement. This emotional link could be met by reminding the target market of Hispanics from Mexico about Squirt. Research had shown that Squirt was already available in Mexico, but not through Dr. Pepper/Seven Up. This link however, could possibly leverage the popularity of the Squirt Brand in the United States if the advertisement of the offering is out there and visible to the target market. All of these factors must be consider with the offering concepts for Dr. Pepper/Seven Up, Inc. , especially concerning the Squirt brand. The changing demographics of the United States means the wants and needs that were previously being met will need to be updated to ensure the largest target markets wants and needs are met which will benefit the organization by increasing Squirt case sales volume. These unmet wants and needs could affect everything from advertising to distribution to the packaging of the product. Bottom of Form 2. How would you characterize the competitive situation for Dr. Pepper/7up, Inc. and Squirt in the U. S. carbonated soft drink industry? In 2000, Americans consumed 53 gallons of soft drinks per person, compared with about 47 gallons in 1990. This increase came from population growth compounded by rising per capita consumption. The increase produced an estimated $60. 3 billion in carbonated soft drink retail sales in 2000. Within the soft drink industry in the United states there are three major participants. They are concentrate producers, bottlers, and retail outlets. Concentrate producers manufacture the basic flavors for sale to bottlers, which add a sweetener to carbonated water and package the beverage in bottle and cans, which are then sold to retailers. The three major concentrate producers in the United States are; The Coca-Cola Company, The Pepsi-Cola Company, and Dr. Pepper/Seven Up, Inc. The bottlers are able to meet the target more locally whereas the concentrate producers tend to focus more on the brand as a whole or nationwide. These advertising and promotion programs can however, be negotiated (R. Kerin amp; R. Peterson, 2010). Reference: Kerin Roger A. , Peterson Robert A. , (2010) Strategic Marketing Problems, Twelfth Edition. Upper Saddle River, NJ: Pearson Education, Inc. Bottom of Form 3. What are the possible new offering decisions for Squirt Brand? The Squirt Brand was presented with new offering decisions dealing with Squirt Brand. Cadbury Schweppes PLC acquired the brand in 1994 and addressed Squirts positioning with Foot, Cone, amp; Belding (FCB). They all agreed that Squirts unique thirst-quenching attribute should be the dominant dimension upon which to build the brand. When Cadbury Schweppes PLC acquired Dr. Pepper/Seven Up, in 1995, they asked FCB to revise its creative strategy. Squirt did a revision to focus on every day, on-the-go experiences. In 2000, Coca-Cola introduced Citra and again Squirts positioning and creative execution was revisited but, no changes were made. After a consumer research in 2001, Squirts brand management team requested the formal positioning. However, prior to deciding on a new offering the marketers must consider and monitor target markets and the offerings to determine when the new offerings should be introduced and if existing offerings should be modified or eliminated. When considering new offerings, three questions need to be answered. First, how consistent is the new offering with existing offerings? Second, does the organization have the resources to introduce and sustain the offering? Third, is there a viable market for the offering? The new offerings presented by FCB included refining Squirts target market and positioning. FCB recommended that Squirt target multicultural, 18- to 24-year-olds who were in that transition stage into adulthood but, still want to make the most out of life, work hard, and play even harder. They presented the following formal positioning statement: For young multicultural adults who thrive on the excitement and spontaneity of living up to the max, Squirt citrus soda fuels your thirst for living life loud, with an exhilarating taste thats powerfully thirst-quenching. This statement continued to emphasize Squirts thirst-quenching benefit but, changed the target market due to the large and growing Hispanic population in the U. S. Kate Cox, the brand manager at Dr. Pepper/Seven Up, Inc. , reviewed the information provided by FCB and asked Jaxie Stollenwerck, the associate brand manager, to prepare a profile of Hispanic and African American consumers in the U. S. Upon the completion of Jaxies research, Kate assembled the Squirt brand management team to discuss and to begin drafting the annual advertising and promotion plan for Squirt. She emphasized that her strategic intent was to lay a solid foundation for Squirts future growth with the current years advertising and promotion plan. Since, FCB focused on market targeting and positioning she wanted to present the possible offerings first. After all the research she concluded there were three general options that existed. First, they could stay with the present market targeting and positioning strategy. Second, they could proceed with the market targeting and positioning strategy recommendation made by FCB. Third, they could develop another market targeting and positioning strategy, which might or might not include elements of the current and recommended strategy. She wanted to ensure the brand management team considered what role the multicultural market for carbonated soft drinks, the grapefruit/citrus category, and Squirt played in formulating a market targeting and positions strategy and implementing the advertising and promotion plan for all the possible offerings decisions. Also, when focusing on the offerings a few other options and/or variables needed to be considered. First, how will a multicultural marketing mind-set guide the overall planning process itself. Second, if they choose to focus on multicultural 18- to 24-year-olds, what might they need to do differently than if they simply focused on 18- to 24-year-olds in general or even stay with their current target 18- to 34-year-olds (R. Kerin amp; R. Peterson, 2010). Reference: Kerin Roger A. , Peterson Robert A. , (2010) Strategic Marketing Problems, Twelfth Edition. Upper Saddle River, NJ: Pearson Education, Inc. Bottom of Form 4. Given your assessment of the competitive situation, what are the pros and cons of: (a) continuing Squirts present market targeting and positioning approach and (b) adopting the recommendations made by Foote, Cone amp; Belding? The competitive situation for Dr. Pepper/Seven Up, Inc. , places them as third when it comes to carbonated soft drinks. They only have two carbonated soft drink brands in the top-ten brands which does not include the Squirt Brand. Squirt competes with Coca-Colas Mello Yello and Pepsi-Colas Mountain Dew in the citrus-flavored soft drink category. When it comes to carbonated grapefruit soft drinks the Squirt Brand ranks the highest. If Squirt continues with its present market targeting and positioning approach their total case sales volume will continue to decrease. This could be based on the significant change in the target market over the past few years and the expected continuance of change that is projected to occur. The change is due to an increase of the Hispanic demographic group that Squirt may not be currently marketing to through advertisements and promotions. However, they do have loyalty to the consumers that are purchasing Squirt over other carbonated soft drinks. This consumer base though is not producing the case sales volume that Squirt needs to be competitive with other soft drink brands that are in the citrus-flavored market such as, Coca-Cola who produces Mello Yello and Pepsi-Cola who produces Mountain Dew. In 1999, Squirts case sales volume was 56 million with a decrease to 54. 6 million in 2000. Compared to Mountain Dews case sales volume increase of 16. 8 cases from 1999 to 2000. These statistics show that the pros to continuing to use the current approach and positioning do not outweigh the cons and therefore, Squirt needs to consider some other approaches to remain competitive in this market. However, the pros also do not outweigh the cons of the recommendation by Foote, Cone amp; Belding (FCB). If Squirt adopts the recommendation made by FCB in its entirety they are faced with losing their current customer base or even potentially constricting Squirts target market by focusing only on a particular group of people. A pro of this recommendation however, is that it does capture the growing demographic segment of the United States. This demographic segment is only expected to continue to grow and if the new approach and positioning is successful there is a potential for a dramatic increase in case sales volume over the next few years. This does however, present the problem of limiting the target market and possibly requiring another formal positioning review to be conducted in the near future to determine if repositioning is required. Repositioning is needed when a product, service, brand or organization is no longer competitively sustainable or profitable. This takes time and money and considering that Squirt is roughly ninth in the company brand portfolio the Squirt brand management team needs to ensure they take the correct approach and position with their product. The best approach for Squirt would to keep eliminates of each position that would benefit the Squirt brand and combine them to effectively meet all target market needs and wants. Maintaining a commitment to an already loyal customer base but, also equally romoting the brand to a new target market to increase the consumer knowledge of the brands benefits and satisfaction successfully meet the goals of the Squirt brand management team, as well as, the Dr. Pepper/Seven Up, Inc. , as a whole (R. Kerin amp; R. Peterson, 2010). Reference: Kerin Roger A. , Peterson Robert A. , (2010) Strategic Marketing Problems, Twelfth Edition. Upper Saddle River, NJ: Pearson Education, Inc. Bottom of Form 5. Might another market targeting and positioning approach be developed? If so, what would this approach look like, and why would it be preferable? Another market targeting and position approach for Squirt to take would be to combine the current and the recommended strategy of Foot, Cone amp; Belding (FCB). This would be a preferable approach because instead of focusing on the Hispanic group and decreasing the age segment from 18- to 34-year-olds to 18- to 24-year-olds it would place more of an emphasis on the growing Hispanic population but, also still attract the age group they currently serve has a target market. There is also the possibility of making the age range larger by focusing some promotions or advertisements towards even younger customers. This doesnt eliminate Squirts current customers but, also adds to the target market they are trying to reach. The relative youthfulness of the Hispanic population is reflected in its population under age 18 and its median age. The population in the United States under 18 in 2000 was 25. 7 percent and 35 percent of Hispanics were under 18. The median age for Hispanics was 25 and 35. 3 years for the entire United States population in 2000 therefore, if the target market is 18- to 24-year-olds as recommended by FCB then Squirt would be missing a large portion of the United States population as a whole and within the Hispanic population. This could possibly work against what Squirt is trying to achieve and potentially limit the target market to the point of even causing a decrease in case sales volume. If Squirt began focusing a few more promotions in the Hispanic communities around the United States, such as in New York, California, Arizona, and Texas but, also continue to remain committed to the market they currently serve I believe there would be an increase in case sales volume. Squirt could also even begin promoting to target markets beginning with a ounger age range since a large percentage of the United States population is under 18 including 35 percent of Hispanics. This is a target market Squirt should consider since the Hispanic population is only expected to continue to grow. Younger consumers may be an area for Squirt to consider also because teens and young adults are generally heavier consumer of regular soft drinks. This information is vital because research has shown that this is the primary audience for the soft drink market because taste and brand preferences are formed between 12 and 24 years of age. Targeting a younger age range could encourage brand loyalty that would create a deep psychological bond with the Squirt brand which consumers could continue to purchase throughout their life. This is preferable because not only will Squirt continue to remain committed to their current consumer market but, it will also open up the doors to a Hispanic community as well as younger consumers. The purpose of the FCB formal positioning review was to determine possible causes for the decrease in sales. Rather than ditching their current approach and position completely, if Squirt implemented a few recommendations from the FCB they would lay a solid foundation for Squirts future growth (R. Kerin amp; R. Peterson, 2010). Reference: Kerin Roger A. , Peterson Robert A. , (2010) Strategic Marketing Problems, Twelfth Edition. Upper Saddle River, NJ: Pearson Education, Inc. Bottom of Form 6. Where does Squirt Brand get its brand equity from? Explain your answer. Brand equity is the added value a brand name bestows on a product or service beyond the functional benefits provided. It has two distinct marketing advantages for the brand owner. First, brand equity provides a competitive advantage and second, consumers are often willing to pay a higher price for a product or service. Brand equity is represented as the premium a consumer will pay for one brand over another when the functional benefits provided are identical. However, brand equity is not easy to develop and consists of four steps. First, is to develop positive brand awareness and an association of the brand in consumers minds with a product class or need to give the brand an identity. The Squirt Brand began in 1938 and with World War II the low sugar content appealed to bottlers because of the restriction on sugar rations. In 1977, Squirt was purchased by Brooks Products, and they reformulated squirt, updated the logo, and positioned the brand as a mainstream soft drink. Second, a marketer must establish a brands meaning in the minds of consumers. Meaning arises from what a brand stands for and has two dimensions-a functional, performance-related dimension and an abstract, imagery-related dimension. Comparing this definition to the Squirt Brand, the brands meaning is thirst-quenching that benefits average every day, on-the-go adults. When establishing brand equity the third step is to elicit the proper consumer responses to a brands identity and meaning. This brings attention to how the consumers think and feel about a brand. Thinking focuses on the brands perceived quality, credibility, and superiority relative to other brands. Feeling relates to the consumers emotional reaction to a brand. In mid-1995 the Squirt Brand revised its creative strategy to focus more on a believability issue. So, rather than focusing on hip, cool, experiential nature of young adults it changed its creative strategy that portrayed spunky, lively, sociable, colorful, and music-driven advertisements. They also narrowed their target market from 18-44 year olds to 18-34 year olds. Consumer research showed that Squirt scored higher on their thirst-quenching attribute compared to other brands and the advertising of Squirt effectively communicated the intended fun and thirst-quenching message, portrayed Squirt users in an interesting, unique, and involving manner, and engaged the target audience with music. One negative from the research suggested that some consumers felt that some aspects of the commercials were juvenile. Although, the history of the brand name and the benefits it provides it consumers have kept the Squirt Brand competitive with sales exceeding preacquisition levels since 1995. The final step to brand equity is the most difficult. It is to create a consumer-brand resonance evident in an intense, active loyalty relationship between consumers and the brand. A deep psychological bond characterizes consumer-brand resonance and the personal identification consumers have with the brand. The Squirt Brand has been around since 1938 when it was first introduced by Herb Bishop. The loyalty began because it contained less sugar and with World War II this benefitted the bottler since there was a ration on sugar. In the 1950s, it became a mixers and by the 1970s it was introduced to Central and South America. When the brand was purchased in 1977 by Brooks Products, Squirt was reformulated, the logo was updated, the brand was positioned as a mainstream soft drink. By 1995, with the acquisition of Dr. Pepper/Seven Up Companies, Inc. , Squirt became part of larger company and the manufacturing, marketing, and distribution increased. This increased the sales of Squirt from 51. 1 million in 1994 to 55. 8 million in 1996. The Squirt Brand has been around for generations and the bond could come from what people grew up drinking and seeing their parents or grandparents drink. This is especially important since taste and brand preferences are formed between 12 and 24 years of age.