Boost Juice Bars
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Boost juice Bars have been a growing success since they opened in 2000. Although there are other competitors, Boost manages to stay in front by augmenting and extending their products. They segment and choose target market to achieve most effective advertising and maximise sales. Boost Juice is a convenience good, currently in the maturity phase of the product life cycle with strong brand equity and brand loyalty. They differentiate in augmented layer with its well known brand, bright packaging and convenience. The promotion achieves strong awareness by changing with social trends, having a colourful, engaging environment and successful campaigns. Boost is now expanding not only in Australia but also overseas. Their stores are small, colourful and strategically located in high foot traffic areas. They now distribute their goods in supermarkets as well as the stores. As boost juice is in maturity phase of PLC is has chosen a stability pricing objective.
OVERVIEW OF BOOST JUICEBoost Juice, offers healthy, fast drinks in Australia and was established in 2000. Boost Juice is the fastest growing fruit juice bar in the southern hemisphere, founded by Janine Allis in Adelaide (Wren, 2005). Boost Juice is growing rapidly as an amazing retail case, turning over $90mill a year with over 3000 staff members (Light, 2006) expanding from the first founding juice bar in Adelaide in 2000 to over 200 stores world wide.
There are ranges of great tasting juices or smoothies sold by Boost which offers healthy convenience and the augmentation of various products also enhances the satisfaction of the consumers’ needs from different groups.
THE EXTERNAL ENVIRONMENTVarious juice bars are popping up all around the market and Boost faces a large number of competitors such as Bubble Cup, Tropicana juice, Minute Maid juice and Sunny Delight. Some of them may own similar recipes and ways to make their products.
As a competitor, Tropicana Juice bar provides a combination of special ingredients, which offers customers a “natural high” and also a reasonable price (Katsudon, 2007).
The brand Bubble Cup is not as healthy as other fresh natural juice bars but many retail stores exist, it is quite popular among the young people due to its cheap price as well as various tastes.
Boost Juice implements demographic, psychographic and behavioural variables as a basis to select its target market. People who prefer to have quick, fresh and nutritious juices with the highest quality and no added artificiality will consider Boost as a favourable brandOn the other hand, Boost Juice is subject to seasonal restrictions. Sales could decline during colder seasons, with other competitors who serve hot drinks dominating the market. In order to offset some restrictions and augment their business, Viva Juice has been acquired by Boost Juice in 2004, with more than 20 stores being added to the company’s retail network through acquisition. Furthermore, “Boost has recently entered into the juice drink manufacturing industry by launching one litre and 350ml bottled products into Woolworths and Coles” (Janie Allies, 2005), a strategy gaining extra market shares from other competitors.
Therefore, as a response to external environmental competition, Boost Juice continuously develops product variations in order to achieve greater market penetration, aiming to build a high quality service with their outgoing and full energy goods. This establishes and fortifies Boost Juice as a reliable brand among the market competitors.
RecommendationsIn addition to fruit juices and smoothies, boost can try to augment other products like Tropicana juice bar and Starbucks to attract more customers, since many customers may also wish to purchase hot beverages in order to compete with other brands through the colder seasons.
PRODUCTBoost Juice offers mainly healthy smoothies and juices, however recently it began expanding the width and the depth of its products by introducing new product categories such as healthy wraps, a new supermarket range and extending its lines by introducing a larger variety of smoothies.
Picking a correct product category is important as it influences the marketing strategies. Boost Juice is a convenience good as it is inexpensive- approximately $5.00; widely distributed over 200 stores (Boost Website) and thus is purchased frequently (1million a month) (Boost Website). It is a low involvement good due to the low risk (low dollar value) and therefore little effort is required to purchase it. During the consumer decision-making process the pre-purchase search will brief.
Boost Juice is currently in the Maturity phase of the product lifecycle (PLC). The growth has started to slow down as they now open fewer stores than they used to but the sales maintain high. Also they don’t market as vigorously now as they used to during their introduction and growth stages, because the brand awareness and brand loyalty is already high -this is indicated by having over 300,000 members in their loyalty club (Boost Website). Boost juice is extending its PLC by introducing new lines and products (as mentioned above).
The way Boost juice differentiates itself can be shown through the augmented product model. The augmented product model is ‘a bundle of benefits for a product or service that the consumer does not expect.’ (Pride et al, 2007). The core layer is that it’s a drink and it should satisfy thirst- not much room for differentiation. The expected layer is that it tastes good. However the level at which brands can differentiate is the augmented layer – healthy drink/snack when you’re short on time. This is where Janine Allis saw a market opening. In order to build a successful brand it must have brand equity, which is achieved through brand name, awareness, loyalty, association and perceived brand quality. Boost aims to achieve brand awareness and association through its promotion mix and brand loyalty through the loyalty program “VIBE”.
Although the good is the main product, service is also a big part of the “Boost experience” adding to the customer satisfaction and hence repeat business.
RecommendationsAlthough there are now many other healthy drink stores, Boost has one with the strongest brand image and loyalty and hence maintains their customers. Being a convenience good there isn’t much room to move in pricing, and most competitors can make delusions smoothies, so it comes to the unique fun experience the consumers receive at Boost and the brand loyalty to keep the brand a success. Over the last few years Boost juice has entered new markets by opening franchises in more countries around the world and offering more products including its supermarket range so it is doing well in product side.
PROMOTIONPromotion is the communication which exists to inform, persuade and remind customers to view an organisation more positively and accept its products thus maintaining a favourable exchange relationship (Pride et al, 2007). Promotional methods vary for different organisations, but ultimately aim to move customers from awareness through to purchase in a ‘hierarchy of effects’ The promotional mix implemented is dependant upon a variety of factors including the external environment (competitors, economics), organisational resources, the stage of the PLC but most importantly on the needs and motivations of consumers.
As social trends change over time, so do customer needs and wants; promotional activities should aim to meet this demand. Brooke Ruscuklic, the marketing manager for Boost Juice Bars in Australia notes the current focus on health awareness: “We’ve seen a gradual shift in attitudes over the past few years. People are looking for healthier alternatives and now expect nutritious options within the fast-food category.” (Fox, 2008). A strong message of health and nutrition in Boost advertisements heightens the interest and awareness of the potential consumer, initiating their adoption of Boost products.
Furthermore, Boost aims to achieve brand awareness and association through its colourful interactive website, ads and outlets: “[in] those vibrant, noisy Boost Juice Bars…you feel like you need sunglasses” (Light, 2006).
Boost employs highly stimulating environmental cues to engage the consumer, emotionally involving them in a fun, energetic experience in alliance with Boost’s brand image. During a customer’s evaluation of alternatives in the product adoption process, this differentiates Boost from other Juice providers, ensuring a position in the evoked set.
Boost engages in several publicity campaigns to reiterate its perceived brand image and generate consumer awareness. Boost is affiliated with UNICEF Australia in providing malnourished children with Vitamin A supplements. This projects a compassionate and credible brand position in the market, augmenting Boost from other competitors as a community-involved organisation. (Janine Allis, 2005)In its advertisements, Boost promotes the trial of its goods by highlighting additional product characteristics. Boost informs its audience that for an added ‘Boost’ customers can add a supplement to fulfil a specific nutritional need (NZ Business, 2004). This arouses desire in the consumer, in an attempt for them to ultimately trial and purchase Boost products.
Brand loyalty is an important promotional objective. It relies on repeat purchases and a positive attitude. In the consumer decision making process, Boost aims to ensure a favourable Post Purchase evaluation by offering the “Boost Guarantee”- responding to all complaints. Consumers are more likely to leave with a positive experience, decreasing the likelihood of cognitive dissonance. In this way Boost attempts to maintain a loyal customer base which is also achieved by its “VIBE” loyalty program.
RecommendationsBoosts promotional communication schemes appear to be quite affective, with its recent expansion through franchising outside of Australia. More resources could be devoted to promotional sale techniques to maintain its strong Australian Customer base.
With over 180 stores in Australia, Boost is gearing up for an aggressive overseas expansion focused on extending the brand into key markets through Europe following the launch of new outlet in UK. (Noelle Waugh, 2007) Boost is now the largest smoothie bar in southern Hemisphere by franchising and becoming a truly global brand.
Janine Allies, emphasizes strongly on the feeling that Boost outlets present to the customer. Every Boost shop is designed to use bright “yellow, green and orange colour” to align with the “fun, funky, loving life” culture and energetic vibe that is associated with the Boost brand.
Boost’s products mainly target people who have fast paced lifestyles. However they are still concerned with healthy living. Instead of requiring a large sitting area like general coffee shops, a 15-20 square meter space is adequate for a take-away operating style. Thus, most Boost stores are designed to adopt an open or semi-open service style located on the side of busy shopping streets or in shopping centres. Most customers are fascinated by the way Boost presents its products and service. The rational designed store locations and attractive style are one of the key factors to influence customer behaviour.
In addition, Boost smoothie products were once only made available for purchase within Boost stores in Australia. Recently however, Boost and Nestle launched bottle Boost smoothies in leading food stores such as Coles. This action allows the product to be purchased through direct and indirect marketing channels, meanwhile with the help of Nestlé’s leading reputation for quality food, Boost successfully expand their distribution channel which made the product easily accepted in new market.
Furthermore, as Boost Juice adopts franchise operation and itself is both the producer and retailer, the direct and vertical marketing channel have effectively avoid any distribution time lag and possible mistakes through operating, thus a better customer service is provided.
RecommendationsWith the clear understanding of “What the customers want, how they want it”, the right product distribution channel and placement can effectively attract customers’ attention and interest. According to the overwhelmed market in UK, research shows that UK market is now ready for “bottle smoothies”. (Noelle Waugh, 2007) Boost should take the opportunity, quickly put “bottle smoothies” production in process before their competitors do; distribute the product in leading food stores such as Woolworth and Coles with advertising in the mass media to expand the product distribution channel.
PRICEPrice can be defined as the cost of receiving the benefit that a particular product brings. Consumers will only pay for that price when they believe the benefit received exceeds the cost. Price changing is one of the competitive tools adopted in a highly competitive juice market. Boost Juice, however, adopts a stability pricing objective at a slightly higher price compared to other juice companies in the market. By setting the product price at the going market price, it allows Boost juice to avoid price retaliation, to focus on product improvement and expand the distribution channel.
The pricing of a product depends on the elasticity of demand. As the trend for seeking a healthier lifestyle increases strongly within society, the demand for Boost smoothies grows rapidly with time. In this case, Boost’s smoothie price with low elasticity stays stable; therefore, it is not necessary for Boost to adjust their price level according to the demand because Boost Juice has been treated as a necessity for some of Boost’s loyal customer. The market reaction in the past has shown that Boost’s price strategy succeeds.
In addition, competitors and product differentiation are important factors to consider when setting price level. In the current fruit smoothie/juice market, Boost is in a dominating position holding a large market share. According to Janie Allis, “we are not afraid of competitors; we are only worried about how to make our customers come back”. (Janine Allis, 2005) Broekhuizen and Alsem (2002) suggest that customers are often willing to pay a premium for customised products because their needs are better met. If a company facilitates the creation of a co-production process to make a product tailored to the customer’s needs and the product adds great value, price becomes a less important factor (Wind and Rangaswamy, 2001). There is less incentive for customers to make comparisons based on price. Boost smoothies, in a way, have met customers’ premium requests since currently there is no other product such as Boost’s smoothies bringing health-concept drinks into the market.
It is important to realize that price decisions have significant effects on consumer behaviour, which affects the life span of the product life cycle. Even though customers are willing to pay a premium for Boost, Moon, Chadee and Tikoo (2007) suggest that if the price goes up beyond a certain range, customers may begin to substitute for less customized products.
ConclusionBoost juice has made a huge success in the retail industry by introducing “healthy drinks” approach; it is now dominating the smoothie market within Australia and expanding overseas rapidly every year. This is because that board of Boost Juice had a clearly understanding of their target customer and market position, carefully chosen distribution channel, setting price range and promote their product with bright, funky, attractive concept. However, Boost is not satisfied by the achievement they made, they carefully analyse customer needs, continuous expanding their product range hoping that they can provide customers better products.
To improve, Boost could further extend its product width and depth by introducing hot drinks and broader range of goods available in the supermarkets. This is so that they can extend their PLC cycle and stay in the maturity stage for longer.
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