PUNCAK ALAM CAMPUS

HTF735 MANAGING FOOD INNOVATION IN FOOD SERVICE ORGANIZATION

CASE STUDY: FRUIT SMOOTHIE

AFRINA BINTI ABU SAMAH 2020372413

NUR „AZIEMAH BINTI NORHAMDANI 2019821592

NURUL HANIS BINTI AMER 2019618354

NUR SYAZLINA BINTI MOHAMAD JAIS 2020758183

PREPARED FOR: MADAM RAJA PUTERI SAADIAH BINTI RAJA ABDULLAH

Case study

Launching innocent into the growing fruit smoothie market

Question 4

Would you have sold the company to Coca-Cola for £200 million? As one of the
shareholders you would have pocketed tens of millions of pounds. If not, why not?

I would have sold the company to Coca-Cola for £200 million. The reason I would have sold the
company to Coca-Cola is because of first, the innocent product is lack of differentiation strategy;
second, the product might easily copy by a competitor, and lastly, it is a harsh competition in the
food and beverage industry.

1. Lack of differentiation strategy

The company aims to be exceptional in its industry in many dimensions in the
differentiation strategy commonly appreciated by buyers. The business selects one or
more qualities that are seen as relevant within a market by many customers and
positions itself uniquely to meet those needs. For every sector, the way to distinguish is
different. Differentiation may be dependent on the product itself, the distribution
mechanism of the product used for sale, the marketing strategy, and various other
variables. Smoothies are popular dietary items with the potential to help people integrate
more fruits and vegetables into their diets (blended beverages that usually contain
multiple ingredients).

At the same time, it demonstrates that in many countries, such as Australia, New
Zealand, the UK, and the USA, the „smoothie industry‟ has experienced massive
economic growth. However, the differentiation strategy of fruit smoothie would affect the
product itself, price, and promotion. For instance, the target market and social media
have to come together in addition to this. It is to spread the word that the smoothie
concession truck or stall will be in that city, the fruit smoothie product has to offer
coupons and position flyers on targeted college campuses. Targeting the audience
would be hard.

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2. The product might easily copy by a competitor
Although competitors can imitate the things they say or the photos they use, they can
also copy the way the consumers feel about the company in question. Investing in the
business can be an intrinsic move, but as the business evolves, the following increases,
and broadens between the company and rivals, it requires investment. This refers to
both the name of the business and the company's specific faces. Other than that, the
stronger company or competitor would implement and manage the strategic
management according to other companies' movement to compete.

Furthermore, the competitors will be using the same messaging and content that other
companies publish, try customizing the content to be highly specific close to the
company. Is a competitor copying the same industry examples in their content? It might
be happening because they will start using the other custom case studies or examples
from other companies' day-to-day, for example, the promotion that already implements,
but at the same time it might be copied by them too.

3. Harsh competition in the food and beverage industry

Smoothies are no longer an ever-growing food and beverage industry niche market. The
industry has really been a 21st-century success story with the steady progression of the
latter's transformation from a drink for a workout to a dessert and now a fast on-the-go
meal replacement alternative. Needless to say, due to the increasing customer
emphasis on a balanced lifestyle and the option of a nutritional alternative for their food
and beverages, the industry dominates the global beverage industry. Consequently, in
terms of new ingredients and kinds of smoothies, the global smoothie market is
experiencing many developments.

However, as per the market analysts, the industry is growing rapidly owing to the
increasing number of consumers demanding healthier alternatives for food and
beverage but not in long term contribution. The health-conscious consumers nowadays
would prefer fruit and vegetables over the categories of smoothies. Hence, the fruit-
based smoothies segment accounts for the largest share of the global smoothie market
but not in the food and beverage industry for now due to customer pattern changes.

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Question 5

Innocent benefited from key advantages: what was this and explain how it helped in the
product development process.

Key advantage is what makes the goods or service is superior and acceptable to all customer
other choices. The innocent provide the value for their customer, innocent continues to make an
unrivalled range of totally natural fruit drinks that taste good and have health benefits.
consumers are paying more attention to what they eat and drink and multinational food and
beverage companies are trying to tap into changing consumer tastes by selling healthier
products. The three founder of innocent exploring and study that young urban professionals who
wanted a healthy lunchtime drink to go with their sandwich. In many large cities across Europe
and the USA, lunch for most is a sandwich. And, when buying the sandwich, most people
usually buy a drink to wash it down. Also, the UK Government Health Department was
promoting the benefits of eating more fruit and vegetables. This was a publicity campaign that
innocent could use to its advantage. Innocent know their target market will be young urban that
want a healthy lifestyle.

Innocent also have the idea screening, their challenge is want their product more successful
than existing market player. So their product must be different expesially in term of promotion.
Screening product ideas is, essentially, an evaluation process. It occurs at every stage of the
new product development process. This idea screening is include the questions like, 1) Do we
have the necessary commercial knowledge and experience? 2 )Do we have the technical know-
how to develop the idea further? 3) Would such a product be suitable for our business? 4 )Are
we sure there will be sufficient demand?

Innocent also develop concept differentiation. Differentiation means companies deliver better
benefits than anyone else. A firm can achieve differentiation by providing a unique or high-
quality product. Innocent decided to develop something different in term of packaging. Design
has played a big role in the product‟s success, from the logo and shape of the bottles to the
delivery vans. Careful consideration of design and packaging has contributed to the success of
the business. The brand was totally unknown, so innocent had to rely on people being intrigued
enough to try the product. This is not a cheap drink, it have the good product quality. Finally, like

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all beverage producers, innocent relied on the taste to be sufficiently good to ensure a repeat
purchase.

Next, innocent also make a prototype development. Their target market – young (they were all
in their mid-20s), urban office workers (they all worked in Central London), affluent (they all had
very well-paid jobs) wanted to emphasize the purity and naturalness of the product, which is
made completely from fresh fruit (no added with water or added preservatives) .They develop a
right image and keep the thing simple. According to innocent, the logo, which resembles an
apple with a halo, or a person with a halo, depending on how you look at it, was sketched on a
serviette in felt-tip pen. The brand image developed and, carefully nurtured by innocent, is one
based on fun and an almost hippie approach to life. This is reflected in the packaging, promotion
and logo used for the product. They also sell their product in varieties type, in “on the go” plastic
bottle, in larger take home cartons and also in children range product.

Make a constant innovation and refusal to compromise. The key advantage is crucial to keep
innocent product sell on the shelf. Innovation is needed when a product is in red ocean market,
in which failure to develop new concept will lead to decrease in market share. Red oceans are
all the industries in existence today – the known market space, where industry boundaries are
defined and companies try to outperform their rivals to grab a greater share of the existing
market. Cutthroat competition turns the ocean bloody red. For the conclusion, the value, idea
screening, product differentiation, prototype development and constant innovation is the key
factor of helped innocent in product development process.

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Question 6

How is innocent ‘virtual’ and how is this different from traditional food and drink
manufacturers? What advantages and disadvantages does this provide?

Innocent „virtual‟ and is different from traditional food and drink manufacturer in a way of it do
not own any manufacturing or packaging resources and supply chain. Hence, all production,
bottling and packaging of the beverages are undertaken by contract bottling plant. In other
words, they use other company‟s products such as bottle, packaging for the smoothie based on
the contracts comparing with others manufacturers. This is the weakness in terms of level of
control. Delivery, reliability, quality, leakage of intellectual property from contractors to other
manufacturers, control of the brand and its value is less secure if there is too much reliance on
others. The advantages are in terms of flexibility and capital investment.

Not only that, virtual communication what other companies might call marketing, innocent
smoothies more often call communication. As mentioned, innocent has not spent large sums of
money on television, press or radio promotion. Advertising copy tends to be witty and
straightforward, as does other communications material. The relationship of innocent with
retailers has been built up through regular communication, including a newsletter, which
combines product information and fun stories. Each communication is intended to reinforce the
unique brand image innocent has built for itself. The copy on the labeling is intended to break
down the barriers between manufacturer and customer, using humor.

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Question 7

Use CIM (Figure 1.9) to illustrate the innovation process

The framework in Figure 1.9 is referred to as the „cyclic innovation model‟ (CIM) (Berkhout et al.,
2010); a cross-disciplinary view of change processes (and their interactions) as they take place
in an open innovation arena. Behavioral sciences and engineering as well as natural sciences
and markets are brought together in a coherent system of processes with four principal nodes
that function as roundabouts. The combination of the involved changes leads to a wealth of
business opportunities. Here, entrepreneurship plays a central role by making use of those
opportunities. The message is that without the drive of entrepreneurs there is no innovation, and
without innovation there is no new business. Figure 1.9 shows that the combination of change
and entrepreneurship is the basis of new business.

In the innovation process, product development and growing the business by using cyclic model
of innovation. Whilst, on the surface, this new business venture may seem slightly unusual, and
the three founders probably would like very much to think that their business is unique, the
development of their fruit smoothie product follows the well-documented process from concept
to commercialization. In the technological research , innovation have to generation of new
product concepts the three founders of innocent had been exploring and planning to start their
own business ever since they met at university.

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They had even tried a few crazy ideas, including a gadget that would prevent baths from
overflowing. It was the fruit smoothie concept, however, that seemed to appeal to the three
founders the most; this is probably due largely to the fact that they were developing a new
product for people like them: young urban professionals who wanted a healthy lunchtime drink
to go with their sandwich. Next, for product creative in innovation process will produce idea
screening is having a new product concept is a long way from a commercially successful new
product. Moreover, this was not a completely new product; fruit smoothies had been on the
market for several years, hence, innocent was entering an established market, albeit a relatively
new one. The main purpose of screening ideas is to select those that will be successful and
drop those that will not – herein lies the difficulty.

Product creative also need the concept testing and prototype development given that the three
founders were the target market – young (they were all in their mid-20s), urban office workers
(they all worked in Central London), affluent (they all had very well-paid jobs) – identifying what
would appeal was simply a question of asking themselves This is a key point because most fruit
drinks are made from concentrated juice with water – and perhaps sweeteners, colors and
preservatives added. On the other hands, market transition in innovation is the marketing
testing on process fruit is sourced from all over the world, and regular sampling is conducted at
innocent‟s test kitchen to ensure that only the most flavorsome varieties are used in the drinks.
The smoothies, which appeal to consumers whom innocent describes as „slightly more female,
slightly more affluent, slightly younger‟, are priced at the high end of the fruit juice market,
selling for £1.79 to £1.99 in „on the go‟ plastic bottles, and for £3.29 to £3.49 in larger take-home
cartons. Innocent has also launched a children‟s range recently, retailing at £1.49.

In market transition, the Launch and promotion having developed their idea, the three founders
then ran into numerous other operational difficulties that meant the launch of the product took
much longer than expected. They encountered barriers, including various experts who told them
their idea would not work. Scientific exploration in innovation process on product such as
PepsiCo joins the smoothie.

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In 2005, Pepsi's manufacturer entered the UK smoothie market significantly by acquiring British
smoothie and fruit juice brand PJ Smoothies PepsiCo UK did not announce the price it paid for
the business based in Newark, Nottinghamshire. PJ established the British smoothie market in
1994 and became its leading brand. PepsiCo said PJ Smoothies is the only big brand making its
own 100% fruit smoothies, complementing its established drink brands Tropicana and Copella.

Similar scientific exploration which is growth for many companies can lead to problems for
potential innovation processes and can cause a company to fail; this is typically because it
stretches to develop, borrows capital and then faces cash flow problems. Innocent did not fall
into this well-known trap, despite its dramatic development. To begin with, innocent would
supply just a few multiples, and as sales increased and revenue grew, production would
increase. This is a much slower path to development, often allowing rivals to join the market or
allowing the multiples to create their own label versions. Nonetheless, innocent citizens followed
the prudent method that appears to pay off.