Kool-Aid Marketing Strategy

Topics: Soft drink, Marketing, Energy drink Pages: 12 (3781 words) Published: May 24, 2012
Table of Contents
Executive Summary3
Situation Analysis4-7

Executive Summary
The Kool-Aid brand has faded as the market has become flooded with various choices of sodas, waters, energy drinks, packaged and powdered sports drinks, and a myriad of other options. Our goal is to bring back this brand which was once at the heart of teen popular culture. We will focus on bringing two new products to the Kool-Aid lineup: sugar-free premixed and energy drink. The target market for sugar free Kool-Aid is soccer moms who generally have one to three children ages four to fourteen. We believe these moms will like the idea of having an alternative to sugary sports drinks and sodas for their children. The target market for Kool-Aid energy drink is young adults who enjoy sports and gaming. We believe that these people drink energy drinks more often and grew up with Kool-Aid and will be happy to see it return in a form they can drink and still feel like adults. We plan to run full page advertisements in magazines such as Better Homes and Gardens and many gaming and sports magazines. We have allocated 7% of the revenue from Kool-Aid for advertising these new products. Once a sufficient number of advertisements have run, we will survey and review customer satisfaction. Comparing these results with surveys prior to running the campaign will let us know if Kool-Aid has become part of the consideration set of energy drink buyers and soccer moms.

This analysis will explain how the Kool-Aid brand will be revitalized with modern culture and existing trends. With parents looking for healthier beverage choices for their children and the energy drink industry booming, it is imperative that Kool-Aid gets into these markets quickly. Kool-Aid will once again be a mainstream part of modern popular culture. -------------------------------------------------

Situation Analysis
We broke the situation down into three different areas:
1) How Kraft’s Kool-Aid competes with competitors of other flavored drinks, such as soft drinks, juices, etc 2) How Kraft’s Kool-Aid maintains a competitive advantage as its own company 3) Who is Kraft Kool-Aid’s customer, and what trends do we see in that market -------------------------------------------------

Market Overview
Kool-Aid, a brand that offers flavored drink mix owned by Kraft Foods is part of the soft drink industry. Three main players control the soft drink industry and they are Coke (42.8%), Pepsi (31.1%), and Dr. Pepper Snapple Group (15%). First of all, a soft drink is defined as any drink that contains water, but not alcohol. This includes soda, juice/punch, energy drink, tea, sports drink, and water. There are more than a thousand different soft drinks in the U.S. market, and among the one thousand variety of drinks, the three main players offer about 400 of them (40%). Since the three dominant brands pretty much control the market, most of the small players compete by offering inexpensive drinks that are often only sold in particular retail chain such as Sam’s Choice and Shasta Beverages. They also compete in the newer category of soft drinks such as tea and energy drinks rather than the already established soda category.

Kool-Aid is considered one of the smaller players in the soft drink industry not only because it has low market share, but also because it only offers drinks in one category of the industry, which is the juice/punch category. Unlike Coke or Pepsi drinkers, who are pretty much everyone in the world, Kool-Aid drinkers are mainly the minority groups in the U.S. such as Hispanics and African American who make 40% of the Kool-Aid population. This...
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