MAKE YOUR OWN HOMEMADE BUBBLES – SODASTREAM

Posted by Triple A/ 215361454

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Father’s day is around the corner, and as always I need to plan a gift with my kids for their dear father. While their motive is to create a lasting memory for their dad, my thought process is to lift the game and buy a gift better than what I received for mother’s day. After all, we women love to trade off the guilt factor.

PRODUCT

First, we narrow down a product that can be used on daily basis. A product can be defined as goods, services or a combination of both and some products are tangible goods whereas services can be intangible (Iacobucci, 2013). Our minds click and we think of purchasing a SodaStream machine, which may eventually end up instead being a gift for the whole family.

SodaStream manufactures home beverage carbonation systems. The system enables consumers to transform ordinary tap water into sparkling water with many different flavours. Their market segments include America, Europe, Middle East and Africa (Ainsworth, 2016).

We reviewed products online that would meet our needs. The internet provided us easy information on all products including evaluation on relatively new products based on the product classification framework called Search, Experience and Credence (SEC) (Giard & Dion, 2010). Search products have relevant attributes and their information can be easily obtained prior to purchase. Experience products information can be known after the use of the product and lastly Credence product information can only be obtained after a considerable period of time (Giard & Dion, 2010). Our bases of finding the right SodaStream was to search the product by physically sighting the models at retail outlets and reading reviews online based on the consumer experience.

The company SodaStream originally established in 1903 by W & A Gilbey Ltd. It later was owned by various companies including Cadbury Schweppes. SodaStream was purchased by an Israeli company in 1998. There were successful in developing a brand that had a clear vision and mission providing consumers fun creative ways to make their bubbly beverages at the convenience of their own home. Their marketing message associated with the brand was to create a healthier planet for their global community with a bottle free beverage. (SodaStream, 2016). Thoughts or a feeling that connect a consumer with a brand is regarded as a brand association. Canan (2013) classified brand association into three groups – attributes (product), benefits and attitudes.

soda-stream-6-638

BRAND VALUE

SodaStream used benefits and attitudes to connect with their consumers by enabling consumers to make their own fizzy drinks, which meant less purchase of the two dynamic brands – COCA COLA & PEPSI.

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Youtube: Game Day 2013 Commerical: The Unaired SodaStream Ad

In 2010, SodaStream stock price was more than Coca-Cola and PepsiCo’s (please below chart) (Rothman, 2013). The brand value for Coca-Cola and Pepsi may not have decreased however, they would have had a significant threat from SodaStream.  Brand value of a brand can be measured and translated by a monetary like figure that the brand is worth in the current market. (Iacobucci, 2013).

sodastream-graph

(Source: The New Yorker)

In 2014, SodaStream wanted to increase its sales in the U.S market by attracting new customers. The company in 2014 decided to get a celebrity endorsement by signing up Scarlett Johansson.  A launch commercial was produced and was to launch during the Superbowl 2014 TV breaks.

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Unfortunately, this marketing expense didn’t create much record sales according to SodaStream CEO Daniel Birnbaum (Tadeo, 2014). The percentage of environment-friendly consumers was relatively small compared to the higher percentage of health conscious consumers.

Sodastream-Revenue-2

(Source: Brand Strategy Insider)

NEW PRODUCT

With an increase in demand for sparkling water in the US, SodaStream decided to focus on its product attribute. Designing of new products and services are important for a company’s survival, performance and growth. The introduction of new products increases the firm’s ability to meet the new market demands (Felekoglu, Burcu, & James, 2014). According to Euromonitor International, the sales for sparkling water in the USA increased by 56.4% whilst canned soda sharply declined is a clear indication that Americans are wanting a healthy lifestyle (Berman, 2015).

SodaStream took the bottom up approach designing new products keeping the health and wellness in the mind of their customers. In late 2014 and early 2015, the brand repositioned with a new tagline “Water made Exciting”. Two years later, the growth in sales for sparkling water has increased by 17.2%. Daniel Birnbaum has stated that the double-digit revenue growth in each of their four geographic regions was due to the benefits of their home carbonation system (McGrath, 2016).

Capture 2(Source: Ivey Business Review)

PRODUCT LIFE CYCLE

SodaStream management is aware that every new product goes through a life cycle. The product life cycle is marked by five distinct stages – Product development, Introduction, growth, maturity and decline (Kotler, 2013). It will be interesting to see the growth and duration of sparkling water popularity in the future.

plc-product-life-cycle-curve

PRODUCT LIFE CYCLE

 

For a healthier lifestyle, SodaStream product will be a good choice especially with my young children leaning more towards canned sodas. In addition, SodaStream in partnership with Samsung has developed a fridge, powered by SodaStream carbonators.
Maybe this year, we should combine Mother’s and Father’s Day. Buy the Samsung fridge with installed SodaStream.

After all, it’s all about making your wife happy.

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(Source: Ivey Business Review)

References:

Iacobucci, D. 2013, Marketing Management (MM4), Student Edition, South-Western, Cengage Learning, Mason USA.

Camille, A. 2016 Changes To SodaStream International Ltd. (NASDAQ:SODA) Target Prices. [ONLINE] Available at: http://www.fiscalstandard.com/2016/08/26/changes-to-sodastream-international-ltd-nasdaqsoda-target-prices/. [Accessed 25 August 2016].

Girard, T. & Dion, P. 2010. Validating the search, experience, and credence product classification framework. Journal of Business Research, vol. 63, issue 9-10, pp. 1079-1087.

SodaStream 2016 – http://www.sodastream.com/

Eryigit, C. 2013 The Influence of Brand Associations on Brand Loyalty in Accordance with Product Involvement. Choregia, vol. 9, no. 2, pp. 17-33.

Joshua, R. 2013 Should Coke and Pepsi be worried about SodaStream? [ONLINE] Available at: http://www.NEWYORKER.COM/News/News-desk/Should-Coke-and-Pepsi-be-worried -about-SodaStream. [Accessed 27 August 2016].

Tadeo, M. 2014 The bubble bursts for Sodastream. [ONLINE] Available at: http://www.independent.co.uk/news/business/analysis-and-features/the-bubble-bursts-for-sodastream-9829869.html. [Accessed 27 August 2016].

Felekoglu, B. & Moultrie, J. 2014 Top management involvement in new product development: A review and synthesis. Journal of Product Innovation Management, vol. 31 no. 1, pp. 159-175.

Jillian Berman . 2015. Sparkling Water Is The New Soda. [ONLINE] Available at: http://www.huffingtonpost.com.au/entry/sparkling-water-soda_n_6614604. [Accessed 28 August 2016].

Maggie McGrath. 2016. SodaStream Surging As Sparkling Water Shift Boosts Sales. [ONLINE] Available at: http://www.forbes.com/sites/maggiemcgrath/2016/08/02/sodastream-surging-as-sparkling-water-shift-boosts-sales/#61d0e43c5565. [Accessed 28 August 2016].

Kotler, P. Burton, S. Deans, K. Brown, L & Armstrong, G 2015, Marketing 9th Ed, Pearson Australia.

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