Marketing Situation Analysis Report:SodaStream Genesis

Dario DobbinKelsey Lemmon

Evan LinkLucy SandstromJustina Schmidt

Nick Szala

Principles of MarketingJohn M. McGrath Ph.D.

6 December 2013

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IntroductionSodaStream is a company that offers home beverage carbonation systems. These systems allow consumers to easily convert regular tap water instantly into carbonated soft drinks and sparkling water of their choosing. The company strives to offer a more efficient alternative for consumers then bottled and canned carbonated soft drinks and sparkling water.

HistoryIn 1903, a man named Guy Gilbey come up with the idea of offering carbonated drinks

and this was the bases that the company SodaStream started on. This idea bloomed into the market when in the 1920’s the Vantas Machine entered the market. This machine allowed restaurants, shops, and boarding houses to make carbonated beverages and sell them to consumers for a reasonable price. However, it wasn’t until 1955 that a home carbonated beverage system was introduced. SodaStream was the first company to release such a product out onto the market. The company named their product the Popular Outfit. At the time there were fourteen flavors available to drink, two of them were non-sweetened.

Over the years the Popular Outfit changed and evolved into many different ideas, designs, and sizes. As the company expanded it eventually reached the United States market in 2002. While later in 2008 SodaStream created Genesis and is now currently sold on the market for $99.95. The company as a whole became public when in 2010 it was listed on NASQAD.

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5 year trendThe 5 year trend for the soda industry and SodaStream in America are listed below in the charts. In order to determine the SodaStream profits and sales from their 20 k form a percentage was calculated out from the global amount. The chart follows the average annual growth throughout the year of 2008 through 2012.

5 year trend of sales and profits for Soda Industry

Year Sales Profits

2008 $19,761.60 $2,715.00

2009 $19,639.60 $2,492.50

2010 $21,029.30 $2,609.40

2011 $20,441.00 $2,558.30

2012 $19,697.30 $2,467.50

5 year trend of sales and profits for the SodaStream

Year Sales Profits

2008 $6,483.20 $3,550.45

2009 $12,169.59 $7,883.31

2010 $40,849 .00 $33,028.06

2011 $83,796.37 $45,688.92

2012 $157,510.08 $85,132.83

*(ibisworld.com)*(http://sodastream.investorroom.com/secfilings)

Macroenviromental FactorsMacroenviromental factors affect SodaStream in a number of different ways and the company does a good job appealing to all of the factors. Their product Genesis was not made to be used by just one gender, both male and female can use it to make whatever beverage of their choice. The product is also easy to use therefore making it a product that can be used by any age. SodaStream has taken demographics very seriously by letting its range be very wide for the

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people who can use their product. Since the product is easy to use the innovations of the product have come very far for the common person. In addition, to it being easy to use the product is also easy to obtain because you can buy it from the comfort of your living room on your computer through their website. SodaStream promotes its product on a number of different outlets. Specifically, it runs commercials on television for a different range of viewers to watch. On there you can find that the price SodaStream’s product Genesis goes for $99.95. SodaStream tends to attract a type of culture that can afford to pay for this kind of product by not having to buy bottles of carbonated beverages. Giving consumers an alternative to bottles also attracts consumers with values that stand for saving the plant. These types of consumers that live this lifestyle feel that by reducing wasteful products from sitting in landfills that it will ultimately help clean up the environment. Therefore, their attitude towards these products are that they are worth the paying the more expensive price. Economically, though the product will save consumers money because buying the refills and using reusable bottles will be cheaper than buying pre-bottled carbonated beverages. Currently, SodaStream’s products do not affect the employment of its competitors.SodaStream has two main competitors. They are Primo with their Flavorstation Home Beverage Maker Model 100 and Cuisinart with the SMS-201 Sparkling Beverage Maker. SodaStream does not have many legal or political issues but it did have its commercials banned during the Super Bowl. The commercials were said to be too much of a direct hit against the Super Bowls two main sponsors; Coke and Pepsi.*(http://www.forbes.com, December 2013)

Market Share

SodaStream & R. TorreCoca-Cola & PepsiCo.Other

The Syrup and Flavoring Production industry is extremely concentrated, with the top four industry firms accounting for 75.1% of industry revenue. The Coca-Cola Company and PepsiCo are the top two largest companies. Combined together they account for 73.8% of industry’s revenue. Torre and SodaStream, are the third and fourth largest industry operators.

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*(ibisworld.com, December 2013)

These two combined account for less than 1.5% of industry revenue. Therefore, making SodaStream as seen in the graph does not have a very large part in the market share. The remaining 24.9% is accounted by other small companies combined.*(ibisworld.com, December 2013)

ProductLife Cycle StageThe SodaStream Genesis product life cycle stage is growth. It is in this category because both the sales and profits are increasing. The SodaStream Genesis is a worldwide product it is sold in many different states and countries all over the world thus the sales and profits keep increasing because they are expanding their brand across the world’s borders.*(ibisworld.com, December 2013)

Introduction Growth Mature Decline

Product TypeThe SodaStream Genesis product type is business to consumer because the consumers purchase the SodaStream Genesis for themselves. Consumers buy the Genesis for personal or household use to either lower the cost of what they pay on soda or to give their kids a healthier drink with less sugar in. The type of business to consumer product the Genesis is would be Shopping Goods or Services. It falls under this category because consumers spend a fair amount of time comparing alternatives to the SodaStream or the different models of the SodaStream. They go to different places and ask about the SodaStream and what other products do the same thing but may cost less than the Soda Stream.

Product Strategy The product strategy used for the SodaStream Genesis is product development because it is the current market but a new product. The SodaStream Genesis is the same market which is the

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SalesProfits

soda industry; it is a new product by just being a different size. There are many styles of the SodaStream makers and the Genesis is a different style and model of the ones previously made.

PricePrice StrategyThe SodaStream Genesis can be priced from anywhere from $99.95-$169.95. However, our main focus is the SodaStream Genesis starter kit. The Genesis starter kit is priced at $99.95. This kit includes the actual soda maker, one sixty liter carbonator, two reusable bottles, and a variety of soda mixes. With all of this included in the package, it becomes a great deal for consumers.*(sodastreamusa.com, November 2013)

Competitive PricingSodaStream has two main competitors: the Cuisinart Sparkling Beverage Maker and the Primo Flavorstation. Both products do just about everything the SodaStream Genesis starter kit does. The Cuisinart Sparkling Beverage Maker, which is priced at $79.95, is the most similar to the Genesis starter kit. The Sparling Beverage Maker even looks very similar to the Genesis starter kit and it includes just about everything the starter kit includes. The Primo Flavorstation is more different because of the price. The Flavorstation is priced at $35.00, but it does not include as much as the Genesis starter kit or the Sparkling Beverage Maker.*(amazon.com, December 2013)

Type of Beverage Maker

SodaStream Primo Flavorstation

Cuisinart Sparkling

Beverage Maker

Price

(Per Unit)$99.95 $35.00 $79.95

Price

(Per Bottle)$4.99 $4.99 $10.65

*(https://www.cuisinart.com, December 2013)*( http://www.sodastreamusa.com, December 2013)

Marketplace Environment

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The SodaStream Company is part of an oligopoly. An oligopoly is only a handful of firms in a market. There are not many firms in the at-home sparkling beverage market. SodaStream is one of the biggest firms in this particular market. In oligopolies, products are not always differentiated, but they can be based on their image.

Pricing ObjectiveConsidering the Genesis starter kit is more expensive than its competitors start kits, it is considered to be profit oriented. Profit oriented companies will do anything to keep their margins and profits high. For companies like this, including SodaStream, it is all about maximizing profits.

Price StrategyThe Genesis starter kit is considered to have a skimming strategy. A skimming strategy is a tactic companies use to increase their profits. Pricing your product higher, will get you more profit in the long run.

PlaceNumber of Locations:There are a total number of 60,000 retail stores in 45 countries that currently sell the Genesis SodaStream. It is sold online, supermarkets, department stores, convenience stores, etc... There are 22 manufacturing sites worldwide where the SodaStream is currently made. The headquarters in the United States are located in Mt. Laurel, New Jersey. *(sodastreamusa.com, November 2013)

Channel Structure Diagram:

Manufacturer (Producer)

Department Store, etc… (Retailer)

Us (Consumer)

Channel Captain:

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The channel captain in this channel structure would be the retailers because they have the most power. The type of power would be Information Power because they would have all of the control over important data. For example, they keep track of how many Genesis SodaStreams are being sold and what price is best in order to maximize sales and profit. So they tell the manufacture how many they need and when they need to have the next shipment by.Distribution Strategy:Intensive- The goal is to get the Genesis SodaStream everywhere and into as many outlets as possible. It is easy to say this is their strategy because it is currently in 60,000 stores worldwide and also available online.

Promotion

Positioning StatementTarget Audience:

Geographic:SodaStream is a global company.

Demographic: They would reach 13 year olds to any age that is capable of drinking

carbonated beverages.Reaching both the male or female

Psychographic:The type of people who would buy SodaStream’s product are the kind

that want to help the environment and like to drink carbonated beverages. However, these kinds of people typically like to drink healthy

drinks so they will most likely by the diet options that SodaStream offers.

Benefits:Consumers who buy and use this product will help to reduce waste while

also enjoying the benefit of having their favorite carbonated beverage that they can choose from the fourteen different flavors.

Geodemographic:Since SodaStream’s Genesis is a higher cost product compared to its

competitors it would be safe to put it into stores next to areas that have either middle or higher incomes.

Loyalty:SodaStream’s goal would be take the loyalty away from Coca-Cola and

Pepsi and have their customers become regular SodaStream customers.

Frame of Reference: Two of the main direct competitors for SodaStream are Primo’s Flavorstation and Cuisinart’s Sparkling Beverage Maker. The substitutes for SodaStream’s carbonated beverage would be Coca-Cola and Pepsi’s carbonated cola beverages.

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Point of Difference: SodaStream’s company focuses solely on making carbonated beverage. The two other competitors make whole assortments of home kitchen appliances. Therefore, since SodaStream only focuses on making carbonated beverage machines it makes their company more unique.

Positioning Map

*( http://www.bedbathandbeyond.com, December 2013)*( http://www.chezlarsson.com, December 2013)*( http://bestsodamaker.org, December 2013)

Promotion ObjectiveThe promotion objective for SodaStream is Interest. The Sodastream Genesis is a fairly new product but its name is definitely on the market. Sodastream is keeping a price fairly close to its competitors but what is putting them ahead is their diverse aray of flavor choices. Being able to stand out from its competition with better and more frequent Ads then its competitors, even though Sodastream does not have many advertisements, also helps maintain originality among other soda makers.

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ExpensiveCheap

Less drink mix options

More drink mix options

Promotion StrategyThe promotion strategies being utilized by Sodastream are both a Push and Pull strategy. Examples of a push strategy include the variety of soda flavors they offer. This is being done behind the scenes to determine which flavors would sell the best, along with this the different color Sodastream makers gives consumers the oppurtunity to pick not just one but a few colors. Not as much so, but Sodastream does use a pull strategy as well. These are all of the advertising done on TV or over the internet.

Promotion Mixed ToolsThe promotion tools being implemented by Sodastream are internet marketing, public relations, sales promotion, and advertising. The internet marketing is being used because of their website which helps them maintain their image as well as creating advertisemets and having the ability to sell products from it. Public relations comes into play whenever they are advertised or sold in magazines, websites, as well as PSA’s. Next, sales promotion includes lowering prices and offering deals that will in-turn get the consumer to buy the product. Lastly advertising is being displayed by Sodastream because they are paying to have their ads in magazines or on TV. Commercials about the Sodastream is an example of how they advertise.

What we would do differentlyMy group decided if we had to improve our brand we thought it should get more media attention in how SodaStream products help benefit and improve the environment and make America, but the world a more eco-friendly place. SodaStream is an active green solution that minimizes the huge eco-footprint caused by the manufacture, transport and waste of plastic bottles. SodaStream product will also reduce the amount of landfill waste that we currently have in America. With media attention we would definitely push for more informative advertising and promotion of Genesis SodaStream starter kit because not that many people in America know about this ground breaking product out on the market. We would definitely try to lower the prices by using sales promotion to make SodaStream a key competitor with its competition. Making SodaStream more affordable would help sale more to a customer who only drinks soda products occasionally.

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