Reference no: EM133340343

Case Study: Frozen food brand Blender Bites is leaning heavily into immunity boosting for its latest new product launch. Founded in 2016, the brand makes premium, organic and plant-based pre-portioned frozen functional foods, like fruit to be made into smoothies. Now, it is introducing an immune supporting smoothie innovation, Daily Defen-C, not only to take advantage of an established and growing market, but also to capitalize on established brand equity and supplement their existing product lines.

A complementary lineup of frozen drinks will be launching later in the spring, which the company says is disruptive to the category and part of its overall efforts to revamp the brand to be a leader in frozen functional food.

Chelsie Hodge, Blender Bites' CEO and founder, tells strategy that with immune health top of mind right now, it's heavily leaning into product functionality. The Daily Defen-C smoothie is high in vitamin A, which naturally supports immune system function, and is high in vitamins C and E, and has a blend of 15 organic vitamins and minerals, as well as on-trend ingredients like ginger, turmeric, and probiotics.

"We wanted to have a higher probiotics dose than the leading probiotic yogurt," she says, saying
the highest concentration yogurt has one billion colony forming units (CFU) and that Daily Defen-C offers twice as much.

The company is opting for a modern packaging update with a more modern font and brighter colours

because the previous packaging had a dated look. "I want young parents and moms to gravitate to the bag," Hodge says. Eventually, the entirety of Blender Bite's product line will match the Daily Defen-C SKU look and feel. According to Hodge, it wanted messaging on pack that's really clear so that consumers can understand what the product is. "One step smoothie" is the brand's new slogan and is a way to convey just how easy the product is to use.

Like all of Blender Bites' one-step smoothie innovations, the company's latest SKU provides the differential advantage of being certified organic, vegan, non-GMO, gluten free, dairy free, soy free and contains no added sugar. "I believe this flavour is going to be a huge hit with families looking to keep their children healthy through the next school year and the older population who are continuing to put their health as a top priority," Hodge says.

The Daily Defen-C product is coming to select Costco warehouses in Ontario, Quebec and the Maritimes, and Hodge is hoping to get broader distribution within the next six months to Loblaw, Sobeys, Safeway, Save on Foods and Whole Foods Markets as expanding distribution will be a major key to the products' success. Blender Bites was first to market in Western Canada with pre-portioned "easy smoothie" puck- shaped products free of inner plastic packaging, and is a market they are well entrenched in. The company's major competitor is Evive, a Quebec brand that enjoys a much stronger presence in the eastern part of the country and is a territory Blender Bites wants to grow.

As the company shifts from customer acquisition to customer retention and building brand loyalty, promotion is focused on owned, earned and paid digital media. To promote the launch of the new product and communicate key differences, Hodge has opted to eschew traditional shopper marketing due to cost considerations, instead focusing primarily on online channels. "Like most food brands out there, we are very conscious of our budget," she says. To get the Daily Defen-C message out cost

effectively, Blender Bites is working with various influencers including moms with at least 70,000 followers. To help the product gain traction, the company is also developing a partnership with well known TV chef Stefano Faita to include product recipe segments on his syndicated television show and website "In the Kitchen with Stefano" as well as Youtube and social comment. The company's own website and Facebook page will also highlight the product and recipes. Langley, BC's White Canvas Design is working on the online/social media/influencer marketing.

The suggested MSRP for a 540-gram bag is $12.99, an 8% premium over competitive offerings such as Evive Smoothie Cubes priced at $11.99 for a comparable serving, a strategy underscoring the company's intent to maximize profits and achieve their objectives to recoup their investment in Daily Defen-C as

quickly as possible, reassuring their investors and bankers. The pricing is consistent with the company's odd-even pricing throughout the entire line, and this will be punctuated by occasional seasonal discounts to incent channel members and help expand distribution, a major key to their future success. Industry insiders see this as a bold move in the growing and increasingly competitive functional food industry becoming known more for price competition and consumer price sensitivity.

Questions:

1 The Product Life Cycle (PLC) is a useful tool to explain how the markets' response to a product and its' marketing activities change over the life of a product. Identify the stage of the PLC Daily Defen-C is currently in and support your choice using three (3) points from the case. How would this stage of the PLC inform each element of their marketing mix?

2. Identify and explain both the pricing objective and strategy Daily Defen-C has employed using examples from the case to support your answer. Identify and explain two (2) different tactics they are using to fine tune the base price further, each supported by an example from the case.

3 As a new product, what is the primary goal of promotion for Daily Defen-C? Explain why using examples from the case. Identify, categorize, and explain three (3) different elements of the promotional mix being used by Daily Defen-C providing evidence from the case to support your choices.

4 Using supporting examples from the case, identify and explain what type of marketing channel Daily Defen-C is utilizing, identify and categorize the channel participants, and describe and justify the level of distribution intensity that has been selected specifically for the product.

5 Using evidence from the case to support your answers, identify and justify each of the following: What category of new consumer product is Daily Defen-C for the Company? What type of consumer product is it? What is the product's differential advantage? What type of product adjustment was made? What branding strategy is being utilized by the company?