Business Communication: Jones Soda Co.

Executive Summary

Jones Soda Co. is one of the companies that specialize in the bottling and distribution of soft drinks, energy drinks, non-carbonated beverages, and candy. Peter Van Stolk started the company in 1986 with the aim of producing soft drinks using cane sugar instead of high fructose corn syrup (Underwood, 2005). The aim of the company was to offer healthy soft drinks in various flavors to the public. The process of the production of such beverages took longer, but the management did not lose the vision. In 1996, the company introduced Jones Soda in seven distinctive flavors, namely cherry, strawberry, oranges, lemon, raspberry, lime, and grape. In 2007, the company managed to produces most of its products using the cane sugar formula.

The attempt to enter into the canned-soda market resulted in great losses due to the barriers posed by Coca-Cola and Pepsi, the leading companies of that time that had established the mass production of soft drinks. Following the losses mentioned above, Jones Soda Co. decided to downscale the employment cost by 40%, which resulted in saving 2.6 million dollars per annum. In 2010, Jones Soda Co. won a contract that allowed it to distribute its products to Wal-Mart (Von Rosen & Vincalek, 2005). In the same year, it received 10 million dollars from Glengrove Small Cap Value Limited (Jones Soda Co. History, n.d). Over the years, the company has produced over 25 products. The company has undergone several changes in the management. Currently, Joth Ricci is serving as the CEO of Jones Soda Co.

Place New Order

Type of assignment
Writer level
Urgency
Number of pages
Spacing
Order total:

Introduction to the Business

Jones Soda Co. was started to offer an alternative soft drink produced without using high fructose corn syrup. The vision and the desire of the company was to offer consumers a healthy drink produced from cane sugar. Although the company faced several challenges, Jones Soda Co. manages to remain in the market because of a strong management team that takes advantages of the companys strengths, maximizes its opportunities, tries to eliminate its weakness, and understands the competitors strategies, which helps to reduce potential threats. The companys SWOT analysis, competitive analysis, and marketing strategies reveal the secrets behind its continuous growth.

SWOT Analysis

i. Strengths

Jones Soda Co. has several advantages over other producers of soft drinks. First, the company has unique marketing strategies. It produces custom-made labels to satisfy various customer needs. All the products they offer contain different quotes in the bottle caps. Second, the company has embraced the use of social media to advertise their merchandize. It posts the photos of their goods on different social media websites, such as Facebook, twitter, and Instagram, and sends advertisements to potential customers. The use of social media provides Jones Soda Co. with a platform that allows it to interact with customers. As a result, the company is able to get feedback on their products. The production of various unique and unusual flavors of soft drinks intrigues people, and they often want to try all of them.

ii. Weaknesses

The company has few retail distribution channels; consequently, it is not that easy for consumers to access the companys products. In addition, the company frequently changes the packaging of its goods. Therefore, customers may find it difficult to recognize the brands manufactured by Jones Soda Co. Since their competitors also design their products using numerous vibrant colors, customers may confuse Jones Soda Co.s goods with the merchandize of other brands, which may hamper the development of product loyalty. Another weakness lies in the limited target market. Most elderly persons consider soft drinks as unhealthy; as a result, mainly the youths consume the companys beverages. Lastly, Jones Soda Co. is a smaller firm compared to other stakeholders; thus, it has a smaller capital base. Financial limitation hinders market expansion and cost reduction since the company cannot buy in bulk to enjoy economies of scale.

iii. Opportunities

The company has the capacity to expand overtime because its products are in high demand. The plan to penetrate other countries will eventually help the company to become global. Currently, Jones Sodas products are available many foreign countries, and the demand continues to grow. The ability to produce energy drinks and juices using a different formula ensures that the merchandize it offers attracts potential customers.

iv. Threats

The company faces strong competition from such well-established companies as Coca-Cola and Pepsi. Another threat is possible future changes in customer tastes and preferences. There is a high likelihood that many people who currently enjoy soft drinks will shift to healthy beverages that have low calories.

Market Analysis

Most consumers do not consider Jones Soda Co. to be a worthy competitor like other huge market players such as Coca-Cola and Pepsi. Instead, the company occupies its own niche together with other small companies such as Cadbury-Schwepps and Snapple.

Below is the comparison of Jones Soda Co. with the giant players in the market during the first quarter of 2016.

In the market capital

Jones Soda Co. 28.09 million

Dr. Pepper Snapple Group 17.05 billion

Coca-Cola 192.75 billion

Monster Beverage Corporation 26.22 billion

Competitor Comparison Table

 
    Our custom writing services includes:
  • Custom essay writing for the best grades;
  • CV, resume and cover letters which would
    make you successful
  • Thesis and dissertations writing by academic
    authors
 

Jones Soda CO

Dr. Pepper Snapple Group

Coca-Cola

Monster Beverage Corporation

Market Capital

28.09M

17.05B

192.75B

26.22B

Employees

22

19,000

123,200

N/A

Quarterly Revenue Growth

-0.14

0.03

-0.08

0.07

Revenue

13.33M

6.28B

44.29B

2.72B

Gross Margin

0.24

0.59

0.61

0.60

EBITDA

-916.00K

1.52B

12.21B

1.00B

Operating Margin

-0.07

0.21

0.23

0.36

Net Income

-914.00K

764.00M

7.35B

546.73M

EPS

-0.02

3.97

1.67

2.84

P/E

N/A

22.86

26.54

45.54

PEG (5 yr. expected):

N/A

2.62

10.39

1.71

P/S

2.01

2.69

4.30

9.54

 
 

The soft drink industry is a duopoly dominated by the Coca-Cola and Pepsi companies, the market shares of which constitute 42% and 29% respectively. Consequently, it is almost impossible for Jones Soda Co. and other start-up companies to penetrate the soft drink market. However, Jones Soda Co. has managed to stay independent and facilitate growth for years (Hartogh, 2002).

Marketing and Social Media Assessments

Jones Soda Co. has well-organized marketing strategies that allow it to capture its target group effectively. The company wraps its products in appealing, creative, and unique packages that can further be customized on customer request (Schindehutte, Morris, & Kocak, 2008). The brand of the soda is written in a bright color that matches the color of the beverage itself, for example, the drink with the green apple flavor has a green color and its name is written in neon green.

Another marketing strategy the company employs is the production of custom label products with the photos of customers or any other information that consumers may like to have on the package (Underwood, 2005). In addition, the company organizes events that involve customers, which makes consumers feel appreciated and part of the community. During such meeting, the companys employees take photos of customers and later post some of them on the official website.

Moreover, the company uses trade magazines to post external and internal information that needs to reach potential customers. The marketing team conducts surveys in order to define which products are needed in the market. The entire marketing strategy targets the customer needs that are under-tapped and inadequately reached by the competitors (Schindehutte, Morris, & Kocak, 2008). Due to Jones Soda Co.s advertising strategy, the company is considered as a lifestyle because it involves customers in many aspects of product development and packaging.

In addition, the company advertises it products through social media and websites. Jones Soda Co. uses popular websites that allow effective interaction with customers. The use of interactive sites enables the company to identify customer needs, listen to complains, and define the areas that need to undergo changes (Grube & Wallack, 1994) The use of advertising and social media has contributed to the growth of the company. Moreover, the company utilizes entertaining vehicles that move across the country and advertise its merchandize in schools and during music and sports events.

Despite the companys strong marketing strategies, surveys indicate a frail public awareness level. Presently, the company faces a challenge of developing adverts that would promote wide brand awareness among its target groups. To improve the public relation level, the company sponsors athletes, individual music artists, and other celebrities.

Recommendation for Improvement

For Jones Soda Co. to reach the global market, the companys management must change several issues. First, the company should reduce the number of products to avoid confusion among customers. Further, the company should design a unique logo and branding that customers can easily identify. Many customers opt to consume Pepsi or Coca-Cola products because of the unique branding of their merchandize.

What are you waiting for?
Order with 15% discount NOW!

ORDER NOW

In addition, I would recommend the use of advertising methods that capture a wider market. The use of social media and other websites works well young people only. The concentration on youths as the only target group has left out most of other potential customers. The use of television, radio, and other mass media communication systems to advertise the companys products may help Jones Soda Co. reach a wider market.

Further, the firm should produce healthy drinks that have a low level of calories. Since most people try to care about their health, the company should consider producing fresh juice, smoothies, and other healthy beverages to ensure that it meets the needs of all. Since a change in customer tastes and preferences is one of the threats that the company faces, Jones Soda Co. needs to produce alternative products beforehand.

Conclusion

Jones Soda Co. is a small soft drinks company that has managed to survive independently in the industry for many years. It has survived due to its effective management and the ownership of a unique formula that uses sugarcane instead of high fructose corn syrup. Despite numerous challenges, the company has undergone many changes without losing its vision. Among the challenges it faced were enormous losses that almost collapsed its operation. The main strengths of the company include unique marketing strategies, the production of custom-made labels, the use of social media to advertise its products, and the production of various flavors. The main weaknesses include a small number of retail distribution channels, constant changes of packaging, limited target market, and low capital base. The most profound opportunity the company has is the capacity to expand. Some of the threats are the competition from well-established companies and future changes in customer tastes and preferences.

Since the soft drinks industry is dominated by a duopoly between Coca-Cola and Pepsi, Jones Soda Co. does not have a significant market share. However, it has managed to stay independent and facilitate growth. The main target market of the company is the youths; therefore, the company uses social media and website to advertise its goods. For the company to improve its productivity, Jones Soda Co. should reduce the number products, employ unique branding, use advertising methods that capture a wider market, and produce healthy drinks that have low levels of calories.

Related essays