ARIZONA ICED TEA

Alex Green

OVERVIEW/HISTORY

AriZona Beverage Company began in Long Island, New York in 1992 John Ferolito and Don Vultaggio founded Ferolito, Vultaggio & Sons, originally a beer brewery abandoned the beer business in favour of a venture into the tea industry goal: create a high quality product in packaging that stands out. since become the #1 ready-to-drink tea in the United States business philosophy centers on offering a gourmet, organic drink experience while keeping consumer costs at a minimum AriZonas Lemon Iced Tea, was invented through an emphasis on quality, all-natural ingredients, without natural flavours, colours, or preservatives

TOTAL PRODUCT CONCEPT

AriZona Lemon Tea is made from real black tea and natural lemon flavor that help to create a slightly sweet, refreshing flavor of sun brewed tea style provides a delicious, refreshing beverage includes symbolic and experiential benefits

association with AriZonas ties to the underground/independent arts culture (music, design, etc.) symbolic benefits are integral to the target market improve mental awareness boost the immune system strengthen teeth prevent aging issues serve as an anti-allergic lower blood sugar

all-natural benefits of tea:

PRODUCT LIFE CYCLE

late-growth phase

costs reduced sales volume increase profitability increase competition increase public awareness increase

PRODUCT MIX

includes product width of 15 other product lines besides iced tea

green tea herbal tonic energy drinks juice blends organic tea tea water bottled water bagged tea

iced tea includes a depth of 10 different products

ICED TEA PRODUCT LINE (EXAMPLES)

Peach Iced Tea Raspberry Iced Tea Half & Half: Mango Half & Half: Lemonade Southern-Style Sweet

PRODUCT & BRAND

cash cow for AriZona

significant share of market no longer high-growth

convenience product routinized-response purchase increasingly valuable brand equity brand preference

BOSTON CONSULTING GROUP MATRIX

High

Star
Arnold Palmer (iced tea + lemonade) Rx Energy Herbal Tonic

Question Mark
Bagged Tea Tea Water Juice Blends Organic Tea Half & Half

Growth

Low High

Cash Cow
Iced Tea

Dog
Powdered Mix

Market Share

Low

MARKET SHARE
Market Share: Iced Tea

32%
AriZona Competitors

68%

COMPETITOR ANALYSIS
Strengths
-

Weaknesses
- currently trails behind competitors in most developed markets

Lipton

no preservatives, artificial colours or flavours gluten-free can be used to make hot tea works with Pepsi diet versions contains antioxidants works with Coca-Cola one of the worlds best-known and best-selling brands of both hot leaf and ready-to-drink tea represents around 10% of the world market for tea marketed as the edgy tea by Lipton focused on those that want more of an extreme and energizing/rejuvenating iced tea unique taste very popular and readily available almost everywhere Real Facts (interactive) diet and caffeine-free versions sold widely

Nestea
-

rumoured to have watered down taste synthetic tasting expensive contains a lot of corn sugar and fructose

Brisk
-

reviews suggest it lacks in flavour mostly made-up of sugar not as available as other iced teas in every market

Snapple

mostly available in glass bottles expensive competes with carbonated soft drinks as well

TARGET MARKETS

primary market:

18-24 year olds

13-17 year olds 25-34 year olds demographic

secondary markets: segmentation variables:

age segmentations
product use

behaviouristic

geographic

primarily urban/commercial, not rural personality, values, attitudes, interests, or lifestyles

psychographic

PRICING STRATEGY
low-cost pricing model priced at 99

advertisement mechanism competitive pricing

major bang-for-your-buck

pay just over 4 per fluid ounce

high-quality, low-cost

DISTRIBUTION
intensive

distribution

using all available outlets to distribute

dual

distribution

independent wholesalers and directly to large chains

hybrid

distribution approach available in:

convenience stores supermarkets superstores warehouse clubs

PACKAGING

functional purpose

maintain freshness of the product

bright colours attractive designs unique product-by-product creations

PROMOTION

focus on packaging

attractive packaging design use TV ad money for packaging

word-of-mouth independent arts culture sponsorships outreach charity

S.W.O.T. ANALYSIS
Strengths
pre-existing unique can design affordable cost recognition potential (through packaging) marketing and sales flexibility (independently owned) -

Weaknesses
less than optimal awareness lack of advertisement not top-of-mind not available everywhere

Opportunities
increasing awareness through advertising advertise to new target market creating new and different flavours becoming top-of-mind -

Threats
competing iced tea brands that have better recognition and a larger budget (due to being owned by larger holding companies) unique yet often inconvenient packaging (large can)

FUTURE OUTLOOK
company continues to grow continue to expand iced tea flavours mergers and partnerships

diversify product mix efficiently expand into new lines

seek to attain top-of-mind-awareness maintain private, independent, grass-roots approach

enlarge customer base generate more word-of-mouth publicity

we make stuff wed like to drink ourselves

THE END
Any Questions?