Transcript How is innocent `virtual`

History
• The three founders of the company did not spend
money on advertising instead they had chosen a
smarter approach trough product packing and
delivery promotion and word - of - mouth.
• In 2005-fastest growing food and drink company
in UK
• The price of the innocent smoothie is quite high –
almost 2£.
• “Yes” and “No” bin story
• Maurice Pinto- 4th shareholder – 20%
innocent development
• innocent is a very professionally established and
developed product (worth 60m – 70m annually)
• Almost 100% crushed fruit
• Import problems
• Product development
Idea Screening
• Innocent’s product was not a new
• Entering an established market
• Trying to beat the other players
• Different forms of promotion
• Developing the whole Fruit Smoothies market
Idea Screening
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Selecting ideas that will be successful
The difficulty of that selection
Screening as an evaluation process
Questions that the process involves:
– Do we have the necessary commercial knowledge and
experience?
– Do we have the technical know-how to develop the
idea further?
– Would such a product be suitable for our business?
– Are we sure there will be sufficient demand?
Concept Testing
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Innocent’s product should stand out on the shelf
Packaging
Branding
Innocent’s confession: “Our user testing was
done on people we knew. We’d email our friends
with packaging designs”
• Advise and expertise: Turner Duckworth, agency
etc.
• Design – logo, bottles, delivery vans
• The success – standing out, design and
packaging, taste
Prototype development
• Target market – young, urban, affluent
• 100% natural, 100% of the time
• Hippie approach to life
• Simplified design
• Brand image
Market testing
• Regular sampling
• Recipe tests
• Price and package design
Launch and promotion
• Barriers
• Distribution channels
• Advertising
- Packaging design
- Guerilla marketing
• Strong retailer relationship
Innocent’s business is ruthless, singleminded, profit driven and very business
orientated. What is the evidence for that?
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Original design
Fruit sampling
Quality control
Cautious approach
Trademark registered
Business growth
Strong and regular communication with
retailers
The success of the business is partly
based on extremely good communication
with retailers. How is this achieved?
Innocent achieved the good communication with
their retailers firstly by giving them as a new
retailers a humorous booklet or the so called “The
Innocent Easy Health Guide”. The second thing
that innocent did to build up the relationship with
retailers was by newsletter which combined the
product information with fun stories. The third thing
that Innocent did was to invite every retailer (3,000
of them) to it’s birthday every year to a themed
party and also to send every retailer a Christmas
card and a present.
What type of financing did Innocent
secure? Does it matter?
The financing that Innocent Smoothies secure was equity
financing. The founders of Innocent benefited from their
very good education and from their many business
contacts and they very quickly got in touch with venture
capitalists. Maurice Pinto, a wealthy American
businessman was the VC that invested £250,000 in
Innocent and became the fourth shareholder, retaining
20% stake. This financing mattered very much for Innocent
because it helped them to start off and the money
provided salaries, office space and cash to buy raw
materials, bottling plants, promotional materials and
labeling fro the bottles.
Would you sell-out to Coca-Cola for £400
million? As one of the three shareholders
you could pocket £100 million. If not why
not?
- Market Value of £ 250 000 in 1999, £ 83
million in 2006
- 50% to 60% annual growing rate
- Market Share of 27%(£ 11.2M) for 2003,
62%(£83M) for 2006
Innocent benefited from a key advantage
what was this and explain how it helped
in the product development process?
Few were the advantages that helped
innocent in the product development
process, but the most vital was that, in fact,
they were the target market…
How is innocent ‘virtual’ and how is this
different from traditional food and drink
manufacturers? What advantages and
disadvantages does this provide?
• Virtual communication – what other companies
might call marketing, innocent smoothies more
often call communication.
- E-mails
- Blogs
- Facebook
- Banana phone