The Soda water is a classic but famous product of Schweppes which blends mineral salts and triple filtered water. (Schweppes, 2018) This report is to identify target markets and position within the market for Soda water of Schweppes Australia.

2.0 Targeting Strategy

Differentiated targeting strategy is to meet the wants which could be defined simply as the biases or preferences to a similar category of products of customers more precisely than competitors. (Peter, 1987) The product differentiation is very depends on physical features and the other elements of the market mix. (Poter, 1976) From the narrow perspective, the specific product of Schweppes — soda water is a concentration product because the character of Soda Water is “healthy” that the original soda water does not contain any sugar and the taste may not as good as other SSBs. The soda water just meets wants and demands of a certain group of customers. However, from the wider perspective, Schweppes uses differentiated targeting strategy that it has five main ranges of products including Classic mixer (Soda Water), Agrum collection, Mineral water, Flavours, and Premium cardinal to meet different customer needs which will be covered in detail in the next section. (Schweppes, 2018)

3.0 Three Customer Profiles

3.1 Customer Profile 1: Cocktail group

Background information for Customer Profile 1:

Absolut (2018) posted a list of 24 most famous cocktail which contains soda water including “Vodka Mojito”, “Moscow Mule”, “Pimm’s Cup”, “Paloma”, and so on. Cocktail is regarded as one of marks of sophistication in the alcohol world with premium connotations. The nature of cocktail is a perception of core image. The marks of the Cocktail consumer are usually well-dressing and high up. (Dominic, 2016)

Customer Profile 1:

Demographics: Aged from 16-35, middle & high income, both of males and females but more males, single, no children, high education level.

Psychographics: Like parties, social, outgoing, Young Optimism.

Behavioural: low usage, low loyalty status, benefit sought: quality, user status: regular user & potential user.

Geographic: Living in the downtown area (High house price).

3.2 Customer Profile 2: Healthy lifestyle group

Background information for Customer Profile 2:

With the household disposable income increasing, CPI group weights of health consumption keep growing from 0.8% in 1960 to 5.4% in 2018. (Australian Bureau of Statistics, 2018) In 2011-12, 58% of Australians aged 2 years & older or 9 million Australians did not consume any Sugar-sweetened beverages (SSBs). The middle- income people care about their health most that use their disposable income to buy a gym membership or bodybuilding apparatus. And the group of people who have a religious belief or with higher education pay more attention to their physical health than the group of people who do not have a religious belief or without higher education. (Christopher, 2018)

Customer Profile 2:

Demographics: Aged from 40-85, middle and high income, high-level education, have children, married.

Psychographics: Healthy lifestyle, focus on fitness, traditional family life.

Behavioural: Heavy use (purchase for daily use), middle loyalty, regular user, benefits sought: economy & quality, Regular occasion, online behaviour: hardly do online-shopping.

Geographic: Living in the suburbs which areas are high-price (away from CBD).

3.3 Customer Profile 3: Diabetics & overweight group

Background information for Customer Profile 3:

In 2015, 63.4% or 11.2 million Australian adults were overweight or obese. The proportion keeps increasing compared to 56.3% in 1995 and 62.8% in 2012. And 5.1% or 1.2 million Australian adults were diabetics and the proportion in 2005 was 3.6%. (Australian Bureau of Statistics, 2015) People who live in most disadvantaged areas (low income, low level of education and poor community) have a higher risk of diabetes. Besides, the group of people who do not have post-school qualifications is more likely to be overweight or obese. (Australian Bureau of Statistics, 2007) In 2005, the proportion of Diabetics was 5.5% compared to the average nationwide proportion of 3.6%. (Australian Bureau of Statistics, 2007)

The incidence of diabetes is related to age and gender. In 2005, only 0.5% of young people aged under 25 years were diabetics compared to 14% of elder aged over 65 years. And a higher proportion of Australian males were diabetics (4%) than Australian females (3.2%). (Australian Bureau of Statistics, 2007) Changing eating patterns is the most common way for diabetes. And each of the Australian National Health Surveys has reported that the proportion of overweight and obesity of males are higher than the proportion of females since 1995. (Australian Bureau of Statistics, 2007) Providing calorie information of sugar-sweetened beverages can reduce the consumption of SSBs low-income people. (Sara, 2012)

Customer Profile 3:

Demographics: Aged from 30 to 70, low-income, more males but not only males, and low level of education, married, have children.

Psychographics: unhealthy lifestyle (from the perspective of diet), under pressure, economization.

Behavioural: Heavy use (purchase for daily use), high loyalty, regular user, Regular occasion and benefits sought: economy.

Geographics: Living in the suburbs which areas are low-price (away from CBD).

4.0 Target Market Decision and Justification

The diabetics & overweight group in Australia is a huge group of potential customers of Soda water. As this report mentioned previously, 63.4% of Australians were overweight or obese and 5.1% of Australians were diabetics in 2015 and the proportions of overweight or obese and diabetics keep increasing. (Australian Bureau of Statistics, 2015) Even though this group tends to have a lower income, 81.2% of diabetes willing and able to change their eating patterns. (Australian Bureau of Statistics, 2001) Soda water is the healthier substitute for other soft drinks with sugar. “Cheap” ($2 for a 1.25L bottle) and “Healthy” (No sugar) are two major characteristics of Schweppes soda water to attract this group of potential customers.

5.0 Competitor Analysis

Three major competing brands of Schweppes Australia (Parent company: Asahi

Group Holdings) are the Coca-Cola Company, Kirin Holding Company, Limited, and Pepsico Inc. In 2015, Coca-Cola took to lead a 38.1% of Australian soft drinks market while Kirin Holding Company took 8.3%, Pepsico took 7.1% and Asahi Group Holdings took 12.9%. (MarketLine, 2015) The carbonates made up 52.7% of Australian soft drinks market and all these four companies produce the carbonates. Coca-Cola, the most strength competitor of Asahi Group Holdings, produce more than 3500 beverage products. However, the profit margin and return on assets keep decreasing since 2010, especially in 2011. Kirin is a Japanese manufacturer that produce alcoholic and soft drinks. The Oceania brand company of Kirin mainly focus on beer, whiskey, spirits, dairy products, and fruit juice rather than the carbonates. (MarketLine, 2015) Pepsico is one of the largest food and beverage companies in the world. The revenues of Pepsico is the highest among these four companies between 2010 to 2014. The revenues of Pepsico is $66,683.0 million in 2014. For the Australian soda water market, Coca-Cola Company and Pepsico Inc. are Schweppes Australia’s strong competitors.

6.0 Perceptual (Positioning) Map

This report evaluates the following four beverage products by the criteria of health and utilizations.

Sugar-sweetened beverages (SSBs) which are regarded as a target for public health intervention (Australian Bureau of Statistics, 2018) increase the risk of overweight, diabetes, chronic metabolic diseases. (Vasanti, 2006) & (Vasanti, 2010) The Australian customers’ purchase pattern of soft drinks keep transforming to “health” as the rises of consumer health awareness that customers tend to focus on sugar intake and calorie intake. ( Paula, 2017) Between 1996 to 2006, the sales volume of water and non-sugar beverages in Australia was decreased by 13%. (Gina Levy, 2007) Dr. Walker also believed that Sugar-sweetened beverages (SSBs) full of calories rather than any nutrition or health benefits are the national vice of Australia and Australian Government should impose an extra tax on SSBs. (Patrick, 2007) For the aspect of utilization, soda water has wider utilization than the other three soda drinks.

Coca-Cola life (lower-calorie Coca-Cola): AU$2.9/1.25L

7 grams of carbohydrates, 7 grams of sugar, 27 kilocalories /100ml (Wikipedia, 2013)

Diet Pepsi (lower-calorie Pepsi): AU$2.2/1.25L

0 grams of carbohydrates, 0 grams of sugar, 1 kilocalories /100ml (Woolworth, 2018)

Kirin Mets Coca-Cola: AU$3.75/1.5L

0 grams of carbohydrates, 0 grams of sugar, 0 kilocalories /100ml (Rakuten, 2018)

Schweppes Soda Water: AU$2.0/1.1L

0 grams of carbohydrates, 0 grams of sugar, 0 kilocalories /100ml (Schweppes, 2018)