A REPORT ON

ZEVIA-"ZERO CALORIE SODA"

BY

Anupam Agarwal(M066)

Shubham Sharma(M067)

Sonali Achwal(M070)

Shashank Mathur(M071)

Saumya Mishra(M072)

Ankit Joshi(M073)

Aishwarya Sinha(M074)

Ankit Gupta(M077)

INTRODUCTION

In 2007, amidst the rainy backdrop of Seattle, Zevia Zero Calorie Soda was born.

Sharing its first flavors, naturally sweetened Cola, lemon lime twist and orange soda

with the world became its mission, the good soda love was spreading as people made it

clear they were ready for smarter choices.

Zevia was embraced by people all around the world but majority of its fans were in the

Pacific Northwest, as it was home. However, cold soda & hot sun seemed like a perfect

fit so they moved to Los Angeles, Southern California became it's new home.

While its team has almost doubled in the last year, so has its commitment to its

incredibly loyal and vocal customers. In early 2013, they launched glass bottles of

Chery Cola, Cream soda, Ginger Aley, Grape and ginger root bear  in addition to

cans.

Their momentum hasn’t slowed. In fact, 2013 have been their biggest year. In the

second quarter of 2013, they broke their own records by selling an astonishing 17

million cans throughout April, May and June. That’s a lot of soda, and tons of sugar

grams avoided and were ranked 17th amongst 20 diet soda brands and were the only

independent brand among them.With a commitment for continuous improvement and

natural sweetener innovation, they have now “cracked the code” on something special

as they added Monk Fruit to their sodas to make them even better tasting . They call

this winning combination of natural sweeteners, SweetSmart. While Stevia still

provides most of the sweetness taste in Zevia, the addition of Monk Fruit .

Composition of Zevia

Stevia

This plant based sweetener, originally native to South America, has leaves 200x

sweeter than sugar and no caloric value or effect on blood glucose levels! In fact, all of

Zevia’s Stevia comes from 100% US crop.

Monk Fruit

Monk fruit is a round, green fruit grown on lush vines in small farms in the sub-

tropical climate of Asian hillsides. Harvested by hand to release its natural sweetness,

Monk Fruit is 200 to 300 times sweeter than sugar but contains no calories or effect on

blood glucose levels.

Erythritol

Erythritol is a natural component of fruits, vegetables and grains, and is classified as a

sugar alcohol, even though it is neither sugar nor alcohol. It is obtained through a

natural fermentation process, much like that of yogurt and has absolutely no calories

and a zero glycemic index.

Figure1: Composition of Zevia

4Ps of marketing:

Product

PRODUCT LIFE CYCLE:

The Product Life Cycle shows the

Time v/s Sales graph of any product in the market. It consists of four stages:

Introduction

Growth

Maturity

Decline

This product when launched will be in the introduction stage and hence will have the

following characteristics:

1. Slow sales volume at the beginning

2. Little or no competition faced

3. Demand will have to be created

4. Customers will have to be prompted to try the product

5. May or may not have profit at this stage due to high marketing and other costs

In today's world people are more concern about their health. In addition to this there is

a significant rise in demand of NATURAL products. Therefore the customers want an

all-round offering from the soft drink industry which incorporates good taste, low

calories as well as use of natural ingredients. ZEVIA is a product with zero calories

and its sweetness comes from STEVIA (leaf extract.)

The product was launched in form of aluminium can of 350 ml and is now also

available in glass bottles.

Place

Since Zevia is one of its kind product and launching it throughout India in one go is a

major risk due to uncertainty in its degree of success. Since cost of product is relatively

higher than other soda product, we have targeted upper class and upper middle class

and people in urban areas are more health conscious so according to this we can launch

the product in posh areas and urban areas of metro cities

-mumbai

-delhi

-kolkata

After analyzing and interpreting the sales volume we will be subsequently cover the

entire urban India.

PRICE:

As Zevia soda does not have any production plants in India it must be imported from

US. For this many duties such as shipping costs, insurance costs, import duty and taxes

etc. will be levied on the product. This means that obviously the product will be

costlier in India than in US. The production cost being 40 per can of 350ml various₹

duties are calculated below:

The cost of shipping and insurance of importing (per carat i.e. 24 cans)

Shipping costs: 200.00 ₹

Insurance costs: 432.00₹

Calculation results (per 24 cans)

Total customs value : 1614.05₹

- Duty: 489.06₹

- Landing Charges: 16.14₹

- Countervailing Duty: 254.31₹

- CESS: 22.30₹

- Additional Countervailing Duty: 95.83₹

Total import duty & taxes due: 877.65₹

Total landed cost: 2491.69₹

From the above calculations we get the total cost price of 24 cans to be

INR 2491.69 i.e. 103.82 per can. ₹

Now, as we come on the path of deciding selling price of one can we can

look forward to this estimation and according to this the company can

decide the price for one Zevia can:

Price 105 110

Units sold 100 100

Revenue 10500 11000

Cost 10382 10382

Profit 118 618

As we can clearly see that if we keep the selling price 105 then the₹

profit is going to be 118 for 100 cans and the profit gets boost up to₹

618 if the selling price is increased by 5.₹ ₹

Is the customer price sensitive?

The product is a bit costly but people who are health sensitive will buy

the product anyhow, as the product contains stevia which is a natural

sweetener and is 300 times sweeter than sugar. The product contains zero

calories and is therefore a health drink targeted towards niche segment of

customers.

How will your price be compared with your competitors?

The closest competitors of Zevia would be Red bull and Monster which

costs

95 for a 250 ml can. Compared to which a 350 ml can of Zevia would₹

cost around 110. Therefore, its price is much competitive than its₹

rivals.

Promotion:

Various marketing promotions and advertisement techniques can be used in positioning

such as:

1. Umbrella marketing : umbrella marketing means that all the soda products

that come under the parent brand name Zevia are advertised together. Customers will

be able to easily identify the brand and its products together. One of the purposes of

umbrella marketing is that it reduces the cost of advertisement.

2. Bandwagon technique : A bandwagon technique can be used as for example

“Canada loves, India will love” will create motivation among the consumers to buy

the product seeing the new features attached to it and comparing themselves with

the ones who are actually consuming it.

3. Ambush marketing : ambush marketing technique can be adopted as

promotions and advertisements can be done at some promotional events. Example

Vidyut Jamwal promote health related campaigns for women, Yoga sessions conducted

by baba Ramdev, Gym openings etc.

4. Association strategy : Association strategies include brand ambassadors, catchy

jingles, powerful emotions etc.

Brand ambassadors: Vidyut Jamwal (famous actor and health enthusiast )

STRATEGY:

Concepts from blue ocean strategy are adopted as it states to discover the uncontested

market space. The Zevia sodas are a complete new set of innovation in the Indian

beverage market and it can be a success if proper marketing strategies are adopted.

STPD Analysis:

Segmentation:

Segmentation of the consumers can be done in the following ways,

1. Demography-

Age : Market segmentation based on different age levels can be done as different age

groups will respond to the product in a different manner.

20-35 Age: Consumers falling in the range in this age group are driven by

emotions i.e. communication with them should be based on lifestyle factor. The drink

will be so designed so it matches with the values of this consumer segment. Focus on

attractive packaging will be more.

36-45 age: Zevia soda is a natural sweetened drink and the largest market share

for it will fall under the extra health conscious people falling under this category. Zevia

soda will focus on minimizing the mix. Of stevia with sugar and a more balanced and

healthy drink will be made.

46-60 age: People suffering from diseases like diabetes, Heart problem etc. fall

in this age group and the drink will be designed on fulfilling the values of this segment

also. Stevia as a natural sweetener will be used for the drink.

Occupation : Segmentation based on occupation.

Doctors: people from the medical industry understand and value the product in

a more technological sense. i.e. Questions are asked frequently by them on how

many tests have the product cleared, is it government approved etc.

Income level : Segmentation based on income level.

Above Rs 30000: consumers falling in this segment will only have the

desire to purchase the product as below this income level a person will not care

to focus on his/her health and would simply buy any drink. Above this category

people value the feature of 85% natural sweetener against the artificial

sweetening agents.

Gender : Segmentation based on gender.

Gender wise women segment is more tilted towards the natural

products hence zevia natural soda has identified the female sector

as its segment.

2. Segmenting on the basis of benefits sought-

It is important to look at diet cola drinkers because it is used as an

alternative soda for many individuals in India.

3. Psychographic segmentation-

Social class : people belonging to the upper medium and upper class has

been identified as a niche market for the product as the kind of health

awareness is seen in these segments of the country.

Lifestyle: this segment gets driven by innovative packaging, basic values

and latest trends. Zevia soda to be launched in India identifies as this as a

major segment of consumers.

4. Geographic segmentation:

Country: Indian consumers have been segmented as they can be one of

the major targets of the company.

City: The product is to be launched in the two major cities of India i.e.

Mumbai and Delhi the segmentation is done geographically.

Wentromm’s segmenting technique:

Figure3: Wentromm’s segmenting technique

Wentromm’s classification is based on the typology of the stakeholders (consumers).

The classification is based on four stakeholders as:

Technology stakeholders

Lifestyle stakeholders

Mass market stakeholders

Technology stakeholders:

The technology stakeholders desires the product only if it matches their need state i.e.

in the case of Zevia soda the consumers are with the problem of cholesterol, diabetes,

blood pressure, thyroid etc.

They are driven by need and a rational approach. The drink should fit their condition

and emphasise to be given on function before food. Expect heavy testing and education

on the product before consumption. Trust expert brand as Zevia is a trusted brand in

the North America.

Lifestyle stakeholders:

This segment gets driven by emotion, innovative packaging and values. Zevia soda

provides innovative packaging by marketing its soda in different packages of different

colours and creating particular values as this segment gets driven by lifestyle factors. A

typical lifestyle stakeholder’s insight: “I don’t need it, I want it-it’s cool/on trend.”

Mass market stakeholders:

This segment does not expect and react to the new changes in the market. Traditional

cola drink will be preferable to them as they are resistant to change. The factors like

taste, value and convenience are most influential. These consumers rely on a mass-

price brand.

Targeting:

Primary targets:

The niche segment of technology stakeholders would be targeted in context to the

features of the product and the profitability of the company.

A niche market of consumers is identified in the form target group as the product will

be highly processed according to the needs of the segment and company compositions.

Needs and wants of the customers to be understood and identified, as on the basis of

demography 36-45 age group people and technology stakeholders are to be targeted.

It is also important to target the segment on the basis of benefits sought as the diet

cola/soda drinkers are in abundance in the country.

Secondary tagets:

Women class which comprises a major segment of the cola/soda drinkers are also

targeted by the company as they would certainly help increasing the brand equity and

the profit margins.

Targeting a niche segment would help the Zevia soda to establish its brand image and

product quality among the selected people as they desire and value the product on the

basis of its composition, ingredients, brand image, market response till date, after

effects and other health related factors.

Positioning:

Positioning of the zevia range of sodas in Indian needs to answer the questions such as

what we make? , what are the features? , where do we make?

Various marketing strategies and advertisement techniques can be used in positioning

such as:

5. Umbrella marketing : umbrella marketing means that all the soda products that

come under the parent brand name Zevia are advertised together. Customers will

be able to easily identify the brand and its products together. One of the purposes

of umbrella marketing is that it reduces the cost of advertisement.

6. Bandwagon technique : A bandwagon technique can be used as for example

“Canada loves, India will love” will create motivation among the consumers to buy

the product seeing the new features attached to it and comparing themselves with

the ones who are actually consuming it.

7. Ambush marketing : ambush marketing technique can be adopted as promotions

and advertisements can be done at some promotional events. Example Vidyut

Jamwal promote health related campaigns for women, Yoga sessions conducted by

baba Ramdev, Gym openings etc.

8. Association strategy : Association strategies include brand ambassadors, catchy

jingles, powerful emotions etc.

Brand ambassadors: Vidyut Jamwal (famous actor and health enthusiast )

Differentiation approach:

Our product Zevia offers the customer with 15 different flavours which any

other competitor like coke or Pepsi is unable to offer

9 out of 15 products of Zevia are caffeine free, thus not having even the slightest

levels of addiction. The other pre-existing brands do not offer such large variety

of caffeine free flavours.

A possible competitor to Zevia zero calorie soda can be Diet Coke offered by

Coca Cola. Here too Zevia has a competitive advantage over the diet coke of

being a zero calorie soda.

In India Pepsi or coke offer us a caffeinated drinks with aspartame as the

sweetener, which is an artificial sweetener, while Zevia uses a natural sweetener

“Reb A”, which is purely a plant extract derived from leaves of stevia plant.

This would prove to be a competitive advantage for Zevia as Indian population

tend to choose natural products over artificial ones.

Coca Cola and Pepsi in India have a perception that it is not a healthy product,

whereas Zevia will come up with a completely different perception of being

healthy, natural and a zero calorie product.

The potential competitors of Zevia in India like Coca Cola and Pepsi give their

customers a carbonated drink with fizz, whereas Zevia Zero Calorie Soda

provides the customers with carbonated drinks with fizz, plus an added

advantage of being healthy.

This product, being a zero calorie product can be used by people having

problems of diabetes, blood pressure, cholesterol, etc., while other sodas/ colas

in India tend to be harmful for such people.

As it has zero glycemic index which no other brand offers..

CONSUMER BEHAVIOUR

Consumer behaviour is the study how an individuals, groups and organisations select,

buy or use and dispose of goods, services, ideas or experiences to satisfy their needs

and wants.

Factors affecting consumer behaviour

1. Cultural Factors

2. Social Factors

3. Personal Factors

CULTURAL FACTORS

Culture is fundamental determinant of person’s wants and behaviour. One must

understand the cultural value in every country to understand how to best market their

existing products. Indian market uses a term called Socio Economic Classifications

(SEC). Which uses a combination of the education and occupation of the chief wage

earner of the house. In case of our product Zevia” A Zero Calorie Soda” it will focus

people from all class from upper upper class to upper middle class as it can be

consumed by everyone.

SOCIAL FACTORS

Social factors such as reference groups, family and social roles affect our buying

behaviour.

Reference Groups are the groups that have direct or indirect influence on

consumer behaviour. In our report our reference group is the aspirational group

who are health conscious and desire to be like their favour actor and actresses.

Here we can choose our

Opinion Leader as the celebrity, sportsmen and athletes who are fitness

conscious and have used these products abroad as they can offer their expert

opinion about Zevia. In our case it is Vidyut Jamwal

According to research Women value connections and relationship, therefore our

Target consumer in our case can be Women as they are the vital part of family

and are important decision makers, so targeting them can be advantageous to

our product.

PERSONAL FACTORS

Personal factors that influence buyers decision are age and stage in the life

cycle, economic and occupation circumstances. In our case as it is a soda so it

will be most popular amoung youth and teenagers.

Personality and Self Concept

Personality is the set of distinguishing human psychological traits that lead to

consistent to environmental stimuli. Zevia is strong on ” Excitement” . Zevia as a

brand has centered on the brand on the evolving lifestyle and need of the consumers.

The prevailing attitude amoung its consumers has always been it’s reference point .

The recent trend of natural being aptly by the brand as it tried to maneuvered through

the prevailing and dominant consumer sentiments of remaining close to natural

product. “Zevia: Zero Calorie Soda” enriched with Stevia(a natural herb) offers 200

times more sweetness than sugar and zero sugar and also many other benefits to health

conscious people.

We can target and position our product within ”LOHAS”, Lohas are the consumer

who worry about the environment want products to be produced in sustainable way and

spend money to advance their personal health and development. In our case LOHAS

are the youth and teenagers.

THE FIVE STAGE MODEL- Buying Decision Process

It is a process done to fully understand customer's buying decision process all decision

in learning, choosing, using and even disposing a product.

Step1: Problem Recognition

Process that starts when the buyer recognises a problem or need triggered by external

or internal environment. In our case its an external environment that include health

issues that have increase due to increasing concern for health and also complex within

the obese people when they see their admirer.

Step2: Information Search

It is used to get all the details about the product , as this product is new to the market

the customer will use "active information search" which include looking for reading

material, phoning a friend, going online and visiting stores to learn about the

product.Information sources will be commercial, public and experimental (which

include FDA test reports about stevia ).

Step 3: Evaluation of Alternatives

As there are many alternatives to this sweetener hence consumers will try to explore

them.

Consumer evaluation will depend upon

trying to satisfy a need

Certain benefits from product solution

As consumer tend to focus on products that offer sought after benefits our product fits

well into this category as apart from being calorie free it is a natural sweetener and has

benefits like zero glycemic index and is non toxic.

Step 4: Purchase Decision

It may depend on

Attributes of others

Unanticipated situational factors

As Zevia is familiar in USA and Canada the consumer purchasing decision will depend

on the Lab reports tests recommendation by FDA(Food &Drug Administration) and

people's view.

Consumer decision to modify, postpone or avoid purchase decision is heavily

influenced by one or more perceived risk. In our case it can be

Psychological Risk

Time Risk

Financial Risk

Step 5: Post purchase Behaviour

After purchase, the consumer might experience dissonance from noticing certain

disquieting features and will be alert to information that support to his or her decisions.

Zevia should ensure

Continuous Customer Readdressals

Ensuring consumer satisfaction by regularly monitoring the product and

changing the product, here we can change the flavour of the product based on

the taste of the customer

Adding value to the consumer by providing promotional offers , discounts etc.

Most important, Not compromising with the quality of the product.

Figure4: Five Stage Model

Value of product to the segmented population:

Packaging is a very important marketing strategy to glamorize product in order

to attract the consumer’s attention. Zevia zero calorie soda comes in 15 different

flavours packaged in cans of 350 ml (12 ounce). The packaging of the cans is

done in such an innovative way that its color symbolizes its flavor in a very

attractive manner, making the product appealing to the segmented population.

The packaging delivers a sense of quality while also reflecting the product’s

brand image by highlighting the core competencies of the product like

“Naturally Flavored”, “No Sugar”, “No Artificial Sweeteners”, and “Zero

Calorie Soda”.This ensures that this product would be of value to the Lifestyle

Stakeholders who are greatly driven by lifestyle factors like emotions and

packaging.

The Technology Stakeholders will be the primary stakeholders for Zevia Zero

Calorie soda in India because this product is widely tested to be a naturally

flavored product. It is also a renowned product having a good brand image in

the United States. With these core competencies, this product would be of great

value to the Technology Stakeholders as no other sodas being sold in India have

such characteristics of being natural, healthy and tasty.

Zevia Zero Calorie soda, with its high brand image in the United States and all

its incomparable advantages will be valued at a high price of Rs. 110 for the

Indian market. Thus it would be of value mainly to this niche market.

Zevia Zero Calorie soda comes in 15 different kinds of flavors, which can be

used to make different products like mocktails, cocktails, desserts, dishes and

floats, thus making wide use in high class cafes, restaurants and clubs.

Zevia Zero Calorie soda, would be of value to women as well, who, as per

studies, consume more colas/sodas than males. This is so because its

composition, natural ingredients, brand image and other health related factors

favor Zevia in having a sure shot upper hand over the conventional colas and

sodas.