Boost Juice Case Study Marketing Management

SERVICES MARKETING MKTG3311 SEMESTER 2 2014 SERVICE CASE STUDY BOOST JUICE REPORT BY: COURTNEY LOGUE IMOGEN PREVOST DORIS RADICEVIC PHILIP SCHEDLBAUER STEVEN SMITH Contents: Company Background MKTG3311 BOOST JUICE SERVICE CASE STUDY Introduction Business Model Target Customers Customer Contact/Involvement/Role Learning and Experience Contribution Major Selling Points Competition Other Information Service Blueprint Blueprint Theory Service Blueprint Screenshot Act One Act Two Act Three Act Four Act Five Act Six Act Seven Act Eight Service Standards and Targets Gap-Model Analysis Company Background: Introduction: 2 MKTG3311 BOOST JUICE SERVICE CASE STUDY Boost Juice is an international chain of retail outlets that specialise in selling fruit juices and healthy snacks. Boost juice was originally started in 2000 in Adelaide, South Australia by Janine and Jeff Allis. Both Janine and Jeff had never run a business before, and decided to attempt a start up after a visit to the United States of America in 1999. On this visit, they had found that there was a market for “Good for you, healthy products”, but changing the business model to a franchisee system to connect the community to the brand. From their humble start in 2000, Boost Juice has expanded to over 300 locations in 15 countries, with licenses in another 8, Boost Juice is still growing after 14 years of operation (Boost Juice Australia, 2014). Boost was originally conceived as an idea in 1999 by Janine and Jeff Allis. On a trip to America, they discovered a need that Australia was lacking, that of “Good for you, healthy products” that were easily accessible. America had businesses such as Jamba Juice and Zuka Juice, both of which provided healthier options than soft drinks and flavoured waters, but the Allis' disliked the corporate run business model, being a firm believer in community and small businesses, and as such decided to operate in a franchisee model. This gave them the opportunity to manage all of the stores whilst others owned, operated and gained a profit from them. In 2008, Boost Juice partnered with Nestle to launch a range of pre-packaged smoothies for supermarkets, as well as some speciality stores stocking their range of healthy snacks. Business Model: Boost Juice has enjoyed massive success since its conception in 2000, becoming the largest juice and smoothie chain in the southern hemisphere and operating stores in more than any other juice bar in the world (A bit about Boost Juice Bars 2011). With a group turnover exceeding $AUD 120, 000, 000 per annum (Boost Juice Bars 2011), Boost can contribute part of its success to their franchise business model. Boost Juice commenced franchising in 2001 and experienced rapid growth, reaching 100 stores in 2004 (Boost Juice Bars 2011). Through continually refining and developing its franchise model, Boost has accumulated 163 franchisee and 17 company owned stores in Australia (Boost Juice Bars 2011). In 2006 the company entered the international market place utilising a localised product approach coupled with customised marketing to enjoy global profit gains (Why Pick Boost? 2014). Boost Juice Bars implemented and maintained an aggressive growth strategy, always remaining focused on their mission statement “to become one of the worlds most famous and loved brands” (A 3 MKTG3311 BOOST JUICE SERVICE CASE STUDY bit about Boost Juice Bars 2011). With this determination, Boost had established a brand awareness level in Australia of 94% within five years (A bit about Boost Juice Bars 2011). This growth strategy has aided the companies’ franchise development by locating stores in most major shopping centres and tourist destinations in Australia and worldwide. Boosts’ growth and success has also been attributed to the recruitment of suitable franchise partners. Founder of Boost Juice, Janine Allis recruits “like-minded people who share our enthusiasm and energy and believe that for Boost Juice to be successful, everyone involved must share the passion and rewards” (A bit about Boost Juice Bars 2011). Target Customers: The wellness retail category is continually growing and adapting worldwide. As health concerns surrounding consumers’ dietary intake are becoming a prominent issue in western countries, companies in the Wellness Category are seeing massive growth (Boost Juice Bars 2011). Boost Juice is renowned for their juices and smoothies, while also offering consumers a variety of healthy snacks. All the products sold by the company are branded as a healthy alternative to fast food. As a result of this successful marketing and branding, Boost Juice products satisfy customers who seek a ‘natural’ and ‘healthy’ drink on the go. There are two main target consumers of Boost Juice; the first target consumers are young people. Boost successfully targets young people by advertising themselves as trendy and cool (Boost Juice Bars 2011). These consumers are attracted by the popular style and frequent Boost easily because of their accessible store locations. The second target consumers of Boost Juice are health conscious individuals. By offering consumers a ‘healthy alternative’ to ‘unhealthy’ fast food products, Boost effectively taps into this major market group and has created a variety of products that cater to these consumers wants. Customer Contact/Involvement/Role Learning and Experience Contribution: 4 MKTG3311 BOOST JUICE SERVICE CASE STUDY Boost Juice pride themselves on customer involvement and experience. The brand is based on the entire ‘Boost Experience’, which occurs whenever a customer enters a store (Why Pick Boost? 2014). Boost describes this experience as a “combination of a fantastic product, served by positive and energetic people who greet you with a smile and are polite enough to call you by your first name” (A bit about Boost Juice Bars 2011). Customer involvement is achieved through the exchange of names, while customer contact is attained through staff interactions. The bright and colourful stores always play fun music, creating a positive experience for all consumers. By creating a fun and colourful atmosphere in any location, Boost positions themselves as fun and fresh, which is further reinforced with various words positioned throughout the store such as ‘love life’, ‘fun’ and ‘healthy’. The stores décor and atmosphere are created to attract consumers pre purchase and provide them with a cheerful experience they will remember post purchase. Boost also implements a variety of programs and promotions to further customer contact and involvement. The VIBE Club is a loyalty program encouraging consumers to purchase products by offering a free smoothie or juice after a specific number of purchases. The VIBE Club also makes consumers feel appreciated and individual by offering cardholders a free drink on their birthday, promoting a positive service experience. Another strategy utilised by Boost to involve customers is their unique customer relations process. The “Boost Guarantee” asks customers to email feedback to the company with every email personally responded to and followed up with the relevant store (Boost Study Kit 2012). Major Selling Points: Boost Juice's major selling points are focused on convenience, health and taste. As stated on their “Why Pick Boost” page, Boost states that their product is made on site in front of you, using real ingredients. This goes to set aside all consumer worries about products being pre-made or not using fresh ingredients. It also allows customers to feel as though they are involved with the service, rather than just being given the final product. Boost also offers a varying amount of health benefits, with their dairy based smoothies having high calcium content, additional boosters of protein and vitamins, as well as the general health benefits given by juice over other drinks such as coffee or soft drink. Finally, they boast that their taste is second to none, and offer custom drinks to suit anyone’s tastes. This combination of selling points makes them stand out above the rest in their market. Competition: 5 MKTG3311 BOOST JUICE SERVICE CASE STUDY Boost Juice in the juice and smoothie market are mainly opposed by Java Juice, New Zealand Natural and independent retailers and cafes. With a reported market worth over 300 million dollars in 2014 (IBISWorld, 2014) and with Boost Juice taking a reported $124,225,460.35 in the 2009/2010 financial year (Boost Juice, 2011), it is clear that Boost Juice is the leader in the juice and smoothie market in Australia. The main difference between Boost and Java Juice is in its production, where Java Juice produces solely juice and fruit smoothies, whereas Boost also focuses on snacks, dairy free alternatives and additional 'boosters', such as protein or energy. This wider variety of products, plus more stores in convenient locations means Boost holds a larger market over Java Juice. New Zealand natural itself offers juice and smoothies, but also sells ice cream and sorbets as their main product, leaving juice as less of a sale point. This also means they have less of an impact on competitors in the juice and smoothie market, and Boost has capitalised on this, leaving them clear winners. Other Information: Boost has not been entirely successful, with a failed experience in New Zealand in 2006. During this time, a single franchisee owned multiple stores over New Zealand, but due to fast expansion and lower than expected sales, the franchise was sold to New Tank, a company that also operates a juice bar. These stores were then re-branded as Tank Juice, and no further sale has been made (Bond, 2006). This however has not overshadowed their extensive success throughout Australia and other nations around the world. The business itself has won a multitude of awards in Australia, ranging from the BRW Fastest Growing Franchise in 2005, to the winner of the Franchise Council of Australia's International Franchise award in 2010, plus many other awards from magazines and associations (Boost Juice, 2011). These just show off how wildly successful and popular the formula is. Service Blueprinting: 6 MKTG3311 BOOST JUICE SERVICE CASE STUDY Blueprint Theory: According to Zeithaml, Bitner & Gremler (2006) a service blueprint is a ‘tool for simultaneously depicting the service process, the points of customer contact, and the evidence of the service from the customer’s point of view’. A service blueprint specifies in detail how a service process is constructed (Wirtz, Chew & Lovelock, 2012). The service blueprint includes two main focus points “frontstage” and “backstage”. “Frontstage” is what is visible to the customer throughout the process, while the “backstage” is what happens out of sight. A service blueprint helps in identifying all the activities involved in creating and delivering a service (Wirtz, Chew & Lovelock, 2012). Service processes require the participation of the customer, either to a low, medium or high extent (Wirtz, Chew & Lovelock, 2012) as a result the service process itself cannot actually take place without the customer, for example a hairdresser cannot cut a customer’s hair if they are not physically present. Due to the fact that the service process is dependent on the customer and their participation can lead to difficulties in having an efficient and effective service process as the customer’s contributions can only be influenced by the provider up to a certain extent (Fliess & Kleinaltenkamp, 2004). This is why the use of a service blueprint can be extremely useful. A service blueprint allows the provider to take a step back and view the service process in its entirety; it also allows them the chance to go through the process step-by-step to see the level of interaction required by customers and any potential fail points; in both the “frontstage” and “backstage”. There are any situations where a service blueprint is ideal, for example when developing a new service, market testing, modifying the service process, developing service recovery strategies or when managing reliability (Blueprint a Service, 2011). There are countless benefits to using a service blueprint including distinguishing between “frontstage and “backstage”, explaining the interactions between customers and staff members at each step and the support provided by “backstage” activities and systems, it can also help to illuminate the provider on steps throughout the process where customers have to wait (Wirtz, Chew & Lovelock, 2012). The key benefit however of a service blueprint is its ability to identify potential fail points in the creation and delivery of a service. This allows the provider to take preventive measures and fix the issue. Nevertheless, there is a drawback for the use of service blueprints. Service blueprints are commonly used with a short-term focus and as a result can lead to the wrong response. Baum (1990) states that 7 MKTG3311 BOOST JUICE SERVICE CASE STUDY service blueprinting is a major effort and should focus on optimising value for the customer throughout the whole process rather than a single step where a known fail point is. There are nine components within a service blueprint (Wirtz, Chew & Lovelock, 2012); 1. Service standards for “frontstage” activities 2. Physical evidence for “frontstage” activities 3. Main customer actions 4. Line of interaction 5. “Frontstage” actions by employees 6. Line of visibility 7. Backstage actions by employees 8. Support processes involving other employees 9. Support processes involving information technology It is important to note that due to the nature of the service provider selected (Boost Juice) there are overlaps of physical evidence and support processes and supplies at each stage of the blueprint. This is due to the open plan design, layout and appearance of all Boost Juice stress. This can also be noted for Fails and Waits, as each stage in the Boost Juice service process affects the other. 8 MKTG3311 BOOST JUICE SERVICE CASE STUDY Service Blueprint Screenshot: Acts: 1. 2. 3. 4. 5. 6. 7. 8. Arrive at Boost Look at Menu Stand in Line Order Drinks Payment Wait for Order Receive Drinks Leave Front Stage Activities:          Arrive at store Legible and clear menu Dietary requirements noted Wait in line Ability to see drink size options Payment transaction Ability to view employees making order Wait for name to be called to collect order Exit store Physical Evidence:        Music Dishes that can be seen by customers Blenders in use Staff available to assist customers Organised lines to order Validate payment Preparing blenders with ingredients Line of Visibility__________________________________________________________ Support Processes and Supplies:         Supplies of fresh produce Food storage Staff training Working equipment Menus are adequately designed Stock of produce Stock of cups, straws and lids Software upgrades for the till Potential Fail Points (F):  Sold out products  Confusing menu  No staff member at till  Music too loud  Insufficient cash for change  Bill accuracy  Excessive wait for order  Given wrong order Backstage Activities:     Adequate staff to serve Considerations of drink prices, calories and size options Knowledge of menu items Till training Identifying Customer Waits (W):  Large wait in queue  Lengthy menu  Large number of customers cluttering store space  Confusion on menu  Technical issues with bill  Time to wait for order 9 MKTG3311 BOOST JUICE SERVICE CASE STUDY Service Standards and Targets: The final step in developing a service blueprint is to set service standards and targets. These standards and targets are developed through discussions with customers and frontline employees to help in determining which attributes of the service process are important to customers at each step (Wirtz, Chew & Lovelock, 2012). Any and all service standards and targets must be measurable to ensure their effectiveness and progress and most importantly achievable; to not only motivate staff but to delight customers (Wirtz, Chew & Lovelock, 2012). In terms of boost their service standards and targets are very similar across all stages of the service blueprint. Their service standards and targets are;  To ensure a quick service  Focus on convenience (similar to a fast food chain)  Quick queue waiting times  Reflect customer expectations; this includes having plenty of menu options to choose from and the ability to customise your order, a high level of customer service interaction with fun and friendly employees and to provide value for money  Achieving a desired level of service which involves responding to customer enquiries and promptly and professionally, having a process of quick and easy payment to highlight focus on convenience, and to provide appetising drinks  Provide a product of high quality- great taste, using fresh ingredients  Satisfy customer’s needs and expectations in terms of the service process and the product Gap-Model Analysis: 10 MKTG3311 BOOST JUICE SERVICE CASE STUDY A gap model analysis is implemented yet effective tool that is designed to identify the ‘gap’ between your current situation and the future state that the organization wants to achieve. A gap model analysis is also designed to help identify the tasks that are required to close the gap between the current state and the desired future state. There are three steps in performing a effective gap model analysis. Step 1: identify desired future state Step 2: analyze the current situation Step 3: identify how to best bridge the gap between the current sate and future state. Ordering process The ordering process defined as a communications gap and presents a potential problem that can result in incorrect orders being conveyed which can be further be hindered by inadequate knowledge of staff members when queried. Boosts goal is to as close to 100% of orders correctly placed. In their current state there are several factors that may potentially keep boost from reaching this goal. Factors There are two factors that contribute to the gap between the current and futures dates regarding the ordering process. Firstly the menu can be tricky to read and to interpret. Customers that are unfamiliar with boost and their menu may have difficulty knowing what is in each drink and whether or not it meets their dietary requirements. The second factor is the potential for employees to not be able to answer any queries the customers may have requiring ingredients and dietary requirements. Proposal There are two potential reasons for a customer to misinterpret the menu. Firstly is the individual customers ability to read the menu. For customers that have trouble with there vision, the sizing and font of the menu can cause them to order something that they don’t actually wont or cant actually drink due to dietary requirements. To solve this problem boost should preview different menu designs on a variety of subjects to determine which style and font size is best suited for those with vision impairments and those without. Boost should then ensure that the chosen menu layout communicates what is intended. The other cause for misinterpreting the menu is confusion in reading the menu. Some new customers may have trouble understanding the menu, including which drinks are dairy free, what extras are available and the cost of these extras and which drinks contain certain ingredients. Creating a menu layout that is simpler to read and understand is the best way of closing the gap. To determine what is most effective boost should also test the proposed new layout option on a wide array of customers and ask for feedback. 11 MKTG3311 BOOST JUICE SERVICE CASE STUDY The second big factor in the gap in the ordering process is the potential for employees to not have enough information or knowledge to answer any quires. To incidents where this occurs to a minimum, two things can be implemented. Firstly is to ensure each employee has extensive knowledge of each drink including, its ingredients, whether it contains dairy or not or if it contains any common allergens. Thorough training and testing can achieve this and by having spot evaluation to ensure each employee can maintain and retain the required information. This can be further improved by aligning current incentives to increasing employee knowledge on all aspects of the products. To further insure employees have all the information required, boost can also create a simple yet detail fact sheet that contains all the information that is needed to answer any enquires regarding there products. Excessive wait times for orders Excessive wait times a characterized as a delivery gap and remains one of the biggest problems for boost juice. Ideally boost juice would decrease the amount of time a customer has to wait for their order to the bare minimum. In boosts current state there are several areas that can contribute to excessive waiting times. Excessive wait times a characterized as a delivery gap Factors There are several factors that can contribute towards the gap experienced between the current and future states. There is a risk that a customer receives their order after a customer that ordered after them. This causes customers to become agitated due to the mix up and inefficacy of the order making process. Another potential cause is the competency of the employees. Having employees that are not correctly trained and do not have a sufficient knowledge of drink recipes can severely increase the wait time for a specific order. Proposal To help close the gap regarding excessive waiting times, several changes can be implemented. To avoid pushing orders in front of others resulting in customers receiving orders before other customers that have ordered before them, boost should implement an effective order display system. The main cause of this problem is the incorrect display of orders. For example orders may be temporarily misplaced or incorrectly displayed in front of others, this can result in a longer then necessary waiting time. By introducing the correct technology By implementing a more efficient and effective order system, such as computerizeddisplay, boost can decrease the amount of mix-ups that occur further helping to decrease waiting times. To combat employee incompetency, boost must review and if necessary change their employee screening and training methods. Screening employees and identifying which candidates are subtle for the job is vital in decreasing waiting times. By allowing candidates that show no interest in improving work related skills in the future slip through the cracks, boost is putting customer satisfaction at risk. Boost should also implement 12 MKTG3311 BOOST JUICE SERVICE CASE STUDY longer periods of on the job training. This will help future employees become more adept at remembering drink recipes and faster at completing orders. Supply levels and quality Supply levels and quality is another delivery gap due to the fact that Ensuring that each boost franchise has adequate supplies for each business day and guaranteeing that the ingredients used in their product stay fresh and to the highest possible quality can offer a significant stumbling block to the effective service delivery to the customer. Boosts goal is to complete each business day with out running out of supplies whether it is through sufficient supply delivery or through maintaining ingredient freshness throughout the day. Currently there is potential to not fully fulfill this goal through 2 two key factors. Factors There are two factors that that contribute to the gap between boosts current state and it future foal state regarding supplies. The first and most important factor is the delivery schedule and efficiency. Ensuring that boost has a reliable and trustworthy delivery system in place is extremely important. Without out this boost runs the risk of not receiving supplies on time, receiving damaged supplies or not receiving the correct amount of supplies. The second factor is maintaining the freshness of supplies so that they are suitable for consumption. Having equipment, mainly refrigeration that breaks down regularly or is inefficient can severally affect supply levels from a day-to-day perspective. Proposal Delivery of supplies as mentioned above can falter in three different ways, incorrect quantities, damaged supplies and late or mistimed deliveries. By incorrectly ordering supplies boost can either run out in the middle of service or order too much and have it go to waste. To prevent this boost should always prepare busier then average day. Running out of a product is far more detrimental and costly then having to let some supplies go unused. To prevent damaged deliveries and late deliveries boost must be very diligent in what delivery service they employ. If choosing to use a external service boost must ensure that they have exceptional references and a good history in the areas in which they operate, another option is to create a in-house delivery system. This entails the creation of new depart whose sole responsibility is to mange the delivery of supplies to each franchisee in each state. This offers the advantage of being able to oversee the whole process and the ability to identify where things may go wrong in the future. Keeping supplies at a high quality while in storage is also extremely important. Having refrigerators breaking down is an issue that must be prevented. Boost implementing a regular maintenance schedule of equipment is 13 MKTG3311 BOOST JUICE SERVICE CASE STUDY the best way to prevent any unexpected breakdowns. Boost should also implement a regular replaced policy to ensure that each refrigerator works at maximum efficiency for the longest amount of time. Conclusion: 14 MKTG3311 BOOST JUICE SERVICE CASE STUDY References: Boost Juice Australia. 2014. About Boost Australia. [ONLINE] Available at:http://www.boostjuice.com.au/about. [Accessed 12 September 14]. Talking Retail. 2008. Nestlé and Boost Juice Bars launch Boosted Smoothies range. [ONLINE] Available at: http://www.talkingretail.com/products/product-news/9253-nestl-and-boost-juice-barslaunch-boosted-smoothies-range.html. [Accessed 11 September 14]. Boost Juice Australia. 2011. Boost Juice Bars: International Franchise Opportunity. [ONLINE] Available at: http://www.boostjuice.com.au/wp-content/uploads/2011/09/International-Boost-andIndustry-Overview-Sept-2011.pdf. [Accessed 16 September 14]. IBISWorld . 2014. Juice and Smoothie Bars in Australia Market Research. [ONLINE] Available at: http://www.ibisworld.com.au/industry/juice-and-smoothie-bars.html. [Accessed 16 September 2014]. Bond, G, 2006. Boost finds fresh owner in New Tank. New Zealand Herald, 10 May 2006. Boost Juice Australia. 2011. National Awards. [ONLINE] Available at: http://www.boostjuice.com.au/national-awards. [Accessed 17 September 2014]. A bit about Boost Juice Bars, 2011. Available from: <http://www.boostjuice.com.au/wpcontent/uploads/2011/09/A-Bit-about-Boost-2011.pdf>. [17 September 2014]. 15 MKTG3311 BOOST JUICE SERVICE CASE STUDY Boost Juice Bars, 2011. Available from: <http://www.boostjuice.com.au/wpcontent/uploads/2011/09/International-Boost-and-Industry-Overview-Sept-2011.pdf>. [17 September 2014]. Boost Study Kit, 2012. Available from: <http://www.boostjuice.com.au/wpcontent/uploads/2011/08/A4173_BBB_Study-Kit_2012_v1.pdf>. [17 September 2014]. Why Pick Boost? 2014. Available from: < http://www.boostjuice.com.au/why-pick-boost>. [17 September 2014]. Blueprinting a Service. (2011). [Blog] Dr Brian's SmartaMarketing Blog Number 1. Available at: http://smartamarketing.wordpress.com/2011/05/03/blueprinting-a-service/ [Accessed 22 Sep. 2014]. Fliess, S. and Kleinaltenkamp, M. (2004). Blueprinting the service company: Managing service processes efficiently. Journal of Business Research, 57(4), pp.392--404. Wirtz, J., Chew, P. and Lovelock, C. (2012). Essentials of services marketing. 2nd ed. Singapore: Pearson. Zeithaml, V., Bitner, M. and Gremler, D. (2006). Services marketing. 1st ed. New York, N.Y.: Irwin. 16

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Case Study Of Boost Juice Bar

325-104Principles of MarketingCase AnalysisofBoost Juice BarsTABLE OF CONTENTS1. Table of Contents 22. Executive Summary 33. Overview of The Boost Juice 44. The External Environment and recommendation 4-65. Product and recommendation 6-86. Promotion and recommendation 8-107. Place and recommendation 10-128. Price 12-149. Conclusions 1410. References 15-16Executive SummaryBoost juice Bars have been a growing success since they opened in 2000. Although there are other competitors, Boost manages to stay in front by augmenting and extending their products. They segment and choose target market to achieve most effective advertising and maximise sales. Boost Juice is a convenience good, currently in the maturity phase of the product life cycle with strong brand equity and brand loyalty. They differentiate in augmented layer with its well known brand, bright packaging and convenience. The promotion achieves strong awareness by changing with social trends, having a colourful, engaging environment and successful campaigns. Boost is now expanding not only in Australia but also overseas. Their stores are small, colourful and strategically located in high foot traffic areas. They now distribute their goods in supermarkets as well as the stores. As boost juice is in maturity phase of PLC is has chosen a stability pricing objective.

OVERVIEW OF BOOST JUICEBoost Juice, offers healthy, fast drinks in Australia and was established in 2000. Boost Juice is the fastest growing fruit juice bar in the southern hemisphere, founded by Janine Allis in Adelaide (Wren, 2005). Boost Juice is growing rapidly as an amazing retail case, turning over $90mill a year with over 3000 staff members (Light, 2006) expanding from the first founding juice bar in Adelaide in 2000 to over 200 stores world wide.

There are ranges of great tasting juices or smoothies sold by Boost which offers healthy convenience and the augmentation of various products also enhances the satisfaction of the consumers' needs from different groups.

THE EXTERNAL ENVIRONMENTVarious juice bars are popping up all around the market and Boost faces a large number of competitors such as Bubble Cup, Tropicana juice, Minute Maid juice and Sunny Delight. Some of them may own similar recipes and ways to make their products.

As a competitor, Tropicana Juice bar provides a combination of special ingredients, which offers customers a "natural high" and also a reasonable price (Katsudon, 2007).

The brand Bubble Cup is not as healthy as other fresh natural juice bars but many retail stores exist, it is quite popular among the young people due to its cheap price as well as various tastes.

Boost Juice implements demographic, psychographic and behavioural variables as a basis to select its target market. People who prefer to have quick, fresh and nutritious juices...

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