Kool-Aid - Most Famous Brands in Children Drinks Market Kool-Aid is one of the largest and most famous brands in children drinks market. The brand is operating under the umbrella of Kraft food and is manufactured by Kraft’s Mexican subsidiary. The drink was first developed by Edward Perkins, and through constant experiment by Edward and his wife, they discovered that if they wanted to reduce the cost of the drink they will have sell it in the powder form, and not in the liquid form. The brand was later sold to General Foods in 1953, and then to Kraft food. (Kraft Food, 2010) Kraft Food promotes Kool-aid through a mixture of advertising and public relations.
It celebrates Kool-Aid days to promote the brand. A mascot is also used to promote the product. The name of the mascot is Kool-Aid man is very famous among young children. Kool-Aid has recently diversified into other products, such as ice-cream bars, jammers, fizzy drinks and hair dye. The effective use of advertising and public relations is used to make sure that brand sustains its distinct position in the market, and brand name is sustained and is positioned effectively among the various brands owned by Kraft Foods.
The product fits very well into the existing product line. It has a diversified product mix that ensures that it is hedged against uncertainty. Therefore, it can enjoy a safe position in the market without worrying about how a plummeting demand in its fruit juices will affect the overall position of the business, as it does not have all its eggs in one basket, instead it has its investment in other sectors to cover up the loss in one sector against the profits or booming in the other.
In the recent years, Kraft Foods has adopted the policy of constant growth. For this, it has taken up global organization structure. This strategy means that the company needs to show its presence in the market and in different sectors. It needs to show its presence everywhere. This is only possible if the company invests into various different sectors and various different products and different brands.
Kool-Aid is one of the many brands that are under the umbrella banner of Kraft Food. This will make sure that this brand will enable it climb ladders to grow fast and expand which is the main aim of Kraft Food policies. Market segmentation is a technique that is used by firms to divide their target market according to different characteristics that they have in common. Many firms in the recent years have found it more profitable to first identify a market segment and then to base their pricing and promotion policy on the basis of the characteristics of market segment.
An alternative to market segmentation is mass marketing which involves using mass media such as TV and radio and make a random pricing and advertising policy, hoping that the product will sell itself. However, this strategy is expensive and many firms are shifting away from this policy and adopting a marketing segmentation approach finding it easy to use and more profitable. (Daft, 1994) As we know that Kool-Aid is a brand for kids, therefore Kool-Aid can divide kid’s market into various different segments.
These segments can be: Age: Age is one of the factors in which Kool-Aid can divide its market. It can introduce different types of drink which are famous among infant, young children and young adults. There will be different flavors of a drink each targeting different segment in the market. Occasion: It can also develop drink for different occasions. For example, it can develop an energy drink that will be targeted towards school children, who need more energy to cope effectively between their school and sports.
It can also develop drinks for different occasions such as party drink, daily drink and drinks for other occasions. Demography: As we know that people and cultures differ in terms of what they eat and what they like, It can be exploited by Kool-Aid to divide its market among various different culture. For example, there can an Indian flavor of Kool-Aid drink, America flavor etc. This will be to attract children of different ethnicity to Kool-Aid. It will also help Kool-Aid in its policy of global expansion. This will help the product to enter into various markets and regions.
It will be effective in developing regional growth policy of the firm which will yield more profits for the firm and will raise its market share. Young and Old: Kool-Aid can use this technique in order boost it sales and enhance its profits. This can be done by developing a product line which will be targeted towards the older people to complement its products in the children market. This will make the brand more popular and hence it will be able to make more sales.
There are also many cultures in which alcoholic drinks are not preferred. Hence, if Kool-Aid can make strides into these cultures, it will not only help Kraft Food achieve growth in the global market, but it will also achieve another aim which all businesses try to pursue, i-e to make more and more profit. These were some of the ways in which Kraft Foods can segment the market for its products. This is really important in the growth of the firm and will enable it to pursue the current organizational policy.
Hence, the firm can rely on market segmentation to align the brand with the organizational policy and structure. We can also safely conclude from the above discussion that by dividing the market into different segments, it will help the firm achieve dual objective, first, that the company will be able to meet its organizational and branding policy of growth and going global. Secondly, it will help Kraft Foods to earn more profits and hence it will hedge Kraft Foods against uncertainty by diversifying into different markets and hence maximizing the potential of the company in terms of profits.
References: Richard L. Daft. (1994). Management. The Dryden Publishing Kraft Foods. (2010). Kraft Foods Official Website. Retrieved on 23 July 2010. http: //www. kraftfoodscompany. com/pages/welcome. aspx