Lindsey Newton

December 5, 2014

Background Hoist, a Cincy-made company, has recently made their way into Kroger stores which is definitely cause for celebration! The

problem, however, is that to keep themselves in stores, Hoist must sell 219,000 bottles of their product between 200

Kroger locations in Cincinnati, Cleveland, and Toledo in 2015; about 1,095 bottles per store. The factors that will make this

goal a challenge include fierce competition, a broadly defined target market, lack of awareness and knowledge of the

product benefits, and a lack of general hydration knowledge . There are four vital electrolytes needed for hydration and of

those surveyed, 14% of respondents knew that potassium and sodium were needed for rehydration, and only 6% knew

that calcium and magnesium were needed (Figure 5). Competition is driven by the consumer mindset that “hydration =

Gatorade”. During an experience interview, Rachel (a millennial in Cincinnati) said, “I know that you’re supposed to

prepare for your workouts by hydrating beforehand, but all I know is you need electrolytes.”(Figure 6). Other competitors

such as Sobe Lifewater, Vita Coco, Vitamin Water, and regular bottled or tap water tend to fill the heads of consumers as

well. At least 20% of both males and females observed in Kroger were buying either sports drinks or bottled water (Figure

1, Figure 2). The current target market for Hoist is focused on the millennial age group of 18-35, which makes up about

25% of the Cincinnati population (2010 US Census). This is a very large segment of the population, which is good for sales,

but the consumers can vary greatly in both demographics and psychographics.

Recommendations • Target millennials that are consistently active 2-4 times per week and that are interested in fitness and health products, live in the

Cincinnati area, and shop at Kroger. • Create an experience with the product through the ad; the customer should be able to see themselves using Hoist in whatever they do.

Communicate the value proposition “Hydrate Your Everyday” • Place ads throughout Kroger stores and on Social media (mainly Facebook) to encourage consumers to notice Hoist and learn more about

the brand and the product • Drive consumers to the Hoist website using the ad. Here they will learn the positioning benefits of made in Cincinnati/Cincinnati proud and

a perfectly isotonic formula. • Use language and social media incorporation in the ad to communicate the brand character “Community-Driven, Honest, Social” to the

consumer

Rationale

Hoist’s ideal target consumer would be someone ages 18-35 (millennial). By 2018, nearly 22 million households will be made up of millennials (Keely & Burbank, 2014). These consumers, however do not know about what it takes to rehydrate. Hoist’s main positioning benefit is that the product is currently the only perfectly isotonic drink on the market in the United States, so nothing hydrates faster. Hoist is also made in Cincinnati and supports many Cincinnati community events which is important to our target consumer. The value proposition that should guide Hoist’s marketing efforts is “Hydrate Your Everyday”. Millennials want to be able to have experiences with products (Ott, 2011). By making the value proposition (and marketing campaign) specific to the consumer’s life, the consumer can envision themselves drinking Hoist during their everyday activities. By choosing to make the proposition about the everyday, Hoist is living up to its catchphrase “live a life less ordinary” and differentiating itself from other sports drinks that tend to focus on athletes. Hoist should communicate a brand character of premium, honest, and social. To emphasize this, it is important that Hoist communicate that it is involved in the community as well. When surveyed, 52% of consumers said they had made a purchase from a socially responsible company in the past six months (Nielsen, 2014a). Millennials also like transparency and authenticity and are more likely to endorse a brand they can believe in and trust (Nielsen, 2014b).Social media will Hoist build recognition and trust because about 52% of millennials say they use social media to interact with brands, and 59% will trust a friend’s recommendation of a product (Barton, Koslow, & Beauchamp, 2014). Using an ad in Kroger and on social media will encourage consumers to learn about Hoist and therefore increase their likelihood of purchase (Figure 4). Learning the brand story and product benefits could also increase liking of the brand by as much as 60% (Figure 3). These recommendations will help Hoist will meet their sales requirements. Hoist needs to sell about 1,095 bottles per store in 2015. If they target someone who buys four bottles per week, then that person will buy approximately 210 bottles of Hoist per year. Each Kroger location needs 6 of these consumers to meet the objective.

Millennials make up

25% of the

Cincinnati Population

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Figure I. Positioning Strategy

Perfectly Isotonic

“Nothing Hydrates Faster”

Delay in Hydration

Made in Cincinnati – Support

Cincinnati Community

Not made in Cincinnati

Brand Character:

Community-driven, honest, social

Value Proposition:

Hydrate Your Everyday

Going Contagious Storyboard

Who Grace is a 23 year old recent college

graduate who is just beginning her career as

a marketer. Grace enjoys a variety of fitness

activities, but her passion is running. Grace

fell in love with Cincinnati during her four

years at the Northern Kentucky University,

and she now loves to participate in

Cincinnati traditions like the Flying Pig

Marathon. Grace is very busy, but manages

to make it to L.A. Fitness about four times

per week, spending most of her time training

on the treadmill. Recently, Grace has been

doing the majority of her shopping at Kroger

Marketplace because she likes the ever-

growing natural foods section. Some of her

favorite brands and products include Cliff

bars, Fitbit fitness trackers, and LuluLemon

clothing.

Where The ad should be placed in Kroger stores,

particularly in the natural foods section and

the drink aisle. The consumer will see the

actual product (bottle of Hoist) on the top

shelf of the drink aisle across from the

bottled water. The ad should also be used on

Facebook to reach more potential

consumers and encourage them to visit

Hoist’s website and to buy the product.

How Grace heads to Kroger one evening to pick up some fruits, veggies, protein bars, and bottled water. As

she walks down the drink aisle, the ad on the left catches her eye. She reads through the ad and

becomes intrigued. She pulls out her phone and goes to Hoist’s website. She sees, on Hoist’s

homepage, that a few of her running friends already like Hoist on Facebook. She skims a little more of

the site and decides to try a bottle. On her next run, she drinks Hoist and is able to recover faster and

run just a little farther. She updates her Instagram and Facebook (in the same status) with a picture of

her Hoist bottle sitting on the treadmill, and captions it: “I think I’ve found my new running partner.

#LiftLimits” She begins buying 3-4 bottles of Hoist per week and telling her friends about the product.

What

Brand Story: Hoist is a Cincinnati-proud company started by four college friends with a passion to bring its premium hydration formula, originally used in the NFL, to the everyday individual. Hoist’s isotonic formula combined with the honest, community-driven spirit of the company will help you lift limits in all that you do. Product Story: Hoist is the first perfectly isotonic beverage available in the United States. This means that it contains all four electrolytes needed for hydration (calcium, potassium, magnesium, and sodium) in a formula that has been perfected by scientists to instantly hydrate you. Let our formula, free of added colors and sugars, help you lift limits in all that you do! Ad: Grace knows nothing about isotonic, and doesn’t think that there is a problem with drinking water for hydration. The goal with this ad is to get Grace to notice the brand. This ad shows Cincinnati and running which are two of Grace’s interests. Once she visits drinkhoist.com, she will learn about the brand and the product which will lead to purchasing, liking, and sharing her experience.

219,000 Bottles 200 Kroger Stores

1,095 Bottles per Store

6 Consumers per Store 4 Bottles per Week

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Methodology Research for this project was conducted using both exploratory and descriptive research designs. Secondary data was used in the background as well as to justify some of the marketing recommendations. For the background information, I used primary data from my observations in Kroger, and data from the sample survey that Dr. Raska gave in class about hydration knowledge. To back up many of my marketing recommendations, I used articles from Nielsen and Gallup. I also used articles from The Boston Consulting Group, and Nielsen that were provided to us in class and helped when learning about millennials as consumers. I also used some data from the 2010 Census to find out more about Cincinnati as a market. In order to learn more about why products go viral (and help my recommendations) I used an article from Fast Company. In my rationale I used data from sample surveys that were given by Dr. Raska then provided to us, and primary data from my own experience interviews with consumers.

References

Barton, C., Koslow, L., & Beauchamp, C. (2014). The reciprocity principle: How millennials are changing the face of marketing forever. The Boston Consulting Group. Dishman, L. (2014). Why ideas and products become contagious: The Jonah Berger formula. Fast Company. Keely, L., & Burbank, J. (2014). Millennials: Dispelling the myths. Nielson. http://www.nielsen.com/us/en/insights/news/2014/uncommon-sense-millennials-dispelling-the-myths.html Nielsen (2014a). Doing well by doing good. Nielsen. Nielsen (2014b). Millennials: Breaking the myths. Nielsen. Ott, B. (2011). Marketing to tweeters and their facebook friends. Gallup Business Journal. http://www.gallup.com/businessjournal/146990/Marketing-Tweeters-Facebook-Friends.aspx Raska, D. (2014). Kona Ice: Dream team presentation. Bluezzoon. US Census Bureau. (2010). American FactFinder age and sex county survey: Cincinnati, O.H. http://factfinder2.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ACS_13_1YR_S0101&prodType=table

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Appendix

60%

50%

30%

50%

30%

90%

40%

50%

Married

Buying Healthy Foods

Buying Soda

Buying Sports Drinks

Buying Bottled Water

Looking Around

BuyingOrganic/Natural Foods

Buying Brand Names

Male Behaviors in Kroger

90%

30%

30%

20%

20%

50%

30%

100%

Married

Buying Healthy Foods

Buying Soda

Buying Sports Drinks

Buying Bottled Water

Looking Around

BuyingOrganic/Natural Foods

Buying Brand Names

Female Behaviors in Kroger

Figure 1 Figure 2

Figure 3

Bottom Line: Hoist should place advertisements throughout Kroger that will educate people about their drink, where to find it, and how to share the brand with friends. Out of the people observed, 50% of females and 90% of males were taking their time in the store and looking around. Hoist could also set up sampling in the natural foods section, because 30% of females and 40% of males were purchasing organic foods. Methodology: Twenty people (10 males and 10 females) were observed on November 9, 2014 in the Kroger Marketplace in Hebron, Kentucky. This observation lasted about 45 minutes. The majority of people observed were middle to upper class, married (75%), and estimated to be in their thirties.

Bottom Line: Integrating new brands into marketing course curricula can increase knowledge, consumption, liking, and purchase intentions for the brand. Students who had been exposed to and learned about Hoist through exercises in Dr. Raska’s classes, compared to those who had no exposure to the brand, reported greater knowledge, more frequent consumption, greater liking, and higher intentions of purchasing the brand in the future.

Methodology (for Figure 3 and Figure 4): A convenience sample of students enrolled in Dr. Raska’s Fall 2014 marketing courses (N=110) were recruited to complete a survey via email (78% response rate). Respondents completed the online sample survey from October 27, 2014 through November 21, 2014. The data was analyzed using Excel.

2.81

5.84

0

1

2

3

4

5

6

7

Purchase Intentions

Likl

iho

od

of

Pu

rch

ase

Will exposure to Hoist increase likelihood of purchase?

Not Exposed (n=85)

Exposed (n=25)

*

* Indicates significance of 99% confidence level. (p < .01)

Figure 4

Bottom Line: Integrating new brands into marketing course curricula increases the likelihood of purchase of the brand. Students who were exposed to Hoist in one of Dr. Raska’s marketing course were more likely to purchase it than someone who was not exposed to the brand in class.

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13% 1% 5% 8%

96%

16%

72% 68%

0%

25%

50%

75%

100%

Top

fo

ur

bo

x fr

eq

ue

ncy

How does integrating a new brand into course curricula influence brand-related actions?

Not Exposed (n=85)

Exposed (n=25)

*Top box percent is reported **Top four box percent is reported

15%

4%

14% 14%

4%

6% 6%

12% 11%

14%

0%

2%

4%

6%

8%

10%

12%

14%

16%

Pe

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of

Re

spo

nd

en

ts

wh

o c

ho

se a

ttri

bu

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Which of the following are attributes of an instantly hydrating product?

Bottom Line: Rachel is the ideal target customer with a need for hydration, but she needs to be educated on the benefits of isotonic drinks. Hoist should get her attention through an advertisement at LA Fitness or the Hyde Park Kroger. Rachel says, “I know that you’re supposed to prepare for your workouts by hydrating beforehand, but all I know is you need electrolytes.”

*Indicates vital attribute for instant hydration

Figure 5

Bottom Line: Consumers need to be educated on what attributes make up an instantly hydrating product. The four vital electrolytes for hydration are potassium, sodium, calcium, and magnesium. Of the students surveyed, 14% of respondents knew that potassium and sodium were needed for rehydration, and only 6% knew that calcium and magnesium were needed.

Methodology: This was an interview with Rachel Schilling. This interview took place during a 30 minute lunch outside of our office, Legion Logistics on November 5, 2014.

Methodology: A convenience sample of students enrolled in Dr. Raska’s Fall 2014 marketing courses (N=80) were recruited to complete in class to complete a survey. Respondents completed the online sample survey on September 18, 2014. The data was analyzed us ing Excel.

Figure 6

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