A) Executive summary

Company History:
Odwalla Inc. is an American food product company that sells fruit
juice, smoothies and food bars. It was founded in Santa Cruz, California in 1980
and is headquartered in Half Moon Bay, California.
Youthful, hip, and fresh, Odwalla, Inc. went from backyard juicer to big
business faster than you can say 'Strawberry C Monster.' While an E.
coli scandal in 1996 squelched its explosive growth, the company's openness in
response to the crisis, won it kudos and it remains today one of the country's
leading brands of fresh juice. Other popular varieties of its 'Juice for Humans'
include Mango Tango, Femme Vitale, and Serious Ginseng. In 1997 Odwalla
converted most of its delivery trucks to run on compressed natural gas, for which
it won a Clean Air Award from the American Lung Association.

Orange Juicing Origins

In 1980, 25-year-old George Steltenpohl and two fellow musicians, Gerry
Percy and Bonnie Bassett, were in Santa Cruz casting about for ways to make
money without much capital. They also wanted to contribute something positive
to their community. A business guidebook gave them the idea of selling fruit
juices and thus Odwalla was launched in a shed in Steltenpohl's backyard in
September 1980.
The company's name came from a character in an Art Ensemble of
Chicago song-poem called 'Illistrum.' Odwalla delivered the 'people of the sun'
from the 'gray haze.' The group set out to do the same with a secondhand, $225
juicer and a 1968 Volkswagen van. Local restaurants were the first clients for the
fresh-squeezed orange juice.
Business was brisk. The company was incorporated in California in
September 1985. It expanded into San Francisco in 1988. Steltenpohl, who
earned a degree in environmental science from Stanford University, attributed
Odwalla's success to the fact that consumers were becoming more quality-
conscious in general. In fruit drinks, this translated to the taste, nutrients, and
enzymes available only in nonpasteurized, fresh juice. This utter reliance on
fresh produce left the company somewhat at the whim of nature, though, and
subject to unexpected losses.
In 1992, Inc. magazine reported on the pride and passion that rallied its 80
employees around the product. The company kept workers informed about the
juices' nutritional benefits and involved them in taste testing and product naming.
A pint of juice (two for drivers) was part of the daily salary. The company
marketed about 20 different types of juices at the time, which sold for about
$1.50 to $2.00 a pint.

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Into the IPO Zone in 1993
Steltenpohl aimed for more than simple enthusiasm through
empowerment. 'If you can take wage earners and instill an entrepreneurial drive,
that translates into much greater productivity,' he told Nation's Business. People
were essentially trained to manage themselves, he said. Employees could also
design their own jobs to an extent. Corporate headquarters a couple of blocks
from the surf in Davenport, California also was considered a motivator.
Odwalla operated 35 delivery trucks in 1993, when sales were about $13 million
a year. It invested in state-of-the-art hand-held computers for its drivers, who
served as de facto PR reps as they escorted the juice along the 'cold chain' to
the 'O-Zone'--the company's distinctive in-store coolers.
The company launched its initial public offering (IPO) in December 1993, when it
had slightly less than 200 employees. The RvR Securities ('risk-versus-reward')
arm of San Francisco investment bank Hambrecht & Quist Inc. had begun
investing in the company in 1992, acquiring a 16 percent stake. The group was
impressed by Odwalla's strong customer loyalty and its distribution network.
Soon after the IPO, the company expanded into the Pacific Northwest via the
acquisition of Dharma Juice. It then bought Just Squeezed, based in Denver.
In 1994, Odwalla moved production to a renovated plant in Dinuba,
California surrounded by produce fields. It moved its corporate headquarters to
Half Moon Bay, California the next year. Odwalla by then dominated Northern
California's fresh juice sales, holding half the market. Its products were sold in
1,400 locations.
Odwalla began selling bottled water in the mid-1990s. It was supplied by
Idaho's Trinity Springs, whose aquifer held water carbon dated from the Stone
Age, 16,000 years ago. This new line was very much the opposite of its highly
perishable, unpasteurized fruit drinks. Water did not require refrigeration and
could be sold in more outlets, offering a distinctive growth opportunity.
Revenues for fiscal year 1996 were $59.2 million. Odwalla supplied 4,000
locations in seven states (California, Colorado, Nevada, New Mexico, Oregon,
Texas, and Washington) and British Columbia. Its largest customer was the
Safeway grocery chain. The natural foods market was growing at a rate of 25
percent a year. Steltenpohl estimated that the company would reach $100 million
in sales around 1999. He and co-CEO Stephen Williamson told shareholders:
'Our objective, our passion, is to lead the fresh beverage revolution.' It spent
heavily to get on Texas shelves in October 1996. Odwalla was on the verge of
becoming a national brand.

1996: Disaster and Mitigation

As part of its sanitation process, the company cleaned its fruit with a
phosphoric acid wash and whirling brushes. But this failed in October 1996. An
outbreak of food poisoning caused by E. coli 0157:H7 killed a toddler in Denver
and sickened 66 other people in the West, and the problem was traced to

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Odwalla apple juice. Pure apple juice accounted for a tenth of the company's
revenues; it also was used in blended drinks, which accounted for a majority of
its business.
Investigators speculated that Odwalla may have been sent fallen apples
(or 'grounders') that had come into contact with animal feces (the bug lives
primarily in the digestive tract of cattle). Or it may have come from carrots
harvested from the earth. The Seattle Times reported that Odwalla's sanitation
was substandard in the week the tainted juice was produced.
Odwalla officials stated that they believed this strain of E. coli, only discovered in
1982, could not survive in cooled, acidic apple juice. The microbe appeared to be
evolving. Steltenpohl pointed out that it also could be spread on fresh lettuce.
Even minuscule amounts of the germ could spread infection. This was the same
virulent pathogen that in 1993 had killed three people in Washington State who
had eaten insufficiently cooked hamburgers at the Jack-in-the-Box chain.
Odwalla responded by recalling its juices containing apples or carrots,
which were processed on the same line. It offered to pay medical bills for
consumers who the juice made ill. The public relations problem was serious. As
Steltenpohl later toldForbes, 'Children's health problems are ranked as the worst
thing that can happen to a company.' Damage control took many forms. Aside
from holding press conferences and setting up an 800 number hotline, Odwalla
used the Internet to disseminate information about the health problem and
Odwalla's response to it. Edelman Public Relations had a web site devoted to the
crisis running on the same day Odwalla received word of the contamination. The
site received 20,000 hits in the first two days. Links to authorities like the Centers
for Disease Control helped firm Odwalla's credibility.
Odwalla's stock fell 40 percent. It would not be considered an attractive
takeover candidate by the major fruit juice brands. Its brand name was damaged.
There were also numerous lawsuits, which the company faced with $27 million
worth of insurance and $10 million in cash. (The Jack-in-the-Box E. coli lawsuits
of 1993 cost Foodmaker $56 million in legal costs.) Most of the suits were settled
within a year. Sales fell 90 percent in the immediate wake of the crisis. Odwalla
laid off ten percent of its 650 workers by December 1996 and posted a loss of
$11.3 million for the fiscal year ending February 28, 1997. In December Odwalla
announced plans to flash-pasteurize its apple juice.
The crisis affected not just Odwalla; grocery store chains dropped other fresh
juice producers as well. Growers across the country grappled with the issue of
pasteurization as the FDA considered making it mandatory. Most felt that the
process destroyed the freshness with which they differentiated their offerings, in
addition to adding another set of costs. Some growers in the Apple Hill area of
California were among the first to implement a 23-point quality assurance plan
that, among other things, forbade the use of 'grounders,' or fallen apples. These
guidelines were referred to as Hazardous Analysis Critical Control Point
(HACCP) rules.

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 Fresh juice accounted for only two percent of the total juice market in the
United States. Some producers resented attempts by Odwalla, the media, and
government to deflect criticism to the industry as a whole. 'Let's not lose track of
the real issue,' one told the San Mateo Times, 'Odwalla got animal poop on its
apples and failed to wash it off.'
According to FDA statistics, the fresh juice industry overall reported only
447 illnesses (including the one fatality) for more than 500 million servings
between 1993 and 1996. Nevertheless, the agency required juice marketers to
label the following warning on fresh apple juice beginning in September 1998
(and all other fruit and vegetable juices by November): 'WARNING: This product
has not been pasteurized and, therefore, may contain harmful bacteria which can
cause serious illness in children, the elderly, and persons with weakened
immune systems.' Juice produced to the HACCP standard was exempt from the
labeling requirement. The fresh juice industry naturally railed against the labeling,
believing it would scare away consumers.
1980:Odwalla begins juicing in Santa Cruz.
1994:First shipments delivered outside of California.
1996:E. coli outbreak traced to company's apple juice.
1998:Odwalla returns to profitability.
They complained that it was 'more aggressive' than that required even on raw
pork.
Although Odwalla's openness in the face of the crisis was commended by
many, the company received the highest food injury penalty ever in what was
reportedly the country's first criminal conviction in a food poisoning case. It was
levied a $1.5 million fine after it pled guilty to 16 counts of delivering adulterated
food products into interstate commerce, a misdemeanor. At Odwalla's
suggestion, one-sixth of the fine was earmarked for the Safe Tables Our Priority
charity and to researchers at the University of Maryland and Penn State
University. Fortunately, the resolution of this case made Odwalla stock safe
again for institutional investors, who owned about 28 percent of the company
before the crisis. That would fall to a low of four percent in 1998.

Rebuilding in 1997—98
Product offerings proliferated as the company pulled out all the stops to
win back consumers. A new type of liquid lunch debuted in May 1997. Odwalla's
Future Shake, designed to appeal to a younger market than that of nutrient-
fortified Ensure, was marketed as a 'drinkable feast' made from 'real food' like
oats, almonds, soy, banana, and mango. No diet drink (one pint contained 12
grams of fat), it offered a lunchtime alternative to fried fast food. These were
offered in Inner Chai, Dutch Chocolate, and Cafe Latte flavors. Odwalla
introduced an energy bar, its first solid product, in September 1998. This entered
the company in a $900-million-a-year market. There was also a new line of
'Nutritionals' enhanced with proteins, herbs, vitamins, and fruits. Redesigned

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packaging appeared in September 1999. The new bottles featured bolder
graphics and a sturdier cap but held slightly less juice. Odwalla also introduced
pasteurized versions of its citrus drinks.
Odwalla announced that it was again profitable by the third quarter of
1997--98, posting a profit of $140,000 versus the previous year's $1.8 million loss
for the period. Analysts reckoned there was still life left in its brand name. The
company continued to expand geographically, entering Philadelphia and
Washington, D.C. markets. This expansion was soon followed by entry into
markets of Chicago, Detroit, Minneapolis, and Phoenix. Analysts felt it wise for
the company to get a toehold in these new markets before someone else did,
even if it came at the expense of bottom line profits. Odwalla's revenues were up
12 percent in 1998, to $59.1 million.
'Odwalla is in the business of providing easy access to great-tasting
nourishment,' CEO Stephen Williamson told the Wall Street Journal. It was still in
business--sales were on track to reach $67 million in 1999, a rise of more than
12 percent. Nevertheless, a net loss was projected. One analyst estimated that
the company would have been a $150 million-a-year, national business were it
not for the E. coli incident.

Principal Competitors: Just Squeezed; Tropicana; Minute Maid; Nantucket

Nectars; Naked Juice (Chiquita Brands); Fresh Samantha's.

A box of Banana Nut bars and two Chocolate Chip Protein bars A bottle of Odwalla Future
Shake

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B) Situation Analysis

• Category analysis

Energy bars is the one of the segments of the broad snack bar category. Snack
bars include such item as granola bars while health bars include for example,
cereal or diet bars. Energy bars are defined as vitamin-enriched, nutritious bars
intended either to boost performance or replenish nutrients following exercise or
as a complete snack or meal replacement. The energy bar category is highly
fragmented with over 100 competitors and 700 brands.

The marketing objectives :

1. To define the current situation facing the product;

2. To define problems and opportunities facing the business;
3. To define the strategies and program necessary to achieve the objectives;
4. To pinpoint responsibility for achieving product objectives;
5. To encourage careful and disciplined thinking;
6. To establish a customer – competitor orientation.

i. Aggregate market factors

a) Category size

Overall snack bar sales were over $1.4 billion in 2002; of this, energy bars were
nearly $300 million with 28 percent growth rate over 2001. The industry experts
expect the energy bar category to continue to grow in the 25-30 percent range
annually. Energy bar category contains four primary brands, plus their sub-
brands and over a hundred smaller players.

b) Category growth

In between 1997 and 2001, the average annual growth rate is 57 percent. U.S
energy bar category sales forecasted at $750 million in 2003 for a continued
expected growth of 22 percent. The industry reports suggest current annual
growth for the energy bar market at 25-30 percent. The category was expanding
because the new competitors are entering the market, the existing brands are
expanding with new products and flavors, market penetration and usage
occasion is increasing.

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 c) Product life cycle

Both the category and Odwalla Bars specifically are both securely in early stages
of the growth phase.

d) Sales cyclicity

While energy bars are premium-priced for their convenience and nutrient level,
the base dollar point of $1 to $3 per bar is low such that they are not directly
impacted by GDP variations.

e) Seasonality

It’s a year-round sales. Category overall may experience a slight sales increase
in the spring and summer months during “race season” and as users are
engaged in more outdoor activities and desire quick, portable energy.

f) Profits

As most major competitors are within the product portfolios of larger consumer
goods companies, it is difficult to benchmark profitability within the energy bar
category specifically. Nevertheless, the recent acquisition of the leading
competitors reflects an expectation for strong profit potential. Increased category
competitiveness may lead to lower pricing and profits.

ii. Category factors

a) Threats of new entrants/exits

A strong potential for new competitors given that the category is profitable, fairly
easy to enter, and increasingly relevant to consumers. Further, with the “big
three” brands strongly in place (PowerBar, Cliff (including Luna) and Balance), it
is most likely that small competitors will enter through the natural foods channel,
creating more direct competition with Odwalla bars. The barriers to entry erected
by the existing competition are key to the likelihood that new competitors will
enter the market. Some of the potential barriers to entry follow:

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 1) Economies of scale

Competitors within the broader category of snack bars would likely

experience economies of scale with a relatively easy entry into the energy
bar market.

2) Product differentiation

Within the mainstream energy bars, differentiation is largely through

brand, taste and flavor variety. With the exception of targeted nutrition
products like protein or carbohydrate-specific products, nutritional levels
are largely at parity.

3) Capital requirements

Capital requirements are relatively low, increasing the threat of new

entrants.

4) Switching costs

Switching costs are very low, opening the door to potential competitors.

5) Distribution

As there are not specialty requirements for distribution (refrigeration, etc.)

it would be very easy for any of the “centre of the store” consumer food
companies to enter the category and add on to their existing distribution
structure. This is particularly true for companies that have an established
relationship with the category buyer.

b) Bargaining power of buyers

Lots of competitors with relatively similar options distinguished by brand and

taste keeps retailer power strong.

c) Bargaining power of suppliers

As the suppliers of raw inputs for energy bars are largely agricultural, the
commodity nature of agriculture keeps prices and supplier power low. While still
relatively low, supplier power will be higher for nutrient supplement suppliers.

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 d) Pressure from substitutes

Fresh fruit, cereal bars, smoothies, candy bar, etc. are all suitable portable
substitutes for the mainstream energy bar consumer. True athletes are most
likely to substitute with higher nutrient level energy bars.

e) Category capacity

It is appears to be high given current scenario of more than 100 manufactures

and many more products. But, still it is too early to determine true capacity.

f) Current category rivalry

Very high. A differentiation is largely by taste and flavor variety and by targeting
unique market segments.

iii. Environmental factors

a) Technological

Technology could play a significant role with respect to manufacturing

efficiencies and taste profiles.

b) Economic

While premium priced, energy bars have so far seemed to fare the recession
well. However, if economic conditions persist, consumers may opt for less
expensive alternatives like fresh fruit or non-energy snack bas.

c) Political/regulatory

The energy bar category is regulated by the FDA as are other food products.
There are not to our knowledge, however, additional regulations directed toward
the energy bar category.

d) Social

As lives get busier and mealtimes shrink, energy bars will continue to be an
acceptable meal replacement.

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 • Competitor analysis

i. Product features matrix

The major competing brands to the Odwalla bar are PowerBar, Balance Bar, and
Clif brand their variants. An additional competitor, Kashi GoLean, comes from the
natural food/energy bar category.

ii. Brand Objectives

All four brands appear to be pursuing market share growth strategies. The
category is at a relatively early stage in the product life cycle, so it is too early to
be going exclusively for profits. The smallest brand, Kashi, also seeks to increase
its presence in the channels.

iii. Brand Strategies

a) PowerBar: This brand invented the energy bar category. While it has
maintained a loyal following of athletes, it lost ground to competitors as the
market expanded to include more mainstream consumers. As a result, the
brand has launched a number of extension, including PowerBar Pria
targeting woman and a breakfast bar, Harvest.
b) Balance Bar: This brand does not appear to have a strong focus. Like
PowerBar, it has focused on brand extension funded by its parent, Kraft,
and is attempting to fill as many segments as possible.
c) Clif Bar: This is the only independent company among the top brands. It is
looking to hold on to its top market position in the face of competition with
much greater resources. To lure athletes, the brand launched an
extension, Ice Bar, and a salty Mojo Bar straddling the health and snack
categories.
d) Kashi : Its marketing focus has been to expand its distribution. It has used
its parent, Kellogg’s, to accomplish this.

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iv. Marketing mix

Marketing Kashi Go Clif Bar Power Bar Balance Odwalla

mix Lean
Price $1.69/$20.00 $1.35/$14.25 $1.35/$14.25 $1.35/$16.49 $1.35/$14.25

Distribution Natural food, Grocery, Grocery, Club, mass, Natural food,

grocery and drug, mass, drug, mass, natural food, and some
mass. natural food. natural food. drug. drug,
grocery and
mass.
Product Taste so Nutrition, Energy for 40-30-30 Nourishing
decadent, energy, optimum nutritional food bar,
but they are natural performance philosophy, ingredients
a healthy ingredients. nutrition and you can
alternative, taste. pronounce.
high protein
and fiber.
Promotion Health Athletes, Athletes Health Natural food
enthusiasts/ general conscious, and health
dieter. consumer. general enthusiast.
consumer.

v. Total sales before merger:

a) PowerBar : 1999 - $135 million

b) Balance Bar: 1999 - $100.9 million

c) Clif Bar : N/A

d) Kashi : 1999 - $25 million

e) Odwalla - $128.3 million (less than 5% is from food bar)

vi. Differential competitor advantage analysis

a) PowerBar : This company has been very successful at differentiating

itself by targeting hardcore athletes and positioning itself solidly in the
energy bar category. This tradition is from its founder, Brian Maxwell, who
was a former Olympic marathon runner.

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 b) Balance Bar : Their main competitive advantage is a solid distribution
system as it is marketed in natural foods, mass merchandise, club, grocery,
and a number of other channels of distribution.

c) Clif Bar : This is the most customer-oriented brand as its managers do

the best job interacting with customers and listening and responding to
their needs. It is perceived by consumers to be the most innovative and
creative of the major brands.

d) Kashi : Kashi is a natural cereal and convenience foods company. The

comnpany’s products are made with a blend of sesame and seven whole
grains. The brand is strongly associated with grain and fiber.

vii. Expected future strategies

a) PowerBar : This brand is likely to continue to be more aggressive in

targeting mainstream markets and thus continue to launch more brand
extensions. The brand’s managers will also invest heavily in advertising
and promotions.
b) Balance Bar : With the assistance of Kraft’s resources, the brand will
continue to introduce more extensions.
c) Clif Bar : Like the others, the emphasis for this brand will be on
extensions. Its goal is to remain ahead of both Balance Bar and
PowerBar.
d) Kashi: This brand will focus on new flavors and expand distribution to gain
shelf space in grocery, drug and mass channels.

• Customer analysis

i. Who are the customers?

According to SPIN (A.C. Nielsen Consumer Reports),

63.7 % of volume is from households with greater than $40,000 income.

32.4% of volume is from households with greater than $60,000 income.

72.8% of volume is from households with no kids.

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 65.8% of volume is from households where the Head has some college
education.

39.4% of volume is from households with the Head under 35 years old.

Eaten by about 1 in 5 people.

Customer segments:

“Hard-core athletes” : the origin consumer target, who use energy bars,
gels and other portable food products to maintain a high level of strenuous
activity.

“Musclemen” : individuals trying to maximize their muscle mass through

use of energy bars, protein powders, and other dietary supplements.

“Dieters” : individuals using energy bars as a meal replacement or snack

alternative in an effort to lose or maintain weight.

“Health purists” : individuals who insists on the nutritional benefits of

organic and all-natural foods.

“Health conscious and on-the-go” : individuals with busy lifestyles who

seek a healthier alternative to traditionally available fast foods.

“Sports enthusiasts” : active individuals seeking sustained energy for less

strenuous activity than hard-core athletes.

“Specialty segments” : such as women and minorities, who desires

specific nutritional formulations geared to their unique health
requirements.

“Nutrition seeking families” : households that actively seek to promote

healthier eating habits among all members of the family, both adults and
children.

ii. What they Buy?

Convenience

Taste

Texture

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 Health benefits

Performance/ energy

Hunger satisfaction

Price (expect to pay $1.00 to $1.50 per bar)

Packaging / buy in bulk

Availability

iii. What use for?

Meal replacements

Snacks

Athletic energy booster

iv. Where they buy?

House food stores

Outdoor retailers

Grocery stores

Drug stores

Convenience stores

Mass merchandizers

Club stores

v. Odwalla customers

Tried Odwalla juice first

Prefer : lighter, fruiter flavors and chewier, whole-grain texture

Taste matters more than performance.

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 • Planning assumption

i. Energy bar potential

We assume (optimistically) that consumers eat an average of one bar per day ( a
real “saturation” level) . We then examine how many people are potential
customers. Here we start with the entire population and then subtract those we
consider not to be consumers due to age, allergies, or income level. (Note in
doing this we over-adjust since some consumers fall in multiple categories, i.e.,
are over 74 and poor). The resulting potential number of customers is 215,430.
Therefore

Potential = (215 million) (365 bars/year) = 78.5 billion bars per year

Notice here how critical the usage assumption (bars consumed per week) is to
this estimate; if we assume a more realistic 1 bar per week average, the potential
estimate drops to a more reasonable, but still hard to attain, 11.2 billion bars per
year, a far cry from current levels.

ii. Forecasting Energy Bar Sales via Regression

Forecasting U.S. sales of energy bars is difficult for several reasons. First, there
are relatively few years of data to go on (here we use five years, 1997-2001, to
forecast 2002). Second, many of the macroeconomic variables one might use
(e.g., household income, CPI) are highly correlated, forcing a choice of one (here
number of household). Third, causal variables such as price and new product
entries are difficult to forecast. For the sake of the example, we use advertising
spending of PowerBar, the category creator, partly because it was available.
(Note we need to forecast this for 2002, which introduces more uncertainty in the
forecast. The resulting regression model produced an R2 of .998, inflated
because of the scarcity of data points. The model was

Dollar sales = -7,130,000,000 + 71.29 (number of households) +

9,557,467 (Power Bar Advertising)

With a standard error of 9,314,701.

Households are fairly easy to forecast; here we use 105,458,124 (admittedly

ridiculous precision.) Power Bar advertising is harder to forecast, so we use three
scenarios: an optimistic 26 million, a best guess of 24 million, and a pessimistic
18 million, a decrease from 2001. (Notice how sensitive the forecast is to this
assumption.)The resulting forecasts, with + 2 standard errors, equal to

15
18,600,000 used, as a conservative estimate of the uncertainty, are the following
_______________________________________________________________

Power Bar

________________________________________________________________
Advertising level Forecast Range

18 million 558,100,000 539,500,000 to 576,700,000

24 million 615,600,000 597,000,000 to 634,200,000

26 million 634,600,000 616,000,000 to 653,200,000

Note that, even with R2 above .99, there is significant uncertainty stemming
mostly from uncertainty about the causal market factors (here PowerBar
advertising) which drive sales. Notice also how much less this is than the
potential estimate, suggesting the result is feasibly attainable.

c) Marketing Strategies

Odwalla bars that produces energy bars category and other all natural and
organic food targeted at people with active lifestyles. Their introduce the brand
extension in the energy bar category in 1998. Marketing strategy fo Odwalla Bar
is :
• They can introduce new brand will be based on their popularity when they
success to produce the product with natural ingredient. So, that can help
them to promote their new product and will be done through a variety of
method.

• They can use promotion for a targeted segment such as sampling in the
market for taster.

• Do in-store activities being favored and can use the primary form of
communication with sponsorship because the demographics of their
readership are fairly similar with their brand’s name.

• Create advertising for your energy bars in a magazine or trade publication

for your target market.

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 • The message Odwalla Inc will seek to communicate and this message will
be communicate through a variety of method. The first method will be
advertisement. The bulk of the advertisements will be in the Willamette
Weekly, a weekly entertainment guide.

• The other form of advertising will be using “grassroots” method where

customers will be given coupons for their friends to try Odwalla bar for the
first time.

d) Marketing Objectives

Our primary marketing objective are to :

• Develop brand awareness through a steady, month to month increase of

new customers.

• Develop an increase in sales or decrease in marketing expenses.

• Develop awareness of the structured conversation system measured by

customers coming to the retailers shop for buy their product

Odwalla bar primary financial objectives are to :

• grow 10 percent faster than the energy bars category.

i. Marketing mix:

Odwalla bars marketing mix is comprised of these following approaches to

pricing, distribution, advertising and promotion, and place.

• Pricing – the pricing scheme is based on standard price for energy bars
category.

• Distribution – all products will be distributed from Odwalla Inc.

• Advertising and promotion – the most successful advertising will be with

Willamette Weekly or retailers shop its self.

• Place – retailer shop

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 ii. Customer targets

We focus to the Odwalla Energy Bar customer targets is from existing

juice customers, health conscious and on-the- go customers, sport
enthusiasts people, health purist and nutrition seeking families.

iii. Competitor targets

Have more than one competitor in energy bar category such as :

• Clif Bars and Clif Luna

• Kashi Go LEAN

• Power Bar

• Balance Bar

• Calorie Mate

iv. Core Strategy

For core strategy, we will increase distribution to 80 percent ACV in

mainstream grocery stores. Then we focus on natural health and leverage
brand name, Minute Maid resources.

v. Product positioning

The Odwalla Inc will position itself as a reasonably price and natural
ingredient (nutrition and health).

e) Financial history and Contingency plan

Odwalla Foods

When Odwalla's apple juice was thought to be the cause of an outbreak of E. coli
infection, the company lost a third of its market value. In October 1996, an

18
outbreak of E. coli bacteria in Washington state, California, Colorado and British
Columbia was traced to unpasteurized apple juice manufactured by natural juice
maker Odwalla Inc. Forty-nine cases were reported, including the death of a
small child. Within 24 hours, Odwalla conferred with the FDA and Washington
state health officials; established a schedule of daily press briefings; sent out
press releases which announced the recall; expressed remorse, concern and
apology, and took responsibility for anyone harmed by their products; detailed
symptoms of E. coli poisoning; and explained what consumers should do with
any affected products. Odwalla then developed - through the help of consultants
- effective thermal processes that would not harm the products' flavors when
production resumed. All of these steps were communicated through close
relations with the media and through full-page newspaper ads.

Thus, Odwalla had a very successful contingency plan during their crisis
managemen. They manage to control their company financial profits as the key
elements towards the continuity of company growth.

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Appendices:

Type Wholly owned subsidiary

Industry Consumer products

Founded Santa Cruz, California, United States (1980)

Founder(s) Greg Steltenpohl

Gerry Percy

Bonnie Bassett

Headquarters Half Moon Bay, California,United States

Area served United States

Key people Steven M. McCormick, COO and General Manager

James R. Steichen, SVP Finance and CFO

Chris Brandt, Director Brand

Products Drinks, food bars

Revenue US$187.9 million (2007)

Employees 900[1]

Parent Minute Maid, a division of theThe Coca-Cola Company

Website Odwalla.com

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References :

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1. www.scribd.com

2. http://en.wikipedia.org

3. www.google.com

4. Product Management by Lehmann /Winer (McGraw-Hill)

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