Jones Soda’s Vision
and Goal
The company of Jones Soda began in 1987, when company founder and president, Peter van Stolk, recognized the potential of emerging “alternative” products in the beverage industry. Jones Soda is a unique company with a vision that is growing with the times. Distribution of Jones Soda began with an “alternative distribution strategy.” Following the execution of the alternative distribution strategy, Jones began an up and down the street “attack” of the marketplace; this time placing products in convenience and food stores. Finally, the company has now begun to achieve larger chain store listings with companies such as Starbucks, Safeway, Albertson’s and 7-Eleven stores. Jones Soda has always focused on interacting with the consumer and always keeps up with the demand. Jones Soda has created a trend, and it is a passion not only among soda drinkers but with its employees, directors and shareholders. Jones Soda’s current goal is to expand nationally within the next two years.
Jones Soda Company develops markets and distributes alternative or new age beverages, including premium soda, diet soda, spring water and energy drinks. We believe that we are creating a new category in the ‘New Age Beverage’ market, and we are offering distributors something new to sell. We see our trade marked Jones Soda Co. brand and product line as leader in the premium soda segment of the new age beverage category. Our business strategy is to increase sales by expending the distribution of our internally developed brands in new and existing markets, stimulating consumer trail of our products and increasing consumer awareness of, and brand loyalty to, our unique brands and products. Our business strategy is to attempt to increase sales by expanding product distribution in new and existing markets (primarily within North America).
We
believe that market for alternative beverages is dependent to a large extent on
image more than taste, so taking this into consideration and understanding that
this market is driven by creating trends; we focus on young consumers between
the ages of 12-34. Due to the limited
life cycle of beverages in the new age or alternative category, we believe that
the ongoing process of creating new brands, products and product extensions
will be an important factor in our long-term success. Our strategy is to
introduce flavors each year and selectively retire those flavors not deemed
popular. In general our target is to have at least 12 active flavors.
Measurable results for Jones Soda
For
the year ending December 31, 2002, revenue from the sales of Jones brands,
Jones Soda Co., Jones Naturals and Jones Energy, constituted 92.6% of our total
revenue.
Gross profit was approximately $8,531,000 for the twelve months ended December 31, 2001, representing an increase of $919,000 (or 12.1%) over the $7,612,000 gross profit for the twelve months ended December 31, 2000. The increase in gross profit was primarily attributable to increased volume of sales. In 2004 Jones Soda’s targeted increase in gross profit is triple that of the increase from 2000-2001. We believe that our gross profit can reach $3,000,000 more than the previous year with expanded national sales. This will increase our year ending gross profit to a targeted $11,531,000. (http://www.jonessoda.com/stockstuff/invest.html).
World, Behavioral, and Business
Dimensions
World-Integration
Management believes that the
overall decrease in sales was primarily attributable to its strategy in 2002 of
pulling out of non-core markets to focus selling its products into four
distinct regions consisting of the U.S. Northwest, the U.S. Southwest, the U.S.
Midwest and Western Canada. Sales declines in the comparable three month
periods for the most part were experienced in the U.S. Northeast and U.S.
Southeast markets, which were not regions of our focus for the first quarter of
2003. These sales declines were partially offset by increased sales in the
comparable quarters in the U.S. Northwest and certain of the Company's core
markets. Revenues for Jones Naturals increased primarily due to the addition of
a new direct retail account with Barnes & Noble, in which the Company will
be selling its Jones Naturals directly to Barnes & Noble pursuant to a
three-year distribution agreement. Beginning in February 2003, the Company
began distributing five flavors of its Jones Naturals line in 505 Barnes &
Noble existing café stores, with a sixth flavor to be added in the second quarter
of this year. In addition, in April 2003, the Company began distributing Jones
Naturals into its Western Canada market, which may result in improvements in
sales for the second quarter of fiscal 2003.
Behavioral-Cybernetic Dimension
The shift in our business focus
went from being solely a regional distributor of licensed and unlicensed brands
and products to being a developer, producer, marketer and distributor of our
internally developed brands and products. The seasonal demand for beverages;
and competition and general economic
conditions are like many other companies in the beverage industry, we generate
a substantial percentage of our revenues during the warm weather months of
April through September. We believe that the demand for our products will continue
to reflect such seasonal consumption patterns while we look to expand our
distribution network.
Business-Financial Dimension
Our products are sold to distributors and various customers and retailers for cash or on credit terms. Our credit terms, which are established in accordance with local and industry practices, typically require payment within thirty days of delivery. We recognize revenue upon receipt by our distributors and customers of our products, in accordance with written sales terms, net of provisions for discounts and allowances.
All sales to distributors and customers are final sales; there is no
return policy. We also pay lump sum slotting fees to certain of our retailers
for shelf space in their stores. We amortize the lump sum payment over a 2-year
period, which is based on historical data of product maintenance on retail
shelves for that period of time. If we had used a shorter amortization period
(such as 18 months) we would have recognized a greater reduction in revenue for
the applicable periods. Conversely, if
we used a longer amortization period (such as 3 years) this would result in a
relative increase in revenue being recognized for the period.
Behavioral-Communication Components
Relevance and Accuracy
One of the main components of the Behavior dimensions is communication. In terms of communication between our suppliers and the distributors, it is very important that the relevance and accuracy of communication between the two exists. Also, if the information is not relevant, there is no point in having a conversation. It would just be a waste of time, money and resources. If the communication is inaccurate, major supply and demand issues within the business would occur. For example, if Jones Soda thought they had communicated to their supplier that they needed a supply of two tons of sugar for a month and the supplier sent two pounds this would cause a significant halt to production. This would cause a ripple effect throughout the entire company.
Timeliness, Exclusiveness, and
Accessibility
The timeliness, exclusiveness, and accessibility of communication regarding information, is crucial. For example, if the C.E.O of Jones Soda needed a report on the financial position of the company by Friday, but did not receive it until next Friday due to misinformation regarding which Friday; major problems could occur. Secondly, if the information in that financial statement had been leaked to others before it was officially released, there could be some serious stock value consequences. Lastly, if an executive could not be reached regarding a rapidly declining stock price in which he owns millions of shares because his cell phone’s battery died, this time delay could be worth millions of dollars.
Format Required (Graphics, Voice,
Video, etc.)
Communication can be used in many different ways. Three different ways to utilize communication are via graphics, voice, and video. Jones Soda utilizes all three in different ways. First, via the internet website, Jones Soda uses graphics to describe the various aspects of their corporation. Secondly, communication via voice is widely used throughout the corporation via telephone and one-on-one meetings with fellow employees or clients. Lastly, video communication is mostly used for advertising commercials and training videos for new employees.
Behavioral & Marketing Dimension Interaction
Distribution of Jones Soda began with what we call our “alternative distribution strategy.” Jones Soda Co. placed their soda in coolers, bearing their signature flames, in truly unique venues, such as skate, surf and snowboarding shops, tattoo and piercing parlors, as well as in individual fashion stores and national retail clothing and music stores. Following the execution of the alternative distribution strategy, Jones began an up and down the street “attack” of the marketplace; this time placing product in convenience and food stores. Finally, the Company has now begun to achieve larger chain store listings with companies such as Starbucks, Safeway, Albertson’s and 7-Eleven stores.
Jones Soda has also incorporated unique marketing initiatives in its strategy. Jones Team Riders, including extreme athletes BMXer Mat Hoffman can be found promoting Jones and sporting the Jones logo at extreme sporting events across the country. The Jones RV’s on both the East and West coasts and in home base Seattle travel throughout cities in North America handing out soda and talking to the people on the street. (www.jonessoda.com/stockstuff/story.html)
The first area examined is that of culture, which is within the behavioral dimension. This area deals with the different cultures Jones Soda interacts with and markets to. The number of different cultures Jones Soda caters to has become both their strength and weakness, depending on how it is looked at. The goal of Jones Soda is to attempt to expand nationally and worldwide, and become one of the best soda companies ever. If Jones Soda continues to cater only to North American youth via marketing strategies that appeal to young skateboard shops and tattoo parlors, then they will never expand into a national company with significant market share. As of now, Jones Soda is known mostly amongst Caucasian youth. In order for Jones Soda to expand nationally, we need to find a way to get Jones Soda more exposure through other cultures around the world. The only way they will ever increase their sales is if they start promoting nationwide and soon after worldwide. For example, Coca-Cola is Africa's soft drink leader and the continent's largest foreign consumer-products investor. Although Coca-Cola was first created in the United States, it quickly became popular wherever it went. The first international bottling plants opened in 1906 in Canada, Cuba and Panama, soon followed by many more. Today, they produce more than 300 brands in over 200 countries. More than 70 percent of their income comes from outside the U.S., but the real reason they are a truly global company is that their products meet the varied taste preferences of consumers everywhere. (www.coca-cola.com).
The second area examined is that of marketing which is within the business dimension. Currently, Jones Soda is trying to market their company via asking different stores to sell their soda. They also came up with a unique idea for marketing that allows people to send in a picture of themselves to put on the label of a Jones Soda bottle for their own personal collection. However, they would have to order a minimum of ten bottles. This may make a great marketing strategy to get Jones Soda’s name out amongst all the different cultures that exist.
The behavioral and marketing dimensions depend upon one another because the marketing plan is defined by which culture the company chooses to market to. The obstacles and complexities that Jones Soda may encounter are how to obtain market share from another generation’s age group. Since their packaging and company culture are aimed towards American youth, this may cause a significant obstacle. However, if Jones Soda continues their current marketing strategy towards youth and expands nationwide or better yet worldwide they may be able to obtain a significant portion of the market.
Self Evaluations
Onur Cakir
This project gave me a better idea how the structure of the business can be shaped. Because of the chain structure in companies and how departments has to work together to be efficient, the role of team work and communication becomes more important. In this sense, as a group we had value in our teamwork and compatibility. I believe the project was well planned out, and we accomplished working together efficiently to get things done.
Jeff Haspas
For this project, most of it was a team effort. All I really did on my own was complete section 3a. Everyone in our group helped one another regarding how to approach the various sections. This made it very easy to understand what was expected for each section of the report, so they would all tie together. This was the most time consuming part of each project. Completing my section was fairly easy once group consensus was met.
Brandi Mark
This project was a challenge in the beginning. It required communication between all partners in the group in order to integrate all aspects of the project. Everyone completed their portion in a timely manner and forwarded it on to me. As with the other projects we have worked on, I edited an arranged the entire project and was also in charge of the title page, table of contents, executive summary, and reference page. Everything went smoothly.
Joanna Segrest
I believe that this was the smoothest project this semester. Everyone coordinated their sections of the report and met their deadline as needed. I was responsible for the section that focused on the dependencies and complexities of the relationships of the two different dimensions. From this project I learned a great deal on how the separate organizational dimensions of a business interact.