For most consumer goods, effective marketing and distribution channels are suitable mechanisms to obtain profitability. The pathways are expected to change just as the markets evolve. That was the situation that faced Jones Soda Company following the increased demand for the beverages in new markets. An enterprise must ensure that it makes its products available to consumers to facilitate solid growth. Many firms get stuck in the same patterns of distribution for decades such that they fail to tap the full potential of the markets. This essay attempts to understand why Jones Soda opted to change its marketing strategy and why the decision resulted in the company’s ultimate failure.
Jones Soda started out as a small firm that sold its beverages by order and produced one bottle at a time. They targeted the young generation in America. Hence, they would send their trucks to the places where the youth would hang out a lot such as tattoo parlors and skate parks. With time word spread out across the nation concerning Jones Soda and circumstances made the corporation change its distribution and marketing channels to cater for the rising demand. Previously, the enterprise utilized a one-on-one or direct connection with the consumers where they would manufacture the beverages per order. However, due to the growing demand, the company sought to start using indirect marketing or retailers such as Wal-Mart as intermediaries to provide more drinks to the buyers. The new avenues also required them to focus on advertisements to reach out to consumers (Pearson, 2010).
A firm that resorts to utilizing retailers is focused on capturing a vast span of the consumer market to be in a position to compete with its competitors. Jones Soda had rivals such as Coca-Cola and Pepsi. For the company to integrate into the new distribution channels successfully, they had to make some adjustments that were costly but promised greater revenue. Jones Soda had to reduce their prices and the production expenses to maintain the profits that they received from the business. They began using the soda cans and bought adequate equipment and machinery to enable the corporation to manufacture more beverages. In doing so, Jones Soda hopes to attract retailers such as Wal-Mart that deals with affordable commodities and would reach out to more consumers (Pearson, 2010).
Jones Soda took the risk of leaving their comfort zone where they only sold drinks to the young generation to accommodate a larger group of individuals. Unfortunately, the move to indirect marketing and distribution avenues led to the failure of the firm. First, the American population had started to shift from unhealthy eating habits owing to the poor lifestyles and chronic illnesses. People began to consume less soda unlike before to avoid conditions such as obesity and cardiovascular diseases. Therefore, the sales of Jones Soda plummeted from the uninterested buyers. Secondly, the beverages were still expensive in the eyes of most average consumers unlike Coca-Cola and Pepsi; hence, people did not see the need to purchase Jones Sodas (Pearson, 2010).
Indirect marketing proved to be a big failure to Jones Soda that had an annual profit per share of 39 dollars during the period of direct distribution. The share prices dropped to as little as 1 dollar making the shareholders sell most of their stocks (Pearson, 2010). Some of the investors even started to sue the firm to recover their losses. The manager and founder also left the company to new directors to separate himself from the scandal. Currently, Jones Soda is struggling to regain its footing in the challenging world of entrepreneurship by looking for a suitable distribution and marketing strategy that will promote the brand. Firms must examine critically proposed changes in distribution channels since they will either solidify their earnings or result in the sudden collapse of the corporations.
Reference
Pearson (2010). Jones Soda: Marketing and Consumer Behavior. Retrieved June 1, 2016 from http://media.pearsoncmg.com/ph/bp/bp_mylabs/akamai/template/video640x480.php?title =Jones%20Soda:%20Marketing%20and%20Consumer%20Behavior&clip=pandc/bp/201 0/management/jones_cb_2010.mov&caption=bp/bp_mylabs/akamai/2010/management/x ml/jones_cb_2010.adb.xml.
