Bionade CASE Study PDF

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This paper analysed Bionade's business operation and how the company enter global market; as a result, learning lesssons from Bionade.
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A Brand-New Brand

Made much like beer, but without alcohol, Bionade is a fizzy, fruity hit in Germany. But can it go global? Ostheim In Der Rhoen is a quiet German town in northern Bavaria. Picture-book pretty, with narrow, winding streets, it does not look like a place where anything – let alone anything hip – ever happens. But this hamlet is the birthplace of Bionade, an all-natural soft drink that has become a national sensation (it more than tripled sales last year), one that its creators now hope to take world-wide. 1/ Bionade: like beer without alcohol (all-natural soft drink)  national sensation Bionade’s founders do not dream of global conquest for its own sake. They speak passionately about what they describe as the drink’s deeper meaning. ‘Bionade is a totally idealistic product. Of course we want to make money, but honestly, this was an attempt to give people something better’, says Bionade’s CEO, Peter Kowalsky, 38. 2/ Bionade founder’s thought: not dream of global conquest for its own sake  attempt to give people something better’. It was the shake-up of the German beer industry in the 1980’s that inspired Bionade’s inventor, Dieter Leipold, then master brewer to quest for a new quaff. With younger German consumers increasingly choosing imports such as Corona and Miller Lite

over local beers, Leipold worried about the brewery’s future. And there was more at stake than just business: it was family. He lived with the brewery’s present owner, Sigrid Peter, now his wife, and acted as stepfather to her sons, Peter and Stephen Kowalsky. Knowing he could not compete with the beer conglomerates, he began to tinker with an idea: invent a healthy soft drink using beer brewing principles. One of the goals was to make a drink for children that did not have any artificial additives and that followed the purity requirements traditionally used to make beer. That meant a product with natural ingredients only: malt, water, sugar, fruit essences. No corn syrup, nothing artificial. And the same fermentation process would be used for Bionade that was used to make beer – the trick would be leaving out the alcohol. 3/ In Germany: increasingly choosing imports  invent a healthy soft drink using beer brewing principles (for children) , followed the purity requirements traditionally used to make beer (natural ingredients: malt, water, sugar, fruit essences). It took Leipold eight years and 15 million Euro to perfect the recipe. Leipold found a way to ferment a non-alcoholic drink by converting the sugar that normally becomes alcohol into non-alcoholic gluconic acid. And because the acid strengthened the taste of the sugar, Leipold only needed a fration of the sugar found in a normal soft drink. Then came the flavours – elderberry, lychee, orange-ginger and herb plus a sprtiz of carbonation. 4/ Duration (8 years & 15 millioin Euro)  converting the sugar that normally becomes alcohol into non-alcoholic gluconic acid. The first cases shipped in 1995, but lean years followed as the company unsuccessfully tried to market Bionade solely on its health claims. The turning point came in 1999, when marketing expert Wolfgang Blum arrived. He gave Bionade a radical makeover – a slick retro blue, white and red logo, and a new strategy, branding it as a hip lifestyle drink that happened to be healthy. With no budget for television or print media, the company needed to get everyone – especially the media – to spread the word. So Bionade, sponsored hundreds of sporting, cultural and kids’ events across Germany. Between word-of-mouth and a flurry of German news reports, sales picked up. Winning influential fans has also been crucial to Bionade’s success. Sarah Weiner, one of Berlin’s top chefs, serves the drink in all three of her pan-European restaurants. The timing was right. As a result, in 2002-2003, Bionade sold 2 million bottles. By

2006, it was available in Switzerland, Austria and the Benelux countries, and sold 70 million bottles. 5/ branding it as a hip lifestyle drink that happened to be healthy. Take advantage of word-of-mouth and a flurry of German news reports/ Winning influential fans (Berlin’s top chefs)  sponsored hundreds of sporting, cultural and kids’ events.  choose closer market: language, government, culture… Bionade now faces a new set of challenges. Back in Ostheim, the small factory is overflowing with equipment and materials are barely able to keep up with demand. But the brand is set to be a global success if the strategic choices and options open to the company are planned well. The key challenge is growth and remaining true to the brand. 6/ small factory not keep up with demand  challenge: growth and remaining true to the brand. Adapted: Trueman, J. (2007) A Brand-New Brand, Times Magazine, p.38, January 22

Lesssons from Bionade 1/ Brand positioning: "Instead of selling it as an 'ecological' drink based on ideology, we appealed to a certain lifestyle". 2/ Target customer: children  hipsters 3/ Ideal product: They've done everything absolutely right, from the product down to the trendy packaging. 4/ Advertising: through word-of-mouth and a flurry of German news reports/ Winning influential fans (Berlin’s top chefs)  sponsored hundreds of sporting, cultural and kids’ events. 5/ Organic doesn't necessarily mean small.  As a producer of ecologically sound refreshment drinks using natural organic raw materials, BIONADE is aware of the importance of maintaining and protecting biological diversity so that mankind can continue to live in an intact environment. 6/ The company demonstrate their social responsibility: -

BIONADE is a product, which originated on the basis of social responsibility from the visionary idea of a healthy children's lemonade free from chemicals of any kind.

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sponsored hundreds of sporting, cultural and kids’ events (social and cultural projects).

 overall importance in marketing strategy  The CSR activities also substantiate the competence, credibility and quality of the product.  Over the long-term, this positively influences the image of the BIONADE brand name.

Tutorial: 1/ Small/ Family Business -

Limited resources: procedures/ people/ locality/ small network/ budget

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Capital: bank loan/ savings/ government grans

 Overdrafts 2. Internationlisation: third party/ agents 3. Branding- new marketer 4/ Promotion -

chef – celebrity endorsement – advocacy

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word-mouth

5/ Product -

Health  Lifestyle

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Product process: innovative/ natural/ less sugar (non alcohol)  unique process

6/ Compared coca-cola in the US vs BIONADE (small business) : time 7/ Theory: internationalization/…...