VIDEO CASE 22–1 Clearly Canadian: How Marketing Strategies Lead to Growth

Clearly Canadian Beverage Corporation CEO Douglas L. Mason has a good understanding of the importance of linking marketing and corporate strategies. As he explains, the company’s success requires that “our energy and resources must be concentrated in the areas where we can produce the greatest value.” Mason describes the company’s goal as “finding more ways to bring Clearly Canadian products to more people.” To accomplish this goal Clearly Canadian’s marketing efforts have focused on expanding current products, developing new innovative products, and meeting the needs of existing and new market segments.

The Company

Clearly Canadian Beverage Corporation started as small entrepreneurial venture in Vancouver in the late 1980s. Its first product, Clearly Canadian Sparkling Flavoured Water, was a huge success with consumers and led to extraordinary growth of the company. Today, Clearly Canadian is a leading producer of premium alternative beverages, the fastest growing category in the $10-billion beverage industry. The company markets and distributes its portfolio of beverages throughout Canada, the United States, and numerous countries around the world. Maintaining its position in the marketplace, however, has been a challenge!

When Clearly Canadian entered the beverage market it wanted to capitalize on the consumer trend toward innovative, good-tasting beverages. It carved out a niche using premium pricing and distinctive packaging to create a very sophisticated image. Premium pricing helped position Clearly Canadian as a high-quality product, and distinctive packaging allowed the product to stand out on crowded retail shelves. The company also achieved widespread distribution for its product in Canada and the United States, which was key to its early success. By 1992, Clearly Canadian was selling about 22 million cases of its beverage annually.

The following year, though, sales of Clearly Canadian dropped to 7 million cases. Experts observed that the beverage market had attracted many competitors. While many of the new brands were positioned to compete directly in the premium-priced niche with Clearly Canadian, others were using low-price strategies to attract customers. In addition, consumers’ tastes were changing as new beverage types, such as ready-to-drink iced tea, became available. Clearly Canadian found itself losing market share in the market it had helped create!

The Strategic Marketing Process

Mason knew that if the company were to grow it needed a plan. A situation analysis revealed several strengths, weaknesses, opportunities, and threats. The company’s strengths, for example, included a strong brand name that had pioneered the product category, distinct packaging, and a premium image. Its weaknesses were that it had been satisfied with its early success—reacting to market changes rather than being proactive—and it had limited resources compared to some of its competitors. Clearly Canadian’s primary opportunity was that unlike the soft drink market, which was mature and dominated by a few brands, the alternative beverage market was growing and dynamic. Threats included competition from other sparkling waters, iced tea, natural sodas, and juice blends, and aggressive price discounting by many of its competitors.

The next step in Clearly Canadian’s marketing plan was to consider growth opportunities in terms of its current products and markets and possible new products and markets. Six months of research, for example, led to a new package design for its flagship brand, and new flavours including Diet Cherry and Diet Blackberry.

After the product’s introduction in the United States and Canada, it was launched in international markets including the United Kingdom, Germany, the Netherlands, Denmark, and Kuwait. To better serve the variety of interests of its existing customers, Clearly Canadian introduced Tré Limone, a lemon-ginger drink inspiredby European café sodas, and Cascade Clear, a non-carbonated pure drinking water. New products designed to attract new market segments were also introduced. Orbitz, a fruit-flavoured beverage with gel spheres, was targeted at teenagers, and Clearly Canadian O+2 (a super-oxygenated water) and Reebok Fitness Water (a water beverage with vitamins, minerals, and electrolytes) were targeted at athletes.

Clearly Canadian designed its marketing programs to increase “consumer awareness and brand imagery” in each of the product–market combinations. National promotions, including joint sampling programs with Warner-Lambert Co. (Trident Gum) and Speedo and regional TV and radio campaigns were used to introduce products and to encourage consumers to try them. The marketing program for Reebok Fitness Water, for example, included sampling teams that drove vans to major sporting events, key grocery and retail outlets, and Reebok-sponsored events in major cities. The company also provided additional training for its salesforce and created stronger strategic partnerships with its distributors throughout the world.

While not all of the product and market initiatives were a success—Orbitz has been withdrawn from the market—the result of Clearly Canadian’s overall plan was dramatic, reestablishing the company as a leading producer of premium alternative beverages. In fact, BevNet.com recently picked Clearly Canadian Sparkling Water as its Number 1 choice in the summer’s Top Ten Hottest Beverages! John Craven, president of BevNET.com, observes that “with literally hundreds of new age products making their way to the shelves each year, it’s difficult to pick a few . . ..” Today’s consumers are looking for beverages that provide a unique thirst-quenching experience and an image of health and style. Clearly Canadian believes it has a competitive advantage in its ability to identify and implement quick and effective changes to meet the changing demands of consumers.

The Future

Clearly Canadian has sold more than 2 billion bottles of its products since it started business. Now its efforts are focused on selling the next billion bottles. To achieve this goal, the company must continue to utilize the strategic marketing process to maintain its position in the marketplace. New challenges include the expansion of the alternative beverage market to include sports beverages, ready-to-drink coffee, energy drinks, and vegetable/fruit blends. In addition, huge competitors such as Coke and Pepsi now offer water and sports drinks, and brands such as Snapple, AriZona, and SoBe have created new product attributes for consumers to consider. Finally, new potential uses of the company’s limited resources—such as new products for restaurants and offices (e.g., larger sizes), new beverage types (e.g., coffee), and national advertising campaigns—continue to present themselves. So as long as the marketing environment continues to change, Doug Mason and Clearly Canadian will be asking Where are we now? Where do we want to go? and How do we get there?

1		Which phases and steps of the strategic marketing process does Clearly Canadian utilize to develop a plan that will lead to growth of the company?
2		Discuss the revenue-generation strategies (see Figure 22–5) that Clearly Canadian has pursued and continues to pursue today.
3		What recent changes in the marketing environment are likely to have an impact on Clearly Canadian? What new strategies would you recommend?