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TEACHING NOTE FOR APPENDIX D CASE D-3
Jamba Juice: Scanning the Marketing Environment
Synopsis
Jamba Juice is a chain of stores selling nutritious, healthy juices, smoothies, and snacks.
The Jamba Juice case illustrates how environmental forces help to shape opportunities for
organizations as well as identify potential threats and problems that must be faced. This case
also raises some interesting issues with respect to how broad the appeal for Jamba Juice’s
products may be.
Teaching Suggestions
Jamba Juice is a retail chain that seeks to capitalize on health-conscious consumers’
interest in fast, healthy snacks, juices, and smoothies. The case may be introduced to the class
by asking the following questions:
1. What do you usually eat for a quick snack?
2. How many of you are concerned about “eating healthy”?
3. What do you think of when you think of a “healthy snack”?
Most students will answer that they eat convenience and fast foods such as burgers,
french fries, shakes, ice cream, candy, chips—items that would not qualify as “healthy” foods.
At the same time, most students know that these foods are probably not good for them and are
concerned about eating right even if they don’t actually do so. Healthy snacks such as fruit are
not always as appealing or as conveniently available.
Students can be asked their opinions about whether there is a need for healthy alternatives
to traditional snacks, alternatives that would be appealing and convenient. One of these healthy
snack alternatives is Jamba Juice.
Answers to Questions
1. Conduct an environmental scan for Jamba Juice as it considers a new juice bar to
open near your university. Identify factors that you think have an impact on the juice
bar market, and indicate whether these factors would tend to enhance opportunities
or represent threats.
Chapter 03 - Scanning the Marketing Environment
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2. Given your environmental analysis, which environmental force do you believe is most
critical for Jamba Juice and why.
Answer:
3. Examine the competitive environment for juice bars. Consider the likelihood of new
entrants, barriers to entry, existing competitors, and substitutes. How would you
summarize the current competitive environment?
Answers:
Chapter 03 - Scanning the Marketing Environment
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4. Do you think that the juice bar phenomenon is a fad or rooted in some fundamental
environmental and market forces? Why?
Answer:
Epilogue
Kirk Perron didn’t have the grade point average to be admitted to Cal Poly’s College of
Business. But he did have what he takes to be the successful founder of Jamba Juice. Any
guesses on who is now a popular invited speaker to the Cal Poly campus to discuss his business
success?
Chapter 03 - Scanning the Marketing Environment
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ICA 3-1: IN-CLASS ACTIVITY
An Environmental Scan for Truvía
Learning Objectives. To have students analyze the social, economic, technological,
competitive, and regulatory forces and trends an organization faces when developing and
marketing a product or service.
Nature of the Activity. To have students learn how to conduct an environmental scan
for Truvía, an all-natural sweetener.
Estimated Class Time and Teaching Suggestions. The Sweetener Market Handout be
distributed to students one class period before the planned in-class discussion with instructions to
read through the material. If students have a chance to read the material in advance, the in-class
portion runs about 15 minutes. This ICA should be conducted in teams of four students.
Materials Needed.
• OPTIONAL: A box of Truvía natural sweetener packets purchased from a local store
and brought to class.
• Copies for each student, either in hard copy or electronically, of the:
– “The Sweetener Market” handout.
– “An Environmental Scan for Truvía” handout.
– OPTIONAL: “An Environmental Scan for Truvía Answers” handout that can be
used as a reference for discussion.
Steps to Teach this ICA.
1. OPTIONAL: Bookmark the following websites on your classroom computer:
2. Pass out the following handouts to students prior to the class in which this ICA is
conducted and ask students to read them before coming to the next class:
3. Form students into four-person teams.
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4. Give the following mini-lecture on environmental scanning:
“Changes constantly affect an organization and are a source of opportunities and
threats that its marketers must manage. Anticipating and then responding to these
5. Briefly explain the nature of this ICA:
“One of the growing concerns in the U.S. and elsewhere is the alarming rise in
obesity. Food and beverages account for about 60 percent of the sugar used annually
in the U.S.1 More and more consumers now demand food products that are healthier.
6. On discussion day, recap the nature of the environmental scan, possibly repeat some
of the information above.
7. Click on the “What is Truvía? Video” Internet icon [TRT = 1:35] to play a YouTube
8. Show “An Environmental Scan for Truvía” Handout and give the following
instructions:
Chapter 03 - Scanning the Marketing Environment
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“Spend the next 10 minutes in your groups and conduct a brief environmental scan
for Truvía. Based on the An Environmental Scan for Truvía Handout and your
9. Call on several student teams to get their responses and discuss them. You may wish
10. OPTIONAL: Pass out copies of the An Environmental Scan for Truvía Answers
Handout to each student.
Marketing Lessons. When conducting an environmental scan, marketers consult a
Chapter 03 - Scanning the Marketing Environment
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THE SWEETENER MARKET HANDOUT
INTRODUCTION
Stevia is an herb that is a member of the chrysanthemum plant family. In 1887, it was discovered in Paraguay,
whose Guarani natives used the plant’s leaves as a natural sweetener.2 It also grows natively in Brazil and
Argentina. During the 1980s, China began to cultivate stevia for export to Japan. During the 1990s, Paraguay and
Brazil produced stevia products and distributed them to international markets.
The natural sweetener comes from the outer edges of the leaves from the stevia plant. The leaves contain chemicals
called glycosides (glyco = glucose = sugar), which are from 250 to 400 times sweeter than table sugar (sucrose). Of
the four steviol glycosides in the stevia leaf, the sweetest and least bitter is rebaudioside A (Reb A). After the leaves
are picked from the stevia plant, they are steeped or boiled in water (like tea) to extract the Reb A.
Aspartame (Equal), saccharin (Sweet ‘N Low), and sucralose (Splenda) are the three principal artificial sweeteners
on the market today. Each of these has had some scientific and anecdotal evidence indicating that there are some
health-related problems when using them. The Center for Science in the Public Interest, a health advocacy
organization, recommends that consumers avoid aspartame and saccharin due to a possible increase in cancer.3 This
concern has led to recent declines in artificial sweetener sales. Enter stevia.4
Some health experts, including the popular nutritionist Dr. Andrew Weil, believe that stevia is safer than the three
popular artificial sweeteners.5 Stevia’s side effects seem minimal: Some consumers have reported nausea, dizziness,
bloating, and headaches. During the 1960s, there were unsubstantiated reports that stevia glycosides caused cancer,
male reproductive problems, hypotension (low blood pressure), and hypoglycemia (low blood sugar).6 However,
the Food and Drug Administration (FDA) and other global health organizations have refuted these claims: Over 200
research studies have proven that stevia is safe for consumption as a food additive.
SOCIAL ENVIRONMENT
Consumers love things sweet. Until recently, table sugar (sucrose) was the only general purpose sweetener. Natural
sugar (sucrose) comes from three primary sources: sugar cane, sugar beets, and honey. However, consumers are
demanding high intensity, low-/no-calorie sweeteners to replace sugar in their diets. The reasons are: (1) the rising
incidence of obesity, which correlates with a increase Type 2 diabetes; (2) a general trend toward healthier eating,
consuming foods and beverages with a low glycemic index (a measure that ranks foods based on their effect on
blood sugar levels) to maintain or reduce weight; and (3) a desire for products that don’t contain fermentable
carbohydrates that cause tooth decay.
Consumers also want their alternative sweeteners to taste like sugar, with no aftertaste when used in hot and cold
beverages, baked goods, confections (candy gum, etc.), dairy products (ice cream, yogurt, etc.), and other uses.
Stevia’s Reb A compound tends to leave a licorice-like taste in the mouth. To improve taste and lower cost, some
marketers combine Reb A with sugar, another natural sweetener such as erythitol (obtained from melons, grapes,
and pears), or a glucose derivative (dextrose, fructose, etc.). In addition, consumers want their sweeteners to be heat
stable when cooking or baking with them. Lastly, consumers want sweeteners that are safe (non toxic), odorless,
and easily metabolized.
Consumers prefer sweeteners in granules or liquid forms and packaged in a variety of types: packets, which are
boxed in various count sizes, pouches/bags (to pour or spoon out), bottles (for drops), powder (to sprinkle), sticks (to
stir), and tablets (to dissolve slowly). Packets come in various sizes (40-count; 50-ct; 100-ct; 200-ct; 400-ct; 800-ct;
Chapter 03 - Scanning the Marketing Environment
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THE SWEETENER MARKET HANDOUT
ECONOMIC ENVIRONMENT
The U.S. and global economies are in the early stages of an economic recovery from the 2008 financial crisis. Since
January of 2012, disposable income has risen from $12 to $12.5 trillion according to data from the U.S. Bureau of
Economic Analysis reported for the third quarter of 2013. For the same time period, unemployment has decreased
from 8.5% to 7.2%.7 Stevia-based sweeteners are more expensive than their artificial counterparts, at least for now.
TECHNOLOGICAL ENVIRONMENT
In 1931, the chemicals that give stevia its sweetness were isolated. In 1995, The National Institutes of Heath
described the chemical structure of the molecules that stevia its sweetness. Another potential artificial sweetener is
neotame, produced by The NutraSweet Company. Neotame is 7,000-13,000 times sweeter than sugar and is a
derivative of aspartame developed by a Japanese firm in April 2009 that has a taste very similar to sugar. The
ingredient has been approved by the FDA.
COMPETITIVE ENVIRONMENT
There are two classes of sweeteners: natural and artificial, of which the latter are produced through chemistry. Until
recently, most firms in this market have focused on artificial sweeteners, such as aspartame, which was first used in
Diet Coke in 1982. As a result, this category currently dominates the market. As the leading segment in the market,
sugar is responsible for a nearly 50% share of all sales, while natural sweeteners and honey hold the remaining half
with honey having the smallest percentage.
Mintel recently estimated the sales of sugar and natural sweeteners remained flat at $4.6 billion in 2013 due to a
Chapter 03 - Scanning the Marketing Environment
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THE SWEETENER MARKET HANDOUT
COMPETITIVE ENVIRONMENT CONTINUED
Other notable sweetener marketers include: (1) The Whole Earth Sweetener Company, which is a wholly-owned
subsidiary of the Merisant Company. It introduced Sweet Simplicity in 2006, which is based on erythitol, a sugar
alcohol found in melons, grapes, and pears. In 2010, Merisant emerged from bankruptcy; (2) The NutriSweet
Company, which was spun-off as a separate firm in 2000 and bought by a venture capital firm. It also developed a
partnership with Domino Sugar to use its “Red & White Swirl” logo, and which also will market its “blue, pink, and
yellow” offerings.
Comparison of the Major Sweetener Brands
Company
Cargill/
Coca-
Cola
Whole
Earth
Sweetener
Co./Meri-
sant/
PepsiCo
Wisdom
Natural
Brands
Stevia in
the Raw
Cumber-
land
Packing
Corp.
Merisant
Company
McNeil
Nutri-
tionals/
Tate &
Lyle
Brand
Truvía
PureVia
SweetLeaf
Stevia in
the Raw
Sweet ’N
Low
Equal
Splenda
Key
Ingredient
Stevia
Stevia
Stevia
Stevia
Saccharin
Aspartame
Sucralose
Type
Natural
Natural
Natural
Natural
Artificial
Artificial
Artificial
Sweetness
Level
250-400
times >
sugar
250-400
times >
sugar
250-400
times >
sugar
300-400
times >
sugar
300 times >
sugar
180-200
times >
sugar
600 times >
sugar
Year
Introduced
2008
2008
2008
Late 1990s
1957
1981
2000
Package Color
Green
Green
Green
Green
Pink
Blue
Yellow
Sample Packet
MSRPs*
40-ct: $4.03
(10.1¢ per
packet)
40-ct: $2.45
(6.1¢ per
packet)
35-ct: $4.59
(13.1¢ per
packet)
50-ct: $3.65
(7.3¢ per
packet)
50-ct: $1.57
(3.5¢ per
packet)
250-ct: $4.98
(1.9¢ per
packet)†
100-ct: $4.73
(4.7¢ per
packet)
*Prices obtained at Mount Royal or online at Walmart
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THE SWEETENER MARKET HANDOUT
REGULATORY ENVIRONMENT
In 1921, stevia was presented to the U.S. Department of Agriculture as a “new sugar plant with great commercial
possibilities.”
In 1956, the Food and Agriculture Organization (FAO) of the United Nations and the World Health Organization
(WHO) established the Joint Expert Committee on Food Additives (JECFA) to evaluate the safety of food additives.
In 1958, The Food Additive Amendments to the Federal Food, Drug and Cosmetic Act allows food ingredients to
be Generally Recognized as Safe (GRAS) if an ingredient has been in common usage for a long period of time,
and/or was demonstrated safe in terms of its intended use by a sufficient body of scientific literature. Some common
GRAS ingredients include vanilla, mustard, and cinnamon.
In 1970, Japan conducts safety tests and concludes that stevia is safe. As a result, Japan began to market stevia as an
alternative to banned artificial sweeteners from the 1960s (cyclamates). In 1986, Brazil allows stevia to be used as a
natural sweetener in foods and drinks.
In 1994, the U.S. Congress passes the Dietary Supplement Health and Education Act or DSHEA. In 1995, the Food
and Drug Administration (FDA), under the authority of the DSHEA, permits stevia to be used as a dietary
supplement but NOT as a food additive, which is defined as an ingredient that affects the characteristics of a food or
beverage.
In 2004, JECFA establishes temporary Acceptable Daily Intake (ADI) of 2 mg/kg. The ADI is temporary pending
submission of additional safety data. This means that a 150 lb/68 kg person could safely consume 15 1mg packages
of sweetener made from Reb A every day over the course of his/her lifetime.
In 2008, the FAO/WHO/JECFA Expert Committee on Food Additives states that high purity (95%) steviol
glycosides are safe for use as an additive in food and beverages. Also, the FDA announces it has no objections to
the use of Cargill’s rebiana in food and beverages. It also finds that rebiana can now come under the category of
Generally Recognized as Safe (GRAS). In December 2008, Cargill received approval from the FDA to use Reb A
(rebiana) as a general purpose sweetener because it is safe for consumers.
In November 2011, the European Commission adopted Regulation EU 1131/2011 granting authorization to the use
of steviol glycosides as food and drinks additive.12 Stevia is also approved in Mexico, Switzerland, Canada,
Australia, and New Zealand.13
As of 2013, nine types of steviol glycosides are approved for use in the United States while ten are approved in the
European Union, five in China, and four in Japan.14
Chapter 03 - Scanning the Marketing Environment
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AN ENVIRONMENTAL SCAN FOR TRUVÍA HANDOUT ANSWERS
Environmental
Force
Positive Trend
Negative Trend
• Desire to live a healthier lifestyle.
• Increased demand for sweeteners like
• More obese people leading to more
diabetics.
Economic
• Some consumers have the disposable
income to spend on healthier but
costlier sweeteners like Truvía.
• Consumers concerned about jobs and
income due to the recession.
• Consumers look for value.
• Stevia sales growing the fastest of any
sweetener—now 10% of total
sweetener sales after only 1 year.
• Additional stevia, natural, and
produce and export stevia.
• NutraSweet/Equal, Sweet ‘N Low,
and Splenda are formidable
competitors, whose firms may
introduce stevia products in the future.
(3) sugar marketers or its trade
association.
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AN ENVIRONMENTAL SCAN FOR TRUVÍA HANDOUT
ENVIRONMENTAL
FORCE
POSITIVE TRENDS
NEGATIVE TRENDS
SOCIAL
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ECONOMIC
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TECHNOLOGICAL
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COMPETITIVE
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REGULATORY
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