Jamba Juice Case Study Analysis

OntarioLearn Marketing I –
Midterm Test – Take Home Case Study Analysis
Student Name: Sandeep Kaur Kainth
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Instructions:
Please read the following case studies and respond to the following questions for each (there are
4 questions – total). Include your name on this paper, and do not exceed three (3) additional
pages, double spaced, 12 pt. font, for the sum of your responses. Provide your responses in the
responses section at the conclusion of the document.
Total: 20 Marks
Part 1 – Case Study - Jamba Juice
What were you doing in 10th grade? Kirk Perron was thinking about his future and putting
together a deal that would help launch the successful Jamba Juice chain. It sounds incredible
but Kirk Perron bought the real estate for his first juice bar when he was in 10th grade. He
borrowed money from a high school counselor, the librarian, and his school bus driver to put
together the $12,000 down payment.
THE COMPANY
Kirk Perron opened up his first operation as The Juice Club in 1990 in San Luis Obispo,
California. He hit on the idea for a convenient, delicious, healthful food store on a long weekend
bike ride. An avid cyclist with a lifelong interest in health and nutrition, he wanted to offer an
alternative to typical fast food fare. The idea was a hit and quickly spread. In 1995, the company
changed its name from The Juice Club to Jamba Juice. Today Jamba Juice has more than 700
stores nationwide offering a variety of healthy drinks and snacks and is considered the industry
leader in the smoothie market.
THE IDEA
Jamba Juice is all about healthy food and fun. Jamba is from an African word that means “to
celebrate.” Walk into a Jamba Juice store and customers can choose from a wide variety of
Jamba Juice specialties including smoothies, fresh-squeezed fruit and vegetable juices, breads,
and pretzels. Jamba’s commitment to healthy products is reflected in its mission statement,
“Enriching the daily experience of our customers, our community, and ourselves through the
life-nourishing qualities of fruits and vegetables.” Smoothies are the bulk of Jamba Juice’s
business. They are made with juice and fruit and often yogurt, sherbet, or ice milk. A typical
smoothie gets most of its calories from carbohydrates and protein, providing a low- or no-fat,
nutritious meal. Jamba smoothies are designed to meet “heart healthy” FDA requirements.
Nutritional supplements called “boosts,” such as “energy juice boost,” containing ginseng and
gingko biloba, and “immunity juice boost,” with echinacea and antioxidants, are available and
can be added to smoothies. Jamba Juice also recently added a new low-calorie drink, the
Enlightened Smoothie, to its menu.
Learn more about Jamba at www.jambajuice.com.

As you sit at the counter in a Jamba Juice, you can watch friendly, well-trained Jamba Juice
employees whip, beat, and blend your smoothie right before your eyes. Stores also feature
nutrition centers where customers can get a complete nutritional breakdown for each product.
Outlets also feature a merchandising area, which has Jamba Juice juicers, mugs, hats, and T-
shirts.
THE COMPETITION
Juice bars have been part of a growing trend. Barriers to entry are fairly low. Single-store outlets
and small chains within a city or region are common, although Jamba has several large
competitors. New Orleans–based Smoothie King, for example, has 580 locations in 32 states,
and Atlanta-based Planet Smoothie has more than 125 stores in 20 states. Other competitors
include Juice Stop, Juice It Up!, Surf City Squeeze, and Orange Julius. Jamba Juice has
positioned itself as a replacement for typical fast food fare. This means it also considers fast food
restaurants indirect competitors. Jamba has had to fight to maintain its trademark in a competitive
market. Several years ago a San Francisco juice bar called Jamm’n Juice was forced to change its
name after Jamba complained that Jamm’n Juice and its animated fruit and vegetables were too
close to the Jamba trademark and logo.
THE MARKET
Juice bars have existed for decades, often in health-food stores and gyms, and were associated
with what was a small group of intensely health-conscious customers. That small demographic
group boomed in recent years, fueling the market for fat-free foods, fitness equipment, and
apparel. There has also been an increasing level of health consciousness among society
generally. However, Jamba Juice is optimistic about the opportunities for expanding the market
by replacing fast food with good-for-you food. Retail sales of juice and smoothies exceeded $1.2
billion in 2006 and $2 billion in 2015, compared with $552 million in 2000. About two-thirds of
Jamba’s customers are between the ages of 15 and 25— not exactly the same demographic group
as the traditional health-conscious baby boomer. Age and education level are important selection
criteria for opening new Jamba Juice outlets. Kirk Perron believes that the more highly educated
potential customers are, the more likely they will be to stop in for a nutritious smoothie. In fact,
many of the current and planned Jamba outlets are in college towns, and partnerships have been
formed to open outlets in universities and airports. Jamba also has a licensing agreement with
Whole Foods Markets, a partner that shares Jamba’s values and commitment to healthy living.
THE ISSUES
Purists insist that the best drinks come from completely fresh produce. Fresh produce can be hard
to work with to provide consistent-tasting drinks. Also, the price of fresh produce can change
drastically throughout the year. With fairly limited menus, juice bars are considered great as an
add-on rather than a stand-alone retail establishment because they are usually not strong enough
to draw customer traffic on their own. Personnel are important to the success of a juice bar—
described as “bartenders,” they have to be able to put on a good show for the customer. There is
a seasonality effect for smoothie and juice operators. For example, in northern climates,
operators in enclosed downtown skyways or mall locations often see their business fall off in the
summer when people are outdoors walking around.
This case study was prepared by Professor Linda Rochford, University of Minnesota, Duluth, and Steven
Hartley from the following sources: Jamba Juice Corporation website and press releases:
www.jambajuice.com; “Juicy Prospects,” Star Tribune, August 27, 2001, pp. D1–D2; Scott Hume,
“Segment Rankings,” Restaurants and Institutions, July 1, 2004, p. 61; Celeste Ward, “Riney Creates

Good Karma for Jamba Juice,” Adweek. com, March 18, 2004; and John Agoglia, “Squeezing Profits,”
Club Industry, December 1, 2003, p. 12.
Part 1 Questions
1. Define in specific detail the industry segment for Jamba Juice and describe in detail
4 of the environmental forces (from the course) currently acting on their industry as
a whole – with examples. (6 marks)
2. Do you think Jamba’s founder, Kirk Perron, is conscious of the company’s
corporate social responsibility? Explain and provide at least 2 examples of how the
company acts (or does not act) in an ethical manner. (4 marks)
Part 2 – Case Study – Cirque du Soleil
A 27-foot-long bronze clown shoe is the only indication that there is something otherworldly
within the concrete walls of the large, rather nondescript building. Located in Montreal, the
building is home to what many feel is the most successful entertainment company in the world—
Cirque du Soleil. The company’s massive headquarters houses practice rooms the size of
airplane hangars where cast members work on their routines. More than 300 seamstresses,
engineers, and makeup artists sew, design, and build custom materials for exotic shows with
stage lives of 10 to 12 years. In fact, the production staff often invents materials, such as the
special waterproof makeup required for the production of O, a show performed mostly in a 1.5
million-gallon pool of water that was also specially designed and engineered by Cirque
employees. Another key in-house resource is Cirque’s team of 32 talent scouts and casting staff
that recruits and cultivates performers from all over the world. The department maintains a
database of 20,000 names, any of whom could be called at any time to join the members of
Cirque’s cast, who number 2,700 and speak 27 languages.
Shows with exotic names like Mystère, La Nouba, O, Dralion, Varekai, and Zumanity
communicate through style and tone that they are intended to do more than just amuse. Cirque
designs productions with distinct personalities that are meant to evoke awe, wonder, inspiration,
and reflection. As one cast member put it, “The goal of a Cirque performer is not just to perform
a quadruple somersault, but to treat it as some manifestation of a spiritual, inner life. Like in
dance, the goal is ... to have a language, a conversation, with the audience.
Audiences have responded. Even with ticket prices that start at $45 and can run as high as $360,
the company sells about 97 percent of all its seats at every show, despite spending little on
traditional media promotion. Promotions are often offered in conjunction with partner hotels and
casinos. For Cirque, that translates to about $500,000 a week in sales and yearly profits of $100
million on gross revenues of $500 million. Incredibly, every one of the 15 shows that Cirque has
produced over its 20-year history has returned a profit. In contrast, 90 percent of the high-budget
Broadway shows that strive to reach the same target market fail to break even. Cirque’s statistics,
however, are eye-popping. Mystère, which opened at the Treasure Island hotel and casino in Las
Vegas in 1993 and still runs today, cost $45 million to produce and has returned over $430
million; O, which opened at the Bellagio hotel and casino in 1998, cost $92 million to produce