A new energy drink

A new energy drink

INTRODUCTION

At FrieslandCampina our ambition is to become the world’s most professional, successful and attractive global company.[1] We are aiming to start a new energy drink to sell in the UK market at the first phase and then extend it to Western Europe, Middle East and Asia. Our major competitor in the UK Market will be Red Bull, Lucozade, Rockstar, Relentless Energy and other few well established rivals in the market.

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1. EXECUTIVE SUMMARY

FrieslandCampina is preparing to launch a new energy drink in the United Kingdom market as high quality on reasonable price under the name of BoosterPack. The company can potentially earn higher profit margin by targeting the UK market. The company is going to target the whole UK energy drinker market from the age 12 to late 60s. Our product line extension will be introduced and launched in the UK Market by end of October 2010, a right time to launch any product in this country and its just before Christmas too where consumer like trying new products available in the market. We can compete within the market with good quality, healthy ingredients and most importantly with cool fresh great taste and it will be entirely new kind of energy drink within UK market.

According to a survey report in 2009 Energy drink market hit £1bn in one year in the United Kingdom and consumer spent £1 in every £5 on soft drinks. The sales of the drinks which contain sugars or stimulants such as caffeine have risen by 75% since 2000 in the UK market. [2]

The UK has the longest working hours as compare to other EU countries and to get most out of the day consumers are increasingly looking at all those products with an extra boost, which is a reason why many people are reaching for energy drinks.

The primary financial objectives are to achieve first year sales revenues of £9million and capture 9% of the UK market and keep first year losses to less than £2million and break even early in the second year. Our main objective will be to make brand awareness among the consumers within first 6 months.

2. SITUATION ANALYSIS

In 1979 DMV Campina was established in Netherland. DMV Campina en Melkunie Holland merge into Campina Melkunie in 1989. In 1997 four major co-operatives in the north and east of the Netherlands merge to create Friesland Coberco, which later becomes Friesland Foods. In 2001, Campina merge with the Milchwerke Köln/Wuppertal co-operative from Cologne, Germany and the De Verbroedering co-operative from the Antwerp region of Belgium. This creates the international Campina co-operative.

In December 2007, Friesland Foods and Campina announce their intentions to merge. One year later, in December 2008, we receive the approval of the European competition authorities to become FrieslandCampina.[3]

In 2008, Campina once again headed the retail top 100, achieving sales of € 426 million. Turnover from supermarket sales of Campina products was 4.5% higher than in 2007, according to the IRI. Moreover, it is the only brand to exceed € 400 million in supermarket sales. The Campina brand sold nearly one and a half times more than the second and third brands on the list: Marlboro (€ 302 million) and Douwe Egberts (€ 297 million).

The dairy organisation markets the following products under the Campina brand: milk, yoghurt, custard (with a healthier fatty acid composition), cream and coffee creamers, Campina Optimel (yoghurt drinks, yoghurts, quark, custard, Smoothie and Control with zero fat and no added sugar), Campina Vifit (for balanced intestinal flora) and Campina Botergoud (butter). There have been some shifts in consumer patterns since the previous year. Sales of classic dairy products such as milk, custard and yoghurt have shrunk further. The flip side however is higher brand turnover for value-added products such as extra healthy dairy and yoghurt drinks.[4]

At FrieslandCampina our ambition is to become the world’s most professional, successful and attractive global company by getting more out of milk and capture a good market share in the beverage industry. We are aiming to do this through our strategic choices that are more focused on the long term basis, and to best serve our customers, consumers, employees and member farmers. Our priorities are to strengthen our ability to get more out of milk, to build our presence globally, and to generate profit to fund our present needs and future growth. We are well positioned to achieve this. Our products and ingredients are a part of everyday life around the world, a source of nutrition, energy and pleasure for adults, children and infants.

2.1 MARKET SUMMARY

“A recent survey estimates that around 35 percent of energy drink consumers are above 35 years old, furthermore energy drinks with high sugar levels are more popular among children and women, while energy drinks with strong taste and flavour are preferred by male consumers”.[5]

Our target market is all the consumers from the age of 12 to late 60s as BoosterPack will be designed for all males, females and children because of its good quality, healthy ingredients and most importantly with cool fresh great taste and it will be entirely new kind of energy drink within this market. The primary consumer for energy drinks are normally under the age of 35 years and are mostly male and then teenager and college students are core target market segments for energy drink and usually consist between the ages of 12 to 30. Although UK is under recession but energy drink market still has been buoyant. According to a survey report energy drink sale has been accounted for a combined £941 million and it was estimated to cross the value of just over £1 billion in 2009. Our plan is to get into the energy drink market for a long term and capture a large share of the market in the UK and globally.

“According to a recent British study, UK consumers view energy drinks as value for their money rather than a luxury, with sales for the products expected to soar over the next five years”.[6]

2.2 STRENGTHS, WEAKNESSES, OPPORTUNITIES AND THREAT ANALYSIS (SWOT ANALYSIS)

FrieslandCampina has much different strength as it has good name in the market with good quality products around the globe. FrieslandCampina is financially strong and the only weaknesses we may face in launching this new product can be the lack of brand awareness and threat from the few well established rivals in the market may start producing same product.

STRENGTHS

At present we have the following strengths within the UK & European market:

• In 2008, Campina once again headed the retail top 100, achieving sales of € 426 million 4.5% higher than in 2007.
• Moreover, it is the only brand to exceed € 400 million in supermarket sales.
• The Campina brand sold nearly one and a half times more than the second and third brands on the list.
• A well known company – the dairy organisation markets the following products under the Campina brand: milk, yoghurt, custard (with a healthier fatty acid composition), cream and coffee creamers, Campina Optimel (yoghurt drinks, yoghurts, quark, custard, Smoothie and Control with zero fat and no added sugar), Campina Vifit (for balanced intestinal flora) and Campina Botergoud (butter).
• Recognised brand name in the UK market
• Market share in the milkshake market
• No sugar No calories
• Consumers loyalty

WEAKNESSES

• No brand name awareness
• As a luxury beverage, demand is highly elastic
• Large distribution network can cause misplaced and wasted products

OPPORTUNITIES

• Increase public’s awareness of healthy choices
• Consumers have an increasing need for energy boost up products in their busy lives
• Energy drink market is the fastest growing segment of the industry
• Using the internet to relay information and reach new customers
• Over £1 billion industry in the UK
• 75% grown sale of energy drinks since 2000 in the UK

THREATS

• Rival in the market may start same product in the market with same ingredients
• Regulatory requirements could tighten and force compliance
• Inability to keep up with changing demands will lose market share

2.3 COMPETITION

In theory we don’t have any specific competitor as the ingredients which will be used in BoosterPack are being used at first time ever in an energy drink but as the market has been already captured by world famous energy drinks so we are assuming them as our main competitors. Red Bull is dominant competitor to BoosterPack while Lucozade, Rockstar, Relentless Energy create additional competition.

Þ Red Bull

Red Bull has a commanding market share of 70% within the energy drink segment in the UK market. Although Red Bull uses the same distribution channels as any other energy drink but has alternative markets that differentiate its product. Red Bull is widely used in the party scene to mix with alcohol, giving people energy for late-night parties. This strengthens Red Bull’s extreme brand image.

Þ Lucozade

Lucozade energy is a firmly established household brand and the No.2 soft drinks in the UK worth £225.1m currently capturing 32.8% share of the energy drink market and is growing at 3.4%.[7]

Þ Rockstar

Rockstar an American company launched their energy drink in the UK in 2007 claims to have 15% of market share

Þ Relentless

Relentless is a brand extension of Coca-Cola and has been launched in February 2006 was aimed at 18 to 40 years old men, had a sale of £25m.

Despite strong competition, BoosterPack can serve out a definite image and gain recognition amount targeted segments. Our 0 sugar and less calories and the special new ingredients (which never been used in any energy drink before) are a critical point of differentiation for competitive advantage. All these competitors are using the ingredients as some of them are not good for human health, Table A.1 shows a sample of competitive products size and their current price in the market.

2.4 PRODUCT OFFERING

• BoosterPack will be the first energy drink in the market which will introduce 0 sugar plus less calories.
• Our product will improve short term memory and its attractive packing will be more convenient and portable for on the go consumption.
• Will be the first of its kind to attract females from all age groups.
• Two different flavours of orange and lemon-lime will attract consumers from all age groups.
• BoosterPack will contain vitamins C.
• BoosterPack will contain vitamins B6 and B12
• It will contain less caffeine than any other energy drink in the market
• Students and drivers who work late will be targeted the most with reasonable price.

3. MARKETING STRATEGY

3.1 MARKETING OBJECTIVES

We have set aggressive but achievable goals for the first and second years of market entry. BoosterPack is introducing to reduce customer’s stress and boost up their energy level and at the same time giving them a great tasting, healthy beverage. The overall objective of our company is to reach as many consumers as possible with this beneficial product and keep them coming back for more. To reach this goal, we set the following measurable goals to assess how our product is doing:

a. Sales

We want to measure BoosterPack popularity by increasing sales in the first year by £9 million. This sales goal is based on company’s number of products in the products mix as Yazoo milkshake is being sold over 80 million bottles in the UK every year that is over 20 million liters of Yazoo.[8]

b. Customers’ awareness

We aim to increase consumers’ awareness of BoosterPack in our target market by the end of 2010. To achieve this objective we will use FrieslandCampina’s promotion strategies and its website that will present unique sense of humor. Consumer’s awareness can be measured by conducting online survey through the already established website. We would only ask two simple questions: (1) Have they heard of FrieslandCampina’s BoosterPack and (2) Have they tried it. These questions will only require yes or no answers and will be easy to collect and calculate. Our goal is to have atleast 70% yes to having heard of FrieslandCampina’s BoosterPack and 50% answers yes to having tried it

c. Market surveys

We will conduct different market surveys at different locations, especially at three different college campuses. During final week have 100 students try BoosterPack for a night. Then have them fill out a questionnaire asking how they liked it on a scale of 1-10. Our objective is to have a 7 average satisfaction rate. It is very important for us that our consumers really like our product.

3.2 TARGET MARKET

The energy drink target market is mostly over-worked lifestyle, young people, students, and worker who work extra hours and require more concentration as per their respective jobs like driving, machine operating etc. Young group of people are more vulnerable to persistent exhaustion and insufficient energy. In this group, the energy drink manufacturers are targeting specifically male teenagers and people in their 20s. As a result, the majority of energy drinks are developed for and advertised to this younger generation.

Adrian Troy, head of marketing for Barr Soft Drinks believes the UK energy drinks market still has a huge potential for growth, he says: “In the past five years the energy drinks market has doubled in the UK but there is still huge opportunity. Penetration of energy drinks in the UK is only 20% whereas it’s as high as 50% in some other countries. This growth has largely been driven by bigger cans, giving more value for money to consumers.” [9]

Our firm will be targeting the following consumers within UK market:

• Unlike all the available energy drink and energy products in the market we are going to target everyone from the age of 12 to late 60s.
• According to all the recent surveys the target market for energy drink are male but BoosterPack will the be its first kind of energy drink in the market which will introduce 0 sugar and less calories which will attract not only the males but also young females who normally don’t drink these drinks and are more health conscious.
• Our product will improve short term memory and its attractive packing will be more convenient and portable for on the go consumption, which will attract the youngsters and college and university students.
• Two different flavours of orange and lemon-lime will attract consumers from all age groups, as most people don’t like energy drink taste already available within the market.
• BoosterPack will contain vitamins C, vitamins B6 and B12 and will be its very first kind of energy drink in the market
• 2% of RDA for sodium will be added in BoosterPack energy drink which is needed for an active human body
• The 0 sugar and less calories will not only attract the young females but it will also attract the females in early 50s who usually prefer coffee and tea as energy boost for their bodies.
• The main targeted market segments will be people from all age groups, who lead active, busy lives, and have a lot of stress. Examples include college students and working professionals. BoosterPack will help them reducing their stress level, give them peaceful mindest, and give them more energy to carry on with their respective work.

3.3 POSITIONING

While using our product differentiation, we are positioning BoosterPack as the most versatile, convenient, value added product for consumer from all the age group and from all areas. Our marketing will focus on the sugar free, less calories, low caffeine, great taste and two different flavours to differentiate out product.

3.4 PRODUCT

BoosterPack is a healthy, refreshing and energy boosters with great taste coupled with herbal supplements that will help relax the mind, relieve stress and act as a energy booster for body. It will be sold in 500g plastic bottles similar to current FrieslandCampina’s product Yazoo milkshake. The logo of FrieslandCampina will stay same as on Yazoo milkshake bottle, a brief description of the flavour, herbal contents and all the ingredients will be given. Nutritional information will be included on the opposite side. FrieslandCampina’s products have clever sayings found under the caps of their Yazoo milkshake bottles, “Low in fat” will stay same on BoosterPack bottle.

3.5 PRICING

We aim to use a market based target costing method to price the new energy drink. The price range for other existing FrieslandCampina’s products like Yazoo milkshake is £0.69 however all other competitor energy drink prices are between £1 to £2, so we believe that consumer will be happy to pay £1.30. This price is less then all other competitors. Our next step will be to find cost effective ways to produce this product that allow us to maintain a specific gross margin on each bottle sold.

3.5 DISTRIBUTION

The overall distribution objective will be to make BoosterPack available everywhere in the United Kingdom market and where existing FrieslandCampina’s products are already being sold as this is a cost saving plan too because FrieslandCampina already have links within the market with a continue and successful supply of its products. So we will sell to our existing business customers and will distribute the product in the market through these channels:

• Vending machines
• Highest traffic urban stores
• College/university campuses
• Super markets chains (Tesco, Sainsbury, ASDA, M&S etc)
• Convenience stores, mini markets
• Select restaurants/hotels with health-conscious customers
• Pubs, clubs
• Motorway breaks
• Garage stations
• Pharmaceutical departments
• Airports, train stations and other busy public places

3.6 PROMOTION

FrieslandCampina is a non-traditional marketer that focuses its efforts on differentiating its products on the shelves. In order to differentiate BoosterPack there needs to be elements of consistency throughout the entire Integrated Marketing Campaign (IMC). These elements include the slogan “Boost up your powers” The slogan helps enforce the personality and feel for the beverage.

3.7 MARKETING COMMUNICATIONS

By spreading our message in all available print and electronic media, we will reinforce the brand name and the main points of product differentiation.

TV advertising

FrieslandCampina already running TV ads for their other dairy products and Yazoo milkshake so BoosterPack can be added into those TV commercial.

Radio advertising

We will use Radio commercials that will communicate how important is to use the right energy drink to boost up energy.

Website

We will introduce a new website for BoosterPack as FrieslandCampina already running a totally separate website for Yazoo milkshake. This website will allow consumers to read about the benefits of the supplements, vitamins and other important facts about energy. There will be a section where consumers can express their likes and dislikes. The website will be designed like Yazoo milkshake and as intense and crazy to be consistent and attractive for consumers from all ages.

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Events and Sponsorships

As Yazoo is a proud sponsor of youth sport to promote an active health lifestyle. BoosterPack will sponsor the same and also will sponsor youth sport with The RFU and England Hockey to help bring tag rugby and hockey to as many young players as possible. Furthermore BoosterPack can also get involved in different universities and colleges campus activities. We will go to these campuses during final exam week and promote BoosterPack with discounted price. Representatives will hand out free bottles at libraries and dorms to give students a chance to try the product

3.8 MARKETING MIX

BoosterPack will be introduced in the UK market by end of October 2010. We will use the following action programmes to achieve our stated objectives:

August

We will be getting ready in this month and will produce a small amount of our product which we will distribute to the professional people and within our staff members to get their opinion about the product. Also during this month we will get intouch with different advertising agencies for effective marketing communications.

September

Just a month before launching the product, September will be very important to introduce the product to the retailer and outlets. Our trained staff will work with retail sales personnel at major chains to explain BoosterPack’s advantages, benefits and how it differentiate from other energy drink available within the market. Also we will collect the response from selected product users after supplying them free samples to get their opinion about our product.

October

As we are launching in this month so we have to be prepared for on time deliveries to all the retailers and shop outlets and all other targeted positions. We will start a campaign on net, radio, TV and through print media to target our end consumers. This will show us the result how our product is doing and how many people like it and what are their dislikes about our products, how we can improve ourselves.

November

As our advertising campaign continues on TV/radio, internet, newspapers, magazines, billboards etc, we will start a small competition to win where we will encourage users to fill an online form and tell us their experience with our energy drink and by submitting this form they will be included in a price draw.

December

December will be a very important month for us as because of Christmas holidays season it is busy every where, in all circles of life, work and study. Usually everyone use energy drinks during this month, as working group have extra load of work, students gets more study material to finish, factories are open late to finish their target so everyone is busy this month and don’t get much sleep and are usually more tired than in any other month so this is peak time for all the energy products. We will advertise more and supply extra stock to all the retailers and outlets to fulfil the extra requirement for this month.

January

January is the month when many businesses are isolated because it is usually said that customers have nothing left to spend after Christmas season. So this is the ideal time to start sale as many companies start sale just after Christmas day and its more kind of cultural thing to go for shopping on boxing day in the United Kingdom so our objective is to start sale in January like buy one get one free to sell more stock plus gain more product awareness in the market.

3.9 MARKETING RESEARCH

Using different research methods we will identify specific benefits of our target market segments value. We will get help to improve our product within UK market after getting the feedback from market tests, surveys and focus groups. We will also analyse consumer’s attitudes towards our competing brands and products. Brand awareness research will help us to determine the effectiveness and efficiency of our messages and media. Finally we will use customer’s satisfaction studies to gauge market reaction.

4. FINANCIAL MATTERS

To reach our £9million sales revenue for first year, the company would need to sell (£9million/£1.30) 6.9million bottles per year. The predicted sale is 133,136 bottles per week. Variable cost per bottle will be around £0.80 so cost for first year will be £5.5million and BoosterPack will become profitable after the sales volume exceeds £5.5million and with our prompt sale as predicted we will generate £3.5million profit for first year.

5. CONTROLS

To closely monitor quality and customer service satisfaction we are planning tight control measurements. So we are able to act fast to correct any problem that may occur. Other early warning signals that will be monitored for signs of deviation from the plan include monthly sale (by segment and distribution outlet) and monthly expenses.

6. WORK CITED

1) http://www.frieslandcampina.com/english/about-us/company/vision-en-strategy.aspx

2) http://news.bbc.co.uk/1/hi/business/4144078.stm

3) http://www.supplementgenius.com/index.php?s=figure+of+energy+drink+consumers

4) http://www.frieslandcampina.com/english/news-and-press/news/corporate-news/2009-02-20-campina-grootste-merk.aspx

5) http://www.researchwikis.com/Energy_Drinks_Market

6) http://www.talkingretail.com/products/product-news/12278-lucozade-energy-cash-giveaway.html

7) http://www.talkingretail.com/products/product-news/12278-lucozade-energy-cash-giveaway.html

8) http://www.yazoo.co.uk/our-products.aspx

9) http://www.fluidtrade.co.uk/Rockstar.fluidnews

10) www.redbull.co.uk

MARKETING PLAN – BoosterPack Energy Drink asghar abbas chaudhry

[1] http://www.frieslandcampina.com/english/about-us/company/vision-en-strategy.aspx

[2] http://news.bbc.co.uk/1/hi/business/4144078.stm

[3] http://www.frieslandcampina.com/english/about-us/history.aspx

[4] http://www.frieslandcampina.com/english/news-and-press/news/corporate-news/2009-02-20-campina-grootste-merk.aspx

[5] http://www.researchwikis.com/Energy_Drinks_Market

[6] http://www.supplementgenius.com/index.php?s=figure+of+energy+drink+consumers

[7] http://www.talkingretail.com/products/product-news/12278-lucozade-energy-cash-giveaway.html

[8] http://www.yazoo.co.uk/our-products.aspx

[9] http://www.fluidtrade.co.uk/Rockstar.fluidnews