Extreme Energy Drink

University Degree Business and Administrative studies

Table of Contents

Introduction

Lacking energy every day? Extreme Energy Drink is your solution.
Energy drinks are non-alcoholic, often lightly carbonated beverages that are designed to give the consumer a burst of energy by the addition of a number of energy enhancing ingredients, most notably caffeine. Despite warnings that energy drinks should not be mixed with alcohol, they have nevertheless become quite popular at bars and clubs. Energy drinks are commonly available in grocery stores, corner stores and gas stations, usually displayed alongside soft drinks, juices and sports drinks.

The Company

The Curacao Beverage Bottling Company NV produces and cans our new product the “Extreme Energy Drink”. This company has over 60 years of carbonated beverages experience in Curacao, which is the ideal company to introduce a new line of beverage besides their soft drinks.

Marketing Environment

Energy drinks are now a very noticeable convenience product readily available in many locations when customers need them.
Energy drinks are currently enjoying a growth in popularity and marketing presence and newcomers to the scene seem to be popping up constantly. Over 200 new energy drinks hit store shelves in 2006, according to the market research firm ACNielsen. Led by such brands as Red Bull, energy drinks are a $3.7 billion dollars industry whose revenues have increased by 51 percent in the past year alone. So this is a big industry with many opportunities awaiting. Many energy drinks have names that convey strength, power, speed, and sexuality (such as "Shark", "Climax", and "Monster"), and many energy drinks are being marketed primarily to a male crowd, between 18-30 years old. Generally speaking, energy drinks are marketed towards young people, such as students pulling all-nighters, movers and shakers "on the go" and those who play sports. At the same time, energy drinks made from fruit juices, teas and dietary supplements like ginseng and glucosamine also appeal to older, health-minded consumers.

New-product development and product life cycle strategies

New Product Development Process

Extreme Energy drink is formulated to give the consumer an energy jolt by using a combination of methylxanthines, B vitamins, and exotic herbal ingredients. Extreme Energy drink spread over a variety of flavor and each will include caffeine, taurine, various forms of ginseng, maltodextrin, inositol, carnitine, creatine, glucuronolactone and ginkgo biloba.

Often Energy drinks manufacturers add a very small dose of a powerful stimulant such as carnitine, but the doses of these add-ins are usually so small that any added "boost" is purely psychological. Despite exotic formulations, generally the energy boost in these drinks is delivered via the whopping dose of common caffeine. Energy drinks should not be confused with sports drinks such as Gatorade or Powerade, which are intended to replenish electrolytes, sugars, water and other nutrients and are usually isotonic (containing the same proportions as found in the human body). However, some products (such as Reload) are now available as hybrids between energy drinks and sport drinks, with both electrolytes and herbal extracts.

The Product Life Cycle stages

Development Stage

Product Development stage begins when the company finds and develops a new-product idea, in our case we came with the idea to produce a new energy drink. So during this stage, Extreme Energy Drink must be produced, therefore we got high production cost and also high raw material cost. This development stage will take about four months of investment to produce the final product, the Extreme energy drink, but sales are expected to be zero of course.

Introduction Stage

At the Introduction Stage we expect that sales of Extreme energy drink should grow slightly. We first start by offering our new product to all of Curacao Beverage Bottling Company NV’s channels and we should expect a small percentage will be interested to buy this product. During our introduction stage we also make use of trained sales persons to sell as many Extreme energy drinks as possible to our retailers. Besides by only offering our product, we also supply all our retailers with shelves and advertisement materials to expose our Extreme energy drink. Therefore this sums up our introduction stage with high marketing, distribution and research costs. During our introduction stage we will expect no profits. Products at this stage also have to be carefully monitored to ensure that they start to grow.

Growth Stage

Once Extreme Energy Drink becomes more popular and more retailers are more interested in buying our product, we enter the Growth Stage, where rapid growth in sales and profits should happen. When accomplishing this stage means that we have finally reached our goal and profits are expected to rise due to an increase in popularity, thus increase in sales. During this stage, our costs of selling our product are kept high to keep increasing our sales and popularity. Profits during this stage should be high, but not the highest, we expect profit records to be ...

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Growth Stage

Maturity Stage

The Maturity Stage is, perhaps, the most common stage for all markets. It is in this stage that our sales can only be maintained to certain revenue and hardly by increasing it. This is where competition is most intense as companies fight to retain their accustomed market share. During this Maturity stage, we must keep a good eye on our key competitors and the right investments in marketing should be made. Marketing strategy has to be monitored carefully, since any significant moves are likely to be copied by competitors. Expenses on research and development are aimed more into product modification and improvement and most importantly to improve production efficiency and quality. During this stage less marketing and promotion expenses are needed, except certain promotion strategies must be retained in order to maintain our current market shares. So, we expect the highest earnings of Extreme energy drink during this maturity stage.

Decline Stage

In the Decline stage, the market is shrinking, reducing the overall amount of profit that can be shared amongst us, the remaining competitors. At this decline stage, great care has to be taken to manage the product carefully. We should take out any unnecessary production cost, lower promotional expenses and carefully monitor our products profitability. If product does not remain profitable, we should consider ending our Extreme energy drink. So, profits should decrease during this final stage.

Like mentioned above, the most profitable stage of Extreme Energy Drink is expected during the Maturity Stage.

Extreme Energy Drink can be described as a brand, so brand’s life cycle concept applies, Extreme Energy drink life cycle can change quickly because of changing competitive attacks and responses. We can expect short life cycle. So, to maximize life cycle, our brand must be well-managed.

Branding Strategy

A Brand is a name, term, sign, symbol or design, or a combination of these that identifies the maker or seller of a product or service

Product attributes

Our energy drinks will contain more vitamins than the leading brands on the market, offering a blend of 100 percent vitamin C and a vitamin B pack. Our energy drinks are the most unique energy drinks in taste and packaging available, and will be made with ingredients that provide longer lasting alertness and energy without the loss of effectiveness associated with other leading energy drink brands. Other attributes to our “Extreme Energy” drink is:

Our flavors will target all age and demographic groups.
Our flavors have no bitter aftertaste.
Our energy drinks will keep consumers coming
Uniqueness
Innovative flavors

Branding decisions
the branding decisions we will be taking is how we would position our brand in our customers’ mind. There are three levels in which we can position our brand. The first is on product attributes, second is benefits and the last is on beliefs and values. Because this is a new product it is best that we choose the second level of benefits. As above mentioned

A brand is the company’s promise to deliver a specific set of features, benefits, services and experiences consistently to the buyers. Our promise concerning our brand to our customers will be that you will always get Q-S, Quality and Service. The quality of our products is given to our customers by having a vitamin-packed energy drink that has a unique balance of ingredients.

Brand name selection

A good name can add greatly to a products success. However, finding the best brand name is a difficult task. It begins with a careful review of the product and its benefits, the target market, and proposed marketing strategies.

Desirable qualities for a brand name include the following:

It should suggest something about the product
It should be easy to pronounce, recognize, and remember
The brand name should be distinctive
It should be extendable
The name should translate easily into foreign languages
It should be capable of registration and legal protection

How our brand name coincides with the above mentioned qualities

Our chosen brand name of “Extreme Energy” suggest that the product gives you extreme energy in which you will know beforehand the benefit of using the drink
Extreme Energy is extremely easy to remember because the name contains energy first of all, when low on energy you’re looking for something that gives you energy the name should help you remember it. It is recognizable and easy to pronounce in the English language.
The name “Extreme Energy” is unique and the first of its kind.
It is extendable because “Extreme Energy” can not only stay with beverages but venture into other products in which it can give energy
The name is easy to translate into other languages
Because it is the first of its kind, it won’t have any problems concerning registration and legal protection

Brand sponsorship option:

A manufacturer has four sponsorship options. The product may be launched as a manufacturers’ brand (national brand), as private brand (also called a store brand or distributor brand) , licensed brands or as a co brand.

In our case manufacturers’ brand is the best option at this time, it is a new product and to make it noticeable to consumers its best to have a sponsorship that is already known to the consumer so we can attract customers faster. They might feel loyal to the manufacturer’s brand which would help us exceptionally.

Brand development

A company has four choices when it comes to developing brands. It can introduce
1. Line extensions (existing brands names extended to new forms, sizes, and flavors of an existing product category)

2. Brand extensions (existing brand names extended to new product categories),
3.Multibrands (new brand names introduced in the same product category)
4. New brands (new brand names in the new categories)

Our product’s brand development choice is of multibrand. The Extreme Energy drink is a new brand name but is in the same product category of beverages in which Coca-Cola operates.

Support services

Our first step will be to survey customers from time to time to evaluate the value of current services and to obtain ideas for new ones. In the first two years of the introduction of Extreme Energy Drink, we will do this every 6 months and after the first two years every year to keep in contact with our customers.

Product line
a product line is a group of products that are closely related because they function in a similar manner, are sold to the same customer groups, are marketed through the same types of outlets, or fall within given price ranges.

Our product line consist of the different flavors of our Extreme Energy drink such as Original Blue, Mango, Coconut, Cranberry Grape Blast, Tropical Blast, “0” with no sugar and no Carbohydrates, and the Vitamin Energy Power Shot.

Line stretching

Product line stretching occurs when a company lengthens its product line beyond its current range. The company can stretch its line downward, upward, or both ways. We will stretch our product upward by introducing Extreme Energy cocktails.

Product mix

Our product mix only consist of energy drinks at the moment and will then be expanded to other sort of products in the future.

Packaging
Energy drink packaging, like the packaging of any product, is a powerful marketing tool. The packaging of any product has a powerful impact on the product's success or failure because it catches the consumer's attention, conveys important information about the product, and creates certain feelings or assumptions in the potential consumer.

Extreme Energy drink will rely on our neon colored baby blue packaging, which creates a shock value of packaging to catch the attention of the consumers and convince them to try the product. It will be sold in a 24 packs, 6 pack or individually.

Label

The label of the bottle will have the following on it:

Name of flavor: to know which flavor your buying
Colors that support the flavor of the drink: To make it more appealable
Brand name: So that they can identify that it’s a Extreme Energy drink brand
Slogan: A slogan that exemplifies the flavor
Size of the amount of fluid: To know the size of the can and amount in it
Nutrition facts: They will be on the side of the bottle. The nutrition facts will include the main ingredients, amounts of sugar, sodium, carbohydrates, etc, and any potential health danger warnings so that it can give valuable information to the consumer, so that he or she can decide which drink is best for him or her.
Additional requirements: such as that Extreme Energy drink is not suitable to children, pregnant or lactating women, or people sensitive to caffeine
Advisory statements: For example recommending maximum daily dosage of caffeine and that the retailers not place Extreme Energy drinks near other products or candy that is specifically targeted to children.

Pricing

Internal and external factors that will affect the price

Internal factors affecting pricing include the company’s overall marketing strategy, objectives, and marketing mix, as well as other organizational considerations. Before setting price the company must decide on its overall market strategy for the product. Internal cost can also influence the price some are: salary, rent, water, electricity and internet.

External factors conditions that can influence the price are:

Economic conditions: Recession or a boom in economy can influence the price. Inflation and interest rates affect both consumer perceptions of the product’s price and value and the costs of producing a product.

Competitors: You should ask yourself “How will resellers react to various prices”?

Some other external factors: Government, Social concerns

Pricing strategy

What determines our pricing strategy is our product. Because is not a complete new product there are more competitors in the market with this type of product. But we can offer to them something extra which is the different flavors that Extreme energy drink can offer.

The type of product and the price strategy to this type of product

Extreme Energy drink is an imitative product it exists already, what makes it different is that in Curacao they don’t know the perception of an energy drink with different flavors.

We will use market penetration pricing to price this product. There are already some competitors so we will introduce the product with a price that will be between the prices of the competitors. For example: Monster fl 2, 75 and Red bull fl 2, 25. Extreme energy drink will be fl 2, 50

How we are going to maximize the profit from our total product mix

By using product bundle prices we are going to maximize the profit from the total product mix. Normally the customer usually buys a six pack of Extreme Energy drink that has the t all the cans as the same flavor. By using bundle prices we will put all the flavors in the six packs in order to increase the sales from the total product mix.

Price-Adjustment Strategies
Companies usually take a variety of price-adjustment strategies to account for differences in consumer segments and situations. They are:

Discount and allowance, segmented pricing, psychological pricing, promotional pricing, geographical pricing, dynamic pricing, and international pricing.

We will be using the following:

Discount and allowance pricing: If customers deliver an empty pack of Extreme Energy Drink, they can get a discount on the next one they buy. Also, buying in large volumes, the customer can get a quantity discount.
Promotional Pricing: At the beginning stage of our promotions, we will decrease the standard price of Extreme Energy Drink to create excitement and urgency to buy the product.
Geographic Pricing: Neighborhoods that have a mean of a low income family will have lower prices for our product, and neighborhoods that are wealthier will have a higher price to pay for our product
International Pricing: In Curacao the product will be at a certain price. When the product is distributed to other countries, the price will vary because of the different markets.

Our response to price changes

There are many factors to consider in responding to a competitor’s price changes. We should anticipate possible buyer reaction if we decrease or increase our price.

For example: If a competitor decides to lower his prices we will fight back raising the perceived value of its offer. Maintaining the same price but increasing communication, stressing the relative value of the product over that of the lower competitor. Sometimes lowering prices can negatively affect our market share or profit.

Distribution

When making a new product you should think about the four elements of the marketing mix. One of those elements is distribution which is where you are going to make the product and sell it.

When you are producing a new product it requires building relationships but not only with costumers but also with key suppliers and resellers in the company. We will be working together with the Curacao Beverage Bottling Company NV so that we can get a big number of consumers of the new brand so that we can give the consumer more value. By working with The Curacao Beverage Bottling Company NV we can also reduce our cost from the product.

To distribute the product we are going the use the indirect method of distribution, the product will be made at the manufacturer then it will go to the retailer and then will be sold to the consumer.

Extreme Energy drink will be made by the Curacao Beverage Bottling Company NV.

Each layer of marketing intermediaries that performs some work in bringing the product to its final buyer is a "channel level". The figure below shows some examples of channel levels for consumer marketing channels:

The one that we are using is the number two; the Curacao Beverage Bottling Company NV is our manufacturer and wholesaler. Another option is that we can also use the number one because people can come at the Curacao Beverage Bottling Company NV to purchase their energy drink. By using the number one option the Curacao Beverage Bottling Company can have face to face contact with the consumers that are buying the Extreme Energy drink and can get feedback to see if they like or dislike the product, so changes can be made if needed. The Extreme Energy drink will be placed on the Curacao Beverage Bottling Company’s website so that consumers can make their orders if they have to.

The Curacao Beverage Bottling Company will be the manufacturer of Extreme Energy. He will be able to sell a variety of Extreme Energy drinks to retailers. The retailers are such business such as supermarkets (Esperamos, Centrum, Mangusa, Best Buy, Plaza), Snack bars, restaurants, and hotels among others. The characteristics of a retailer are as follows:

He is regarded as the last link in the chain of distribution.
He develops personal contact with the consumer.
He aims at providing maximum satisfaction to the consumer.
He has a limited sphere in the market.

Promotion

The promotion mix-also called marketing communications mix consist of the following five major promotion tools:

Advertising

The advertising for our product will be done in the following ways:

Television: Ads will be played on the local channels
Newspapers: Amigoe, , Extra, Ultimo, Nobo and the other various local newspapers will have an ad
Magazines: Go weekly, , Focus, On Top, Support and other local produced magazines
Free Publications: Curacao Events, Dolfijn FM Magazine, Expedition Curacao, Insights, K-Pasa and Kiko ta Kiko Weekender
Radio: we will have a spot on every radio station on Curacao that would play at least once a day.
Internet: We will have an ad of the Extreme Energy drink on websites of companies on Curacao.

Sales promotions

The sales promotion of the product will be that we will distribute coupons, stickers for cars, flyers, and we will have various contests.

Public relations
To promote the product we will have our PR representative go on radio stations and local TV shows for interviews. Other ways are holding and hosting events

Personal selling

Under personal selling, we will have trained salespersons go to different neighborhoods to personally speak and introduce the product to consumers. We will also have a sampling table in various supermarkets to give customers of those supermarkets free samples for tasting of the product and communicate with them to get their feedback. We will also have a promo-van, which will distribute all over Curacao.

Direct marketing

Our direct marketing will consist of the following:
Direct Mail: we will send emails consisting of information about our product, ads, and also put a link to the website of the product. We will also have brochures.

Conclusion

Extreme Energy Drink is a new product to the Coca-Cola Company that can target a new type of customer. The product will be better than competitors concerning taste, vitamins, flavors, packaging and price. With the curiosity of our people, we think that this product should do great in Curacao and be profitable. There is always somebody who would ask why they don’t have more time in a day or feeling sleepy when personal tasks aren’t even finished yet. Maybe they were just tired and causing inefficient efforts. With a product such as Extreme Energy Drink, they won’t have any more complains. It will give them energy to do what they have to, in the time period that it has to be done. Anyone who needs energy or is lacking energy, this Extreme Energy is for you and will not fail you.