- Profitability & future growth potential
In 1993, Concentrate Producers earned 29% pretax profits on their sales, while bottlers earned 9% profits on their sales, for a total industry profitability of 14%. While the functional drinks sector only accounts for 3.7% of the total soft drinks sales in 2004, estimates are forecasting a growth of 7.3% in sales and 11.0% in volume consumption by 2009.
(Source: Wiki)
- SWOT Analysis
- Competitor Analysis
100 plus top competitors for the soft drinks industry are coca cola (43.6%) and Cadbury-Schweppes (15.8% of market), which combined, represent about 58% of the total market. 100 Plus share is 42.7% of the total soft drinks market. isotonic will launch into a currently un served subset of that market (RTD “Ready-To-Drink”), which is until now un existing. It is anticipated that the following brands could potentially compete with functional drinks market: Brisk, Lipton Iced Tea, Sobe (owned by PepsiCo), as well as Pepsi. isotonic also creates a potential situation for cannibalism with F&N very own brands of isotonic 100+Masala and other drinks.
Consumers firstly decide that they are going to have a soft drink. Then they compete brands with each other. Like they compete Coke, Pepsi with 100+ and Sprite with 7up and team .So the major competitor of 100+ is Coke and Pepsi. When they motivate to any other brand or on 100+ it’s in instinct basically that based on messages derive certain feelings.
But F&N thinks in a different way, they believe that RC Cola, new coming AMRAT Cola, and all juices, even they take water as their competitors.
- Direct Competitor
COCA COLA & PEPSI is the direct competitor of F&N and all other soft drinks in the market.
The Coca-Cola Company’s core undertaking is to benefit and refresh everyone it reaches. Founded in 1886, we are the world’s leading manufacturer, marketer, and distributor of non-alcoholic beverage concentrates and syrups, which are used to produce nearly 400 beverage brands that make up for our wide portfolio. Our corporate headquarters are established in Atlanta, and we are holding local operations in over 200 countries around the world. Our activities cover all sectors of the beverage industry. We are the second leading player in functional and Asian specialty drinks, while ranking number one in value for the ready-to-drink tea sector.
(Source: Coca Cola & PEPSI)
- Indirect Competitor
All the Cool drinks brands and water is in indirect competition with F&N.
- Product Offering
- Marketing Strategy
- Mission
The mission of 100 Plus isotonic drink is to market an alternative to high electrolytes energy drinks. Rather than getting energy from normal sugar and carbohydrates, it’s packed sodium, potassium, calcium, magnesium, chloride, phosphate and water that are healthier and still give you the boost you need. Currently 100 plus drinks are sold independently in cases at Singapore and Malaysia, but the ultimate objective to our marketing plan is to reach a younger demographic by supplying to college campuses, Sports teams and offices, while 100 plus still maintaining private status.
- Segmentation
- Marketing Objectives
Company is centered on these objectives: With the expected growth of the billion dollar ready-to-drink isotonic drinks drink market, isotonic drinks poised to capture a bigger share of the market with an aggressive marketing strategy: from packaging to advertising.
Short Term Goals: Improve market presence by 20%
Short-Term Objectives: Aggressive Marketing Strategy F&N can take advantage of the positive press on the health benefits of isotonic to boost the sales of its isotonic drinks product line. The company can use recent studies on the health benefits of isotonic as the basis of its press releases and advertising campaigns.
Improve Packaging: The isotonic drinks will be introduced in two sizes: the 250ml bottle and 1/2 liter bottle. F&N can come up with other packaging sizes to ensure that consumers will have other choices and that isotonic drinks will be easily and readily available to consumers.
Improve Shelf Presence: F&N can make a deal with retailers ensure retail shelf space and prominent positioning for isotonic drinks. “Although an average shopper may not notice what brands are positioned in prominent places on shelves or how much room is allotted to each manufacturer, shelf space and positioning as make or break factors in introducing new products”
Long-Term Goals: World Number One ready-to-drink isotonic drinks.
Long-Term Objectives: F&N must continue its innovative research and development strategy to come up with new flavors and products. F&N has extensive research facilities on product improvement. The company can use its resources and professional expertise to come up with new flavors that will suit the continuous demand for healthy ready-to-drink isotonic drinks. With aggressive marketing strategy and product positioning, isotonic drinks is ready to take the global lead in ready-to-drink industry.
- Financial objectives
The estimated cost that will incurred while marketing of isotonic drink is about 10 crores or 10 billion Indian rupees for one year.
The details are as follows:
- Target Market
There are two major target markets for ready-to-drink isotonic drink.
- One group is the consumers on the go. These are the employees, students, and other consumers who lead a busy lifestyle. The hectic South India lifestyle demands for optimize productivity with lesser time-consumption. Thus, there is a need for products that are accessible and readily available. Convenience has dominated the market, particularly the food and beverage industry.
- The other group is made up of health conscious consumers, specifically the younger who demand anything healthy. The positive reviews as well as the studies on the benefits of drinking have stirred an interest in nutrition drinking.
Segment identification: RTD (Ready-to-drink) bottled Isotonic Drink, to be established within the Functional Drinks sector.
Segment needs: The product will have both physiological need (hydrating and nutritional value) and social needs (perception of a social, fun drink with a sense of belonging within peer consumer groups)
Segment trends: The current trends include a shift away from junk foods and carbonated drinks, a growing interest for healthier / beneficial products for the “mind and body” the trend towards the availability of on-the-go products for those with an active lifestyle, as well as the trend for personalization through customization (or for beverages, through variety-seeking in a wide introduction of flavours. (www.oppapers.com)
Segment growth potential: Statistical reports anticipate a segment growth of 1.72% over the next 9 years (2015) for the 10-29 years old subsets. (www.oppapers.com)
- Market Specific and Value Creation
State Name: Tamilnadu and Kerala
Geographic Location: Located in southern tip of India. Both these market have produced more number of sports men.
Target Customer: Schools, College, Sports people and youth people.
Income: no barriers
Isotonic Drinkers: Due to hot climate in Tamilnadu and some part of Kerala people usually take some drinks to overcome the head. So there is a demand for drinks and there more number of sports persons than any other states in the country. And we are not only focusing only on isotonic drink market but also the commercial drinks market too as explained above.
Market needs: Currently in Tamilnadu and Kerala, there is a large portion of people consuming soft drinks. And these soft drinks are carbonated drinks there is no isotonic drinks at present. And it is a virgin market to conquer and 100 PLUS already a popular brand in Malaysia, Singapore and other part of south East Asia.
Value Creation:
- Tamilnadu and Kerala produced many top ranked sports man.
- Hot weather.
- High number of Engineering/Medical/Research Colleges and Schools.
- Tamilnadu has many of festivals (People from all region’s they celebrate their festival by offering cool drinks / Ice Water / Butter Milk to others)
- Tamilnadu has around 1000 IT and Industrial companies (most of the companies offers Cool drinks / Tea / Coffee to their employee)
- Positioning
“Isotonic Drink” will be a bottled beverage and will be positioned as the only ready-to-drink Masala Drink product available on the market. The beverage will have a differential advantage that it can be drink as normal Temp drink and can be taken as cold drink. It will bring an entirely unique drinking experience to its consumers. It will present itself as a funky and unusual alternative to traditional drink while providing the great taste of authentic fruit juice in an attractive and convenient packaging.
Positioning strategy:
The only RTD bottled Isotonic Drink available. Funky & eye-catching bottle, functional packaging, premium-priced, cool, new and unusual, unique drinking experience, aspects of play variety of flavors, sweet, refreshing, for hip & young people, healthier alternative to heavy-sugar drinks.
Positioning Statement:
To young active soft drink customers who have little time for sleep, isotonic drink gives you the nutritional benefits of tea and keep you awaken. You can take it while on the go, now it's your choice that you can chill it and room temp. There is no boundary of season now because isotonic drink can be taken from both aspects normal drink and cold drink.
- Justification for the innovation of Product
Through our marketing plan, we are planning to expand our sales demographic and get our product name on school/college campuses throughout the Tamilnadu. 100plus and 100+Masala is not a household name like Monster and Red Bull, but our goal is to distribute our product in vending machines and school stores, while still keeping the personal touch our IBO’s bring to the business. Vending machines make up 11% of the market segment, which can greatly increase our sales. Our plan is to increase awareness and knowledge, but do not make the company as large as in supermarkets and convenience stores spread account for another 60% of the market turnover. As per Survey Energy Drink Market expected to grow annually by 12% over 2012 (Source: XSBlast.com).
Creating the opportunity for 100plus and 100 + Masala drinks appear in stores and more public is greatly increase your sales increase and market knowledge of the product. Energy Drinks, as a whole are expected to be the strongest growth 2007-2012 showing increases by 53% overall. Energy drinks remain popular with younger "Generation Y" consumers have to replace the coffee drinks as a preferred source of caffeine. Part of this appeal is due to the novelty of the energy drinks that are only in Tamilnadu for just over a decade, and probably have used from their parents. Energy drinks are also appearing in more and more flavours and brands than ever before, the more consumers in a unique brand, you can find them. We will have lot of potential in a continuously growing market by new release of flavours every 6 months.
- MARKETING MIX
- Product Distribution
The current market for cool drinks is fragmented, since the distribution is restricted to local outlets and selling points such as counters and small shops in scattered locations. However, direct competition from these local players is not anticipated, since the marketing roll-out will initially emphasize on product awareness and both sales channels do not reach or serve the same market (retailing vs. counter/restoration). So the distribution will on Retailing and Wholesaling.
- Advertising
Informative Advertising
There will be Informative Advertising during market of isotonic drink and that will help company:
Informing the market of a price:
- Describing available services
- Correcting the false impression
- Building a brand and company image
- communicating customer value
- Telling market about a new product
- Explaining hoe the product works
- Suggesting new uses for a product
Persuasive Advertising:
It will help marketers to:
- Building brand preferences
- Encouraging switching to your brand
- Changing customer's perception of product attribute
- Persuading customers to purchase now
- Convincing customers to tell others about product
- Price Strategy
The price strategy that will be undertaken should consider the following aspects:
- Consumer demand
- The product lifecycle
- Potential substitutes
Customer demand: Customer demand is a crucial factor which is driven by tastes, income and availability of others similar products at a different price. For a lot of consumers, value and price are highly related: ‘’the higher the price, the higher the value’’. Consequently, F&N’s intention to position Isotonic drink as a unique, innovative and attractive product gives it a certain control over Isotonic Drink price. To be able to implement higher pricing though, the minimization of the non-monetary costs to customers should also be include along with awareness of the product (notably by advertising) and value (benefits).
The product lifecycle: The company should take advantage also to the fact that the newer the product and the earlier in its lifecycle the higher the price can usually be. It ensures a high profit margin as the early adopters buy the product and the firm seeks to recoup development costs quickly and it also brings a certain prestige to the product. (Source netmba.com)
Product development: It begins when the company finds and develops a new product idea. During product development, sales are zero and the company's investment costs mount.
Introduction: Is the period of slow sales growth as the product is introduced in the market. Profits are nonexistent in this stage because of the heavy expenses of product introduction.
Growth: Is a period of rapid market acceptance and increasing profits .
Maturity: Is a period of slowdown in sales growth because the product has achieved acceptance by most potential buyers. Profits level off or decline because of increased marketing outlays to defend the product against competition.
Decline: Is the period when sales fall off and profits drop. (Ref. from book)
The point here is that F&N can not set a price that is too high because competitors will be attracted by potential profits and will follow by a lower price. After having taken all the important factors into consideration, there are five price-level fixing approaches seem appropriate.
Cost Based Pricing: One of the central objectives of this project being to become the market leader in functional drinks, F&N is willing to stay among the top competitors, if not becoming the greater, by achieving a certain target profit. This could be obtained by establish a price that will largely cover variable and fixed costs while bringing tremendous profits.
Value Added Pricing: Competitors and potential substitute's prices can also be part of the strategy. Having a higher price could make customers aware of the additional benefits and the higher quality of Isotonic drink.
Value based Pricing: The company sets its target price based on customer perceptions of the product value. The targeted value and price then drive decisions about product design and what cost can be incurred. As a result pricing begins with analyzing consumer needs and value perceptions, and price is set to match consumer's perceived value.
Market Penetration Pricing: The company can set a low price for a new product in order to attract a large number of buyers and a large market share.
Break-even pricing: The company has to make some strategies for break-even prices, setting prices to break even on the costs of making and marketing a product; or setting prices to make a target profit.
Potential substitutes: F&N constrained by the monopolistic market in which it competes. The main characteristic however is product differentiation.
- Promotion Strategy
Objectives:
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To initiate strong awareness about the launch of Isotonic Drink throughout Generation Y (10-29 years old) consumers as well as their parents.
- To win market shares over our top functional drinks competitor, F&N.
The promotional activities will convey the clear message that “Isotonic Drink is a healthy drink for sporty and young people who simply enjoy taking care of their body and life.”
Concepts:
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“Think outside the bubble”: Be Bold, Be Original, Be Different, Be Yourself.
- “A good spirit in a good body.”
- “For the out-of-the-ordinary individuals who like to challenge themselves.
Media selection:
Before choosing the appropriate Medias, it is important to note that Generation Y consumers only give partial attention to media. However, they can be reached through integrated programs. They are typically using more than one communication media at a time; a behaviour that is often called “multitasking”. This group of consumers doesn’t give its full attention to one single message, but rather uses continuous partial attention to scan the media. Marketers can still communicate with Generation Y by using a variety of targeted promotional tools. Another important tactic to reach our target market is through “Isotonic Drink” marketing, which F&N will heavily use in this campaign (campus, contests).
Advertising:
Justifications for advertising selections:
TV: Most viewed channel for now a days are geo ,Ary one world and Aag tv and specially etc and MTV are the most viewed channels by teen age groups. And in Tamilnadu, Kerla most viewed channel like Vijay TV, Sun TV should be targeted. TV communicates with sight, sound and motion, which is needed for HOT ICE TEA. It is the only media that can reach 99% of the homes at once. PEPSI has the budget to cover the high costs of this media.
Radio: FM 100 ,FM 103 ,FM 106.2 AND FM 101 are the most popular fm radio stations which are equally listened by every age group.
Radio is an already segmented medium. There are many radio stations in Tamilnadu. The average University or college student is a surprisingly heavy radio listener and spends more time during the day listening to radio than watching network television we could also use of “Interactive radio”.
Magazines: We should take advantage of the fact that magazines have become a very specialized medium. There are many consumers' magazines in Tamilnadu and Kerala. Good color production is also an advantage that creates strong images which is the purpose of F&N with its Isotonic Drink brand. Each magazine’s readers often represent a unique profile. Such as Family Magazine, Defence Journal, Young World, She Magazine, Spot Magazine, Computer Magazine.
Internet: Online advertising is similar to print advertising in that it offers a visual message. It also has additional advantages; it can also use the audio and video capabilities. As we are targeting our ads to young outgoing people, sound and movement may attract more attention from viewers and has the unique feature of being interactive. Interactive media would offer F&N the opportunity to reach younger consumers who have developed a preference for online communication.
Outdoor: Billboards in specific geographical area would allow us get a good reach and frequency. It is a low cost and flexible alternative. (Campus, malls, Bus and metro stations)
- Distribution Strategy
Isotonic Drink will be distributed through these channels: supermarkets, convenience stores, independent food stores, discount stores, multiple grocers, direct sales.
Action plan:
Marketing Department Hierarchy Chart:
Control: In the first month of operation Management will over view that whether the Marketing goals and objectives are going in right direction or not if not than what went wrong and what are differences between actual and expected performance. This may require changing the action programs or even changing the goals.
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Operating control: It involves checking ongoing performance against the annual plan and taking corrective action when necessary. It will ensure us that the com-any achieves the sales, profits and other goals set out in annual plan. It also involves determining the profitability of product.
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Strategic Control: It involves looking at whether the company's basic strategies are well matched to its opportunities. Marketing strategies and programs can quickly become out-dated and there will be need of periodically reassess its over all approach to the market-place. A major tool is marketing audit.
Marketing Audit:
There will be a need of monthly marketing audit regarding current activities and sales volume. It will cover all the marketing areas of business. It will include audit of:
- Marketing Environment
- Marketing Strategy
- Marketing Organization
- Marketing Systems
- Marketing Mix
- Marketing productivity
- Profitability
Measuring and Managing return on Marketing Investments: After six months of operation we have to measure that whether our investment is being spent well or not? Are we getting targeted Return on Investment or not?
Return on Investment: The net return from a marketing investment divided by the costs of the marketing investment. It measures the profits generated by investments in marketing activities. (Source: Principles of Marketing)
- REFERENCES
100 Company Website, (2010), Malaysia Website. Retrieved on July 26, 2010 from
100 Company Website, (2010), Singapore Website. Retrieved on July 26, 2010 from
David Parmerlee, (2000), Preparing The Marketing Plan. Chicago. USA: NTC/Contemporary Publishing Group.
LoveSabah Forumotion, (2010), TRY 100PLUS with WATER - NOT PANADOL ~~ it kills~~. Retrieved on July 27, 2010 from
Mike Meldrum & Malcolm Macdonald, (2007), Marketing In A Nutshell. Great Britain: Elsevier Ltd.
Shanghai Registered Population Grows, (March, 2009). Retrieved on September 1, 2010 from http://www.chinadaily.com.cn/china/2009-03/14/content_7579501.htm
Wikipedia, (2010), 100plus. Retrieved on July 26, 2010 from
