The Growing Energy Drink Industry

Discuss about the Marketing Plan and strategies of the Company.

Woolworth is the company that operates in the supermarket industry and initiated its operation in Sydney, Australia in the year of 1924. Later on the company expands in other countries like New Zeeland, South Africa, UAE etc. In today’s time Woolworths is one of the competitive companies in the world’s supermarket industry and competing with very big brands like Wal-Mart (Woolworths.com.au., 2017). As the company is in the supermarket industry thus it act as the mediator between the customers and the brands and serve the customers with all types of daily requirements products by different brands in different products lines. Now the company has initiated a new step by launching their own new products in the section of energy drinks. This initiative is taken by the company in order to capture the market in diverse ways and also to retain their customers. The company has taken such decision of getting into a products line like energy drink because of the growing popularity of the products amongst the customers.

In the year of 2016, it has been observed that the value of global energy drink market was around USD 43 billion (Heckman, et al.  2010). It was expected that the industry will attain a growth of high percentage I the next years as customers and giving great response to such products. The change in the lifestyle of the customers has also become one of the greatest reasons of this industry growth. These drinks not only give physical strength to the customers but also provide time mental relaxation in the hectic schedule. These drinks have become the integral part of social gatherings these days and thus more and more of the companies are launching their on energy drink products with less amount of alcohol so that it can satisfy the alcoholic needs of the people in the parties as well.

Energy drink is the products that can replace the need of water amongst the life of the people. This is because this is not only killing their thirst but also providing them extra energy to be active the whole day. The consumption of energy beverages is quite high amongst the youngsters and also become the status symbol these days. Thus this behavior of the consumers drives the sales of energy drink products in the market (Reissig, Strain & Griffiths, 2009). Consumption of alcohol mixed with these drinks ahs also become the trends in the social gatherings and parties these days. More and more customers are looking for energy drinks instead of fruit juices and lime water in the market and these drinks are observed to be healthier than the other drinks available in the market.

The Variation and Flavors of Energy Drinks

 There are any variations and flavors available in this product line. Some companies are selling energy drinks mixed with fruit juices and some are mixing very low percentage of alcohol in the same to satisfy the cravings of the customers who wants to have alcohol at the parties or in general.

As far as the product variation by Woolworths is considered, it has been analyzed that the company is releasing the energy drinks in various flavors along with different types of packaging as per the convenience of the customers. Following are some of the features of the product:

Flavors:  green apple, mango, mixed fruit, orange, pineapple. These are the flavors that will be available by the company.

Packaging: served in two sizes of tetra packs. The small one if 50 ml and the other one is of 100 ml tetra pack along with the straw.

Vitamins: addition of and vitamins A contents.

Preservatives are also added so that the drink can be consumed for some time. It can be consumed within 2 days of manufacturing and within 6 hours of opening the packet. The time of usage is low as the company believes in providing fresh products to the customers.

Sweetness is given by cane sugar and the amount of sweetness is very low so that it can become healthier.

As sales of the energy drinks are increasing thus the companies entering the industry are also increasing resulting is saturated industry and high competition. The major players that are operating in this industry are Red Bull, PepsiCo. Inc., Taisho pharmaceuticals Co. Ltd., Monster Energy, Rockstar Inc., Coca cola etc (Seifert, et al. 2011). these companies are making use of various strategies such as competitive pricing, sponsorships, innovations and improvements in the products etc. to capture the market and withstand the competition in the industry. Most of the competitors believe in making innovations in their products so that they can get the first mover advantage in the market with the unique feature in their product. As all the energy drinks have similar components thus it is required by the competitors to come up with new and innovative features in the products to be different and to stand out from other companies operating in the industry.

Red Bull is the company that is serving the market with great marketing and other products strategies thus capturing the larger share of the market. It has been realized that in order to compete with such a big brand it is required by Woolworths to make strong strategies in terms of channel and distribution (Marczinski, 2011). Woolworth has the upper hand in this area of channel and distribution as it has already has its own stores where the company has great foot falls thus providing a shelf space to its own products along with the competitor products in a more presentable way will allow the customers to compare the products and thus purchase the Woolworth’s products. Thus the company does not need to spend more in distribution area. There are various other options where the company and target its customer such as fitness centers, gyms, other retail stores, online medium etc. this helps the company to make its products visible in the market (Howland & Rohsenow, 2013).

Competitors and Strategies to Compete

This is the section of the report that focuses on the strengths, weaknesses, opportunities and threats for the product that is Active Drinks by Woolworths. Following table provides the brief overview of the strengths, weaknesses, opportunities and threats of Active Drinks.

strengths	weaknesses
·         high quality ·         amalgamation of juice ·         brand awareness	·         not have alcoholic flavor ·         no bottled or can packaging
opportunities	threats
·         variation in packaging ·         market growth	·         competition ·         change in health trends of the customers

Strengths:

1. high quality: As far as the Active Drink is considered, it has been analyzed that the products is very healthy in nature and also have high quality vitamins and required nutrients that attracts the health conscious customers towards the products.
2. Amalgamation of juices: inclusions of fruit juices make the products even healthier and tasty as well. This provides natural sweetness to the drink and thus artificial sweetness needs to be included in very less concentration.
3. Brand awareness: as Active Drinks are associated with the brand like Woolworths thus extra marketing is not required to be done. The products already have the brand awareness and the established brand name associated with it.

Weakness:

1. Non alcoholic: it has been analyzed from the market and the behavior of the consumer and most of the customers in the adult age group prefer to drink the products having less amount of alcohol in it. Especially in the social gatherings the drinks with alcoholic content are preferred to be served so that the cravings of alcohol ca are satisfied by the drinks served. Active Drinks does not have alcoholic content in it.
2. No bottled or can packaging: the packaging of tetra packs may be inconvenient for the customers to carry in their gym bags or any other bags if there are opened once thus the company lacks in this area.

Opportunities:

1. Packaging: as per the weakness, the company should launch the products in can or bottled packaging so that it becomes convenient for the customers to carry the product.
2. Market growth: as the market or the industry of energy drinks is experiencing a great hike thus the company have great market to capture.

Threats:

1. Competition: the major players that are operating in this industry are Red Bull, PepsiCo. Inc., Taisho pharmaceuticals Co. Ltd., Monster Energy, Rockstar Inc., Coca cola etc. these companies are making use of various strategies such as competitive pricing, sponsorships, innovations and improvements in the products etc. to capture the market and withstand the competition in the industry (Gunja & Brown, 2012).
2. Change in health trends of the customers: it is also the biggest threat as the lifestyle and choice of the customers may vary frequently and this dynamic nature affects the business of the companies with specified products.

objective for the 1st year:	objective for 2nd year:
The first year objective of the company is to sell around 25 million units of the products and making the market aware about the products.	At this year, the company wants to capture around 7% of the total energy drink market.

Issue: the major issue that may come and obstruct the success of the products is the change in the image of the company called Woolworths. As the company is serving the market with supermarket industry and not have its own products, it may be difficult to convince the customers to have the taste of its own products.

Following are the market strategies of the company in different sections so that it can market the products wisely amongst the customers:

 As far as the positioning strategy of the company is considered, it has been analyzed that the products will be positioned with the slogan that is “kill your thirst with power”. This suggests that the products will provide you with the benefits of water along with energy. The products will positioned as the energy drinks for all especially for the health conscious people.

In terms of products strategy, the products will be sold in the market containing all the features that were discussed in the product review section. As of now the company will be providing 5 flavors but as the products get the hold in the market, the company will launch new variations.

Pricing: as the company is launching a new product in the market and the market is already saturated thus, it is required to make use of the competitive pricing strategy (Candow, et al. 2009). Woolworth will be using the same strategy to launch the products so that it can compete with the profits along with keeping the high quality of the product.

The distribution approach can be associated with the channel and logistic section discussed before. It has been analyzed that Woolworth already has its own stores at various locations in many countries and thus the major point of distribution of its own products is to have the shelf space in its own stores (Lees-Marshment, 2014). This is the best place without any major investment for the products to be showcased to the customers. The company will use this outlet approach for serving the market by its own products of energy drinks and then in future will plan to open exclusive stores as per the response and the profits that the company receives.

Woolworth’s Advantage in Distribution and Channel

Marketing communication strategies are the strategies that are used by the companies in order to communicate and creating their awareness about the presence and the existence of the products in the market. It is very important in order to create the brand visibility or the products visibility in the market. Following are some of the strategies that will be used by Woolworth:

Advertisements: the company will make use of many different media such as television, radio broadcasting, and print media etc. so that the company can target masses in a go. This is the most convenient and the effective method of marketing communication (Kotler & Armstrong, 2013).

Sponsorships: This is one of the most important method or strategy to target the customers and create product awareness. Sponsorship helps the company to target the masses and to have greater visibility (Sheth & Sisodia, 2015).

online promotions: As more and more customer are affected by the online advertising thus online promotions will helps the company to target the customers specifically as per their products preferences.

Online medium and fitness centers are the best places that can help the company to conduct the research about the customers’ behavior and the responses towards the products. Making online discussion and reading the comments on the online page of the company and the products helps the company to gather the consumer responses and their choices (French, 2010).

Woolworth will launch the product in the market in the month of July. Thus, the company has to continue its actions at least for six months that is from June to November.

June: In the month of June the company will perform the pre launch activities of the products such as creating and developing marketing campaigns and promotional campaigns so that the products release date can be announced and curiosity amongst the customer can be developed.

July: The launch activities need to be performed in this month and lots of promotion will be required (Bowie & Buttle, 2011). The company will be campaigning in different areas to serve the customers with free drinks to have the taste.

August: this will the time when the company needs to enhance its social marketing and online promotional activities. This will give a new turn to the sales of the products and also make the people aware about the product.

September: from the month of September, the company will launch the product online as well. This will enhance the sales of the company and also provide a better reach.

Strengths, Weaknesses, Opportunities, and Threats (SWOT) of Active Drink by Woolworths

October: various events regarding the products campaign will be conducted by the representative of the company and the sales team will be established exclusively for this products.

November: New objectives will be set as per the response of the customers and improvements in the marketing of the products will be done as per the needs.

Various types of cost are incurred in order to launch new products by the company. It has been analyzed that the price of the products per unit will be $1.2 and the company will be selling around 20 million units in a year. After that the company has predicted to achieve the break even in the end of the first year or in the starting of the second year of the products launch. The marketing budget of the products will be around $850,000. This will include all the campaigns along with online campaigns.

Developing controlling measures is the most important step to be conducted at the time of developing the marketing plan (Kotler, 2015). This is because it is the step that provides the plan to correct the mistakes or the deviates that occur in the overall plan. It has been analyzed that the company will develop controlling measures in some of the major areas such as customer satisfaction, products quality, brand visibility of the product etc (Serrat, 2017). These controlling measures will help the company to take the corrective steps at the area of deviation and this improves the quality of processes in the company.

Conclusion:

it has been concluded from the report that Woolworth is the company that operates in the supermarket industry but launching its own products in the section of energy drink, the name of the products will be Active Drinks and the major target customers or the group for the products will be youngster who are very much health conscious. The company will further have the opportunities to launch the variation of the products in the later years as per the response of the customers. As the industry of energy drinks is very saturated thus it is required by the company to be unique in its features so that it can cater the market with differentiation.

References:

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Candow, D. G., Kleisinger, A. K., Grenier, S., & Dorsch, K. D. (2009). Effect of sugar-free Red Bull energy drink on high-intensity run time-to-exhaustion in young adults. The Journal of Strength & Conditioning Research, 23(4), 1271-1275.

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Lees-Marshment, J. (2014). Political marketing: Principles and applications. Routledge.

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Woolworths.com.au. (2017).  About us [online] Available at: https://www.woolworths.com.au/Shop/Discover/about-us [Accessed 22 May. 2018]