Voltage Energy Drink - Focus on Marketing - Business Plan Example

Introduction

The essay outlines a business plan that focuses on distribution and promotion of a new energy drink in the US. The business plan outlines the marketing mix that includes product, place, price and promotion. The energy drink industry has enjoyed a relatively steady growth in the global market outdoing the other packaged beverage production industries. Generally, teens and young adults are the main consumers of the energy drinks (Gallimberti, et al., 2013). The industry will continue to grow due to changing lifestyles of consumers that favor consumption of energy drinks. The plan will highlight the marketing strategy of the energy drink to be introduced in America, the brand name being Voltage energy drink.

Product

The product to be offered in the market is Voltage, a refreshing energy drink. The drink is to be offered in the energy drink market to suit the needs of the customers in this segment, who despite having many options, still lack a drink that satisfies all their drink at once. Voltage is intended to provide mental and physical stimulation simultaneously. Heckman, et al., (2010) stated that the market currently needs a drink that is energy providing but contains natural sugar, a factor that is crucial in diabetic consumers and those who are religiously observing nutrition. Additionally, in the energy drink market there are existing products that have features that do not contain plant-based caffeine. This is the market niche that remains untapped, and Voltage offers a solution.

Traditionally, energy drinks have been produced for young adults and teens who are usually the major target clientele (Gallimberti, et al., 2013). However, it is imperative to recognize that the market that contains the older consumers has a great potential, a community that needs plan-based caffeine and natural ingredients that are energy-boosting. Voltage combines all the desirable ingredients that consumers always wish for in the existing drinks that are leading such as Red Bull and Rockstar. There is also the unmet need of the various flavors considering that many firms offer only limited flavors like citrus, sweet and light flavors. The Voltage energy drink will offer a hybrid flavor that incorporates fruity flavor, crispy and will taste smooth.

Target Market

The energy drink industry is still growing and therefore has a lot of growth prospects as compared to other beverage industries. The market that is served is narrower than the other beverage industries and hence characteristically not diverse nor expansive (Heckman, et al., 2010). Conventionally, the energy drinks were historically manufactured predominantly for athletes. However, the contemporary world has seen the market slightly expand to target other consumers that are not necessarily in sports. The target market for voltage energy drink is the market that comprises of customers who are susceptible to constant exhaustion and insufficient energy. These customers are the young adults and teens who are from the age of thirteen to people in their 20’s. The young generation believes in the authenticity of the energy drinks hence form the primary target market (Gallimberti, et al., 2013). The young populations are found in recreational areas such as clubs, resorts, cinemas, and picnics.

Moreover, Voltage is developed to satisfy the market with clientele involved in games, extreme sports, and the hip-hop fraternity. These categories of people are those with high-level of income as gamers who are involved in casinos and professional players earn high incomes and are financially stable. Sportsmen and women such as those in athletics, American football and basketball are to be the ones that the drink will target, mainly because these are the major sports in the US. The older generation will also be a target clientele given that Voltage tries to satisfy those people suffering from diabetes, a factor highlighted by Koplan, and Brownell, (2010). The grown-up market segment would also be persuaded to purchase this product on the grounds that it is intended to suit all generations, a factor that differentiates Voltage from other products in the market.

Product Features and Benefits

The Voltage is an energy drink that is intended to stimulate a person physically and mentally. The drink is bluish in color with a pleasant scent packaged in a stylish modern light-metal can. It is a sweet tasting drink that has a smooth touch which refreshes both body and mind. It contains caffeine, natural sugars, amino acid, herbal extracts and is also carbonated. The vitamins are also an ingredient designated to help the body get the energy from the food ingested by a person (Howard and Marczinski, 2010). Voltage has vitamin Bs such as the B-12, B-6, and niacin.

Ballard, Wellborn-Kim & Clauson, (2010) illustrated that caffeine is paramount as it is a substance that boosts energy. Hence, Voltage has caffeine making it an energy elevator since it stimulates the nervous system without causing any side effects such as nervousness. The caffeine component also lowers risks of diseases such as Alzheimer’s. The benefit that the sports market segment will derive from the drink is improved athletic performance. Improved endurance, focus and alertness are some of the aspects that accompany every intake of Voltage before exercise. Voltage has less amounts of sugar hence it suits all athlete because it doesn’t adversely affect sugar and insulin levels. Existing sports drink are suitable for certain people hence Voltage is better in terms of health (Walsh, et al., 2010).

Furthermore, the L-Carnitine amino acid aids in the conversion of fat into energy hence it is an additional benefit. Upon consumption, Voltage offers an immediate energy boost to the person. Long-distance drivers can enjoy the drink as the energy generated lasts long especially those drivers who drink alcohol as it fixes drowsiness and lack of concentration. Voltage energy drink is primarily intended also to calm a person and also reduce the feeling of stress. The psychological well-being of a person is presumed to be the most important aspect that affects the lifestyle of a person, an also their life-expectancy.

Product Differentiation

Product differentiation is a crucial facet that has been considered in developing Voltage so as to facilitate gaining a competitive advantage over the rivals. Voltage has been developed to give it an edge in the target market in regard to attractiveness and uniqueness. Voltage has unique features that distinguish it from the already existing products in the energy drink industry. First, the product has lower sugar levels to meet the needs of the target market that is nutritional-observant and those with diabetes. The sugar component is non-synthetic, and so the product is likely to sell more than the products in the market which are avoided with the segment with those needs.

Many energy drinks have almost identical ingredients and are sold in same places (Bacanu, 2010). Voltage has additional flavors for every taste that are fruity to capture the attention of vegetarians. Hence, Voltage has embraced product improvement to those already available such as Monster and Red Bull. Besides, with Voltage, we have created new categories with tiny cans for kids and sleek cans with customized names and graffiti for teens. Because most of the energy drinks are designed to boost energy, Voltage offers that plus a relaxation effect. This will be an added advantage as the elderly not only need an energy boost, but also calmness. Therefore, in Voltage, a diverged category has been created to present the diversity that widens the target market. The product is also unique in the sense that it is healthier and also meets almost the needs of the entire market of the energy drink.

Pricing

The pricing strategy of existing energy drink indicates that the products are highly priced. Pricing is an important marketing mix as it determines the profitability of the business. It determines whether the consumers will purchase the product or not. One of the main reasons why energy drink firms charge high prices is to encourage favorable perceptions on buyers based on the prices in a premium pricing strategy (Meier, 2013). The high prices have led to people going for soft drinks that only rehydrate, as opposed to the highly-priced drinks that offer nutritional value. As such, Voltage will try to breach the gap in order to capture the price-sensitive buyers and also those who value a product based on prices. The 12 Fl Oz Can will retail at a price of $1.7 which will be affordable to a majority of the consumers in the market segments that is targeted.

The pricing strategy that will be adopted is the penetration strategy where the product will be offered at low prices so as to lure customers and quickly gain a market share. Once the product has been established and become popular, the goal will be to win customer loyalty. Afterward, once a market share is attained, the prices will be marginally increased to ensure a break-even. The penetration pricing strategy is going to be used because it is the most appropriate approach to a new product or firm in an industry. The production rate is still low in a new product and the demand for the commodity is triggered and subsequently increased.

Place (Distribution) Issues

Distribution involves the channels that will be used to avail the product to customers (Davies, 2012). The market segments that have been selected for Voltage include the young generation, old generation, the athletes and those seeking nutritional benefits. The teens and young generation are mainly found in colleges and clubs. Voltage energy drink will be distributed by a van to the institutions of higher learning where the samples will be offered for free. The channels of distribution will contain intermediaries who facilitate the distribution function to present the product finally to the end-user. Voltage will not use the intermediaries hence the product will be sold directly to the consumer because of the low prices. Agents will only be involved in case our market share rapidly increases. The product will be availed in general stores, supermarkets, restaurants, petrol stations, college cafeterias and clubs.

When procurement orders increase, the production rates of Voltage will also increase. Consequently, the distribution of the drink will require a larger mode of transport. Transportation by truck will be the next mode that will be used to ship the offering. Building an ideal distribution channel for beverages has been a challenge to many because of the costs of distribution and the competitiveness of the industry (Coles and Kirwan, 2011). Hence, the firm has identified the best way to minimize costs by using cans for efficient shipments. Cans are easy to transport because of their low weight and form. Voltage is also packaged in cans because cans save approximately 30% in truckloads as compared to PET bottles and almost 40% as compared to glass bottles.

Advertising

Aaker and Biel (2013) stated that advertising is a marketing communication tool that is used to promote a product so as to inform, persuade, and remind customers of an offering. Voltage is a product that targets a diverse market in the energy drink industry. Hence, one of the advertising media will be the use of T.V commercials during programs that are popular among the audience. For instance, the advertisement can be aired during a game of basketball and commercial breaks in news time. This will cover a larger target audience, and with the addition to advertising through sports magazine, sport enthusiast will also get the message.

In a research carried out by Dartmouth College in 2015, it was established that half of advertising campaigns in TVs are aired for teenagers. The slogan of the product will be refreshing, healthy, affordable drink. Billboard along the roads will be erected to advertise the Voltage energy drink in order to persuade drivers on the product as it will meet their need to stay focus and concentrate on their driving. They will also be informed that the drink enhances their sense of judgment and driving experience because of the herbal extracts that are included when manufacturing the product.

Promotion

Promotion is one of the elementary components of the 4Ps of the marketing mix of a product. Kotler and Armstrong, (2010) defined promotion as raising the product awareness of a consumer, thereby, generating sales and creation of loyalty of the brand. Apart from the conventional promotion methodology of using advertising, there are other several approaches that are appropriate for Voltage. One of the promotional tools that will be used for the energy drink is the use of social media. Social media platforms are quite popular in the modern world and many people especially the young and the wealthy have access to social media networks. A website and a blog will be formed for the product. Facebook and Twitter will be used to create product awareness where a page for Voltage will be created for both. Customers will be able to air their opinions on the product and also give suggestions on how to improve the product.

The product will also be promoted through personal selling via the selected agents. The agents will pass the message to target audiences by use of word of mouth and also erect posters in strategic places. Additionally, the firm will conduct PR activities that are aimed at increasing sales. Such activities will include media releases, special events such as college games and even give free drinks to clubs on particular occasions. The promotional strategy has been given priority as it is the strategy that influences the sales revenues and ultimately the profits of the firm.

Conclusion

VVoltage energy drink is a new product to be offered in an industry that is still young with a potential to grow just as witnessed in the soft drink industry. Voltage is chosen because, in the energy drinks industry, there is the unmet need of diabetic consumers and older clients who are not served by the existing drinks in the market. Voltage is offering an option to a diverse market as it is healthy, affordable and stylish drink. If the promotion is carried out well, the product will be a success as it targets a wider market and with time, it will surely be one of the market leaders in the energy drink industry.

Appendix

Market growth potential for the energy drinks in the US, source: Mintel’s Survey

Reference

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