New beverage product development and market analysis

New Beverage

Raspberry Delight

Target Market Segment

The fitness drink market is highly segmented, and one of these segments includes energy drinks. However, energy drinks are not exclusively subsumed by the fitness drink product category; energy drinks overlap to some degree with other product categories such as soft drinks. An example of an energy drink that represents the overlap of both fitness and soft drink categories is Red Bull.

Not only is the market segmented according to usage, but also by ingredients into a spectrum with distilled water at one end and sugary drinks like Gatorade and Red Bull at the other. Somewhere in between we find the mineral waters, vitamin enhanced water, vitamin and mineral enhanced water, flavored vitamin and mineral enhanced water, sweetened and unsweetened varieties of the same, sugary and sugar-free varieties, and so forth. Propel is a popular vitamin and mineral enhanced flavored bottled water while Dasani is a mineral enhanced water purified by reverse osmosis.

From this approach, we (the company) have identified an undeveloped product category: vitamin and mineral enhanced carbonated fruit juice. One could draw overlapping Venn Diagrams showing people who drink beverages a) for energy, b) for the vitamin and mineral content, c) for the drink's ability to refresh them, d) for its pleasant taste, and e) for the pleasant way carbonated drinks "go down." Our initial target market segment is represented by the area where all of these diagrams overlap.

Consumer Behavior Patterns

Most consumers fall into two categories: innovators or imitators. Innovators are consumers who adopt a product as soon as they become aware of its presence in the market. Imitators are those who adopt a product only after they have become aware that others are using it. There are various ways to categorize imitators; as early majority adopters, laggards, and so forth. However, at least initially, we are depending on absolutely delighting the innovators in this segment with our product. If we can do a good job of this, then innovators (who are also opinion leaders), will positively influence the imitators to give the product a try.

Product Features and Packaging

The product is a carbonated raspberry-flavored fruit juice product enhanced with vitamins, minerals, and a special enzyme. The vitamins and minerals are special: they contain L-Carnitine and Alpha Lipoic Acid -- two supplements that have received a lot of positive press recently for their energy-boosting and anti-oxidant properties. The other minerals are derived from sea water. But the supplement that really distinguishes the beverage is its inclusion of telomerase. Telomerase is an enzyme that lengthens the telomeres located at the end of chromosomes. Telomeres regulate how often a cell can divide and each time it does divide the telomeres get shorter. When they are completely "used up," the cell can no longer divide -- instead, it dies. Telomerase restores telomeres to their more "youthful" lengths. The inclusion of telomerase in the recipe actually lengthens the lifespan of each cell in the human body. Essentially, the introduction of Raspberry Delight creates a new sub-category within the fitness drink product category -- longevity drinks.

Regarding the packaging, the product will be dispensed in bottles, not cans, and come in 250ml, 500ml, and 750ml sizes. It will be available as singles, six packs, twelve packs, or cases of 24. All of the bottles are designed to be drunk from "on the fly" and contain an innovative vented cap that permits the user to take multiple swallows without withdrawing the bottle from his or her mouth to let air back into the bottle.

Price

Innovators are fairly price insensitive, and low prices sometimes send a signal that the product is of low quality, a product characteristic that innovators find off-putting. So the introductory price will be high. Not only will the high price signal a high quality product, but innovators are also sometimes motivated by prestige, which is also signaled by high price.

For these reasons, we are going to adopt a skimming pricing policy. Once the product has diffused through the 3% - 5% of the market represented by innovators, we can begin to lower the price so that more affluent imitators will be more inclined to adopt it, then the less affluent, and so forth. This policy also offsets some of the losses due to high costs of production, marketing, and distribution that are incurred until the cost-saving benefits of experience effects accumulate later in the product's life cycle.

Marketing Channels

The product will debut at health and fitness specialty boutiques like GNC. These boutiques are where our innovators in this product category shop. Simultaneously, the product will be introduced for purchase from our company website; another well-established shopping arena for innovators.

Movement to non-specialty venues will coincide with the planned drop(s) in price. High end drugstore chains such as CVS and Walgreens will precede supermarkets and low end drugstores. Finally, refrigerated departments at convenience stores and gas stations will receive the product. It is doubtful whether we will utilize vending machines unless there is something special about their location; sports arenas and college campuses being potential exceptions.

Promotion

We will promote the product in four ways: advertising; event sponsorship; contests; and public relations.

Our advertising campaigns will embrace print, television, and radio. We plan to make good use of celebrity spokespeople.

Due to the limited quality of graphics in newspapers, we will not advertise there since we want to present the product in as favorable a light as possible. So our print advertising strategy will encompass magazines in which we can display the product in full color. All of our print ads will make use of the Gutenberg diagonal, with ad title either centered or (preferably) left-aligned, the product displayed in the center with any captions centered directly below, and the company name and logo right-aligned at the bottom of the page. The product will be displayed in the act of being consumed by athletic-looking models, but not by models who are "over-sculpted." It is important for the consumer to be able to identify with the models, and not every consumer in our target segment looks like Mr. Or Ms. Universe. Print ads will be at least 1/4-page in size.

Television advertising will be broadcast during prime-time shows but not between them (no interstitials) and will make ample use of comedy and metaphor to make its point about the product. For instance, at least one spot will open showing a wilted flower being refreshed by the product being poured onto it. When it resumes it full glory, the flower petals open to reveal a human face. The camera pulls back and we see an entire field of these flowers growing and stretching in response to a dose of the product. Then the flowers uproot themselves and take off running, all in the same direction. The camera pulls back again until the flowers are almost lost on the horizon, and the viewer sees a banner stretching across the TV screen with the words "Finish Line" on it.

In another ad, a black and white animated Popeye gets into trouble and reaches for his can of spinach. It's gone. Olive Oyl throws him a bottle of Raspberry Delight, that he gulps down, and is not only suddenly in color, but defeats the bad guys, stops the locomotive, and gets the kitten out of the tree.