The non-alcoholic beverage (NAB) company for this study will be Motivated Energy Drinks
Motivated Energy Drink produces a new form of energy drink known as Danone with a reduced amount of caffeine and with ingredients from local farmers. The firms pay much attention to marketing to create the brand image. Danone uses well-targeted campaigns and promotions to increase consumer brand awareness. Our products also target kids who need energy to study and go to school, unlike other energy drinks that only targets athletes and sportspersons.
Company’s Mission Statement and Rationale
We seek responsible and profitable commercial success producing and selling non-alcoholic beverage drinks. We seek this by offering quality service and products and by being in the forefront in what we do. How we do and what we do is vital. Here is how we do; by being responsible and honest citizens in the society where we operate. By having a productive and safe workplace, where employees work together in teams to improve their skills. Motivated Energy Drinks strives to become a regionally recognized business by capitalizing on the interests of people who choose healthy beverages.
Trends in the NAB Industry and Reasons for Choosing Energy Drinks
Energy drinks have changed from being a local product to a fast-growing product in the global non-alcoholic drinks market. This transition has been influenced by the increasingly evident consumer focus on fitness and health. Furthermore, the consumption of aerated drinks is declining in most vital markets in the world leading to the demand for energy drinks in the market.
Strategic branding and marketing remain to be an important part of the success of energy drinks brands even as the consumers across the world increasingly being drawn towards energy drinks for health benefits. Several reports indicate that consumers are gradually cutting down the consumption of drinks with much sugar, an opportunity emerges for promoting the sugar-free energy drinks. Moreover, the packaging is increasingly becoming a new trend in the energy drinks market, and it is vital just like improved product formulation. Packaging will play a great role in influencing the consumer to purchase a certain brand as more energy drinks continue to fill space on retail shelves. Since the market promises a positive long-term growth outlook, the company will reevaluate its product formulas to overcome negative publicity associated with harmful ingredients in their products (Inshakova " Inshakov, 2017).
Three key reasons necessitated the choice of producing energy drinks. First, energy drinks carry a lot of health benefits to consumers apart from providing energy for sportspersons and athletes. Second, energy drinks market promises a long-term growth as many people are abandoning other sugar-drinks. Finally, it is cheaper to produce energy drinks than other non-alcoholic beverages (World Health Organization, 2012).
Strategic Position for the Company
The objective of Motivated Energy Drinks is to be the leading producer of energy drinks in the United States. The company has developed a strategic position that will promote to achieve its goal. The strategic position will emphasize on three main elements. First, Dietician directed, chef, inspired and created menu selections. Second, personal, specialized selections and options. Finally, products will be made with ingredients that are grown locally. Moreover, the strategic position of Danone will be based on assessing factors such as industry trends, targeted market, product environment, and the capabilities of the company. Danone targets the consumer who is seeking healthy and sugar-free drinks. The market is fast growing looking for a snack and create meal alternatives. Our products also target kids who need energy to study and go to school, unlike other energy drinks that only targets athletes and sportspersons (Kapferer, 2012).
Distribution Channels Overview
In aiming to capture the top position in the market, Motivated Energy Drinks will forge a crucial strategic partnership with the leading producer of aerated drinks like Coca-Cola. The partnership will benefit Danone of Coca-Cola’s global distribution network. Coca-Cola has the most powerful distribution network in the global beverage industry. The partnership aligns both companies by combing the strength of Coca-Cola’s global bottling system with Danone’s dedicated expertise and focus to be the leading energy drink producer in the country (Kelly, King, Baur, Rayner, Lobstein, Monteiro, " Hawkes, 2013).
Types of Risk the Company Faces
Danone beverage products comply with the Food and Drug Administration (FDA) regulations. FDA has not imposed any restrictions on the level of caffeine in energy drinks. However, FDA is under pressure from health organizations and experts to increase their scrutiny on energy drinks. Health organizations want children to be banned from consuming energy drinks. If the regulatory authority chooses to impose strict regulations, the sales of the company will be negatively affected. The second risk facing Motivated Energy Drinks is that the company depends on a third-party entity to distribute its products. Thus, any adverse changes in relationship with the distributor will have a great impact on the firm’s business. Third, the products from Motivated Energy Drinks may impose serious health conditions on some individuals due to certain issues like allergies leading to litigations. The litigations may expose the firm to additional financial costs (Nakamura, Pechey, Suhrcke, Jebb, " Marteau, 2014).
The company has numerous plans to mitigate these risks as they arise. First, the firm will try to reduce the amount of caffeine and other controversial ingredients in its products and substituting them with more healthy products. This can be achieved through evaluation by the technical team. Second, the company will develop an alternative distribution channel to supplement the main distribution strategy. Therefore, in case the main distribution strategy fails the firm can sustain its distribution chain.
SWOT Analysis for the Company
A business should set a target it aims to accomplish before operations begin. As part of a business plan, SWOT analysis should be conducted as it involves numerous roles. SWOT is used in inspecting the shortcomings and qualities of the business. It is also used in determining the possible dangers that might arise from the business as well as the benefits. SWOT helps investors and stakeholders to assess and plan the business to ensure effective operations in the business environment (Lee " Sai, 2000).
Strengths
Needs and demands are satisfied by Danone energy drink.
Strong, fashionable brand identity.
Weaknesses
Higher price
Small product base
Ability to retain current consumers and attract new consumers.
Opportunities
Extension of product line.
Partnership and advertising with social media
Threats
Health concern and social responsibility
Consumer awareness
New product of energy drink
Competition
Strengths
Social need plays a crucial role in Danone energy drink as it was formed in an image that supports young culture and extreme sports. Consumers who use the products are satisfied with the social benefits the brand grants them. Danone is a sweet drink with caffeine that gives consumers high energy kick. Furthermore, Motivated Energy Drinks created a brand image impression that connects the drink with adventure-related sports and youth culture as it attempts to avoid buzz marketing. Targeting the youth is a vital role in promoting the product.
Weaknesses
Lowering the product price and developing the quantity of products are the problems facing Danone at the moment. As it develops into a mature brand, its prices are higher than the existing energy drink companies. Limited product lines is a serious issue affecting the firm as it offers only one version of products in the market. Moreover, being a new company, the ability to attract and retain consumers has continuously affected Danone.
Opportunities
The single line of product offered by Motivated Energy Drinks gives the company an opportunity to develop various production lines. This will offer consumers a variety of choices which helps in protecting the firm from competition threats. Advertising through social media is also an opportunity that Danone will use to reach many consumers in the market. Since the main target of Danone energy drink is the youth who form over 80 percent of social media users, social media is the best option for advertising (Nakamura, Pechey, Suhrcke, Jebb, " Marteau, 2014).
Threats
The company will take health concern and social responsibility into consideration when manufacturing the energy drinks. Several studies have shown that energy drink has negative impacts on health because of high caffeine content in them. Type2 diabetes and childhood obesity are on the rise, and it is attributed to non-alcoholic beverages (World Health Organization, 2006). Moreover, the development of science and technology has enabled people to access information on various products before purchasing easily, and people tend to buy products from well-known companies. Competition is an issue in Danone since it is a developing company and most people are still not aware of its existence in the market.
References
Inshakova, E., " Inshakov, O. (2017). World market for nanomaterials: structure and trends. In MATEC Web of Conferences
(Vol. 129, p. 02013). EDP Sciences.
Kapferer, J. N. (2012). The new strategic brand management: Advanced insights and strategic thinking. Kogan page publishers.
Kelly, B., King, L., Baur, L., Rayner, M., Lobstein, T., Monteiro, C., " Hawkes, C. (2013). Monitoring food and non‐alcoholic beverage promotions to children. obesity reviews, 14(S1), 59-69.
Lee, S. F., " Sai On Ko, A. (2000). Building balanced scorecard with SWOT analysis, and implementing “Sun Tzu’s The Art of Business Management Strategies” on QFD methodology. Managerial Auditing Journal, 15(1/2), 68-76.
Nakamura, R., Pechey, R., Suhrcke, M., Jebb, S. A., " Marteau, T. M. (2014). Sales impact of displaying alcoholic and non-alcoholic beverages in end-of-aisle locations: An observational study. Social Science " Medicine, 108, 68-73.
World Health Organization. (2012). A framework for implementing the set of recommendations on the marketing of foods and non-alcoholic beverages to children.
World Health Organization. (2006). Global strategy on diet, physical activity and health: a framework to monitor and evaluate implementation.
