united beverages
TRANSCRIPT
United Beverages
Product Development Genius or One-hit Wonder
Flow of Presentation
• Introduction• United Beverages History• The development Team• Re-Revolutionizing the Beverage Industry• New Products: The Next United Beverages
Generation• Case Q & A
United Beverages
• Debuted the beverage industry with interactive beverage named “GandBusters”
• Interactive beverages are the Looney Tunes character beverages
• Subsequently the company expanded licensing agreements for various comic characters– The companies included Warner Bros, Disney,
Universal studios, Marvel, 20th century Fox etc.
United Beverages- Problems
• First time in five years the sales growth stalled
Jan Feb
March
AprilMay
June
July
August
September
October
November
December
0500
10001500200025003000350040004500
Revenue (amounts in thousands)
Revenue
United Beverages- Problems
• Strategies to counter stalled sales– To develop a new carbonated drink for kids aged 9
to 12– To develop dual drink i.e. two juices packed in a
dual-chamber bottle• The top of the bottle will have a mixing chamber
History and Brand Position
United Beverages History• Paul Diaz and Charles Smith formed it in 1997
• During a joint project with sea world in Orlando, Florida, Diaz identified an untapped retail niche: interactive beverages
• After that they created Looney tunes character beverages for sale at sea world theme parks
• As the sea world project was a tremendous success then Diaz and Smith realized that interactive beverages was going to be lucrative
• In 1999 united negotiated with Warner Bros. for retail rights to produce and market the first generation of interactive beverages featuring the Scooby-Doo character then suddenly Gangbusters brand took off
• Publix signed off on as the initial Gangbusters retail partner in Florida and Scooby-Doo remarkably positive test result in the spring 2000
• Further Gangbusters won placements with other major distributing chain like Kroger and 7-eleven
United Beverages History
• Further United beverages negotiated additional licensing agreements with Warner Bros., Disney, Universal studios, Marvel comics, DC comics, 20th centaury fox, Sanrio and more.
• The Gangbusters character variety multiplied from
Scooby-Doo and power rangers in 2000 to 45 collective characters including Looney tunes, the powerful girls, Spider man, Superman, Batman, Hello kitty and more.
United Beverages History
• The nation’s second largest grocer reported that Gangbusters owned five of the ten top selling spot in their canned juice/fruit drinks
• Within months of launching in 7-Eleven stores, Gangbusters held the number-one and number-three top ten selling spots among non-carbonated beverages, outselling brands like Minute Maid, SoBe and kool-Aid burst
United Beverages History
• Gangbusters held the number 8 position out of 100 total juice drink brands on target shelves, outselling ocean spray, sunny delight, Minute maid.
• Also Gangbusters held the number 13 position out of the top-50 juice drink brands on Kroger shelves, outselling Minute maid, Hawaiian punch and Snapple
United Beverages History
The Development Team
The Development Team
Katja Von Robinson- Marketing• Market introduction strategies of “NEW PRODUCTS”• Branding approaches for existing products
Mary Smith- Marketing• Was production marketing liaison• Ensures correct products on retail shelves • Worked earlier at PepsiCo International
The Development Team
Luis Hernandez- Production & Packaging• Deep contacts with suppliers
Bill McBride- Head of Operations• Responsible for production success
Bob Jones- Industrial designer• Successful designer for “GANGBUSTERS”• Also responsible for providing ergonomic design
Interactive Beverage Industry
• United’s future
• Real innovation
• Mix of innovation & Marketing
• Concept of Dual Drinks & Flavor mixing
Second Meeting
Dual Drink
Second Meeting
• Decision making regarding the drinks.• Sales as of Year 2002
• Three Options:– Continue with GangBuster & expand– Kids Energy Drink– Dual Drink
Second Meeting
Second Meeting
Marketing guru’s research saysDual Drinks
• Market Potential 4-5 times of GangBusters.
• Slower Acceptance Rate
• 50% respondents were not sure about the idea & 25% gave +ve feedback.
Kid – Energy Drink
• Potential Market is smaller.
• Fast acceptance rate.
• 80% of respondents gave +ve feedback.
Second Meeting
Production & Packaging expert of United Beverages:
• Development cost will be high
• Commitment of all the resources for Dual Drinks
• Might lead to failure of GangBuster
Case Questions
Pros & Cons for Product
Pros Cons
Potential as much as 4X or 5X the size of GangBuster market
Market not well defined
Patent the outcome Suppliers req large quantities to give low prices
Most Innovative Huge Development Cost ($1,800,000)
Requires full Commitment
1. Dual Drink
Pros & Cons for Product
Pros Cons
Continued growth for GangBusters in target customer segment (adolescents aged 9-14)
Not a concrete idea
Cross selling opportunity due to product familiarity with GangBusters
Threat from big players in Industry
Its not a healthy drink, carbonated energy drink
yields only marginal market impact, even under the best circumstances.
2. Expanding GangBuster
Pros & Cons for Product
3. Kid-Energy Drink
Pros Cons
Easier to produce Plenty of Competition
Lowest investment Not a guranteed success but chances better than Dual Drink
Factors to be accounted:
• Feasibility of Idea• Cost• Development time• Potential Market• Competition• Benefits
Kid-Energy & Dual Drink Graph
Kid-Energy Drink
1 2 3 4 5 6 7 8 9 10 11 120
50
100
150
200
250
Monthly Investment IMonthly Investment II
Dual Drink
1 2 3 4 5 6 7 8 9 10 11 120
50
100
150
200
250
300
350
Monthly Investment IMonthly Investment II
Recommendation of a Project for United Beverages
Dual-Drink Project
• New & Innovative Product
• Outcome can be patented
• 4 to 5 times greater market
• In the Best Case Result, profits can be extreme
• Re-revolutionize the beverage industry
• Medium effect in case of Worse Case Scenario