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Page 1: University of Texas Pan-American_Full Written Case
Page 2: University of Texas Pan-American_Full Written Case

1. Executive Summary ……………………………………………………………………………………. 3 2. Marketing Environment ……………………………………………………………………………… 4 2.1 Competitive forces 2.2 SWOT Analysis ……………………………………………………………………………………………. 5 2.3 Consumer trends ………………………………………………………………………………………… 6 2.4 Target Market and Consumer Segmentation …………………………………………….....7 2.4.a Demographics and Psychographics 3. Market Research …………………………………………………………………………………………. 9 3.1 Primary Research 3.1.a Surveys 3.1.b Focus groups 4. Marketing Objectives …………………………………………………………………………………. 10 5. Product positioning and brand strategy ………………………………………………………. 11 6. Marketing Strategies …………………………………………………………………………..……… 14 6.1 Product and Packaging 6.2 Distribution …………………………………………………………………………………………………. 15 6.3 Pricing …………………………………………………………………………………………………….…… 16 6.4 Promotion …………………………………………………………………………………………………... 17 7. Budget …………………………………………………………………………………………………………. 20 8. Sales Forecast ………………………………………………………………………………………………. 21 9. References …………………………………………………………………………………………………… 22

10- Appendices …………………………………………………………………………………..……………. 25

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vitaminwater is positioned as the market leader in the enhanced water beverage category, a pioneer in the industry that certainly took control of its first-mover advantage. However, for the last 6 years since The Coca-Cola Company purchased Glacéau back in 2008, vitaminwater has continuously faced decreasing sales. Throughout the years vitaminwater has stayed true to its bold and irreverent roots, particularly using pop culture tie-ins to promote their products. However, it seems that consumer preferences and values have changed drastically since vitaminwater first came into the market, particularly among young consumers. Not only values and preferences seem to be changing, but also the fact that young consumers might be shifting into other alternative beverages for hydration like energy drinks or simple purified water and other external factors. This marketing plan will tackle the challenge of revamping the vitaminwater brand as the exciting and relevant brand it used to be, particularly among the target market of consumers 18-24 years old while avoiding the alienation of current brand loyalist ages 30-39. The ultimate objective of this marketing plan is to improve sales numbers and catch the attention of 18-24 year old consumers. This marketing plan will also discuss: - Current marketing environment. - Consumer segmentation. - Primary and secondary market research. - Marketing objectives. - vitaminwater´s new positioning and brand strategy. - vitaminwater as a technology brand. - Product and packaging strategies. - Pricing and distribution strategies. - Promotion strategies and campaigns - Budget allocation - And 3-year estimated sales forecast

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Enhanced-water beverage submarket main competitors: (Refer to Appendix A, I and J for supplementary secondary research graphs and data) - Sobe LifeWater: $1.02-$1.34 80 calories and zero calories version - Propel: $.88-$1.39 0 Calories and 0 sugars - Sparkling Ice: $.99-1.47

0 Sugar and 0 calories - Aquafina FlavorSplash: $1.19-$1.39 0 calories and 0 sugars - Vita Coco: $1.98-$2.25 90 calories and 22g sugar

Indirect competitor submarkets:

- Water - Sport drinks

- Tea - Energy drinks

Product (500-600 ml, no taxes included)

Price range

vitaminwater $.88-1.86

Dasani water $1.08-1.58

Nestle Pure Life water $1.02-1.39

Gatorade $1.68-1.99

Powerade $1.37-1.48

Snapple Tea $1.00-1.56

Arizona Tea $.79-1.19

Redbull $1.99-2.68

Monster $1.99-2.78

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“Offerings that stress hydration, health, and convenience will support increased bottled water consumption. Consumers remain price sensitive in the category, and with so many choices, value will be what consumers fall back on. Products with higher price points need to be justified through unique flavors and innovation to draw in new users.” – Elizabeth Sisel, Beverage Analyst, Mintel.

Vitamin enhanced drink.

Broad selection of vitamin water products and flavors.

Zero calorie and low-calorie options.

The Coca-Cola Company marketing and brand management expertise.

Leading brand in the enhanced water beverage category (62%).

Unique product positioning and first-mover advantage.

More effective consumer segmentation trough tools like Facebook and Google Analytics

Lack of new customer acquisition, particularly in the segment of 18-24.

Isolated marketing campaign in the upper East Coast (New York), alienating the rest of the country´s consumers.

Outdated product packaging.

Lack of product positioning among young consumers.

Lack of key distribution channels among young consumers.

Lack of interest and engagement with vitamin water among young consumers.

Too many flavors and product variations may cause cannibalization and confusion among target consumers.

Increasing interest and concerns about a healthy lifestyle among young consumers.

Ability to reach target consumers in real-time through mobile and digital strategies.

Ability to create an engaging brand community at an early stage among young consumers.

Increasing social media time expenditure among the target consumers.

Increasing desire of brand interaction and brand communities.

Opportunity to acquire brand loyalists and ambassadors for years to come.

Shifting customer preferences.

Rapidly increasing competition in the enhanced water category.

Fast-evolving industry with increasing number of competitors as well as other emerging categories.

The “How I Hustle” campaign may alienate all other consumers that don´t feel related to the New York lifestyle and the city

Alienation of the 30-39 y/o brand loyalists through new marketing strategies.

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Amid rising consumer disdain for high-calorie beverages, a convergence in demand for simple refreshment and functionality is starting to give rise to a broad, catch-all category: premium hydration. At its core are products that are generally thought of as enhanced waters, but it has more room at the margins, including alkaline waters, electrolyte enhanced waters and beverages, naturally functional products like coffeefruit-based Bai or any number of coconut waters, mix-to-drink twist-cap bottles, even carbonated products like Sparkling Ice and its current raft of imitators.

In particular, coconut water products and electrolyte-infused waters, led by market leaders Vita Coco and Smartwater, respectively, have found success by promoting hydration as a key function of their beverages, particularly as a way to bridge the gap between health and refreshment.

“Hydration is a very contemporary opportunity that’s out there,” said Neil Kimberley, a longtime beverage consultant. “I think it probably comes back to the idea that it’s not so much about enhanced water as it is about some form of hydration. And then it’s about, ‘is this an updated form of modern hydration that is not for a sports occasion?’ Then I think you get into this kind of space.” (Ray Latif, Bevnet, 2013)

Consumers have been drinking more beverages in general, Kimberley noted, particularly as hydration becomes a more significant part of their daily needs, and a big part of that boost in consumption has come from bottled water. Moreover, as U.S. consumers increasingly shun carbonated soft drinks, research from Nestlé Waters North America and published by Zenith International, a consulting group focused on the food and beverage industries, found that 51 percent of consumers choose non-flavored bottled water in favor of CSDs, while 12 percent opt for sweetened or enhanced water (Ray Latif, Bevnet, 2013).

So if flavor and boredom are part of the impetus behind premium hydration, what else is driving it? Much of the seismic shift created by the global health and wellness movement has given way to consumers clamoring for function-infused enhanced water products, according to a recent Euromonitor International report. Euromonitor, found that while concerns over high sugar and high calorie content drove declines in total volume and dollar value of flavored water in the U.S. in 2012, consumers’ interest in functional benefits has led to a 5 percent growth in overall dollar sales of functional waters and a 6 percent jump in volume.

Consumer Interest in Health & Wellness Drives Bottled Water Sales in U.S.

According to a report by Packaged Facts, the struggle with obesity in the U.S. has caused many Americans to turn to water as their zero-calorie/ultra-low calorie beverage of choice. Even activists across America are protesting high-calorie beverages, saying sugary drinks are menaces to public health, which highlights water as the better, healthier alternative.

Over the last decade, the number of adults who drank five or more bottles of water grew more than 20%, while the number of adults who drank five or more glasses of diet cola, regular cola, and other carbonated diet drinks fell by double-digit percentages. Most of the customers that are purchasing large amounts of sparkling or still water bottles are also much more likely to look for organic foods and buy foods that are locally-sourced and without artificial additives. (Caitlin Stewart, Market Research, 2104)

U.S. Bottled Water Market Landscape

Companies need to create a new competitive advantage that isn’t based on price or volume. Industry leaders have been forced to revisit their strategies in the face of increasingly competition from branded premium products from brands like Talking Rain Beverage Co. as well as low-priced commodity products from private label manufacturers. Some of the key ways companies are changing their water to stay on top are through:

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Making water and enhanced-water not only a fashion statement but a fashion accessory Moving away from commodity-type bottled water and pivoting towards new products with the potential to

capture a share of the premium sparkling water market Creating enhanced waters to claim the loyalties of converted drinkers of carbonated soft drinks

Bottled water companies are working less to compete on the base of volume, and instead are working to market by offering high-profit, premium brands of bottled water. (Caitlin Stewart, Market Research, 2104).

Millennials reject soft drinks, embrace energy drinks The millennial generation, is the most important cohort in determining the direction of the beverage industry. As the largest generation since the baby boomers, its members' purchasing power will shape the industry's landscape. Unfortunately, Milliennials' influence on the beverage industry may not favor Coca-Cola, PepsiCo, and Dr Pepper Snapple. Bonnie Herzog, an equity analyst at Wells Fargo, conducted a survey of convenience-store operators and received several worrying replies:

“I just think it's a natural shift. Energy is what the younger consumer identifies with as well as health offerings. I anticipate [a carbonated soft drink] sales decline... As the group that was brought up on energy drinks gets older, carbonated soft drinks become less and less a part of their daily intake.

[Energy drinks have] become as important as a morning cup of coffee and the younger generation seems to want caffeine all day long, whereas the older generation only got caffeine in the morning to jump start the day.”

In essence, convenience-store operators have noticed a definite trend away from soft drinks and toward energy drinks. Millennials' consumption patterns are different than their predecessors, they want caffeine and energy all day long and they prefer higher doses of caffeine than is available in a soft drink. PepsiCo's convenience- store sales are estimated to have increased 1.1% last quarter mainly due to sales of its Kickstart energy drink and Frappuccino drink sold through Starbucks -- evidence that corroborates convenience-store operators' observations.

Primary target market: Consumers ages 18-24 years old (first half Millenials). Secondary target market: Consumers ages 24-35 years old (second half Millenials). Note: New marketing strategies should not alienate current brand loyalists (30-39 yrs old).

Demographic information

- Millennials, 17-35 years old, constitute 27% of the U.S. population.

- 18-24: 31.5 million, 10% of the total U.S. population.

- 20% are of Hispanic origin. - Millennials have 21% of direct consumer

discretionary purchasing power, or $1.3 trillion annually.

- About 40 million Millennials are already parents and 9,000 millennial moms give birth every day.

- 2.6% identify as multiracial. They are more diverse than any previous generation.

- 18% of them live at home and are financially dependent on their parents, but 25% of those still in the nest have full-time jobs and 20%

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work part-time. (Adweek and Marketing Charts, 2014) Psychographic information

- Millennials embrace innovation. - Constantly seek out information and new

experiences. - Marketing savvy and demanding of brand

partners. - They want to change the world, feed the

starving, fix global warming, in other words, make a difference.

- 69% of Millennials identify themselves as adventurous and value brands that create

experiences for them to share with their networks.

- They leave home later than other generations. - They marry later in life than previous

generations. - They´re early adopters and rely heavily on tech.

30% use four or more devices a day. - On average, Millennials check their

smartphones 43 times a day. (Adweek and Forbes, 2014)

Refer to Figure 1, Appendix A, Figure 1 for the “US Millenials Six Distinct Segments” chart (BCG and Barkley US, 2014). Millennials as consumers Their purchasing path is more circuitous than with shoppers of other generations, and is heavily reliant on word of mouth:

- 68% are completely unfazed by celebrity endorsements or star-studded ads.

- 66% ask for friend´s advice. - 59% ask their significant other. - 37% look to mom and dad when making tech

purchases.

- 93% have purchased a product after hearing about it from a family member or friend. 89% of them trust these recommendations more than claims by the brand.

- 59% make product recommendations to share highly positive or negative experiences. 41% pass these to friends and family specifically via social media.

Importance of digital presence Millennials prefer to browse on mobile devices:

- 52% use smartphones, 61% use tablets. - 71% browse online but do their actual shopping

offline. - 93% usually read reviews prior to purchase.

- 77% trust product reviews and feedback on brand websites.

- 97% trust anonymous feedback on tertiary websites like Amazon and Target

How can vitaminwater reach Millennials? Online!

- 56% use social-networking apps at least once a month, up 10% since 2013.

- 90%+ of Millennials can be found on Facebook, and 42% log on the site daily.

- 66% follow brands on social media. But only 41% of those said they enjoy interacting with the brands.

- 38% claim that brands are more accessible and trustworthy when they use social rather than traditional advertising.

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- 60% follow brands to hear about new deals and coupons.

- 58% want to have full control over how they

engage with brands.

Methodology: The purpose of conducting these surveys was to better understand our primary target market

and find key insights on their lifestyle, interests, health consciousness, social media and online activity, and

vitaminwater´s brand awareness. We invited participants of 18-24 years old to anonymously participate in

an online survey through email and Facebook, 102 respondents participated in this survey. (Refer to

Appendix B, Figures 1-13 for complete survey graphs and data)

The most important findings for the 13 questions are the following:

- At least 44% of respondents claimed to use

Facebook, Instagram, SnapChat or Twitter as

their primary social media on a daily basis.

More importantly 87% claimed to use

Facebook on a daily basis.

- 43% of respondents rated themselves as

physically active. While 71% consider health

and nutritional products as important to

them.

- 94% of respondents claimed water as their

primary source for hydration, followed by

juices with 58% and sodas at 37%. Flavored-

enhanced water got 25%.

- 73% of respondents selected supermarkets as

their main channel to purchase beverages,

followed by convenience stores with 49% and

vending machines with 38%.

- 52% of respondents consider that vitamins

are needed in beverages.

- 78% know vitaminwater. This implies that

there is good brand awareness in this

segment for vitaminwater.

- 34% of respondents felt neutral or indifferent

when asked about how they perceived

vitaminwater´s price at $1.85 dls. 25% of

them perceived it as affordblae and 20% as

expensive.

- 66% of respondents claimed to have tried

vitaminwater at least once. However, only

27% of them had a positive impression.

Methodology: Two separate focus groups of 8 participants ages 18-24 were conducted in which

vitaminwater was analyzed and compared against its main competitors through taste tests, packaging and

label preferences. Respondents were also asked to comment about their usual beverage preferences, price

sensitivity when it comes to beverage purchases and possible new vitaminwater product offerings. The

brands and beverages used during these focus groups were the following:

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- vitaminwater: XXX, squeezed, energy, power-

c

- vitaminwater zero: XXX, power-c, revive

- Sparkling Ice: Lemonade and Black Raspberry

- SoBe Life Water: Yumberry and Black and

Blueberry

- Propel: Peach

- Nice! Sparkling Water: Black Raspberr

The most meaningful findings and insights from these focus groups are the following:

- Top 3 best rated beverages (in order) based

on taste were vitaminwater squeezed,

vitaminwater XXX and Sparkling Ice

Lemonade.

- Top 3 worst rated beverages (in order) based

on taste were SoBe Yumberry, vitaminwater

zero power-c and Propel Peach. Participant

also stated that these 3 beverages had a

“horrible after-taste”.

- From the 3 flavors that were tested for

vitaminwater zero, 85% of participants said

that they would never buy any of these

products judging by taste. They were referred

to as “having bad after-taste, tasting like

cough syrup and lack of sweetness”.

- Worst rated vitaminwater flavor based on

taste was energy, while worst rated

vitaminwater zero flavor was power-c.

- Over 50% of respondents preferred Propel

and Sparkling Ice slimmer bottle design.

- 50% of respondents selected vitaminwater´s

label design as their favorite due to its “clean

and simple design, however it´s boring as and

medicine-look-like”. The other 50% selected

Sparkling Ice label.

- 75% of respondents claimed that price has no

influence on their beverage purchasing

decisions.

- When asked about their daily preferences on

hydrating beverages 60% claimed that water

was their beverage of choice.

The marketing objectives for vitaminwater´s marketing plan are the following:

- Re-position vitaminwater to the prominent, exciting brand status it once had. vitaminwater as the enhanced, more exciting alternative to water and healthier alternative to sport drinks, sodas and energy drinks.

- Regain consumers´ trust through improved product development, PR and product offerings. - Educate current consumers and non-consumers on vitaminwater´s efforts to improve its products and

become a healthy beverage choice. - Avoid alienation of current brand loyalists based on new marketing strategies. - Avoid cannibalization within Coca-Cola´s hydrating beverage portfolio. - Increase brand awareness among consumers ages 18-24. - Increase social media likes, interactions and overall engagement among consumers ages 18-24 by 200%

within the next 3 years. An overall increase of 100%. - Achieve number 1 listing on Google´s organic search for the search term “vitamin” trough SEO. - Increase number of visits per month to vitaminwater´s website by 150% within the next 3 years. - Increase repeat purchases among consumers ages 18-24 by at least 35% within the next 3 years.

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- Increase vitaminwater trademark sales by at least 65% within the next 3 years, 15% the first year, 35% the second year and a total of 65% at the end of the third year 2017.

- Gain a minimum of 8% market share within the enhanced-water beverage category by December 2016.

- Gain a minimum of 2% market share within the hydrating beverage category by December 2016.

This report will discuss vitaminwater´s positioning by analyzing the theory presented by Keller et al. (2012) which presents three strategic questions to analyze brand strategy: Differentiation, Frame of Reference, and Points of Parity.

vitaminwater is distinguished by vitamin-enhanced hydration and a bold brand attitude. Such points of differentiation are, in many cases, what consumers remember about a brand. But points of differentiation alone are not enough to sustain a brand against competitors. Managers often pay to little attention to two other aspects of competitive positioning: understanding the frame of reference within which their brands work and addressing the features that brands have in common with competitors. Effective brand positioning requires not only careful consideration of a brand´s points of difference, but also of what we call its points of parity with other products.

Frame of reference

Two dimensions have been selected in order to define vitaminwater’s current positioning in customer’s mind: health benefits and how exciting the brand is. vitaminwater and its main competitors have been placed in the following quadrants according to the dimensions selected:

1. Less exciting & more health benefits (quadrant 1) 2. More exciting & more health benefits (quadrant 2) 3. More exciting & less health benefits (quadrant 3) 4. Less exciting & less health benefits (quadrant 4)

Page 12: University of Texas Pan-American_Full Written Case

Moving away from the enhanced water industry, the majority of the present-day most successful companies have

imprinted their image in Millennials’ minds by running engaging and exciting campaigns throughout their overall

strategy; for example Coca-Cola’s “Share a Coke” or Redbull’s “Stratos”, to name a few.

vitaminwater must strive to move away from its competitors and shift towards the upper-right side of quadrant 2;

this shift will mean, of course, that consumers will think of vitaminwater as not only a drink with higher health

benefits than competitors but also as more exciting brand with which they will feel identified and connected.

vitaminwater’s brand perception would be highly positively affected by the use of experiential marketing to be

able to shift to the desired quadrant. It has been proven by countless research than millennials are more

responsive to this type of below the line marketing. By engaging in consistent experiential and guerilla marketing,

vitaminwater will be able to engage consumers and create excitement around its brand image.

Ideally, the end goal will be for vitaminwater to be positioned as the most exciting beverage that provides the

most health benefits and to create a “brand community” around it to foster a sense of belonging and encourage

loyalty throughout the market.

Points of parity

- Large logistics capabilities.

- Creative branding and advertising.

- Substantial marketing budgets.

- Social media presence.

- Clear target markets.

- Support from big companies like Coca-Cola,

Pepsi Co. and Talking Rain.

- Research and development facilities.

- Celebrity endorsements.

- Large warehouse capabilities.

- Hydrating product offerings.

- Zero-calorie products.

- Vitamin-enhanced and nutrient-enhanced

products.

Points of differentiation

Careful analysis shows that there are three types of brand differences: brand performance associations,

brand imagery associations, and consumer insight associations. By considering each of these kinds of

differences, vitaminwater can better target its message:

Brand performance associations relate to the ways in which a product or service attempts to meet

customers´ functional needs. These associations, which are based on intrinsic properties of the brand,

revolve around the many facets of the question: “Does this product do what it says?”

Brand performance associations fall into five broad categories. One category is composed of a brand´s

performance on the benefits that prompt consumption. For vitaminwater, these benefits include taste,

nutritional value, and the variety of products offered. A second set of assumptions relate to a brand´s

reliability, durability, and serviceability. vitaminwater might be positioned as delivering healthier, enhanced

hydration options different from the ones offered by carbonated soft drinks, sport drinks and energy drinks.

Service effectiveness, efficiency, and empathy make up another set of associations that vitaminwater might

offer by focusing on the product availability, product enhancements and price promotions. Style and design

constitute a fourth category of associations: vitaminwater´s emphasis on a simple enhanced-hydration

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benefit might be supported by the minimalistic, clean packaging and publicity design. Finally, association to

value and price might help differentiate a brand from its competitors: More health benefits at competitive

prices would serve vitaminwater well in its battle to top Sparkling Ice, SoBe, Vita Coco and other

competitors.

When making choices based on experience – such as where to get a haircut or eat dinner – consumers use

brand imagery associations. Brand imagery is typically established by depicting who uses the brand and

under what circumstances. vitaminwater represents its point of difference by using spokesmen that live up

to the premise of their latest campaign “Hydrate the Hustle,” particularly with rising characters of the

underground/alternative music scene hustling their way up to stardom. This device implies that

vitaminwater is for the “hustler” that wants a simple way to stay hydrated while enhancing their overall

health.

Consumer insight associations are generally used when a brand´s performance and imagery don´t differ

much from those of the competition. For example, ads for vitaminwater showing people´s tribulations in the

search for a better hydration method (and the rituals they go through to get it) as the basis for positioning

vitaminwater as the brand that offers superior hydration.

There are two questions that serve as fundamental filters through which to run vitaminwater’s points-of-

difference benefits: Are they desirable to customers, and can vitaminwater deliver them? When the answer

to both is yes, a point of difference can become a strong, favorable, unique brand association.

Desirability. To qualify as desirable, a point of difference must be perceived by the brand’s audience as both

relevant and believable. Relevance is easily over-looked. It’s worth noting that as long as benefits are

perceived as enhancing performance, they needn’t have any real effect. In the case of vitaminwater, this

particular quality has been on the fence for the past couple of years due to controversy about its product

claims, particularly its health benefits and overall product formula

Deliverability. A product’s point of difference needs to meet three deliverability criteria. First, creating the

point of difference must be feasible. Second, positioning on a particular benefit must be profitable. And

finally, the positioning must be preemptive, defensible, and difficult to attack. While consumers may find low

prices or bundle promotions attractive as points of difference, all too often these features compromise

profitability and are easily imitated.

Differentiation amongst Coca-Cola’s hydrating beverages

We considered 5 out of 23 Coca-Cola´s hydrating beverages that share some qualities with vitaminwater. The

following table shows how vitaminwater differentiates from the rest Coca-Cola products:

Beverages/Qualities USP 1 2 3

DASANI Simple, purified, clean

water. Fresh style Pure fresh taste DASANI

drops

POWERADE

ION4 Advanced Electrolyte system

beverage with different vitamins

Replenishes 4 key electrolytes:

Sodium, Potassium,

Provides energy, aids stamina while hydrating

Point of sweat

beverage

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Calcium & Magnesium

POWERADE ZERO

Electrolyte-enhanced sports and fitness

drink with no calories

Sports product positioning

Replenishes 4 key electrolytes: Sodium, Potassium, Calcium &

Magnesium

Point of sweat

beverage

vitaminwater

Enhanced-hydration healthier than most

hydrating beverages, cooler than water

The pioneer of the nutrient-

enhanced water beverage

Comes from an original idea: water plus vitamins

Off the court

hydration

vitaminwater zero

A water-based vitamin beverage with fruity

flavors, and no calories.

Ideal for more calorie-conscious

consumers

Usage of different hype modern celebrities for promotion instead of

athletes.

Off the court

hydration

smartwater A hydrologic cycle

distilled water Includes

electrolytes Genius, “smart” product

positioning Processed

water

Current vitaminwater´s products and packaging are missing the mark in attracting new consumers,

particularly in the segment of 18-24 years old. According to the results found in our primary research (focus

groups), these young consumers do not feel related or attracted to vitaminwater´s current label design.

Participants referred to the label design as “generic, medicine-look-like and boring”. They liked the simplicity

of the label, but also stated that it was lacking “personality, excitement and engagement”. Current label

design and vitaminwater´s overall packaging decisions also have the issue of not allowing consumers to

interact with the brand, which is a MUST for Millenials to become brand loyalists.

Another issue with vitaminwater´s current packaging was that more than half of the focus groups´

participants stated that they perceived the current bottle shape as “too bulky and wide, not appealing”.

When presented with other bottle shapes from the competitors´ products most participants preferred the

ones with slimmer designs.

(We noticed that vitaminwater introduced a new, slimmer bottle shape around November, 2014 which

applies better to the overall packaging strategy this report is supporting. That is the type of packaging

vitaminwater should follow. (Refer to Appendix E, Figure 1)

In order for vitaminwater to be successful among Millenials this marketing plan presents new product and

packaging strategies. Taking into consideration the target market´s lifestyle, interests and values,

vitaminwater must do the following:

- Engage consumers rather than Market at

them.

- Allow consumers to co-create products,

services and experiences.

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- Leverage technology within vitaminwater´s

brand authority.

- Solidify vitaminwater as a digital and social

platform, meaning that all aspects of its

marketing strategy should be connected

through technology, including product

packaging and label designs.

- Package shape must appeal to the target

market´s values and preferences.

By taking these premises into consideration this marketing plan presents new product and packaging

proposals including:

- vitaminwater interactive mobile app. (Refer

to Appendix D, Figure1)

- Interactive label design that instantly

connects to vitaminwater´s mobile app using

QR code scanning and social media platforms.

(Refer to Appendix C, Figures 1-5 for label

designs)

- Variation in packaging colors and designs.

- Taste and overall product enhancement.

- Modification of bottle shape, slimmer design.

- Introduction of new product: vitaminwater

ONE. (Refer to Appendix C, Figure 3)

Current main vitaminwater´s distribution channels include:

- Grocery stores and other mass merchandisers (Walmart, Whole Foods, Safeway, HEB, Target, etc.)

- Convenience stores

- Drug stores

According to the research, Millenials preferred-spots for purchasing hydrating beverages are supermarkets

and convenience stores; this is also supported by vitaminwater´s sales information provided in the case

brief. In addition, on-the-go options, particularly vending machines, were extremely popular among the

target market. Mainly in places like college campuses, malls and sports complexes. It is also incumbent for

vitaminwater to innovate in point-of-sales displays to attract these young consumers since current

vitaminwater displays are not achieving this objective. All vitaminwater´s marketing efforts should comply

with the premise of being engaging with consumers through the use of technology. This plan proposes an

interactive POS display that allows consumers to engage and obtain information about vitaminwater

through a screen while purchasing a cold vitaminwater from the refrigerating display. (Refer to Appendix

G, Figure 1)

The proposed distribution channels for vitaminwater to focus on based on research are the following:

- Convenience stores

- Supermarkets and mass merchandisers

- Vending machines

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Based on previous research, it has been determined that vitaminwater is adequately priced within the range of $.95 - $1.60 throughout different regions in the US, and from $1.25 – $2.00 at vending machines. Different research shows that 90% of Millennials use coupons, and over 60% of those use electronic coupons. Different ways of coupon-searching could be via Internet, social media, or mobile apps. This marketing plan proposes sales-oriented pricing strategies in order to gain more market share and maximize sales. In order to be successful with this plan, store promotions and promotional pricing must intertwine responsibly with the same message in all regions, have a consistent message. Based on our primary research, (Refer to survey question #11) respondents perceived current vitaminwater´s price as fair or neutral. Proposed in-store promotions and promotional pricing are the following:

Strategies 1 2 3

Store Promotions

2x1 or 3x2 offers: Plan a seasonal sales strategy in which stores sell vitaminwater and incentivize consumers in special dates.

Standard coupons offered at different stores: Available for individual and the 6, 8, 12, 15, 20 and 24 bottle packages.

In-store bundles to incentivize consumers to try other vitaminwater products like the zero drops or vitaminwater energy bundled with their base vitaminwater or zero versions.

Promotional Pricing/ Sales promotions:

Online and downloadable coupons: A great strategy to incentivize consumers to buy online and redeem in-store.

66 Million Coupons were redeemed.

Millennials are the ones who use coupons the most (26%)

82% of consumers open emails regarding coupons.

Google Trends shows that people are looking for vitaminwater coupons online. (Refer to Appendix J)

Special festivities: vitaminwater will take the following U.S. Calendar celebrations to promote special offers and discounts for online and in-store shopping:

New Year’s Eve

Valentine’s Day

St. Patrick’s Day

Mother’s Day

Father’s Day

Independence Day

Columbus Day

Halloween

Thanksgiving

Christmas

Sign me Up! vitaminwater will introduce a new account system for everyone available at vitaminwater´s mobile app.

By using a redeem-points system, similar to Starbucks, people will redeem points each time they buy a vitaminwater product, a code will be printed under the bottle cap. Point will earn discounts, free vitamin water products, trips, and more!

Surprise! A new pragmatic and better method of sampling. Randomly selecting mobile app users on their birthdays for special offers. By doing this, vitaminwater will stimulate consumer behavior as well as brand loyalty.

The following personal information will be needed for users to create an account on the mobile app. This will also allow the app to become intuitive and later help develop better targeted pricing strategies. o Name, email, birthday date, address,

and gender. The following questions about vitaminwater will display at their account settings page, but are are not required to create an account.

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What is your favorite vitaminwater product?

Describe vitaminwater in one word. A recommendation for

vitaminwater? o For a quicker process, Facebook and

Twitter sign-ups will be available, allowing vitaminwater to use more information.

#hydrationforinspiration

Digital Marketing Strategies This marketing plan suggests an integrated promotional strategy that will include both above the line (ATL) and below

the line (BTL) marketing strategies. Aside from using the traditional communication mediums (such as TV ads, print ads,

billboards, etc.), this marketing plan proposes a stronger push into digital and social media marketing. Making digital

platforms, we intend to create an exciting brand-image for vitaminwater where the target market spends the most time

in, online. These strategies will encourage listeners/viewers to engage with vitaminwater in social platforms and create

conversation topics that consumers can relate to.

The table below will discuss the different digital platforms proposed with its respective objective and estimated cost.

The implementation plan for the following strategies runs from September 2015 through December 2016:

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Platform Strategy Cost

1 YouTube Ads

YouTube is the most used video-sharing website in the U.S. Highly used by Millennials every day. The strategy is to have ads running in popular YouTube videos that are usually watched by our target market. These ads must tell a story (a possible contest that makes consumers interact with the brand similar to what Dodge Journey did in 2011) and offer meaningful content, particularly using Content Marketing and Storytelling. By doing this, vitaminwater will better connect and engage with Millennials. Ads must position vitaminwater as an exciting engaging brand. 1 year 3 months equals 455 days to execute the strategy. 440 standard days plus at least 15 special (holidays) days.

Spending $7,000 dollars per day and $15,000 dls per special day (holidays or special dates). 440 days x $8,000 dollars equals $3,520,000 dollars plus 15 special days x $15,000 dollars equals $225,000 dollars. A total of $3,745,000 dollars spent on YouTube ads throughout 455 days. Investing $8,000 dollars on a YouTube add will reach approximately 99K viewers or more, investing $15,000 dollars will reach approximately 150K+ viewers.

2 Facebook

Ads

Facebook is the most used social media platform in the world. Using tools like FB Graph Beast, vitaminwater will be able to develop hyper-targeted online campaigns, which will increase ROI, improve social media results and ultimately create more engagement as this will help reach the ideal consumers. These strategies will mainly focus in the most influential metropolitan areas in the US as they typically act as influencers for other areas.

Spending $12,000 dollars on a daily basis from September 1st 2015 to December 31st 2016 will give us an estimated daily reach of 1400,000 - 3,100,000 people. A total expense of $5,396,448.00, according to Facebook Ads statistics.

3 Twitter and Instagram

Ads

Twitter and Instagramare other great platforms to reach Millennials as they are constantly tweeting and interacting with brands through there. vitaminwater must use these platforms to create a forum to constantly interact with their consumers and post relatable/meaningful content.

Spending $4,000 per day from the selected strategy dates. $4,000 x 455 days equal $1,820,000.

4 Pandora and

Spotify

These two online music applications are the top 2 most used apps for streaming music online. It also serves vitaminwater to particularly target consumers 18-24 years old in a more meaningful way. vitaminwater must take advantage of these type of mobile and online apps.

Due the high demand to advertise on these two platforms, Pandora and Spotify do not allow companies to advertise as on a daily basis and would not give specific amounts on their advertising prices. However, we´ve allotted $4 million dollars total for these two channels.

5 Shazam

Shazam, a music identification application, has created a new way to identify music and is highly popular among Millenials. Its high usage rates must be of interest to vitaminwater. That is why vitaminwater must implement ads on this platform.

The daily price for the app´s screen takeover is $30,000 dollars. It is planned to invest $4,000,000 dollars in this platform. That is 150 out of the total of 455 days. This clearly differentiates vitaminwater for its techy/bold personality.

6 Teads.tv

15-30 second videos from vitaminwater will now be shared through different websites, either private or public by using the new video advertising from Teads.tv. Teads is a software company for digital branding, operating a disruptive video advertising SSP (Supply Side Platform).

$7 million dollars will be spend on this platform due to the great exposure among a variety of websites that vitaminwater can target using the targets market´s online activity data. By using Teads.tv, vitaminwater will move away from the typical video ad to something

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Media, Print, Outdoor and Guerrilla Marketing This marketing plan focuses mostly on digital marketing to attract 18-24 years old consumers; however, this integrated marketing campaign will propose traditional advertising strategies to complement the o marketing plan. (Refer to Appendix H, Figures 1-4 for campaign mockups)

- 30-second TV spots on “The Walking Dead” and “The Big Bang Theory” TV series: According to research, these two TV shows are the most watched among Millenials (Variety, 2014).

- 1 page print ads in Cosmopolitan and MAXIM magazines: These two magazines are the most read among 18-24 years old consumers (Millenial Marketing, 2012).

- Outdoor advertising in key metropolitan areas: Creative advertising using subways, billboards, buildings and bus tops in influential cities like New York, Boston, San Francisco, Portland, Austin, Chicago, Miami and Denver.

- Guerrilla marketing: Young consumers have a more positive response to these type of “street marketing” compared to traditional advertising. These creative campaigns would be placed around key metropolitan areas.

The most interesting feature about this company is that it only charges for completed views, CPCV (Cost-Per-Completed-View) business model, totally opposite from current online video ads. This means, they have eliminated the doubt associated with view ability and impressions. vitaminwater should only pay for those who have engaged with your video.

more bold, innovative and less invasive for consumers.

7 Google Ads

Google AdWords is an online advertising service that places advertising copy at the top, bottom, or beside, the list of search results Google displays for a particular search query. Our strategy consists of utilizing a daily ad system to inform, remember, and showcase everything about vitaminwater to specific and broad queries on the Internet using Google Trends.

Total of $8,000 dollars that can be divided in numerous ways, either spending $8,000 dollars on one ad or $1,000 dollars for 8 ads. During vitaminwater special days, we will invest $15,000 each day.

8 Snapchat

A completely free application that nowadays some of the best brands in the world use to get a closer relationship with its consumers, Snapchat. Millennials want instant interactions with their friends, but also with brands. Taco Bell asked the official Snapchat account on twitter to promote them. vitaminwater can do a similar strategy through some type of trade.

Free. This report looked for the possibility to advertise on this platform, but Snapchat currently is closed for that specific reason.

9 vitaminwater

website update

vitaminwater has to update its website in order to involve the ideas explained on the pricing strategies section. This update must cover the following features:

A sign up system where people can create an account and profile, linked to mobile app.

Consistent special promotions (listed on pricing section). These promotions will attract consumers to redeem offers and coupons.

Estimated total cost to accomplish this task, $90,000 dollars + daily maintenance.

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Social responsibility strategies Coca-Cola has made it a point to become socially responsible through the use of social responsibility campaigns. In 2007 vitaminwater became part of the Coca Cola family. In doing so it also became a part of its environmental projects. Existing strategies:

- Water Stewardship Program: Its goal is to break-even with the amount of water they take up in order to make their products and help provide clean drinking water to water-deprived communities around the globe. vitaminwater could certainly take advantage of this Coca-Cola´s program.

- Student Ambassador Program: Helps college students learn important marketing skills, cultivate work experience, and help them financially via a par-time internship.

- Coca-Cola Troops For Fitness (CCTFF): Employs veterans in the communities to teach those in the communities how to stay active and fit.

Proposed strategies:

- “Paws for a Cause”: Provide free vaccination for dogs and cats in key metropolitan areas. Using Facebook Analytics we were able to find that 44% of vitaminwater´s followers on Facebook purchase pet products online, #1purchase behavior. (Refer to Appendix XX Figure XXX)

- “Hydration for Inspiration” Grant: A grant and contest for college students with a business or startup idea. The goal is to motivate young people to pursue their entrepreneurial dreams.

- The vitamin-a Scholarship: A nationwide scholarship competition for outstanding and inspiring students.

Timeline: September 2015 through December 2016.

DIGITAL ADVERTISING BUDGET

Platform Cost (dollars)

YouTube $3,745,000

Facebook $5,396,448

Twitter and Instagram $1,820,000

Pandora and Spotify $4,000,000 ($2,000,000 each)

Shazam $4,000,000

Teads t.v. $5,000,000

Google Ads $3,745,000

Snapchat Free

vitaminwater website update $100,000

Total cost $28,126,000

MEDIA, PRINT, OUTDOOR AND GUERRILLA BUDGET

30-second National TV spots (20 packages) $3,260,000 – The Walking Dead (10) $3,171,600 – The Big Bang Theory (10)

1-page magazine print ads (16 issues) $1,963,200 – Cosmopolitan (8) $1,812,472 – MAXIM (8)

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Outdoor adv. (avg. billboard and outdoor adv. rates) $6,480,000 (120 at $54,000)

Guerrilla marketing $2,000,000

Total cost $18,687,272

SOCIAL RESPONSIBILITY BUDGET

“Paws for a Cause” $500,000

“Hydration for Inspiration” Grants $1,000,000 (40 at $25,000)

“The vitamin-a scholarship” $500,000 (20 at $25,000)

Total cost $2,000,000

PRODUCT AND PROMOTIONAL BUDGET

Point of sale displays $287,500 (834 at $306)

Store promotional items $2,000,000

Label change Zero (same # of colors and size as current label)

vitaminwater mobile app $95,000

Website update $70,000

Free and promotional samples $1,000,000

Brand ambassadors 2,500,000 (100 at $25,000 part-time wage)

Total cost $5,952,500

TOTAL BUDGET $54,765,772 dollars

This sales forecast has been prepared analyzing available vitaminwater sales data from 2009-2014, external

factors and data provided by Google Trends software regarding vitaminwater and the hydrating beverages

industry trends. (Refer to Appendix K, Figures 1-3)

Using Google Trends we were able to find that the peak of interest for vitaminwater happened around 2008

when Coca-Cola bought Glacéau. This also matches the peak in total sales for the data provided which is 2009

with $1,016,626,320.00 dollars. This marketing plan objectives and strategies are designed to get

vitaminwater back to those sales numbers within 3 years. As explained in the marketing objectives, sales are

calculated to increase by 15% in year 1, 35% compounded increase in year 2 and a total of 65% increase by

year 3, in comparison to the calculated end-of-year sales for 2014.

Some external factors that have been taken into consideration for vitaminwater´s decay were the economic

recession, price sensitivity of the target market and current employment landscape in the US.

Note: vitaminwater´s marketing budget for previous years was not available for the development of this sales

forecast which may hurt the accuracy of the following data. Refer to Appendix G for full sales forecast graphs.

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Appendix A, Figure 1-7: Secondary Research

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Appendix B, Figures 1-13: Surveys primary research

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Appendix C, Figures 1-5-: Interactive Labels

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Appendix D Figure 1: vitaminwater mobile app

Appendix E Figure 1: Slim bottle design

Appendix F Figures 1-7: Current distribution strategies

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Appendix G Figure 1: Proposed POS Display

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Appendix H Figures 1-4: Promotion strategies and campaign

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Appendix I: Facebook Analytics

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Appendix J Figures 1-6: Google trends

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Appendix K, Figure 1-3: Sales Forecast

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cast