Marketing Plan
Marketing Plan
Marketing Plan
Marketing Plan
Erin Moller
Bryant Johnson
Sam Kunjummen
Megan Victorson Bryant Johnson Erin Moller
Mission Statement
History of XS Energy
Market Potential
PRODUCTS 2
SITUATIONAL ANALYSIS 3
MARKET ANALYSIS 4
Market Demographics
MARKETING STRATEGIES 5
Product Strategy
Price Strategy
Promotion Strategy
Distribution Strategy
Mission Statement
carbohydrates, it’s packed with B-vitamins and amino acids that are
healthier and still give you the boost you need. Currently XS Energy
college campuses and offices, while still maintaining our private status.
History of XS Energy
In 2001, XS Energy Drink was launched into the U.S. market. During
the first year the drinks were marketed through retail outlets primarily
in the Western U.S. Our mission was to find people who could “sample
the drink and tell the story, making a personal connection with the
Energy was the first energy drink brand to hit the market with a variety
BevNET, within the first year of business with Quixtar, XS Energy Drink
became the second best selling energy drink in North America. They
growing market, not only in the U.S., but also in world markets.
Within the first year, XS Energy did over $51 million in revenue,
over $70 million in the second year, and by the third year they had
made more than $90 million in revenue. Usually in the growth stage of
the business, revenues are fairly low because of production costs, but
since this market has such high demand XS Energy had no problem
company, IBO’s sell approximately one million cans every six days,
which is quite a leap from the 660,000 that were sold in the first three
only a new flavor, but also a new category of drinks for XS. Reported
Market Potential
Monster and Red Bull, but our goal is to distribute our product in
vending machines and school stores, while still keeping the personal
touch our IBO’s bring to the business. Vending machines make up 11%
of the market segment, which can greatly increase our sales (IBISWorld
Industry Report). Our plan is to increase knowledge, but not make the
Since the release of the first energy drinks nearly a decade ago they
Drink sales are made (Beverage World). Creating the opportunity for
growth between 2007 and 2012, rising by 53% in total volume terms
consumers, for whom the drinks have replaced coffee as the preferred
drinks, which have only been in the US for a little over a decade, and
appearing in more flavors and brands than before, which allow more
consumers to find unique brands that appeal to them. With the new
Products
2
give the drinks flavor without the added sugars. In fact, the calories in
the drink come from the 2 grams of amino acids. Sucralose and Ace-K
Gold Energy Plus. With the large variety of flavors, our company
using IBO’s rather than distributing from one central unit. Who else
can say their energy drinks are delivered right to their door? Not many
companies have the personal touch that IBO’s bring to the business.
There are many competitors in the market, and any small touches can
competition. Many energy drinks in the market are almost three dollars
a can, and they contain sugars and carbohydrates to give you energy
rather than nutrients the body really needs. We may have a smaller
can, but what the can contains is the most important part. Our drinks
are packed with B-Vitamins and amino acids to give you the energy
you need without the added sugars. Many cans currently in the market
are around the same price, but consumers may only notice the size of
the can. The selling point we try to emphasize is how much healthier
carbohydrates.
smaller size of our cans, being only 8.4 oz. Some energy drinks come
in cans nearly twice the size of ours, but don’t contain the same
vitamins and amino acids that consumers get from XS Energy Drinks.
many consumers like to see the larger cans rather than the nutrition
all the bright colors and large icons, but their smaller can size still can’t
there were very few flavor choices. XS Energy has gained a reputation
a new flavor every year. This year’s new flavor is XS Gold containing a
mix of superfruits such as blueberry and acai. Each year our customers
can expect something new and exciting, which also brings potential for
and amino acids to give our consumers the energy they need.
The major threat we face is not being a public company. Red Bull
every corner. They even have stock market share and gain money
be able to boost sales and get our brand name in the heads of our
Market Analysis
4
above the age of 40, mainly “soccer mom” types (Beverage World).
These people fit the ideal because they have the money to spend on
energy drinks and other luxury items, and may be the ones purchasing
groceries for the whole household. They are also more likely to be
XS Energy’s previous statistics, only about one can per week per
The feature that sets our plan apart from the others currently
market ranges from 16-25; from kids with a new found freedom, to
The sixteen year olds find themselves a new freedom with the
ability to drive and get a job, which brings in their own flow of income.
They are able to spend more freely because the money is theirs, and
they no longer need to rely on their parents for money. For the college
or an energy drink after the first class of the day, this activity will carry
through when they get their first jobs. The need for energy is apparent
in everyone’s life, and the older you get the more concerned about
health you become. This makes the young professionals a good target
for our product. If we can get the teenagers and college students used
to our product they may find more benefits than just energy as they
2002 624,879,136
2003 842, 729, 975 34.9% Growth
2004 1,278,225,135 51.7% Growth
2005 2,113,177,208 65.3% Growth
2006 3,138,856,560 48.5% Growth
2007 4,157,945,347 32.5% Growth
2002 100
2003 132.5
2004 199.6
2005 327.8
2006 481.5
2007 630.6
group, we need to understand who they are and what they want. We
will separate our target market into three key demographics by age:
“Young adults aged 18-24 are the key consumers in the market with
34% drinking energy drinks in 2008,” this is where we need more users
Teenagers seem more interested and likely to try new products, and
the wide variety of flavors that XS has is a great advantage over its
single flavored competitors. College students are notorious for their all
night study sessions, and as unnatural as that is, they need a means of
load and many of them also working. These qualities make them a top
candidate for energy drink users. One key characteristic that sets
them apart from the teenagers is their ability and freedom to spend
have more freedom and are living away from home. According to
fit into the typical energy drink crowd. However, some of the
specifications that these adults are looking for are found with this
product that many others don’t have. As people get older, health
Marketing Strategies
5
Product Strategy
nutrients and herbs that will help boost up anyone with a lull in their
Taurine and L-Glutamine, that give this healthy energy drink its blast of
Every flavor comes with its own color and design on the can
Price Strategy
like to see the company branch out and start selling single cans in
more than one at a time, and put in place a discount of 2 for $3.50.
Promotion Strategy
target market we also would like to team up with dance clubs, sports
For sports teams we want to sponsor new and edgy sports such as
snowboarding, boxing, and lacrosse to get our logo out in the action.
Lastly with music producers we hope to help sponsor musical tours and
have a booth at concerts to give out samples and also sell XS Energy
to consumers.
Distribution Strategy
an exclusive contract with XS Energy for selling the product in the USA.
But our next goal is to have XS Energy available to buy in outlet and
retail stores in other countries such as Canada, the UK, Australia, and
Energy to have its own distribution center with its own delivery trucks.
Financial Summary
6
Out of the four life cycle stages, Energy Drinks are in the
maturation stage. Since energy drinks have been around for many
years, they are no longer in the introductory stage. New products and
drink market, which has pushed them past the growth stage. Major
indicate a shift to a mature life cycle stage. Industry Value Added (IVA)
Break-Even Analysis
Break-Even Analysis
Forecast
Volume in
Units
(Cases) 5,832,117
Total $139,270,9
Sales 54
Variable
Costs
Direct (99,320,95
Labor 3)
Total
Variable (99,320,95
Costs 3)
Contributi
on Margin 39,950,001
Fixed (39,950,00
Costs 0)
Profit
Before
Vary-with-
Profit
Costs $1
For our break even analysis we used information from “The Risk
numbers were not available for us to take so; we had to use numbers
point.
In order to find the break-even point we took the Net Sales (100%)
(71.3%). To find our Unit Variable Cost we took that 71.3% multiplied
sell in order to break even. Based on these numbers, and the 2007
With this information we are able to make projections and goals to sell
Implementation Plan
7
Energy”. Since our product contains B-Vitamins and Amino Acids that
young adults, mainly 16-23 year olds. We are hoping since the drink
contains vitamins and nutrients healthy for the body, parents will find
currently in stores.
and selling our products individually through school stores will help
create impulse buys when placed in high traffic areas, which is an area
company and strictly provide their product through IBO’s, but we are
hoping to get the name well known among a younger crowd through
high sugar and high carbohydrates, which is the exact opposite of our
product. Our main emphasis will be getting our consumers the energy
they need without all the added sugars and carbohydrates that no one
daily diet.
are living in a fast paced world, and our product needs to keep up with
the school in high traffic areas so students are aware of our name and
easy to get our product into these resources. Schools like the
want to get involved to put a bid in for a contract. These contracts can
or for the whole campus so its product goes out to every school. The
school sets out a list of criteria that they are looking for so they can
find the company to best suit their needs. This would be difficult for XS
against these power houses of the soda and energy drink industry.
Area.
While no numbers were available, the cost for a home school and
the best suggestion would be to start with smaller schools and build
report and eventually get into the larger schools. By doing this we
would still be getting our name out while spending a significant less
These smaller facilities would be a good test for how our product fairs
in schools.
will notice our “Health drinks that promote energy” signs, and realize
they can get energy without adding sugars that can ruin their workout
energy, they will be eager to try the new product that not only tastes
other high sugar energy drinks in the market. Vending machine sales
are constantly increasing, and edging XS Energy into that market will
traffic areas and fliers throughout the school, we are hoping students
will notice our diverse product and boost sales in a new market for XS
Energy.
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Analysis
Even though energy drinks are fairly new to the United States, their
has grown from $100 million to more than $250 million in just two
Fast growth in the specialized coffee market has also made a great
want things fast, and expanding energizing coffee into can form is a
great idea for people on-the-go. This is a great advantage for people
who want more options for energy, rather than picking up their every
day coffee.
day, and everyone loves having options. Many of the drinks consumed
energy for the day. Since there are so many new energy drinks brands
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