Final Business Plan

Company Description

Versatile Company is launching a function beverage into the market called BOOST. Unlike other energy drinks, this beverage will contain stimulant drugs which provide mental and physical stimulation. It is a new product in the market which will join dozens of other drinks in the same category. Energy drinks contain stimulants whose excessive consumption can be harmful to one’s performance, hence will not be sold to children.

Mission Statement

The mission of NAB (Non-alcoholic Beverage) company is to be a premier of beverages focused on convenient products in the world of non-alcoholic drinks. We pursue provision of financial rewards to financiers as well as seeking opportunities for enrichment and growth of our employees. The consumers, the business partners and the communities in which we operate are placed at a central point of focus in all the operations of the company toward their enrichment and growth. BOOST shall uphold integrity, honesty, and fairness in everything that we do.

Range and Nature of Products Offered

The NAB Company operates in the beverages sector of the food industry. The company specializes in non-alcoholic drinks. Ready-to-drink beverages are demanded by demographics of all ranges basing on the tremendous benefits they have on health.

Quality

The energy drinks produced by the company are composed of the omega-3 ingredient, a popular component in cognitive health and appeals to all demographics. The ingredient puts attention on brain health and the preventive measures of concern in the food industry which is through the diet. Recent studies have revealed that over 5 million Americans suffer from Alzheimer's Disease of which majority are adults. Ingredients that help consumers in the maintenance of their cognitive abilities are becoming a major focus by the consumers of all ages. Another component of brain health is the mental energy which boosts the memory. The company will spend most of the time on the ingredients for product development. The industry trends in quality have been identified to be getting more inclined toward high protein and the natural factor. The previous outlook survey of new product development placed health as the highest consumer interest which is the specific attribute of the product.

The focus formulas and energy drinks of the company are openly pushing on the mental health benefits of the ingredients so that our products appeal to the wide demographics. The product attributes that are ranked as top industry trends are high in protein, low glycemic, low fat, probiotic, mineral and vitamin fortified, cognitive health, beauty enhancing, indulgent, low salt and potion controlled. The BOOST beverages have the right mixes of flavor. The customers’ interest in flavors was reported in 2014 at an average of 11.5 with the traditional flavors being the highest in the flavors chart. The research conducted on product usage based on colors shows an affinity that is inclined toward the natural colors.

Price

The prices of products are composed of the costs incurred in new product development. However, costs of developing a new product have continued to rise. This increase can be attributed to the increase in the efforts dedicated to the exercise which calls for resources in terms of money, infrastructure, personnel, and time. Versatile is an NAB start-up company. Therefore, will incur more expenses in new product development as compared to existing companies. This means that the NAB company will not break-even quickly and it will have overlooked the charging of reasonable profits in the products prices so as to make the price fair for the market. The offering of customer support services will be given intensity to ensure a complete customer satisfaction is achieved.

Overall Relationship with Customers

The company recognizes the health concerns of its consumers. Trends show that products related to diet and exercise have a higher appeal to the customers and who have resolved to live healthier lives and lose weight respectively. Many consumers have identified the need to address their weight and health issues hence creating the opportunity in the soft-drinks sector. Many customers contemplate themselves as overweight, therefore, are willing to pay the premium to take charge of their health. The alignment of the health concerns of the consumers with the non-alcoholic beverages of NAB will help the company in realizing the benefits of growth. At the national level, the American Beverage Association is currently advocating for the reduction of the number of calories that each consumer takes. The company is pursuing proactive means to deliver products that address the health and wellness wishes of the customers. The provision of solutions to the problems faced by the consumers is the main objective of the NAB limited. The health concerns of the customers are obesity, diabetes, and artificial ingredients. The delivering of pure ingredients, antioxidants as functionality, not using sugars and calories.

Industry Analysis and Trends

There have been a lot of changes that have been taking place in the Non-Alcoholic Beverages Industries all over the world. These changes cover consumer’s preferences, regulatory measures, prices, sales, and use of technology.

Sales

The sales of beverages in the United States of America retail market has mainly been dominated by soft drinks. The sale of soft drinks has been found to lead in the food and beverage sector for a long period of time making soft drinks the main point of focus in the process of new product development by NAB Company.

Social Pressures Forcing Change on Ingredients

Many civil society groups and the government are exerting a lot of pressure on non-alcoholic beverages to reduce the number of calories in soft drinks. The soft-drinks market has experienced a declining market in the recent past because of the developed market which has increased the awareness on the side-effects of sugar and other ingredients that are present in carbonated drinks. The industry players are pushing for the reduction of calories in soft drinks by up to 20% in the next decade. The industry pressures can be achieved by expanding portfolios of low-calorie products, educating customers about healthier alternatives and introduction of smaller portions containers.

Growth of Ready-to-drink Beverages Industry

The growth of the non-alcoholic beverages industry is projected to occur at a compounded rate of 5% annually of which a large ratio will come from the emerging economies. Reports have projected a growth in retail value of $135 billion in 2016 and the amount is estimated by Euro monitor International to grow by more than $200 by the year 2020. The high growth selling rates in the ready-to-drink beverages have mainly been witnessed in tea, coffee, sports, and energy drinks. The companies having a strong presence in the sector are already investing heavily in the product development to align themselves with the changing consumer tastes and preferences. The Versatile Company will focus on products which are healthier and nutritious as the primary growth driver. It will target consumers who are health conscious by putting very little sugar and adding healthy ingredients such as omega 3. The growth has been slow in the non-alcoholic beverages sector especially in carbonated beverages. The key reason for the fall is reduced savings in the years 2011, 2012 and 2013 subsequently. Per capita consumption has been declining because of indicating a declining population and a slower rate of growth in the demographics. On the contrary, macroeconomic conditions have created a weak consumer spending. Poor economic conditions will make the population be health conscious. Mexico has recently increased the soda tax of 10% on carbonated drinks with an aim to reduce the consumption of sugar. Other developed markets will soon follow the suit and the Company as a player in the NAB industry should get prepared for an increase in tax in the future.

Strategic Position and Risk Assessment

The greatest strength of the company is that it produces healthy products that match with the current consumers’ taste and preferences and most importantly it has narrowed down to a specific market segment. The big players in the NAB industry have already established their roots in the market and have built a strong brand giving them a competitive advantage of the company which is a startup. The company is aware that it still a small company, therefore, should communicate the benefits of its products to the target market clearly. The company will target a specific demographic.

The company is aware that the consumer purchasing power depends on the economy. It will, therefore, target demographic areas where the economy is stable and the majority of the target customers are financially stable. Consumption expenditure by customers is measured as the personal incomes less current personal tax expenses. With that being said, the company in economically stable towns, cities, and other regions will expand to other areas with similar characteristics.

The company also targets sportsmen and other people who do strenuous activities. The boost drink is an energy drink that is suitable for footballers, athletes, Olympians, and other individuals who do heavy duties or people who feel week and need energy booster. These markets have been ignored by the main players in the industry. Therefore, the company will establish into these markets by providing products that are specific to them. The company will also create a new value curve for the targeted demographics. The products will be distributed in the areas with many sporting activities and it will target both of funs above 18 years and the players. Fans use a lot of energy in cheering their player. To be quite frank, the entire process of cheering is energy consuming, which will make BOOST energy drink attractive and good for them. Most consumers have become health conscious and have turned to healthy eating habits.

The health concerns of the customers have created a market demand that is geared toward exercise and diet because these are the problems being faced by the all the demographics. They avoid drinks with high calories and do not have any potential health benefits and this has led to the decline in consumption of NAB with high sugar content. The company has taken this into consideration and has developed BOOST with little sugar content and omega 3, a healthful ingredient, making the drink a healthy product that suits into the current lifestyles of many NAB consumers. This will make the target consumers to have a positive perception towards the company and its products. The company will ensure that it communicates the product to the target consumers through advertisements on all commercial media platforms and on the internet. The company will carry out promotions by sponsoring sports events to create the brand awareness and improve its visibility. The company will conduct extensive marketing through promotional sales to create awareness of the company and its products in the industry.

Customer Perception Factors toward the NAB Company and its Products

The company will be conscious of prices and the composition of the products. Quality will not be overlooked at the expense of low pricing because the customers are ready to pay any amount for the product which will provide solutions to their problems. In the market segment, the company will be geared on the geographic areas where rising markets are located. The other factors of concern in the market segment will be the covering of customers at all levels of incomes. The product portfolio of NAB will aim to attract dedicated age groups specific to cover the whole demographics according to their specific tastes and preferences.

Regulatory Risks

The NAB industry is currently facing a lot of regulations from the states and governments of various nations. Consumer protection bodies and the government have been growing a lot of pressure on companies toward the development of healthy products. It has been a result of the maturity of the market which has increased awareness of the risk factors which are created by the ingredients. The American Beverage Association in which NAB will be a member, was formed by beverage producers to push for the addition of health concerns of the consumers into the beverages. This was to standardize the industry in the interests of the customers (Heckman et.al, 2014).

Registration

In the US, all companies that produce, pack, and store any food or drink for human and animal consumption food establishments, must register and get a license from FDA Food Facility Registration. The registration process is long and burdensome and the company may take longer to get approval or not get it at all.

Pre-Market Review or Approval

The alcoholic beverages are subjected to special regulations by the US governments and are permitted to be sold in the U.S. by the Alcohol and Tobacco Tax and Trade Bureau (TTB). Therefore, the company being a startup company should get approval from FDA prior to commercial production and distribution in the U.S – something which may take a long period of time due to the strictness of new NAB Companies in the government (Heckman et.al, 2014).

Tax Regulation

This relation by the government poses a great threat to the survival of the company, especially if the taxes charged on NAB drinks are increased. An increase in taxes increases the production cost, consequently the prices of the products will rise for the company to realize profits. The rise in prices of the products will scare away consumers who are price sensitive which may lead to a decline in sales leading to loss or minimal profits.

Marketing Plan and Sales Strategy

The company is launching a function beverage into the market called BOOST. Unlike other soft drinks, this beverage will contain stimulant drugs which provide mental and physical stimulation. It is a new product in the market which will join dozens of other drinks in the same category. Energy drinks contain stimulants whose excessive consumption can be harmful to one’s performance, hence will not be sold to children (Guelinckx et al., 2015). The target for the drink will be for proactive people in the community between the ages of 18 and 45 years. Other than age, many of the intended targets will also be people in highly active activities. In particular, the drink is customized for sportsmen, gym attendants, athletes, and other people who engage in activities which are energy intensive.

The local area, where the drink will be launched, aims to make significant success on a decision to move out in a home of several sports teams. The areas have two basketball teams, a football team, and multiple schools who engage in sports regularly including leagues which run on every weekend. It also has multiple gym facilities for people interested in fitness. All of these facilities are perfect places to market and sell the beverage and the firm will be critically analyzing these market segments. The drink is being launched in a metropolitan area, where levels of education are extremely high. In this area, close to three-thirds of all people are degree holders, with others holding higher qualifications. Even those without degrees still have a high school or college education. The level of education is essential in ensuring people understand the value of this drink. Unlike in populations dominated by low education standards, it is hard to mislead people in this area about anything including the contents of this drink.

The gender in this area is balanced out. However, when it comes to those in active sports like basketball, soccer, among other sports, men tend to be more. This is why it is worth assuming that men are likely to form a higher percentage of those who will consume the drink. The population also has some of the best income rates in the US, with the average person making $70,000 in the region. On average, this is an attractive salary and means the local populations possibly have extra to spend on things like drinks, sports, and such initiatives which will drive the sales of the drink.

Competition

Rivalry

The drink will enter a market dominated by other energy drinks like Monster, Coca-Cola Balk, Lucozade, Red Bull, and Power Horse among several others (Thursby, &Berbari, 2016). These are global multinationals which have been on the market for a considerably long time. Setting up to compete with these drinks will be suicidal for BOOST. However, it can create a niche market to kick-start the sales. The drink will sell within a radius of 25 miles. This is a considerably small region, and the firm can customize the drink based on the needs of the local market. The firm will not compete with established energy beverage lines but aims to create a different unique market for its drink. It cannot survive with the apparent rivalry if it decides to take up market leaders.

Suppliers

The firm aims to produce its drinks 100 percent in its local plant. However, it will contract other suppliers to supply other products like packaging materials. Despite that, the firm will get hold of the supplier’s forces and can dictate the number of drinks reaching the market at the predetermined time.

Customers

Customers will definitely hold a very powerful position and the success of the beverage will be based on their reception to the drink. Satisfaction is what the firm will closely guard given there are so many substitutes available to customers.

Threat of New Entrants

Better Drinks is itself a new market entrant, which shows that other firms can easily enter the market. Manufacture of beverages is a low capital enterprise with very favorable regulation. That means there is a constant threat of new entrants, and creation of new market niches will not guarantee that other entrants will not come and join the market segment.

Threats of Substitution

There are so many soft and functional beverages which can substitute BOOST. The threat of substitution is therefore real, and the firm must ensure it produces the best drink which meets the customer’s needs to ensure they do not abandon it for other beverages.

Strategy

The marketing strategy will be based on understanding the market needs in terms of packaging, content, flavor, and other customizations. Established drinks like Red Bull and Monster come with a similar taste, which may not be favorable with every place. The company will try to offer a product which reminisces the taste of the local needs in terms of taste and flavor. It will give it the flavor of some of the commonly consumed fruits, just to ensure it tastes like a local product. That is one strategy to localize the product.

The company’s core message will be producing and marketing a local product. It will also market the product as a high energy, locally customized product to meet the needs of the specified population. This method will certainly make most people, if not all, in the local area aware of the drink and increase their visibility.

Marketing Vehicles

One of the most effective vehicles are Billboards. Billboards of raise brand awareness for products within a specified locality (Law, Tavitiyaman, & Zhang, 2015). They often display witty and distinctive visuals to passers along busy streets, highways, malls, or any other part frequented by the masses.

Another important vehicle will be building an online presence. This starts with establishing a website, opening a Facebook page, Twitter, and many other online platforms. Other than raising visibility and brand awareness in today’s highly digitized consumer, those platforms will also be essential in communication, public relations, and events organizations.

The firm should also consider sponsoring events, particularly school and sports ones, where users are likely to require and consume energy drinks. Other than increasing sales, sponsorship has an effect of increasing the brand awareness and visibility (Meenaghan, 2013). Lastly, sampling the products in events and local stores will also enable the salespeople to meet customers, introduce them to the drink, and even make sales.

Ethics & Social Responsibility Plan

Ethics are the primary principles of a company or an organization. Social responsibilities are how a company or an organization will carry out activities that will benefit the community and improves the environment. Ethics and social responsibilities play a vital role in the strategic planning of the company, therefore, the new NAB Company will not ignore it (Robin & Reidenbach, 2015). The company will create job opportunities to the masses around, treat its employees fairly, and promote honesty, transparency, and integrity within and without the company.

Job Creation

The company intentions are to create job opportunities for the people around. The company will give priority to the community around to get employment. The company will employ casual workers and people from a wide range of professionals. The management will focus on growth and expansion of the company and opening of subsidiaries in order to create more job opportunities.

Compliance

Every state or country has different laws and regulations related to employment, environment, tax, and other standards. The company will set up a legal and compliance department that will ensure that the company complies with the rules, regulation, and statutes of various states and countries where it will operate. The company will comply with the environmental laws, labor laws, tax, and other codes and standards related to food and beverage production.

Transparency and Honesty

The company will promote transparency and honesty in all its dealings. The management shall communicate openly and freely to shareholders, stakeholders and employees. In doing so, they will be able to make a decision based on the true status of the company. The shareholders will be informed of the profits and losses incurred by the company. It will also provide quality products to the customers and charge fair prices. Also, the company will give equal and competitive employment opportunities to the community. Honesty and transparency will also be promoted amongst the employees so that there are no under dealings that may create a loss to the company. Transparency will enhance the credibility of the company to both internal and external stakeholders.

Employees

The company will give equal opportunities to its employees to develop and grow in their career. Also, the employees will be fairly numbered and apart from salaries, they will be given several benefits such as health insurance, retirement benefits, paid sick leave, and paid annual leave allowance. The management will treat all employees equally regardless of their race, tribe, gender, and/or religion. Also, the company will ensure diversity of its staff by employing people from different ethnical backgrounds. The employees will be promoted on a competitive basis and will be dismissed or disciplined on fairgrounds.

Improving Environment

The company’s activities may negatively affect the environment in some ways. The bottles in which the drinks will be placed may pollute the environment if they are left all over the consumers. Management will ensure that the bottles will be marketed as refillable therefore will be recycled and used again by the company. Consumers who collect and return the used bottles will be paid based on the weight per kilograms. This will encourage many people to keep their bottles and hence will create employment opportunities for many people who will be collecting the bottles and taking to collection points. In areas where there is a scarcity of water, the company will not use the same source of water the community relies on as this will deprive them of the scarce resource. The company will dig boreholes and supply to the nearby communities.

Corporate activities

The company will sponsor sports events and use the opportunity to market its products. Sports attract many people and draw the attention of local leaders and the media. This will create awareness of the product and improve the visibility of the brand. Also, the company will sponsor Olympians and football teams that will wear attire with the brand image thus promoting it.

Heath Issues Related to the Products

BOOST will have no negative effects on the consumers. Instead, it will bring a lot of health benefits to them. BOOST contains health friendly ingredients which will be accurately measured and professionally mixed and tested by competent laboratories. The drink contains stimulant drugs which provide mental and physical stimulation. The company will put various measures to ease any negative issue regarding the drink. For example, the company will put on the label the ingredients used to make the drink beside the manufacturing date and expiration date. In addition to that, the company has had stickers showing the product has been approved by the Bureau of Standards of the state or the country where the drink is sold. The drink will have low sugar content and the good thing is it will not be evident in the taste.

The company has design advertisement messages that inform the consumers about the benefits of the drink and certification from the authority. In doing so, consumers will have a positive attitude towards the brand. BOOST has a negative effect on children, therefore, the company indicates through the advertisement messages that it is strictly sold to people of 18 years and above. Also, a warning message will be printed on the package that it is unsuitable for children. The products will be distributed through wholesalers, retailers, and to the consumers. The retailers will be advised not to sell the drink to children.

Works Cited

Heckman, M. A., Sherry, K., Mejia, D., & Gonzalez, E. (2014). Energy drinks: an assessment of their market size, consumer demographics, ingredient profile, functionality, and regulations in the United States. Comprehensive Reviews in food science and food safety, 9(3), 303-317.

Guelinckx, I., Ferreira-Pêgo, C., Moreno, L. A., Kavouras, S. A., Gandy, J., Martinez, H., ... & Ma, G. (2015). Intake of water and different beverages in adults across 13 countries. European journal of nutrition, 54(2), 45-55

Law, V. T., Tavitiyaman, P., & Zhang, H. Q. (2015).An analysis of industry forces, strategic implementation, and performance: Evidence from state-owned hotels in China. Journal of China Tourism Research, 11(3), 315-336.

Meenaghan, T. (2013).The role of sponsorship in the marketing communications mix. International journal of advertising, 10(1), 35-47.

Thursby, M. C., &Berbari, M. (2016).Identifying and Evaluating Market Opportunities. In Technological Innovation: Generating Economic Results (pp. 33-58). Emerald Group Publishing Limited.

Robin, D. P., & Reidenbach, R. E. (2015). Social responsibility, ethics, and marketing strategy: Closing the gap between concept and application. The Journal of Marketing, 44-58.n