Contents

Executive Summary....................................................................................................................................... 2 Key Decision .................................................................................................................................................. 3 Problems/Opportunity .................................................................................................................................. 3 Stakeholder ................................................................................................................................................... 3 Decision Criteria ............................................................................................................................................ 4 Internal Analysis ............................................................................................................................................ 4 Strengths ............................................................................................................................................. 4 Weaknesses......................................................................................................................................... 5 Current Financial Position ............................................................................................................................. 5 Current Marketing Strategy .......................................................................................................................... 6 Current Marketing Mix ................................................................................................................................. 6 External Analysis: .......................................................................................................................................... 7 Opportunities: ..................................................................................................................................... 7 Threats: ............................................................................................................................................... 7 Consumer Behavious: ................................................................................................................................... 7 Competitor Analysis ...................................................................................................................................... 8 Alternative Marketing Strategies .................................................................................................................. 8 Recommendation.......................................................................................................................................... 9 Implementation Plan: ................................................................................................................................... 9 Target Market ............................................................................................................................................... 9 Positioning .................................................................................................................................................. 10 Marketing Mix ............................................................................................................................................. 10 Product................................................................................................................................................ 11 Price .................................................................................................................................................... 11 Place .................................................................................................................................................... 11 Promotion ........................................................................................................................................... 12 Expected Results ......................................................................................................................................... 12 Appendices.................................................................................................................................................. 13 Appendix A: ................................................................................................................................................. 13

Appendix B: ................................................................................................................................................. 14

Executive Summary
Want Beverages is a business owned and operated by Bill and Angela Moffat alongside their Spellbound business, that sells energy drinks to young action sports consumers in Canada. They are faced with the challenge of defining their distribution intensity within their financial constraints, such that their product is convenient and available to their consumers and increases brand awareness among their target market. Want has a differentiated product that is promoted effectively to its niche market, but lacks the external financing and human resources required to achieve a desired level of profitability and brand awareness. The company is faced with negative retained earnings and struggles to succeed in the rapidly growing, highly competitive energy drink industry dominated by Redbull. Want must develop a defined marketing plan in order to attract potential equity investors or lenders. Want must redefine its distribution to selective intensity, focusing only on nontraditional retailers like West 49, and specific convenience stores located in close proximity to their target market. This strategy ensures the company increases sales, maintains flexible inventory and promotes brand awareness within its target market. Want will be positioned based on its key product attributes of taste, design, and packaging. Its value-based pricing strategy will be a benefit for the price-sensitive target market, since Want is priced at a lower level relative to its competition. The company will remain with its current manufacturer in order to achieve maximum flexibility in its ordering and inventory levels. Want will maintain its socially responsible promotions, with the addition of hiring 5 sales representatives to further

increase its brand awareness. Based on the implementation of this marketing strategy, Want can expect to attain a profit of $33,795 by the end of its second year of operations.

Key Decision
Want Beverages is currently facing a problem of defining their distribution channels within their financial constraints, such that their product is convenient and available to their consumers while promoting brand awareness for their target market.

Problems/Opportunity
The Moffats hope to see Want become a profitable and reputable business in the near future alongside Spellbound. A lack of financial resources has severely limited the growth potential of the company. Securing financing arrangements is imperative for Want to increase brand preference and see profitability in the near future. Their current marketing plan must be altered in order for the company to look attractive to potential investors or lenders.

Stakeholder
The most important stakeholders are Bill and Angela Moffat. They have invested a significant amount of time and personal savings into Want beverages. They want to build a business that is strong and profitable on a long-term basis. Thus, if Want is successful, they can benefit from the profits earned and success of the business. In contrast, the Moffats could lose considerable amounts of money and time if the company fails to become profitable. Bill and Angela also face the risk of having two unprofitable businesses by ineffectively managing both Want and Spellbound. It is possible that they may prioritize a substantial
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amount of effort and resources to stabilize Want, while disregarding their focus and responsibilities in operating Spellbound. This could prove to be an underlying downfall because if Want ultimately fails after concentrating their effort for growth, the Moffats could suffer with two unstable businesses.

Decision Criteria
1. Increasing sales to a level that ensures long-term success 2. Maintaining flexible production capacity and inventory levels 3. Increasing brand awareness among target market 4. Stay aligned with goals of corporate social responsibility

Internal Analysis: Strengths

Want successfully differentiates itself from its competitors through features such as taste, design, and packaging. Wants relationship with its bottle manufacturer is an intangible benefit. They provide Want with the opportunity to produce low volume quantities, given their current cash flow situation, and allow flexible scheduling resulting in shorter lead time. Want has built a socially responsible image by its charitable donations to action sports in local communities; an activity that no other energy drink competitors offer. Another strength is the Moffats experience with their target market and background in marketing and distribution, which was developed through their business with Spellbound. This advantage has helped their product gain access to markets across Canada and provides Want beverages with the
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opportunity to be marketed effectively and profitably.

Weaknesses
Wants weaknesses are in its lack of financial and human resources. The Moffats are operating at a highly inefficient level as they frequently market and promote the Want product entirely by themselves as opposed to hiring additional sales staff. This in turn takes away from their ability to focus efforts on certain aspects of the business that ensure growth. The company also faces a weakness in their inability to secure financing from external sources. It is this factor, along with their limited sales, that affects Wants ability to meet the credit terms that their retailers or manufacturers require and further limits their opportunity for growth. In addition, Wants capacity issues can restrict potential profits that they can make from increasing demand.

Current Financial Position

Current financial results show the firm having negative retained earnings of $33,304 making it extremely difficult to attract any investors. Failure to maintain adequate inventory levels to meet demand along with cash flow problems have put the firm in a very compromising financial position.

Current Marketing Strategy

Want is currently using a concentrated segmentation strategy where they are targeting a young Canadian, action sports crowd aged 14-24 years old. They have positioned their product as low priced, providing buyers with a distinctive taste and a unique bottle design that is convenient for sports; a competitive advantage that its competitors do not offer.

Current Marketing Mix

Want offers an energy drink product that provides the consumer with an alternative to the mediciney taste that is present in many competitors products. The Want beverage offers a re-sealable plastic bottle unlike the traditional cans sold by their competitors, the consumer does not have to consume the whole drink in one sitting. In terms of pricing, they are implementing a value-based pricing strategy due to the low price value that they have on their product compared to their competitors, especially in the bar scene. To distribute their product, Want uses an intensive distribution strategy to get their product into as many outlets as possible, specifically in most action sports outlets and convenient stores. For promotions, Want promotes its corporate social responsibility by offering 15 cents of bottle sales to local skateparks, snowboard hills and bmx trails for each bottle sold. They are also sponsoring local up-and-coming athletes and use tabletop refrigerators to promote their product image. Furthermore, they promote their brand though bar and nightclub promotions where they give out sample shots of vodka with their energy drink, as well as sponsoring sporting events.

External Analysis: Opportunities

The energy drink industry is a rapidly growing market with a present value of $653 million in the U.S. (approximately $65 million in Canada). This is a fairly strong indicator of potential profitability if Want can increase its market share. As Wants brand awareness and market share increase, the company also faces the opportunity to change manufacturers which would significantly improve their margins, yet require larger order sizes and the potential to ruin the current relationship with their manufacturer. The company also has the opportunity to increase the depth of their Want product line to include electrolyte drinks and iced tea.

Threats
The highly competitive energy drink industry is a major threat towards the potential success of Want. Another threat facing Want is its ability to maintain the inventory levels and displays of Want beverages at its retail locations. The companys limited human resources has made it difficult to ensure that their product is properly presented and restocked by its retailers.

Consumer Behavior
Want currently targets the 14 to 24 year old Canadian action sports crowd. This is a substantial market because the average teenager purchases 24 beverages per month. Many consumers of energy drinks encompass habitual buying behaviour, while brand conscious consumers exhibit variety-seeking behaviour. Want satisfies the needs of its variety-seeking consumer segment because of its unique product differentiation from its competitors.

Competitor Analysis
One of Wants main competitors in the energy drink market is Redbull who is the market leader with a 60% market share. Other competitors that have entered this industry include Coca-Cola, Rockstar, AriZona and PepsiCo. Given Wants company size and scale of operations, it would be very difficult for them to compete with their larger sized competitors for market share because most of them have an established presence in the market in terms of their brand awareness and leadership. Furthermore, Wants competitors have more capital to spend on advertising and the type of efficient intensive distribution channel to distribute the product to as many outlet as possible for higher profits.

Alternative Marketing Strategies

1. Selectively distribute Want to non-traditional retailers and convenience stores located in close proximity to their target market. This distribution strategy effectively reaches their concentrated market and limits the competition because of its exclusivity in non-traditional outlets such as West 49. Sales volume may be limited because it will not be intensively distributed throughout Canada.

2. Intensively distribute Want to non-traditional retailers, convenience stores and bars. This distribution strategy maximizes their product availability and sales volume, but it is not feasible given their limited resources and financial instability.

3. Exclusively distribute Want to non-traditional retailers, convenience stores or bars. This type of strategy will grant West 49 and a few other retail stores exclusive rights to sell Want beverages, but extremely limits the availability of the product. (An in-depth evaluation of marketing alternatives can be found in Appendix A.)

Recommendation
After an evaluation of Wants feasible marketing alternatives, the logical solution I to selectively distribute their product to non-traditional retailers, as well as convenience stores located in areas that are highly populated with their target market segment. This distribution strategy ensures that sales will increase to a level that sustains long-term profitability. With this solution, brand awareness will increase as it will be exclusively marketed towards Wants target segment and there will not be as much direct competition in non-traditional retail outlets as there are in traditional outlets. The success of this marketing plan is contingent on obtaining external financing from an equity investor, which is reasonable to assume given the profitability of implementing this strategy.

Implementation Plan: Target Market

It is recommend that Want continues using the concentrated segmentation strategy in Canada where its target market is around the age of 14-24 years old, and have an interest in action sports. Users are primarily the action sports crowd who want convenience, a unique taste in their beverage, and energy that is needed in the type of sports they partake in. By
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distributing Want to non-traditional stores and convenience stores near the target market, Want beverages will be more reachable and responsive to its consumers. In addition, it would make Want a product that will be substantial and profitable in the future because of the loyalty that is built through repeat customers.

Positioning
Want Beverages will continue to position itself as a unique tasting energy drink, which attracts the young action sports crowd. It will continue to emphasize its key product attribute of taste, which differentiates from the mediciney taste relative to its competitors. Furthermore, Want should communicate that its resealable bottle is much more practical for the action sports crowd than traditional cans. These two attributes will allow Want to be preferred since these are features that its competitors do not offer and are desired by WANTs target market.

Marketing Mix Product

Want should continue to use its unique product design and resealable packaging as a competitive advantage. The traditional Berry, Lemonade, and Lemonade Lite beverages will remain in the Want product line, with the bottled water dropped. This product does not fit the core positioning of the brand, is difficult to differentiate, and provides smaller margins than other Want products.

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Price
Want should continue to price its product at a lower price than the market leader Redbull. This value-based pricing strategy will give Want point-of-purchase attention at its nontraditional retailers, and look attractive compared to its higher priced competitors at convenience stores. The target consumers generally fall into the category of lower income earners (under $30,000 per year) which implies they are price-sensitive for convenience goods such as energy drinks.

Place
Want should selectively distribute its product to non-traditional retailers such as West 49, as well as convenience stores located in close proximity to areas that are highly populated by its targeted consumers. The concentrated distribution strategy allows the company to have greater control over its product inventory and product displays at its selected retailers. This strategy ensures the company will have the necessary production capacity to meet demand since it will only be distributing to a limited selection of retailers. Want will remain with its current manufacturer because of their order flexibility, as well as the capacity constraint of 6,000 cases in the new Want warehouse. Want should continue to use direct distribution to its retailers, an advantage they have gained with West 49 because of the Moffats connection with Spellbound.

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Promotion
Want should discontinue bar promotions due to Redbull securing such a significant proportion of that market. The expenses associated with the bar promotion far outweigh the benefits derived from them and proceeding with this type of promotion will further decrease the current cash flow. Instead, Want should hire five additional full time sales staff to target customers with a high degree of personal selling. They will be paid on a mixed salary plus commission basis depending on the amount of sales that the staff generates. This sales team will be responsible for promoting Want at various action sports events that occur throughout the year. Furthermore, these five new sales reps will be responsible for increasing brand awareness of the Want beverages and managing inventory levels at various retailers who carry the Want product. Want should continue to promote their socially responsible brand by donating 5 cents (reduced from 15 cents) from every bottle purchased to local community skateparks and action sports events. This maintains Wants socially responsible image, and increases the companys financial flexibility.

Expected Results
Want is projected to attain a profit of $33,795 in its second year of operations largely due to increased brand awareness, an innovative and experienced sales team, increased inventory levels to meet demand, guaranteed sales contract with West 49 and an equity investor with an annual 5% dividend return. The break even quantity is 13906 cases per year, or less than half a percent of the Canadian market. Refer to Appendix B for an in-depth analysis of financials.

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Appendices Appendix A:
Alternatives Selectively distribute Intensively distribute Want to nonWant to nontraditional retailers traditional retailers, and convenience convenience stores, stores located in close and bars. proximity to their target market. Increases sales volume, Limits overall sales volume, but increases but more difficult to maintain long-term sales within niche success against market to ensure competitors. long-term success. Company can remain Company most likely would be required to with original switch manufacturers manufacturer that to have capacity for offers flexibility in intensive distribution. production. Only a Most likely face small chance of warehouse inventory exceeding warehouse capacity issues. capacity. Brand awareness could Target market more increase, but also face a exposed to Want in greater risk of direct these locations. competition from Continued Redbull and other promotions directed competitors. at target market increase awareness. May dilute image of Maintains Want social responsibility reputation for towards communities if donating to local, sold intensively across selected Canada. communities. Exclusively distribute Want to nontraditional retailers, convenience stores or bars.

Decision Criteria

Increasing sales to a level that ensures long-term success

May increase sales within a concentrated market, but limited overall growth potential. Company could remain with original manufacturer. Almost no chance of reaching maximum production capacity.

Maintaining flexible production capacity and inventory levels

Increasing brand awareness among target market

Not a great chance brand awareness could reach a substantial level if exclusively distributed.

Stay aligned with goals of corporate social responsibility

Maintains Want reputation for donating to local communities.

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Appendix B:

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