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After acquiring Crescent, the company PDB is trying to develop the strategy to place the new product (Quelch and Zalosh 2). This product is a new all-organic energizer. After certain research, the vice president of PDB, Sarah Ryan has to choose between the two strategies, energy drinks or sports drinks. However, Ryan thinks that it is better to choose the third option and position the product as the organic energizer, a part of the organic market.
It is possible to identify such stakeholders as the PDB management, regulatory bodies, consumers of energy drinks, consumers of sports drinks and consumers of organic products. The PDB top management can be regarded as the stakeholders as they develop the strategy, which will define the way the product will be positioned and sold. The regulatory bodies are also important stakeholders as they develop various policies and put restrictions concerning the production and distribution of certain products. Consumers are divided into three groups as each of these groups may differently affect the future of the product. Thus, consumers of energy drinks will be in the focus if the strategy of energy drinks will be chosen. Likewise, consumers of sports drinks or organic products can also be chosen as the priority group.
Competition is quite significant in all three target markets. As for the energy-drinks market, the major competitors are “Together, Fright, Razor, Torque, and Stellar” (Quelch and Zalosh 5). These competitors occupy 85% of the market. As far as the sports drinks market, the main competitors are Gleam (with 73% market share) and Drip (21% market share) (Quelch and Zalosh 6). When it comes to organic beverages, the competitors are Nestle, Izze Beverage (acquired by PepsiCo), CocaCola with its Honest Tea, Dean Foods with its Horizon Organic (milk) (“Business”). The market for organic energy drinks is not significant. Organic energy drinks brands include Guru, STEAZ Energy, Syzmo, Sambazon, and Cell-nique (“The Most Popular Organic Energy Drinks and Health Benefits”). Another serious competitor can be Baobab Foods (Yu par. 13).
Problems and Solutions
Problems can be associated with the public opinion concerning energy drinks, the growing competition in the market, the risk of choosing the wrong strategy. The public opinion on organic energy drinks is changing as people learn about little to no adverse impact of such beverages (Quelch and Zalosh 8). Nonetheless, people still associate energy drinks with significant health threats (Koff par. 1). All three markets mentioned in the case study are expanding. For example, the market for energy and sports drinks will increase by 11% by 2019 (“Sports and Energy Drinks Market to Grow” par. 1). Clearly, the competition in these markets is becoming more intense. Finally, the company may lose millions of dollars if it chooses the wrong strategy as the new product may become a failure.
One of the solutions is to choose the organic energy drinks market. The shift towards healthier diets is evident as people try to eat healthy food and drink organic beverages. The drinkers of energizers had to compromise and sacrifice their health. Now, they do not have to do that, which can be the primary message of the advertising campaign. At that, it is essential to implement thorough research to make sure that the organic market is the best option as the funds to market the products will be significant.
“Business.” CNBC 2016. Web.
Koff, Ashley. “Are Organic Energy Drinks Safe?” Fox News. 2014. Web.
“Sports and Energy Drinks Market to Grow at 11% CASR to 2019.” PR Newswire. 2016. Web.
“The Most Popular Organic Energy Drinks and Health Benefits.” Gazette Review. 2015. Web.
Quelch, John, and Alisa Zalosh. “Crescent Pure.” Harvard Business School 9-915-539 (2014): 1-12. Print.
Yu, Douglas. “Baobab Foods Predicts Baobab Will Explode in the US Beverage Industry.” BeverageDaily. 2016. Web.