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University of Minnesota-Duluth
B
XS Energy Marketing Plan
Bryant Johnson
Sam Kunjummen
Megan Victorson
.........TABLE OF CONTENTS
EXECUTIVE BUSINESS SUMMARY 1
Mission Statement
History of XS Energy
Growth of the Business
Market Potential
PRODUCTS 2
13 Flavors of XS Energy Drinks
SITUATIONAL ANALYSIS 3
Internal Strengths and Weaknesses
External Opportunities and Threats
MARKET ANALYSIS 4
Target Market Identification
Market Demographics
Product Market Grid
MARKETING STRATEGIES 5
Product Strategy
Price Strategy
Promotion Strategy
Distribution Strategy
FINANCIAL SUMMARY 6
Cost Structure
Life Cycle Analysis
Break-Even Analysis
IMPLEMENTATION PLAN 7
APPENDIX A Competitor Analysis
APPENDIX B Survey Results
Executive Business Summary1
Mission Statement
The mission of XS Energy is to market an alternative to high sugar
energy drinks. Rather than getting energy from sugar and
carbohydrates, it’s packed with B-vitamins and amino acids that are
healthier and still give you the boost you need. Currently XS Energy
drinks are sold independently in cases, but the objective to our
marketing plan is to reach a younger demographic by supplying to
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
business” (David Vanderveen, co-founder of XS Energy Drinks). XS
Energy was the first energy drink brand to hit the market with a variety
of flavors, now totaling 13 different varieties and releasing a new flavor
every year. In September of 2002, XS Energy merged with Quixtar, an
Internet e-retailer and network marketing company, and began selling
through Independent Business Owners. Over 55,000 cases were sold
within the first three weeks of distributing through IBO’s. According to
BevNET, within the first year of business with Quixtar, XS Energy Drink
became the second best selling energy drink in North America. They
have shown their potential to make a bold statement in a constantly
growing market, not only in the U.S., but also in world markets.
January 2003 – XS launches in Canada
January 2004 – XS launches in Australia and New Zealand
January 2005 – XS launches in United Kingdom
Growth of the Business
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
attaining large revenues. According to current reports from the
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
weeks (XSBlast.com). XS Energy understands the need for varying
products and tries to keep up with their consumers by creating a new
flavor every 6 to 12 months. Their latest flavor is XS Gold, which is not
only a new flavor, but also a new category of drinks for XS. Reported
sales in 2007 were $150 million, and the company expects continual
growth as the market expands.
Market Potential
Through our marketing plan, we are aiming to expand our sales
demographic and get our product name on college campuses
throughout the United States. XS Energy is not a household name like
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
company so large as to distribute to supermarkets and convenience
stores, which account for another 60% of market sales.
Since the release of the first energy drinks nearly a decade ago they
have grown popular at an amazing pace in the U.S. According to the
Beverage Marketing Corporation, the U.S. Energy Drink market is
projected to grow by 12% each year through 2010 (XSBlast.com). One
disadvantage XS Energy currently has is the fact their product is not
sold in stores and supermarkets, which is where 54% of all Energy
Drink sales are made (Beverage World). Creating the opportunity for
XS Energy Drinks to emerge in stores and become more public will
greatly increase sales and increase market knowledge of the product.
Energy drinks, as a whole, are predicted to show the strongest
growth between 2007 and 2012, rising by 53% in total volume terms
(GMID). Energy drinks remain popular among younger “Generation Y”
consumers, for whom the drinks have replaced coffee as the preferred
source of caffeine. Part of this appeal is due to the newness of energy
drinks, which have only been in the US for a little over a decade, and
are unlikely to be used by their parents. Energy drinks are also
appearing in more flavors and brands than before, which allow more
consumers to find unique brands that appeal to them. With the new
release of flavors every 6 months, XS Energy has much potential in a
continuously growing market.
Products2
XS Energy was the first innovator in the market of energy drinks to
release multiple different flavors. As of 2007, XS has released 10
energy drink flavors, as well as three caffeine free options. XS Energy
uses a blend of Sucralose, Acesulfame Potassium, and fruit essences to
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
are used as sweeteners in our beverages because they are high
quality, great tasting, and safe FDA approved sweeteners. Energy in
the drinks is derived from B-Vitamins, and each can of XS Energy
contains a full day’s supply of vitamin B6 and B12 (XSBlast.com).
Following their mission of releasing a new flavor every 6 to 12
months, XS Energy is releasing their latest flavor in the fall, titled XS
Gold Energy Plus. With the large variety of flavors, our company
believes there is a flavor for everyone.
XS Gold: A superfruit flavored energy drink of acai, mangosteen, blueberry, and pomegranate, enhanced with Essentra. This is the latest flavor in the XS Energy Drink collection.
XS Black Cherry Cola: We brought together the classic taste of cola with a vibrant black cherry to give you a powerful infusion of delicious energy. XS Black Cherry Cola Blast packs the punch so you
can work all day or play all night without crash and burn.
XS Cherry Blast: Take whatever curveball life throws at you with Cherry Blast, which combines the sweet tartness of sun-ripened cherries with the natural antioxidant-rich power of pomegranate.
XS Tropical Blast: A powerful swirl of carbonated passion fruit, peach, and pineapple. B vitamins give you one long swell of power—and because there’s no sugar, you’ll never wipe out. Plus you’ll get essential amino acids and our proprietary blend of herbs.**
XS Citrus Blast: Revs you up and accelerates you through the day. A delicious carbonated infusion of orange, lemon, and lime, Citrus Blast shakes you awake with big taste, B vitamins, and our proprietary blend of herbs like Reishi and Astragalus. Plus, there’s no sugar or carbohydrates, so you can avoid the crash.
XS Cola Blast: Offering the traditional refreshing taste of cola with none of the sugar or carbohydrates and only 8 calories! And keeping with the XS trend, we've put together our premium blend of herbs, key amino acids and B Vitamins.
XS Cranberry- Grape Blast: Blast off with a mouth-watering explosion of big grape and cranberry flavors. No sugar, no carbohydrates, just huge taste and an even bigger explosion of energy, without the calories. B vitamins amp you up, while our proprietary blend of herbs power you through your day.**
XS Electric Lemon Blast: Pucker up to Electric Lemon Blast for a sparkling refresher that’ll give you the natural energy surge you need to tackle any task. B vitamins and essential amino acids get your batteries charged—and our proprietary herbal formula keeps you that way.
XS Rootbeer Blast: Captures the classic flavor pioneered by the same sarsaparilla root that began the popular refreshment of the Old West. With no sugar, no carbohydrates, only 8 calories, and plenty of B vitamins, this is one rootbeer that can take you to the end of the trail with energy to spare.**
XS Tea-Berry Blast: Get a powerful antioxidant boost with our new improved tea, an energy drink without the carbonation. It offers the antioxidant power of green and black teas with energy boosting B vitamins and a unique blend of Adaptogenic herbs.
XS Peach Tea Blast: XS is taking flavor to the next level with an exciting twist on iced tea. We have taken the full-blown intensity of EGCG as well as other mighty antioxidants and combined them with the sweet taste of summer peaches and ice-cold tea.
** These varieties also offered in Caffeine-Free
For more drink information, visit http://www.xsgear.com/info/drink_info.asp
Situational Analysis3
Internal Strengths and Weaknesses
XS Energy prides itself on working through Independent Business
Owners to sell our products to businesses all over the world. We
maintain closer business relationships with all distribution areas by
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
give us a competitive edge. Along with distribution and flavors, price is
also an important factor in gaining profits.
When it comes to price, XS Energy has an advantage over the
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
XS Energy Marketing Plan 12
our drink options can be, and how energy through a small amount of
vitamins can be more beneficial than a large amount of sugars and
carbohydrates.
Since we maintain such close relationships with our customers and
choose not to distribute to larger chains, we are not as well known as
Red Bull and Monster. Having a private company gives us a
disadvantage in market share and restricts potential customers from
coming in contact with our product. We would like to keep the
company private, but be able to distribute to larger chains and colleges
to get our name better known and recognizable.
Another trait some consumers may see as a disadvantage is the
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.
Lifestyles today seem to be more based on health and nutrition, but
many consumers like to see the larger cans rather than the nutrition
facts, which give Monster a competitive advantage over XS Energy.
Monster and Rockstar use 16 oz cans and bright, flashy colors to
attract consumers, which is clearly working for them. XS Energy uses
all the bright colors and large icons, but their smaller can size still can’t
stand up to larger competitors.
External Opportunities and Threats
XS Energy Marketing Plan 13
When energy drinks emerged into the market nearly a decade ago,
there were very few flavor choices. XS Energy has gained a reputation
of being innovators, introducing numerous new flavors to the category,
including three caffeine free varieties. As a part of our marketing plan
to set us apart from competitors, we have made it a mission to release
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
new customers. As well as new flavor innovations, XS Energy also
offers a healthy alternative to other energy drinks by using vitamins
and amino acids to give our consumers the energy they need.
In today’s society, there has been a growing emphasis on eating
healthy and staying in shape. Energy drinks such as Monster contain
about 100 calories, 26 grams of carbohydrates, and 26 grams of sugar
in an 8 oz serving (BevNET). XS Energy’s main selling point is being a
healthier alternative to other energy drinks in the market. Most drinks
in the XS Energy line contain 0 grams of carbohydrates, 0 grams of
sugar, and only 8 calories per 8.4 oz can (XS Gear).
The major threat we face is not being a public company. Red Bull
and Monster have a large advantage over our company by placing
their products in convenience stores and vending machines at nearly
every corner. They even have stock market share and gain money
XS Energy Marketing Plan 14
through sponsoring, but XS Energy has stayed lower key. Our
marketing plan is not intending to make us as large as other
competitors, but we want to get our company known to a younger
demographic on college campuses. By placing vending machines on
college campuses and by selling single cans in school stores we should
be able to boost sales and get our brand name in the heads of our
target market consumers.
Market Analysis4
Target Market Identification
The current consumption market for XS Energy Drinks are people
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
concerned with health issues such as sugars and calories. According to
XS Energy’s previous statistics, only about one can per week per
household is currently consumed (XS Gear), which is why we are
XS Energy Marketing Plan 15
aiming to sell to younger adults to hopefully increase amount of cans
consumed per household.
The feature that sets our plan apart from the others currently
implemented by XS Energy is that we want to get our name known to
younger audiences. Trying to sell to a younger, impressionable market
will greatly benefit the company’s revenues. The group we plan to
market ranges from 16-25; from kids with a new found freedom, to
college students, and also reaching young professionals.
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
students to young professionals, they need energy and it is apparent
that they gain habits in college. Whether it is a morning cup of coffee
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
mature and get into the working world.
Market Demographics (Global Market Information Database)
XS Energy Marketing Plan 16
Market Sizes (per 8 oz. serving size) USA
2002 624,879,1362003 842, 729, 975 34.9%
Growth2004 1,278,225,13
551.7% 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
8 oz. Servings Per Household Per Year
2002 1002003 132.52004 199.62005 327.82006 481.52007 630.6
Product Market Grid
Market Segment Products
General Group with Need Caffeinated Drinks Caffeine-Free Options
Need Energy 85%
High School Students
Primary Secondary
College Students Primary Secondary
Adults Primary Secondary
Thirsty 15% High School Students
Secondary Primary
College Students Secondary Primary
Adults Secondary Primary
Since we are trying to sell more of our product to a younger age
group, we need to understand who they are and what they want. We
XS Energy Marketing Plan 17
will separate our target market into three key demographics by age:
high school students, college students, and adults. Each one of these
segments can be looked at individually. Some offer more than others
as consumers but each one is key to our product. According to Mintel,
“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
of XS Energy. This should not be that difficult because in 2008, teens
accounted for around 21% of total energy-drink consumers (Mintel).
XS offers the ability to purchase their product online, which will
become a key characteristic for purchasing with the computer savvy
young adults. However, this may also cause an added inconvenience
in attaining the product.
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
getting energy. Students find themselves taking on a full academic
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
money as they please. Spending habits change drastically when you
have more freedom and are living away from home. According to
XS Energy Marketing Plan 18
Mintel, Parents are the main source of income for 55% of all teens,
which changes when they go to college.
As the main consumer of XS energy, the 40 plus age group doesn’t
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
becomes an increasing concern. This is a main selling point for XS
Energy; it offers a healthy alternative to its sugar filled competitors.
The group above 30 is also great consumer because they are
financially independent and may purchase the product for the
household. By doing this they will be introducing their kids to the
product and encouraging them to use a healthy alternative to other
products. Parents can have a strong influence as to what their children
will consume in the future.
Marketing Strategies5
Product Strategy
XS Energy is a healthy energy drink, fortified with essential
nutrients and herbs that will help boost up anyone with a lull in their
energy and focus. XS Energy is a healthy and tasty alternative to a
high sugar soda or energy drink. Also a good alternative to coffee and
XS Energy Marketing Plan 19
expensive espresso drinks. With a proprietary blend of herbs that
contain a mix of Gandoderma, Ginseng, Astragalus, Echinacea
Purpurea, Reishi mushrooms and Schisandra also amino acids L-
Taurine and L-Glutamine, that give this healthy energy drink its blast of
natural energy needed to keep drinkers gain back their spunk. XS
Energy comes in a convenient 8.4-ounce aluminum can, which is the
perfect size to throw in a purse, backpack, gym bag, or brief case.
Every flavor comes with its own color and design on the can
distinguishing it from the other flavors.
Price Strategy
XS Energy currently provides competitive prices ranging from
$23.88 to $34.88 for a 12-pack case of XS Energy drinks. We would
like to see the company branch out and start selling single cans in
convenience stores, and vending machines. We would like to keep a
competitive price of $2.00 a can. Also to offer incentives of buying
more than one at a time, and put in place a discount of 2 for $3.50.
Promotion Strategy
To promote XS Energy to our new target market of teens and young
adults, we want to focus to put promotions of schools and campuses.
Offer incentives for students to spend their money on XS Energy drinks
by offering deals on buying more than one. Currently XS Energy
targets 35 – 45 year old women, or the main ‘buyer’ of the household.
XS Energy Marketing Plan 20
So we want to keep the strategy of buying in bulk through
Amway/Quixtar for that demographic. To advertise to the new younger
target market we also would like to team up with dance clubs, sports
teams, and music producers. With dance clubs we would offer
alcoholic and non-alcoholic drinks in the club made with XS Energy.
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
As of now XS Energy is only available to customer by buying
through either an IBO (Independent Business Owner) or through
Amway/Quixtar directly. We want to make XS Energy available to
everyday customers in gas stations, grocery stores, convenience
stores, and in vending machines. Currently the Amway/Quixtar have
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
New Zealand. Currently XS Energy is transported through general
mailing companies like FedEx. In the next few years we would like XS
Energy to have its own distribution center with its own delivery trucks.
XS Energy Marketing Plan 21
Financial Summary6
60%
8%
Cost Structure
PurchasesDistributionWagesAdministrationAdvertising & MarketingOther
Purchases include packaging materials, beverage bases, and
beverage ingredients. Distribution costs arise from product delivery to
a large number of markets. XS Energy must ship products to
Independent Business Owners, who then ship products to their
customers. Other costs include depreciation, rent, utilities, interest,
and other organizational sustaining costs (IBISWorld Industry Report).
These costs consist of estimates throughout the soft drink industry.
Life Cycle Analysis
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
new emerging brands have expanded consumer choice in the energy
XS Energy Marketing Plan 22
drink market, which has pushed them past the growth stage. Major
mergers among energy drink companies and soft drink companies
indicate a shift to a mature life cycle stage. Industry Value Added (IVA)
has grown at an estimated rate of 2.1% during 2008, and is expected
to grow by a further 2.6% per year until 2013 (IBISWorld).
Break-Even Analysis
Break-Even Analysis ForecastVolume in Units (Cases) 5,832,117 Total Sales
$139,270,954
Variable Costs Direct Labor
(99,320,953)
Total Variable Costs
(99,320,953)
Contribution Margin 39,950,001 Fixed Costs
(39,950,000)
Profit Before Vary-with-Profit Costs $1
XS Energy Marketing Plan 23
0 2,823,786 5,647,571 8,471,357 11,295,142 14,118,928 0
50,000,000
100,000,000
150,000,000
200,000,000
250,000,000
300,000,000
350,000,000
400,000,000
Total Fixed Costs
Total Variable CostsTotal Sales
For our break even analysis we used information from “The Risk
Management Association Annual Statement Studies Financial Ratio
Benchmarks.” Because XS Energy is a private company, certain
numbers were not available for us to take so; we had to use numbers
from a similar sized in the financial statements to find our break-even
point.
In order to find the break-even point we took the Net Sales (100%)
and subtracted Gross Profit (28.7%), this gave us a Variable Cost of
(71.3%). To find our Unit Variable Cost we took that 71.3% multiplied
by the cost of a case of XS Energy as $23.88, giving us $17.03. We
assumed our fixed costs to be our Operating Expenses in the Financial
XS Energy Marketing Plan 24
Ratio Benchmark which came out to be 23.5%. We multiplied this by
our $170 million to get 39,995,000. Using the Break-Even Equation of
Fixed Cost/ (Unit Price-UVC), we get 39,995,000/(23.88-
17.03)=5,832,116. This is the number of cases that we will have to
sell in order to break even. Based on these numbers, and the 2007
sales of XS Energy of $170 million, they were able to turn a profit.
With this information we are able to make projections and goals to sell
more cases and estimate what our profits will be.
Implementation Plan7
XS Energy Drinks are currently marketed as just that, “Energy
Drinks”. Through our marketing plan, we are aiming to launch our
product to a younger audience as a “Health Drink that Promotes
Energy”. Since our product contains B-Vitamins and Amino Acids that
are healthy for the body and promote brain function, we would like our
drink to be associated with health drinks rather than energy drinks.
The current market captured by the company is the over 35 crowd,
or “Generation X” (Mintel). Our plan is to market to an audience of
young adults, mainly 16-23 year olds. We are hoping since the drink
contains vitamins and nutrients healthy for the body, parents will find
XS Energy Marketing Plan 25
it to be a good alternative to the other sugar filled energy drinks
currently in stores.
Vending machines throughout college campuses and high schools,
and selling our products individually through school stores will help
increase awareness among younger consumers. Vending machines
create impulse buys when placed in high traffic areas, which is an area
where XS Energy is currently lacking. They have remained a private
company and strictly provide their product through IBO’s, but we are
hoping to get the name well known among a younger crowd through
wider distribution channels.
We are going to market the product as a health drink that promotes
energy. When people think of energy drinks they automatically think of
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
needs to add to their diet. Health has been an increasing trend in
today’s society and XS Energy Drinks can be a positive addition to your
daily diet.
In order to get our name in the schools, we need to put vending
machines in places that students can easily access on-the-go. Students
are living in a fast paced world, and our product needs to keep up with
them. Giving them the option of buying it in school gives an alternative
XS Energy Marketing Plan 26
source of attaining the product. Fliers will also be placed throughout
the school in high traffic areas so students are aware of our name and
the healthier options that are available.
For our implementation into schools and universities, it will not be
easy to get our product into these resources. Schools like the
University of Minnesota and satellite campuses put out RFP or requests
for proposal which is basically an open bidding for companies who
want to get involved to put a bid in for a contract. These contracts can
be for just the solar campuses like the University of Minnesota-Duluth
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
Energy because they would be competing against large companies like
Coca-Cola and Pepsi. It would be hard for us to compete financially
against these power houses of the soda and energy drink industry.
There would need to be a large amount of research done to determine
whether putting a bid into these would be worth the cost and time for
XS Energy. This information was given by Penny Graskey of Coca-Cola.
She is the On Premise Customer Development Manager for the Duluth
Area.
While no numbers were available, the cost for a home school and
sister schools like the University of Minnesota would be great. I think
XS Energy Marketing Plan 27
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
amount of money trying to compete against the larger companies.
These smaller facilities would be a good test for how our product fairs
in schools.
Sporting events and entertainment are very popular on college
campuses, so we would like to use banners of our product during
basketball games or even during student concerts to get our names in
the mainstream of students. Athletes and nutrition-conscious students
will notice our “Health drinks that promote energy” signs, and realize
they can get energy without adding sugars that can ruin their workout
and performance. When students see our signs promoting healthy
energy, they will be eager to try the new product that not only tastes
good, but also is good for them.
All in all, our main goal is to be seen as a healthy alternative to the
other high sugar energy drinks in the market. Vending machine sales
are constantly increasing, and edging XS Energy into that market will
continually increase revenues. Through product placement in high
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.
XS Energy Marketing Plan 28
http://
www.franchiseonline.com/cgi-bin/folpages/xynergy2.gif
XS Energy Marketing Plan 29
APPENDIX A Competitor
Analysis
Even though energy drinks are fairly new to the United States, their
popularity has grown at a remarkable pace. The energy drink market
has grown from $100 million to more than $250 million in just two
years (XSGear.com). Red Bull, the most widely advertised energy
drink, claims to sell over one billion cans every year.
Fast growth in the specialized coffee market has also made a great
contribution to the growth of energy drinks. People in today’s market
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.
The average American family drinks several gallons of liquid every
day, and everyone loves having options. Many of the drinks consumed
are soda or other forms of sugared and caffeinated drinks to provide
energy for the day. Since there are so many new energy drinks brands
emerging in the market, companies need to have a competitive edge
to get their name in the minds of consumers.
XS Energy Marketing Plan 30
XS Energy Marketing Plan 31
APPENDIX B Survey Results
XS Energy Marketing Plan 32
32%
68%
Have you heard about XS Energy?
YesNo
54%
18%
14%
4%11%
What is your favorite Energy Drink?
RockstarMonsterRed BullXS Other
XS Energy Marketing Plan 33
72%
10%
10%7%
How many Energy Drinks do you consume weekly?
0 to 12 to 33 to 44 to 5
50%
What is an ideal price for energy drinks?
$0-1$1-2$2-3
Sources
1. "XSGEAR.COM: FAQ." XSGEAR.COM. Jan. 2007. 01 Dec. 2008
<http://www.xsgear.com/support/faqs.asp>.
2.
"BevNET.com Media for XS Energy Drink." BevNET.com. BevNET.com,
Inc. 01 Dec. 2008
<http://www.bevnet.com/reviews/xsenergy/media.asp>.
3. Global Market International Database
4. Energy unleashed: a unique distribution model for XS Energy Drink
proves a winner. Beverage World, 127. March 15, 2008. RDS
Business Suite, UMD Library.
5. Soft Drink Production in the U.S: 31211. IBISWorld Industry Report.
October 10, 2008.
XS Energy Marketing Plan 34
100%
If you were presented with an Energy Drink brand with 13 dif-ferent flavors, would you try it?
Yes No
.........
.........6. "Official Website of XS Energy Drink." XSBlast.com. 01 Dec. 2008
<http://xsblast.com/default.aspx>.
7. Financial Ratio Benchmarks: Annual Statement Studies .
Philadelphia, PA: The Risk Management Association, 2007. 284-85.
8. Cirillo, Jennifer. "Energy Drinks Are On A Steady Track." Beverage
World Apr. 2008: S15-17.
9. Kleiner, Adam. "XS Worldwide: With a Unique Distribution Model, XS
Energy Drink is Unleashed." Beverage World. 11 Mar. 2008. Ideal
Media. 18 Nov. 2008
<http://www.beverageworld.com/content/view/34516/>.
10. Solman, Gregory. "Strategic Smarts Pay Off." Ad Week. 8 Aug.
2007. Nielsen Business Media, Inc. 18 Nov. 2008
<http://www.adweek.com/aw/national/article_display.jsp?
vnu_content>.
11. “Market Size and Forecast.” Mintel/ based on information
Resources, Inc. InfoScan. Energy Drinks June 2008. 15 Nov. 2008.
University of Minnesota Duluth. Mintel Reports.
XS Energy Marketing Plan 35
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