Energy Punch: A Marketing Research Plan for a New Energy Drink in the UK

This marketing research plan outlines a comprehensive strategy for launching Energy Punch, a new energy drink, into the UK market. The plan analyzes the current energy drink industry, identifies the target market, and develops a detailed marketing mix strategy. It includes a SWOT analysis, competitive analysis, and financial projections, along with contingency plans for potential challenges. The goal is to establish Energy Punch as a leading brand in the UK within three years, achieving a 15% market share and a 200% return on investment.

MARKETING RESEARCH PLAN
1

Table of Contents
Introduction......................................................................................................................................3
Executive Summary.........................................................................................................................4
Situation Analysis............................................................................................................................5
Industry Analysis.........................................................................................................................5
Sales Analysis..............................................................................................................................6
Competitive Analysis...................................................................................................................7
Customer Analysis.......................................................................................................................8
Target Market..............................................................................................................................8
Market Segmentation...................................................................................................................8
SWOT Analysis.........................................................................................................................10
Analysis of Marketing Activities...............................................................................................10
Objectives......................................................................................................................................11
Marketing Strategy........................................................................................................................11
Marketing Communication Plan....................................................................................................13
Implementation Plan......................................................................................................................14
Performance Evaluation and Monitoring.......................................................................................15
Financial Information....................................................................................................................16
Contingency Plans.........................................................................................................................18
Conclusion.....................................................................................................................................19
References......................................................................................................................................20
2

Introduction
The increasingly demanding nature of modern life has necessitated people to be constantly alert
and focused. This has created the demand for products such as energy drinks that help consumers
achieve an instant stimulus for their mind and body. The market of the energy drinks industry is
expected to grow in the future and thus Energy Punch is expected to perform well in the market
provided it manages to establish itself effectively. It is the purpose of this assignment to
determine the steps necessary to plan an effective marketing campaign and introduce a new
product in the market effectively. A host of factors have been considered and all possible
scenarios have been analysed with the help of appropriate tools in order to plan an effective
marketing campaign.
3

Executive Summary
Energy Punch is a newly formulated energy drink that is to be introduced in the market. The
drink will be launched in the domestic UK market and an effective marketing campaign is to be
developed for the product. The global energy drink market is worth billions already and is
expected to grow. The goal of the marketing campaigns is to make the brand recognisable in the
UK and gain at least a market share of at least 15% within three years of initiating operations.
The total implementation of the project is expected to cost around £ 9,000,000 and the revenue
earned is projected to provide a 200% return on investment within 3 years of starting operations.
The vast majority of the consumers are identified to be young and under the age of 35. This
opens up new opportunities and avenues for the marketing to be implemented. Social media will
be heavily used, since the vast majority of the intended customer base have a strong presence in
them. The success of the marketing campaigns relies on the effectiveness of the strategies
developed and therefore periodical ways to assess their effectiveness will be utilised in the form
of market surveys and financial audits.
4

Situation Analysis
Industry Analysis
Characteristics of the Market
Energy drinks have been gaining favourability in the whole world, owing to their wide-spread
use by people with demanding lifestyles. The global market is currently worth $ 43 billion USD
and is expected to grow at a significant pace in the foreseeable future (Mordor Intelligence,
2018).
Trends or Drivers
The increasingly demanding lifestyles of people across the world have been a major driver in the
adoption of energy drinks (Ali et al., 2015). The majority of energy drink consumers are young
and below the age of 35. However, there have been growing concerns regarding their use and
their effects on health, which might affect the market.
Legal, Political & Economical Factors
Energy Punch must take into account all the relevant laws and regulations set forth by the
Government of the UK regarding food administration through the Food Standards Agency. The
company must also take into account the tax rates for non-alcoholic beverages and economic
factors such as stability of the market and inflation rates.
Sociocultural Factors
The consumer spending habits regarding energy drinks have been becoming favourable. The rise
of hectic lifestyles and increase in expendable income have increased the demand for energy
drinks
Technological Factors
Food and beverage production industry has increasingly been adopting automation (Groover,
2016). This allows organisations to hire less manpower and drive up productivity; thus,
increasing their profit margins.
5

Sales Analysis
The energy drinks market is one of the most profitable and lucrative opportunities in the whole
world. The industry today is worth over $ 43 billion USD and is projected to grow at a pace of
around 4 percent up to the year 2025. A significant number of people are switching over to
energy drinks and quitting carbonated beverages owing to rising concerns regarding their sugar
content.
Figure 1: Energy Drink Market Projections
(Source: Grand View Research, 2018)
6

Competitive Analysis
The energy drink market is rife with extreme competition. Large brands such as Monster and
Red Bull are current market leaders and have aggressive marketing techniques. There are also a
range of other competitors in the market. The competitive analysis table illustrates the current
market scenario effectively:
Competitor Market
Share
Strengths Weaknesses Marketing
Strategy
Aggressiveness Threat
Direct
Competitor
1. Red Bull 35% Large
market
share
Growing
concerns
about
caffeine
Quirky
advertising
campaigns
High Shifting
consumer
perspectives
2. Monster 13% Extensive
marketing
campaigns
Negative
health effects
Sponsorships
to a large
number of
sporting
events
High Concerns
regarding
caffeine
content
Substitutes
1. Green Tea 2% Healthy Limited
market share
Well known
source of
anti-oxidants
Low Change in
market trends
2. Juices and
smoothies
5% Healthy Expensive Appeal to
health-
conscious
people
Low Low
spending
power of
consumers
Potential
Entrants
1. PepsiCo 40% Enormous
resources
at disposal
New to
market
Large
advertising
campaigns
Medium High level of
competition.
The above table clearly illustrates that Red Bull and Monster are the current market leaders with
both of them aggregating almost half of the total sales volume in the market. Therefore, Energy
Punch must develop a unique brand image that lets them market themselves effectively since the
market is very competitive and developing a brand image is essential to the organisation’s
success.
7

Customer Analysis
Target Market
The potential customers are identified to be mostly comprised of young people under the age of
35. A significant number of the consumers are identified to be in high school or college. The
consumers are mostly located in urban areas (Peacock et al., 2017). The market is observed to be
growing steadily and is projected to be worth over $50 billion USD by 2025. The local market
seems to be perfectly suited for an energy drink company; with a growing number of young and
adventurous people in the area.
Market Segmentation
The market can be segmented on the following bases:
Segmentation Segmentation factor Discussion
Geographic Geographic
region
Urban Urban populations are more likely to buy
energy drinks
Rural The rural areas consume comparatively less
quantities of energy drinks
Demographic Gender Male Men account for around 60 percent of the
current market share.
Female Women account for 40 percent of the market
share
Age Under 18 A significant amount of the market is held by
teenagers.
18 – 30 The vast majority of the market belongs in
this age group.
31 – 45 Considerably less number of consumers in
this age group.
Distribution Retail Online Online shopping for daily products has been
constantly on the rise.
Offline The majority of the market operate offline.
Wholesale The product is sold wholesale to large
retailers.
Lifestyle Social class Upper class A significant number of consumers belong to
the upper class.
Middle class The majority of the market belongs to the
middle class.
Occupation Students Students in either high school or college are
large consumers of energy drinks.
Employees Young professionals also account for a
significant amount of the market.
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Income Medium Medium income households are the majority
in the market.
High High income households also account for a
considerable market share.
Product Life
Cycle
Early adopters Few number of people adopt the product
early.
Trend followers The majority of the market belongs in this
segment.
Late adopters A significant amount of people also adopts
the product in its late life cycle.
9

SWOT Analysis
SWOT analysis is an effective framework that can help ascertain the various internal and
external factors affecting an organisation. The SWOT analysis of Energy Punch has been
illustrated below:
Strengths Weaknesses
 Strongly growing market
 Valued product
 Relatively new to market
 High competition in the market
Opportunities Threats
 Increasing nutritional value in energy
drinks
 Adopting innovative marketing
strategies
 Rising concerns regarding caffeine
content in energy drinks
 Shifting consumer preferences
towards alternatives such as juices and
smoothies.
Analysis of Marketing Activities
The current marketing plan consists of marketing activities in the form of advertisements in the
local television and radio stations as well as newspapers and magazines. The company
established itself firmly in the digital realm with the help of an enhanced social media presence
and search engine optimisation techniques. These activities have ensured a steady rise in sales
and increase in customer base. The sales of the drink have risen as a result of these marketing
activities as evidenced by the latest quarterly reports. Surveys conducted by the company also
indicate that customers are becoming more aware of the brand and recognising it as a viable
alternative to rivalling brands.
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Objectives
The key objectives of the organisation are as follows:
 To establish the brand firmly in the United Kingdom market.
 To gain a market share of at least 15% in the first three years of starting operations.
 To produce and sell at least 500,000 bottled units and 300,000 canned units of the
beverage in the first two years of operations.
 To achieve at least 50% return on investment during the first year of operations and
200% return on investment within 3 – 5 years of operations.
Marketing Strategy
The marketing strategy employed by Energy Punch can be broken down using the 4Ps of
marketing mix approach, which has been explained below:
Aspect Discussion
Product The product is the most integral part of the marketing mix. The product
offered in this case is an energy drink by the name of Energy Punch. The
market is already saturated and is dominated by names such as Monster and
Red Bull (Statista, 2018). Thus, it is important to have a unique selling point
that differentiates Energy Punch from the rest. The product will contain
caffeine and taurine along with a host of other compounds which would help
the consumer gain instant mind and body stimulation. The product will be sold
in varying sizes of bottles and cans and will bear the distinctive look and
branding of Energy Punch.
Price The initial costs of setting up the production facilities and distribution channels
will be heavy. Further, the ingredients contained in the drink are considerably
expensive. Thus, it is important to sell the product at a price which will
provide a viable return on investment in a suitable amount of time. However,
the selling prices of the rival products must also be considered since the selling
price will be crucial factor that determines the performance of Energy Punch.
Thus, an effective balance must be reached between these two factors at play
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and a feasible selling price must be established.
Place The product will be sold nationwide, but with an emphasis on urban places
with an abundance of youth. The drink will be sold through retailers and
certain trade agreements have been established with large wholesalers. Since
online shopping is broadly adopted by the targeted market, Energy Punch will
also be available online, through retail stores as well as directly from the
company website. Further, the company is also planning to enter partnerships
with fast-food restaurants to sell the drink at select restaurants.
Promotion Since the company is mostly unknown to the majority of the target market, a
extensive marketing campaign has been planned. The most emphasis is given
on advertisements in television and social media marketing, since these two
were identified to be most prominent sources of influence for the targeted
groups. Several contests and promotional events on social media will also be
held to ensure enhanced consumer engagement rates.
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Marketing Communication Plan
The key to a successful marketing campaign is effective communication between the consumer
and the organisation (Armstrong et al., 2015). The major communication outlets employed by
Energy Punch to ensure effective marketing are:
Television advertisements
Television adverts will cater to a wide audience and would ensure increased brand awareness
(Moriarty et al., 2014). Energy Punch will partner up with a host of national and local television
networks and will specialise their advertisements for each region.
Website
Websites are the primary source of information about a certain organisation online and as such,
Energy Punch will maintain an effective website that clearly communicates its goals and the
advantages their product offers over their competition. The website will also sell products to
consumers directly; thus, serving a dual purpose.
Social Media
Since the targeted population is overwhelmingly young, it is of the utmost importance that an
effective social media presence be maintained. Social media is one of the biggest influencers of
consumer choices today (Lamberton and Stephen, 2016) and therefore Energy Punch will have a
presence across all social media networks including Facebook, Instagram ann Twitter.
Billboards
The role of traditional marketing is equally as important for market dominance (Andrews and
Shimp, 2017). Energy Punch will advertise itself on billboards in or near places of interest for the
targeted population. The billboards will sport the unique and distinctive logo and brand image of
Energy Punch and will help reinforce the brand image in people’s minds.
Public Relations
It is important for modern organisations to maintain an effective brand image to survive in the
market (Cornelissen and Cornelissen, 2017). The key to that is to have a dedicated Public
Relations department, that ensures that the company is seen favourably in the public sphere.
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Implementation Plan
An effective product implementation campaign is usually preceded by an effective product
implementation plan (McDonald and Wilson, 2016). Thus, the key plans for product
implementation employed by Energy Punch are:
Product design and development
 The product was formulated and tested by the company and appropriate certifications
were obtained for sales and distribution of the product.
 The brand look and logo design will be outsourced to third-party designers.
 The production facility will be set up along with and all the required machinery.
Marketing and Sales
 The target market will be identified
 The most effective marketing campaign appropriate for the target and the product will be
devised.
Distribution
 The most appropriate distribution channels will be used, including online and offline
retail outlets, wholesale and direct selling to consumers.
Resource Requirements
 The financial and physical resources required to implement the total plan will be
evaluated and an effective strategy will be devised to utilise them optimally.
Scheduling
 Time management is of the vital essence in the proper implementation of a plan; thus all
of the aforementioned tasks will be scheduled and steps will be taken to maintain them
accordingly.
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Performance Evaluation and Monitoring
In order to gauge the effectiveness of the marketing campaigns, the organisation will conduct
several audits and surveys to measure the effects of the marketing in quantitative and qualitative
terms. These include:
Consumer surveys – Quantitative
These will be conducted at regular intervals among the targeted demographic groups.
Quantitative surveys would provide a clear picture of the current scenario of the consumer
preferences and would help the organisation determine what actions have been beneficial for
their marketing effectiveness.
Consumer Surveys – Qualitative
Qualitative surveys would provide an accurate representation of the consumer perspectives
towards the brand its products. This would therefore enable the company understand their
consumers more closely and would help them better target their products at the consumers.
Market Surveys
Market surveys would assess the performance of Energy Punch as compared to its rivals at
regular intervals. Thus, it would help measure the performance of the product as compared to its
time in the market as well as the marketing campaigns employed.
Financial analysis
The financial analysis will consist of
i. Sales analysis which would determine the breakeven point, the profit or loss margins and
the overall financial performance of the organisation.
ii. Analysis of the cost of the advertising campaign compared to the product performance in
the market.
Consumer assessment
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This would help the organisation identify the current consumers. The organisation will also
determine whether or not the current consumers belong to their initial targeted demographics.
This would help Energy Punch assess the effectiveness of their targeted marketing approaches.
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Financial Information
The financial state of the company as well as the market is important to consider when planning
a marketing campaign (Kotler, 2015). The assumptions made when staring out with the
marketing plan are:
 The product is viable and there is ample demand in the market for it.
 The company has enough funds to sustain the marketing campaign it undertakes.
 The market will stay relatively stable and no major economic event will occur in the near
future.
 The initial costs of setting up production facilities and distribution networks will be
overcome within a practical time of starting operations.
The budget developed for the implementation plan is laid out below:
Activity Details Budget Allocated
Product design and
development
Product formulation £20,000
Obtaining licenses to sell and distribute
the product
£10,000
Brand logo and look design £20,000
Setting up production facilities and
distribution networks
£2,000,000
Marketing and
Sales
Target market identification £40,000
Devising marketing campaign £25,000
Implementing the devised marketing
campaigns
£2,500,000
Distribution Identifying appropriate distribution
networks
£35,000
Contacting and reaching agreements
with concerned organisations
£2,500,000
Distributing the products £1,500,000
Total £8,650,000
.
With the help of appropriate market research and data analysis, the sales of Energy Punch have
been projected to stay low during the initial few months of operation but are expected to rise
rapidly as the brand gains recognition. The projected figures have been depicted below:
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2018 2019 2020 2021 2022
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
Sales Volume Projections
Number of units sold
Figure 2: Sales Volume Projections
(Source: Created by the author)
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Contingency Plans
The markets of today are highly unstable and prone to frequent changes in consumer spending
habits and fast changing market trends (Piercy, 2016). Thus, it is pertinent for any new
organisation to address these concerns. The business model proposed by an organisation may not
be viable in the market, and therefore it is important for organisations to recognise their failures
and develop strategies to mitigate them (Bryson, 2018).
The organisation must first develop strategies to identify a potentially failing brand. These
include:
 Low levels of sales volume despite extensive marketing and brand awareness.
 Sudden drop in sales and revenue due to a significant event (economic recession, bad PR
for company etc.).
 Gradual fading of the customer base due to changing consumer preferences.
These symptoms, once identified must also be addressed (Solomon et al., 2014). In case of a
remediable situation, the organisation must take every step possible to gain their share of the
market back, but in case of an unsolvable crisis, the organisation must utilise their contingency
plans. The contingency plans developed in case of the failure of the energy drink business model
are:
 Develop carbonated drinks and enter the soft drink industry.
 Develop healthier alternatives for energy drinks such as juices and smoothies.
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Conclusion
The energy drink market represents a lucrative business opportunity for organisations. The
market is already worth billions and is expected to grow at a steady pace in the coming years.
Energy Punch therefore has a profitable opportunity to attain a significant part of the market
share. However, a proper marketing plan must first be developed. This includes analysis of the
situation at hand as well as the opportunities and challenges to be faced. Analysis of these factors
have been done with the help of appropriate tools such as the SWOT and PEST frameworks. The
effectives of the marketing campaigns are to be assessed with the help of appropriate techniques
such as consumer and market surveys and the sales of the drink have been projected with the
help of appropriate market research.
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