Innovation and Commercialization Report for YOYO Drinks Analysis

This report analyzes the innovation and commercialization strategy for YOYO drinks, a beverage brand specializing in lassi. It identifies the market opportunity for a packaged lassi product, particularly in the UK, and proposes an innovation funnel approach to develop a healthier alternative to existing carbonated and sugary drinks. The report includes a detailed business case, covering market analysis, industry competition, a proposed business model with omni-channel distribution and promotion, and financial projections for five years. It also addresses funding sources, monitoring and control mechanisms, and strategies for protecting intellectual property through patents, trademarks, and copyrights. The report aims to provide a comprehensive overview of the steps YOYO drinks should take to successfully commercialize their innovative product and tap into the growing demand for healthier beverage options. The report is intended to fulfill the requirements of the BTEC HND in Business Marketing, Unit 8: Innovation and Commercialization assignment, and provides a detailed analysis of the product's market potential and the strategies required for its successful launch and growth.

Innovation and
commercialization
YOYO drinks

Business overview
• Yoyo drinks is a leading beverage brand from India.
• They are specialized in lassi, a traditional refreshing drink
based on curd.
• Their competency in the developing healthier alternative to
carbonated drinks is effective (Briggs et al. 2017).
• Their tagline is “where refreshment meets health”.

Identification of the problem
• Energy drinks are having huge demand across the world.
• However, majority of the brands are offering carbonated
drinks (Pomeranz, Munsell and Harris 2013).
• Thus, customers are having fewer alternatives to have healthy
drinks.
• Fruit based drinks are there but with added sugar.

Use of innovation funnel
• The first step of the funnel is gathering ideas in broad manner.
• The next step is the narrowing the funnel. In this case,
potential solutions are placed against the problems (Breda et
al. 2014).
• Lastly, the most suitable solution is being fine tested by Yoyo
drinks in meeting the business objectives.

Proposed innovation
• The lassi will be introduced in the packaged avatar.
• This will help in increasing the convenience for the global
customers.
• Will be offered in different flavors to meet the diverse tastes.
• It will provide a healthier alternative to the customers.

Market opportunity
• As of now, the beverage market of the United Kingdom stands
at US$ 13,378m (Amienyo and Azapagic 2016).
• It is expected to grow at more than 7 % till 2023.
• The target market will be customers seeking cost effective and
healthier alternative to the existing drinks.
• Thus, huge opportunities can be tapped by Yoyo drinks.

Industry analysis
• Beverage industry in UK is majorly dominated by PepsiCo and
Coca Cola.
• Price sensitive market with evidence of price war (Briggs 2016).
• There are number craft brands offering authentic taste and
flavor in the market.
• Market competition is high.

Business model
• The product will be the dairy based lassi with different flavors.
• Market penetration pricing will be followed.
• Omni Channel distribution will be followed.
• Omni Channel promotion will be followed.
• Effective approach of hrm will be followed.
• Unique packaging will act as physical evidence.
• Technology will be at the forefront of the production process.

Financial projections
Year 1 Year 2 Year 3 Year 4 Year 5
Gross revenue $100,000 $120,000 $130,000 $137,800 $148,824
Cost of goods sold $11,400 $11,628 $12,093 $12,819 $13,844
Gross margin $88,600 $108,372 $117,907 $124,981 $134,980
Other revenue [source] $50,000 $0 $0 $0 $0
Interest income $0 $0 $0 $0 $0
Total revenue $138,600 $108,372 $117,907 $124,981 $134,980
Operating expenses
Sales and marketing $10,000 $10,200 $10,608 $11,244 $12,144
Payroll and payroll taxes $50,000 $51,000 $53,040 $56,222 $60,720
Depreciation $30,000 $28,458 $33,072 $33,708 $34,344
Maintenance, repair, and overhaul $1,340 $1,367 $1,394 $1,420 $1,447
Total operating expenses $91,340 $91,025 $98,114 $102,595 $108,655
Operating income $47,260 $17,347 $19,793 $22,386 $26,324
Interest expense on long-term debt $6,000 $6,720 $7,526 $8,430 $9,441
Operating income before other items $41,260 $10,627 $12,267 $13,956 $16,883
Loss (gain) on sale of assets $0 $0 $0 $0 $0
Other unusual expenses (income) $0 $0 $0 $0 $0
Earnings before taxes $41,260 $10,627 $12,267 $13,956 $16,883
Taxes on income 30% $12,378 $3,188 $3,680 $4,187 $5,065
Net income (loss) $28,882 $7,439 $8,587 $9,770 $11,818

Sources of funding
• The major sources of funding will be:
• Sales
• Overdrafts
• Angel investment
• IPO

Monitoring and control
• Pilot project will be initiated for would be introduced variants
in the market.
• This will help to gather the feedback and detect shortcomings.
• KPI will be used to measure the success of the business.

Protecting Intellectual property
• Patents will be used by YOYO drinks in terms of their
innovative technology to increase the long lasting ability and
unique taste of lassi (Buchanan and Wilson 2014).
• Trademarks will be used to protect their branding elements.
This will help in managing the physical evidence.
• All the distinctive logos, designs and symbols to be used will
be copyrighted.

Reference
• Briggs, A.D., Mytton, O.T., Kehlbacher, A., Tiffin, R., Elhussein, A., Rayner, M., Jebb, S.A.,
Blakely, T. and Scarborough, P., 2017. Health impact assessment of the UK soft drinks
industry levy: a comparative risk assessment modelling study. The Lancet Public
Health, 2(1), pp.e15-e22.
• Pomeranz, J.L., Munsell, C.R. and Harris, J.L., 2013. Energy drinks: an emerging public
health hazard for youth. Journal of public health policy, 34(2), pp.254-271.
• Breda, J.J., Whiting, S.H., Encarnação, R., Norberg, S., Jones, R., Reinap, M. and Jewell, J.,
2014. Energy drink consumption in Europe: a review of the risks, adverse health effects,
and policy options to respond. Frontiers in public health, 2, p.134.
• Amienyo, D. and Azapagic, A., 2016. Life cycle environmental impacts and costs of beer
production and consumption in the UK. The International Journal of Life Cycle
Assessment, 21(4), pp.492-509.
• Briggs, A., 2016. Sugar tax could sweeten a market failure. Nature News, 531(7596), p.551.
• Buchanan, J.A. and Wilson, B.J., 2014. An experiment on protecting intellectual
property. Experimental Economics, 17(4), pp.691-716.