Lucozade Energy Drink: Business Development and Innovation Proposal

This report provides a comprehensive analysis of Lucozade energy drink, focusing on its market position, competitive landscape, and potential for innovation. It begins with an introduction to innovation and the background of Lucozade, followed by an in-depth SWOT analysis to assess its strengths, weaknesses, opportunities, and threats. The report then examines Lucozade's current market position, including sales figures and competitor analysis. It delves into the pricing policies of energy drinks and compares them to competitors. The core of the report proposes an innovative strategy, suggesting an organic touch to Lucozade's energy drinks, highlighting the strengths and weaknesses of this approach. The report concludes with a marketing plan for the innovative product, emphasizing the unique selling proposition and ultimately recommending a business development strategy. The report emphasizes the importance of adapting to market trends, leveraging competitive advantages, and overcoming challenges to enhance Lucozade's market presence.

PROPOSAL

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Background of Company............................................................................................................3
Current Situation of Energy Drink..............................................................................................3
Market Position...........................................................................................................................5
Pricing Policy Energy drink and comparison with other competitor..........................................5
Innovative strategy......................................................................................................................6
Unique selling proposition..........................................................................................................8
Marketing plan of Innovative product.........................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Innovation is commonly defined as the "carrying out of new combinations" that include "the
introduction of new goods. Current study is based on the case study of Lucozade energy drink
(Kahn, 2018). This report highlights the background of the company and after that report goes in
understanding the current position of energy drink in the market. After understanding the
limitation in the current situation the report highlights the innovation which can be brought by
the company to improve the position of the company in the market.
MAIN BODY
Background of Company
Lucozade is a soft drink manufacturing company, Lucozade is well known for producing
good range of energy drink in the market. Lucozade is one of the biggest energy drink producing
firm in UK market, looking at the market share of Lucozade in UK market it has been identified
that they used to rank second most preferred energy Drink Company in the market behind Red
bull. Lucozade offers good variant of soft drink in the market and able to see good number of the
customer toward all the product of the company, one of the main reason behind the same is
quality of product which is offered by Lucozade in the market (Chen, Yin and Mei, 2018).
Current Situation of Energy Drink
SWOT
Strength
 Goodwill: Energy drink product of the company has eventually helped the company in
building good image of the company in front of the other in the market. As from the
initial stage itself energy drink is one of the most sold product of the company
(Rajapathirana and Hui, 2018). This has ultimately help the company in building good
goodwill in the market.
 Quality: It is another strength of Energy drink product of the company, it has been
identified that the company is able to maintain the good quality of the product in the
market. This has helped the company in maintaining the position of the company in the
market in a long run.
Weakness

 Low profit margin: Lucozade generally used to operate in the heavily competitive market,
as there are many organization who generally used to operate in the industry and offers
the same type of the product in the market. This ultimately used to force the company to
use competitive pricing technique in the market to attract good number of the customer
towards the product. This used to lower down the profit margin of the company in the
market.
 Reduction in segmentation: It is another weakness which had been linked with the
Lucozade from the initial stage itself. As it has been identified that product which is
offered by Lucozade can only be consumed by very low number of the consumer in the
market (Bogers, Chesbrough and Moedas, 2018). This generally used to create the variety
of the issue for the company in regards of managing and maintaining the marketing
position for longer period of time in the market. For example, energy drink are generally
preferred by teenage more as compare to other segment.
Opportunity
 New variant introduction: This is one of the biggest opportunity which is in front of
Lucozade to use in the organization, doing this in the market will ultimately help the
Lucozade in offering the better amount of the option to the different customer in the
market which will ultimately help them in getting competitive advantage in the market.
New variant can be thing which is offered by competitor but not by Lucozade. Also they
can look to bring any innovative product (Schot and Steinmueller, 2018).
 New technology: Organization also can look to introduce new technology in the
organization to manufacture different product in the organization. This will help the
company in reducing the amount of the cost which is incurred by the company and
improving the level of profit margin in the organization. This will ultimately prove very
handy for the organization in managing the impact of competition in the best way
possible in the market.
Threat
 Competition: It is one of the biggest threat in front of organization, it has been identified
that Lucozade generally used to operate in highly competitive market, this ultimately
used to create variety of the issue for the company in managing the customer base in the
best way possible in the market (Arundel, Bloch and Ferguson, 2019). Not only that this

can prove as one of the biggest threat for the company at the time of introducing new
policy in the organization as well.
 Legal Threat: It is another sort of the threat which can occur for Lucozade in long run.
There are variety of different type of laws which need to be followed by all the
organization in the market, for the same reason it sometime used to complicated different
activity in the organization. Hence, Legal threat is another big sort of threat which is in
front of Lucozade to manage.
Market Position
As explained in the SWOT analysis as well it has been identified that the company used to
operate in the heavily competitive market. This ultimately used to impact the position of
Lucozade. Looking at the market share of Lucozade energy drink it has been identified that
Lucozade energy drink is doing well in the market but at the same time there is good of threat
which is also present for the Lucozade. Lucozade enjoys the second place in the market after
Lucozade. In term of the sales which was done by the company in the passed by year. In the year
Red bull has sold 3759 000 unit of product in the year 2018. At the same time Lucozade has
made the sales of 3453 000 unit sales. This is really a good sign for the company, at the same
time it has been identified that In the past year the sales of company was higher than what is in
current scenario. Rapid rise of new firm in the industry has created this sort of the issue for the
organization (Khalili, 2016). As in the recent past it has been identified that company like Boost
and Monster is able to attract the eye of the customer in the best way possible in the market. One
of the research which was highlighted by the author it has been identified that rise of new firm in
the industry has also driven the big firm like Lucozade and Red bull to reduce the price of the
product in the market. As amount of the competition was to high in the market, as new firm was
operating at low scale in the market which was helping them to offer the product at low cost as
well. Hence, Lucozade to overcome the issue of competition in the market has to reduce the price
of different product in the market.
Pricing Policy Energy drink and comparison with other competitor
Lucozade generally used to follow the competitive pricing strategy in the organization.
They generally looks at the price of the competitor and on the basis of the same used to decide

the price of the company product in the market. At the same time it has been identified that price
of the company product is little bit high as compare to that of competitor in the market.
At the same it has been seen that firm who are entering in the industry generally used to
use penetration pricing method in the market. Reason behind the same is that they generally used
to look at attracting the eye of different customer toward the product of the company. After they
are able to do the same they generally used to attract new customer toward the product of the
company.
Red bull the main competitor in the market generally used to use the screaming pricing
method in the organization, this generally used to make the price of the product high in the
market.
After understanding the pricing strategy of the company and other competitor in the market
it has been identified that big and reputed firm generally used to sell the product of the company
with the help of good will which they have built over a year. At the same time New firm which
generally used to enter the industry generally used to target the different customer in the market
with the help of price of the product in the market (Howaldt, Domanski and Kaletka, 2016).
Innovative strategy
After going through the current position of company and pricing strategy which is followed
by the company in the market it has been identified that company is doing good in the market but
at the time there is good threat of competition in the market. For the same reason it has been
understood that bringing new variant of the product is one of the best way through which
competitive threat can be reduced by the organization.
For the same reason it has been recommended to the organization that they should bring
the organic touch in the energy drink of the company (Išoraitė, 2016). They has to make sure that
they generally uses the flavor of flower and organic raw material at the time of manufacturing
energy drink. Reason behind identifying is the current situation which is prevailing in the market,
it has been identified that due to Covid 19 pandemic in the current scenario there is good sort of
demand of organic product in the Market.
There will be variety of the strength as well as limitation which is will be seen by the
organization by introducing the new product in the market. Strength and weakness related to
introduction of product is as follows:

Strength
 Competitive advantage: It is the first benefit which will be seen by the organization by
making this sort of change in the market. As there are variety of organization who used to
offer the organic energy drink in the market but non of them were able to earn the name
or trust of the consumer in the market. For the same reason it has been identified that with
the help of the new offering of the company in the market they will be able to see good
competitive advantage from the market.
 Product line development: It is another sort of the benefit which will be seen by the
organization in the market, it has been identified that with the help of new product of the
company, they will able to enhance the product lime of the company in the long run.
Also, it will help the company in offering the better range of the product in the market,
this will ultimately help the company in providing better choice of product to consumer.
This help the company in improving the sales of the company in the marke (Wu and Li,
2018)t.
Weakness
 Enhance the cost of the company: It is the biggest weakness which will be seen by the
company by bringing this sort of innovation strategy in the organization. It has been
identified that after covid 19 pandemic price of different organic raw material in the
market has been enhanced in the recent past. This will increase the price of the company
product in the market and this sort of the thing will come handy when you are dealing in
highly competitive market. For overcoming the same thing it has been recommended to
the organization that with the help of the product innovation, they also have to look for
the frugal innovation in the organization as well. This will help them in seeing well sort
of cost advantage in the organization as well.
 Difficulty in getting raw material: It is another weakness of this innovation, it has been
identified that due to Covid 19 it has become very difficult in getting organic product
from the market. For the same reason it has been recommended that it will create the
situation of non-delivery of product.
Opportunity
 It will open up the variety of the different type of the opportunity for the organization, as
with the help of new product company will able to improve the level of sales as well as

market area coverage of the company will also be enhanced. It has been identified that
with the help of new product company, company will able to improve the goodwill of the
company as well. As there is good demand of organic product in the market as well.
Threat
 Looking at the threat linked with the organic product of the company it has been identified
that there are good sort of the competitor in the market, they can look to develop the same
type of product to attract the eye of the customer as well.
Unique selling proposition
By implementing the new innovative product in the organization, organization will see
good sort of benefit from the market. This benefit will be seen on the basis of the Unique selling
proposition of the company. Unique selling proposition of company’s current product is as
follows:
 Organic product: It is the first unique selling proposition which will be seen by
implementing new product of the company. As it has been identified that there is no
energy drink which is made up of flower in the market.
 Price: It is another important aspect which will be highlighted as a unique selling
proportion of the company. As it has been identified that company will be using the
frugal innovation in the organization to reduce the amount of the cost of the company
product in the market. On the basis of the frugal innovation company will able to reduce
the cost of the company product and on the basis of same will offer the product at low
price.
Marketing plan of Innovative product
 Product: Company will offering the good quality of the product in the market with the
help of new technology in the organization. Product will include the touch of organic
material as current situation demand the same in the market.
 Price: To sell the product of the company in the market, company will be using the
penetration pricing method in the market. By using the penetration pricing method in the
market organization will be keeping the price at low in the initial stage. After seeing the
result they will be planning future activity.

 Place: Company will be offering the product of the company in local market with the help
of both direct as well as indirect distribution channel. After seeing the result in the market
future activity will be decided by the organization.
 Promotion: There are two type of promotional tool which will be used by the organization
to promote the product of the company in the market. First promotional tool will be
Social media platform and another one will be newspaper advertisement.
CONCLUSION
After going through the report it has been concluded that company is doing good in the
market but there is good sort of competition in the market. After that it has been concluded that
bringing good innovative product in the market will be good choice for the organization and for
the same reason it was decided that bringing organic product in the market will be the best
choice.

REFERENCES
Books and journals
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Chen, J., Yin, X. and Mei, L., 2018. Holistic innovation: An emerging innovation
paradigm. International Journal of Innovation Studies. 2(1). pp.1-13.
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type, and firm performance. Journal of Innovation & Knowledge. 3(1). pp.44-55.
Bogers, M., Chesbrough, H. and Moedas, C., 2018. Open innovation: research, practices, and
policies. California management review. 60(2). pp.5-16.
Schot, J. and Steinmueller, W. E., 2018. Three frames for innovation policy: R&D, systems of
innovation and transformative change. Research Policy. 47(9). pp.1554-1567.
Arundel, A., Bloch, C. and Ferguson, B., 2019. Advancing innovation in the public sector:
Aligning innovation measurement with policy goals. Research Policy. 48(3). pp.789-
798.
Khalili, A., 2016. Linking transformational leadership, creativity, innovation, and innovation-
supportive climate. Management Decision.
Howaldt, J., Domanski, D. and Kaletka, C., 2016. Social Innovation: towards a new innovation
paradigm. RAM. Revista de Administração Mackenzie. 17(6). pp.20-44.
Išoraitė, M., 2016. Marketing mix theoretical aspects. International journal of research
granthaalayah. 4(6). pp.25-37.
Wu, Y.L. and Li, E.Y., 2018. Marketing mix, customer value, and customer loyalty in social
commerce. Internet Research.