Pace Executive MBA - PepsiCo Hydration Strategy
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Jabb Consulting's team developed a market report for PepsiCo highlighting opportunities in the hydration drinks sector, specifically targeting enhanced and flavored bottled water. They conducted research, focus groups, and concept testing, leading to the recommendation of launching a new product, Aquafina+, which received strong consumer interest and feedback. The marketing plan emphasizes a unique bottle design, competitive pricing, and digital advertising strategies to attract health-conscious consumers aged 24 to 44.
Pace Executive MBA - PepsiCo Hydration Strategy
- 1. JABB Consulting – Team 3: Joanne Raffa, Astroon Robinson, Byron Rocha, and Bill Burkey
- 2. Executive Summary • We were tasked with providing a market report to deliver new opportunities and new product generated • We researched the hydration drinks industry • We conducted focus group interviews, brainstorming sessions and performed concept statement testing • Ultimately, this lead to the creation of our new product which we believe will provide increased market share for PepsiCo in the enhanced / flavor bottled water category
- 4. Exploratory Research - Sample Composition • 60/40 Male/Female • Ages: 25-34, 30%, 34 – 44, 44%, other 26% • Race: Caucasian 48%, African American 22%, Hispanic 21% • Married 54%, single 24%, other 22% • 78% work full time, 8% part time • Focus group: 68 people • Interviews: 92 people • Respondents from NY, TX, FL
- 5. Target Demographic • Men & Women ages 24 - 44 • Active and health conscious • Balancing life and a healthy lifestyle with the challenges of living an active lifestyle • Seeking additional nutritional benefits • Prefer brands like Vitamin Water, Activate, Karma
- 6. Focus Groups: What they thought: • “I like to stay healthy, so I would select water” • “I would buy and try the new hydration drinks if they weren’t so expensive” • “The Aquafina bottle is boring” • “I make my own flavored water” • “…too many of them have fake sugar taste”
- 7. Interview and Focus Group Findings • Aquafina does not have brand presence in the enhanced water category • All bottles are the same in base water category • Local water and origin count • Refillable stations • Club stores extremely important • Package is not attractive • People want to see new packaging ideas • Eco friendly tech for bottles is key • Labels are misleading • Enhanced water is not overrated • Price matters • Aquafina sponsorships lack brand awareness
- 8. New Ideas Generated • BPA free bottle • Bottle with gripping design in the middle • Metal twist cap • Inspirational quotes (label /cap) • Cool designs and colors • Package with specific sports themes • Flatter bottle to fit in one’s pocket • Glass reusable bottle • Bottle with a straw • Branded refillable water stations • Bottle filter • Glow in the dark bottle • Bottle that contains prizes via a code • Every bottle earns credits towards iTunes or Google Play (customer loyalty program) • Accessorize the bottle to match personal style
- 10. Concept Testing Respondents and Marital Status 139 Respondents 53% Married, 27% Single, Divorced 14%, Engaged 4%
- 11. Concept Testing: Age and Ethnicity The majority of the respondents, 72% fell within the age range of 25 to 44 ½ of the respondents were Caucasian. The other ½ were of African descent and Hispanic
- 12. Concept Testing: What activities & How often do you exercise? Gym, home and work were where most people drink hydration drinks Half exercise 2 – 3 times a week
- 13. Introducing Sparkling Mineral Water!
- 14. Concept Statement: Sparkling Mineral Water
- 15. SparQ Concept Statement Rankings • What do you think of the SparQ Sparkling Water concept statement? • 75% of the respondents thought the SparQ concept statement was Good to Very Good
- 16. SparQ Name and Label Rankings 71% of the respondents thought the SparQ labels were Good to Very Good 71% of the respondents thought the SparQ name was Good to Very Good
- 17. Name Testing SparQ was the name with the highest acceptance within the sample group
- 18. SparQ Cans or bottles and the rankings of the 8.75 oz. skinny can • 65% thought the 8.75 oz. can was very good to good • 53% felt that SparQ should be sold in skinny cans
- 19. SparQ Buying Rankings • How likely would you be to purchase SparQ sparkling water if it were sold at a price you felt was reasonable? • Only 44% would Probably or Definitely buy SparQ at a reasonable price.
- 20. SparQ Price Point • How much would you be willing to pay for a 8.45 oz. can of SparQ Sparkling Water • 63% wanted to pay less than $2.00
- 21. How many cans would you drink per week? • How many skinny cans of SparQ Sparkling Water would you drink per week? • 56% would drink 1-3 cans a week
- 23. Concept Statement: Enhanced Water
- 24. Aquafina+ Concept Testing Results What do you think of the new Aquafina+ product and concept statement? More than 80% of the respondents said that they thought the new Aquafina+ product and concept statement was Very Good to Good
- 25. How about the name ? What do you think of the new Aquafina+ name? Almost 80% of the respondents said that they thought the new Aquafina+ name was Very Good to Good
- 26. Name Testing Aquafina+ was the name with the highest acceptance within the sample group
- 27. Aquafina+ Purchase and Bottle Results Almost 90% of the respondents said that Aquafina+ should be sold in a plastic bottle 69% of the respondents would definitely or probably purchase Aquafina+ if it were sold at a price they felt was reasonable
- 28. 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% Amount Willing to Pay for Aquafina+ 58% Price Point 35% $2.00 $2.25 $2.00 $2.25 $2.50 $2.75 $3.00 • 58% of survey participants are willing to purchase Aquafina+ if the price is retailed at $2.00 • 35% of survey participants intended to purchase Aquafina+ if the price is retailed at $2.25 • The price point that would have the highest probability of attracting new Aquafina+ consumers is between $2.00 & $2.25
- 29. People reached through Advertising and Promotions • 59% of Millennials (14.2 mill) are able to be reached through advertising and promotions • 41% of Gen X’ers (9.9 Mill) are estimated to be reached through advertising and promotions
- 30. Average bottle of purchased per week? • 64% of survey participants reported that they would purchase at least 2 bottles of water a week on average • 17% of participants stated they would most likely purchase 5.5 bottles of Aquafina+ per week as well 64% % consumed per week 17% 5% 1% 70% 60% 50% 40% 30% 20% 10% 0% 2 5.5 9 10
- 31. Product Selected & Competitive Analysis
- 32. Target Market • Aquafina+ is the ideal beverage for adult individuals that live active, healthy and challenging lifestyles • Aquafina+ is targeted primarily to adults aged 24 to 44
- 33. Competive Analysis Factor AQUAFINA+ ACTIVATE KARMA VITAMIN WATER Producer PepsiCo Activate Drinks Karma Culture LLC. Coca Cola Established 2014 2012 2011 1996 Company Location Purchase NY Los Angeles, CA Pittsford, NY Atlanta, GA # of Employees 168,000 11 to 50 7 71,000 Company Size (Water Division) $878 million $5 million $5 million $880 million Number of Products 5 varieties 10 varieties 5 varieties 6 varieties Shape of Bottle Easy grip hole in the middle Standard Standard Standard Powder in Cap & Release Technology Yes Yes Yes No Sweetener ZSweet Stevia Stevia Stevia
- 34. Competive Analysis (cont.) Factor AQUAFINA+ ACTIVATE KARMA VITAMIN WATER Product Prices (16.9 oz.) $2.25 $3.75 $2.82 $2.50 Case Price (12 Pack) $27.00 $44.45 $33.85 $33.00 – $42.50 Product Quality Excellent Good Good Good Stores/Distributors/Resellers Grocery Stores, Deli, Retail Stores, Convenience Stores, Membership and Health Clubs and Online Grocery Stores, Deli, Retail Stores, Convenience Stores, and Online Grocery Stores, Deli, Retail Stores, Convenience Stores, Health Clubs and Online Grocery Stores, Deli, Retail Stores, Convenience Stores, Health Clubs and Online Brand Development/ Event/Promotion Radio, Digital Marketing, Social Media, Web, Sports Events (Tough Mudder, Spartan Race, etc.), Online and TV Commercials Online, YouTube, Digital Marketing, Social Media Online, Universities, Professionals, Digital Marketing, Events, Conferences, Concerts, Radio Online, YouTube, Digital Marketing, Social Media
- 35. Unique Bottle • The new Aquafina+ comes in a unique and functional bottle with a hole in the middle, providing the consumer with an easy grip • Aquafina + is available in 16.9 ounce plastic 100% recyclable bottles • It can also be sold in 6 packs, 24 packs as well as in a variety pack with 6 and 24 units
- 36. ZSweet Sweetener Benefits • 100% Organic • Aid in weight control – Zero calories per serving and no carbohydrate fillers • Aid in good oral health – Contains non-cariogenic properties and it helps fight tooth decay • High digestive tolerance – Absorbed in the small intestine quickly • Healthy for people with diabetes – Does not increase blood glucose levels
- 37. Electrolytes (Lemon/Lime) • Calcium to help maintain electrolyte and mineral balance • Potassium to help maintain electrolyte and fluid balance • Sodium to help regulate the total amount of water in the body
- 38. Energy (Watermelon) • Green tea extract to provide a natural source of caffeine that supports health and wellness • Potassium to help regulate the heartbeat, function of muscles and maintain electrolyte and fluid balance • Phosphorus to help increase endurance • L-Tyrosine to help stay alert and focused and to also reduce fatigue and anxiety
- 39. Protein (Strawberry/Banana) • Whey Protein to reduce the risks of heart disease, cancer and diabetes and to stimulate protein synthesis to help speed up recovery from exercise and boost muscle volume • Potassium to help regulate the heartbeat, function of muscles and maintain electrolyte and fluid balance
- 40. Weight Control (Berry) • Vitamin C to help turn fat into fuel • Tangerine to increase your sensitivity to insulin, which burns sugars • Cucumber, and grapefruit to help to make you feel full
- 41. Vitamins (Mango) • Vitamin A for growth and development and to maintain the immune system and good vision • Vitamin B3 to help increase levels of HDL in the blood • Vitamin B5 to help synthesize and metabolize proteins, carbohydrates and fats • Vitamin B12 to help normalize the brain and nervous system function
- 42. Aquafina Plus+ Vitamins - PepsiCo Canada • In 2009 PepsiCo Canada introduced Aquafina Plus+ in Canada • Currently only sold in Canada • We significantly improved the product as follows – Improved shape of the bottle – Replaced sweetener with ZSweet – Added a powder twist and release technology – Vastly perfected overall look and feel of product • PepsiCo can leverage the trademark Aquafina+ which PepsiCo already owns
- 43. Marketing Plan
- 44. Media Plan Overview • Radio Advertisement • Out of home • Digital Advertising • Sponsorships • Influencers campaign
- 45. Radio & Magazine : Precision and targeting platform Digital Radio: Print: Precision targeting buy via internet and satellite radio 8-16 weeks per year Heavy advertising weeks: (1 ,2, 17, 18, 26, 27, 48, 49) Soft advertising weeks: (20, 21, 23, 24, 31, 34) Influencers radio ads Specific buys in magazines that target our demographic 6 publications / 2 feature formats – product feature & Influencer articles 2 month buy during introduction, then on & off
- 46. Out Of Home • All major metro markets NY, LA, Chicago, DC, SF, Boston, MIA, PA • Times Square signs & buses • Billboards in key markets near colleges, sports arenas and stadiums • Bus shelters & metro stations
- 47. Digital • Rewards program with ITunes • Banner ads: YouTube, Hulu, Bodybuilding.com, yoga, sports related • Viral video creation: YouTube, Vimeo, Facebook. • Banner ad buy in heavy traffic websites for target market • Sponsored ads with Google to feature Aquafina+
- 48. Social Media • Interaction with consumers using top social platforms: Facebook, Twitter, Snapchat, and Instagram • Selective feed to target demographic • Develop a two way communication channel using social media • Engage consumers to talk about Aquafina+ during their daily lives • Spark #AquafinaPlus conversations and achieve 100,000 likes on Facebook • Aquafina+ Facebook Page
- 49. Influencers Program • Feature of short videos, radio stories and articles of Aquafina+ Influencers • Influencers can be celebrities or regular people. They can be unique or represent millions, highlighting individuals in everyday moments, showing the target market how Aquafina+ supports and promotes healthy hydration & nutrition • Digital radio, Social media, Digital TV & Print adds
- 50. Sponsorships • Sponsor events that demand training and preparation • Unconventional urban sport events • Make Aquafina+ part of the culture and build brand awareness • Leverage sponsorship using social media and out of home banners
- 51. Budget • The majority of the budget will be spend on digital and sponsorships – Precision marketing target, maximizing exposure and generating brand awareness – Improve ROI – Digital is important due to Gen X and Millennials – Sponsorships will build brand awareness with the rest of the target market Digital and TV ads 35% Sponsorships 20% Influencers 15% OOH 15% Radio 10% Other 5%
- 52. Sample Print Ad
- 53. Sample Print Ad
- 54. Additional Sample Banner Ads
- 55. Sales Forecast
- 56. Competitive Price Analysis FACTOR AQUAFINA+ ACTIVATE KARMA VITAMIN WATER Product Prices (16.9 oz.) $2.25 $3.75 $2.82 $2.50 Case Price (12 Pack) $27.00 $44.45 $33.85 $33.00 – $42.50 • Based on our competitive analysis, we believe Aquafina+ will be priced aggressively against its competitors in order to capture market share immediately after launch
- 57. Price Recommendation • We recommend that Aquafina+ be sold at the suggested retail price of $2.25, per 16.9 oz. bottle Rationale: – The Aquafina+ product is being targeted to a more demanding and health conscious consumer – The addition of flavor enhancers, vitamins and innovative packaging – Aquafina + should be priced above the price of the standard bottled water products – Aquafina+ is positioned as an alternative to caffeinated energy drinks
- 58. Projected Unit Sales of Aquafina+ •In the first full year, Aquafina+ is forecasted to have unit sales over 266 million •Second year sales are projected to increase to approximately 293 million units, with a steady growth projection of 10%, year-over-year 295,000,000 290,000,000 285,000,000 280,000,000 275,000,000 270,000,000 265,000,000 260,000,000 255,000,000 250,000,000 266 Million 293 Million 1 2
- 59. Projection of Sales Revenue • Projected profit in the first year is $26.6 million $58,548,435 Profit • Second year profits will increase to $58.5 million $26,612,925 $70,000,000.00 $60,000,000.00 $50,000,000.00 $40,000,000.00 $30,000,000.00 $20,000,000.00 $10,000,000.00 $- 1 2
- 60. Projected Expenses & Profit First Year Second Year Sales $ 266,129,250.00 $ 292,742,175.00 Operating Expenses $ 186,290,475.00 $ 204,919,522.50 Advertising $ 26,612,925.00 $ 29,274,217.50 R&D $ 26,612,925.00 Profit $ 26,612,925.00 $ 58,548,435.00 • 70 % of our sales revenue will go towards operating expenses • 10 % will go towards Advertising • 10 % for first year R&D
- 61. Conclusion
- 62. Recommendation • We absolutely recommend that PepsiCo commercializes • We recommend that Aquafina+ be sold at the suggested retail price of $2.25, per 16.9 oz. bottle • Total market should include both Gen X and Millennials • Benefits of ZSweet as a sweetener • A unique and functional bottle with a hole in the middle • Wide variety of flavored enhancers • Unique media and marketing campaign
Editor's Notes
- #3: Bottled water is the second largest commercial beverage category by volume in the US Our new product is a unique proposition with premium features that targets premium water consumers
- #13: 3d for gym one
- #24: I need a editable copy of this. It says powered. Needs to say POWDERED!
- #29: 93% intend to purchase between $2 and 2.25
- #38: Animate lemon lime on the bottom to fill in space. Picture bounce in??
- #46: What is specific buy?
- #59: Where do you get this data, need to explain!