The new energy drink, Raptor is branded into three blends, Extra, Mild and Ultra. The company
expects to sell more 200,000 units every month across the US but largely in Georgia. Raptor
Extra is expected to sell more than 50% of the segments sales while the other two would share
the remaining half. The total net income expected at the end of the first month in May is
expected to amount to $138,218 and a GP of $227125. The net cash flows at the end of May are
expected to amount to $1,252,027 and ending cash balance of $1,352,027. The increased cash
flows are due to an existing loan of $1,000,000 that was supposed to cushion the company
against any unforeseen cash flow problems and also to finance all the operations of the company
besides serving as a contingency reserve fund. Compile a report on the marketing strategy and market competition.
Introduction
The new energy drink, Raptor is branded into three blends, Extra, Mild and Ultra. The company
expects to sell more 200,000 units every month across the US but largely in Georgia. Raptor
Extra is expected to sell more than 50% of the segments sales while the other two would share
the remaining half. The total net income expected at the end of the first month in May is
expected to amount to $138,218 and a GP of $227125. The net cash flows at the end of May are
expected to amount to $1,252,027 and ending cash balance of $1,352,027. The increased cash
flows are due to an existing loan of $1,000,000 that was supposed to cushion the company
against any unforeseen cash flow problems and also to finance all the operations of the company
besides serving as a contingency reserve fund.
Marketing & Competition 3
Performance
The company’s liquidity status is expected to be above average given that its current ratio is 1.59
for the first quarter while the final quarter is 4.23 averaging 2.79 for all the quarters. The quick
ratio also reflects a very positive trend for the company. The Return on Assets (ROA) averages
31% that is Enhanced Energy Drinks makes $0.31 for every dollar invested in the company’s
assets while the debt is almost 1.5 times the equity. The company is highly geared but its solvent
as can be concluded from the financial statement.
- Company’s Target Market
My target market being Atlanta City, Georgia has a general male population of 217,939 and a
female population of 222,703 which is 49.5% and 50.5% of the population respectively. The
Marketing & Competition 4
target population will be from ages 20-34 years of age which makes the majority of the entire
population at 30.2% of the entire population. The African Americans make the bulk of the ethnic
composition at 52.95%. This is an ideal market for the energy drink given that the household
income is $49,342 and the per capita income is $ 25, 427, also, a good percentage of the
population is above the poverty line at 81.7%. The younger generation is likely to consume
energy drinks more; hence this will propel the company’s sales considerably close to the market
leaders.
In Georgia, soft drinks form a huge market segment even though energy drinks are not as
exploited as soft drinks; the total sales for energy drinks in billion dollars is 8.1 while its
projected that the market is bound to increase to sales of 13.5 billion dollars. This means there is
still potential for a new entrant in the market with the biggest player being the Red Bull
Company (Heyne et al 2014).
- Competition
Given that Red Bull and Monster dominate the energy drink market with a total market share of
82%, a new entrant must target a niche market like the 20-34 years age bracket chosen. This is
owing to the fact that this segment mostly contains college going students and youngsters who
would not mind spending their incomes on energy drinks. The company will divide the market
into segments and have different distribution channels for different market segments.
Marketing & Competition 5
Following the recent economic crisis in the U.S, consumers are becoming price sensitive, given
that Raptor energy drink will be new in the market, prices have to be slightly lower than that
charged by the market leaders (such as Red Bull and Monster) while at the same time factoring
in the costs of production. Technology has to play a key role in marketing, production and
distribution; for instance the company intends to use internet and social media for marketing and
distribution systems (Cohen, 2005).
Differentiation will be based on the premise that it’s a healthy energy drink that acts as a
lifestyle product; this will ensure the consumers relate with the products especially due to
psychological and social marketing to the target audience.
- Company’s message and marketing vehicles
The company’s message is crucial since it determines what remains in the consumers mind in
relation to competitors; reinforces the brand name while targeting specific customers. The
company’s positioning statement will be “Enhanced Energy drinks, boosts energy everywhere,
every time’. As mentioned earlier in the paper, social media is huge today and cannot be ignored
if a company is choosing a marketing vehicle to increase its sales. At the click of a button, a
consumer will access our website and it’s even possible to track profitability, wholesalers could
make orders online and distribution done in a short time (Clark, 2000). Using this marketing
vehicle in isolation will not be viable, hence the need to supplement with trade shows, radio and
television advertisements, vendor events, direct mails among others.
Social media marketing will involve face book marketing campaigns through updates,
optimizing you tube presence is part of this package and will involve creating you tube channel
to advertise the drink. Use of twitter ads platforms with tailor made messages for specific
Marketing & Competition 6
audiences (Kurtz, 2010). The Red Bull Company has successfully used social media in almost all
projects they undertake, they have millions of followers coupled with well integrated social
channels, online events. They also integrate this with other marketing vehicles such as film, radio
and television advertising.
At the end of the first year the Net Worth of the business is supposed to have increased to
$1,534,148 while in the second, third, fourth and fifth years, the Net worth of the business is
supposed to increase to $1,912,095, $2,336,618, 2,814,755 and $6,462,611 respectively. The
company expects to breakeven after selling energy drinks worth $1,139,952 annually.
Marketing & Competition 7
References
Clark, S. (2000). “Do the Two-Step with Advertising Budget.” Memphis Business Journal.
Cohen A. W. (2005) The Marketing Plan. John Wiley & Sons, Inc.
Heyne, P.,Boettke, P.J. Prychitko, D,L. (2014). The Economic Way of Thinking (13th ed.).
Pearson. pp. 102–106.
Kurtz, D. (2010). Contemporary Marketing Mason, OH: South-Western Cengage Learning.
