Executive Summary
Leaping Lizard is a new company in the beverage industry that has introduced the new Leaping Lizard drink. The company has a strong mission, which is to offer clients with every day solution to their endeavors and at the same time provide them with energy. The energy drink motivates individuals who work early in the morning and late at night (Hardy, 2010). The company’s choice of introducing energy drinks had led to competition from other companies. These companies include Red Bull and Monster and other similar energy drinks producing companies in the market (Paul, 1997).
Current Marketing Situation
Leaping Lizard is a purely is purely non-alcoholic though it provides a high amount of energy to the users. The company has just launched the drink and it is yet for introduction in the market. It is obvious that the company has to work hard for a successful capture of the market. There is already a stiff competition in the market of natural drinks, the leading competitor being Red bull. Red Bull controls a large market share of the soft drink industry. The company wishes to reach as many customers as possible. Therefore, the main challenge is to find effective ways through which Leaping Lizard can get popular to the market.
Product Description
The product we seek to introduce in the market is one that provides the much needed energy for working individuals as it helps those who are under the pressures brought about by early morning and late night working hours. In this relation therefore, it has major competition from other existent products such as Red Bull, Monster, coffee and other energy drinks in the market. Leaping Lizard is a new all natural product in the market. Unlike its competition, it has no addictive qualities and is therefore highly recommended for anyone. Additionally, its use is not long term and only works for the duration in which it is consumed. Besides being very effective in providing energy to the consumer, it does not generate side effects like anxious estate, impatience or nervousness. It is highly recommended for students under the stressful conditions of the college life, and other working individuals who have difficulty coping with the work laden environment.
Income summary
In review of the leaping lizard, audited and unaudited income statements and expenses have various differences. In the financial year 2006 and 2007 for example, income statements show an inconsistency in consumption of the energy drink. Provision of doubtful accounts turns out to be the biggest difference. In 2007 figures on the unaudited statements read $13,600,000.00 while audited reports in the same year read $14, 700,000.00 both figures display a one million dollar difference and it is put in red (Hooley, 2008).
Organizational Objectives
The main challenge that Leaping Lizard Company faces is how to introduce Leaping Lizard drink to the market. The company is now struggling to establish marketing methods that will see its product compete well in the market. Since this product is intended mostly for the middle class workers, the company wants to reach as many low income earners as possible. For that reason, there is a dire need to include very many work places in the marketing strategy. This calls for a well defined organizational objective plan.
Leaping Lizard’s primary strategy for its soft drink is to aim at the general family, with specific emphasis on athletes, young, married, high income earners. Both lower price and higher price will be added to help expand the product line. The company will raise its average price line with 2%. To enhance product awareness in the industry, the company will employ integrated marketing communications. In particular, intensive advertising campaigns and sales promotion will be used to influence potential customers’ perception. The company will use viral marketing strategy. It will employ positioning strategy by product use or application.
Marketing Objectives
In order for Leaping Lizard to achieve its financial objectives, it has formulated SMART marketing objectives. It aims to occupy 10% of the market share by selling 4 million units during the first year in business. Similarly, it aims to achieve $25,000,000 in revenue from sales in its first fiscal year. Leaping Lizard aims to increase the level of awareness of its energy drink brand from 5% to 20% over the planning period. The company also aims to expand its distribution outlets by 20% annually.
Is the company’s organizational and promotional skill competent?
The success of the company’s objective will depend on external factors such as the economy, competition, and the success of the marketing strategies. A healthy business environment in coordination with sound internal factors such as good financial management, efficient planning and good work ethics will ensure that the company pilots into the correct path.
Strengths
What makes the item for consumption more recommendable to many is that it contains no additive and it is not addictive. That means it has zero percent of caffeine. Another advantage is that it is not continuous and only works at the time of use (Paul, 1997). Leaping Lizard energy drink is a natural product and has no side effects despite its rapid action in boosting energy. Identification of the market where the company wants the product get an upper hand is an ingredient of market segmentation. Presently, many energy drinks are highly addictive and contain components that are addictive to the user. To those who fear chemicals and value natural products, leaping lizard is their ultimate choice (Hardy, 2010).
Weaknesses
The Leaping Lizard’s weakness is that it is a late player in a market full of other players such as Redbull, Monster and many other drinks. The company must build a customer base and transfer previous Red bull and Monster users to the new drink. This will be a strenuous exercise that requires precession and consistency (Hardy, 2010).
Availability of Market
The most important aspect of marketing is ensuring that there is the availability of the product to all the clients who want it. This means that the consumer can easily find Leaping Lizard whenever they want to consume it. In our line of production, we are concentrating on low levels and mid level income earners. The students who require this commodity need to find the label at their designated shopping location; school canteens. Those who go to work and need this product need to find the product in convenient store’s counters on their way home, in vending machines across the streets and so on. Place marketing mix should market the product by always being available to the relevant consumers. The main tool for promoting Leaping Lizard energy drink is creation of awareness of a new product or one that has been in existence but has in the lost marketability in the past. In business, promotion of products regardless of age in the market is very important. With this, there are various reasons that come with it including the creation of awareness in new products, increase in demand, positioning, competition outperformance and establishment of brand equity (Hardy, 2010).
We realize that our customers need is an energy drink that is not addictive, cheap, and has good taste. This is the reason we are looking for segment of the population that will be adventurous to try new things. We focus on college students and young adults as the section of the society that we target. By giving lower rates, we make a calculative effort to prey on our competitors customers by offering an opportunity for a new product. We would like to make our customers in charge of the decision making by making Leaping Lizard a customer friendly and environmentally friendly drink.
Competitors
Leading Lizards can compete within the market share of non alcoholic drinks, soft drinks, and energy drinks. Some of the Leading Lizards competitors are products of larger brands. Some of the most known competitors of Leading Lizards include Red Bull and Monster Natural. Monster natural comes in an 8 ounces size with 100 calories. Monsters strengths include its relatively bigger size (twice the size of Redbull) for the same price as Red Bull. In addition, Monster is known for its activity of sponsoring athletes. For example, Monster has sponsored BMX Rider Mike Spinner and skater Dorien Walker. Like Leaping Lizard, Monster Energy targets youthful and energetic adults. In 2003, Monster launched the “Absolutely Zero” zero calorie drink and also introduced Monster Java that infused coffee. This brand flopped after a short instant hit. However, Monster has the limitations of having additives such as gruana that have been evaluated by FDA.
Red Bull
Red Bull is a slightly carbonated energy drink that improves mental and physical activity. It is a combination of minerals found in the body with caffeine and other minerals. The company holds 55 percent of the market share in the energy drink industry. Red Bull targets middle age people between ages 35-65 years. For advertisement, the company used different media channels to build a highly loyal customer base. Red Bull aims to expand its customer base by venturing into other social groups in the society.
Strength
Leaping Lizard is a new product having no addictive qualities as it has all natural products. Marketing manager will have an easy task in introducing the product and concentrate less on the price. The company can afford to set low prices for the product as it does not require a stiff price since the products used are readily available and come at a low cost. The product can be set low enough as to compete favorably with predecessors such as Monster and Red Bull.
Weaknesses
The company faces a high threat form already known products. The company is a new one and therefore marketing for this product will face various hurdles as the company is not renowned as Red Bull and monster
Opportunity
With the current global financial crisis, there has been extensive advocacy of extending the working hours in orders to minimize the rate of recession. People have had to put up with competition from other sectors as those who emerge victors during these hard times will be the king of the future economic times. In this regard, people have had to engage extensively and extend work harder in order to emerge victors in the future. Having energy drinks in the market better boosts the morale in the workplace and therefore Leaping Lizard faces as great opportunity, timely as these products have a high demand today.
Product Strategy
Leaping Lizard has three aims that it seeks to realize with its strategy. This includes:
Increase interest in Leaping Lizard among ages 18-35
Increase revenue growth for the company
Position Leaping Lizard as an alternative to Monster and Red Bull energy drinks
Promotion
Media is the most efficient way of marketing a new product. For that reason, Leaping Lizard Company will direct most of its promotional activities to the media advertisements. These will include radios, televisions, magazines and newspapers. For instance, advertising through radios and magazines is not only cheap but also effective in passing out the information to a target market. The company will not rely so much on newspapers since they are very expensive. Instead, it will complement the radios and magazines with cable television since this mode is cheap and passes information to many people at the same time. The adverts on these media will contain the necessary details of the new brand including its cost and benefits (Hardy, 2010, p. 8).
Secondly, the company will create awareness of the product by word-of-mouth and issuance of free samples. The company will hire young energetic individuals who will then be trained and informed about the new product. These individuals will be sent to various work places and institutions of higher learning to pass the information to the potential customers in these places. The marketers will also be given free samples to distribute to these targeted prospects. Word-of-mouth and free samples are as effective as media in creating markets for new products such as the Leaping Lizard.
Lastly, the company will also use Internet pop-up ads and the company’s website to pass information to prospects. This mode will mostly target the e-prospects. Pop-ups are effective in promoting a new product since they come automatically whenever someone accesses the company’s website. The company will design the pop-ups in such a way that they contain information regarding the company and the product. This will be important in informing the viewers about the location of the company, importance of Leaping Lizard and its price. Internet ads are cost-effective and reach a large group of prospects at the same time (Stephenson & Thurman, 2007, p. 330).
Sales Promotion
Leaping Lizard Company will direct most of its promotional activities to the media and trade shows at an estimated cost of $20000. These will include radios on frequency 103.5 Liz fm, televisions, magazines and newspapers. The advertisement will roughly cost $8000 slightly lower than sales contest which ideally awards trips and vacations to dealers with an estimate of $13000. The company will not rely so much on newspapers since they are expensive. Instead, it will complement the radios on frequency 103.5 Liz fm and magazines with cable television since this mode is cheap and passes information to many people at the same time. The adverts on these media will contain the necessary details of the new brand including its cost and benefits.
The company may also go the Monster way by endorsing sports personalities and having them advertise Leaping Lizard. If the competition is stiff within the United States, the company can decide to go abroad and expand its operations in emerging markets in Latin America, Africa or Asia.
Target Market Strategy
a) Price
Many of the works who are under the pressure of working late and early mornings are subordinates. They are expected to meet deadlines in submitting reports and sometimes setting up the work place before their seniors show up at work. On the other hand, college students sometimes face the challenge of having to wake up early and also do late nights when their academic years reach the critical stages, where they have to submit projects and hefty assignments to their supervisors. They are basically low earners and therefore though in need of a late night friend, they require it at low prices. The components of the Leaping Lizard are not costly and therefore, the price we set on this product could be low as to accommodate the financial needs of the consumers in the market segment we choose to engage. Others such as Red Bull go at a cost of $ 2.50. For this beverage, we would set a high profit margin of about $0.50 if we set prices at $ 2. It would be a good market entry strategy.
b) Promotion Stategy
An important aspect of the marketing mix is promotion. Through promotion one should make the product known in the market, putting in mind that the market is filled with competitors that could be detrimental to the entry of the product we are introducing. Some aspects that we could employ in the promotion of this product would be free samples, certain impositions on purchase such as a “buy two get one free” promotion initiative, ruffles and others. These are a powerful tool in the whole marketing mix aspect of marketing, especially when it concerns the entry of a new product in the market such as the Leaping Lizard (Zaleznik, 1989).
c) Product
A product mix is one that most personally affects the personality of the consumer. In this regard, we would look at a product mix that suits the diversity in the preference of tastes. In the case of introducing a beverage in the market, one would most likely involve in the production of different flavors to suit the different tastes of clients. A cold beverage goes well with the most preferred tastes including mint, chocolate, vanilla and strawberry flavors. This would mean therefore, that most if not all the consumers find the taste they most prefer in the consumption of the product. Leaping Lizard will come with all these core flavors in order to enjoy a vast market for the new beverage.
d) Place
An important part of marketing is to ensure the availability of a product to the clients. This means that the consumer can easily find Leaping Lizard whenever they want to consume it. In our line of production, we are concentrating on low levels and mid level income earners. The students who require this commodity need to find the label at their designated shopping location; school canteens. Those who go to work and need this product need to find the product in convenient store’s counters on their way home, in vending machines across the streets and so on. Place marketing mix should market the product by always being available to the relevant consumers.
Projected profit and loss statement
Action programs and sections give room for the leaping lizard manager to prepare an underneath budget. On the side of revenue, there is a clear display of the forecasted sales volume in units and realized value put on average terms. On the side of expenses, there is a clear indication of the production cost and values in dollars. Leaping Lizard aims to have a steady growth in its revenue. In particular, the company has a financial objective of earning an annual rate of return of 20% on its investment over the next five years in business. Year after year, the company aims to grow its profits by 25%. Specifically, it aims to produce $2,000,000 in profits during the first year in operation. Leaping Lizard also strives to produce a cash flow of $3,000,000 during the first year in business. In successive years, this should increase by 25% (Hooley, 2008). See attached spreadsheet.
Implementation Evaluation Control
An important objective of any business is continuity and profitability (Kotler, & Keller, 2006). The company seeks to enhance profitability through maximizing sale units through price, promotion and place marketing mix and enhancing continuity through product marketing mix. Outlining a precise marketing plan will ensure that the product entry is fully effective. However, continuity is enhanced through active participation of constant evaluation of the market in response to the product as well taking appropriate action in response to the feedback from the consumers (Paul, 1997).
Implementation Plan
Objectives:
Start the process in the month of June
Promote Leaping Lizard by intense advertising in the media
Roll out sales promotion in the next six months to the tune of $200,000
Realize sales improvement in the next six moths
Measure the success of the new plan by comparing sales output before and after the execution of the new plan
Calculate profit and loss.
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