EDGE Organic Energy Drink is the main product of a start-up company. Due to the unique features of the beverage, the major consumer groups will be teens and millennials, as they are open to discovering innovative offers (Poindexter, 2012). The target audience is represented by 12-30-years-olds (middle to high income) living in Houston from different ethnicities (Hispanics (44%) and Non-Hispanics (46%)) and level of education (school, college, university, employed) (The City of Houston, 2015). They are both males (50%) and females (50%), who care about their health and like to try new products. In my geographical area, they account for 17.9% (5-17), 10.4% (18-24), 18.1% (25 to 34) in Houston, but within five miles, it would be 20% of total population of the city (approximately 400,000 people due to differences in density) (U.S. Census Bureau, 2015). Thus, there are ten local farms, as the company plans to create collaborations with these businesses.
The major competitors are global players Coca-Cola, PepsiCo, Dr. Pepper, Snapple, and Monster Beverage Corporation that have an array of sub-brands such as Minute Maid, Aquafina, Powerade, Gatorade, and Lipton. The rivalry is also represented by energy drinks and juice producers like GURU, Scheckter, and Red Bull at both national and international levels. Additionally, it is essential to consider small local drink producers and restaurants that offer smoothies and other beverages since they create direct and indirect competition.
When discovering the basis on which EDGE competes is its eco-friendliness, delicious taste, a boost of energy, and natural ingredients. When comparing it to the rest of the rivalry, the company is a new entrant that will occupy the niche of organic products. Its unique value proposition pertaining to offering high-quality organic energy beverage can help it regain its market share and 10% sales growth by the end of the first year. Apart from its well-defined competitive advantage, it is necessary to consider potential future competitors such as local companies that produce similar drinks for a lower price and online retailers. The entry barriers for soft drinks industry are high due to the need for substantial investment and strict regulations, but it does not prevent new companies from entering, and Colt Corporation is a bright example of this case (Hill, Jones, & Schilling, 2014). Consequently, EDGE has to monitor economic changes and develop its brand image to mitigate these risks.
Strategy and Differentiation
The previous section showed that it would be irrational to compete against mature competitors such as PepsiCo and Coca-Cola. Consequently, it would be reasonable to focus on specific marketing segment or rely on the strategy of niche marketing. In the context of EDGE, in collaboration with local farms, it can focus on organics food or organic energy drinks markets within the defined geographical area. This strategy would be the most rational one since it will help deliver exceptional value to the customers while creating an image of a high-quality and eco-friendly product (Warren, 2016). Overall, employing this strategy is logical since it will not only help reach the identified financial goals but also regain recognition in the market segment.
When referring to competition, PepsiCo and Coca-Cola share 70% of the market while having revenues growth. Their brand associated life styles, extensive years of operation, and a variety of beverages are their competitive advantages. Thus, their market shares tend to shrink due to high market saturation (Hill et al., 2014). Other companies such as Dr. Pepper, Snapple, and Monster Beverage Corporation occupy the rest 25% while 5% is represented by local producers in manufacturers. These aspects underline that this sector experiences growth, and it implies that EDGE has to differentiate itself from the competitors by stressing attention on its organic features, energy boost, and eco-friendliness.
Message and Marketing Tactics
The message reflects the mission of the company in its content, and its major focus will be marketing EDGE Organic Energy Drink as a non-alcoholic high-quality organic energy beverage with a variety of flavors. Consequently, when applying 5Fs strategy, the message will be “With EDGE Organic Energy Drink you will get a boost of energy (function) for a reasonable price (finances) while being given an option to keep up with you healthy dieting (freedom) and experience joy and happiness (feelings)! Stay with us, and try new flavors for free (future)!”.
As for advertising, the company will employ a unique blend of marketing vehicles. It will strongly rely on social media and create its brand image with the help of its website, YouTube (an entertaining video once a week), Instagram (image every two days advertising products, events, and partners), Facebook (three posts every week and replying to consumer comments), and SEO. It will be rational to use these techniques since they are cost-effective and can reach target audience including millennials and teens due to an extended popularity of social networks among these demographic groups (Poindexter, 2012). Prioritizing social media is rational since it assists in providing rapid feedback from customers while enhancing Business-to-Customer (B2C) relations (Baruah, 2012). The major industrial players such as PepsiCo and Coca-Cola use these strategies successfully.
At the same time, the company has to advertise itself to the local farms to establish sufficient Business-to-Business (B2B) relations. These partnerships will be created via direct communication at trade fairs such as Houston Job Fair, Houston Gordon Food Service Show, and National Angus Convention and Trade Show 2017 and by offering samplings (10times, 2017; TSNN, 2017). Samplings can be used in both B2B and B2C segments. Overall, the company will utilize a unique blend of marketing vehicles while relying on social media, company’s website, indirect advertisement via farmers (posters), samplings, billboards (at the beginning), displays (at the beginning) and word-of-mouth.
10times. (2017). Trade shows in Houston. Web.
Abrams, R. (2014). The successful business plan. London, UK: The Planning Shop.
Baruah, T. (2012). Effectiveness of social media as a tool of communication and its potential for technology enabled connections: A micro-level study. International Journal of Scientific and Research Publications, 2(5), 1-10.
Hill, C., Jones, G., & Schilling, M. (2014). Strategic management: Theory and cases: An integrated approach. Boston, MA: Cengage Learning.
Poindexter, P. (2012). Millennials, news, and social media: Is news engagement a thing of the past? New York, NY: Peter Lang Publishing Group.
The City of Houston. (2015). 2015 Houston demographic profile. Web.
TSNN. (2017). National Angus Convention and trade show 2017. Web.
U.S. Census Bureau. (2015). 2015 population pyramid. Web.
Warren, T. (2016). Bull’s bye! The ultimate how-to marketing and sales guide to CPA. Hoboken, NJ: John Wiley & Sons.