MARKETING PLAN: AMP ENERGY DRINK

PREPARED FOR
CLUSTER FACULTY Jeff Anderson Arthur Marinelli John Schermerhorn Christy Thamburaj

PREPARED BY
TEAM 6 Trudi Fisher Sean Fitzpatrick Mike Ingledue Jessica Johnson Amy Kalnasy

May 7, 2004

EXECUTIVE SUMMARY
The purpose of this Executive Summary is to highlight key points of the marketing plan for AMP energy drink. The situational analysis and the market segmentation gave valuable information in developing the marketing mix. Situational Analysis Pepsi is the number two soft drink maker in the world and is continuously investing money into the research and development of new products. Since AMPs launch in early 2001, it has become a major contender in the energy drink market but has had trouble creating brand equity and establishing itself among its competitors. AMP is based on the original flavor of Mountain Dew. AMP has been enhanced with the following: Taurine Ginseng B complex vitamins Maltodextrin (a complex carbohydrate) Guarana MDX5 The B-vitamin found in AMP is the element that allows the drink to glow under a black light. Segmentation Analysis The names of energy drinks express many qualities that males find attractive; such as power, strength, masculinity, and sex. These traits are more appealing to males than females. The energy drink market today is becoming highly competitive. With so many energy drinks in the market they are all trying to find an identity and figure out what types of people they want to market their products to. Typically, energy drink consumers on college campuses are males according to a survey performed at Ohio University earlier this month. Furthermore, AMPs current market strategy towards extreme athletes is inconsistent with sales patterns found from talking to distributors of the drink. Energy drinks are most popular in bars, nightclubs, and among college students when extra energy is needed to study for tests; rather than extreme athletes needing a boost for competition. Marketing Mix AMPs positioning will greatly influence how successful it will become in the energy drink market. AMPs positioning strategy will be developed on the basis of product, place, promotion, and price. AMPs price of under $2.00, for an 8.4-oz. can, is consistent with its competitors. Because of the slightly higher cost of AMP than a can of Mountain Dew a customer perception of a better value is created and it allows for customers to differentiate the product from Mountain Dew, despite having the same taste. Furthermore, AMPs slogan of get plugged in portrays the feeling consumers experience after drinking the beverage. AMP is lacking any type of promotion of its product. In order to increase customer awareness of the product, highly advertised and publicized promotional events are needed. By teaming up with Bacardi this can be achieved. AMPs placement of its product is crucial in reaching its core market. Through product placement of AMP throughout college campuses, specifically in bookstores, vending machines, and in bars and nightclubs will make them more accessible than they are currently. i

TABLE OF CONTENTS
Executive Summary.........................................................................................................i Situational Analysis........................................................................................................6 Company...................................................................................................6 Product......................................................................................................7 Customer...................................................................................................8 Competitor................................................................................................8 SWOT Analysis.............................................................................................................10 Market Segmentation...................................................................................................11 Segment Overview..................................................................................11 Lifestyle of College Men........................................................................11 Men and AMP.........................................................................................12 Benefits of Energy Drinks......................................................................12 Conclusion..............................................................................................13 Marketing Mix..............................................................................................................13 Product....................................................................................................13 Place........................................................................................................15 Price........................................................................................................16 Promotion................................................................................................16 Short and Long Term Projections...............................................................................18 Short-Term Projections...........................................................................18 Long-Term Projections...........................................................................19 Conclusion.....................................................................................................................19 Evaluation Methods................................................................................20

APPENDIX
Appendix A: Business Law- Employment Contract......................................................24 Appendix B: Business Law- Employment Agreement Highlights................................34 Appendix C: Management-Mission Statement and Management Philosophy..............38 Appendix D: Management-Organizational Structure and Staffing Plan for AMP........42 Appendix E: Management Information Systems-Web Evaluation...............................51 Appendix F: Visits to CVS, Bobs IGA, and CI in Athens Ohio..................................59 Appendix G: Bacardi/AMP Promotional Event...........................................................62 Appendix H: Caffeine Comparison...............................................................................64 Appendix I: Ohio University Survey Results................................................................66

Marketing Plan: AMP 6

SITUATIONAL ANALYSIS
AMP energy drink has potential for growth in the functional beverage industry. Functional beverages (also known as "neutraceuticals") are beverages fortified with dietary supplements and herbal medicines. It is becoming a multi-billion dollar industry.1 Included in this industry are nutritional supplements, energy drinks, herbal remedies, and sports drinks. The energy drink segment is the specific focus of this analysis. In the following situational analysis the company, its product, customers and competitors are examined. Company Analysis AMP energy drink is branded under Mountain Dew, which is owned by PepsiCo. PepsiCo is an international company whose North American divisions operate in the United States and Canada. Furthermore, its international divisions operate in over 175 countries, with PepsiCo's largest operations in Mexico and the United Kingdom.2 The company is a world leader in convenient foods and beverages. PepsiCo consists of FritoLay, Pepsi Cola, Gatorade, Tropicana, and Quaker Foods. PepsiCos success is the result of superior products, high standards of performance, distinctive competitive strategies and the high integrity of our people.3 In this brief company analysis an overview of PepsiCos financial performance, mission and goals, and corporate citizenship will be discussed. Financial Performance. Currently, PepsiCo has revenues of about $27 billion for 2003, with over $3 billion in profits. PepsiCo International raised net revenue by $1 billion from 2002 to 2003; this is approximately 32 percent of the total divisions net revenue. Specifically, PepsiCos carbonated soft drink volume grew 1.5 percent in 2002 and currently they have 26 percent of the U.S. market share.4 The Mountain Dew Brand accounts for nearly 16 percent of Pepsis total product mix and is the fastest growing brand in the United States. Mountain Dew products continue to increase profits for the company as the popularity of the Mountain Dew Code Red increases. PepsiCo is the number one driver of supermarket sales growth outperforming the closest competitor by two times.5 Mission and Goals. PepsiCos mission is to be the world's premier consumerproducts company focused on convenient foods and beverages. We seek to produce healthy financial rewards to investors as we provide opportunities for growth and enrichment to our employees, our business partners and the communities in which we operate. And in everything we do, we strive for honesty, fairness and integrity.6 In conjunction with this mission statement, PepsiCo believes that it has a responsibility to contribute to the quality of life in the communities that it associates with. Corporate Citizenship. PepsiCo has implemented many projects and programs to help give back to the communities in which it serves. A few events that PepsiCo participates in are sponsoring local programs and support of employee volunteer activities. Management is very conscience of how their employees give time and its corporate

Marketing Plan: AMP 7 giving is directed towards these charitable organizations.7 Furthermore, PepsiCo is aware of the environment and has implemented an environmental commitment; it is as follows: PepsiCo is committed to providing safe and healthy work environments and being an environmentally responsible corporate citizen. It is our policy to comply with all applicable environmental, safety and health laws and regulations.8 By standing by their mission statement and their environmental commitment, PepsiCo has the potential to continue their corporate success that is currently demonstrates. Product Analysis PepsiCos goal with AMP coincides with the goals of the other Pepsi products. This goal is to bring AMP to a profitable market share and it is using the popular taste of Mountain Dew to do so. There are many energy drinks in the market today and the main goal of PepsiCo, with AMP, is to make it one of the top competitors in the energy drink segment. Market Trends. Energy drinks are still a baby; they have only been popular for two years in the drink industry. Currently, energy drinks are most popular at clubs and bars. Late night partiers mix the beverages with alcohol to make a cocktail that allows for partying all night long. This trend continues today with most bars in America serving a type of energy drink out of a cooler behind the bar, namely Red Bull.9 Pricing. Typically, energy drinks are sold at prices per can about 400 percent higher than a regular carbonated beverage. 10 PepsiCo sells AMP for $1.99 per can. Online shoppers can also buy AMP by the case.11 Distribution Channels. Presently, energy drinks are being sold in grocery stores, convenience stores, gas stations, and bars around the country and world. In stores, energy drinks are strategically placed near the front of the store in their own cooler, or near the beverage section with eye-popping displays to draw in the customer. Bars may also have their own cooler behind the bar. The single cooler draws attention to the drink, making it seem more appealing than the others in the store displays or behind the bar. Advertising. Currently, Red Bull is the only energy drink that is advertising on television. Red Bull has become a generic name for energy drinks. This gives all energy drinks an advantage because they do not currently have to advertise. Customers see a Red Bull commercial and go to the store, but they may not necessarily buy a Red Bull. Customers are looking for an energy drink they really enjoy, and to the consumer, an energy drink is an energy drink as long as it tastes good. Companies other than Red Bull may have the advantage at the moment because they do not have the advertising expenses. However, this is attributed to the fact that Red Bull is becoming a generic name for energy drinks and people do not necessarily associate Red Bull commercials with the actual Red Bull product, but energy drinks in general. Energy drinks are beginning to taste better the longer they are in the market. The market

Marketing Plan: AMP 8 is becoming saturated with energy drinks and soon there will be a few key players in the industry, and advertising will become a major part of their marketing strategy. The functional beverage industry, especially energy drinks, will continue to grow as more products enter the market. Competitors in the industry will be increasing advertising to distinguish their product from the rest. Marketing will be very competitive and AMP will need to find a way to distinguish its product from the others. Customer Analysis AMP customers are young, energetic and looking for an extra edge in their busy lives. Energy drinks are viewed as extreme to many youth today and the drink connects with rock music lovers as well as extreme sports athletes. Currently, the nightclub use of energy drinks is also increasing and most carry these drinks at the bar. The energy drink is also available at supermarkets, general stores, and gas stations. Customers purchase energy drinks when they are looking for an energy boost to study, drive, focus, and be alert for night and day activities. Customers often choose energy drinks based on appearance and proximity to the cash register. By increasing marketing and product awareness to our customers, AMP can become the one of the most popular energy drink and draw in new potential customers. Competitor Analysis Energy drinks have only been popular for about two years, yet they are one of the fastest growing markets in the beverage industry, energy drinks are the 21st century's alternative to soda pop.12 Experts agree that even though the energy drink market is growing, it is a niche and will only occupy a small percentage of the overall nonalcoholic beverage market.13 The industry began when Red Bull introduced the first energy drink in Austria in 1987. Red Bull began selling its product in the United States in 1997. Since energy drinks sprang into the market, companies worldwide have been jumping at the opportunity to cash in on Red Bulls trademark idea.14 In the food and beverage industry the threat of new entry is low due to the powerhouses that currently have an overwhelming presence in the market. Especially in the beverage division, Coke is Pepsis major competitor. AMP is currently competing with about 100 different energy drinks that are all trying to find a niche and differentiate themselves in this booming market. By looking at the top 6 competitors of AMP, its easier to see the energy drink market as a whole. Red Bull The brand power of this leading energy drink is amazing despite its complaints from consumers about the painful taste. Red Bull brands

Marketing Plan: AMP 9 itself as being able to give you wings. Industry professionals question if this carbonated energy drink has the power to stay number one, with industry leaders such as Coke and Pepsi introducing new energy drinks. Red Bull has one main advantage; its the only energy drink currently with international business and customer popularity.15 SoBe Adrenaline Rush This is SoBes first entry into the US energy drink market. The taste of Adrenaline Rush is said to have a sweet and refreshing passion fruit flavor. Consumers and industry experts like this particular energy drink because it does not contain the after-taste that many of the others have. SoBe is also under the PepsiCo name; therefore AMP will be competing against one of its own.16 Impulse Extreme Sugar-Free This energy drink has triple the caffeine, no sugar, and only 5 calories. Clearly, Impulse is different than the other energy drinks. The flavor is slightly bitter and sweet at the same time. The design of the package has been popular because of its bright red packaging allures customers. Impulse is only one of the few sugar-free energy drinks on the market aside from Red Bulls sugar-free version.17 Monster Recently reformulated to give it a new and improved taste, Monster is definitely a top competitor. The new taste is sweeter and no longer has the bitter after-taste associated with energy drinks. Monster differentiates itself in the energy drink market by making the only 16ounce can.18 KMX Lightly carbonated this energy drink goes down smooth. Its berry blue color and taste have been a hit with consumers. However, KMX has been criticized for its drab packaging and lack of customer appeal.19

Pimp Juice This non-carbonated energy drink is an 8-ounce serving of a tropical berry flavored apple juice. This particular energy drink brands itself on being non-carbonated; perfect for demanding sports and intense workouts. There is current market criticism over the drinks offensive name.20 By evaluating PepsiCo, energy drink customers, AMPs product, and competitors of AMP, a situational analysis was performed. Pepsi is the number two soft drink maker in the world and is continuously investing money into the research and development of new products. Since its launch in early 2001, it has become a major contender in the energy drink market but has had trouble creating brand equity and

Marketing Plan: AMP 10 establishing itself among its competitors. Through the investigation of these components a SWOT analysis has been developed.

SWOT ANALYSIS
The following SWOT analysis covers AMPs internal strengths and weaknesses as well as its external opportunities and threats. Strengths AMP energy drink has had a major strength working for it since day one. AMP is produced under the number two soft-drink maker in the world. This alone gives AMP an advantage over its 100 competitors in the energy drink category. PepsiCo needs to utilize its excellent reputation with its distributors to promote AMP. AMP is branded under the Mountain Dew label, which is the one of the most popular soft drinks under the Pepsi name. By taking a similar marketing approach as Pepsi did with Mountain Dew, PepsiCo can assure itself a large share of the energy drink market. Weaknesses The market for energy drinks is very young and over 100 energy drinks are currently in the market. To survive in this vast product line AMP must market itself well. AMPs distribution is currently limited and distributors are apprehensive about carrying the product amidst all the other energy drink options. AMP lacks eye-catching displays at the store level. Red Bull alone has large displays in convenient stores and coolers at counters that catch customer attention. Opportunities AMP should closely align itself with PepsiCos advertising strategies of other popular and successful products. By increasing advertisement of its energy drink AMP, Pepsi will increase customer awareness of the product. AMP should also mimic Red Bull by doing promotional events on college campuses that have the largest opportunity for customer awareness. AMP is among the best tasting energy drinks available in the market. By devoting attention to the increase in product exposure, we believe our targeted customers will also view AMP energy drinks as their favorite. Spreading the functions and benefits of AMP will help turn typical coffee drinkers onto the refreshing advantage of AMP energy drink. Continuing the promotion of the young and extreme image will tempt energy drinking customers to try AMP the next time they are looking for a boost. Because of energy drinks popularity in the bars, teaming up with a liquor producer could increase sales and cause AMP to become an in-bar name like Red Bull has currently. Threats

Marketing Plan: AMP 11

Energy drinks in general continue to be scrutinized by health professionals. Questions of health concerns continue to be major topics among the energy drink researchers. AMP should take this issue seriously and educate is consumers on the proper uses and possible dangers of drinking energy drinks and mixing them with alcohol. This factor alone will differentiate them from their many competitors who have not made this a concern.

MARKET SEGMENTATION ANALYSIS

Typically, energy drink consumers on college campuses are males according to a survey performed at Ohio University earlier this month. (See Appendix G) Furthermore, AMPs current market strategy towards extreme athletes is inconsistent with sales patterns found from talking to distributors of the drink. (See Appendix F) Energy drinks are most popular in bars, nightclubs, and among college students when extra energy is needed to study for tests; rather than extreme athletes needing a boost for competition. These various components of segmenting AMP energy drink will be discussed in latter sections of this analysis. Segmentation-Overview Because of the higher product interest from men rather than women, AMP should make men their core target. Additionally, male college students ages 18-24 have a high interest in sustaining energy to enhance performance in their academic and social life. Most important to the AMP segmentation strategy is lifestyle. Interests of this group include a mixture of both academics and social activities, making energy a vital concern. Geographically, AMPs ideal consumer lives on or near a college campus; traditionally in cities where there is an abundance of bar establishments.21 Despite the fact that 58 percent of college students are only employed part-time and make minimal wages, the average student spends on average $133 a month on discretionary items.22 By marketing towards this college male, AMP can hope to gain some of the $70 billion that undergraduates spend a year.23 Lifestyles of College Men The lifestyle of the typical male college student is somewhat unpredictable. Balancing school, work, friends, family, and fun is a task not easily accomplished. Whether it is cramming for a midterm or going out with friends all night, college males need all the energy they can get. The average college male is very active, in and out of school. When it comes to school activities, college demands the most out of a male student. They need to be able to focus and perform at high levels on a daily basis to tackle homework, midterms, and projects. Many male students often wait until the last minute to start working on assignments, and this can cause much stress and loss of energy.

Marketing Plan: AMP 12

The college nightlife is very lively, exciting, and demanding for male students. Many college campuses have an array of bars, dance clubs, and other hangouts in the vicinity for student use. The male population in college consists of a large percentage of students who like to push themselves to the limit through all hours of the night. After a busy day of classes and schoolwork it is often quite difficult to engage in nightlife activities as much as a male student would like. These males sometimes find themselves lacking energy by midnight. Men and AMP The names of energy drinks express many qualities that males find attractive; such as power, strength, masculinity, and sex. These traits are more appealing to males than females. The energy drink market today is becoming highly competitive. With so many energy drinks in the market they are all trying to find an identity and figure out what types of people they want to market their products to. AMPs current marketing strategy targets an extreme sports and athletic individual. The problem with targeting this group is that it does not seem to be the main consumers of the drink. Red Bull targets active people who are looking to have fun, not necessarily athletes. AMP should focus on this target market as Red Bull does however, they should take it one step further by specifically targeting socially active college males. It is a well-known fact that sex sells. By targeting sex-driven males looking for a good time, AMP can increase its appeal. This is a strategy that many magazines such as Maxim, FHM, and Playboy utilize. The Axe body spray commercials are also a good example of this. Benefits of Energy Drinks AMP energy drinks have a number of components that are beneficial when consumed. Academic, social, and health benefits can be achieved from the consumption of AMP energy drink. Academic Benefits. Academically, men can benefit from AMPs supplement energy ingredients: ginseng, panthothenic acid and guarana. These components improve abstract thinking, reaction time, allow for stress tolerance, and an overall boost of alertness levels that would allow for a deeper concentration while studying. 24 Social Benefits. Maltodextrin, a complex carbohydrate, provides energy for physical activity such as dancing and nightlife activities. Once again, the herbal extract guarana is a huge benefit to the socially active male. It contains the highest caffeine level and is known to add a booster effect that will maintain energy through the day and night.25

Marketing Plan: AMP 13 Health Benefits. Not only do energy drinks offer academic and social benefits, but they also provide many daily essential vitamins. B2 Riboflavin is a vitamin required for cell growth of which AMP offers 20 percent of the suggested daily intake. B3 Niacin, which also included in AMP, is required for oxidation and respiration in tissues. Lastly, taurine is an essential amino acid that aids in making protein in the body.26 The combination of these ingredients provides the essential base for all energy drinks. Males benefit from these especially because they typically need more vitamins and supplements per day. By consuming energy drinks, males will get a portion of the dailyrequired amounts of each of these supplements. Conclusion Energy drinks are being marketed to consumers from the ages 18-30. By narrowing this segment to males ages 18-24 AMP can capture the college market. Balancing school, jobs, nightlife, friends, and family can be stressful at times. Many students begin to run low on energy throughout the day. There are many benefits to energy drinks: improved performance, eliminating drowsiness, and keeping you energized for a long night out on the town. Furthermore, AMP needs to reformulate its image to appeal more to the college market instead of the extreme athletes and music consumer. This image change will allow AMP to sell more of its product and be a dominant force in the energy drink market. When looking at all these factors, it is clear that AMP will benefit the most by marketing to college males age 18-24. AMPs marketing mix will focus on how customers view its product.

MARKETING MIX
The following marketing mix has been developed to create how AMPs customers view the drink in terms of quality and image compared to its competitors. AMPs positioning will greatly influence how successful it will become in the energy drink market. AMPs positioning strategy will be developed on the basis of product, price, promotion, and price. Product AMP is based on the original flavor of Mountain Dew. AMP has been enhanced with the following: taurine, ginseng, B complex vitamins, maltodextrin (a complex carbohydrate) and guarana, which PepsiCo has patented as MDX5. The B-vitamin found in AMP is the element that allows the drink to glow under a black light.27 Brand name. AMP is a good name to describe the effect that the beverage will have on its customers. PepsiCo has started the motto get plugged in which is an appropriate

Marketing Plan: AMP 14 and attention getting slogan. AMP wants their customers to get Amped up to study or to party all night long. Quality. Only consumers can measure the quality of AMP. AMP will sustain its reputation for being one of the best tasting energy drinks by continuing to model the taste of Mountain Dew. One other way to appeal to more consumers will be to have different variation in their product. Mountain Dew does this with Code Red and Coke does this with KMX having blue and orange versions of the energy drink. Another interesting attribute about AMP is that it glows in the dark thanks to the B vitamin Riboflavin. This certainly adds to the quality of AMP and is something that needs to be shown to consumers. The fact that it glows in the dark will be incorporated into the advertising that AMP participates in. Scope of product line. The main target audience for AMP will be college males ages 18-24. Energy drinks in general are marketed more towards college kids than any other group. Focusing on this age range will make AMP more successful in their market overall. AMP should focus on males because they are drinking more energy drinks than women. This does not mean that AMP does not want women or older men to purchase their products. The purpose of choosing the age group and sex is because this is the main group of energy drink consumers. AMP a small market share in the energy drink industry for market share to increase AMP must venture at and attract new customers. Packaging. The packaging of AMP is the same as almost all other energy drinks in the 8.4-ounce can. The way that AMP makes the packaging different is by the logo and design of the can. The can has a wild and extreme image that would appeal to Mountain Dew drinkers. In fact, the Mountain Dew logo is even on the can under the AMP logo. It was mentioned above about having different versions of AMP energy drink. Along with different versions it can also have slightly different cans. By simply keeping the same logo, but changing the design of the can, AMP will appeal to different types of consumers. For example, if there was a version of AMP that was based on the flavor of Code Red, the A could be red instead of green. If you look at KMX for example, their can is very plain and boring. This has reflected negatively on KMX when it comes to sales. If AMP had a couple different attractive looking cans they would sell a whole lot more.

Place

Marketing Plan: AMP 15 Where a consumer buys a product is extremely important. The place needs to be easily accessible and appealing to the targeted consumers. By targeting male college students, AMP will need to place its product conveniently throughout college campuses. Bars. Promoting the sale of AMP in bars will capture the attention of the party and nightlife crowds. Typically bars remain open until 2 a.m. and are usually busy all the way until closing time. With the hectic lives of male college students and their constant need for energy, making AMP available at bars and clubs is a great way to entice potential consumers. Because the popularity of mixing energy drinks with liquor is ever increasing and the taste of AMP is one the most popular among consumers, AMP needs to establish a presence in bars. Campus bars can serve as a very convenient location for the sale of energy drinks. Having AMP available for purchase at bars can attract many consumers that tend to lose energy well before the bars closing time. This will allow the male students to maintain their energy levels and not become fatigued throughout the night. By providing this benefit to its targeted market, AMP can attract consumers that consistently purchase the product for nightlife activities. Campus Buildings. AMP can also position itself better by placing its product in popular campus spots such as campus buildings, college bookstores, convenience stores, and small eating establishments. These places are visited on a daily basis by male students and by placing AMP in these locations it can sell its product without having consumers go out of their way to find and purchase the product. Another perk of AMP being located in campus located buildings is that it can capture the attention of students walking to and from classes. Most students spend a lot of time in campus buildings and by making AMP available to where students will already be, AMP can gain a convenient position. Vending Machines. While AMP makes itself more available in certain stores, vending also becomes another option for product placement. College campuses have an abundance of vending machines that provide students for quick access to drinks and snacks. As will be further discussed in promotion, making AMP available by vending can attract consumers on the run that do not have much time on their hands. In order for AMP to position itself well in the energy drink industry, it will need to focus on convenience for its target market. Male college students often have limited resources to travel and usually operate in somewhat of a rush. The place that the targeted market can purchase AMP will be a key factor to the success of the products sales.

Price

Marketing Plan: AMP 16

Although, energy drinks health benefits are still currently being debated, theres one thing that is un-debated, their ability to deliver big profits to the company. While the retail price of a single can is relatively low, PepsiCo hopes to cash in on the latest energy drink craze. List Price. A single 8.4-ounce can of AMP retails for just under $2.00. Meanwhile consumers can by a 24-pack case of AMP online for $43.99. Both of these prices are consistent with their competitors. AMP must be careful not to get into a price war with any of its competitors, especially Red Bull. AMPs current price reflects the associated manufacturing and production costs. Furthermore, by having AMP cost more than Mountain Dew, brand equity is established. Customers perceive that AMP is better, whether it be because of the larger dose of caffeine or the extra vitamins and nutrients that are added for health purposes. Discounts. Many companies, not just beverage producers, utilize coupons as an offer to entice customers for further purchase of an existing product. AMP can insert coupons inside Mountain Dew cases for $0.50 off the purchase of the next AMP can. This coupon will increase customer interest in the product by offering an incentive to purchase AMP. Customers will be more likely to try an unknown product if savings are an option. Promotion At the moment, AMP is not being heavily promoted by Mountain Dew. In order for AMP to become the preferred energy drink the amount of promotion must be increased. It must be increased through advertising and promotion within the stores and bars and vending machines. Advertising. AMP does not utilize any form of advertising other than its Internet site. For a complete website analysis see Appendix E. PepsiCo can designate less than 3 percent of AMPs profits to advertise the product. When considering AMPs possibilities for advertising, the best form of media would be through print; magazines to be precise. Magazines provide the most direct route to the male population. Television targets a large population of people whereas magazines target certain readers. Although a television might be turned on in a household, it is not necessarily being watched. On-thego males can easily miss AMP ads. Magazines offer specific targeting and almost guaranteed viewing. AMP is already targeting to sex driven male consumers. By advertising full page spreads in magazines such as Maxim, Sports Illustrated, Playboy, and FHM (For Him Magazine), AMP can be assured that readers will view the ad. Magazines involve high concentration as apposed to television. The reader must set aside time to purchase and view the pages.

Marketing Plan: AMP 17 Another magazine segment is the video gamers. Males spend hours playing Sony PlayStation2, Microsoft X-Box, and Nintendo Game Cube. Each game consul has its own magazine that can be purchased containing secrets to newly released games and other tidbits of information game players thirst for. Late night game playing is not uncommon with these males. Advertising in magazines for late night gamers can allow AMP to slip into the gamers life. AMP is an easy energy fix to keep those thumbs going for hours in order to beat the game. Within The Stores. AMPs current advertising in grocery stores and convenience stores needs to be better than competing producers located in the same store as AMP. By advertising AMP within stores, PepsiCo/Mountain Dew can grab the attention of the customer as they are shopping. Visibility in stores is not nearly as evident with AMP as compared to other energy drinks. AMPs current display sits easily on a counter yet its does not refrigerate the beverage. People on the go often consume energy drinks. If AMP does not sell the drink available pre-chilled it is losing potential customers who need a boost yet want it cold. The customer will turn to Red Bull who sells its drink from individual coolers that keep the drink cold. AMP can create its own cooler to contain the drinks; it must be eye catching yet small enough to be placed near the register. The Ice Cooler Design is based on Red Bulls convenience near the front of the store, yet AMP must differentiate itself from other competitors. To avoid the high costs of conventional coolers, AMPs ice cooler can cash in on the increasing image of old school. The ice cooler will be reminiscent of the tub containers that were sat near the register or through out stores in years past. By making AMPs ice cooler round and free standing the product will be visible from all sides instead of only the front as a conventional cooler. AMPs bold colors entice the customer to buy a refreshing beverage. Displays of AMP can also create more visibility near the beverage section. Large displays of Pepsi products are common at the front of beverage aisles. Including AMP in the display acquaints it with Pepsi products. Customers will feel more comfortable buying a less common product that is from a reputable company. Other energy drinks, such as FUZE, promote themselves through food vendors. FUZE bottles can be seen on counters of restaurants that sell anything from sandwiches to pizza. Placing cans of AMP on or near counters where food is sold informs buyers of the presence of AMP. If its presence is known, the customer can decide to forgo the fountain drink and opt for the can of AMP.

Marketing Plan: AMP 18 Pop Machines offer another tool for visibility that PepsiCo has yet to touch on. There is an abundance of vending machines, located widely throughout college campuses. However, energy drinks are not offered in these machines. Vending machines offer quick and convenient access to the product. This form of distribution would also be perfect for dormitory buildings, where students have limited resources to travel to convenient stores. By making slight alterations to the actual machine and allowing the machines to offer AMP, sales can be expected to increase. Individuals from IT would have to make necessary changes to the computer system that deals with the pricing of the items in the unit, and PepsiCo should add the AMP button to the bottom of the pop machine. Visually AMP should consider adding a graphic to the front of the machine saying NOW Featuring AMP to draw in customer just passing by. Within the Bars. AMP must also increase its visibility in the bar scene. Red Bull is the largest promoter of energy drinks in the bar. Red Bull is mixed with vodka or Jaegermeister to entice consumers to purchase a drink. Promoting AMP with Bacardi Liquors has the potential to boost AMP sales. Bacardi already has established itself within the bars and is highly involved with the promotion of its liquors. The Bacardi girls can be seen in bars nationwide, passing out pins and giving free shots of Bacardi. If AMP can associate itself with this image in the bars a staple drink can be primed to compete rigorously with Red Bull.

SHORT AND LONG-TERM PROJECTIONS

The following includes projections that AMP needs to be aware of over a short and longterm time period. Short-Term Projections Through the marketing plan AMP has determined a few short-term projections. These include creating awareness of the product, increasing PepsiCos market share, and increasing the sales of AMP. Create Awareness of the Product. Initially PepsiCo will create awareness of the product to its targeted market. Through the marketing plan it has developed many ways that AMP can get its name out into the market. Some examples include mini tub coolers in stores, AMPs affiliation with Bacardi liquor, and putting AMP cans into Pepsi vending machines on college campuses. Increase Market Share. PepsiCo intends to increase AMPs market share in the energy drink industry. By being innovative, creating new products, and product lines PepsiCo can gain a competitive advantage over the competition. Also, they can drive away some of the 100 products that are currently competing in the functional beverage industry.

Marketing Plan: AMP 19 Increase Sales of Mountain Dew and AMP. PepsiCo intends to increase the sale of Mountain Dew by significantly improving the sales of AMP. While the sales of AMP may or may not increase noticeably in the short-term period, it is more likely that it will show substantial increases in Mountain Dews portion of sales in the long-term. The focused long-term goal of PepsiCo is to increase Mountain Dews portion of sales from 16 percent to 17 percent through AMPs sales. Long Term Projections After creating the new marketing plan AMP has also developed some long term goals that we would like AMP to posses. They include, PepsiCo becoming the worlds leader in the soft drink industry, increase long term awareness of the product and having AMP be a lasting product in bars. Worlds Leader. Through the increase in awareness and sales of AMP this will continue to increase the brand equity of PepsiCo. By creating these new products it will continue to help PepsiCo a world leader in the soft drink industry. Also by creating these new products PepsiCo will be reaching new potential customers that at first were not drawn to any of PepsiCos current products. Increase Long-Term Awareness of the Product. PepsiCo eventually intends to have a greater awareness of AMP in the energy drink industry than Red Bull currently has. It wants customers to be aware that AMP is associated with the power-house PepsiCo. It does not want to make AMP a generic name like Red Bull is becoming. AMP plans to be a distinctive energy drink that customers do not mistake with other brand names. Lasting Presence in the Bars. The last thing that PepsiCo proposes to see is its presence in the bars is long lasting. A partnership with a company like Bacardi will help promote both products as mixed together or as separate products. AMP has the potential to be a common name and drink in bars throughout college towns and across the world.

CONCLUSION
By looking at just a few of the competitors above, it is easy to see that PepsiCo needs to work on making its product new and original. There are so many energy drinks out there today so if AMP wants to make an impact it has to be different. AMP is off to a good start with the look of its product and modeling Mountain Dew, but it needs to continue its strive into the industry. AMP needs to keep thinking of new ways to improve on that concept. AMPs marketing plan has great potential and is very promising, but absolutely nothing in the business world is definite. PepsiCo will need to monitor AMPs success and failure, especially in its targeted demographic market. In order to increase AMPs sales and popularity, AMP will need to evaluate whether it is executing its marketing plan effectively.

Marketing Plan: AMP 20

Evaluation Methods The following methods will be offered to evaluate the success or failure that AMP will gain as its new marketing plan is implemented. Success. For AMPs marketing plan to be successful, its focused demographic market will need to contain AMPs greatest sales and popularity. The marketing plan will be successful if AMP becomes a highly purchased item in the bar and nightclub scenes. Whether bars choose to sell the drink individually, or as a mixed drink, AMP will need to become a favorite among male college students that love to party into the night. The short-term success of AMP may not only be due to increased sales, but rather on the basis of word-of-mouth. If bars can continually sell AMP to customers and increase the exposure the drink and the brand name receive, AMP can then focus on long-term success by keeping consumers interested in a product they have shown loyalty to. Therefore, if the campus locations that AMP is distributing to continue to request that AMP be a consistent product sold, then AMPs marketing plan can be viewed as successful. If the targeted market increases its consumption and continues to spread their satisfaction of the drink it can lead to continual success on the college campus. The failure of AMPs marketing plan can also be evaluated by monitoring the selected demographic areas that will be distributing the drink. Failure. The failure of AMPs marketing plan may be simpler to evaluate than the actual success. If the marketing plan is not spreading word-of-mouth or increasing its sales at campus locations then PepsiCo will need to rethink its positioning strategy. An evaluation method PepsiCo may want to consider is to conduct surveys at the campus bars and buildings where AMP is being distributed. This can help determine if male students are actually purchasing the drinks when they go out at night or even during the day for study purposes. Direct surveys to bar owners and male students can help see how fast the products are moving and whether the consumers seem to be satisfied with their purchase. Due to the fact that AMPs new marketing plan focuses increasing exposure to male college students, the success or failure of the product can best be determined my monitoring college campuses. When evaluating AMPs marketing success, it should consider that short-term success might not be as visible as long-term success. AMP really needs to evaluate how effectively its marketing plan has gotten the AMP name into the market because that will be its primary concern.

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