Electro-Light

Client goal

Your client is SuperSoda. SuperSoda is a top-three beverage producer in the

United States and has approached you for help in designing a product-launch strategy.

Description of situation

As an integrated beverage company, SuperSoda leads its own brand design,

marketing, and sales efforts. In addition, the company owns the entire beverage supply
chain, including production of concentrates, bottling and packaging, and distribution to
retail outlets. SuperSoda has a considerable number of brands across carbonated and
non-carbonated drinks, five large bottling plants throughout the country, and distribution
agreements with most major retailers.

SuperSoda is evaluating the launch of a new product, a flavored sports drink

called Electro-Light. Sports drinks are usually designed to replenish both energy
(sugars) and electrolytes (salts) in the body. However, Electro-Light has been
formulated to focus more on the replenishment of electrolytes and has a reduced sugar
content compared to most other sports drinks. The company expects this new beverage
to capitalize on the recent trend away from sugar-rich products.

SuperSoda’s vice president of marketing has asked you to help analyze the

major factors surrounding the launch of Electro-Light and its own internal capabilities to
support the effort.

Question 1:
What key factors should SuperSoda consider in deciding whether or not to
launch Electro-Light?

Helpful hints

 Take time to organize your thoughts before answering.

 Develop overall approach before diving into details.

Question 2:
After reviewing the key factors SuperSoda should consider in deciding whether to
launch Electro-Light, you want to understand the beverage market and consumer
preferences to gauge potential success of Electro-Light.

You have gathered the following information on the US sports-drink market. The
information shows an estimate for the share of electrolyte drinks, as well as the current
share for the two main electrolyte products: CoolSweat and RecoverPlus.
 Based on the target price and up-front fixed costs, what share of the electrolyte
drink market would Electro-Light need to capture in order to break even? Here is some
additional information for you to consider as you form your response:

 Electro-Light would launch in a 16-ounce presentation (one-eighth of a gallon)

with a price of $2 to retailers.
 In order to launch Electro-Light, SuperSoda would need to incur $40 million as
total fixed costs, including marketing expenses as well as increased costs across
the production and distribution network.
 The vice president of operations estimates that each bottle would cost $1.90 to
produce and deliver in the newly established process.

Helpful hints

 Don’t feel rushed into performing calculations. Take your time.

Question 3:
SuperSoda executives believe that the company's position as a top three
beverage company gives them strategic strengths toward achieving the desired market
share. However, they ask the team to outline what would be needed to achieve the
target of 12.5 percent share of the electrolyte-drinks market. What
would SuperSoda need to do to gain the required market share for Electro-
Light following its launch?

Helpful hint
 Consider the issues raised in the question, and group your thoughts around
them. This will ensure that you are giving the most relevant answers.