Hult IBS - Marketing Plan Guarana in China -- FEB-2013


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Marketing Plan project as part of International Marketing (MKT5915) course at Hult International Business School.

Guarana Antarctica is a soft drink that is made from the Guarana berry, and is extremely popular in Brazil, where it originated. This berry is special because of it “natural energy” provided to the consumer. Guarana is manufactured and produced by InBev only in Brazil, Portugal, and Japan, and is distributed in about 20 markets throughout Latin America and Europe. The market in China for soft drinks has grown at a rate of 20% in average in last years. This growth in the market, along with the company’s successful launch in Japan, brings us to the conclusion that China is a huge opportunity for Guarana.

Targeted Segment: the active sports fan
Our target consumer in China is between the ages of 16-35, lives an active lifestyle, and is a fan of watching sports. He or she also practices a sports 3 to 6 times a month. We believe these behavioral and attitudinal characteristics of our consumer are the most important, which is why we will position our brand around this “active sports fan”.

Size of the segment
The football fan base is estimated at 600 million people in China, making the number one most watched sport. Chinese follow their national league (Chinese Super League) as well as all major European leagues.Also, Guarana is the main sponsor of the Brazilian National football team, and with the world cup coming to Brazil in 2014, there will be a great international brand exposure.

These facts support our strategy to position Guarana related to sports success in this new market.

We have identified our main and direct competitors in the China market to be Coca-Cola/Pepsi, Sprite/7Up and the full range of Iced Tea products. Right now, the Coca-Cola Company owns 19% of the Chinese soft drink market, and PepsiCo only 9%.

There is thus an opportunity for Guarana to enter the market as a refreshing natural energy drink. Guarana will be positioned in between coffee and coca-cola as a refreshing, energy enhancing beverage. When compared to Sprite, Guarana offers similar refreshing attributes, but with the added energy boost. And if those were not compelling enough reasons for our consumers to buy it, Guarana can be positioned as the healthiest version of all carbonated soft drinks on the market because of the “natural” energy from the Guarana berry.

For active sports fans, Guarana Antarctica is the refreshing soft drink that delivers natural energy, because only Guarana is able to give you the feeling that you can excel like a professional footballer.

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  • GZ is the optimal city for us to launch Guarana
  • Why football: team sports, attracts families, friends, individuals.Female football National team is very popular, achieving great success in the past decade, makes football famous among women also.Guarana: “Contagious energy”
  • Marketing: Starting progressively into China, first in Guangzhou, the number one football city in China. It has 15 million inhabitants. 8 million active sports fans. 2 Major football teams and a strong amateur league that moves 15,000 weekly.GZ is 15Million people (3rd biggest), The entire province of Guangdong is 79Million. We will target the Greater GZ area which represents 65M (GZ, Shenzen, +…)
  • Positioning in China: As a product, we think of it as a healthier alternative to Coke and coffee. Too late for a coffee but to early for a coke, Guarana will give you the same energy plus a natural and refreshing feeling. We think that over the long term it could replace Sprite and Red Bull, as it has better taste, less sugar, similar refreshing attributes, and natural energy.To capture active sports fan, we want to establish the product between the people that is looking for a boost of energy, in a more natural way.People that like watching and playing sports, will feel identified with Guarana, as it is a natural drink, with the right amount of sugar and the extract “guarana” (natural energizer), a unique fruit coming from the amazonia. Guarana will give you the boost of energy you need to … your day.
  • World Cup: Is the most successful event in the world. It is shown in every single country and territory in the world. The in-home television coverage for the 2010 World Cup reached more than 3.2 billion people, 8% more than in 2006. (46.4% of global population).The World Cup finals consist on 32 teams, playing a groups stage in where the 16 best team will go on Play-offs to define the Champion.Also, Guarana is the Official Sponsor of the Brazilian Football team for the 2014 World Cup, and extremely popular event among Chinese People and the world, after the Korea Japan 2002 World Cup, 2008 Beijing Olympics; we have Brazil coming in 2014 with the World Cup and 2016 with Olympics.Chinese football fans favourite football national team, sometimes even over the National Chinese team, is the Brazilian team.
  • MarketingCampaign:Guangzhou Evergrande F.C: Champion the last 3 leagues, it has 3 Brazilian players, including the top scorer and the top figures of the league: LuizGuilherme da Conceição Silva (2nd scorer of the league) and Muriqui… and Paolo RibeiroGuangzhou International League: extremely popular amateur league, bringing families and friends as players and supporters.Brazilian Team: Most popular international football team in China, known players, international figures, 2014 World Cup coming. Advertise for free.Retailers:
  • Year1 -------------------------------------------------Total Cost estimate: U$D    3,559,870 (Ads, production, distribution costs)Sales projections: Q1:  950,000  Q2:  1,021,250  Q3:  1,097,844  Q4:  1,180,182Cumulative: Q1: 950,000 Q2:1,971,250 Q3:3,069,094 Q4: 4,249,2761st year :  U$D 4,249,276 Year 2: U$D  5,038,189 (cumul: 9,287,465)Year 3: U$D  7,837,183 (cumul: 17,124,647)What’s in it for Pepsi as the distributor 1st year: U$D  169,971 (4%) of salesBUdget for advertising and promotion: U$D 1,340,000
  • Cumulative cost Q0:373,000 Q1:767,000 Q2:1,093,825 Q3:1,434,437 Q4:2,219,870Units sold year 1 (forecast): 10.1 Million
  • Hult IBS - Marketing Plan Guarana in China -- FEB-2013

    1. 1. INTRODUCINGGuaranaTO CHINATeam 8 WaitanMalindile NkambuleAshley NeylandSantiago LiottaAlexey BelovMaximilien Meilleur
    2. 2. MarketingObjectives Introduce Guarana Antartica to theChinese consumer Capture 5% of the soft drinks market inthe Guangzhou area and progressivelyexpand to the rest of China Be in the top 5 soft drink (in marketshares) within 2 years in the areas whereGuarana is distributedMarketingObjectivesFinancialObjectives Generate sales of $5M Breakeven within 2 year from launch
    3. 3. Agenda  Target Market Market Size Competitors Target Segment Target Geography Marketing Strategy Positioning A case for football Product & Pricing Promotion Supply Chain Financial Projections Advertising Spending Sales Forecast Breakeven Analysis Controls & Success Measures
    4. 4. +Target MarketMarket SizeCompetitorsTarget SegmentTarget Geography
    5. 5. CarbonatedSoft DrinkExtract fromGUARANA BERRYNatural EnergyfromAmazonia, BRAZILOfficial sponsor ofBrazil NationalFOOTBALL TEAMOwned byINBEVTop 15th soft drink soldIN THE WORLD(Brazil, Japan, Europe, Latin America..)What is Guarana?
    6. 6. Market Size: Capturing 5% of the market*represents a $19M opportunityGuarana’s Market Share (5%)• Revenue = $19 million• Volume = 35 million litersGuangzhou Greater Area (6%)• Revenue = $380 million• Volume = 700 million litersCarbonated Soft Drinks (22%)• Revenue = $6.3 billion• Volume = 11.8 billion litersSoft Drink Market in China (2010)• Revenue = $28.6 billion• Volume = 47.6 billion liters* 5-year plan
    7. 7. Competitive LandscapePepsiPepsi LightCokeSpriteDiet CokeCoke ZeroFantaRed BullGuaranaCaffeineSugarCaffeine freeSugar free/HealthyCompany % ShareThe Coca-ColaCompany 65.10%PepsiCo, Inc. 26.70%Guangdong JianlibaoGroup Co., Ltd 3.30%Sunkist Growers, Inc. 0.50%Other 4.40%Total 100%
    8. 8. - Male/Female 16-35- Active Lifestyle- Sports Spectators- Plays Sports 3-5 times a monthActiveSportsFan“Danny Xu is 27 years old, plays badminton twice a month andoccasionally goes to the gym. He likes meeting up with his friends andwatch sports on TV, especially football.”Market Segmentation: Active Sports Fan600 million football fans3.5 million regular stadium attendantsIN CHINA:
    9. 9. Targeted Market:Greater Guangzhou Area (65million)GreaterGuangzhou3rdbiggest cityen China65millioninhabitantsNº 1football cityin China2Majorprofessional footballteams8Braziliantop playersin thoseteamsStrongInternationalAmateurLeague
    10. 10. From a SWOT analysis, key facts emerged thathelped in developing our marketing strategyWeaknessesZERO brand awareness in China(education needed)HIGH sugar and citric acid contentThreatsFRAGMENTED market with manycompetitorsAt the mercy of PEPSICO as theonly official distributorStrengthsUNIQUE natural energy and tasteSponsor of the BRAZILIAN football teamOpportunitiesThe soft drinks market is GROWING at arate of 20% in ChinaMany SPORTS FANS in China/Guangzhou
    11. 11. +Marketing StrategyPositioningA case for footballProduct & PricingPromotionSupply Chain
    12. 12. How we will position Guarana inChinaProduct positionBrand position in ChinaFRESHNESSNATURAL ENERGYDRINKABILITYGuarana is positioned in the niche between Cola products and coffees. Itis easier to drink than coffee, and fresher than Coca-colaTo target the “active sports fan” segment, we will position Guarana as therefreshing soft drink that delivers natural energy. We will leverage its Brazilianorigin and the equity and fame of the Brazilian national football team. Finally, wewill also emphasize the following attributes of the brand:… AND ITS FOOTBALLASSOCIATION!
    13. 13. A case for targeting football in China2002: China national football team qualifies for the firsttime for the World Cup finals (Korea-Japan World Cup)2008: Beijing Olympics fuels nationalsupport for sports teams in general.Football becomes the most watched sport inChina. Estimated viewership: 600M2010: South Africa World had cumulative viewership of3.2bn2014: Brazil will host the 20th WorldCupGuarana is the officialsponsor of the BrazilianNational Football team!!
    14. 14. Product & Price Format Aluminum can, 350ml Packaging Consistent with the internationalpackaging (no majormodifications) Brand name Remains the same: GuaranaAntartica Chinese / English Brand name &slogan: “Nature Energy from Brazil” Price The products in the mostdirect competition (CocaCola,Sprite) are sold for 2,50RMB We will price Guarana at2,70RMB and introduce itwith a 15% discount Price after discount:2,30RMB
    15. 15. Supply Chain: we will leverage theexisting capabilities•Produce guaranaberry concentrate•Ship to bottling plantsworldwideAmazoniaInBev Plant•Receive guaranaberry concentrate atInBev-operated Plant•Bottling for Japanesemarket•Distribute to ChinesepartnerJapanInBev Plant•Bottle Guarana withChinese marketspecifications•Ship to distributioncenterGuangzhouPepsiCo Bottling Plant•Distribute to retailersand small shopsthrough theirestablished networkGuangzhouTingyi DistributionCenterInbev-PepsiCoDistribution AlliancePepsico/TingyiJoint VentureThis part of the supply chain is already in operations asInBev is already producing Guarana in Japan.InBev already has an agreement for PepsiCo to be theinternational distributor of Guarana Antartica.The PepsiCo/Tingyi joint venture is already signed and will beeffective in March 2013
    16. 16. Promotion: marketing mix by quarterCreate buzzthrough adpartnerships withfamous footballplayersQ0UnawareStrengthenposition inmarketBuild momentumfor World CupQ3Available Gain repeatcustomersthroughrecognition as asponsor of theWorld CupQ4RepeatIncreaseawarenessthrough initialpromotionaldiscount of 15%Q1AwareGet customersto try throughsampledistribution atsports eventsDistributepromotionalmerchandiseQ2Trial- Two Brazilianplayers on theGuangzhouEvergrande footballteam.- Sample distributionat Guangzhou’s 5main sport centers- Leverage brandsponsors (players) inbillboard and POSadvertising in GZ- Launch micro websitesupporting world cupcampaign- Sign two more playersin preparation for theWorld Cup buzzLaunch date:June 1st, 2013
    17. 17. +Financial ProjectionsAdvertising SpendingSales ForecastBreakeven AnalysisControls & Success Measures
    18. 18. Advertising Spending, year 1Player Sponsorship $200,000 0 0 0 $300,000Brand SupportAdvertisement$150,000 $200,000 $120,000 $120,000 $250,000Q0 Q1 Q2 Q3 Q4Sign exclusive yearly contracts with top players form the Guangzhou top teams to become the brandambassadorsPlayers images will be used on promotional material (TV, billboards ads…) and events.Player Sponsorship Program:
    19. 19. Sales ForecastY1 Y2 Y3Q1 Q2 Q3 Q4($,000) Q1 Q2 Q3 Q4Cumulative Sales 950 1,950 3,000 4,200Quarterly Sales 950 1,000 1,050 1,200($, 000) Y1 Y2 Y3Cumulative Sales 4,200 10,600 19,600Yearly Sales 4,200 6,400 9,000What’s in it for PepsiCo?As our distributor, they will get 8% of our sales. Year1 revenues: $340,000Annual Sales Growth: 30%Expected Market Share: 1.1%Annual Sales Growth: 40%Expected Market Share Y3: 4.7%Quarterly Cumulative Sales, Year1 Yearly Cumulative Sales, 3Y
    20. 20. Breakeven analysis: we will breakevenin Q3, year2Year1:10.1MWe know that the average contribution margin for Guarana worldwide is 18%.Retail Price: $0.43 (2.70RMB)Contribution margin: $0.09Cumulative CostsYear 1: $2.2MQ0Units SoldYear 2 Year 3CostsBreakeven point:Q3 year 2
    21. 21. We will control and measure thesuccess of the implementation Revenues & Expenses: monthly and quarterly review of actualperformance compared to planned. Customer Satisfaction: quarterly analysis of repeat customersand net promoter score (word of mouth) Brand Recognition: quarterly analysis of purchase intent andbrand awareness
    22. 22. THANKYOU!Team 8 WaitanMalindile NkambuleAshley NeylandSantiago LiottaAlexey BelovMaximilien Meilleur