BCD Final Report

Brownie Chocolate Drink
Tear, Pour, Shake, Go
Luke Haley
Emily Peters
Tiffany Cha
Elsie Lamo
Elaine Wong
Noah Kroutil

BCD SWOT Analysis
Strengths
Purpose: Brownie Chocolate Drink (BCD) will incorporate healthy, natural products that
provide energy and increase aid to digestion and hormonal health. Medical Daily conducted a
study of 12,000 adults and only 11% of adults met the daily recommended fiber intake .1
Customers will be able to drink BCD and supply micronutrients that an average person may lack.
Distinction: BCD provides a nutrient-packed powder that is quick and easy. Americans prefer
meals they can make quickly and consume on the run. Forty-four percent of meals are prepared
under 30 minutes, with 1/5 of meals consumed in a car. Sixty percent of Qualtrics respondents2
consider convenience a very important attribute, ranking it four to five on a 5-point scale (refer3
to appendix Data Table 1). Because BCD offers all the ingredients for a nutritious and healthy
drink in a convenient package, it is poised to capitalize on these behaviors.
Weaknesses
Negative Publicity: The old BCD product and brand reputation was represented poorly, due to its
unhealthy and undesirable ingredients such as high fructose syrups, artificial flavors and
sweeteners. This runs contrary to the US per capita consumption of high fructose corn syrup,
which has gone down from 62.5 lbs in 2000 to 41.4 lbs in 2016. Consumers may associate4
BCD’s product with its unhealthy past image and not include it in their health conscious decision
set.
Accessibility: Because BCD’s ingredients can easily be located from local markets, consumers
may choose to purchase all of the components of BCD and produce their own supplement shake,
instead of purchasing BCD’s product.
Opportunities
All-Natural Products: As of 2015, consumers’ interest has grown for fresh, natural, and organic
products as a way to manage their health. Consumers are also willing to pay more for healthy
products. As an all natural supplement drink, BCD’s customers will value its high quality5
ingredients, even at a higher price.
1
(Bushak, 2014)
2
(Darian, 2011)
3
(BCD, 2018)
4
(Statista, n.d.)
5
(Gagliardi, 2015)

Profitability: MRI reports a growing trend of both men and women having an increased interest
in taking supplements. In the U.S., sales of supplement nutrition drinks amounted to $2.2 billion6
dollars in 2015, and is estimated to be worth $2.55 billion by the year 2020. Further, the “dietary7
supplement industry is growing at a rate greater than 5 percent per year”. This demonstrates that8
supplement drink products have a significant profitable market share that continues to grow.
Threats
Product Similarity: Many companies offer similar “to-go” bottled drink products that BCD will
have to compete with; companies like 1st Phorm, Bodybuilding.com, and optimum nutrition.9
Because many companies offer a similar alternative to BCD’s product, these companies can
hinder BCD’s entry to market.
Short Trends: Most importantly, trends in the health industry can rise/fall drastically as seen in
the 9% increase of dietary supplement use from 2015 to 2016 . These specialized supplements10
can be expensive, and if economic hardships arise, consumers could turn to a cheaper alternative.
6
(University Reporter, 2017)
7
(Statista, n.d.)
8
(Health Supplement Stores, 2009)
9
(First Research, 2018)
10
(Supplement Use, 2016)

BCD STP
Segmenting
Twenty-seven percent of the population that take meal, dietary, and weight supplements for
nutritional benefit are aged 25-34 and have an annual household income above $75,000. In the
US, 51% of the population that uses nutritional supplements is female. People in the United11
States value exercising and eating healthy . Twenty-six percent of people who take meal,12
dietary, and weight supplements watch ESPN . Today’s population of US adults are making13
efforts to participate in physical exercise and strive to consume a better diet . Based on14
Qualtrics, 64% of people consider themselves health conscious when it comes to dietary choices,
and 48% state that they exercise four or more times a week.15
Targeting
Brownie Chocolate Drink (BCD) is targeting health-conscious, upper-middle class females aged
25-34. These target women are recent college graduates and young professionals making above a
$75,000 salary, who frequently attend the gym and subscribe to health or fitness magazines.
Thirty seven percent of Qualtrics respondents state they take supplements once a day, while 57%
of the respondents have gym memberships.16 17
Positioning
BCD will separate itself from competition by its quality ingredients and convenient packaging.
From 2011 to 2015, annual sales of Green Mountain K-Cups increased from $2.65 million to
$4.52 million, showing a shift in consumer spending habits towards single-use, convenient
buying options . BCD’s simple ingredients encompass many health benefits that will draw a18
wide-range of consumers. According to Qualtrics, 92% of respondents said that convenience was
an important factor when choosing what to buy. BCD’s consumers will see this brand as a19
high-quality supplement that is quick and convenient for any lifestyle.
Persona
Victoria is a 27 year old Cal Poly graduate with a bachelor's degree in Kinesiology. She recently
became a pilates instructor. She is married to a special events coordinator for Marriott with a
annual household income of $125,000. She participates in morning yoga, weekend spin classes,
11
(MRI, 2017)
12
(Dickinson & MacKay, 2014)
13
(MRI, 2017)
14
(Dickinson & MacKay, 2014)
15
(BCD, 2018)
16
(BCD, 2018)
17
(IHRSA, 2016)
18
(Statista, 2015)
19
(BCD, 2018)

and walks her dog, Pompom, daily. She takes health and nutrition seriously and only consumes
products with the purest ingredients. With her busy routine and health conscious preferences,
Victoria represents the ideal BCD customer.
Perceptual Map

Product Strategy
Primary Features
BCD provides consumers with high quality, nutritious ingredients in a convenient drink
containing a variety of health benefits. BCD includes vitamin B12, cocoa powder, maca powder,
and collagen. Vitamin B12 helps strengthen nerve and blood cells , cocoa powder is a natural20
energizer containing caffeine and antioxidants , maca powder is from the maca root providing21
iron, copper, and vitamin C , and collagen gives the body amino acids to help in collagen22
protein growth . Twenty-eight percent of US consumers are drawn to products that provide them23
with essential nutrients and has no artificial ingredients . BCD provides features that directly24
address the 58% of Qualtrics respondents that consider high nutritional content as an important
attribute .25
BCD provides a seven-day supply of single-serve powder packets along with a plastic shaker
bottle that offers a quick, healthy drink option for those on the go. Fifteen-percent of all US
consumers are willing to spend money in order to save time . After a study that asked why26
participants would choose to eat pre-packaged or processed food, 61% responded because they
are convenient, 49% replied because they save time, and 52% said because they are easy to
prepare . These demonstrate a market that desires convenience that BCD’s product can fulfill.27
With BCD simply, tear, pour, shake, and go.
Packaging
BCD is presented in a matte white box with the “BCD” logo in maroon on top of the box (refer
to appendix Image 2). The maroon color is used to represent confidence, power, and excitement.
It increases appetite, boosts adrenaline, and increases heart rate. BCD chose white packaging28
because white resembles cleanliness and simplicity, an accurate representation of the product and
its contents . When the customer opens the package, they will be met with the primary features29
listed above. Included in the box will be the simple instructions on how to use BCD and the
guarantee details. Victoria will be inclined to purchase BCD due to its aesthetic, that she can
show off to her pilates friends.
20
(National Institute of Health, 2011)
21
(Ashton, 2017)
22
(Link, 2018)
23
(Ashton, 2017)
24
(Euromonitor, 2017)
25
(BCD, 2018)
26
(Euromonitor, 2017)
27
(Statista, 2017)
28
(Color Psychology, n.d.)
29
(Clark, 2016)

Branding
BCD will develop brand recognition by its minimalistic design. BCD is made up of all natural
ingredients, boosting overall health. This simple concept will appeal to the target audience of
post-college students and young professionals. BCD’s slogan is: “Be Loved, Care More, Dig
Deep.” BCD provides the support to their consumers in “digging deep” into their goals toward
loving themselves and caring about their health.
Guarantee
If the cup is damaged and/or the individual packages are opened/deformed, BCD will refund a
full replacement.
Disclaimer
BCD makes no representations or warranties of any kind with respect to the information or
content posted on the product label. In no event shall BCD be liable for damages including, but
without limitation to: direct, indirect, special (including loss of profit), consequential or
incidental damages arising from connection with the existence or use of this product and the
information or content posted on the BCD label, regardless of whether BCD has been advised as
to the possibility of such damages.

BCD - Distribution Strategy
Channel Strategy
BCD will begin production of its four-ingredient powder: collagen protein, cocoa powder,
vitamin B12, and maca powder, at a “clean and pure bulk” supplement company called
BulkSupplements.com in Henderson, Nevada. BulkSupplements.com states “each supplement is
tested in the in-house laboratory, ensuring that each are safe for consumption .” BCD30
appreciates BulkSupplements.com effort into clean, effective supplements reflecting BCD’s care
for their consumers. BCD will purchase boxes, powder packets, and crinkle-cut paper from
Alibaba.com, a company that sells various items in bulk at an affordable price . BCD will31
partner with Corkcicle, who offers durable, stemless tumblers with a clean design. Corkcicle
donates 5% of sales to a non-profit that helps bring clean water to those in need . BCD identifies32
with Corkcicle’s efforts that mirror BCD’s brand mission of being loving, caring more, and
digging deep. BCD will be manufactured at Assemblies Unlimited in Bloomingdale, Illinois .33
At Assemblies Unlimited, the BCD powder will be mixed, individually packaged, and boxed
with instructions and a customized Corkcicle cup.
After packaging, JKC Trucking Company will deliver BCD’s product to the Target Distribution
Center in Ontario, California, the GNC distribution center in Indianapolis, Indiana, and the
Whole Foods distribution center in Vernon, California. Each wholesaler will then distribute the
product out to all their stores in the area. Target, Whole Foods, and GNC are popular stores for
“female, younger, and chic” post college individuals and young professionals like Victoria, to
pick up their box of BCD! In fact, 57% of Qualtrics respondents said they would expect to34
either purchase BCD’s product in big box stores or health focused grocery stores (refer to
appendix data table 4) .35
30
(Bulk Supplements, 2018)A
31
(Alibaba, 2018)
32
(Corkcicle, n.d.)
33
(Assemblies Unlimited, n.d.)
34
(PYMNTS, 2016)
35
(BCD, 2018)

Channel Diagram
Transportation
BCD will utilize JKC Trucking, located in Summit, IL. They are a cost-effective trucking
company that takes freight across the country from Bloomingdale, Illinois, to Ontario, California.
JKC is a trusted carrier for Walmart, Sysco Food Service, and Walgreens, which exhibits
dependability with large corporations .36
BCD utilizes trucking because it provides “fast, frequent, and economic delivery to more
destinations in the country than any other mode .” Road transport is considered to be the most37
convenient mode of transportation, due to reliable tracking systems and responsiveness to market
changes . Ground shipping is proven to be significantly more economically priced than shipping38
by air . BCD values customer satisfaction by ensuring product quality and condition.39
Channel Management
BulkSupplements.com and Corkcicle will be liable for transporting the contents of BCD to
Assemblies Unlimited. Assemblies Unlimited will be responsible for producing BCD based upon
the agreed terms (taste/appearance). JKC does not have any warranties about their service and
36
(JKC, n.d.)
37
(Reference, 2018)
38
(Awal, 2010)
39
(TSI, 2018)

BCD will take forth the responsibility of potential risk in moving product . Target has high40
standards for its product safety and quality assurance tools and processes. With this standard,
Target ensures all products, including BCD, to be at its expected conditions . Whole Foods and41
GNC Distribution do not make any guarantees regarding their product shipment, hence BCD will
accept all liability of product shipment .42
40
(JKC, n.d.)
41
(A Bullseye View, n.d.)
42
(U.S. Securities, 2018)

BCD Promotion Strategy
Push Strategy
Brownie Chocolate Drink (BCD) will utilize intermediaries to promote sales, increase
awareness, and spur trials. Specifically, BCD will supply a sample of its product to personal
trainers at 24 Hour Fitness gyms in order to gain product support and endorsements from experts.
This allows BCD to obtain immediate access to 24 Hour Fitness’ four million members at over
400 club locations across the US. By targeting 5-10 trainers per location, approximately43
2,000-4,000 trainers will be incentivized to push BCD’s product onto their clients and promote
entry into the market. Sampling has been shown to increase sales of products by 300%. Results44
of sampling have shown a larger potential for acceleration of purchases and a greater retention of
customers after trial .45
Pull Strategy
BCD will create an Instagram and utilize recognizable influencers such as Blogilates to promote
the product on their personal accounts as well as BCD’s own. Influencer content shows that
audiences exposed to the content spend an incremental $639,700 more than audiences not
exposed. BCD will create a Facebook page and invest in boosting posts to allow for recurring46
ads. Social media is a relevant form of communication for the target market of post college and
young professionals. This corresponds to the 80% of Qualtrics respondents who said they would
expect to hear about BCD through Social Media. BCD will benefit from the growing social47
media popularity and increase in platforms young people utilize. The slogan attached to the
product will read “Be Loved. Care More. Dig Deep. BCD” through the communication channel.
43
(24 Hour Fitness, 2018)
44
(Heilman, 2011)
45
(Bawa, 2004)
46
(Sussman, 2017)
47
(BCD, 2018)

BCD will also print posters with the logo and description, and distribute them to 24 Hour Fitness
facilities across the country, where the largest demographic subset of gym goers are females
aged 25-34 years, just like Victoria. BCD will be available for sampling in front of 24 hour48
fitness locations and in front of GNC stores to allow the public to get a taste of the product. A
20% discount coupon will be given to each customer to incentivise them to purchase BCD. The
person-to-person contact will promote selling the product directly to the consumer.49
In addition, BCD will purchase advertising space in Spry Living, the most popular health and
fitness magazine in the US with 9 million readers . Magazines appeal to BCD’s target audience50
of 24-35 year olds as “younger adults read more magazines than older peers .” Spry Living is a51
magazine acting as a “resource for common sense health, wellness, and lifestyle advice .”52
Twenty-two percent of the US population are positively influenced by product advertisements in
magazines and purchase the product after . Spry Living’s readers will be pulled towards BCD’s53
product as a boost to their overall health, wellness, and lifestyle and become motivated towards
future purchases.
48
(Foursquare, 2018)
49
(Hopwood, 2016)
50
(Cision, 2016)
51
(Marketing Charts, 2007)
52
(Spyr Living, n.d.)
53
(Cision, 2016)

BCD - Pricing Strategy
Elasticity
After analyzing 46 out of the 81 Qualtrics respondents who were surveyed on the $40 product
price, BCD’s product was found to be inelastic (See Table 2 in appendix). This shows that a 1%
increase in price would result in a 0.5% decrease in product demanded.54
Target Price:
Qualtrics shows that potential consumers will pay a higher price for a quality product . BCD55
will charge $40 per box to stay competitive in the current market and to create a higher profit
margin than charging $20 per box.
Discount
BCD offers a 10% discount via mass-email to those who are subscribed to Spry Living Magazine
and 24 hour Fitness, reaching 13 million people .56
Financials
BCD’s costs of goods sold after year one will be $1,287,500 and will increase to $1,327,928 in
year two. Raw materials such as vitamins are bought in bulk through bulksupplements.com and
shipping and packaging materials are bought through alibaba.com. According to the income57
sheet below, one unit of BCD’s product will cost $25.75 to produce. For a more thorough
breakdown of expenses used to create BCD’s product, refer to Table 3 of Appendix. BCD will
partner with Assemblies United, where packaging costs will be $4,545. Based on Statista, U.S.
retail sales in vitamins and nutritional supplements increased 3% from 2016-2017. BCD58
expects to follow a similar demand growth, increasing 50,000 units to 51,570 units between year
1 and 2.
54
(BCD, 2018)
55
(BCD, 2018)
56
(AMG Parade, n.d.)
57
(Bulk Supplements, n.d.)B
58
(Baird, 2012)

According to Liberty Packaging, average packaging costs equate to $1 for every $11 price spent
. With expected sales projection of 50,000 units for year one, the packaging cost will equal59
$4,545. BCD’s advertising expenses include the Facebook and Instagram outreach advertising
costs of $4,500 a month. In addition, the Spry magazine fixed cost for a cover strip is $80,793.60
With expected projected sales growth for the following year, BCD plans to increase social61
media marketing expenses by 15% to increase brand awareness. BCD’s shipping will be done by
JKC Trucking company. JKC’s shipping costs will be similar to those of Chuck’s Trucks’s cost
of $200,000. The average markup for wholesale distributors is approximately 20%. Thus, BCD62
expects that the distribution expense will be 20% as well. About 0.7% of U.S consumers utilize63
coupons distributed; BCD estimates that a similar amount of consumers will redeem BCD’s
coupon . BCD will be based in California, therefore a corporate tax rate of 9% will be accounted64
59
(Spitz, 2013)
60
(The Content Factory, 2018)
61
(AMG Parade, n.d.)
62
(RTS Financial, 2014)
63
(Gray, 2012)
64
(Statista, 2016)

for under expenses. Based on BCD’s fixed costs, BCD estimates that $51,883 unit sales is
needed to break even (refer to appendix Table 4 for BCD’s break-even analysis).
Labor Costs
Labor costs will be covered in the distribution and shipping expenses, because BCD will be
partnering with the manufacturing company to package and transport the product. All shipping
expenses will include the costs for the transportation of the product and the costs for the
employees required to transfer the packages.

Brownie Chocolate Drink (BCD) Appendix
Logo
Image 1 Image 2
Qualtrics Data
Data Table 1- Importance of Convenience
Data Table 2- Willingness to pay $40

Data Table 3- How health conscious are you?
Data Table 4- Where would you expect to purchase BCD

Data Table 5- How often do you take dietary supplements?

Financials
Table 1- Discount for Intent
Table 2- Price Elasticity of Demand
Table 3- Raw Materials Expenses

Table 4 - Break-Even Analysis
*Note: Please see the “Pricing and Financials” section of the Marketing Plan for a thorough explanation of the
figures above.
Qualtrics Survey

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