Point of Purchase Promotion: Vitamin Water

Vitamin Water is an enhanced water product distributed by Energy Brands, also

doing business as Glacau. Glacau Vitamin Water has always been a simple idea.
Start with water and then add bold, fruity flavors and just the right amount of sugar
to make it delicious. Finally, top it off with a little extra nutrition.
Energy Brands (Glacau): Energy Brands or Glacau, is a privately owned
subsidiary of The Coca-Cola Company based in Whitestone, New York City that
manufactures and distributes various lines of enhanced water. Founded in May 1996
by J. Darius Bikoff with an electrolyte enhanced line of water called Smart Water,
Energy Brands initially distributed its products to health food stores and
independent retailers in the New York area. Adding Fruit Water and Vitamin Water to
its line in 1998 and 2000, respectively, the company expanded to nationwide
distribution in the early 2000s. By 2002, the Glacau line of waters were the top
selling enhanced water brand in the United States, with the company's Vitamin
Water being its bestselling product. In 2006, the company earned US$350 million in
revenues. The company then began its global expansion, launching its products in
the United Kingdom and Australia in 2008, France in 2009 and Argentina in 2011.
Competition: The Vitamin Water, Energy Brands bestselling product has the
largest market share in the enhanced water category. But it is facing competition
from sports drinks, a related but different category. Sports drinks are beverages
whose stated purpose is to help athletes replace water, electrolytes, and energy
after training or competition. Two of the biggest brands in the sports drinks category
are Gatorade and Powerade.
Gatorade: Gatorade is currently manufactured by PepsiCo and distributed in over
80 countries. The beverage was first developed in 1965 by a team of researchers at
University of Florida, to replenish the combination of water, carbohydrates, and
electrolytes that the school's student-athletes lost in sweat during rigorous athletic
competitions. As of 2010, Gatorade is PepsiCos 4th-largest brand, on the basis of
worldwide annual retail sales. Within the United States, Gatorade accounts for
approximately 75 percent market share in the sports drink category.
Powerade: Powerade is a sports drink manufactured and marketed by The CocaCola Company. First introduced in 1988, its primary competitor is PepsiCo's
Gatorade brands. As of December 2010, Powerade has grown to take 21.7 percent
of the United States market in the sports drink category.

Team Task
As a marketing manager of Glacau, you need to design the Point of Purchase
promotions for Vitamin Water to be placed in all Walmart Superstores in the US. The
broad purpose of your planned promotion is to increase sales. You need to decide
the more specific purpose of your promotion plan. You need to:1. State the specific objective you expect to achieve with your promotion plan.
Your objectives should be qualitative as well as quantitative. Your objectives
can be 1) increase sales to individuals who have hardly ever tried enhanced
water, 2) increase sales to individuals who try sports drinks but not enhanced
water, 3) increase sales to individuals who consume enhanced water but not
Vitamin Water, 4) increase sales to regular customers of Vitamin Water, or 5)
anything else that you think can be a substantial sales based objective that
can be achieved by using Point of Purchase promotions.
a. You need to give the expected number of people your promotional
design will reach
b. You need to estimate the additional volumes in terms of units sold and
additional revenues which can be attributed to the promotion
c. Also, quantify any other objective that your design plans to achieve
2. Develop an original Point of Purchase Promotion Plan. You cannot use the
exact designs already being used by Glacau or any other company. Let your
imagination fly while coming up with designs. Discounts (price discounts or
quantity discounts) are not allowed.
3. Justify that your plan will help you achieve the objectives
4. List the conflicts with other parties that your design will may (will) give rise
to. Think of ways to resolve these. Not all conflicts can be resolved.
5. Calculate the costs attached with your promotion plan.
a. You can calculate the costs of designing the promotion
b. Then, you can estimate the costs attached with putting your plans at
work within the Walmart store at Iowa City.
c. Then, you can use these values to estimate the cost to implement your
plan in the entire country.

Grading and Timelines and Format Guidelines

Every team needs to turn in a paper and make a 6-8 minute presentation.

Timelines:
o 10th September: Initial introduction to the concept of Point of Purchase
and the Honors Case Study
o 29th October: Detailed discussion
o 2nd December: a four page paper (excluding appendices and
references) due
o 3rd December: Presentation to be made in the class

Grading:
o The paper and your design carries 50 points
o The presentation is worth 25 points. These points are awarded to your
team by me as well as other teams.