Download - Active-Lyte Presentation
Group D’s Marketing Plan
By: Sean Ching, Zhuoyun Xu, Deanna Walton, Nicholas Njotowidjojo, Travis Mackenzie, Alison Antoku
Marketing Challenge - SWOT● Adult consumption of Pedialyte has risen about 60% since 2012.
● Hangover remedy, Intra and Post-Activity, and Dehydration Prevention.● CEO - “Today we (Abbott) know that more than a third of our sales actually come from
that adult use". Though this new market has been recognized by Abbot, they have resisted any formal change to the product.
● Social Media Campaign “See The Lyte”.● Why should change anything when Pedialyte is already a market leader?● Strength - Proven product invented by Dr, Gary Cohen, trusted by consumers, organically
created market.● Weakness - Product Name, New T.M awareness.● Opportunity - New market is 3X times larger than current market.● Threat - Late to party? Entering a market dominated by huge brands (Gatorade. Powerade)
STP Analysis
For Pedialyte for instance, the various segments that are include in the marking plan are age, lifestyle and market economy.
Based on segmentation, targeting and positioning analysis, the specific target group selected for this product are the active adults living in the developing countries.
Positioning Statement
“For active adults, ACTIVE-lyte is the electrolyte recovery drink that delivers superior hydration because only ACTIVE-lyte is the proven industry leader backed by science.”
The word lyte is used to show the relationship between the product and the Pedialyte brand. The word electrolyte is also used to show the intentions of the product in the market.
Marketing Objectives - By December 2016
1. Reach sales of 100 million bottles
3 in 5 ad viewers become newly exposed to
ActiveLyte
#SeeTheNewLyte#SeeTheNewLyte#SeeTheNewLyte#SeeTheNewLyte
Marketing Objectives - By December 2016
2. Get 500,000 social media tags tracked via
#SeeTheNewLyte
Marketing Objectives - By December 20163. Follow Marketing Budget of $75 million
Sales Promotions: $12.5 million-Coupons for Discounts-Free Sampling-Sweepstakes
EXPENSE BREAKDOWN:Advertising: $ 62.5million-Billboard: $2.5 million-Commercials: $50 million
-SuperBowl: $5 million-Prime time TV: 45 million
Two Celebrity Endorsements: $5million each
Commercial per 30 sec exposure: $50,000
The Calculation
With 100 million bottles sold,
$5 per bottle,
$500 million net sales
15% of Sales =
Budget of $75 mil
Action PlansCelebrity Endorsements and Brand Ambassadors
SuperBowl advertisement
TV advertisements
Billboard advertisement
Social Media Sweepstakes
#SeeTheNewLyteACTIVE-lyte
Why let yesterday’s
activities stop you today?
IBEV for Celebrity Endorsement
Unit Price = $5Unit Variable Cost = $2.5Unit Margin = $5-$2.5 = $2.5Endorsing Selena Gomez and Rob Gronkowski = $10 million ($5 million each)IBEV = Incremental Cost/Unit Margin
= $10 million/$2.5 = 4,000,000 bottles.
#SeeTheNewLyte#SeeTheNewLyte#SeeTheNewLyte#SeeTheNewLyte
IBEV for Advertisements
Unit Price = $5Unit Variable Cost = $2.5Unit Margin = $5-$2.5 = $2.5Advertisements Cost = $52.5 millionIBEV = Incremental Cost/Unit Margin
= $52.5 million/$2.5 = 21,000,000 bottles.
Market Demand
Assumptions:Total Adults: age 20-64 years (United States)
= 167,449,000“Active Adults” (subset): (25%)(167,449,000) =
41,862,250Year One Customers (subset): (16%)
(41,862,250) = 6,697,960Unit Price: US$5.00Average Spending on ACTIVE-lyte per year:
US$10020-1 liter bottles per year at $5 per bottle = 5
gallons per yearMarket Demand = (6,697,960)(US$5)(20) =
US$669,796,00016%
2.5% 13.5%
Required to calculate market demand:Predicted No. of Customers in
year oneAverage No. Sold per
CustomerUnit Price
Sensitivity Analysis
Assumptions:Total Adults: age 20-64 years (United States) = 167,449,000
“Active Adults” (subset): (25%)(167,449,000) = 41,862,250Year One Customers (subset): (32%)(41,862,250) = 13,395,920
Unit Price: US$3.00Average Spending on ACTIVE-lyte per year: US$100
20-1 liter bottles per year at $5 per bottle = 5 gallons per yearMarket Demand = (13,395,920)(US$3)(20) = US$803,755,200
FLAWED Method
32%
2.5% 13.5% 34%
Assumptions based on historical data: ● Aggregate Income Statement - NOT to be confused with incremental analysis● Sales and COGS (Variable Costs): Constant Growth by $600m and $110m per year, respectively
○ Incremental increase in net sales by $500 million (100m. bottles X $5)○ ALL Expenses (COGS, Fixed, Miscellaneous): Remain relatively constant, despite random fluctuations and inflation.
● (Total) Net Earnings: $3,683,000,000 by end of 2016
Abbott 2016 Annual Report
Consolidated Statement of Earnings(in millions) Year Ended December 31 ___________2016 __2015_________Net Sales___________________________ 22,347 20,847________Cost of Products Sold 9438 9328Amortization of Intangible Assets 500 520Research and Development 1350 1350SG&A 6500 6500________Total Operating Costs & Exp. ____________17,788 17,698_______Operating Earnings 4559 3149Interest Expense 150 150Interest Income (80) (80)Net loss on extinguishmentof debt - -Net foreign exchange (gain) loss (20) 40Other (income) expense, net _____________75 45________EBT - Continuing Operations 4434 2994Taxes - Continuing Operations ________ _1300 900_______Earnings - Continuing Operations 3134 2094Earnings - Discounted Operations 550 550_______ Net Earnings _______ 3684 2644_______
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