Download Crystal Light has been meeting the refreshment needs of women for

with calcium
TABLE OF CONTENTS
Introduction ........................................................................................................................ 2
Executive Summary ........................................................................................................... 2
Environmental Analysis ...................................................................................................... 4
Internal Environment .................................................................................................... 4
Customer Environment ................................................................................................. 5
External Environment ................................................................................................... 7
SWOT Analysis ................................................................................................................ 10
Strengths.................................................................................................................... 10
Weaknesses .............................................................................................................. 11
Opportunities .............................................................................................................. 11
Threats ....................................................................................................................... 12
Synthesis ................................................................................................................... 12
Marketing Goals and Objectives ...................................................................................... 14
Marketing Strategies ........................................................................................................ 15
Target Market ............................................................................................................. 15
Marketing Mix ............................................................................................................. 16
Key Consumer and Competitor Reactions.................................................................. 19
Marketing Implementation ................................................................................................ 20
Evaluation and Control ..................................................................................................... 21
Marketing Controls ..................................................................................................... 21
Financial Assessment ................................................................................................ 21
Works Cited ..................................................................................................................... 23
Appendix .......................................................................................................................... 24
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Power Point Presentation ........................................................................................... 25
Crystal Light has been meeting the refreshment needs of women for more than 17 years. “We
know that today’s woman understands what is truly important in her life and lives her life on her
own terms. When you feel good on the inside, it shows on the outside. That’s the beauty of
Crystal Light” (www.crystallight.com). However, we at Crystal Light acknowledge the growing
trend in health consciousness and see the opportunity to grow our market share in the beverage
industry. We are introducing a product line extension of our already existing product by
introducing Crystal Light with Calcium. If we can increase the awareness of health issues
concerning calcium deficiencies through a strong marketing plan, this alternative source of
calcium is sure to be a great success. The following report will discuss the internal, external,
and customer environments, a SWOT analysis, our marketing goals and objectives, the
marketing strategies, the marketing implementation, evaluation and control methods, and finally,
the financial implications of the product line extension.
EXECUTIVE SUMMARY
As the marketing team for Crystal Light, we present the marketing plan for Crystal Light with
Calcium. We have worked for nine months doing marketing research and scientific
development. We feel that we have found a product that the market needs and that we have
developed it with a scientific method that will be the most easily absorbed and will not affect the
texture or taste of Crystal Light’s refreshing beverage.
The product line extension will be the already existing Crystal Light beverage with 240
milligrams of additional calcium. This is 20% of a person’s daily-recommended value of calcium
in just one eight-ounce glass of flavored drink. We believe that Crystal Light provides the
perfect medium for the vitamin supplement because we have already established ourself as a
health conscious drink by focusing on our product’s low calorie attribute. Crystal Light has had
a declining market image of late, and we feel an extension on our current product is just what
we need to gain back the market share lost.
Calcium has vast benefits for all adults, children, and senior citizens. The most well known
benefit is its ability to strengthen teeth and bones. Other benefits include reducing the risk of
osteoporosis and kidney stones and maintaining normal blood pressure in pregnant women.
There is a definite need for calcium since 90% of American women do not get their daily
requirement.
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We feel that combining calcium and Crystal Light is a great move for many reasons. Crystal
Light with Calcium will be a more convenient way for Americans to get their daily requirement of
calcium. Another reason is that many consumers do not want to drink a beverage with a lot of
calories, carbonation, or caffeine. Our product will allow a person to avoid all three of these and
still receive the calcium needed. Crystal Light with Calcium will also be less expensive than
dietary supplements and more accessible for the entire population.
We have proven through our financial statements and analysis that this is a viable project that
will add value and profits to Crystal Light. Please feel free to contact us with any questions or
comments.
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ENVIRONMENTAL ANALYSIS
Internal Environment
Our current marketing goals and objectives are to increase profits by adding a line extension to
our current powdered drink market. This calcium-enriched line extension will provide a low
calorie, non-carbonated, caffeine-free, calcium-enriched beverage that will meet the unmet
needs of consumers. These goals and objectives are consistent with the mission, goals, and
objectives of Kraft Foods, the manufacturer of the Crystal Light brand. Kraft’s mission is to be
the undisputed leader of the global food (beverage) industry according to six core values: focus,
innovation, passion, speed, trust, and teamwork. Recent trends of health consciousness will be
capitalized upon by providing a nutrient-enriched beverage line.
Kraft Foods is the largest branded food and beverage company in North America and the
second largest worldwide, with their brand being found in more than 99% of all households
(www.kraft.com). Numerous entities and industry fragmentation make it difficult to compare
Crystal Light to the entire beverage industry. The beverage industry is finding increasing growth
in non-soft drink beverages. By continuing to be innovative and responsive to consumer
demand and changing market plans, we will continue to improve our performance. This
improvement in performance will be due to superior planning and implementation.
We, Crystal Light, are strong in most states of our current organizational resources. Kraft Foods
allows us to have substantial financial, human, experience, and relationship resources.
Resources are likely to change for the better in the near future as Kraft continues to be an
industry leader with increasing profit margins. With additional resources, Crystal Light will be
able to increase advertisement and develop new products/line extensions to better serve its
customers. The strength of Kraft Foods’ financial backing and experienced human capital will
allow us to stay abreast of the most recent technological advances. The research and
development department of Kraft Foods (internal source) has the capability and finances to
develop the calcium-enriched formula for our product line extension.
Under the Kraft Foods brand, marketing holds a prominent position in the organizational culture.
Kraft’s structure and culture are relatively stable, which is shown through their ability to grow
into the largest branded food and beverage company in North America.
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Customer Environment
Our current and potential customers for the calcium-enriched line extension are health
conscious individuals who keep a watchful eye on the four C’s: caffeine, carbonation, calories,
and calcium. Primarily, our buyers are women ages 18 to 65 that are educated, middle-class
citizens. The purchasers of our product are usually the members of the household responsible
for grocery shopping, and this is most likely the female in the household. The purchaser will
most likely be the consumer, although, many mothers may purchase the product for other
members of the household. The individual purchaser has the need and is the primary influence
in procurement. The head of household is financially responsible for making the purchase.
Potential customers during our first year of promotion will be located in California, Florida, and
Texas. Not only are these states the most populous in the United States, but they also have
climates that will complement our cold beverage. As you can see from the chart below, women
make up over half of each states’ population, as do residents over the age of 18. These are
primary characteristics of our consumers.
POTENTIAL CUSTOMER STATS IN TARGETED MARKETS
California
Texas
Population
33,871,648
20,851,820
Female
16,996,756
10,498,910
Male
16,874,892
10,352,910
% Females
50.2%
50.4%
% Males
49.8%
49.6%
Over 18
24,621,819
14,965,061
% over 18
72.7%
71.8%
Median household income
$39,595
$34,478
Rank in pop.
1
2
Rank in numeric pop. change
1
2
Major population centers
Los Angeles,
San Francisco,
San Diego,
Sacramento
Houston,
Dallas,
Austin,
San Antonio
Florida
15,982,378
8,184,663
7,797,715
51.2%
48.8%
12,336,038
77.2%
$32,877
4
3
Orlando,
Tampa,
Miami,
Palm Beach
Source: U.S. Census Bureau 2000 census
Consumption and purchase of Crystal Light will take place year around, but sales will increase
during spring and summer months when cool, fruity beverages are desirable. As calciumrelated issues in the news increase and our population ages, there will be an increase in sales
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related to calcium-enriched products. Calcium has gained new light as osteoporosis continues
to plague aging women, including 28 million Americans. Recent government studies show that
80% of American women are calcium deficient. With such statistics, we are certain that a strong
customer base will be in existence for Crystal Light with Calcium.
The basic needs of noncustomers that are not being met by our product include those persons
that feel that they would not derive any additional utility through consumption. In addition, the
convenience need is not met through the powdered mix. Customers choose competing
products because of price, previous brand loyalties, and lack of education, income, and
inconvenience. Crystal Light contains an artificial sweetener, Aspartame, which has unknown
long term effects and has recently attracted the attention of much of the media. This could
make some potential customers shy away from procurement. However, this is a problem for all
Crystal Light products, not just Crystal Light with Calcium. Pricing is a factor in the willingness
and ability of purchasing our product. The distribution in only selected target markets will also
not allow consumers to buy. Some consumers won’t purchase because of lack of promotional
activity or lack of utility from current promotional activity. The potential for converting
noncustomers to use our product is feasible. Better advertising, larger distribution area, and instore samples can be used to get customers to initially try the product. Also, consumer
research to find new flavors can be done to meet consumer tastes.
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External Environment
Within the beverage market, there is an immense amount of competition for beverage budgeted
income. The total beverage market is a $139.5 billion dollar business, and the powdered drinks
segment only makes up $0.9 billion of this market.
U.S. PER CAPITA BEVERAGE CONSUMPTION
Source: Beverage Digest
As depicted in the chart above, the major market players include soft drinks ($60 billion), beer
($18.5 billion), juice ($12.2 billion), wine ($4.8 billion), distilled spirits ($37.3 billion), bottled
water ($5.2 billion), and dairy drinks ($0.6). According to estimates by Beverage Digest,
“carbonated soft drinks led retail beverage sales growth in absolute terms in 2000. The
category’s annual retail sales grew by $2.32 billion, a 4.0% increase from 1999”. Each segment
has its own target market, however we are marketing to a “niche” target market of health
conscious women who are not satisfied with all of the attributes of the other beverage products
and seek to find a product that meets their overall needs. For example, soda is high in calories
and carbonation, milk is high in fat, juice is high in calories and sugar, and water is of very poor
quality in many areas. Competitors’ strengths include large budgets, name recognition, brand
loyalty, and overall availability and convenience. Weaknesses are simply the unattractive
attributes.
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Our competitors’ key marketing capabilities in terms of the marketing mix include:
 Promotion: The soda companies have large budgets and milk and juice are funded
through promotional boards and councils.
 Products: There is consistent demand for the other products.
 Distribution: All beverages have established distribution channels.
 Pricing: Soda and water are cheaper; juice and milk prices fluctuate with the market.
The competitive set is not likely to change in the future because the other products will always
be popular and consumed by certain markets. Our direct competitors in the powdered drink
market include brand names such as Kool-Aid, Country Time, and Gatorade. Future
competition would come from other health-type drinks.
The economy of the United States is currently in a slight recession, however this does not
currently have a major impact on the sales of food and beverage products. However, if the
economy moves into a depressionary stage, some consumers would have to give up “luxury”
beverages such as Crystal Light and consume a cheaper alternative. According to the latest
reports, customers are optimistic that the economy will rally by 2003. Federal Reserve
Chairman Allen Greenspan announced in recent weeks that the recession is over for the United
States. The buying power of customers in our target market is low. No one buyer can have an
effect on Crystal Light. The spending pattern of the female shopper is to buy goods that they
feel are beneficial to themselves, their children, their family, and their health.
From a political standpoint, Kraft Foods strives to maintain healthy relationships with
government officials. Before the spin-off of Kraft foods, other corporate entities were met with
opposition and strife from the government, including the tobacco products of Phillip Morris. The
smoothing of the relations is imperative in preventing a backlash onto Crystal Light from Kraft’s
other activities.
Kraft has not been faced with recent legal and regulatory issues. Our marketing activities have
not been scrutinized and are well within the law. Future issues may arise with using aspartame
and its long-term effects.
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Since customers demand a higher quality product at a reasonable price, Kraft and Crystal Light
must keep current with technological changes. Technological changes in the way we operate or
manufacture our products include higher mechanized production, increased communication due
to better Internet systems, and advancement in retail outlets due to e-commerce. Marketing
activities could be advanced through the use of the Internet by allowing for increased promotion
and advertisement. A more efficient distribution system due to increased communication
between buyers and sellers will reduce costs and improve operations. Also, technology will
allow for increased inventory control. Increased research and development could find additional
nutrient additives and expand product lines. By commercializing packaging to meet the
demands of convenience-oriented customers, Crystal Light would be a more effective provider.
Threats could arise from further innovations in calcium supplements that render our products
obsolete. Other products with more advanced packaging could replace Crystal Light.
That changing face of society has altered the product mix. Society has an increased concern in
health issues, focusing more towards lower caloric, caffeine, and carbonation intake, while
increasing calcium for stronger bones and a healthier body. People will be impacted by our
product promotions and purchase the calcium-enriched product. The lower income levels of
people are unable to purchase this product due to higher price and will consume an alternative
beverage such as water. Also the increase in the diverse U.S population will effect the
purchase of our product. The average age of the U.S. population is increasing and they could
benefit from the extra calcium provided in this product. Kraft products are well established in
99% of all households.
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SWOT ANALYSIS
A SWOT analysis was conducted to gain information for market planning and assess ways to
attain our objectives and overcome any obstacles. A brief summary of the results is shown in
the following table.
Strengths
 Brand of Kraft Foods
 Customization
 Four C’s
Weaknesses
 Not convenience oriented
 Weak market image
 Limited target market
Opportunities
 New uses of product
 Aging population
 Rapid growth in industry
Threats
 Kraft internal brand competition
 Increasing number of substitutes
 High new product failure rate
Strengths
 Brand of Kraft Foods
Crystal Light is a brand of Kraft Foods, which is a formidable player in the global food and
beverage industry. As mentioned earlier, 99% of all households have some Kraft product in
their home. Being a brand of Kraft, Crystal Light has the needed resources, human capital, and
research and development to achieve success with the new product line extension. In addition,
Crystal Light has been serving the refreshment needs of women for more than 17 years.
 Customization
The powdered Crystal Light drink is flexible and can be customized to meet individual needs of
consumers. The drink can be mixed stronger or weaker depending on the tastes and
preferences of each consumer.
 The 4 C’s
Our product is focused around the nutrition of the 4 C’s: low Calorie, Caffeine-free, nonCarbonated, and Calcium-enriched. Our dedication to ensure that health conscious consumers
have a drink that meets their needs is demonstrated through our commitment to the new Crystal
Light with Calcium. Our product contains these attributes that give it a distinct advantage over
substitutes. For example, most soft drinks are carbonated, have caffeine and are high in
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calories. Juices are also high in calories. Water is one of the few drinks that supersede Crystal
Light in nutrition, yet at the same time, the taste of water in some areas is displeasing.
Weaknesses
 Not convenience oriented
The product is in the form of a powdered drink mix and requires time to be made. In today’s fast
paced society, consumers are busier and on the go more than ever, making our product not
conducive to their needs. It is not packaged in a plastic bottle that can be grabbed on the go,
and it cannot be sold in a convenience store’s beverage cooler.
 Weak market image
Another major shortcoming of our business is that Crystal Light currently has a weak market
image. In the eyes of consumers, Crystal Light is not a major competitor in the beverage
industry and is not a frequently purchased product. It is only the brand loyal customers that
repeatedly purchase the product.
 Limited target market
The last weakness is the constraint on the target market. Women primarily consume Crystal
Light. By marketing to just women, we are limiting ourselves of the potential number of buyers
of our product. Another downfall is that we are limiting the regions to which we will sell the
product in the first year.
Opportunities
 New uses of the product
The flavored drink has the possibility to allow consumers to use the product in other ways
besides just a liquid beverage. For example, Crystal Light can be mixed to make slushes and
smoothies, which are popular items in some places.
 Aging Population
As the population ages, consumers are becoming more mindful of their health. They are more
concerned with getting the recommended daily allowances of vitamins and minerals, especially
calcium. Due to the alarming statistics of calcium deficiencies for both women and men and the
threat of osteoporosis, the need to provide products that help ensure individuals reach the daily
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targets is key. Crystal Light with calcium provides 20% of the daily needed amount in just one
eight-ounce glass.
 Rapid growth in industry
Industry trends show an increasing growth in non-soft drink beverages. This growth
demonstrates the change in consumers buying habits. Crystal Light hopes to capture some of
this growth with their “good for you” drink.
Threats
 Kraft brand competition
The fiercest competition in the powdered drink segment is from other brands in the Kraft family.
Both Country-Time Lemonade and Kool-Aid are brands of Kraft.
 Increasing number of new substitutes
Another threat to the business is the immense amount of substitutes being introduced in the
beverage industry. More and more companies are competing for the consumers beverage
budgeted income. Between January and September 2001 there were 795 new beverage
products introduced.
 High product failure rate
The introduction of new products onto the market is not always successful. It has been found
that 75% of all new products fail. Our new product line extension may not be receptive and
meet consumers needs as we had hoped. This demonstrates our desire and need for a strong
commitment to the product and marketing plan.
Synthesis
By capitalizing on the strength’s of the business as well as seizing potential opportunities, we
feel that this Crystal Light product line extension can be very profitable. It is important that we
stress the 4 C’s and the quality of being a brand of Kraft in order to reach the health conscious
consumers and gain market share.
With beginning success in our target markets, we hope to overcome the weakness of nonconvenience and offer our Crystal Light with Calcium in individual plastic bottles. Further
expansion in the future will combat the weakness of the limited target market. Moving into new
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regions and targeting men will stimulate growth in the future. Also, with a strong promotional
campaign we plan to strengthen our market image.
There is little to be done to combat the large number of new beverage products introduced.
This is a growing industry that will continue to see an immense about of competition. By
extensive R&D, a well-researched and compiled marketing plan, and commitment of the
management team, we can help ensure that our product is not one of the many that fail.
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MARKETING GOALS AND OBJECTIVES
Our current marketing goal is to revive Crystal Light sales by increasing consumer awareness of
our “Better For You” beverage. Under this goal, our three major objectives are bulleted as
follows:
 To gain product acceptance of Crystal Light with Calcium in 35% of our target market
in year 1.
Our strongest method of ensuring this objective is met is by utilizing the extremely large portion
of funds set aside for advertising and public relations. Our public relations campaigns that
include speaking at conventions, such as the National Osteoporosis Convention, will help make
this marketing objective a reality.
 To increase current sales by 6% over the next three years from $94.6 million to
$100.276 million.
Our second objective of increasing current Crystal Light brand sales includes the plan to
increase sales by a mere two percent per year over the next three years. This goal is
achievable given we are introducing a new line extension directed to a profitable market
segment of health conscious individuals that seek additional calcium in their diets.
 To increase our share of the fruit drink mix market from 15.3% to 20%.
The fruit drink mix market consists of brands such as Country Time and Kool-Aid. Both of these
brand names are owned by Kraft Foods, therefore the competition is actually within the
company. By creating ways to meet the needs and desires of consumers through new product
development, the objective of increased market share is easily attainable.
As previously stated, our goals and objectives are consistent with the mission, goals, and
objectives of Kraft Foods, our parent company. Our marketing goals and objectives are also
consistent with recent trends in marketing, which entails targeting distinct customer segments
that demand healthy nutritious beverages that provide essential vitamins and minerals without
including the negative features of calories, caffeine, and carbonation.
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MARKETING STRATEGIES
Target Market
To meet our goals and objectives, we have chosen the growth strategy of new product
development in the form of a line extension. According to its definition, product development
involves the development of new products for existing markets to meet changing consumer
needs. We at Crystal Light feel that we strive to meet, and exceed these needs demanded by
our customers. By providing our enhanced Crystal Light with Calcium, we believe our
customers will achieve full satisfaction with our product, our services, and our commitment. Our
game plan was as follows:
1st -- We identified our target market as women ages 18-65. We then positioned our product as
a healthy alternative to other beverages that meets the needs of health-focused individuals.
Our product is “positioned” based on product differentiation.
2nd – We used market segmentation variables to adequately define our target:
demographic (women, educated, middle class, age, population); geographic (warmer
climate); psychographic (social class, lifestyle, acceptance level); behavioral (use of
product, attitudes toward healthy foods/beverages).
We performed a usage and
attitude survey in the three-state area that was chosen following some of the other
segmentation variables. We feel we meet the five major criteria in market
segmentation because our product is (1) internally homogeneous, (2) identifiable, (3)
accessible, (4) has effective demand, and (5) our company has the resources and
commitment to support our product.
3rd – We analyzed consumer behavior/ personality studies performed by our parent
company, Kraft Foods in order to reinforce our current positioning strategy.
4th – Customer Satisfaction will be achieved!!
After final market segmentation analysis was performed and evaluation of key aspects of our
marketing environment was complete, we affirmed that our initial target market would include
well educated, middle class women ages 18 to 65 that live in the three state focus area of
California, Texas, and Florida. These women will be the primary household shopper, and will
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purchase the product for themselves, or their family members who will gain from the health
benefits of Crystal Light with Calcium. We plan to focus our marketing on those who are healthconscious because studies revealed that they hold positive attitudes toward products that offer
enhanced benefits and could possibly improve their way of life. This target audience is
homogenous in that each member of the segment is seeking a healthy, refreshing alternative to
other beverages, such as milk, water, soda, or juice. These other drinks all contain some
negative attribute that enhanced Crystal Light corrects, such as high calories, carbonation,
caffeine, or a lack of essential vitamins and minerals. Our most dedicated consumers will seek
to purchase this type of product weekly, just as they would milk, while others will purchase it to
use daily as a replacement for soda or water.
Marketing Mix
In order to achieve our set goals and objectives, we will use our product mix capabilities to the
best of their potential. As described above in the objectives statement, promotion will be our
most important asset, but our product, pricing, and place all have increasing significance in the
attainment of our set objectives. Our marketing mix strategy is as follows:
 Product
The product line extension, Crystal Light with calcium is a powdered drink mix that is enhanced
through extensive research and development to contain a calcium additive
that provides 20% of the daily-recommended value of vitamins and
minerals. This product will be released in three flavors. Based on surveys
and sales data collected by Kraft, the three most popular flavors of Crystal
Light were chosen, Kiwi Strawberry, Pink Lemonade, and Raspberry Tea. To remain consistent
with the production facilities for the Original Crystal Light, Crystal Light with Calcium will be
offered in two convenient sizes. One container will hold four tubs (makes 8 quarts of liquid
drink) and the other size will hold six tubs in its cylinder (makes 12 quarts of liquid drink). The
only modification in the packaging will be in a label change to highlight the addition of calcium.
Our product has both tangible and intangible benefits. First, the intangible benefit of the Kraft
Foods name is a giant resource for any product. Kraft has name and brand recognition world
wide, and combined with its ample financial and human capital it provides strength to Crystal
Light with Calcium. The tangible benefits include the 4C’s: low calories, no carbonation, no
caffeine, and calcium enriched. The benefits of calcium have been a very important issue
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recently in the area of research. By definition, calcium is a mineral that primarily functions in
your body by making bones and teeth hard. It helps muscles contract, blood clot, and helps the
nervous system work properly. According to research results, three of the largest benefits of
calcium include:
 Reduced risk of osteoporosis
 Lowered risk of kidney stones
 Aided in maintenance of normal blood pressure in pregnant women
 Place
In order to keep a constant flow of distribution for our product we will use the preexisting
distribution system of Kraft. Kraft’s vast distribution system currently reaches all major retail
chains in the United States, as well as some convenience oriented stores and discount
wholesalers. In addition, Kraft has established “partners” within its distribution system, and
strives to maintain a smooth flow of operations. By creating these long-term relationships with
its partners, Kraft has ensured that its products are delivered in a timely manner with extreme
attention paid to product quality.
For the purpose of our study, we will limit the distribution of Crystal Light with Calcium to our
three state introductory focus area. California, Texas, and Florida were chosen based on our
research and extensive segmentation analysis. As our chart shows, we’ve chosen three of the
four most populous states in the United States. The percentage of women in each of these
states was over 50%, and studies revealed that the people of these states held positive
attitudes toward trying a new product, especially if it was beneficial to their health.
 Price
Our pricing strategy was derived based on our cost (as a floor on pricing) and demand
estimations. Our research and development costs to create the enhanced line extension will be
reflected in a slightly higher price than original Crystal Light. Our focus on price, however, was
on the perceived value that customers placed on our product. After hours of working with our
major retailers to establish an appropriate pricing strategy, we chose the psychological pricing
strategy of Odd-Even pricing, in which our small tub sells for $2.99 and the larger tub for $3.29
at the retail level. Our price to the retailer was slightly lower, but fluctuated depending on the
retail chain and volume purchased. We understand that customers are price sensitive, so
elasticity of demand studies also played an important role in deriving our price.
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 Promotion
In order to foster awareness for our line extension, increase the knowledge of its benefits, and
encourage purchase (and repeat purchase), we relied heavily on the most important element of
the product mix – promotion.
The three areas of promotion that we chose to use include advertising, sales promotion, and
public relations. The expenditures on promotion were increased from year one to year two, and
then decreased over the next two years. (See the following chart for more details and outlays
for each area.)
MARKETING EXPENSES
T.V.
Magazine Ads
Sales Promotion
Educational Packets
Other
Total Mktg Exp
2003
2,752
1,213
543
180
115
4,803
2004
2,890
1,274
570
189
121
5,043
2005
2,167
955
428
142
91
3,782
2006
1,084
478
214
71
45
1,891
Our major expenditure was in television and magazine advertising, which accounted for 57%.
We believe that we can reach a the largest portion of our target audience by focusing on
television shows and magazines that women watch frequently and look to for guidance,
including:
 Lifetime – Television for Women
 TLC – The Learning Channel
 The Today Show
 The View
 All major talk shows, such as Oprah, Sally, Ricki Lake
 Women’s Health Magazine
 Redbook
In the area of sales promotion, we will be offering in-store demonstrations in some of our top
retail chains for the three state focus area, including HEB, Albertson’s, and Kroger. At these
demonstrations, grocery shoppers will have the opportunity to sample the three calcium
19
enriched flavors, and thus provide feedback to the trained professionals that Crystal Light
provides to the stores free of charge. The other form of sales promotion that will be utilized is
free-giveaways of shakable containers. This container, which will be shrink-wrapped and
attached to a six-tub cylinder of Crystal Light, will demonstrate to consumers the ease in
preparation, while also appealing to their desire and attraction to free merchandise.
To educate consumers, as well as, appease any concerns, we will allocate a portion of our
promotion expenditures toward public relations. Some planned activities include speaking at
conventions regarding osteoporosis and the benefits of calcium, and creating educational
packets for consumers. Through our public relations activities, our customers will be assured of
our commitment to meeting their needs for a healthier beverage.
As the use of trade promotion has increased over the past 15 years, we feel it is imperative to
utilize the leverage of Kraft foods through a push-pull strategy. With Kraft, a giant in
manufacturing and processing, as our parent company, we will be able to dominate eye-level
shelf space in the powdered drink section of retail grocery stores. This domination will help to
“push” our product onto retailers’ shelves. In addition, we will participate in cooperative
advertising, which will provide incentives to our retailers. Through cooperative advertising, our
new product will be highlighted in store circulars while the retailer will receive money to increase
their store traffic and store sales. Our customers will also be a major asset, as they will “pull”
our products through the channels. By offering coupons and free merchandise, customers will
ask for our products in stores. Also, demonstrations and taste samplings will be used. (See
below for diagram)
Key Consumer and Competitor Reactions
It is likely that some customers who are confident in Kraft’s brand equity will be willing to
purchase Crystal Light with Calcium without trial. We will depend on our parent brand strength
and similarity to enhance initial sales. We feel that the same taste, with added health benefits,
will encourage repeat purchases. Although this concept is easily duplicated, we do not
anticipate a surge in competition because Kraft is also the parent company of Kool-Aid and
Country Time. If competition from other beverage manufacturers does arise, we hope to hold
the first-mover advantage. The marketing mix will give us a competitive advantage in serving all
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of our markets including health conscious women. Our competitive advantage is highly
sustainable because calcium is essential to an individual’s total body wellness—all consumers
stand to benefit from the consumption of calcium on a daily basis. By being the first to offer this
product, we will gain the confidence of consumers. Consumers will trust that our enhanced
products really do provide the benefits sought.
MARKETING IMPLEMENTATION
The rationale behind our marketing implementation plan is to identify the steps taken to execute
our previously discussed marketing strategies. Prior to the release of Crystal Light with
Calcium, we will train all personnel that will be involved in the in-store demonstrations and taste
sampling in order to ensure quality control. By using our own-trained staff, we will also be able
to receive immediate feedback from our sales promotion activities. We also have in a place an
outstanding public relations department that will be armed with an immense knowledge of our
company, our product, the activities of the research and development department, and all
issues that might arise regarding the effects of calcium enrichment. Our product manager will
be responsible for any changes that need to be made in the product following our initial
feedback and will monitor the research and development department in making these changes.
Our CFO, in conjunction with the Vice President of Marketing and Sales, will constantly monitor
our price, as well as that of our competition. The distribution manager will keep a watchful eye
on the distribution system of Kraft to guarantee that our product is arriving at each store in a
timely manner, as well as, being placed in the optimal shelf area.
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EVALUATION AND CONTROL
Marketing Controls
Marketing controls will be set to ensure that the marketing plan is successful. During the preimplementation stage, we will allocate the product to the top selling stores first. We will recruit
and train a small sales force to specifically promote the marketing strategy. It is also important
to verify that capital is available for the increase in expenditures for research and development.
During the actual process, marketing management commitment is critical because employees
will follow the mangers direction. An internal communication program will be created to promote
job empowerment, but still inform employees of the correct direction of the new strategy.
The follow up stage is designed to check that marketing outcomes are in line with anticipated
results. The actual results will be compared with the foundation that was set, and
accommodation for any changes will be met at this time. High-level performance standards will
be set based on sales, profits, and cost. It is valuable to set more specific standards based on
customer survey results and employee attitudes after the plan has been implemented. A
marketing audit will be conducted for maximum performance output and increased customer
satisfaction. This audit is performed to evaluate marketing objectives, strategies, and
procedures, so that if any changes need to be met they can be implemented and reviewed.
Financial Assessment
We feel it is of great concern that our firm performs well financially. We hope that our product
line extension increases the sales revenue of Crystal Light. Initially we estimated our sales to
be 10% of the current $9.46 million Crystal Light brand sales. Our marketing expenses are
broken down into five categories, with the most money being spent on television
advertisements. These marketing expenses increased from 2003 to 2004 by 5% and then
decreased from 2004 to 2005 by 5% and another 10% the next year. The gross margin was
negative in the first year due to the extreme amount of marketing expenses to try to enhance
the Crystal Light image and bring about brand awareness. This negative gross margin
illustrates that our product is in the introductory stage of the product life cycle. By the second
year, the bottom line is positive and we earning a profit. This profit continues to increase over
the next years as sales grow and expenses decline. The following table depicts the financial
condition.
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PRO-FORMA INCOME STATEMENT
(in thousands)
Net Sales
Less: COGS
Gross Profit Margin
2003
9,460
2,838
6,622
2004
10,406
3,122
7,284
2005
11,967
3,434
8,533
2006
14,360
3,777
10,583
Marketing Expenses
T.V.
Magazine Ads
Sales Promotion
Educational Packets
Other
Total Mktg Exp
2,752
1,213
543
180
115
4,803
2,890
1,274
570
189
121
5,043
2,167
955
428
142
91
3,782
1,084
478
214
71
45
1,891
Less: other SG&A
Gross Margin
2,013
-194
2,134
107
2,198
2,553
2,264
6,428
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WORKS CITED
Beverage Digest. 2001
Ferrell, O.C., Hartline, Michael D., Lucas Jr., George H., and David Luck. Marketing
Strategy. Fort Worth, Texas: Harcourt Brace & Company, 1998.
Nichols, John P. Agribusiness Market Analysis. Texas A&M University, 2002.
Postlewaite, Kimbra. Powder Potential. Beverage Industry. Volume 89. July 1998.
Thompson, Stephanie. “Kraft to Reenergize Crystal Light with Good-for-You Body
Refreshers.” Brandweek. December 1997.
Website. The Calcium Information Resource – Calcium Topics.
www.calciuminfo.com
Website. U.S. Census Bureau. www.census.gov
Website. CNN Interactive.
www.cnn.com/FOOD/resources/food.for.thought/…/calcium.facts.htm
Website. Crystal Light. www.crystallight.com
Website. The Daily Apple. www.thedailyapple.com
Website. Kraft Foods, Inc. www.kraft.com
Website. Stagnito Communications. www.stagnito.com/market.asp
Website. U.S. Business Reporter. www.activemedia-guide.com/food.htm
Website. U.S. Business Reporter. www.activemedia-guide.com/pkg_kraft.htm
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Appendix
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