United Beverages, Inc. Summer 2012 Term Paper

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Preliminary Conclusions for Kid-Energy Drink

1. Potential market is smaller than current GangBuster market.

2. Fast acceptance rate.

3. Approximately 80% of focus group responded favorably to concept.

Based on current trends in beverage packaging, it is also reasonable to suggest that further innovations in nanotechnology will provide manufacturers with the ability to produce truly interactive beverage containers that can provide a wide range of product information (including the history of the temperature of which the beverage has been maintained), display different graphics and messages that change (like a slideshow), and perhaps even respond to individual questions from the consumer (Buzby 2010). In fact, according to this industry analyst, "In the beverage packaging sector alone, worldwide sales of products using nanotechnology grew almost six-fold in two years from $150 million in 2002 to $860 million in 2004" (Buzby 2010, p. 529). While much of this investment in nanotechnology has been focused on improving the integrity of the beverage containers themselves, these innovations will also provide manufacturers with the ability to manipulate containers in new ways that have never been possible in the past. Indeed, it may even be possible within the foreseeable future for beverage containers to warp into new shapes after consumption such as an aerodynamic shape that can fly like a glider or be spun like a Frisbee. According to Wilson and Vozikis (2008), beverage producers that remain tied to a static design run the risk of being run over by their competition that recognizes the potential in new technologies for beverage containers. In this regard, these authorities report that, "It is important to realize that no design is sacred: form follows where the future leads. Consider the containers used in the beverage industry" (Wilson & Vozikis 2008, p. 39). In support of this assertion, Wilson and Vosikis (2008, p. 40) cite the following examples from beverage container developmental history:

1. Glass bottles and crown bottle caps allowed beverages to be stored for individual consumption;

2. Advancements in the tin and aluminum production industry allowed for the replacement of glass bottles (in some cases) due to cost savings associated in transportation and production;

3. Advancements in plastics, namely high density polyethylene, allowed for the substitution of tin and aluminum for beverage packaging;

4. Advancements in materials technology changed the bottling industry and likewise the design of the container itself.

It can also be assumed that consumer interest in innovative packaging will continue to increase in the future. For example, studies have shown that consumer perceptions of beverage packaging have changed in significant ways in recent years. As a result, "Instead of viewing it as a necessary evil, consumers see desirable packages as a reason to purchase, and packages they don't like as a reason to avoid products they might otherwise choose" (Consumers yearn for better packaging 2004, p. 37). The eye-catching and colorful designs used by the company in its extensive GangBusters product line are therefore a desirable reason for consumers to select this product over its numerous competitors, but there are other factors involved that must be taken into account as well. For instance, the results of a survey by the Consumer Network found that, "Triggering such a shift is a critical mass of consumer-friendly packages that relieve widely experienced frustrations, delight the eye, or facilitate multi-tasking lifestyles with new levels of convenience and flexibility" (Consumers years for better packaging 2004, p. 37). Although the Gangbusters' package may "delight the eye" (as demonstrated by the collector following that has emerged in recent years), the Consumer Network survey of 1,600 respondents also found that consumers were interested in other aspects of their beverage packaging, including:

1. Twist-off closures on juice cartons were the most widely noted improvement, followed by personal-size milk bottles, zipper closures, and no-spill (sports-cap) water bottles.

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2. Consumers appreciate ergonomic packages shaped to fit the hand (to date, this has been evident primarily in cleaning and dishwashing products) and eye-pleasing graphics.

3. Many consumers believe that all gable-top milk containers should have spouts or yield to alternative kinds of user-friendly and more-convenient packages.

4. Consumer feel soft drinks have failed to keep up with the needs for smaller sizes, hand and mouth fit, reclosing, fizz retention, and sturdier bottoms.

5. Consumers like plastic, but miss the cold-keeping attributes of glass.

6. A majority of respondents says that packaging improvements are needed in sugar and flour (80%), drugs in pill and tablet form (68%), crackers and cookies (61%), chips (58%), canned soft drinks (58%), cereal (57%), milk (55%), and two-liter soft drinks (50%).

7. The research also reveals wide interest in packages that can be harmlessly composted or put in the garbage disposal, can be stored anywhere from fanny packs to desk drawers, and go beyond tamper evidence to showing abuse that sometimes causes damaged or broken contents.

8. Packages that notify consumers when leftovers have gone bad also have great appeal (Consumers yearn for better packaging 2000, p. 37).

Less is known, though, about the acceptance rates of these different beverage packaging concepts in countries where the company does not currently compete. In this regard, Buzby (2010) emphasizes that, "Consumer acceptance of new food technologies is influenced by many factors, including consumers' perceptions of the risks and benefits as well as perceived quality, perceived naturalness, price, and general attitudes, values and cultural norms. Diverse cultures, traditions and values in different parts of the world may also have a significant impact on consumer acceptance of new technologies and products" (p. 529). Therefore, these are existing times for United Beverages, of course, but the harsh reality faced by the company at present means that an optimal allocation of resources must be made among the three projects described in Tables 1 and 2 above and these recommendations are provided below.

The research showed that United Beverages' flagship product, GangBusters, remains a viable product line but requires some ongoing commitment of resources to remain competitive. The GangBusters product line has much going for it, including numerous valuable licensing agreements with world-class characters and a collectors' following on the level with Pez. Based on the respective pros and cons of each of the three projects discussed above, it would appear that the optimal application of the company's resources would best be achieved by integrating these three projects into one. Since the kid-energy drink project is easy to produce, this could readily added to the company's existing beverages in their interactive containers. Likewise, the existing interactive containers could be modified to accommodate the dual-drink innovation rather than developing an entirely new container. This approach would capitalize on all of the pros of the three projects while minimizing their respective cons. The company should also exploit the opportunity represented by the enormous collectors' following it has developed for its containers and create new containers specifically for this market. Finally, the company should investigate opportunities beyond these three initiatives, including using so-called "drink boxes" for its product line (this would be especially appropriate for the kid-energy drink product) as well as innovative ways their beverage containers can be recycled into useful household products while retaining the integrity of the brand image......

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