Marketing Plan Part II: POMS Soft Drink
Adam Rahmouni El Idrissi Group #08 Éloi Dallaire MGCR 352 SECTION: 07 Etienne Pouliot
WINTER 2020 Date: April 09, 2020
Solomon Coupal
ORIGINAL PART (p.1 to 8)
1. New Product Introduction
As a company, Coca-Cola’s mission is to refresh the world in mind, body, and spirit, to
inspire moments of optimism and happiness through actions and to create value and make a
difference. We are the world’s leading non-alcoholic beverage company, serving about 500
sparkling and still brands and offering 3900 beverage choices (The Coca-Cola Company). To
increase our variety of products and reach a Canadian market segment that has not been tapped on
by large beverage companies yet, we want to introduce POMS. POMS is an apple-flavored soft
drink that is currently sold in Morocco only. It has great success in Morocco and we believe it
could have a matching success in Canada due to the Canadians’ proven penchant for apples and
Coca-Cola products. As of now, the only way Canadians can get POMS is from small international
convenience stores that import the product directly from Morocco.
In both two soft drink corporations dominating the Canadian market, Coca-Cola and Pepsi
Co. (Ibis World), there is currently no apple-flavored soft drink option available to consumers. Yet,
Canadians have proven their taste for apples as the latter have accounted for 41.5% of all marketed
production of Canadian fruit when ranked by weight (Crop Life Canada). Therefore, we believe
POMS could be the next big hit in the Canadian soft drink market.
Going one step further, we suggest using real Canadian apples to get closer to the heart of local
customers. In addition, we could make POMS a healthy choice, by using natural sugars. Using
Coca-Cola’s high performing distribution channel, POMS’ entry would be relatively easy
even in the face of the presence of major competitors being Pepsi Co. and Dr. Pepper Snapple
Group.
2. Consumer Profile
2.1 Segmentation
Each resident of Canada is a potential consumer. To segment the market, we will first
define our market by looking at variables such as demographics as well as lifestyle characteristics.
First, Millennials are changing their diets to be more environmentally friendly and to increase their
health in general. In fact, according to the article “Millennials are changing their diets to help the
environment”, “ Millennials report making changes to their diet, with the top changes found to be
eating healthier foods (46%) and avoiding sugar/carbs (41%)” (Haaland, 2019). An average
millennial will be more tented by our product which is made with local apple producers and that
corresponds to his new healthy habits. POMs will also target the generation X. Gen X are in their
best-earnings years and are defined as the most loyal consumers and are in their best-earnings years
(Ha, 2018), meaning that this generation will most likely want to try other products from a
company that is already associated with a good feeling of freshness that can be shared with the
whole family. Each generation has their own advantage. Millennials who tend to spend more time
with a group of friends, will multiply our brand presence in their group of friends. In contrast, baby
busters (Gen X) have a higher tendency of being with their own family. They will promote our
product to other generations of their family. POMS has decided to target these demographics as
both age groups are reachable through online and other advertising efforts. They are both profitable
and similar regarding patterns of everyday choices, purchases and needs.
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2.2 Targeting
These segments are attractive because they are already aware of the Coca-Cola brands and
their values are in line with POMS uniqueness and flavors. In addition, these age groups are those
one who spend the largest amount of money toward eating out and unplanned purchases on their
shopping excursions. As a result, POMS will adopt a differentiated marketing strategy to offer his
product to these two segments and emphasizing on the same core value Coca Cola uses to make
each of their winning products so popular which are: taste and clever marketing of happiness. By
selling a healthy get away from a stressful life, POMS is targeting those stressful workers who are
asking for a great taste to bring their mood up to cautious consumers about their diet. POMS wants
to be perceived as a healthy and environmentally friendly brand that sells to their customers the
best product for them while satisfying every single of their taste buds.
2.3 Positioning
For thirsty customers who have the desire to quench their needs, POMS have the expertise
to offer a healthy product that isn’t sacrificing the taste due to the provenance of its ingredients.
Among the two target age groups for POMS’s apple soft drink, our brand aims to generate the most
success through positioning our product to consumers in those groups who share similar
characteristics such as a desired to consume healthy options, have a desired to reduce stress and
anxiety and who want a cheap getaway to escape stressful life events. So basically, almost every
Millennials or Gen X who has a job.
3. Market Profile
3.1 Situation Analysis
The average revenue per capita for soft drinks in Canada is estimated to be around USD
357.60 in 2020 and to grow to USD 265.75 in 2023. In 2013, the soft drink consumption per
capita
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was of 73 liters in Canada (Statista, 2019). When comparing the latter statistics with the Moroccan
market for non-alcoholic drinks which is of USD2,097 million, we can easily determine that selling
the product to Canadian consumers is likely to be very profitable, since it will be available to a
wider range of potential consumers (see Appendix 1) (Statista, 2019).
The Canadian market for non-alcoholic beverages is expected to have a slight growth of
1.3 % before 2023, and the forecasted market volume of the soft drink industry went from 7943.3
million liters in 2014 to 9371.2 million liters in 2019 (eMarketer, 2019). We can thus deduce that
our product will operate in an industry that will increasingly gain importance in the upcoming
years, which could help us to guarantee future sales. POMS could benefit from the Canadian
market for non-alcoholic drinks, which is much more important than the actual Moroccan market
and is slightly growing yearly. It is essential to understand that our product can be distinguished
due to its unique apple-flavored taste, which is not offered with PepsiCo, our main competitor.
Although the most popular type of carbohydrate soft drinks were still regular colas in 2014, fruit
flavored carbohydrate soft drinks were still consumed by 26% of Canadians in the same year (De
Lima, 2014). Analyzing the possible threats that our product could face is crucial. First, the health
awareness for soft drinks is constantly growing. In 2014, 52% of Canadian consumers admitted
checking the ingredients on the packaging of soft drinks before their purchase. Because of this
possible threat, Coca-Cola had to review its prices (De Lima, 2014). A of 12-pack of 355ml cans
has indeed fallen to $3 at times (Sturgeon, 2014). Additionally, the threat of environment
awareness could make it difficult for our product to find continuous success in the country. If we
do not find solutions or alternatives to redeem to those potential threats, the Canadian market might
be leaned to purchase products from our direct and indirect competitors.
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3.2 Competition Analysis
Coca-Cola’s main competitors include PepsiCo, Dr Pepper Snapple, Refresco, and
National Beverage (Statista, 2019). We can thus see the presence of a consolidated competition
market in which few large companies own the industry. Since each of the latter company has a
variety of product, it is essential to take into consideration the intra-company competition. For
instance, Sprite can be in an alternative to POMS even though they are both Coca-Cola products.
In 2018, Coca-Cola dominated the soft-drink industry with a 43.3% market share in the United
States, which is the country that brings them the highest revenue. PepsiCo, Snapple, Refresco,
and National Beverage got a 24.9%, 17.9%, 3.6%, 3.1% market share respectively (see Appendix
B) (Statista, 2019). PepsiCo had the second highest revenue in 2018 with USD64.66 billion. Dr
Pepper Snapple followed with USD11.12 billion. Although having the highest market in soft
drinks, Coca-Cola did not showcase any significant growth in market share percentage since 2004
when they owned 43.1% of the market. Bringing POMS in Canada can be a new apple-flavored
alternative that could potentially increase Coca-Cola’s market share (Statista, 2019). Perhaps the
biggest threat for Coca-Cola is its indirect competitors. Indeed, there are many different
alternatives that are offered to Canadians when it comes to choosing something to drink, notably
energy drinks, coffee, tea and water bottles. Red Bull, which is the leading company for energy
drinks worldwide, saw its annual revenue increase massively from 4.25 billion euros in 2011 to
6.28 billion euros in 2017 (Statista, 2019). In Canada, the revenue for bottled water increased
from USD946 million in 2010 to USD1,120 million in 2019. The average volume per person of
bottled water consumed surpassed the average volume of soft drink in 2012 and are now getting
increasingly spread up (Statista, 2019).
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Appendix 1: Canadian Average Revenue per Capita in the Non-Alcoholic Drinks
Market
Appendix 2: Moroccan Average Revenue per Capita in the Non-Alcoholic Drinks Market
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Appendix 3: Market Share of Leading Carbonated Soft Drink Companies in the U.S.A
from 2004 to 2018
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References
Beverage Digest. (May 1, 2019). Market share of leading carbonated soft drink (CSD)
companies in the United States from 2004 to 2018* [Graph]. In Statista. Retrieved March
08, 2020, from https://www-statista-com.proxy3.library.mcgill.ca/statistics/225464/market
share-of-leading-soft-drink-companies-in-the-us-since-2004/
Haaland, M. (August 2019). Millenials are Changing their Diets to Help the Environment. The
New York Post. Retrieved from https://nypost.com/2019/08/27/millennials-are-changing
their-diets-to-help-the-environment/
De Lima, W. (May 2014). Carbonated Soft-Drinks. Infographic Overview. Retrieved from
file:///C:/Users/HP/Downloads/Carbonated%20Soft%20Drinks%20%20Canada%20- %20July%202014%20-%20Infographic%20Overview.pdf
Ha, L. (2018, October 2018). Generation X: The Forgotten-Yet-Powerful Consumers,
Passport-Euromonitor International.
Non-Alcoholic Drinks - Canada. (n.d.). Retrieved March 08, 2020, from https://www-statista
com.proxy3.library.mcgill.ca/outlook/20000000/108/non-alcoholic-drinks/canada
Non-Alcoholic Drinks - Morocco. (n.d.). Retrieved March 08, 2020, from https://www-statista
com.proxy3.library.mcgill.ca/outlook/20000000/159/non-alcoholic-drinks/morocco
Sturgeon, J. (October 2014). Soft Drinks are Increasingly Hard to Sell to Canadian Consumers.
Global News. Retrieved from https://globalnews.ca/news/1642238/soft-drinks-an
increasingly-hard-sell-to-canadian-consumers/
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1. Marketing mix
1.1 Product
POMS is a carbonated soft-drink made of real Canadian apples that is sold in individual can,
in pack of 12 canisters and in two-litre bottles. The drink, which is owned by the Coca-Cola
company is currently sold in Morocco but is not yet made of authentic ingredients. Our goal is to
commercialize POMS in Canada by introducing real Canadian apples to the recipe. We would then
fulfill the needs of consumers who look for both a natural and healthy soft drink made of local
ingredients. Cans are efficient to sell our product for singular consumption. We will be using 355
mL canisters, which is the same volume as standard drinks Canadians are used to. Nevertheless,
we want to use a sleeker can format than usual because we think it will grab potential consumers’
attention better. Hence, POMS’ cans will be 156.9 mm in height with a 58mm diameter (compared
to 122.7 mm in height and a 66mm diameter). The 12-pack format will be sold in a regular
cardboard box with POMS colors on it. (see Appendices 1 and 1B) POMS’ 2L bottle will be sold
in the similar plastic format used by widely known soft drinks. Moreover, we need our potential
customers to associate our brand with the apple flavour. Contrary to the Moroccan recipe, we want
our product to be made of real Canadian grown apples because it is essential for our product to
have a healthier reputation than the classic Coca-Cola. It would thus be made of concentrated
apple-juice, CO2, water and stevia. (see Appendix 6 for more details) Indeed, younger Canadians
are getting more conscious about personal health and local consumption. It is our duty to be aware
of this fact to secure long-term sales (Gustafson, 2017). Moreover, we want to keep the logo as it
is currently in Morocco (see Appendix 2), with the sole exception that we want to add the Canadian
maple leaf on it (inside the apple). By doing so, we believe aligning perfectly our branding to the
positioning we decided to take. Indeed, an allusion to both POMS unique characteristics will easily
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be made by the first look: local and natural Canadian apples. Also, those minor adjustments to
our branding will make our product easily recognizable for those who are already familiar with
it, notably the Moroccans living in Canada and the Canadians with Moroccan origins. This is
why the initial dark green colors will remain. Although, in order to include 100% of the Canadian
population, both French and English will be used on POMS’ packaging. We established two
positioning maps to clearly illustrate how we want to be seen by the general Canadian population.
When it comes to choosing a carbonated soft drink, we want POMS to be seen as the healthiest
alternative while respecting the local consumption philosophy. (see Appendices 3 and 3B for
detailed explanations)
1.2 Distribution
Distribution of POMS will take various paths to get to consumers. Many contexts welcome
consumption of POMS since it is a health-conscious soft drink option. By being part of the Coca
Cola family, we have access to the vast distribution network of Coca-Cola within and outside
Canada. We want to make POMS available in the retailers, such as grocery stores, corner stores,
and online via Amazon. For grocery stores in Canada, POMS will be located in two areas. The
first area will be the soft drink section, along with the Coca-Cola family. Ideally, we would place
12 x 355mL and 2L packages at the limit where soft drinks end and where carbonated waters
begin, to project a healthier choice. It would also help if, on the other side of the aisle, were
standing sports beverages or healthy refreshers, such as aloe and coconut water. The second area
is near the cash registers. There, in fridges containing other Coca-Cola brands, individual cans of
355mL will be available. In total, there are 22,320 grocery stores in Canada (Government of
Canada, 2020) and we plan eventually reaching to all of them. For the launch, we target the
Sobeys and Loblaw food retail brands, including IGA, Foodland, Safeway, Maxi, Provigo etc.,
equivalent to roughly
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half of the grocery store population in Canada. Together, they account for 12,447 locations in all
Canada (Sobeys, 2020)(Wikipedia, 2020). In convenience stores, cans will be featured in fridges
between carbonated waters and other soft drinks (ideally, with sports beverages not too far). The
2L POMS will be available on shelves, away from other 2L packaged soft drinks and close to
500mL water bottles). In Canada, there are 12,317 convenience stores (Government of Canada,
2020). Considering the wide potential reach of Coca-Cola, we count on at least two thirds of
these locations for our launch, giving POMS a little over 8,100 “corner store” touch points.
POMS will be offered online via Amazon in only one type of packaging: the 12 x 355mL. POMS
will appear in “soft drinks” and “refreshers” categories. Description of the product will include a
photo of the package along with a can, the size (12 x 355mL), and a brief description of POMS.
(see Appendix 26) POMS will respond to search words like “apple”, “Coca-Cola”, “soda”,
“pop”, and “cola”, refresher. Indirect distribution might present challenges. For example, in the
events where Coca Cola would offer discounts on POMS cans to drive up demand, retailers might
feel threatened by a decrease in profit, causing tension between levels of the distribution channel.
Concerning brand exclusivity, fridges near cashiers often feature only one company of beverages
(e.g., Coca-Cola,
PepsiCo, etc.), limiting POMS’ access to the ones already occupied by CocaCola. 1.3 Promotion
The objective of promotion of POMS is to make POMS a Canadian landmark that projects a
healthy choice among the Coca-Cola company. We want to make POMS part of Canadian culture,
part of Canada pride. The key message of communications is offering Canadians a healthy and
local product they can identify to. POMS is made with Canadian apples; it is a healthy and tasty
alternative to classic soft drinks that reflects Canadian culture. For Canadian customers, this
message translates into: “Recognize the great taste of home in a healthy, refreshing and crispy
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POMS!”. The two benefits that set POMS apart from the mass are health and local ingredients.
Focusing our efforts on identifying to these two will help us secure a territory of mind not yet
explored by large size beverage companies (see Appendices 3 and 3B). Through promotion, we
will tie health and local ingredients together, and promote that POMS possesses both of these
qualities. Since we aim at reaching the heart of our audience, our approach must be delicate.
Looking back in time, during the peak of Cola Wars in the 1980s, PepsiCo understood that not
only language differentiated the province of Quebec from the rest of Canada: the culture was and
remains unique. That is what set PepsiCo to take the outright lead in the soda market of the
province of Quebec (Summerfield, 2010). Learning from there, we must ensure POMS’
personality not only fits the general Canadian culture, but also the subcultures of Canada. We will
focus our promotion efforts at creating the bridge between provincial cultures and POMS, for
Canadians to all have their special reason for loving the brand. Associating locally admired artists
and athletes with POMS is a very efficient way to gain access to a society’s culture. We chose
YouTube, Facebook and Instagram as platforms for our advertisement because they are the most
direct access points to our target consumers: millennials. (see Appendix 27 for details) For
example, in British Columbia, we could have successful hockey players, Jordie Benn and a few
of his teammates in Vancouver, perform in a short video publicity. All commercials would
include a catch phrase, which would represent the two main qualities of POMS: health, local
ingredients. (see Appendix 4 and 5 for a list of potential personalities and publicity synopses).
Since POMS benefits from the credibility and network of existing clients of Coca-Cola, its
parent company, promotion to retailers will be limited to presenting the assets of POMS, health,
local ingredients and the reliability of a Coca-Cola product. In the introduction phase, a discount
of 25% will be in effect to seduce retailers to purchase POMS.
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1.4 Pricing
Since our soft drink will be distributed by a global recognized brand, implementing a
going-rate pricing is appropriate to compete with other big companies that sell similar products.
(De Toni, 2017) The price of a soft drink needs to be cheap since more than half of Canadians
spend less than 15$ a month on soft drinks. (Bedford, 2019) However, POMS’ price doesn’t need
to be priced as cheaply as generic store brands, since more than three Canadians out of four are not
even considering buying soft drinks from store brands. Coca Cola main competitor Pepsico is
selling a similar product known as IZZE. To stay in line with their pricing, a single can of POM
will have a selling price to its customer at the same price as IZZE which is one dollar. Our product
will be sold to the retailers at a price of $0.87 (see Appendices 6-8) by can, giving them the
opportunity to apply the industry markup standard of 15% and to reach the one dollar price. When
selling to suppliers, our gross contribution margin will be 87.53% (see Appendix 7), this high
markup can be reduced if POMS allocates a costlier marketing campaign which will increase
overall sales. In the introduction phase, POMS will sell their cans at a discount rate to their retailers
at around 25%. This initiative will place POMS products better positioned in the grocery store and
will facilitate the search for new clients when they enter their favorite grocery store. Cans will also
be available in a twelve pack that customers can get at their favorite retailers or online using
Amazon platforms. The twelve packs will be sold to retailers at a price of $4.77. Since Amazon
charge a lower markup on this type of good, POMS will be sold to them at 4.99$ to avoid a channel
conflict. Customers’ purchase price is $5.49. (see Appendices 6-8) POMS product will also be
available in a 2 liters bottle that will be sold in corner stores at a $1.99 price for customers. POMS
will be sold to retailers at a $1.73 so retailers can apply their 15% margin.
2. Financial Evaluation
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Based on the different prices established earlier, we were able to compute all the unitary
contribution margins. As we can see in the Appendix 7, the selling format and the distribution
channel used to sell our products are influencing the different margins. For example, because our
online distributor is taking lower margins, POMS is able to generate better profit from a 12-pack
sold online. POMS will be first penetrating the Canadian carbonated soft drinks industry, followed
by the German one, 2 years later. This means that our Canadian potential market for 2020 is nearly
2.05 Billion Liters, accounting for $8.91 Billion in revenues. Our German expansion in 2022 will
give access to POMS to a 8.15 Billion Liters market, whit annual revenues of $21.48 Billion. (see
Appendix 9) Our sales projections were established by expecting to reach 2.5% of each potential
market within a year. We consider it as a fairly attainable objective, considering the fact that we
will benefit from huge existent facilities and channels from Coca-Cola. This would result in a total
revenue of $222,750,000 and a profit of $32,964,361 for the year 2020. (see Appendix 14 to 16)
Our sales were distributed assuming that 95% of our revenues are coming from selling to retailers
and the remaining 5% online. Hence, we will sell approximately 199.35 Million Liters for the first
year. (see Appendix 19) Furthermore, sales in the first year of operations in Germany are expected
to be over $537.10 Million. (see Appendices 14-15) Moreover, being paired with Coca-Cola will
lead us to operate at a lower fixed costs level. Because we are going to be in an introduction phase,
marketing and advertising costs were increased to represent 3% of our total sales. Other main
expenses were stated to respect the industry average. This is why we established our SG&A to be
29% of our total sales. (see Appendix 20, Edmonston) After setting all our costs, we were able to
compute both our break-even in units and in sales. So, to be able to fully cover our fixed costs, we
will need to sell 63,843,412 Liters, for approximately $165 Million in revenues. Thus, our break
even represent only a 1.85% share of the total market. (see Appendices 21-22)
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3. Foreign Potential Entry
Marketing on a global scale allows Coca Cola to take advantage of different opportunities
to increase profits as well as decrease costs. As an already well-established brand, the company
will be taking part in direct investment, which has the highest profit potential and the highest
degree of control for the firm compared to other international marketing strategies. This means that
they will manufacture and sell their new product in a foreign country. Due to Coca Cola’s presence
in many countries, it has the knowledge to succeed in offering POMS products abroad. After some
research, the best alternative for a foreign entry is Germany. Germany’s favorite fruit is the apple,
79% of Germans consume apples regularly and another great aspect is that 74% of Germans
believe in the doctrines: “An apple a day keeps the doctor away”. By implementing POMS healthy
soft drinks in a country where population beliefs are in line with POMS’ values will lead to a better
success. Germany counts nearly 84 M inhabitants. With the proportion of Germans who love
apples and the average consumption of fruit related soft drinks, POMS have access to a market of
3,514,652,573 liters of fruity carbonated soft drinks. (see Appendix 23) However, POMS unique
health benefits could lead to a change of habits in other types of soft drink consumers. Those
characteristics can give access to the entire carbonated soft drinks market in Germany, which is
8,15 Billion liters. Canada’s market is relatively smaller with 2,05 Billion liters for all types of
carbonated soft drinks. (see Appendix 9) Almost 70% of Germans follow a healthy diet, meaning
that a healthy soft drink would be in-line with most of Germans. With these statistics in mind,
evidence occurs that potential sales could be profitable in a country like Germany who has similar
characteristics as Canada like a love for apples, consumes a lot of soft drinks products and where
the majority of the population try to eat healthier.
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4. Implementation
At Coca-Cola, we are aware that every great marketing plan is thoroughly planned over
time. In order favorize POMS Canadian market penetration success, we listed chronologically the
most important steps of our implementation. We did this to make sure that we will not be part of
all the product introduction failing examples and to assure the exponential growth of our soft drink.
Here are the main steps to acknowledge:
JANUARY 2020: Distribution deals, Pre-production
- We need to familiarize ourselves with the huge existent Coca-Cola distribution channels by
working and completing distribution deals (retailors, participating fast-food restaurants) Production will start within Coca-Cola facilities, to be ready for the imminent launching
FEBRUARY 2020: POMS launch in Canada, Start of Advertising effort - Like mention
earlier, POMS is going to spend 3% of its sales on advertising, for the next 4 years. (see
Appendices 14 to 16 for further long-term results)
APRIL 2020: Start of Partnership with Celebrities (see Appendix 5 for detailed synopses)
- Jordie Benn will figure in a video that will be launched for the start of the NHL playoffs - A
promotional video with Drake will be launched just before the summer festival season JULY
2021: Preparation of the German expansion
- After our Canadian success, we prepare the penetration of another profitable market. It is time to complete deals with Coca-Cola distribution partners in Germany. JANUARY
2022: POMS launch in Germany
- Working with Coca-Cola’s same differentiation strategy, POMS will easily be able to
commercialize the same product abroad. (see Appendix 18 for German projections)
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Appendix 1: POMS Single Can Packaging
Appendix 1B: POMS 12-Pack of Cans Packaging
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Appendix 2: POMS’ Official Logo
Appendix 3: POMS Carbonated Apple-Flavored Soft Drink Positioning Map within the
Carbonated Soft Drinks Market
Positioning Map
Local Ingredients
Unhealthy Healthy
Foreign Ingredients
Your Logo or Name Here
Disclaimer: The horizontal axis represents the relative health of the product (compared to the other
soft drinks), going from unhealthy to healthy. The vertical axis measures the extent from which
drinks are made or local ingredients. We can notice how POMS is from far the healthiest and most
natural alternative when it comes to choosing a carbonated soft drink.
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Appendix 3B: POMS Carbonated Apple-Flavored Drink Positioning Map within its
Indirect Competitors
Positioning Map
Local Ingredients
Unhealthy Healthy
Foreign Ingredients
Your Logo or Name Here
Disclaimer: We found it necessary to make a second positioning map that would compare POMS
with its indirect competitors. The horizontal axis represents the relative health of the product
(compared to the other soft drinks), going from unhealthy to healthy. The vertical axis goes from
local to foreign ingredients. We see that POMS is one of the most local and healthiest alternative
for a drink, even compared to some “high-end" indirect competitors such as Rise or Izze.
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Appendix 4: Potential Artists and Athletes for POMS’ Launch
British Columbia Ryan Reynolds (Actor), Emily Bett Rickards (Actress)
Alberta Amy Nixon (Curling), Cam Ward (Hockey) Saskatchewan Kaylyn
Kyle (Soccer), Brayden Schenn (Hockey) Manitoba Tracy Spiridakos
(Actress), Jonathan Toews (Hockey)
Agnes Nagonak (Artist) Micheal Gilday
North West Territories and Yukon
(Speed Skating)
Alex Deborgorski (Local Personality),
Nunavut Madeleine Allakariallak (throat singer), Annabella Piugattuk (Actress) Ontario Shawn
Mendes (Singer), Gabrielle Daleman (Figure Skater) Quebec Rachid Badouri (Comedian),
Cœur de Pirate (Singer) New Brunswick Cayouche (Acadian Singer)
Celebrities Featured Commercial
Nova Scotia, Newfoundland &
Labrador, P.E.I,
Sarah Conrad (Snowboarding), Mike
Synopses
Adam (Curling) Appendix 5:
1. Jordie Benn Commercial:
The context of the video would be the following: Jordie Benn, player for the Vancouver Canucks,
walks in the locker room after a game and cracks open a cold can of POMS. Other players,
surprised to see a soft drink in the hands of their very athletic teammate, stare at him until Jordie
Benn says: “What? It's healthy, it’s natural, and it’s made here!”. After the next game, we see more
Canucks players cracking open cans POMS in the locker room. The ad ends with a catchphrase
such as: “Healthy, Local, Good... like Jordie Benn”
2. Drake Commercial:
Drake finishes a show and some famous looking people ask him to go out for drinks, he refuses
because he needs to watch his diet and wants to go home. Once home, he walks in his kitchen,
opens the fridge doors, grabs a POMS and heads to the living room. There, from behind, we see
him standing, admiring the night view on Toronto while he sips on a POMS. The lights are dimmed
but we can see the colors of the can brightly. A catchphrase appears in the middle of the screen:
“It’s a healthy treat that feels like home, because it’s made home”
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Appendix 6 : Price Description and Computations
Disclaimer: Prices information were found in US dollars and were converted in CAD at a 1.35
$CAD / USD rate.
Cost saving methods:
- Price of a plastic container: 0.035USD IBS world Industry report: Soda production
Canada & https://my-ibisworld
com.proxy3.library.mcgill.ca/download/us/en/industry/519/1/0/pdf
- Price of a can for Coca Cola: 0.02USD
- Price of concentrate Apple Juice per 1L: -> 0.125746USD/L
- An average of 100ml should be used to give the taste desired.
- ½ gallon of concentrate Apple juice: 1.19USD -> 0.62873USD/L
https://www.ams.usda.gov/mnreports/fvwaplproc.pdf
- Price of water for coke : 10USD for 100,000 liters of water-> 0.0001USD/L Price of CO2 per 1L: -> 0.00072422183USD/L
- There is an average of 6.57g of C02 by soft drink.
- A ton of CO2 cost 100USD.
!"#,%&'((% +,-)
%""$ = 0.'#(
2$ x$ => 0.00072422183$
- Price of stevia per 1L: -> 0.108USD/L
- A diet coke can use 50g of stevia for 1L. Since our product will be already sweetened with
the concentrate of Apple we will only require around 30% of Stevia to reach the same
sweetness of an original coke.
- 100 kg of stevia cost 720USD
- Total Cost:~0.26957USD/L -> 0.3639 CAD$
~ 0.0803USD/can -> 0.1084 CAD$
IZZE Soft Drinks
Currently sold in the US in for 0.75USD -> 1.0125 CAD$ ~1CAD$
Price sold to retailer
- According to Statista, a grocery store retailer usually applies a 15% margin markup on
items.
- Markup %retailer = (Price of a unit sold to customer- Price sold from POM(1 unit)) /
Price sold from POM (1 unit)
o For a single can: 0.15 = (1-x)/x = $0.87
o For a 2 liters bottle: 0.15 = (1.99-x)/x = $1.73
o For a 12 pack of cans: 0.15 = (5.49-x)/x = $4.77
o For a 12 pack of cans sold online through Amazon: 0.10 = (5.49-x)/x = $4.99
21
Appendix 7 : POMS’ Unitary Contribution Margins
Retailer Online
Distributor
Single Can 12-pack 2 Liter 12-pack
Price $ 0.87 $ 4.77 $ 1.73 $ 4.99
Cost $ 0.11 $ 1.30 $ 0.73 $ 1.30
Cost (% of Price) 12.47% 27.25% 42.07% 26.07% Contribution Margin $ 0.76
$ 3.47 $ 1.00 $ 3.69
Gross Contribution
Margin (%) 87.53% 72.75% 57.93% 73.93%
Appendix 8 : POMS’ Prices and Costs Description
POMS
Contribution Margin per Unit
PRICE PER UNIT
Single Can
Price to Retailer $ 0.87
12-pack
Price to Retailer $ 4.77
Price to Online Distributor $ 4.99
2 Liter
Price to Retailer $ 1.73
COST PER UNIT
Single Can
Beverage $ 0.08
Can $ 0.03
Total Cost $ 0.11
12-pack
Beverage $ 0.98
Cans $ 0.32
Total Cost $ 1.30
2 Liter
Beverage $ 0.64
Bottle $ 0.09
Total Cost $ 0.73
22
Appendix 9 : POMS Potential Markets
Market Size Canada (2020E) Germany (2022E)
Units (L) 2,047,700,000 8,145,700,000
Sales ($CAD) $ 8,910,000,000 $ 21,483,900,000
Appendix 10: Canadian Carbonated Soft Drinks Market Volume from 2010 to 2023
Reference for Appendices 9-10: Carbonated Soft Drinks - Canada. (n.d.). Retrieved March 28, 2020,
from https://www-statista-com.proxy3.library.mcgill.ca/outlook/20020100/108/carbonated-softdrinks/canada
23
Appendix 11: Canadian Carbonated Soft Drinks Market Revenue from 2010 to 2023
Appendix 12: German Carbonated Soft Drinks Market Volume from 2010 to 2023
24
Appendix 13: German Carbonated Soft Drinks Market Revenue from 2010 to 2023
Disclaimer: Amounts retrieved from Appendix 5 and 7 were converted in Canadian dollars using
a 1.35 CAD/USD exchange rate.
References for Appendices 11-12: Carbonated Soft Drinks - Germany. (n.d.). Retrieved March 28, 2020,
from https://www-statista-com.proxy3.library.mcgill.ca/outlook/20020100/137/carbonated-soft
drinks/germany
25
Appendix 14: Projected Statement of Income for 2020 to 2023
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Disclaimer: Sales were projected with the annual growth rates as follows, knowing that the
potential German market is expected to have a slightly better growth for the next years.
(Carbonated Soft Drinks - Canada. & Germany (n.d.))
Selling Point Canada Germany
Retail 5% 7%
Online 11% 13%
Appendix 15: POMS’ Projected Total Sales for 2020 to 2023
27
Appendix 16: POMS’ Projected Profit for 2020 to 2023
26
28
Appendix 17: POMS’ Projected Sales in Canada for 2020 to 2023
Appendix 18: POMS’ Projected Sales in Germany for 2020 to 2023
29
Appendix 19: POMS’ Projected Sales Distribution for 2020
Projected Sales Canada
Retail Sales ($CAD) $ 211,612,500
Units (L) 189,841,690
OnlineSales ($CAD) $ 11,137,500
Units (12-pack) 2,231,964
TOTAL Sales ($CAD) $ 222,750,000
Units (L) 199,349,857
Disclaimer:
1. Because retail sales are composed of all 3 different selling format, an average price was
used to compute the units sold. The different volume in each format was also considered. 2.
In order to compute the total units sold in Liters, we had to convert the units sold online
(from number of 12-packs sold to Liters), knowing that a 12-pack contains 4.26 L.
Appendix 20: POMS’ Expenses Distribution for 2020
Disclaimer: Although, Coca Cola spends an amount corresponding to around 1.4% of their total sales on
marketing and advertisement, we decided to increase that amount to 3% for the introduction phase of
POMS on the Canadian market.
30
Appendix 21: POMS’ Break-Even in Sales for 2020
Disclaimer:
1. The following formula was used to compute the break-even in dollars:
B/E (units) =!"#$% '()*)
+,-!"#$"%&' )*+, (./$,)
1#$2' (./$,) .
2. Even though Marketing & Advertising expenses were established as 3% of POMS total sales
and SG&A as 29% of the total sales, it was only as reference purpose. Both expenses were
considered as fixed costs.
3. Hence, fixed costs were composed of the following expenses: Marketing & Advertising,
SG&A, Others. (see Appendix 19)
4. Variables costs were composed of the following expenses: COGS and Distribution and
Transportation (see Appendix 19)
31
Appendix 22: POMS’ Break-Even in Units for 2020
Disclaimer:
1. The following formula was used to compute the break-even in units:
B/E (units) =!"#$% '()*)
/0"1$ (34"*)-670"789$ '()* (34"*)
2. Even though Marketing & Advertising expenses were established as 3% of POMS total sales
and SG&A as 29% of the total sales, it was only as reference purpose. Both expenses were
considered as fixed costs.
3. Hence, fixed costs were composed of the following expenses: Marketing & Advertising,
SG&A, Others. (see Appendix 19)
4. Variables costs were composed of the following expenses: COGS and Distribution and
Transportation (see Appendix 19)
32
Appendix 23: Consumption of Soft Drinks in Germany from 2012 to 2018 (liters)
Average consumption of fruity related drinks soft drink:(31.3+ 3.2 + 7.6 + 11) =53.10 L
83,042,200 of resident in Germany (31 March 2019)
79% of Germany residents consumes apples regularly
66,189,314 residents in Germany like apples.
On average one German consumes 53.1 liters of fruit related soft drinks in a
year. Give us access to a market of 3,514,652,573 liters of soft drinks by year.
WAFG. (2019, March 22) Per capita consumption of soft drinks in Germany from 2012 to 2018, by type.
[Graph] Retrieved from: https://www-statista-com.proxy3.library.mcgill.ca/statistics/540540/soft-drinks
per-capita-consumption-by-type-germany/
Kitchen Stories. (2019, December 20). Would you say that you eat a healthy and balance diet? [Graph]
Retrieved from: https://www-statista-com.proxy3.library.mcgill.ca/statistics/1085360/individuals
following-a-healthy-and-balanced-diet-in-germany/
33
Appendix 24: Proportion of German Population Following a Healthy Balance Diet
Kitchen Stories.
(2019, December 20). Would you say that you eat a healthy and balance diet? [Graph] Retrieved from:
https://www-statista-com.proxy3.library.mcgill.ca/statistics/1085360/individuals following-a-healthyand-balanced-diet-in-germany/
Appendix 25: Canadian Carbonated Soft Drinks Industry from 2014 to 2019
MarketLine. (2015, July 31). Forecasted market volume of the carbonated soft drinks industry in Canada
from 2014 to 2019 (in million liters)* [Graph]. Retrieved from https://www-statista
com.proxy3.library.mcgill.ca/statistics/505383/forecasted-market-volume-carbonated-soft-drinks
industry-canada/
34
Appendix 26: Amazon “mock” description
Appendix 27: Platforms and Content Type Chosen for Video Publicity
- Facebook: In 2019, 79% of adults between 18 and 39 in the US use Facebook. (Clement,
2019)
- Instagram: 67% of adults between 18 and 29, and 47% of adults between 30 and 39 in the
US use Instagram. (Clement, 2019)
- Youtube: 81% of people between 15 and 25, 71% of people between 26 and 35, 67% of
people between 36 and 45 in the US use Youtube (Clement, 2019). 54% of millennials use
Youtube daily (Hayes, 2019)
Content Target:
- Millennials enjoy short and captivating videos. They like unboxing videos, and product
reviews. They like human interest videos and stories that help them stay up to date.
(Hayes,
2019)
35
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37