I.

Executive Summary
We are from the Five Star Group, a marketing consulting firm. Our department handles all
customers from the beverage industry. We were approached by the Naked Juice Company for
recommendations on how to market a new product they are developing Naked Energy. This new drink
is all natural and contains healthy doses of vitamins, minerals, and antioxidants without any caffeine. We
mapped out a strategy for how to go about this task and identified some important elements of the
marketing plan and issues that may arise. We went back to the Naked Juice Company with a plan that
included a six month promotional tour of the drink before it becomes available in stores and a magazine
advertisement they should put in health and fitness magazines. Our group also stressed that in their
promotion, Naked needed to highlight the lack of caffeine and all natural ingredients their product
contains which sets it apart from other energy drinks.
II. Company History and Market Conditions:
The Naked Juice Company currently produces all natural fruit and vegetable juices and smoothies.
The firm was started in California in 1983 by Jimmy Rosenberg. Originally, he produced fruit drinks in
his home and sold them to beach goers in Santa Monica. He called it Naked Juice because it did not
contain any artificial colors or flavors. The juice made its way to local grocery stores and eventually all
the way to Los Angeles and San Diego. By 2000 the drink was all over California. In 2000 North Castle
Partners, a private equity firm from Connecticut, acquired Naked Juice and demand and sales increased
significantly.
In 2005 Naked Juice became more popular than its competitor, Odwalla, which is owned by the
Coca-Cola Company. In November 2006, PepsiCo announced plans to acquire the Naked Juice Company.
The acquisition, completed in 2007, not only marked PepsiCos shift towards ownership of food and
beverage brands with a health and wellness aspect, but also put PepsiCo in a better position to compete
with Coca-Cola. Naked saw the acquisition by PepsiCo as an opportunity to increase brand awareness,
utilize the large distribution channels of PepsiCo, and to have a significantly bigger marketing department.
Since the acquisition, distribution of Naked Juice products expanded to all 50 states, Canada, and
the U.K. The Naked Juice Company currently operates as wholly owned subsidiary of PepsiCo. It
remains dedicated to producing high quality product and is involved in sustainability initiatives. Since
2009, The Naked Juice Company has worked with Rainforest Alliance, an international nonprofit
organization, to help farmers producing bananas used in a majority of its juices. The goal of this
cooperation is to achieve sustainable livelihoods for people while protecting wildlife and the environment.
The Naked brand is currently housed under PepsiCos Global Nutrition business. This unit leverages the
strength of core products and enables PepsiCo to stay ahead of the increasing demand for more nutritious
food and beverage choices. This business unit is comprised of not only the Naked brand, but Tropicana,
Quaker, and Gatorade. Currently the Global Nutrition portfolio is $13 billion and Pepsi Co expects to
grow it to $30 billion by 2020. According to the 2011 Annual Report, PepsiCo management has five
major strategic directions for growth in the future. Two of these directly impact the Naked Juice
Company. PepsiCo plans to grow their worldwide beverage business in a sustainable and profitable way,
and expand their Global Nutrition unit. As part of this growth strategy, the Naked Juice Company is
developing a healthy energy drink called Naked Energy. Both PepsiCo and the Naked Juice Company
want to take advantage of the rapid growth in the energy drinks market.
According to Zenith International, a consulting firm specializing in the food and drink industries
worldwide, energy drinks are the most dynamic segment of the soft drinks market. The average growth
over the past five years has been 10% per year. In 2011 alone, the global energy drink consumption rose
by 14% to 4.8 billion liters (1.3 billion gallons). The graph below illustrates the US and worldwide
consumption growth (in billions of gallons) in the past 6 years.

Zenith Internationals report placed the United States in the top ten countries for energy drink
consumption, along with Vietnam, China, the United Kingdom, Thailand, Mexico, Australia, Germany,
Poland and Saudi Arabia. In 2011 North America accounted for 36% of total global volume and it was
considered a leading region, followed by Asia Pacific with 22% and West Europe with 17%.
The worlds leading brands are Red Bull and Monster. Year after year, Red Bull continues to lead
the market in dollar sales, emphasized by the chart below.


Dri nk Top 8 Based on Dol l ar
Sal es 2011
Dri nk Top 8 Based on Dol l ar
sal es 2012
Red Bul l $2.3 billion Red Bul l $2.95 billion
Monster $1.9 billion Monster $2.6 billion
Rockstar $.66 billion Rockstar $.78 billion
AMP $.33 billion Amp $.30 billion
Doubl eshot $.25 billion NOS $.25 billion
NOS $.22 billion Ful l Throttl e $.14 billion
Ful l Throttl e $.13 billion Xyi ence Xenergy $.04 billion
Xyi ence Xenergy $.03 billion VPX Redl i ne $.02 billion

III. Environmental Analysis
After investigating the energy drink market our group found that the majority of energy drink
consumers are younger people, teens and twenty-somethings, involved in all types of activities that keep
them on the go. Moreover, we found that a significant amount of todays youth are replacing traditional
beverages such as milk or juice with an energy drink and are therefore not getting the vitamins that
traditional beverages contained. In fact, since 2007, the amount of teens drinking milk, juice, or even soda
has declined and their intake of energy drinks has risen. For example, the percentage of 13-17 year olds
that drank milk in 1976-1980 was 75%. However, in 2007-2010 that number was just 57% (Watson).
Thus our group has determined to market the Naked Energy drink to 2 different markets: males
and females ages 13-17 and males and females ages 18-34. By focusing on the importance that this
energy drink provides nutrients that other energy drinks such as Red Bull or Monster dont, we will be
able to sway these markets to switch to the Naked brand. We also found that these two groups are the
most susceptible to exhaustion and fatigue due to either their involvement in numerous extracurricular
activities or the need to always be on the go due to balancing a career and possibly graduate school or
other types of activities that require a lot of attention. We suggest the Naked Juice Company emphasize
the fact that their new energy drink provides vitamins these two groups are not receiving from the
currently available energy drinks as well as the fact that it provides overall health benefits in the long run.
In order to successfully create a marketing plan for the Naked Energy drink we needed to create a
SWOT analysis to determine the positives and negatives of the product and the energy drink market. The
following are the most significant issues we identified.

Strengths:
1. All ingredients contained in the product are natural. Naked energy is caffeine free. The new recipe
contains non-toxic ingredients that increasing produce energy over time, and slowly diminish after peak.
Since it is not toxic for everyone and not just youth who will drink it. Naked Energy drink has no artificial
preservatives or colorants. It is 100% healthy.
2. The Naked Juice Company is controlled by PepsiCo and therefore has strong financial
support. Since PepsiCo is determined to compete with Coca Cola in the energy drink market,
it is going to invest more capital to promote its drinks. The distribution of Naked Energy will
be similar to Naked Juice and other Pepsi drinks.
3. Naked Energy is safe for everyday use.
4. PepsiCo currently has another energy drink brand in its portfolio, AMP Energy. It is the 4
th

top selling energy drink as of 2011. Due to the high performance of this line, PepsiCo wants
to develop a new line to expand its energy drink market. Therefore, Naked Energy will have
sufficient amounts of capital and a strong advertising team.

Weakness:
1. PepsiCo has never been involved in the natural energy drink, therefore there is a lack of experience in
this field.
2. The components the Naked Juice Company uses to improve physical endurance and affect
psychological excitement may not perform as efficiently as caffeine based energy drinks.
3. Potential consumers are more familiar with Red Bull and Monster energy drinks, the currently top
selling energy drinks. It will be a challenge to sway them to purchase a new product.



Opportunity:
1. The majority of the top selling energy drinks in the current market excessive amounts of
caffeine, an amount that is dangerous to teenagers and people who are sensitive to
caffeine. The FDA has reported deaths and non-fatal heart attacks that are linked to
Monster Energy drink and the effects of its ingredients. This lawsuit will have
repercussions on all energy drinks and could possibly end in a regulation on the amount
of caffeine allowed in energy drinks. It will be an advantage for the Naked Energy drink
since there is zero caffeine in this product.
2. Some of the top selling energy drinks are sold in large cans such as Monster, Rock Star,
or Red Bull. Naked Energy drink provides come in a smaller, more efficient can.
Moreover this smaller size costs less money to produce.
3. Year after year, there is an emphasis among Americans concerning their health and living
a healthy life, including Michelle Obamas Lets Move campaign for Americas youth.
This trend will increase awareness of all natural energy drinks and incentivize consumers
to buy Naked Energy drink.
4. Research shows teenagers consume energy drinks more than soda, milk, or pure juice.
Therefore, this group will become our target market.
Threats:
1. Currently there is a lack of regulation on energy drinks. There is no exact definition of what an
energy drink is. There is little information available to determine what the FDA will constitute as
an energy drink in the future. It may limit any drinks that can provide energy to avoid accidents
caused by over drinking such kind of drinks.
2. When consumers think about energy drinks, there is a negative impression due to over doses in
caffeine. Additionally, parents dont want their children to drink them since the ones currently
available offer no nutritional benefits. As more cases related to energy drinks are exposed, the
stigma attached to energy drinks can affect the energy drink whole market.
IV. Marketing Strategy
Our group has determined that awareness of the Naked Energy product is crucial for its success.
Therefore our first objective is to bring awareness of the Naked Energy drink to 15 million people. This
will be done mostly through social media. We proposed that the Naked Juice Company aim to sell 30
million cans of Naked Energy in the first year, which will bring in about $75 million in revenue. We came
to this number by calculating the average unit sales for the top 10 energy drinks (as per the graph below,
excluding Red Bull and Monster as their sales are outliers.) and came up with 54.5 million units sold.
However, since this will be the first year selling the product we reduced the amount to 30 million since
Naked is just breaking into the market.

In terms of the second year, the Five Star Group determined the Naked Energy drink will be in its
growth stage under the product life cycle. This means sales should go up. The reason behind this will be
because of the promotional campaigns across the country, as well as social media exposure. Also, we will
gain consumers curious to see if this healthy product in fact does have the desired stimulant effect as a
Red bull or Monster without the pure caffeine. Therefore, for the second year we have an objective for the
product to have sales of $100 million and in effect obtaining up to 2% of the energy drink market share.
Our last objective is that after two years, revenue would increase at a 15% growth rate for 7 years. We
came up with this number based on graph above that the average growth rate is about 15 %. This amount
can be attained given the backing of PepsiCo.

Marketing Mix Strategies:

Product:
The product we were approached to market is the Naked Energy drink. It will contain few
differences from the well-known energy drinks already in the market. However, this product will not
contain any pure caffeine. The main reason behind this difference is because high amounts of pure
caffeine are a health concern for many. Therefore the Naked Juice Company plans to include vitamins
and other ingredients to give a stimulation effect as well.
For starters there will be B vitamins in the Naked Juice Companys Naked Energy drink. There
are many types of B vitamins. The most prevalent ones are B12 and B6. These vitamins will be included
in the energy drink because they increase alertness and improve mood (Heckman 313). The effects of
these vitamins will help our energy drink to not rely on pure caffeine.
Guarana is a plant that has been used as a natural additive to energy drinks. The Guarana plant
comes from Brazil, and the seeds of the plant are what cause a stimulant effect. (Heckman 311). The
seeds are insoluble when placed in water and the desired effects emerge. The stimulant effect of guarana
is released at a slower rate than pure caffeine lasts longer than pure caffeine (Heckman 311). This
prevents a crash effect common with Red Bull and Monster. This difference in stimulation can make
the Naked Energy drink different from those already out in the market.
Another ingredient that the Naked Juice Company will add as a stimulant in place of caffeine is
ginseng. Ginseng comes from Asia and has always been promoted as a natural source of longevity
(Heckman 312). The root of the plant is what has all the positive effects of the plant. There are also other
benefits of ginseng that prevent problems such as cardiovascular conditions and improved central nervous
system. Due to these positive effects of ginseng, it has been reported that the market of ginseng related
products is $3.5 billion and it is expected to grow (Heckman 312). This is yet another example of an
ingredient that will make the Naked Energy drink product more appealing.
Lastly, antioxidants are crucial to have in this energy drink. According to market research, 60%
of individuals look for antioxidants when they shop for a functional beverage (Heckman 314). The reason
is that antioxidants help protect cells from damaging effects of cancer and coronary heart disease
(Heckman 313). Promoting the use of these ingredients and antioxidants in the drink can greatly increase
the appeal of the product as an alternative source of energy to that of Red Bbull and Monster.
Another feature of the Naked Energy drink will be that it will come in a can. There are two main
reasons for this. First, it is done to clearly show customers the difference between the Naked Juice
Companys juice products and the energy drink. Naked Juice currently comes in a plastic bottle and the
juice is mostly used as a beverage to accompany a meal. The energy drink will come in a can and can be
consumed when a consumer needs a boost for whatever need they need energy for.
Additionally, a can is used to appeal to current energy drink customers. Currently all energy
drinks come in cans. Therefore, if the Naked Juice Company tries to appeal to the same customers, they
should use a can so they can encourage customers to buy it.
Price:
We determined that the Naked Energy Drink should market for $2.49 per 8 ounce can. This is
consistent with competitive products currently available and will also ensure that potential customers are
not turned off by a high price.
Promotion
The Naked Juice Company is looking to grow interest, excitement, and anticipation of their new
product. To do so, Naked Energy will build momentum through a vigorous six-month promotional
campaign leading up to its national launch date of 1/4/14. During the six-month crusade, promotion
efforts will be centered around its target market.
During the fall semester, the Naked Energy promotional team will occupy both colleges and high
schools within 3 major cities of each of the 50 states. During each visit, Naked Energy will work in
conjunction with sporting events, homecoming activities, professors or students holding study/tutor
sessions, and areas of high student traffic. The Naked Energy drink promotional tour bus will travel and
be visible at various locations on the premises. Students and faculty will be able to express their opinion
of Naked Energy by trying samples, answering survey questions, and take away promotion material that
announces the launch date of the product. Surveys and check-ins will be on hand so there will be a record
of how many potential customers were reached on that day. For tour dates and locations, individuals can
view the social media pages for up to date listings.
Additionally, juice bars, chain fitness locations (i.e. 24 Hour Fitness, Planet Fitness, Crunch,
Equinox, Gold's Gym), Wholesale chains (i.e. Sam's Club, BJs, Costco), and health spas will be given
sample size cans of Naked Energy to be give away to clients for sampling. Having Naked Energy at
fitness centers will serve the purpose of either giving individuals the energy boost to work out, or the
energy to proceed with their day after the workout. The idea of having sample size giveaways at health
spas is to promote rejuvenation after a relaxation. Wholesale chains are a great opportunity to captivate a
mass of everyday shoppers in locations where Naked Energy will soon be sold.
Social media outlets including Facebook, Twitter, Instagram, and YouTube will be used to inform
clients of the launch date, locations where Naked Energy sampling and events will be held, product
highlights, and ultimately serve as a community style platform to share opinions, feedback, and up and
coming news. Naked Energys social media platform will be highly interactive - encourage photo sharing,
announce contests and secret locations where Naked Energy can be found for the day, and encourage
dialogue between consumers. Commercials will be limited to the social media outlet with anticipation of
viral recognition and news coverage that will arise as a sub product.
After the 1/4/14 launch date of Naked Energy, the first months sales will be taken into account,
and each segment of the promotional plan will be re-evaluated. Based on those results, funding will be
reallocated among the marketing techniques deemed successful.
Distribution
We determined that the Naked Energy drink should be made available not just in specialty stores
such as Whole Foods, but anywhere Naked Juice is currently available. This includes all types of
convenient stores, grocery stores or super markets, and pharmacy shops such as CVS or Walgreens.
Additionally, we proposed making the Naked Energy drink available in fitness centers and health spas to
capture more customers.
V. Conclusion
We stressed to the Naked Juice Company that while we have a solid marketing plan for their new
Naked Energy drink, there are potential negative issues that this new product can create for the company.
The most severe would be cannibalization of its current juice and smoothie line or other PepsiCo products.
When Naked Energy is introduced into the market, it may distract customers who used to buy other Pepsi
products. Therefore we stressed to the Naked Juice Company the importance of advertising the Naked
Energy drink as its own separate product that is used for a different purpose than the juice lines. Most the
juice and smoothies on the market now are consumed when someone is thirsty or, since they are hearty
products, sometimes to offset a meal. Naked Energy is intended to be consumed when someone needs an
energizer to either get through their day they are feeling lethargic, or get through a workout or study
session.
Additionally, there is a great uncertainty of new regulations that are currently being debated over in
the US. There is no set definition from the FDA concerning what constitutes and energy drink or what
producers can put into their drink to create that bolt of energy customers are looking for. Recently in the
news however, interest groups are lobbying for more regulation on these drinks. Currently some countries
have set rules for their energy drinks market pertaining to ingredients or who can buy them. If such
regulations come to the US, Naked Energy will face new barriers and therefore the promotion and
marketing plan will have to be adjusted.
To measure the effectiveness of the promotional tour and marketing campaign the Naked Juice
Company should definitely look at its sales in terms of both dollars and units. We also recommended
working with a firm such as BuzzFeed that will track when Naked Energy is mentioned in social media
and report on if positive or negative feedback is being posted.
With the success of this marketing campaign our group determined that Naked Energy should be able
to be in the top ten selling energy drinks within ten years. To do this, the Naked Juice Company will have
to expand to distributing Naked Energy worldwide, making certain to focus on markets where energy
drinks are consumed the most such as Saudi Arabia or the UK.

Bibliography

Resources:
Heckman, M.A., Sherry, K. and Mejiary, E. Gonzalez de. "Energy Drinks: An Assessment of
their Market Size, Consumer Demographics, Ingredient Profile, Functionality, and Regulations
in the United States". Institute of Food Technologists. Comprehensive Reviews in Food Science
and Food Safety, Vol 9, 2010.
Naked Juice Company. "Our Purpose". NakedJuice.com 2011. 28 November 2012
<http://www.zenithinternational.com/articles/1012>

PepsiCo, Inc. "2011 Annual Report". PepsiCo.com. 9 November 2012
<http://www.pepsico.com/investors/annual-reports.html>

Renfrew, Esther and Martinez, Cecilia. "Global energy drinks market spurts ahead to $37
billion". Zenith International.com 14 February 2012. 7 November 2012
<http://www.zenithinternational.com/articles/1012>