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Accounting 3 Pages

Refresh Now!: Case Study

Question

Client goal

Our client is RefreshNow! Soda. RefreshNow! is a top 3 beverage producer in the U.S. and has approached your consultant group for help in designing a product launch strategy.

Description of RefreshNow! Soda

As an integrated beverage company, RefreshNow! leads its own brand design, marketing and sales efforts. In addition, the company owns the entire beverage supply chain, including production of concentrates, bottling and packaging, and distribution to retail outlets. RefreshNow! has a considerable number of brands across carbonated and non-carbonated drinks, 5 large bottling plants throughout the country and distribution agreements with most major retailers.

Case study

RefreshNow! is evaluating the launch of a new product, a flavored non-sparkling bottled water called O-Natura. The company expects this new beverage to capitalize on the recent trend towards health-conscious alternatives in the packaged goods market.

RefreshNow!’s Vice President of Marketing has asked your group to help analyze the major factors surrounding the launch of O-Natura and its own internal capabilities to support the effort.

QUESTION 1: What key factors should RefreshNow! consider in deciding whether or not to launch O-Natura?

Helpful Hints 

  • Take time to organize your thoughts before answering. This tells the interviewer that you think about the problem in a logical way
  • Develop overall approach before diving into details

QUESTION 2: After reviewing the key factors RefreshNow! should consider in deciding whether to launch O-Natura, your team wants to understand the beverage market and consumer preferences to gauge potential success of O-Natura.

The bottled market splits into non-sparkling, sparkling, and imports. Flavored water falls within non-sparkling. Your team has gathered the following information on the U.S. bottled water market. The information shows an estimate for the share of flavored water, as well as the current share for the two main products: Cool and O2Flavor.

Based on the target price and upfront fixed costs, what share of the flavored non-sparkling bottled water would O-Natura need to capture in order to break even? Here is some additional information for you to consider as you form your response:

  • O-Natura would launch in a 16 oz. presentation (1/8 of a gallon) with a price of $2.00 to retailers.
  • In order to launch O-Natura, RefreshNow! would need to incur $40 million as total fixed costs, including marketing expenses as well as increased costs across the production and distribution network.
  • The VP of Operations estimates that each bottle would cost $1.90 to produce and deliver in the newly established process.

Helpful Hints

  • Ask for clarification of information, if necessary
  • Take notes of the numbers
  • Take time to plan out how to approach the calculation
  • Describe your approach and talk the interviewer through your calculation. The more you talk the easier it will be for your interviewer to help you

QUESTION 3: RefreshNow! executives believe that the company’s position as the top 3 beverage company in the country gives them strategic strengths toward achieving the desired market share. However, they ask the team to characterize realistically what they would need to achieve that target.

What would RefreshNow! need to ensure realistically to gain the required market share for O-Natura?

QUESTION 4: Within the key drivers for market share, RefreshNow! wants to know which to tackle first and what the strategy should be. Therefore your group was asked helped RefreshNow! to design and run a study to understand branding and distribution. The following information shows results from the study, based on a sample of target consumers. What can you conclude from the study in regards to the preferred marketing image and strategy of O-Natura?

QUESTION 5: The team now explores RefreshNow!’s internal operational capacity to fulfill the projected O-Natura demand. RefreshNow! has decided to produce O-Natura from an existing dedicated production line in a single facility. In order to be on the safe side in case of increased demand they plan for an annual capacity of 420 million bottles (units) of O-Natura. The production line they have in mind currently operates for 20 hours per day, 7 days a week and 50 weeks per year. The speed for the current bottling process is 750 units per minute.

Is the current production capacity sufficient to fulfill the desired annual production plan of 420 million bottles of O-Natura?

QUESTION 6: Given the need for a specialized production process for O-Natura, the company has decided to add a new production line to only one of their 5 facilities. What factors should they consider in selecting the adequate plant?

QUESTION 7: The RefreshNow! CEO has seen the team's analysis and confirms that the decision to launch O-Natura has been made. The product will be marketed as a sports drink, produced in the Midwest US, and distributed through supermarkets, convenience stores, and sport outlets. He asks the team what the company should start doing tomorrow?

Helpful Hint

  • Ensure to mention different insights instead of immediately diving very deep into one insight. Then ask your interviewer if he/she wants to go deeper on any of them


Solution

Title: Refresh Now!: Case Study
Length: 3 pages (961 Words)
Style: MLA

Preview

RefreshNow!: Case Study

Question 1

RefreshNow! should consider the cost of product implementation; such may include the need for more in-house staff to support the implementation, for instance, such activities as marketing and advertising. The company should also consider the competitive environment with a focus on their competitors, the competitors’ pricing strategies, and their market share. Another significant factor the company should consider is the profit potential with a focus on the product’s potential impact on bottom-line revenue. Focus should not only be on the product itself, but also on its potential to open more doors to new opportunities for revenue.

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