the case highlights the marketing strategies of us based energy brands inc

8/3/2019 The Case Highlights the Marketing Strategies of US Based Energy Brands Inc

1/13

The case highlights the marketing strategies of

US based Energy Brands Inc., maker of the

Glacau range of 'enhanced water' products.

Glacau's Vitaminwater was highly successful

and in some markets in the US, it outsold Dasani

and Aquafina. Vitaminwater was different from

other products, in several aspects including

packaging, appearance, labels and ingredients; it

was a category creator.

Vitaminwater was promoted through Vehicle

Marketing Program, Retail Sampling Program,

banners & posters, and 'Campus Ambassadors,'

a college outreach program. By 2006, several

famous celebrities from sports and

entertainment arena endorsed Glacau products.

The case also describes Glacau's unique distribution strategies. Notwithstanding the success

of Vitaminwater, industry experts felt that the product may face stiff competition from the

established players in the industry like Coca-Cola and Pepsi, which were launching their own

line of 'enhanced water' products owing to there growing popularity.

Issues:

Understand the marketing mix adopted by Glacau for Vitaminwater

Critically examine the promotion and distribution strategies for Vitaminwater

Analyze the factors that helped Glacau carve a niche for itself in a saturated beverages

market in the US

Examine the challenges Glacau may face from established players


2/13

.

Glacau: Marketing

VitaminwaterCase Details

Case Intro 1

Case Intro 2

Excerpts

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ICMR HOME|Case Studies

Collection

Case Details:

Case Code : MKTG166

Case Length : 18 Pages

Period : 2002-07

Pub Date : 2007

Teaching Note :Not Available

Organization : Energy Brands Inc.

Industry : Packaged Water

Countries : US

To download Glacau: Marketing

Vitaminwater case study (Case

Code: MKTG166) click on the

button below, and select the case from

the list of available cases:

Price:

For delivery in electronic format: Rs.

300;

For delivery through courier (within

India): Rs. 300 + Rs. 25 for Shipping


3/13

"Vitaminwater has

hit those three

rongs (physical,

emotional and

spiritual) by

balancing the

spiritual need o

overall health and

wellness with the

hysical o

refreshment and the

vitamins that you

need, plus the

emotional with the

ackaging having

words on it that are

cheeky and fun. I

think it's one of the

best new product

introductions that

I've seen in the last

ew years."3

- Heather Dupre,

Director

Innovation,Kindred Keziah

4,

in 2005.

Introduction

In September

2006, PepsiCo

Inc.

& Handling Charges

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Please note:

This case study was compiled frompublished sources, and is intended to

be used as a basis for class discussion.

It is not intended to illustrate either

effective or ineffective handling of a

management situation. Nor is it a

primary information source.
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4/13

(Pepsi)5announced

that it had agreed

to change the

packaging, label,

and cap of its

SoBe Life Water6,

as per the

settlement it had

reached with

Energy Brands

Inc., (Energy

Brands), maker of

the Glacau range

of enhanced water

products.

In April 2006,

Energy Brands

Inc. had filed a

lawsuit against

Pepsi, alleging

that SoBe Life

Water's

packaging, label,

and cap were

similar to those of

Glacau

vitaminwater and

that Pepsi

intended to

confuse the

consumers with its

new packaging.
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5/13

As per the lawsuit,

Pepsi had resorted

to trade dress

infringement and

dilution and its

label and bottle

resembled that of

vitaminwater.

It was also alleged

that Pepsi had

launched SoBe Life

Water after it failed

to acquire Energy

Brands in early

2006.

On reaching

the settlement

with Pepsi,

Founder CEO

of Energy

Brands, Darius

Bikoff

(Bikoff), said,

"We were

pleased with

the overall

settlement.

There has

been a history

of attempts to

ride the

success of


6/13

vitaminwater's

coat tails. And

it is kind of a

shame because

I think our

competitors

are better

served trying

to come up

with their own

innovation..."7

Analysts

opined that the

lawsuit and its

subsequent

settlement

indicated the

growing

insecurity of

the soft drink

majors, which

were facing a

threat from

companies

promoting

healthy

alternatives to

soft drinks.
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7/13

Glacau: Marketing

Vitaminwater

Case Details

Case Intro 1

Case Intro 2

Excerpts

++ Font|Font --

ICMR HOME|Case Studies

Collection

Case Details:

Case Code : MKTG166

Case Length : 18 Pages

Period : 2002-07

Pub Date : 2007

Teaching Note :Not Available

Organization : Energy Brands Inc.

Industry : Packaged Water

Countries : US

To download Glacau: Marketing

Vitaminwater case study (Case


8/13

which

advocated

healthy living

through low-

calorie, low

sugar drinks,

and non-

carbonated

water with

additional

nutritional

supplements.

Glacau's line

of enhanced

water

products

comprised

vitaminwater,

Smartwater,

and

Fruitwater.

Energy

Brands was

credited with

creating a

new category

of drinks

popularly

known as

'enhanced

water

products.'

According to

Code: MKTG166) click on the

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the list of available cases:

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9/13

analysts,

Glacau's

success in a

scenario in

which major

soft drinks

and beverage

manufacturers

like Coca-

Cola and

Pepsi had a

strong hold

over the

distribution

network and

spent

aggressively

in marketing

their

products,

illustrated

that even the

most

saturated

markets could

accommodate

innovative

products.

In 2005, less than a

decade since it

began as a small

start-up, Glacau

earned revenues of

Please note:

This case study was compiled from

published sources, and is intended to

be used as a basis for class discussion.

It is not intended to illustrate either

effective or ineffective handling of a

management situation. Nor is it a

primary information source.


10/13

over US$ 350

million, with

compounded

annual growth of

200% per year. It

found prominent

shelf space at the

stores of several

major retailers

across the US. In

the process,

Bikoff's efforts

were also

recognized. In

2000, Bikoff was

awarded

Brandweek's

'Marketers of the

Next Generation'

and in 2001,

Crain's Weekly

named him 'New

York's Top

Entrepreneur.' He

was among the

finalists in Ernst &

Young's

'Entrepreneur of the

Year' in 2003.

The

Beginning

In the early


11/13

1990s, when

Manhattan

was hit by

water

contamination,

Bikoff8set out

to buy bottled

water and

found that

except for the

brand name,

there was very

little

difference

between the

different

brands of

bottled water

sold. Bikoff

was looking

for additional

nutritional

value rather

than plain

water. Finding

none, he

started

conducting an

in-depth study

about different

companies

making

bottled water.
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12/13

He found that

he could use

vapor

distillation9to

create an

alternative to

bottled water.

Bottled water

was generally

procured from

springs and

contained

some

dissolved

minerals,

which could

be removed

using vapor

distillation...

Glacau's products were priced higher than the other soft

drinks, at US$ 1.49 per 20-ounce bottle while Coke was

priced at 50 cents. Glacau targeted consumers who were

ready to pay a premium for healthy alternatives to soft

drinks. It defended the higher price citing the higher value

that the product provided. Energy Foods had always

maintained a close contact with the consumers in order to

understand their tastes and preferences. According to Rohan

Oza (Oza), Senior Vice-president, Marketing, Glacau,

"The insight came from consumers. When you start with the
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13/13

consumer giving you the answer, it's always easier. But you

have to spend a lot of time with consumers to do that.

Whenever our folks go into stores, we talk to people, talk to

retailers, chat with consumers at the shelf"

For the 52-week period ending April 2006, Glacau vitaminwater was among the top 10

bottled waters in the US, when sales through food, drug, and mass merchandisers was taken

into consideration (Refer to Exhibit I for top bottled waters in the US)...

The Road Ahead

With the rising demand for vitaminwater, there were several instances of the products being

sold out within no time. At the same time, the company was trying to increase its shelf space

among the retailers in the US. Vitaminwater was also facing a challenge from some exclusive

stores, which provided specialized products with natural ingredients and lower calories. With

the capital infused by the Tata Group, analysts opined that Glacau would be able to expand

its operations further and could consider entering international markets. By 2011, Glacau

was estimated to be a US$ 10 billion company...

the case highlights the marketing strategies of us based energy brands inc

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