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PDF Case 1

This document discusses a case study for SuperSoda, a top beverage producer in the US, evaluating the launch of a new sports drink called Electro-Light. Electro-Light is formulated to focus on electrolyte replenishment with reduced sugar. SuperSoda's VP of marketing asks for an analysis of key factors in launching Electro-Light and SuperSoda's capabilities to support it. The case study provides market data on the sports drink category and results from consumer research on Electro-Light to help inform SuperSoda's launch strategy.

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Diana Ștefania Crăiuț
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232 views4 pages

PDF Case 1

This document discusses a case study for SuperSoda, a top beverage producer in the US, evaluating the launch of a new sports drink called Electro-Light. Electro-Light is formulated to focus on electrolyte replenishment with reduced sugar. SuperSoda's VP of marketing asks for an analysis of key factors in launching Electro-Light and SuperSoda's capabilities to support it. The case study provides market data on the sports drink category and results from consumer research on Electro-Light to help inform SuperSoda's launch strategy.

Uploaded by

Diana Ștefania Crăiuț
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Practice Case Electro-Light

Client goal
Our client is SuperSoda. SuperSoda is a top-three beverage producer in the United States
and has approached McKinsey for help in designing a product-launch strategy.
Description of situation
As an integrated beverage company, SuperSoda 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. SuperSoda has a considerable number of brands across carbonated and non-
carbonated drinks, five large bottling plants throughout the country, and distribution
agreements with most major retailers.
SuperSoda is evaluating the launch of a new product, a flavored sports drink called
Electro-Light. Sports drinks are usually designed to replenish both energy (sugars) and
electrolytes (salts) in the body. However, Electro-Light has been formulated to focus more
on the replenishment of electrolytes and has a reduced sugar content compared to most
other sports drinks. The company expects this new beverage to capitalize on the recent
trend away from sugar-rich products.

Study
SuperSoda’s vice president of marketing has asked YOU to help analyze the major factors
surrounding the launch of Electro-Light and its own internal capabilities to support the
effort.
Helpful hints
• Write down important information.
• Feel free to ask the teacher for an explanation of any point that is not clear to you.
• Remember that calculators are not allowed - you may write out your calculations on
paper during the class.
Question 1:
What key factors should SuperSoda consider in deciding whether or not to launch Electro-
Light?
Helpful hints
• Take time to organize your thoughts before answering. This tells theteacher that you
think about the problem in a logical way.
• Develop overall approach before diving into details.
Question 2:
After reviewing the key factors SuperSoda should consider in deciding whether to launch
Electro-Light, your team wants to understand the beverage market and consumer
preferences to gauge potential success of Electro-Light.
Your team has gathered the following information on the US sports-drink market. The
information shows an estimate for the share of electrolyte drinks, as well as the current
share for the two main electrolyte products: CoolSweat and RecoverPlus.
Based on the target price and up-front fixed costs, what share of the electrolyte drink
market would Electro-Light need to capture in order to break even? Here is some
additional information for you to consider as you form your response:
• Electro-Light would launch in a 16-ounce presentation (one-eighth of a gallon) with
a price of $2 to retailers.
• In order to launch Electro-Light, SuperSoda 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 vice president 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.
• Take notes of the numbers, and don't be concerned if the units are unfamiliar to
you.
• Take time to plan out how to approach the calculation.
• Describe your approach and talk the teacher through your calculation. The more
you talk the easier it will be for your interviewer to help you.
Question 3:
SuperSoda executives believe that the company's position as a top three beverage
company gives them strategic strengths toward achieving the desired market share.
However, they ask the team to outline what would be needed to achieve the target of 12.5
percent share of the electrolyte-drinks market. What would SuperSoda need to do to gain
the required market share for Electro-Light following its launch?
Question 4:
To help SuperSoda determine how best to launch the new Electro-Light product, the team
conducted a consumer-research study. The following information shows results from the
study. What can you conclude from this regarding how the new Electro-Light product
should be launched?

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