Case Study

Positioning Urzza: Launching a New Energy Drink

Group 1
Aimen Naseem - BSMT22046
Zaina Javed - BSMT22098
Masooma Altaf - BSMT22093
Khubaeb Murtaza - BSMT22037

Submitted to:
Dr. Zeeshan Rafiq
Q1. How can the beverage market be segmented? Who should Urzza Target?

Market Overview
India's beverage industry is a sizable and bright sector with enormous growth potential. This positive view is
influenced by a number of factors, such as low penetration, low per capita spending, growing disposable incomes,
and the growth of organized retail.

Market Segmentation
The market can be effectively segmented based on various factors, with specific relevance to Urzza:

1. Demographics
- Age Group(13-40 years): Urzza's caffeine-free composition allows it to appeal to a broader audience, including
teenagers who may be conscious of caffeine intake.
- Lifestyle:Targeting the urban middle class and higher segments aligns with Urzza's positioning as a premium
beverage.
- Gender Neutrality: Urzza aims for a gender-neutral appeal, ensuring inclusivity in its target audience.
- Location: Primarily targeting metropolitan cities caters to areas with higher consumer spending and diverse
preferences.

2. Behavioural
- Health-conscious attitude: Urzza caters to the tastes of people who value their health by providing a caffeine-
free beverage that may be viewed as a healthier option.
- Enthusiastic and positive people: Urzza is positioned as a high-end energy drink, it might draw customers who
are looking for something refreshing and who have an upbeat attitude.

3. Beverage Type
- India's non-alcoholic beverage market is large and may be roughly divided into two categories: soft drinks and
hot beverages.
- As a functional drink, Urzza competes in the growing market for energy drinks, sports drinks, ready-to-drink
tea and coffee, and fortified water instead of neatly fitting into any of the established categories.
- The absence of caffeine in Urzza allows it to stand out and be classified differently within the functional drink
segment.

Market Dynamics
- The functional drink segment, including energy drinks, sports drinks, and others, is relatively new in the Indian
market.
- Urzza, positioned as an energy drink without caffeine, introduces a unique proposition, leveraging global trends
of increased interest in functional and healthier beverage options.
- The absence of caffeine in Urzza provides an opportunity for differentiation within the competitive landscape,
allowing the brand to carve its own niche.

In summary, Urzza’'s strategic positioning takes into account the unique dynamics of the Indian beverage market,
targeting specific demographics, behaviors, and beverage preferences to differentiate itself in a diverse and
evolving industry.
Q2. What was the intended positioning at the time of the conceptualization of Urzaa? In your view, what
positioning options are available for Urzaa? Discuss their pros and cons.

When Urzza was first introduced, the company wanted it to be different from other energy drinks. They planned
for Urzza to stand out by not having caffeine. The goal was to attract more people than their competitors. By being
caffeine-free, Urzza aimed to appeal to those who wanted an energy boost without the jitters from caffeine. This
idea was to make Urzza a unique and healthier choice in the energy drink market, reaching a broader group of
consumers.

Urzza, in its market strategy, adopted several key approaches to differentiate itself:

Premium with Low Price: Urzza entered the market with a competitive pricing strategy, offering its energy drink
at Rs. 50/- for a 250 ml can or a 300 ml PET bottle, a price point lower than its competitors. This allowed Urzza to
attract cost-conscious consumers while maintaining a premium positioning with golden-colored fonts on the
packaging.

Casual Consumption: Unlike competitors marketing their products as party drinks, Urzza positioned itself for
casual consumption, emphasizing that its energy drink could be enjoyed by anyone, anywhere.

Positioning Options

Energy Boosting Drinks: Urzza had the option to position itself as an energy-boosting drink during a time when
the energy drink segment was changing with increased government regulations on caffeine. The market openness
to new products presented an opportunity for Urzza, but the challenge lay in upholding energy-boosting claims
without caffeine.

General Health Drink with Vitamins: Another potential positioning was as a general health drink with added
vitamins aiding digestion. This would have allowed Urzza to tap into a segment with less competition, but the
premium pricing could have been perceived as high for a general health drink.

Additional Strategies Urzza could have considered

Taste Enhancement: Urzza could have focused on improving the taste of its energy drink, aligning with its casual
consumption positioning. This would have enabled the brand to target a broader market, including social settings
like clubs and occasions where taste plays a crucial role.

Pros: Product differentiation, and attraction to consumers of all ages.

Cons: Resistance from customers loyal to a specific taste.

Caffeine-Free Formulation: Urzza could have differentiated itself further by offering a caffeine-free option,
catering to health-conscious consumers, and expanding its appeal to all age groups.

Pros: Attraction of health-conscious customers, suitability for a broad consumer base.

Cons: Challenges in convincing consumers about the energy-boosting properties without caffeine.

To sum up, Urzza's original approaches were centered on positioning and price for casual consumption.
Nonetheless, by catering to a range of consumer tastes and trends in the energy drink industry, there were chances
to improve the product's flavor and create a caffeine-free recipe that would have increased its market presence. The
exact objectives of Urzza and the state of the market would determine which of these approaches to use.

Q3. Discuss the pros and cons for Urzza in creating a product category different from energy drinks that
can generate mass appeal.

Pros of Creating a New Product Category for Urzza

1. Reputable and well-established brand: Urzza can capitalize on its established and trusted brand image,
fostering consumer confidence in the new product category.

2. First Mover Advantage: By introducing a new subcategory beyond caffeinated energy drinks, Urzza gains a
first-mover advantage, shaping consumer perceptions and setting industry standards.

3. Regulatory Advantage: Urzza, being caffeine-free, is less impacted by regulations set by the Food Safety and
Standards Authority of India for caffeine limits in drinks, providing a regulatory advantage.

4. Diverse Distribution Channels: Urzza can leverage a broader range of distribution channels due to its unique
product positioning, potentially reaching new and diverse consumer segments.

Cons of Creating a New Product Category for Urzza

1. Limited Buyer Base: The introduction of a new product category may attract fewer buyers initially, as
consumers may be cautious or slow to adopt a novel offering.

2. Higher Investment in Promotion: Gaining customer confidence and market share for a new product category
requires higher investment in promotional activities, advertising, and marketing efforts.

3. Product Trial Challenges: Encouraging consumers to try a new, unfamiliar product category poses challenges
in inducing product trial, particularly when established habits or preferences are in place.

4. Informing Potential Consumers: Communicating the benefits and unique features of the new product category
requires substantial efforts in informing and educating potential consumers.

5. Production Challenges: Incorporating the production of a new product into existing facilities poses challenges
despite the availability of resources, including adjustments to production processes and potential logistical
complexities.

Launching a new product category is a strategic move with both advantages and challenges for Urzza. Careful
consideration and effective marketing strategies will be essential for ensuring a successful introduction and
sustained market presence.

Q4. Evaluate the current marketing mix for Urzza?

The marketing mix for Urzza includes the four Ps of marketing: product, price, place, and promotion. Here is a
detailed evaluation of each element:

1. Product: Urzza is a non-caffeinated energy drink that contains vitamins B and C and tartaric acid. The product
is unique and differentiated from traditional energy drinks, which can potentially appeal to a broader consumer
base. However, the lack of multiple variants may limit its appeal to consumers who prefer different flavors or
variations. The company could consider introducing new flavors or variations to cater to diverse consumer
preferences.

2. Price: Urzza is priced at ₹50 for a 250-ml can or a 300-ml PET bottle, which is lower than most existing energy
drinks. However, it is still priced at a premium compared to soft drinks. The pricing strategy is aligned with the
perceived value of the product, which is positioned as a premium and healthier alternative to traditional energy
drinks. However, the premium pricing may be a barrier to entry for some consumers.

3. Place: The distribution strategy is effective, leveraging Bisleri’s existing distribution network to ensure
widespread availability of the product. Urzza is distributed through various retail channels such as supermarkets,
convenience stores, and pharmacies. However, the company could consider expanding its distribution channels to
reach a wider consumer base.

4. Promotion: The promotional strategy is comprehensive, leveraging various media channels such as television,
print, billboards, and social and digital media. The company has also engaged in promotional activities such as
sampling and events to create brand awareness. However, the company could consider partnering with health and
wellness influencers to endorse the product and drive consumer adoption. Additionally, the company could focus
on creating engaging and interactive social media content to increase brand engagement and awareness.

Overall, the marketing mix for Urzza is effective in differentiating the product from traditional energy drinks and
creating brand awareness. However, there is room for improvement in terms of expanding distribution channels,
introducing new flavors or variations, and partnering with influencers to drive consumer adoption. Additionally,
the company could focus on creating engaging and interactive social media content to increase brand engagement
and awareness. By continuously evaluating and refining its marketing mix, Urzza can work towards achieving its
sales targets and establishing itself as a leading player in the functional beverage market.

Q5. Do you think the target volume set for Urzza is achievable? What should Urzza do next?
Meeting the set target volume of 240 million cans for Urzza poses significant challenges:

1. Caffeine-Free Composition: The lack of caffeine may hinder attracting consumers seeking a rapid energy
boost.
2. Intense Market Competition: Competing with established brands like Red Bull requires significant effort to
gain market share.
3. Operational Challenges: Managing the launch of a new product while maintaining the existing product line
poses operational hurdles.
4. Undefined Positioning: Urzza's open-ended strategy and lack of a clearly defined market niche make it
challenging to attract and retain customers.

Recommendations for Urzza

1. Focused Positioning: Clearly define Urzza's market niche and emphasize its unique selling points.
2. Targeted Marketing: Invest in focused marketing campaigns across various media outlets to target a wider
market.
3. Competitive Pricing: Maintain a competitive pricing strategy to capitalize on the cost advantage.
4. Educational Campaigns: Educate consumers about the benefits of caffeine-free energy drinks to dispel
misconceptions.
5. Gradual Expansion: Instead of aiming for an ambitious volume target immediately, focus on gradual market
expansion, monitoring consumer responses and adapting strategies accordingly.
In conclusion, while the target volume is ambitious, strategic changes in positioning, marketing, and customer
education could enhance Urzza's chances of success in the competitive energy drink market. A gradual approach to
market expansion, coupled with continuous adaptation based on consumer feedback, may increase the likelihood
of achieving the set sales targets.