Going Global with CAPABLE JUICE
Background
You are the CMO (Chief Marketing Ocer) for CAPABLE JUICE. CAPABLE JUICE is a company that sells a line of premium, all-natural juices.
CAPABLE JUICE is marketed as a tasty beverage particularly well-suited for people who emphasize health and wellness in their lives. To date, your
company has only sold in the United States, but you are now preparing to make your first expansion into a foreign market.
Previous research has narrowed the candidate countries down to three. Regardless of which country is selected, it has already been determined
that CAPABLE JUICE will be sold to local distributors who will then be responsible for selling to local retailers and, ultimately, consumers. Your
Chief Financial Ocer (CFO) has provided you some preliminary financial information, and you have also been handed a report created from the
2014 GfK Consumer Trends Global Consumer Survey. This survey reports information about each country. Importantly, it dives deeper and also
segments consumers by their relative income and occupational status. In the United States, income and occupation have been important
characteristics to identify CAPABLE JUICE consumers.
Your Goal:
Review the data from the CFO and from the GfK consumer report. Then, make some preliminary financial estimates about the likely financial
performance of CAPABLE JUICE. Based on your estimates, make some preliminary recommendations for CAPABLE JUICE’s future international
expansion.
The Data:
About the data from the CFO:
oPRICE: The CFO has provided you with the assumed sale price per bo:le of CAPABLE JUICE. The price has been adjusted into US
dollars and is assumed to be constant for each of the three countries and for any quantity of CAPABLE JUICE that is sold.
oMARKET SHARE: The CFO has asked you to assume that CAPABLE JUICE will account for a specific percentage of the foreign market
a<er a single year. For simplicity, that percentage is assumed to be the same regardless of which country you enter. The market for a
country is defined as the quantity of fruit juices or fruit drinks sold in a given year.
About the GfK data: The GfK Consumer Trends Global Survey is a large survey of many countries. Results for each country are adjusted to be
representative of the country’s population that is 15 years or older. Each country has results for four di>erent consumer segments from the
combination of income (high/low ) and occupation (white collar / other occupation).
oSize (000s): The estimated number of people (in thousands) who are in each segment of a country
o% Country: The estimated % of the entire country that is comprised of people within a particular segment
o% Group: The “% Group” means the percentage of people within a segment who meet the criteria for a specific survey question
oPersonal Values, Health and Fitness: The percentage of segment members who scored the 2 highest possible values on how
important “health and /tness” were as part of their personal values.
osatisfaction with Primary Shopping location: Availability of healthy foods and beverages: The percentage of segment members
who scored the 2 highest possible values on how satistied they were with the availability of healthy foods / beverages.
oDrink fruit juice daily: The percentage of segment members who said they drink fruit juice “daily”
oDrink Fruit juice weekly: The percentage of segment members who said they drink fruit juice “weekly”
oDrink fruit drinks daily: The percentage of segment members who said they drink fruit drinks “daily”
oDrink fruit drinks weekly: The percentage of segment members who said they drink fruit drinks “weekly”
oRegularly eat healthy, nutri)ous foods for: physical health: The percentage of segment members who said this is a motivation to eat
healthy foods.
oRegularly eat healthy, nutri)ous foods for: mental / emotional health: The percentage of segment members who said this is a
motivation to eat healthy foods.
oRegularly eat healthy, nutri)ous foods for: appearance: The percentage of segment members who said this is a motivation to eat
healthy foods.
ALL NUMBERS HERE ARE
PLACEHOLDERS PENDING
ACCESS TO GFK GLOBAL SURVEY
DATA
Country Germany Ireland USA
Income
Group
High Medium High Medium High Medium
Occup.
Group
White
Collar
Skilled
Trades
White
Collar
Skilled
Trades
White
Collar
Skilled
Trades
White
Collar
Skilled
Trades
White
Collar
Skilled
Trades
White
Collar
Skilled
Trades
Size
(000s)
500 1,000 800 1,000 300 400 160 100 8,000 8,000 16,000 24,000
Personal Values: Health and Fitness % of
Country
5% 10% 8% 10% 15% 20% 8% 5% 10% 10% 20% 30%
Satisfaction with Primary Shopping
Location: Availability of healthy foods
and beverages
% of
Group
30% 60% 15% 20% 30% 40% 80% 10% 60% 45% 35% 45%
Drink fruit juice daily % of
Group
30% 40% 80% 10% 40% 80% 30% 60% 15% 20% 10% 60%
Drink Fruit juice weekly % of
Group
5% 5% 20% 5% 20% 5% 5% 5% 20% 5% 5% 5%
Drink fruit drinks daily % of
Group
10% 5% 5% 10% 5% 5% 10% 5% 5% 5% 10% 10%
Drink fruit drinks weekly % of
Group
10% 10% 10% 5% 10% 10% 10% 10% 10% 10% 10% 10%
Regularly eat healthy, nutritious foods
for: physical health
% of
Group
20% 5% 20% 30% 40% 60% 15% 5% 5% 5% 20% 20%
Regularly eat healthy, nutritious foods
for: mental / emotional health
% of
Group
10% 5% 5% 5% 20% 5% 10% 10% 5% 10% 10% 5%
Regularly eat healthy, nutritious foods
for: appearance
% of
Group
5% 10% 5% 5% 5% 5% 15% 5% 5% 5% 20% 20%
Personal Values:
Health and Fitness
% of
Group
10% 10% 10% 10% 10% 15% 5% 20% 5% 20% 5% 5%
Beverages sold per year to segment (000s) 13,688 20,075 51,100 29,200 21,353 16,060 4,088 2,008 467,200 160,600 438,000 657,000
Estimated number of annual fruit juice / drink
beverages consumed per year by segment member
27.4 20.1 63.9 29.2 71.2 40.2 25.6 20.1 58.4 20.1 27.4 27.4
Estimated Market Share within Segment 5% 10% 5% 5% 5% 5% 10% 5% 10% 10% 5% 10%
Estimated Annual Sales (000s) $513 $1,506 $1,916 $1,095 $801 $602 $ 307 $75 $ 35,040 $ 12,045 $ 16,425 $ 49,275
Estimates Sales per Consumer $1.03 $1.51 $2.40 $1.10 $2.67 $1.51 $1.92 $0.75 $4.38 $1.51 $1.03 $2.05
Task 1: Understanding the Data:
Before providing recommendations to the CFO, make sure you understand how to interpret the information presented in the table.
1. Which country has the segment with the fewest consumers in it?
2. Which country has the largest total number of potential consumers in it?
3. Find the country that has the consumer segment that makes up the largest percentage of its total amount of consumers. What is that
percentage?
4. Which segment prioritizes physical appearance as a motivation for eating / drinking healthy?
TASK 2: Estimating Sales
Using some assumptions provided by the CFO, you are tasked with estimating the annual sales (in $) for each segment in each country. To do so,
you will need to make the following assumptions:
Actual consumption:
oWhen someone says they drink juice or drinks fruit drinks “daily,” we assume they actually have 0.7 of that drink on a typical day.
oWhen someone says they drink juice of drinks fruit drinks “weekly,” we assume they actually have 0.1 of that drink on a typical
day.
oFor all other answers, we assume that they don’t drink the beverage at all.
Using the data provided by GfK and the assumptions above, what are total estimated number of fruit drinks & juices (combined) that are
estimated to be sold to consumers of each segment in a typical year (365 days)? The answers have been provided to you for the first two
columns.
oCALCULATION:
Annual Sales $ estimated per segment =
[
]
According to these estimates, how many beverages would we assume a typical person in each segment consumes per year?
oCALCULATION:
TASK 3: Estimating Sales
The CFO is impressed with your initial estimates. She would like you to go even further and estimate the total sales expected within each
segment a<er one year. Again, the CFO has provided you with some important estimates to help you make your calculations.
Financial assumption:
o(1) The per unit price sold to distributors will be $0.75, regardless of country or quantity sold.
o(2) The estimated market share for sales depends on how much a segment sees health and wellness as being essential to their
lives. If healthy and wellness is a priority for a segment, the CFO assumes a 10% market share is during the first year is
reasonable. If health and wellness is not a major priority, the market share is assumed to only be 5%. Health and wellness is
considered to not be a priority for a segment if less than [calculation: median value of row (Personal Values: Health and
Wellness) ].
question 1: Using the GfK data and the information provided by the CFO, what is the estimated annual sales for each segment?
oCALCULATION:
Annual Sales $ estimated per segment =
[
]
question 2: Which country, overall, has the highest estimated annual sales?
question 3: Based on these estimates, how much money per consumer would we expect for each segment?
oCALCULATION:
=
Discussion and Debate:
Based solely on the information that was analyzed, which country do you think CAPABLE JUICE should expand to? Why?
While making its financial estimates, CAPABLE JUICE did not consider the impact of every GfK survey question reported in the table above. For
example, CAPABLE JUICE did not consider if each segments’ satisfaction with the availability of healthy foods and beverages at grocery stores
might impact their market share within a given segment. From your perspective, how might CAPABLE JUICE incorporate the rest of the GfK
information into their estimates? Which questions do you think may lead to you increasing or decreasing di>erent estimates?
Think about other important consumer behavior factors that might impact the success of CAPABLE JUICE in a foreign market. What other
important information do you think is pertinent for CAPABLE JUICE to know but was not present in the table above? Why?