mhbc crowdcasting
DESCRIPTION
Richard Ivey School of Business MBA Spring 2009 ProgramNew Venture ProjectPitch Presentation: Crowd-casting for New Product Development in the Alcohol IndustryTRANSCRIPT
AIL ATZ BAL BER BKK CCJ CIW DME DUB DXB EMD EZE FKS FUK GCM GDJ HAN HKN IST IXQ JKG JNS KAT KLO LAZ LBG LHR MAK MGQ NIM NTY ORK OTP PCL PKU QDL QZT RGA RIO SGD SOY SUX TAB TIP UVL VAN VIJ WRU WGA XSC YNY ZOS AIL ATZ BAL BER BKK CCJ CIW DME DUB DXB EMD EZE FKS FUK GCM GDJ HAN HKN IST IXQ JKG JNS KAT KLO LAZ LBG LHR MAK MGQ NIM NTY ORK OTP PCL PKU QDL QZT RGA RIO SGD SOY SUX TAB TIP UVL VAN VIJ WRU WGA XSC YNY ZOS AIL ATZ BAL BER BKK CCJ CIW DME DUB DXB EMD EZE FKS FUK GCM GDJ HAN HKN IST IXQ JKG JNS KAT KLO LAZ LBG LHR MAK MGQ NIM NTY ORK OTP PCL PKU QDL QZT RGA RIO SGD SOY SUX TAB TIP UVL VAN VIJ WRU WGA XSC YNY ZOS AIL ATZ BAL BER BKK CCJ CIW DME DUB DXB EMD EZE FKS FUK GCM GDJ HAN HKN IST IXQ JKG JNS KAT KLO LAZ LBG LHR MAK MGQ NIM NTY ORK OTP PCL PKU QDL QZT RGA RIO SGD SOY SUX TAB TIP UVL VAN VIJ WRU WGA XSC YNY ZOS AIL ATZ BAL BER BKK CCJ CIW DME DUB DXB EMD EZE FKS FUK GCM GDJ HAN HKN IST IXQ JKG JNS KAT KLO LAZ LBG LHR MAK MGQ NIM NTY ORK OTP PCL PKU QDL QZT RGA RIO SGD SOY SUX TAB TIP UVL VAN VIJ WRU WGA XSC YNY ZOS AIL ATZ BAL BER BKK CCJ CIW DME DUB DXB EMD EZE FKS FUK GCM GDJ HAN HKN IST IXQ JKG JNS KAT KLO LAZ LBG LHR MAK MGQ NIM NTY ORK OTP PCL PKU QDL QZT RGA RIO SGD SOY SUX TAB TIP UVL VAN VIJ WRU WGA XSC YNY ZOS AIL ATZ BAL BER BKK CCJ CIW DME DUB DXB EMD EZE FKS FUK GCM GDJ HAN HKN IST IXQ JKG JNS KAT KLO LAZ LBG LHR MAK MGQ NIM NTY ORK OTP PCL PKU QDL QZT RGA RIO SGD SOY SUX TAB TIP UVL VAN VIJ WRU WGA XSC YNY ZOS AIL ATZ BAL BER BKK CCJ CIW DME DUB DXB EMD EZE FKS FUK GCM GDJ HAN HKN IST IXQ JKG JNS KAT KLO LAZ LBG LHR MAK MGQ NIM NTY ORK OTP PCL PKU QDL QZT RGA RIO SGD SOY SUX TAB TIP UVL VAN VIJ WRU WGA XSC YNY ZOS AIL ATZ BAL BER BKK CCJ CIW DME DUB DXB EMD EZE FKS FUK GCM GDJ HAN HKN IST IXQ JKG JNS KAT KLO LAZ LBG LHR MAK MGQ NIM NTY ORK OTP PCL PKU QDL QZT RGA RIO SGD SOY SUX TAB TIP UVL VAN VIJ WRU WGA XSC YNY ZOS AIL ATZ BAL BER BKK CCJ CIW DME DUB DXB EMD EZE FKS FUK GCM GDJ HAN HKN IST IXQ JKG JNS KAT KLO LAZ LBG LHR MAK MGQ NIM NTY ORK OTP PCL PKU
The Mile High Beverage Company
new heights in the global partying experience
AIL ATZ BAL BER BKK CCJ CIW DUB DXB EMD EZE FKS FUKGCMHKN JKG KATLAZ MAK NIMPKURIOSUXTIP WRU ZOS
The Mile High Beverage Company
The Present
Product development process in the alcohol industry is staid and slow
Large incumbents cannot exploit emergent trends at the ground level
Top-down product development (push strategy) Players lack the web architecture to truly exploit
online platforms beyond basic advertising
The Mile High Beverage Company
The Future: Industries are Consumer Driven
Companies across many industries use active two-way dialogue with customers to drive product and service innovation
AIL ATZ BAL BER BKK CCJ CIW DUB DXB EMD EZE FKS FUKGCMHKN JKG KATLAZ MAK NIMPKURIOSUXTIP WRU ZOS
The Mile High Beverage Company
Our Vision: We’re Crashing the Party!
To be the number one user-driven alcohol company in the world through a relentless
focus on user-driven innovation!
AIL ATZ BAL BER BKK CCJ CIW DUB DXB EMD EZE FKS FUKGCMHKN JKG KATLAZ MAK NIMPKURIOSUXTIP WRU ZOS
Dm1
Limited Retail
TargetLicensed
Est.
Test MarketingIdeation
The Mile High Beverage Company
Dem
and
Distribution Volume
High
Low High
Identify TrendsCreate Concepts
Test ProductBuild Buzz
Events
Dm2
Apply to LCBO
MHBC Identifies Trends Online, Establishes Demand and Sales Offline, then Sells at Mass Retail
Mass Retail
LCBO
AIL ATZ BAL BER BKK CCJ CIW DUB DXB EMD EZE FKS FUKGCMHKN JKG KATLAZ MAK NIMPKURIOSUXTIP WRU ZOS
The Mile High Beverage Company
We Prove Demand Through a Consumer Engagement Platform Prior to Mass Retail
New Product Development and Marketing
Data Mining Tools
Product Microsites
Offline Events & Promotions
MHBC Corporate Website
Social Networking
Communities
Consumer
AIL ATZ BAL BER BKK CCJ CIW DUB DXB EMD EZE FKS FUKGCMHKN JKG KATLAZ MAK NIMPKURIOSUXTIP WRU ZOS
The Mile High Beverage Company
Our Process will Lead to Quick Product Innovations
MHBC Product Development
12 Months
BKK Bucket
LAX Electrolytes
HKG Tea
TBD
SMM supports BKK Bucket Launch
SMM supports HKG Tea Launch
SMM supports LAX Electrolytes Launch
SMM supports TBD
SMM supports brand revitalization process
AIL ATZ BAL BER BKK CCJ CIW DUB DXB EMD EZE FKS FUKGCMHKN JKG KATLAZ MAK NIMPKURIOSUXTIP WRU ZOS
The Mile High Beverage Company
Our Competition Cannot Do This
Incumbents are traditionally reluctant to exploit new categories Competition does not embrace the user-generated model Locking in our community
AIL ATZ BAL BER BKK CCJ CIW DUB DXB EMD EZE FKS FUKGCMHKN JKG KATLAZ MAK NIMPKURIOSUXTIP WRU ZOS
The Ready to Drink Market
The Mile High Beverage Company
AIL BKK CCJ DUB EMD EZE FKS FUK GCM HKN JKG KAT LAZ MAK NIM PKU RIO SUX TIP WRU ZOS
The Mile High Beverage Company
2008 2009 2010 2011 2012 2013$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
$1,800
$2,000
Source: Euromonitor International
Canadian RTD Market
2008 2009 2010 2011 2012 2013
RTD $MM
1,195 1,284
1,348
1,401
1,458
1,512 % Change 7.0% 4.7% 3.8% 3.9% 3.5%
We See a Major Opportunity in a $1.2B Ready-to-Drink Market
AIL ATZ BAL BER BKK CCJ CIW DUB DXB EMD EZE FKS FUKGCMHKN JKG KATLAZ MAK NIMPKURIOSUXTIP WRU ZOS
The Mile High Beverage Company
Small Nimble Competitors Are Gaining Market Share
Source: Euromonitor InternationalSource: Euromonitor International
Smirnoff Ice
22%
Bacardi Breezer
5%
Vex5%
Mike's Hard5%Rev
4%
Other60%
2007 Market Share
Smirnoff Ice
Bacardi Breezer
Vex
Mike`s Hard
Rev
2007 Sales Growth/Shrink
AIL ATZ BAL BER BKK CCJ CIW DUB DXB EMD EZE FKS FUKGCMHKN JKG KATLAZ MAK NIMPKURIOSUXTIP WRU ZOS
Target Customer
The Mile High Beverage Company
AIL BKK CCJ DUB EMD EZE FKS FUK GCM HKN JKG KAT LAZ MAK NIM PKU RIO SUX TIP WRU ZOS
Our Target Customer Personas
The Mile High Beverage Company
Name: JennyAge: 28Marital Status:Single
Occupation: Graphic DesignSalary: $70K
Hangouts:Social, Drake
Travel:India, Thailand,Eastern Europe
Trendsetter
Name: MylesAge: 26Marital Status:Girlfriend
Occupation: I-BankerSalary: $125K
Hangouts:Amber, Brant
Travel:Ibiza, Greece Southern France
Perception
Name: TonyAge: 23Marital Status:Single
Occupation: TELUS Sales Salary: $45K
Hangouts:Cheval, Tryst
Travel:Cancun
Low Cost Copier
IMAGE-SEEKER WANNABEACTIVE URBANITE
AIL ATZ BAL BER BKK CCJ CIW DUB DXB EMD EZE FKS FUKGCMHKN JKG KATLAZ MAK NIMPKURIOSUXTIP WRU ZOS
Our Target Customer Personas
The Mile High Beverage Company
Image Seeker(Premium)
Urbanite(Value)
Partier(Budget)
Price
Brand Name
Packaging
Ingredient base (vodka,rum,malt)
Exciting Flavours
Importance
High Medium Low
Dec
isio
n Cr
iteria
Customer Segmentation
Source: The Spirits Business, May 2008, Issue 03
AIL ATZ BAL BER BKK CCJ CIW DUB DXB EMD EZE FKS FUKGCMHKN JKG KATLAZ MAK NIMPKURIOSUXTIP WRU ZOS
Customer Engagement
The Mile High Beverage Company
AIL BKK CCJ DUB EMD EZE FKS FUK GCM HKN JKG KAT LAZ MAK NIM PKU RIO SUX TIP WRU ZOS
The Mile High Beverage Company
The Marketing Conundrum
21 3
AIL ATZ BAL BER BKK CCJ CIW DUB DXB EMD EZE FKS FUKGCMHKN JKG KATLAZ MAK NIMPKURIOSUXTIP WRU ZOS
The Mile High Beverage Company
The Solution: Consumer Engagement Platform
Green Arrows = MHBC Generated InformationPurple Arrow = User Generated Information
New Product Development and Marketing
Data Mining Tools
Product Microsites
Offline Events & Promotions
MHBC Corporate Website
Social Networking
Communities
Consumer
AIL ATZ BAL BER BKK CCJ CIW DUB DXB EMD EZE FKS FUKGCMHKN JKG KATLAZ MAK NIMPKURIOSUXTIP WRU ZOS
The Mile High Beverage Company
Social Networking Component
AIL ATZ BAL BER BKK CCJ CIW DUB DXB EMD EZE FKS FUKGCMHKN JKG KATLAZ MAK NIMPKURIOSUXTIP WRU ZOS
The Mile High Beverage Company
MHBC Corporate Site and Microsites
New Product Development and Marketing
Data Mining Tools
MHBC Corporate Website
LAX Electrolytes Microsite
BKK Buckets Microsite
HKG Tea Microsite
AIL ATZ BAL BER BKK CCJ CIW DUB DXB EMD EZE FKS FUKGCMHKN JKG KATLAZ MAK NIMPKURIOSUXTIP WRU ZOS
The Mile High Beverage Company
Data Mining Tool
New Product Development and Marketing
Video/Audio
Social Network
Online Marketing & Demographics
AIL ATZ BAL BER BKK CCJ CIW DUB DXB EMD EZE FKS FUKGCMHKN JKG KATLAZ MAK NIMPKURIOSUXTIP WRU ZOS
The Mile High Beverage Company
Offline Events & Guerilla Marketing
IN-BAR PROMOTIONS
EXPERIENCE EVENTS
•Upscale bars•Airline Theme•Product testing & real-time feedback
•Art galleries and museums•Emphasis on international culture
•Unconventional marketing intended to get maximum results for minimal resources
GUERILLA MARKETING
AIL ATZ BAL BER BKK CCJ CIW DUB DXB EMD EZE FKS FUKGCMHKN JKG KATLAZ MAK NIMPKURIOSUXTIP WRU ZOS
Capabilities and Contingencies
The Mile High Beverage Company
AIL BKK CCJ DUB EMD EZE FKS FUK GCM HKN JKG KAT LAZ MAK NIM PKU RIO SUX TIP WRU ZOS
The Mile High Beverage Company
We have a Low-Fixed Cost Production Model
OutsourcedMHBC
Marketing
Web Architecture
…
Manufacturing
Prototypes
Mass
Transportation
Product Development
AIL ATZ BAL BER BKK CCJ CIW DUB DXB EMD EZE FKS FUKGCMHKN JKG KATLAZ MAK NIMPKURIOSUXTIP WRU ZOS
The Mile High Beverage Company
Our Combined Skills Uniquely Position Us for Success
Samira Amini Anthony Duong Ben Gordon Allen Spektor Dan TolhurstPartner Partner Partner Partner Partner
I-Banking Interactive Marketing
Consulting
Interactive Marketing
Web Architecture
Public Relations
Operations Management
Sales & Trading
I-BankingLaw
Events & Promotions
BKK CCJ DUB EMD EZE FKS FUK GCM HKN JKG KAT LAZ MAK NIM PKU RIO SUX TIP WRU ZOS
AIL ATZ BAL BER BKK CCJ CIW DUB DXB EMD EZE FKS FUKGCMHKN JKG KATLAZ MAK NIMPKURIOSUXTIP WRU ZOS
AIL BKK CCJ DUB EMD EZE FKS FUK GCM HKN JKG KAT LAZ MAK NIM PKU RIO SUX TIP WRU ZOS
Financial Projections
The Mile High Beverage Company
The Mile High Beverage CompanySource: http://www12.statcan.gc.ca/census-recensement/2006/as-sa/97-551/vignettes/cda06pymd.swf
1 2 3 4 5 -
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
Addressable Population
MHBC’s Addressable Market Increases With Each Geographic Expansion
Years
Drin
king
Age
Pop
ulati
on
GTA
Ontario
Quebec
National
AIL ATZ BAL BER BKK CCJ CIW DUB DXB EMD EZE FKS FUKGCMHKN JKG KATLAZ MAK NIMPKURIOSUXTIP WRU ZOS
The Mile High Beverage Company
Annual Sales Projections Ranges from $9MM to $14MM by Year 5
1 2 3 4 5 $-
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
$14,000,000
$16,000,000
Annual Sales
Total Sales LowTotal Sales MedTotal Sales High
Year
Sale
s
AIL ATZ BAL BER BKK CCJ CIW DUB DXB EMD EZE FKS FUKGCMHKN JKG KATLAZ MAK NIMPKURIOSUXTIP WRU ZOS
The Mile High Beverage Company
Annual Free Cash Flow Ranges from $700K to Approximately $3.5MM by Year 5
Sale
s
Year
1 2 3 4 5
-$1,000,000
-$500,000
$- $500,000
$1,000,000 $1,500,000
$2,000,000
$2,500,000 $3,000,000
$3,500,000 $4,000,000
Annual Free Cash Flow
Free Cash Flow Low
AIL ATZ BAL BER BKK CCJ CIW DUB DXB EMD EZE FKS FUKGCMHKN JKG KATLAZ MAK NIMPKURIOSUXTIP WRU ZOS
The Mile High Beverage Company
Strategy for Exit
Three potential exit avenues: Partial/complete acquisition by larger competitor or
financial sponsor Management buy-out Public offering
AIL ATZ BAL BER BKK CCJ CIW DUB DXB EMD EZE FKS FUKGCMHKN JKG KATLAZ MAK NIMPKURIOSUXTIP WRU ZOS
Capital Raising Schedule
Capital Raised
Ris
k
Seed Funding: $250K Valuation
Angel/Venture Funding: $2MM Valuation
Final Venture Funding: $10MM Valuation
The Mile High Beverage Company
PE/Strategic Partnership: $50MM Valuation
AIL ATZ BAL BER BKK CCJ CIW DUB DXB EMD EZE FKS FUKGCMHKN JKG KATLAZ MAK NIMPKURIOSUXTIP WRU ZOS
The Mile High Beverage Company
We Require an Additional $250K in Funding
Currently at the Seed Funding Stage Each Partner will contribute $10K for initial funding Contributions from other sources: $50K
Additional $250K will provide funding for: Extension of online tools Hire general manager and marketing coordinator Ramping up offline marketing and events Supplier/Manufacturer contracts
AIL ATZ BAL BER BKK CCJ CIW DUB DXB EMD EZE FKS FUKGCMHKN JKG KATLAZ MAK NIMPKURIOSUXTIP WRU ZOS
The Mile High Beverage Company
Perceived Risks
Primary RisksCompetitive Large competitors to emulate model through guerrilla teams
Execution Poor management of network and/or improper execution of interactive platform
Social Decrease in social acceptability of alcohol consumption High alcohol content and caffeine combination may make MHBC a target
Secondary RisksFinancialLegalMarket
AIL ATZ BAL BER BKK CCJ CIW DUB DXB EMD EZE FKS FUKGCMHKN JKG KATLAZ MAK NIMPKURIOSUXTIP WRU ZOS
The BKK Bucket
The Mile High Beverage Company
AIL BKK CCJ DUB EMD EZE FKS FUK GCM HKN JKG KAT LAZ MAK NIM PKU RIO SUX TIP WRU ZOS
The Mile High Beverage Company
Product Launch No.1: BKK Bucket
Green Arrows = MHBC Generated InformationPurple Arrow = User Generated Information
New Product Development and Marketing
Data Mining Tools
Product Microsites
Offline Events & Promotions
MHBC Corporate Website
Social Networking
Communities
Consumer
AIL ATZ BAL BER BKK CCJ CIW DUB DXB EMD EZE FKS FUKGCMHKN JKG KATLAZ MAK NIMPKURIOSUXTIP WRU ZOS
The Mile High Beverage Company
Product Launch No.1: BKK Bucket
AIL ATZ BAL BER BKK CCJ CIW DUB DXB EMD EZE FKS FUKGCMHKN JKG KATLAZ MAK NIMPKURIOSUXTIP WRU ZOS
The Mile High Beverage Company
Product Launch No.1: BKK Bucket
Green Arrows = MHBC Generated InformationPurple Arrow = User Generated Information
New Product Development and Marketing
Data Mining Tools
Product Microsites
Offline Events & Promotions
MHBC Corporate Website
Social Networking
Communities
Consumer
AIL ATZ BAL BER BKK CCJ CIW DUB DXB EMD EZE FKS FUKGCMHKN JKG KATLAZ MAK NIMPKURIOSUXTIP WRU ZOS
The Mile High Beverage Company
Product Launch No.1: BKK Bucket
Ingredients: vodka or rum, energy drink, cola High alcohol content (18%) Large volume format (750L)
Glass Bottle Metal screw cap Bundle of 4, large plastic straw
$24.95 wholesale per 750L
AIL ATZ BAL BER BKK CCJ CIW DUB DXB EMD EZE FKS FUKGCMHKN JKG KATLAZ MAK NIMPKURIOSUXTIP WRU ZOS
The Mile High Beverage Company
Product Launch No.1: BKK Bucket
Functional Benefits Sugar ingredients speeds the rate of
intoxication The cola and energy drink provide an energy
jolt Group drink
AIL ATZ BAL BER BKK CCJ CIW DUB DXB EMD EZE FKS FUKGCMHKN JKG KATLAZ MAK NIMPKURIOSUXTIP WRU ZOS
The Mile High Beverage Company
Product Launch No.1: BKK Bucket
Green Arrows = MHBC Generated InformationPurple Arrow = User Generated Information
New Product Development and Marketing
Data Mining Tools
Product Microsites
Offline Events & Promotions
MHBC Corporate Website
Social Networking
Communities
Consumer
AIL ATZ BAL BER BKK CCJ CIW DUB DXB EMD EZE FKS FUKGCMHKN JKG KATLAZ MAK NIMPKURIOSUXTIP WRU ZOS
The Mile High Beverage Company
Product Launch No.1: BKK Bucket
From the Mouths of Our Consumers
“I like drinking exotic, international drinks cause it makes me feel sophisticated. A Jetsetter” – Shannon, 20
“The bucket holder becomes the center of attention. It’s pretty sick.” – Dave, 28
“I really want to go to Thailand now” – Ivy, 23
“The bucket idea is awesome. I’d definitely have a party cause my friends would talk about it forever” – Ginger, 20
AIL ATZ BAL BER BKK CCJ CIW DUB DXB EMD EZE FKS FUKGCMHKN JKG KATLAZ MAK NIMPKURIOSUXTIP WRU ZOS
The Mile High Beverage Company
We’ve Talked to the Scene and the Scene Has Spoken: “We’re Interested!”
“I will give you guys a chance. I’m curious to see where this goes!”
- Lobby, Toronto
“If you can bring the crowds, then I don’t see why we can’t do this”
– Social, Toronto
“I’m interested to see if this would actually work. Lets give it a shot!”
–Gallery 9, Toronto
AIL ATZ BAL BER BKK CCJ CIW DUB DXB EMD EZE FKS FUKGCMHKN JKG KATLAZ MAK NIMPKURIOSUXTIP WRU ZOS
The Mile High Beverage Company
Secure additional funding Launch corporate site Launch first product micro-site Begin production for limited retail distribution Secure private label suppliers/manufacturers for
mass production Guerrilla Sand Castle Campaign, May 2009
Consumer Engagement Platform: Next Steps
AIL ATZ BAL BER BKK CCJ CIW DUB DXB EMD EZE FKS FUKGCMHKN JKG KATLAZ MAK NIMPKURIOSUXTIP WRU ZOS
Question & Answer
The Mile High Beverage Company
AIL BKK CCJ DUB EMD EZE FKS FUK GCM HKN JKG KAT LAZ MAK NIM PKU RIO SUX TIP WRU ZOS
The Mile High Beverage Company
UGC: TurboTax YouTube Tax Rap
AIL ATZ BAL BER BKK CCJ CIW DUB DXB EMD EZE FKS FUKGCMHKN JKG KATLAZ MAK NIMPKURIOSUXTIP WRU ZOS