German Market Launch / Product Launch Plan: Neuro Drinks

Research Paper (undergraduate), 2013

95 Pages


Table of Contents

Executive Summary

List of Abbreviations

List of Figures

List of Tables

List of Appendices

1 Introduction
1.1 Preface/Problem Description
1.2 Objectives
1.3 Scope and Structure of Work

2 Situation Analysis
2.1 Preface
2.2 Market Needs
2.3 The Market
2.3.1 Market Growth
2.3.2 Market Demographics
2.3.3 Market Trends
2.4 The Company
2.4.1 Mission
2.4.2 Product Offering
2.4.3 Five Forces Analysis
2.4.4 SWOT Summary Strengths Weaknesses Opportunities Threats
2.4.5 Historical Results
2.5 Competition
2.5.1 Direct Competition
2.5.2 Indirect Competition
2.6 Summary

3 Marketing Strategy
3.1 Preface
3.2 Value Proposition
3.3 Unique Selling Proposition
3.4 Positioning Statement
3.5 Critical Issues
3.6 Financial Objectives
3.7 Marketing Objectives
3.8 Target Market Strategy
3.9 Strategy Pyramids
3.10 Summary

4 Marketing Mix
4.1 Preface
4.2 Product Marketing
4.3 Pricing
4.4 Promotion
4.5 Web Plan
4.5.1 Website Goals
4.5.2 Online Shop System
4.5.3 Social/Business Networks
4.6 Channels
4.7 Service
4.8 International Markets
4.9 Sales Plan
4.9.1 Sales Strategy
4.9.2 Sales Process
4.10 Summary

5 Financials
5.1 Preface
5.2 Break-Even Analysis
5.3 Sales Forecast
5.3.1 Sales by Channel/Partner
5.3.2 Sales by Product
5.4 Expense Forecast
5.5 Contribution Margin
5.5.1 Average Case
5.5.2 Best Case
5.5.3 Worst Case
5.6 Summary

6 Controls
6.1 Preface
6.2 Implementation Scenario
6.3 Keys to Success
6.4 CRM Plans
6.5 Summary

7 Results
7.1 Preface
7.2 Results from Investigation
7.3 Visualisation of Results
7.4 Summary

8 Conclusion



Executive Summary

This assignment is about assessing the market potential and building a launch plan for Neuro Drinks, entering the German market.

Neuro Drinks is the drink company with increasing popularity. The US-company was established in 2008 and has now a substantial customer base in the USA. Neuro Drinks is just in the first steps to launch its products in the European Union, particularly in Germany.

Lifestyle beverage products continue to dominate the drink markets worldwide. Though, the offer in Neuro Drinks’ products is becoming increasingly sophisticated with each passing year and is continuously shifting from basic wellness drinks towards lifestyleand health oriented drinks for nearly every occasion. Developed markets such as the EU and especially Germany are expected to register maximum demands.

Neuro Drinks’ products are produced in California/United States and each one fulfils a specific demand. This is the main manufacturing characteristic of Neuro Drinks products. Neuro Drinks wants their products to be known as consummate lifestyle culture - this is what the Neuro Drinks brand stands for. Therefore they have to create a high quality image in Germany and the price has to be at the above-average-level of the pricing scale. Neuro Drinks’ distribution plan in Germany is dual - direct and indirect. This means to establish a retailer network and, on the other hand, an expansion of the website.

All in all Neuro Drinks has to offer consistent and high end quality products, meet the market demands and provide superior customer services. But success will always depend on critical assumption and a theoretical assessment cannot guarantee practical success. However, it exists a market potential for Neuro Drinks’ products as a healthy, lifestyle-oriented and trendy American brand and they have the chance to enter the markets of Germany and the European Union.

List of Abbreviations

illustration not visible in this excerpt

List of Figures

Figure 1 Structure of Expenses for Food, Beverages and Tobacco 2003

Figure 2 Beverages - Segmentation

Figure 3 Food & Drink Prices; 2005 = 100%

Figure 4 Soft Drink Prices; 2005 = 100%

Figure 5 Differentiation Concepts - Segmental Growth

Figure 6 Differentiation Concepts - Overall Growth

Figure 7 Demographic Allocation - Germany 2008

Figure 8 Gender Structure Lohas - Germany

Figure 9 Age Structure Lohas - Germany

Figure 10 Income Structure Lohas - Germany

Figure 11 Five Forces

Figure 12 SWOT - Summary of Neuro Drinks

Figure 13 Porter's Generic Strategies

Figure 14 Strategy Pyramid

Figure 15 Price Development at the Skimming Strategy

Figure 16 Neuro Logo

Figure 17 Break Even Forecast - Average Case

Figure 18 Sales Forecast - Average Case

Figure 19 Break Even Forecast - Best Case

Figure 20 Break Even Forecast - Worst Case

Figure 21 Customer Loyalty and Customer Satisfaction

List of Tables

Table 1 Monthly Net Income per Household - Germany

Table 2 Neuro Drinks' Competitors

Table 3 Neuro Drinks' Direct Competitors

Table 4 Neuro Drinks' Indirect Competitors

Table 5 Value Proposition

Table 6 Consuming Occurrence

Table 7 Neuro´s Ingredients and their Effects

Table 8 German VIPs per Genre

Table 9 European VIPs per Genre

Table 10 Distribution Channels in Germany

Table 11 Sales Units per Distribution Channel

Table 12 Financial Forecast - Average Case

Table 13 Financial Forecast - Best Case

Table 14 Financial Forecast - Worst Case

Table 15 Key Figures of Customer Oriented Sales Processes

Table 16 Analysis of Process Efficiency of a Sales Person

Table 17 Time Table of Actions for Controlling

List of Appendices

Appendix 1 ITM-Checklist: 360-degree analysis

1 Introduction

1.1 Preface/Problem Description

Neuro Drinks are lifestyle drinks which are currently available in the USA and UK. These drinks are related to different life situations. With the help of celebs and on sport events the drinks are promoted. The self-fulfilment increased in recent years. Therefore, these drinks fit the market requirements. Both mentioned countries are English spoken countries. In addition, both countries are out of the EURO-zone. This means that Neuro is faced with two topics - on the one hand with the greater focus of people to lifestyle and individualism and on the other hand with different languages and currencies.

1.2 Objectives

It is the aim of this assignment to issue a German Market Launch Plan for Neuro products. Due to the facts mentioned in problem description, solutions are requested. For these reasons, we act as external consultants to analyse and to provide suggestions for expansion. The following topics have been formulated and need to be explored:

- Market situation (competition, products)
- Company analysis (USP analysis etc.)
- Marketing plans
- Finance analysis

The final result should be the identification of the best way to introduce Neuro products into the German market for a greater expansion to whole Europe.

1.3 Scope and Structure of Work

Chapter 2 contains a market analysis with respect to demographics, trends and growth. It also includes a market needs review. This chapter also outlines the company Neuro with its product portfolio and the company’s strengths, weaknesses, opportunities and threats. Finally, the Chapter 2 examines the current competition situation in Germany.

In the course of this assignment, it will become clear why Neuro need to know how to manage the market entry in Germany. Chapter 3 therefore focuses on marketing strategy and explains the value proposition, the USP and general positioning statement. It also describes the financial and marketing objectives.

Chapter 4 deals with the marketing mix in order so as to better understand the complexity of marketing activities. It describes how the 4 Ps can be converted into the Neuro’s organization. In addition, a homepage plan including an online shop concept is demonstrated. An illustration of the service and sales plan completes this chapter.

Chapter 5 give details to the financial aspects. It deals with the break-even analysis as well as the sales forecasts by distribution channels and by products. Furthermore, a cost analysis is shown which helps facilitating the set-up of the marginal return.

Chapter 6 focuses on controls and serves for CRM plans and schedule mechanism. The explanation of a Sales-Performance-Measurement-System is followed by an action plan in specific time periods. The provided checklists help Neuro to analyse its business environment. Furthermore, it represents ways to customer loyalty and the move to customer management of relationships

Chapter 7 indicates the results of this assignment. Based on the made analyses, goal settings and strategy developments, the key factors are pointed out. In addition, the customer loyalty and the relevant customer satisfaction are visualized.

The conclusion in Chapter 8 sums up all main points of this assignment. A theoretical and practical summary will be given. This is followed by recommendations for the efficient use of this German market launch plan in order to ensure the successful market entry. Finally, an outlook into the future will be given.

2 Situation Analysis

2.1 Preface

Situation analysis has a two-fold direction: On the one hand it is used to receive valuable information about the present company situation, while on the other hand it is also applied to anticipate future developments. Ideally, the following three instrumental sectors can be distinguished for the allocation of analysis instrument:

- Market analysis
- Analysis of the corporation
- Competitor’s and industry analysis

2.2 Market Needs

Historically, a kind of beverage market was quite prevalent in the ancient civilisations. The first form of beverage was natural water. Competing products then became wine and, in the medieval times beer. The major breakthrough in the late 19th century was probably the establishment of Coca-Cola 1886 in Atlanta.1

Like many people who change history, John Pemberton, an Atlanta pharmacist, was inspired by simple curiosity. One afternoon, he stirred up a fragrant, caramel-coloured liquid and, when it was done, he carried it a few doors down to Jacobs' Pharmacy. Here, the mixture was combined with carbonated water and sampled by customers who all agreed - this new drink was something special. So, Jacobs' Pharmacy put it on sale for five cents a glass. Pemberton's bookkeeper, Frank Robinson, named the mixture Coca- Cola, and wrote it out in his distinct script. A century later, The Coca-Cola Company has produced more than 10 billion gallons of syrup. Unfortunately for Pemberton, he died in 1888 without realizing the success of the beverage he had created.2

Over the course of three years, 1888-1891, Atlanta businessman Asa Griggs Candler secured rights to the business for a total of about USD 2,300. Candler would become the Company's first president, and the first to bring real vision to the business and the brand.3

The successful history of Coca-Cola’s example represents in some way the development of the worldwide beverage market. From the early beginnings when just nine drinks a day were served, Coca-Cola has grown to the world’s most ubiquitous brand, with more than 1.4 billion beverage servings sold each day.

Furthermore, the history shows the market needs for savoury refreshing drinks on the one hand and the trend towards high brand awareness in the beverage sector on the other hand.

Therefore, Neuro Drinks identified a target group as desirable to address that comprises the following sub-target groups:

- Lohas (Lifestyles of Health and Sustainability) represent a wealthy demographic segment of Europe’s - and especially Germany’s - population. They have a higher disposable income than many other groups. Lohas have realized that a healthy and a high quality lifestyle brings them sustainability and quality of life. Many are living very active lifestyles and want their appearance to mirror their attitude and feelings of youth and health-consciousness.4
- Another important target group is the group of hip, single and lifestyle-oriented sportspeople with an above-average income aged between 25 and 50 years. Their health-consciousness motivation is to remain young, hip, trendy and attractive even in the future.

2.3 The Market

“Drinks are the most innovative products among functional groceries. Producers and marketers prefer them due to the fact that they are suited to enhance the taste of several bad tasting but functional ingredients, such as aloe or soy.”5

Although the sector of drinks in general - being a part of the food and drinks industry - the drinks market is always present. The history of special segments inside the drinks segment shows a slight but continuous growth. The global beverages industry generated total revenues of 1,046.6 billion EUR in 2008; the German beverage industry generated 19.8 billion EUR in 2008.6

In order to better understand the drinks market breaking it down into sub-segments appears meaningful. A first clustering can be undertaken into alcoholic and non- alcoholic beverages. In particular, the German beverages segment then can be illustrated as follows:

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Figure 1 Structure of Expenses for Food, Beverages and Tobacco 20037

In order to continue this market analysis this work will focus on the non-alcoholic beverages segment. This can be structured in the following sub-segments:

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Figure 2 Beverages - Segmentation8

The above-mentioned ‘new-segments’ cluster represents the target segment for Neuro Drinks.9 Especially the demand for wellness-products began to rise from 2003.10

Due to future sales planning it is to consider that the food and drink prices in general are increasing while the non-alcoholic beverage prices remain rather stable.11

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Figure 3 Food & Drink Prices; 2005 = 100%12

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Figure 4 Soft Drink Prices; 2005 = 100%13

As the above-mentioned figures display the market for non-alcoholic beverages in general appears mature. But with respect to the stated ‘new-segment’ it is to mention that this market is growing (please see sub-section 2.3.1).

2.3.1 Market Growth

As already outlined, the market for the so-called ‘new-segment’ drinks is growing. The following figure visualises this:

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Figure 5 Differentiation Concepts - Segmental Growth14

The ‘new-segment’, as it was a differentiation to the standard soft drinks, now is clustered into the following four ‘generations’:

- 1st Generation: Iced tea, sports drinks, spritzer, flavoured water
- 2nd Generation: Wellness drinks, ACE-drinks, tea & fruit
- 3rd Generation: Nearwater, O²-water
- 4th Generation: Smoothies, bio-lemonades15

Neuro Drinks’ product can be classified into the 1st and 2nd generation products which have the major impact on the growth of the differentiation concept products.

The market growth of this differentiation segment is - according to the stable market of non-alcoholic beverages - very attractive with an overall growth-rate of more than 91% (2003 till 2009 including):16

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Figure 6 Differentiation Concepts - Overall Growth17

Finally, it is to constitute that Neuro Drinks with its differentiation products enters into an attractive growing market with a fundamental potential.

2.3.2 Market Demographics

In order to detect the market potential the aspired target groups have to be analysed. As introduced, Neuro Drinks will focus on individuals with a rather high disposable income. The following illustration shows the target markets income demography:

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Figure 7 Demographic Allocation - Germany 200818

Due to the fact that this part of Germany’s population is usually working and earning money this age-target group appears most attractive for placing Neuro Drinks’ products.

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Table 1 Monthly Net Income per Household - Germany19

The coloured income cluster is the aspired above-average income target group. The potential of this group is - with respect to the volume - obvious.

Finally, this target group Lohas (Lifestyles of Health and Sustainability) has to be analysed. This target group represents 5.6% of Germany’s overall population (i. e. 3.67 million people) and consists of 40% male and 60% female individuals.20

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Figure 8 Gender Structure Lohas - Germany21

The age structure is slightly allocated towards older individuals. But still 42% of the Lohas target group fit into the delineated target group profile of Neuro Drinks (agerange between 25 and 50 years).

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Figure 9 Age Structure Lohas - Germany22

With a high potential of income (above 2,500€ p. m.) the target group appears wellfunded and reasonable to address:

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Figure 10 Income Structure Lohas - Germany23

This finally leads to the insight that the target group is worth to cope with. Accordingly, the consumer-segmentation leads to the decision to enter the German market for Neuro Drinks.

2.3.3 Market Trends

The current growth of Germany’s drinks market is indicative of its future. Product segmentation or better matching of products to consumers’ needs has really been the driver for the growth seen in the drinks-differentiation market.

This trend varies away from the consumption of the well-known beverages like water throughout the history. In the said period, drinking was just for the matter of thirst. The consequent changes in society which affected the body image of the modern individual have considerably taken the necessary steps which are inherently favourable to the Lohas industry.

Growth in demand for healthy drinks is also attributed to the evolving social and professional culture in North America and even in Europe. It is becoming more important for mature men and women to include health-consciousness and personal care in their daily activities. As the workforce becomes more competitive, men have begun using their disposable income to invest in a professional, sporty and healthy appearance that will enhance their lifestyle and personal health. Traditionally, young individuals between 15 and 30 years of age were targeted by the non-alcoholic drinks industry but since the early 2000. Now, baby boomers and Lohas have started to purchase healthy and lifestyle-oriented products.24

Lohas are interested and able to invest in their personal health. However, there is still a stigma attached to purchasing healthy products. Rather men of all ages continue to be hesitant in associating with healthy products that are still considered primarily feminine. Since the wellness drinks market is still fairly young, many people have limited consumer knowledge of products that are good for them. They will purchase products only after they understand the utility of the product and its value. Therefore, a certain level of education is important to be successful in the chosen market.25

2.4 The Company

Diana Sanela Jenkins, the founder of Neuro Drinks, is an entrepreneur and philanthropist, with a straightforward approach to business. She believes that it can drive change as well as profit - a philosophy that powers Neuro Drinks.

All eight drinks under the Neuro brand grew out of Jenkins' own life as a successful entrepreneur and international human rights activist - and all reflect her commitment to healthy living and environmental sustainability. Jenkins designed Neuro so that it contains no artificial flavours or colours and every distinctively shaped Neuro bottle is fully recyclable.

Neuro was established in 2008 after a bad experience with a well-known energy drink. Weeks later, she assembled a team of nutritionists and researchers and launched Neuro.

"I wanted to create drinks that taste good and promote well-being, without a bunch of chemicals," said Jenkins, who oversaw each stage of Neuro's scientifically rigorous development process. "Neuro's success reflects the desire for something different, responsible and smart."26

Jenkins serves as Chairman, CEO and Founder of the U.S. and U.K.-based company, remaining hands on in all aspects of the business.

2.4.1 Mission

Neuro Drinks offer consumers an alternative to products that perpetuate our self medicating caffeine-dependant society. Designed to sustain and enhance your active lifestyle with natural ingredients, each beverage is packed with essential vitamins, minerals, amino acids and botanicals at dosages backed by scientific research. Just real results - no marketing hype.27

2.4.2 Product Offering

The product line consists of eight different drinks, each for specific needs. Lohas, trendsetters or sportspeople find their format in a variety of tastes and designs. Drinks for refreshing needs, health and sportivity complete the program. Neuro’s new drink, NeuroSonic, is designed to increase mental functioning, especially memory and concentration.

illustration not visible in this excerpt

“Superior to other energy drinks, NeuroSonic was formulated to help meet the demands of today’s high stress living, where it’s vital for the brain to function at top form. The unique combination of plant extracts, amino acids and unique dietary ingredients provide fuel for the brain to remain focused and alert over long periods of time. The ingredient Alpha GPC provides raw materials to the brain to help it function better, faster. The amino acids, including acetyl l-carnitine and l-phenyalanine also support mental function. Vitamins Inositol, B-6, B-12 and other B-vitamins help support the nervous system. Rounding out the formula is the ingredient resveratrol, an antioxidant found in red wine, which protects the brain and may have anti-aging benefits. Together, these ingredients provide the foundation for enhanced brain function.28

illustration not visible in this excerpt

“NeuroSun is a delicious drink designed to provide all the benefits of Vitamin D without the harmful UV rays of the sun. Vitamin D is so strongly associated with the sun that it’s commonly known as the ‘sunshine vitamin.’ But according to recent studies, 53 percent of women have insufficient levels of Vitamin D in their bodies. Packed with 1000 IU of Vitamin D in each bottle, NeuroSun provides the recommended daily amount of this essential vitamin, which protects the immune system, increases bone, heart, and muscle health, naturally enhances mood, and provides raw materials for the brain to function more efficiently. With only 35 calories per serving in a 100 percent recyclable bottle, NeuroSun enhances mood naturally and strengthens the body at the same time. Quite simply, it’s ‘Sunshine in a Bottle’.29

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“NeuroBliss is a delicious drink designed to promote happiness and eliminate stress without affecting your energy levels. The combination of blissful ingredients in this product is distinctly unique from any other product on the market. L-Theanine, an amino acid found in green tea which has been clinically proven to help reduce stress, works by altering brain waves, shifting them from the beta spectrum to the alpha spectrum - where a person is focused and alert, but calm. Another key ingredient is the cognitive booster Acetyl-L-Carnitine, a highly functional amino acid. 5-HTP and the botanical ingredient chamomile promote feelings of calm and relaxed attentiveness. NeuroBliss is perfect for anyone wishing to reduce anxiety caused by every day stressors. NeuroBliss can be consumed multiple times per day and works immediately.30

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“NeuroSleep is a delicious drink with a unique formula designed to promote restful sleep and improve overall sleep quality. Clinically proven to be effective, the combination of melatonin and magnesium found in NeuroSleep work together to aid in healthy sleep quality and normalize the circadian rhythm, especially after travel over 3 or more time zones. Additionally, NeuroSleep provides 5-HTP, an ingredient structurally similar to the amino acid tryptophan, but more effective. Magnesium is included at 300 mg per bottle, providing a significant amount of this key electrolyte to help you sleep better and prevent cramping while asleep. NeuroSleep is the optimal bedtime drink, providing quality rest which helps you function at your best.31

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“NeuroGasm is a delicious drink designed to promote better sexual health. Two powerful amino acids, L-Arginine and L-Citrulline play a role in the production of a compound called nitric oxide. Nitric Oxide helps regulate blood flow through arteries that supply nutrients to muscles, brain, lungs and other organs. Nitric Oxide may also stimulate a sexual response through the same physiological process. Other ingredients include green tea and L-Theanine, which combine to promote energy levels without nervous anxiety or tension. One remains energetic and focused without feeling hyper or anxious. A full range of B-vitamins and other key amino acids, make the perfect combination for the ‘right’ kind of energy when you need it most.32

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“NeuroSport is a delicious drink designed to replenish the body during and after exercise with the unparalleled combination of 12 minerals and 5 electrolytes. The five key electrolytes of potassium, sodium, magnesium, calcium, and chloride are in each bottle. Most sports drinks contain only 2 - sodium and potassium - not enough to keep the body properly hydrated. It’s scientifically proven that magnesium, calcium, and chloride significantly contribute to effective rehydration during exercise. NeuroSport also has good-for-you minerals such as chromium, copper, manganese, molybdenum and selenium, which are depleted during rigorous workouts. Quickly restoring these minerals helps improve endurance and increase fitness levels, making NeuroSport the sports drink of the next generation.33

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“NeuroTrim is a delicious drink designed to promote weight loss. It could well be the most effective weight management tool on the market. The key ingredient, LuraLean, is a unique, proprietary, 300-year old Japanese fiber derived from the konjac root and activated upon consumption. The konjac fiber temporarily swells to more than 200 times its actual size upon consumption, sending signals to the brain that it is satisfied. LuraLean also absorbs fats and oils, before they’re absorbed by the body, and promotes healthy regularity and improved digestive health. Over 20 clinical trials demonstrated the safety and effectiveness of this ingredient for weight loss. ‘One gram’ of this special fiber (contained in each bottle) is the equivalent of consuming 20 grams of regular fiber. The ingredient L-Carnitine aids in burning fat, which also promotes weight loss and helps achieve a leaner you.34

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“NeuroAqua is refreshing spring water sourced from the Californian Adobe Springs - thought by many to be the world’s purest source of water. What makes this water different than others on the market is its naturally high levels of magnesium and calcium. Magnesium serves as a critical electrolyte in the human body, helping to maintain bone health, hydration and nerve function. Recently, the World Health Organization recommended fortifying drinking water with magnesium due to its importance in human health. These naturally occurring minerals give NeuroAqua a high alkaline level and a higher pH level. This counters the acidity that food leaves in our bodies, and balances it out. NeuroAqua is refreshingly crisp and smooth, providing instant hydration and refreshment throughout the day.35

NeuroDrinks Partnerships

Currently there is no partnership or company working with Neuro Drinks in other countries than the US. Actually, Neuro is exploring the European market with a test- market in the UK. In the British market Neuro offers four drinks: Bliss, Sport, Sonic, and Trim. The products are sold online via the shopping provider ocado and at the well- known retailer Tesco, both channels at a price of GBP 1.79 per 430ml bottle.



2 ibid.


4 Cf.

5 Verbraucherzentrale Nordrhein-Westfahlen (2003), pp. 4.

6 Cf. Publikation/Jahrbuch/StatistischesJahrbuch,property=file.pdf.

7 Cf. Czaika, S., Kott, K. (2003), p. 632.

8 Cf. GfK Consumer Tracking (2009), p. 3.

9 Cf. ibid.

10 Cf. Verbraucherzentrale Nordrhein-Westfahlen (2003), p. 5.

11 Cf. Publikation/Jahrbuch/StatistischesJahrbuch,property=file.pdf.

12 Cf. ibid.

13 Cf. Publikation/Jahrbuch/StatistischesJahrbuch,property=file.pdf.

14 Cf. GfK Consumer Tracking (2009), p. 4.

15 Cf. GfK Consumer Tracking (2009), p. 4.

16 Cf. GfK Consumer Tracking (2009), p. 5.

17 Cf. ibid.

18 Cf. Publikation/Jahrbuch/StatistischesJahrbuch,property=file.pdf.

19 Cf. ibid.

20 Cf.

21 Cf. ibid.

22 Cf. ibid.

23 Cf.

24 Cf.

25 Cf. ibid.











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German Market Launch / Product Launch Plan: Neuro Drinks
University of Applied Sciences Essen
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german, market, launch, product, plan, neuro, drinks
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Silvio Wilde (Author)Daniel Franzen (Author)Maxim Stührenberg (Author), 2013, German Market Launch / Product Launch Plan: Neuro Drinks, Munich, GRIN Verlag,


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