ACCORD CASE STUDY

Owners
Kayl A heptathlete. International athletes
a Focused on ethics. Live in a country with tertiary economy with
She was going to be in charge of the few primary producers.
finance and account part of Accord Must frequently apply to corporate
Ended up deciding that Kayla was going sponsorship funding for travel, equipment
to manage marketing and finance. and fees.
Aran Marathon runner. They also apply to charities and non-
Supplements his water intake with governmental organizations.
expensive energy drinks. These are  NGO = Involved in economic
becoming increasingly popular. development issues. Plan and
He discovered that health benefits and implement specific projects.
costs are controversial. Influence governments policies on
Because of the discussion about energy areas such as poverty and human
drinks, Aran decided he would consume rights
a limited range of carefully selected  Charities = Aim is to provide as
energy drinks. much relief as possible for those in
Aran was going to manage operations need
and supply chain (HL). Focus is on philanthropy and desire
to help those who cannot. Also seek
to educate. They are exempt from
paying taxes

General facts about Aran and Kayla are athletes who drink a lot of water but they also need
Accord a source of energy. Since energy drinks were claimed to have negative
effects, especially on young audiences, Aran created his own drink
called Enrich.
Enrich: natural ingredients (oranges, kale and spinach)
Aran believed that it would be the first all-natural energy drink which
was considered its USP. However, Kayla argued that there were already
existent all-natural drinks.
Anyways, Enrich would save athletes money apart from providing
excellent nutrition.
Aran wants Enrich to be seen as a brand of related products and
services rather than just an energy drink, for it to become a healthy
lifestyle brand.
Long – term goals.
There is the idea of Enrich being able to be frozen and transported
longer distances to sell it.
Partnership between Aran and Kayla  Accord: sell Enrich as an
ethical drink.
Business would have very high ethical objectives, to determine their
future marketing, operations and financial direction.
Kayla completed some secondary market research by attending to a
conference
Competitor: ABC  used primary research (snowballing technique)
Starting up Accord was easy and quick
She then used primary market research using social media to get info
about athletes’ contacts, friends and family contacts.
  the sampling method she used was convenient sampling method
Lack of communication: Possible problem between stakeholders 
when Kayla didn’t tell Aran that she conducted primary market research
in between close friends (concern as it focused on the people she
already knew which could have been biased)
An HR department wasn’t created as Accord had a small workforce.
Aran had already suppliers contacts but would need additional ones for
fruits and vegetables.
There is a need of space to prepare the drinks.
If Enrich was successful, they might need a small factory that operates
with job/customized production.
Even though they’d want to use job production, it’d be better for them
to use batch production method as it’s more suitable.
Enrich drinks prices were a little over other similar drinks from MCNs.
For example, ABC. They have experience already and have branding
advantages, economies of scale and promotional reach.
Enrich  BTL promotional methods which was the most cost effective.
Kayla though BTL would allow Accord to have better and tighter
control over their position of ethical provider of energy drinks.
They wanted to position the brand as the foremost ethical provider of
energy drinks. Meaning they wanted people to think that Enrich was the
most ethical drink.
Kayla’s secondary market research allowed her to notice that many
MCNs were selling their drinks to teenager which was against the law.
Enrich’s USP would be the only caffeine-free and all natural energy
drink.
Additional health benefits and cost savings would strengthen their USP
and brand value.
Accord wanted to only sell their product through sports or leisure clubs
where if you weren’t a member, in this case a teenager, you wouldn’t be
able to acquire the drink. This meant a possible limitation in their sales
but Kayla was more focused on building up a better brand image than
generating large profits in short term, because profits would eventually
come in the future.
Enrich  Niche product (Kayla perspective)
Enrich  Mass product (Aran perspective)
There were conflicts between stakeholders:
- They both had different perspectives
- Aran though that considering Enrich as a niche product would
narrow the possible market segments
- Aran favored a mass-market approach
- Aran = Innovation
- Kayla = Ethics
They were receiving positive feedback from fellow athletes and friends
but new customers were confused about Enrich’s drink, whether it was
a fruit juice or an energy drink.
Product Development: Revenue Stream = the new drink called Detox

Pressure Groups Focus on how the business impacts on their area of concern
Multinational Operates in many different countries at the same time.
companies (MNCs)

Business-to-consumer Involves a business selling to the end-user

(B2C) This is the experience that most of us have of the internet.
Transactions are more visible to the public

Niche Marketing Strategy that appeals to smaller and more specific market segments
Good strategy for smaller firms that may have limited resources.
Using this strategy you can market your products more efficiently and
effectively.

Unique Selling Point Differentiating factor that makes a company’s product unique, that
(USP) could motivate customers to buy
Key in protecting niche once a business has identified it.
If the product doesn’t have something special or different, customers
may be easily tempted away by its rivals.

Market Segmentation AKA differentiated marketing

Process of dividing a market into smaller groups based on some key
defining characteristics of consumers
Involves division of larger markets into clear sections
Allows a business to better target its marketing efforts.
Demographical Geographical, and Psychographic segmentation.
Mass Marketing AKA undifferentiated marketing.
Firm ignores the differences in the specific market segments and targets
the entire market
Business consider the needs and wants of consumers and aim to sell
products to a large number of customers in order to maximize their
sales.
Partnership Organizations where two or more individuals choose to work together
as co-workers. The risks are shared and all owners have unlimited
liability. Can be specialized in certain tasks.
Advantages:
- Additional skills
- Shared workload
Disadvantages:
- Unlimited liability
- Shared profit and shortage of capital
- Disagreement
Ethical Objectives Setting ethical objectives is a process by which organizations apply
ethical values to their targets and establish basic principles. Business
ethics are a shared set of attitudes, morals and rules of behavior that
underpin the decision-making process. Setting this help create
competitive advantage, most firms want to be perceived as “ethical” as
this brings potential commercial advantages.
Ethics Moral principles that govern a person’s behavior or the conducting of
an activity.
Ethics is the branch of philosophy concerned with rules of human
behavior. It considers what is “right” and “wrong” and examines how
moral principles and values are created and evolve.
Secondary market Attending to a conference as Kayla did, is secondary research
research Second-handed research. AKA desk research.
Based on data that has already been connected
Cheaper than primary market research.

Market Size Total sales of all the companies operating in one industry/market.
By volume: Amounts of goods sold by quantity. (milk)
By value: Amount spent with consumers on the total volume of the
goods sold and will be expressed in terms of money.

Primary Market First-hand research. Data collected directly from consumers.

Research Can be: surveys, interviews, focus groups and observation.
AKA field research

Random Sampling The sampling is selected randomly.

Advantages:
- Reduces bias as everyone has the equal chance of being chosen.
- Relatively easy to find a sample.

Snowballing Sampling Involves surveying the first group or individual who then suggests other
groups or individuals who could participate, and so on. May be used
when there is quite sensitive research.
Advantages:
- Cost effective method
Disadvantage:
- There could be a potential possibility of getting the info biased.
Brand Value/ Many companies focus to have a high perceived value of the service in
Perceived Value the customer’s mind.
If the customer is made to feel easier, better or richer in some way
from using the service, then the marketing has been successful.
Since the customer will not walk away from the business with a
tangible product in-hand, this emotional connection is a key element in
service marketing.
Social Media Marketing tool that incorporates the use of technological concepts
Marketing (SMM) and techniques with the aim of growing a business through
different media.
Benefits:
- Enables to get direct feedback
- Provides low-cost ways to reach a larger audience
- It can enhance a firm’s brand
Convenience Sampling Groups selected based on their easy access to the researcher.
Method Advantages:
- Fast, easy and cheap method of sampling.
Disadvantage:
- Sample may be biased and not representative of an entire
population
Marketing It’s not just advertising and selling products. It is key to success to
 satisfy the needs of its customers. Marketing is about identifying,
anticipating and satisfying. Is the activity and processes for creating,
communicating, delivering, and exchanging offerings that have value
for customers, clients, partners, and society.

Finance It’s the language of the business. Profit is the goal that inspires
entrepreneurs and makes them take risks.
Money is the unit that provides a means to compare and understand
businesses to judge their successes and their failures

Job Production AKA customized production

Production of a single, one-off product. Are often unique.
Each individual product has to be completed before the next product is
started. The emphasis is on quality and originality
Production is market-oriented. Requires clear objectives and careful
planning. Client may expect greater expectation.
Advantages:
- New small firms can use labor intensive job production before
they expand and acquire other machinery
- Can charge premium prices
- Flexible production method and clients get what they want
Disadvantages:
- Result in high unit costs and takes long time to complete.
Highly skilled for labor force isn’t always easy to achieve.
- Possibility that product might fail because of the lack of
knowledge of this client.
Batch Production Producing a limited number of identical products at a time.
Makes products in separate groups and go through the whole
production process together.
It is associated with the middle of the market with emphasis on quality
and affordability. Products are still market oriented. Market research
can replace consultations with customers.
Advantages:
- Increase output volume compared to JP. By meeting high
demand, it can increase sales revenue
- Enables economies of scale
- Some flexibility is retained
- Help deal with unexpected orders
Disadvantages:
- Lack of uniqueness
- Tends to have high levels of work in progress stocks
- If batches are small, then unit costs are likely to remain high
- Work may be boring and demotivating for the workers
Branding Building brand awareness is ensuring customers recognize name and
products for a certain reason. Brand development is trying to increase
the power of name or logo to increase brand awareness, therefore gain
higher sales.
Benefits:
Promotes instant recognition of the company and product
Helps differentiate the company and its products from rivals
Aids in employee motivation
Economies of Scale When business increases its scale of operations and becomes more
efficient.
Refers to the reduction of the average unit cost as a result of the
increase in the scale of operations.
Below-the-Line Involves use of promotional media over which the firm has control.
For example:
- Loyalty cards/ discounts
- Direct marketing
- Price promotions
- Public Relations
First – mover If you are the first one to introduce a product, you’ll gain competitive
advantage advantage and that competitive advantage. That competitive advantage
earned from being first ones to introduce a product is called a first
mover advantage.

Innovation Innovation refers to creating more effective processes, products, and

ideas. For a business, it could mean implementing new ideas, improving
services or creating dynamic products. It can act as a catalyst that can
make your business grow and can help you adapt in the marketplace.

Revenue Expenditure Money spent on the day-to-day running of a business. Payments

include: rent, wages, raw materials, insurance, etc.
Needs to be covered immediately to keep the business operational
Having high revenue expenditure will make it difficult for the business
to build sufficient capital in order to make long-term investment.

Capital Expenditure Money spent to acquire items in a business that will last for more than a
year and may be used over and over again. Items = assets  machinery,
land, buildings, vehicles and equipment. Fixed assets are needed to
generate income for the business over the long term. Long-term
investment to succeed and grow.

Gross Profit Margin This is found by dividing the gross profit by the sales
revenue, expressed as a percentage.
GPM = GP/Sales Rev x 100
Strategies to improve:
- Increase prices for products: May increase sales revenue
- Source cheaper suppliers of materials: to cut down on purchase
costs
- Adopt more aggressive promotional strategies: Persuade
customers to buy its product
- Reduce direct labor cost: ensuring staff is more productive and
sell more units.
External sources of Share Capital Subsidies
finance Loan Capital Debt factoring
Overdraft Venture Capital
Trade Credit Leasing
Grants Business angel

Business Angel Provide financial capital to small start-up or entrepreneurs in return for
ownership equity
 May provide a one-time initial capital injection
One disadvantage of a business angel is that they also want to be part of
the decision-making of the company
One advantage is that they give more favorable financial terms than
other institutions
Revenue Stream/ Benefits:
Product Development - Should lead to higher total revenue for the business
- Form of diversification
Drawbacks:
- It’s more hard-working, activity needs to be controlled and
managed
- The more activities the more focus the business lose and is less
likely to succeed
Economic Refer to the fact that budgets must be respected, wastage must be kept
Sustainability minimum. Savings should be made, through greater efficiency for
example.
Measured in monetary terms. Aim is to use available resources and raw
materials to their best advantage. Ultimately ensuring profitability over
the long term.

SWOT ANALYSIS
Strengths Weaknesses
Has a USP: Ethical all-natural energy drink, Comments on social media: New customers
that brings benefits in a person’s health being confused about the product
Price of the product: More expensive than
other similar products

Threats Opportunities
ABC company: A competitor. Has more Expanding the business or having revenue
experience, economies of scale and is streams such as the Detox.
cheaper. (But unethical, infringes the law) Transporting it overseas: Aran already has
contacts for this to be an option