Competition in Energy Drinks, Sports Drinks, and Vitamin-Enhanced Beverages

Table of contents

Explain. Demographics:

The total sale for beverages in 2009 in the US was about 458. 3 billion gallons and it is one of the largest markets with dollar value of 1,581. billion in 2009 and with a forecast of $1,775. 3 billion for 2014. 48. 2 percent of industry sales were from carbonated soft drinks and 29. 2 percent of bottle water industry sales. In 2009, the alternative beverage industry included sports drinks, flavored or enhanced water and energy drinks made up 4%, 1. 6%, and 1. 2% of industry sales respectively. The global market for alternative beverages in 2009 was $40. 2 billion, while it was $17 billion for alternative beverages in US market. It was $ 12. 7 billion and $9. billion for Asia pacific and European markets respectively. Market growth: The market growth has huge potential with the dollar value of the global market for alternative beverages grew at a 9. 8% annually between 2005 and 2009, but was expected to slow down to 5. 7% annually between 2010 and 2014. US is the country which has strongest growth internationally in term of alternative beverage sales with an annual growth rate of 16. 6% between 2005 and 2009 and a forecasted growth rate of 6. 7% between 2010 and 2014.

Europe and Asia-Pacific grew at annual rates of 5. 3% and 5. 6% between 2005 and 2009 and were expected to grow at a rate of 4. 4% and 5. 1% respectively between 2010 and 2014. However poor economic conditions in the US in 2008 and 2009 led to a 12. 3% decline in sports drink sales and a 12. 5% decline in flavored and vitamin waters sales. It was also the reason why energy drinks sales increased only 0. 2% between those years. Rivalry between competitors: Coca Cola, Pepsico and Redbull are the three big players that made the industry rivalry become global.

However, there were hundreds of brands like Otsuko which were specialty yet regional brands that did not have a foot print internationally but were doing well in their own terms. Beverage producers had made various attempts at increasing the size of the market for alternative beverages by extending existing product lines and developing altogether new products.

Social Forces:

Global beverage companies such as Coca Cola and PepsiCo had relied on such beverages to sustain in volume growth in mature markets where consumers were reducing their consumption of carbonated soft drinks. Expanding the market for alternatives beverages and increasing sales and market share, beverage producers also were forced to content with criticism from some that energy drinks, energy shots, and relaxation drinks presented health risks for consumers and that some producers’ strategies promoted reckless behavior, the primary concern of most producers of energy drinks, sports drinks, and vitamin-enhanced beverages was how to best improve their competitive standing in the market place.

Driving Forces for this industry:

  1. Expanding Market share Desire to reach out to Consumer needs and meet the demand.
  2. Personalization of the Market Segments.
  3. Branding.
  4. Market Size.
  5. Maximization of Growth Potential General Economic Conditions: Global growth is projected to grow at 3. 5 percent in 2012, then accelerate somewhat to 3. 6 percent from 2013-2014. In 2012 it is expected that emerging economies will be slow in growth by 0. 7 percentage points on average, going from 6. 3 percent growth in 2011 to 5. 6 percent in 2012, partly as a result of slower export growth and partly because several of them have been growing above trend and the GDP Growth for the world is predicted to be at 3. Things look a little slow but are picking up slowly and there is no recession in sight so far. This could really help the industries like Food, Beverages, Health surge ahead like they already are into the market with more percentage of market share and consumer usage based on the increasing numbers in the trend.

Impact of Economic Factors:

  1. Demand on beverages and alternative beverages should remain incremental or stable.
  2. Branded alternative beverages with national and international presence should do well.
  3. Business opportunities should be encouraged with fair and encouraging interest rates 2.

What is competition like in the alternative beverage industry? Which of the five competitive forces is strongest? Which is weakest? What competitive forces seem to have the greatest effect on industry attractiveness and the potential profitability of new entrants?

The Beverage industry is highly competitive and the segments that come into picture when it comes to competition are Distribution, Shelf management, Licenses, Brand name and Image, Pricing, Labeling and Packaging, Marketing and Advertising, Quality and taste, Trade and Consumer promotions and Branding.

Competition with non-alcoholic beverages, competition with carbonated beverages, competition with regional beverage producers and private label soft drink suppliers, competition in maintenance of distribution network, competition on quality and pricing, competition on Branding, Labeling, Marketing, Packaging and Promotions.

Bargaining power of buyers:

Strong convenience store, grocery store, and wholesale buyers had considerable leverage in negotiating pricing and slotting fees with alternative beverage producers because of their bulk purchases. New entrants with comparatively lower market shares are most affected with this like how it is mentioned in the case where the shelf space is limited to top brands like Coke, PepsiCo and Red bull for that particular market segment. The larger brands like coke and Pepsi also already have spaces worked out with them for their other products and this makes it easier for the bigger brands to get their newer products in the shelf’s too. Delis and restaurants have low switching costs to other brands but they have less volumes compared to stores and less space, shelfs etc. nd also will not have the same bargaining power that a store enjoys. Demand is highly dynamic Bargaining Power of Suppliers: Weak suppliers for alternative beverages do exist in huge numbers and the competition is high. The producers of alternative beverages are important customers of suppliers and buy in large quantities.

Packaging is readily available Threat of substitutes.

 Many substitutes like tea, bottled water, juices, nutrition water etc. have surfaced but the market is not as big as alternative beverages and this customer preference had weakened the competitive power of substitute beverages. Many substitutes that can quench the thirst of the consumers Price point of substitutes is less compared to alternative beverages Threat of New entrants: Weak Brand leaders already exist in the industry with competitive prices and well established distribution system, convenience stores and Shelves across the stores are already in partnership with existing big-wigs, customer loyalty towards branded products is high, need for large financial resources and funds, High Brand equity for already existing and successful brands Threat of Rivalry: Strong Competition centers among major brands based on brand image, appealing taste, packaging, R&D, Marketing and Distribution capabilities, Attempts by all the brands to increase the number and types of products in their product line, Low switching costs for the consumers of the industry, Strong marketing campaigns by each brand to gain customer loyalty The Bargaining power of consumers and rivalry that exists between the competitions in this industry contributes to the attractiveness of the industry.

The numbers are promising, the industry is dynamic and increase in demand each year. The factors that affect the potential profitability of the new entrants are the Brand image, Distribution network and Product line breadth.

How is the market for energy drinks, sports drinks and vitamin-enhanced beverages changing? What are the underlying drivers of change and how might those forces individually or collectively make the industry more or less attractive?

Driving forces of the alternative everage industry are dependent on the creating/sustaining market demand, dynamics of the growth rate and product innovation. Industry leaders established: Segments within the alternative beverage industry have consolidated as markets have matured and leaders have been established. Red Bull GmbH and Hansen Natural Corporation remained independent in 2010, Coca-Cola controlled such brands as Powerade sports drink, Fuze vitamin-enhanced beverages, glaceau vitamin water and NOS.

In addition, Coca-Cola distributed Hansen’s Monster energy drink in parts of the United States, Canada, and six European countries. * Changes in Long term Growth Rate: The recession had an impact on sales of sports drinks and flavored or enhanced water and has stalled growth in the market for energy drinks; there was also growing market maturity for most categories of alternative beverages. The annual rate of growth for the dollar value of the global market for alternative beverages was forecasted to decline from the 9. percent annual rate occurring between 2005 and 2009 to an anticipated annual rate of 5. 7 percent for 2010 through 2014. While dollar value growth rates were expected to decline only slightly in Europe and Asia-Pacific, the annual rate of growth in the U. S. was projected to decline from 16. 6 percent during 2005 – 2009 to 6. 7 percent between 2010 and 2014. Product Innovation: The industry is continuing to evolve with introduction of new products that enable rise of new category of products.

The recent introduction of energy shots is an example of how an innovation that has given rise to an altogether new sub-segment in the industry. The creation of new product segments, the increasing positive trends in growth rate and increasing market share for each product are a good indication and good drivers of change that increase the attractiveness of the market for an emergent industry. What does your strategic group map of the energy drink, sports drink, and vitamin-enhanced beverage industry look like?

Which strategic groups do you think are in the best positions? The worst positions?

The strategic group maps show the industry participants competing with axes of Geographic foot print and Brand. The Map shows that Industry giants like Coke and Pepsico are positioned strongest in the industry due to already existing contracts, supply chain, distribution network and shelf spaces in retail spaces. Red Bull is seeing a successful brand in Europe and the U. S. Hansen’s Monster is also doing good standing up to the other market giants with distribution partnership with coke giving it the required space and opportunity to grab the market and hence can be considered at a favorable position. Rock star has also been at a favorable position due to the same reason of distribution network partnership with PepsiCola.

Companies with a single brand and regional distribution like Otsuko, Vitamin water etc. appeared to be at an unfavorable place with chances of competition gulping the market share of the small players very soon.  What key factors determine the success of alternative beverage producers? The Key success factors for Alternative Beverage producers are Constant Product Innovation: A company must be able to identify what a consumer is looking for and also maintain the ability to adapt with the changing market trends. They must be able to keep up and not lag behind.

Price:

Price is always a factors in many cases and in this case consumers with a low brand preference will buy a product based on its competitive pricing Brand Loyalty: Consumers are particular about what brand they purchase and they stick to it in most of the cases.

This stresses for a superior brand image and quality Distribution system: Probably one of the most important, Effective distribution channels will not only help reduce costs but also helps a company remain competitive. Size and Scale: Successful alternative beverage producers were required to have sufficient sales volumes to keep marketing expenses at an acceptable cost per unit basis.

What recommendations would you make to Coca-Cola to improve its competitiveness in the global alternative beverage industry? To PepsiCo? To Red Bull GmbH?

Recommendations to Pepsi Pepsico have to launch a major image building campaign for the most promising products it has.  Pepsico also needs to develop its own energy shot brand try to convince Rockstar to add an energy shot to its distribution agreement. In addition, Pepsi should negotiate for distribution rights to European and Asia-Pacific market with Rockstar or launch its energy drink brands in attractive international markets. PepsiCola can expand its foot print and focus on other international markets in energy drinks for more international presence and to utilize the demand of a branded and standard product.

Red Bull is currently the number in the energy drinks category and they should really take advantage of that and come up with more product line extensions and more products so people can identify with that brand and try other products too. They should focus more on product innovation and product line extensions. Recommendations to Coca Cola should improve its product by innovating and building up good image to recapture the market share it lost in energy drinks category. * Coca cola should also try to create more rapid growth in vitamin-enhanced beverages and energy shots product. Coke should focus on products and Branding efforts to gain market and regain lost market share in energy drinks. It should build up its strength in term of alternative beverage sales in by pursuing acquisitions and focus on building its strength of sales in Asia and react quickly to solve the problem of lacking competitiveness in the European market for alternative beverages.  Coca cola can use a combination of new flavors and formulations, brands, line extensions, improved image building, and distribution capabilities to increase sales of alternative beverages internationally.

Recommendations to Red Bull GmbH Redbull should improve the performance of its recently introduced energy shots and continue to expand into rapidly growing country markets for energy drinks. It is necessary for the company to maintain its lead in the U. S. and European energy drink market with additional product line extensions based upon product innovation. It should develop sports drinks or vitamin-enhanced beverages that can further exploit the appeal of the Red Bull brand 7.

Who has been the most profitable? Who has better managed their expenses? Which business has shown the most growth? Which of the three would you give the strongest grade for their performance?

Using the data from Exhibit 11,12 and 13 for Coke, Pepsi and Hansen, Hansen seems to be the most profitable so far as it became the largest seller of energy drink in the US by leading most of alternative beverage categories. PepsiCo’s global market share in 2009 was 26. 5 percent, overcome by 11. 5 percent to Coca-Cola.

The Coca Cola has better managed their expenses it was the third-largest seller of alternative beverage and in the top five best-selling non-alcoholic beverages worldwide in 2009. But they have lot of catching up to do. I would give the strongest grade for performance to Hansen for its market share, range of products, product innovation and distribution strategies. Hansen also managed to have higher revenue growth and higher cash flow growth. The company growth rate analysis of the three companies in terms of revenue, income and profit show that Hansen has higher percentage of growth rate well above the industry average. Hansen has greater revenues in the industry segment and higher customer demand and financial success.

Read more

Energy Drinks Market in Denmark

Table of contents

Introduction

Danish soft drinks sales have recorded positive volume growth in recent years. Strong volume growth was recorded in energy drinks sales attributed to the aggressive marketing and new product launches. Some of the major players in the Danish energy drink market are Burn and Red Bull. Accordingly, the main aim of this report will be to identify and analyze the possible ways for Burn energy drink product to compete with the world famous energy drink Red Bull which has recently entered into Danish energy drink market in 2009. . 1 Problem Description In 2009, the Danish Veterinary and Food Administration approved the increase of caffeine level in energy drink. This has given a wide-open-door for beverage companies to develop in this segment. Taking advantage of this opportunity, Red bull the world’s most famous energy drink company, started to compete within the Danish energy drink market. On the other hand, Coca-cola Denmark also considered it as an opportunity to further develop product chain of its energy drink Burn.

In Denmark, Burn has been dominating the energy drink market so far but now with the entry of Red Bull into the market it will now have to strategically develop its marketing mix to find a better way to compete with Red Bull and maintain its dominant position.

1. 2 Problem Statement We define the problem question for our research as follows: How could Burn compete with Red Bull on the Danish energy drink market? To support main question we have formulated some sub questions. They are as follows:

1. 2. 1 What is the preference of customers between Burn and Red Bull? .

2. 2 How should Burn products be developed and how should they be priced?

1. 2. 3 How should Coca-cola Denmark promote and distribute Burn?

1. 3 Definitions

1. 3. 1 Energy drink Energy drink can be defined as a drink or the beverage that contains higher doses of caffeine and other stimulating agents that give you instant energy. The doses of the caffeine and the stimulants are legally approved by the government health authorities. The main purpose of drinking an Energy drink is to get an instant energy to your body.

1. 3. 2 Burn energy drink

Burn Energy Drink is a functional beverage, mixture of 14 ingredients that come in a 16 ounce can and is available at almost every grocery store or convenience store across Denmark. It is one of the products of Coca-Cola Company.

1. 3. 3 Red Bull energy drink Red Bull Energy Drink is a functional beverage, specially developed for periods of increased mental and physical exertion. It can be drunk in virtually any situation: during sports, at work, whilst driving and during leisure activities.

1. 4 Demarcations (Scope and limitation of the study) As every report has its limitations, this report is also subject to various limitations.

This report is based on two products, Burn and Red Bull which are the products of The Coca-Cola Company and The Red Bull Company respectively. These two companies have various product categories; however this report will be focused only on those two products among wide category of energy drink in energy drink sector. As far as the market place is concerned, this report is limited to the Danish market. Most of the consumers of energy drinks in Danish market are mainly the younger people aged 18-25. Considering this fact we have selected this age group as our target group.

Theoretical Background

This section of the report helps to provide the broad theoretical framework used for interpreting the research presented in this report. Various marketing theories have been applied as a background in this report. Theory of Market segmentation is used to analyze Burn and Red Bull in the Danish Market. To analyze the competition between Burn and Red Bull, Competitor Benchmark Analysis is used. Finally Using the theory of Marketing Mix (4 Ps), recommendation to Burn has been made to successfully develop its marketing campaign so that it can increase its sales and compete with Red Bull.

2. 1 Market segmentation

Market segmentation will be identified by taking into consideration the demographic variables (like gender, different age group and life style) and geographical locations (various cities of Denmark) like Center of Copenhagen, Sj? lland, Fyn and Jylland

2. 2 Competitive Benchmark Analysis Competitive benchmark of Burn will be made with its direct competitor, Red Bull. For this we will take various factors which are flavor, taste, brand, price, place (convenient to buy), packaging and effectiveness of the products. During our group discussion these factors came up as the most relevant criteria for making competitive benchmark.

Accordingly, respondents were asked to rate and evaluate both Burn and Red Bull on those factors during the online survey.

2. 3 Marketing Mix (4 Ps) Marketing Mix i. e. 4 Ps will be taken as theoretical base for providing recommendation to Burn after the analysis of data and findings are presented. Accordingly, Product, Price, Place and Promotion Strategy will be presented in order for Burn to successfully compete against its rival Red Bull. Then after, the conclusion will be made.

3 Methodology Description This section of the report gives information about the stages that we went through while doing the research and writing the report.

Research Design

We chose exploratory design as our research design. We have a research problem which is unstructured. We do not have enough information about our topic for which we have to investigate more on our topic. Both Qualitative and quantitative data collection methods are used. To gain more and more information and insights about the problem topic, Qualitative research design was chosen. Using qualitative data collection method, it became easier for us to change translate and reformulate our unstructured questions. Quantitative method is also used in order to check the validity of the results obtained from qualitative method.

For quantitative data collection we tried to get as many respondents as possible who can represent the total population.

3. 2 Primary and secondary data collection For this research we have chosen both Qualitative and Quantitative data collection method for primary data. Similarly, wherever required, we have also used secondary data from the articles, publications and website of the company as well as blogs and other relevant news articles.

3. 3 Qualitative data collection To collect the qualitative data, a focus group interview was conducted. We prepared the interview guide for the focus group which is attached in the appendix.

The focus group contained 11 members who are the students from 2nd semester class at Niels Brock. After the completion of interview process we also took a blind test among the focus group interview participants plus 15 other students. Students were chosen randomly. Each of them were given to drink two glasses, one filled with Burn and another filled with Red Bull and were asked which one they like and how they taste. The responses from the participants were used for the analysis.

3. 4 Quantitative data collection

To collect quantitative data, we prepared structured questionnaire. It consisted of 15 questions (open and closed ended questions).

We posted our research questionnaire in the Facebook blogs and invited 600 Facebook users through simple random method. We got only 116 responses and of which only 77 respondents answered all questions of questionnaire. So in this research 77 respondents are our total number of observation. In other words our sample size is 77 which represent the total population of energy drink customers in Denmark.

Presentation and analysis of data

The presentation and analysis of data has been categorized as Market segmentation and Competitor Benchmark.

4. 1 Market Segmentation of energy drinks

4. 1. 1 Analysis of Focused group interview:

During the focused group interview, 11 participants were asked about the consumption of energy drink every week. Among the participants, 1 participant consumes 5 or more cans per week. 4 respondents consume 3 to 4 cans and 1-2 cans as well. Whereas, 2 respondents consume less than 1 can of energy drink. Thus their consumption habit is around 1-4 cans per week. When there was a discussion about the occasions during which they consume the energy drink, most of the answers was during workout, training or going to sports and when mixing with alcohol. There was also a discussion about having coffee instead of energy drink when one is tired. participants said that they prefer coffee whereas others preferred energy drink. Regarding price, most of the respondents voted for cheaper one, less than 20 DKK and between15-17 DKK.

4. 1. 2 Analysis of Online questionnaire survey

The willingness of various age groups towards energy drink is illustrated in the diagram below. It shows that 56% of respondents from age group 18 to 25 years are interested in energy drink.

But only 4% of the elderly respondents are interested in energy drink. Thus, it can be seen that the highest number of people from the age group 18-25 years are interested in the energy drink. Willingness towards energy drink by gender Source: Appendix 5 The above figure shows that 68% of male population is interested in energy drink whereas only 32% of female population is interested in Energy drink. Figure 3 Willingness towards energy drink by location Source: Appendix 6 According to the above figure, most of the respondents from center of Copenhagen are interested in energy drink. 8% respondents from the Copenhagen region and 32% respondents from  land region showed interest in energy drink. While analysisng the age wise consumption of energy drink which is illustrated in the figure below it has been seen that the data is bit conflicting. Figure 4 Age wise consumption of energy drink Source: Appendix 7 As shown by the diagram, those who almost never drink energy drinks are higher in age group 18 to 25 years. But again, those drinking from 1-2 cans per week are also higher number in age category 18-25 years but less ompared to those who never drink. But what can be concluded that those who drinks energy drinks they normally consume 12 cans per week and are higher in 18-25 years category. Analyzing the preferred occasions when customers usually like to drink energy drink, the research show that customers usually prefer it to mix with alcohol as their first preference and then drinking when they are tired. Figure 5 Occasional preference of Energy Drink by gender Source: Appendix 8 The above graph shows most of both females and males consume energy drink when they mix with alcohol. 2 females out of 35 female respondents (63%) and 19 males out of 42 male respondents (45%) said they consume it when they mix with alcohol. Similarly 43% of female and 40 % of male respondents answered that they take energy drink when they are tired. Likewise, 11% female and 33% male said that they take it when they go to sports. 14% of female and 21% of male chose energy drink when they are thirsty and 6% of female and 7% of male chose for other occasions.

Relating to the price it can be clearly seen from the figure above that 18-25 years age group which is the target customers for energy drinks are willing to pay 16-20 DKK for the energy drinks where as 26-35 years age group are willing to pay 10-15 DKK for the drink.

4. 2 Competitor Benchmark (Burn and Red Bull)

4. 2. 1 Analysis of Focused group interview: During the focused group interview, 8 out of 11 participants preferred Red Bull. Only 3 preferred Burn. When there was a discussion of product features like taste, flavor and effectiveness of the products; participants said that effectiveness of the product is important.

During the blind test 26 participants were made to taste both Burn and Red Bull drinks blindfolded. Table 1 Preference of product by tasting without knowing the product (Blind Test) BurnRed BullBoth Total no. of participant (26)9152 The research showed that Red Bull was highly preferred by the participants with 58% appreciating the taste of Red Bull. Burn was preferred by only 35% of the participants.

4. 2. 2 Analysis of Online questionnaire survey The illustration of various measures to which the consumer gave importance when buying energy drink is shown in the figure below. Figure 7 Customers’ emphasis when buying energy drink

Source: Appendix 10 We found data of customers according to the importance they give to various measures or elements when they want to buy an energy drink. The above graph shows that 53% of the total respondents said flavor is very important when they buy energy drink. About taste, 60% said it is very important. None of the respondents said that it is not important at all. Talking about brand, only 19% said very important, 34% said important, 30% said not so important and 17% said not important at all. About price, 51 %( more than half population) said that it is very important.

Only 5% said not so important and no respondents said that it is not important at all. So far as convenient place to buy is concerned, 29% said very important, 54% said important. When packaging is concerned 16% said very important, 29% said important 39% said not so important and 16% said not important at all. When it is about effectiveness, 44% said it is very important, 38% said important. Thus the analysis shows that flavor, taste, price, convenient buying options and effectiveness of the drinks are important for customers where as brand and packaging are not that important in buying decision.

Based on the various factors to which the consumers give preference when buying energy drinks, comparative analysis between Burn and Red Bull has been carried out. This can be described from the figure given below. We asked the respondents to evaluate Burn and Red Bull giving them 4 options (Very Good, Good, Bad, Very Bad). But here in the analysis we have taken only two options as we think these two options are sufficient for comparative analysis.

Comparison of Burn and Red Bull based on the various factors Source: Appendix 11 The above figure shows the customers preference between Burn and Red Bull on he various factors which are important for their buying decision. 34% of the total respondents said the flavor of Burn is good and 23% said very good while 48% and 29% said the flavor of Red Bull is good and very good respectively. Similarly, 39% and 13% of the total respondents said the taste of Burn is good and very good respectively while 52% and 29% respectively chose good and very good for the taste of Red Bull. As far as brand is considered, 39% and 26% said the Burn brand is good and very good respectively while 42% and 45% said Red Bull brand is good and very good respectively.

When it is about price, 27% and 12% chose good and very good for Burn while 16% and 12% for Red Bull. 35% and 23% of total population said Burn is good and very good respectively when considering convenient to buy whereas for Red Bull it is 38% and 17% respectively. About packaging 36% and 22% answered good and very good for Burn while for Red Bull its 45% and 18%. Finally for the effectiveness of the product, 39% and 18% respectively chose good and very good for Burn while it is 45% and 25% for Red Bull.

Thus the analysis shows that customers highly prefer Red Bull while relating to flavor, taste, and brand. On the other hand, with relating to price, convenient to buy and nice packaging, customers seemed to prefer Burn. So far as the effectiveness is concerned, Preference towards Red Bull is high but the difference is not so much. 5 Findings and summary of the analysis According to the analysis presented above, it can be seen that the energy drink market segmentation is more concentrated on the costumers between age group of 18-25 and that the customers are dominantly male rather than female.

Looking at the geographic distribution the market segment is undoubtedly concentrated on Copenhagen with to some extent. However, the other fact is also that since Copenhagen is the largest city with dense population this result is quite obvious. The other important findings of the study regarding the life style of the customers relating to the consumption of energy drinks is that energy drinks are excessively consumed as a mix in alcohol and then it is consumed while people get tired. Also energy drinks are often consumed just 1 or 2 cans per week. Normally customers are willing to pay 16-20 DKK for the drink.

The analysis shows that in general the customers give high importance to the flavor, taste, price, effectiveness and buying convenience while making their buying decisions of energy drinks and that the brand and packaging are not of importance for the customers. Keeping this in mind the competitor benchmark of Burn and Red Bull Red Bull clearly shows that though Red Bull being a new entrant in the Danish market it has succeeded in taking good share of energy drink market in Denmark. Red Bull is preferred by customers in terms of its flavor, taste which are important factor in general for customers while making their buying decisions.

Similarly, with the effectiveness as well Red Bull is preferred by customers in comparison to Burn. Burn is preferred by customers in packaging which not of important factor for customers. But Burn still dominate Red Bull in terms of its easy availability at stores which is due to the fact that it is distributed by Carlsberg Brewery which is considered to have a very strong distribution channel in Danish market. (footnote) Again at price Burn is rated better owing to the fact that they are cheaper than Red Bull. Of course with the brand Red Bull is rated much better as it is an internationally recognized brand. Recommendations Based on above findings following recommendations have been suggested for Burn to improve its products, promotion and pricing strategy. The recommendations will be based on the marketing mix (4 Ps) which is product, price, place and promotion.

Product Since the research findings show that Red Bull has dominant preference by customers in terms of flavor, taste and effectiveness, therefore Burn has to come up with innovative product development in order to provide added value to its product so that customers preferences divert towards Burn.

Therefore, considerable amount of resources and time should be spent on research and development of variety of flavors and appealing taste with its product. Since the market segment of the energy drink is mostly 18-25 years old and that they consume it as mix in alcohol so the taste preference of these age group should be taken into consideration and the flavor and taste should be developed which is appealing while mixing with alcohol as well.

Price Relating to the price, Burn is cheaper that Red Bull and realizing the fact that Red Bull is gaining market share it is wise to maintain its low price strategy. .

Place

The research show Burn with strong placement but since strong distribution channel is its one of core competencies it has to fully utilize this competences to move ahead form Red Bull to place its products at all the convenient stores. The major priority should be given to Copenhagen since it’s the main market segment but again taking advantage of its well managed distribution channel it should also focus on other cities where Red Bull are not able to reach due to lack of experience with the Danish market. .

Promotion

A well planned advertising strategy should be developed mainly targeting on the 18-25 years age group and again the male customers who are the major customers of energy drinks. Though Red Bull is world recognized brand, Burn also has its brand reputation as it is a product of world class Coca Cola Company. Thus advertising campaign should also be focused to create awareness of the Coca Cola brand among the customers while promoting Burn which can positively influence customers’ choice. Conclusion Based on the research analysis and findings, it can be concluded that within the Danish energy drinks market Burn is definitely getting a tough competition from Red Bull despite the fact the Red Bull is a new entrant in Danish market. Its global brand recognition has provided Red Bull with competitive strength which can be a serious threat to Burn in coming future. Therefore it is a must for Burn to take timely action and initiate necessary marketing strategies to compete with Red Bull.

Burn has low price advantage as well as strong distribution channel which provide Burn with an edge in the competitive market and therefore it needs to look more into product development and promotion strategy in order to compete with Red Bull and thus gain success in the competitive energy drink market.

References

  • Books David Jobber. (2007). Principles and Practice of Marketing. UK. McGraw-Hill Education Pervez GH, Kjell Gr. (2005). Research Methods in Business Studies. UK. Pearson Education Bryman, A. and Bell, E. (2007). Business Research Methods. 2nd Ed. UK.
  • Oxford University Press Burns, A. C. and Bush, R. F. (2006) Marketing Research, 5th ed. , Prentice Hall Kotler, P. and Keller, K. L. (2006) Marketing Management, 12th ed. , Prentice Hall Svend Hollensen, (2007) Global Marketing – a decision-oriented approach, Websites http://www. euromonitor. com/Soft_Drinks_in_Denmark http://advantageaustria. org/dk/news/local/Red-Bull-und-Shark. en. jsp http://www. aeofooddrink. com/34. php http://www. dietspotlight. com/burn-energy-drink-review/ http://www. redbull. com/cs/Satellite/en_INT/Products/Red-Bull-Energy-Drink-021242751115866? =1242745950125#/product-FAQ 9
  1. How interested are you in energy drinks? oVery interested oInterested oNot very interested oNot intererested at all
  2. How often do you drink energy drinks? oAlmost never oFrom 1 – 2 cans per week From 2-5 cans per week oMore than 5 cans per week
  3. On what occaasions do you drink energy drinks?When I’m tired oWhen I’m thirsty oWhen I go to sports oWhen I mix with alcohol oOther (please specify in the box below)
  4. Where do you often buy energy drinks? oIn the super markets oIn the bars oIn Seven Eleven oIn small shops (eg: gas station, kiosk etc) oOther (please specify in the box)
  5. How much would you like to pay for an energy drink? o10 – 15 Kr o16 – 20 Kr o21 – 25 Kr oMore than 25 Kr
  6. How important are the following factors when you buy energy drinks?Very important Important Not so important not important at all Good flavor Good taste Good brand Reasonable price Convenient to buy Nice packaging The effectiveness of the drinks
  7. Which of these brands do you know? oBurn oRed Bull oNone of them
  8. Which one of these brands do you prefer? oBurn oRed Bull oNone of them
  9. How do you evaluate RED BULL in the following factors? Very goodGoodNot good-not badBad Very bad Brand Taste Flavor Price Convenient to buy Packaging Effectiveness
  10.  Do you have any recommendations for RED BULL to better meet your satisfaction? I don’t know oI’m already very satisfied oI would recommend as follows:
  11. How do you evaluate BURN in the following factors? Very good Good Not good-not bad Bad Very bad Brand Taste Flavor Price Convenient to buy Packaging Effectiveness
  12. Do you have any recommendations for BURN to better meet your satisfaction? oI don’t know oI’m already very satisfied! oI would recommend as follows:
  13. What is your age? Younger than 18 years old oFrom 18 – 25 years old oFrom 26 – 35 years old
  14. What is your gender? Male oFemale
  15. Which part of Denmark do you live in?

 

Read more

Are Energy Drinks Bad for You or Good

When people ask you, “What are energy drinks? ” Everybody say drinks that give you energy. They are wrong. Energy drinks are beverages that claim to give an extra boost of energy from caffeine. Energy drinks such as Red Bull or Rock star are good and bad for your bodies. Red Bull (Energy Drink) Good qualities that energy drinks have are that there non-alcoholic. This means that the more teens that buy this, the less chance of accidents and situations to do with the law the teens have to go through.

Sometimes Energy Drinks keep you awake from times you can’t/don’t want to be asleep. There are many bad qualities when it comes to Energy drinks. If a person of some kind consumed to many energy drinks, it can lead to heart problems or possibly death, as the caffeine rates in these drinks are jaw-droopingly gigantic. Caffeine can also cause Tremor / shaking, chest pains, and lots of headaches. Some teenagers mix alcohol with energy drinks at parties, which is a deathly and dangerous mixture.

Questions you can ask yourself is: 1. Do I want to have a body with a lot of caffeine? 2. Do I want to ruin my life? 3. Alcohol or Non-alcoholic? 4. Do I need to suffer? Overall energy drinks are bad and not good for athletes. There are times to use energy drinks and times not too. But before you make your decision, think of the questions I asked you. And see if you want a good body or bad body. Make your mind up ?

Read more

The Health Danger of Energy Drinks

Energy drinks are a kind of refreshments that are advertised as soft drinks that boost energy. The truth is these kinds of drinks are full of many harmful ingredients, such as sugar, stimulants, and other herbal supplements. Energy drinks are targeting high school and college students who may use this kind of drink to keep them awake for a midterm, or even give them a hallucination feeling any other alcoholic beverages will do. Many studies showed the disadvantageous of these drinks, yet this industry has wildfire between underage kids who used it to show their rebellious side through a safe and cheap way.

A new study shows that 34% of youth between the ages of eighteen years old and twenty- four years old consume energy drinks regularly (Casiano, 2011), this large number of consumption should raise the question whether the united state should ban selling Energy drinks to underage kids, and treat it like alcoholic beverages? Youth are having a hard time keeping up with all of the school activities, volunteering, schoolwork, and maybe jobs; those people usually relay and learn bad habits that will effect their health in many years to come.

Energy drinks can cause many health problems such as overdose, toxication, heart problems, blood pressure, liver problems, and teeth decaying. Joelving (2011)explains how a recent study in New Zealand’s show that the excessive amount of caffeine that is found in energy drinks can cause fast heart rate, insomnia, and anxiety; the study also shows that “just one energy drink is enough to make most kids experience some side effect, including mild ones like irritability or upset stomach.

And there are other ingredients with effects of their own, such as the amino acid taurine, the herbal extracts yohimbine, guarana and ginseng, and often loads of sugar. ” There are many types of energy drinks that are accessed easily in markets and gas stations. One of the most common types is Red Bull, in the website of this energy drink it is written that it will increase concentration and reaction speed, and improve vigilance and emotional status.

These manufactures will grab young people attention who are in need to increase and improve their concentration, reaction speed, and emotional state; but they fail to acknowledge the side effect of their products, such as being very tired after several hours of “sugar rush”. An over dosage of Red Bull cause a twenty-eight years old man to have a heart attack (Richards), this incidents is one of many that prove to us that this dangerous products should be banned from super markets and other easily ccessed places for younger generation. Many Young adults choose to be rebellious to prove their social status; many young adults are mixing energy drinks with alcohol. Mixing a depressor like alcohol with a stimulant like caffeine cause the human body to forget the effect of alcohol, and make the youth drink more alcohol to feel the buzz feeling; leading them to consume more alcohol than their usual body limit.

In 2010, nine college students were hospitalized after drinking alcoholic energy drink called four loko (Hogan, 2010). Four loko can be found in any gas station for about three dollars,it is commonly called “ blackout in a can” , it can raise your alcoholic blood level to . 3; the legal limit for blood alcohol level is . 08. One can of four loko contain as much alcohol as a six pack of beer laced with several shots of espresso.

Casiano, R., & Contributor, C. (2011, February 17). Queens chronicle – Study finds energy drinks bad for youth. TownNews.com . Retrieved February 17, 2011, from http://www.zwire.com/site/news.cfm?newsid=20456245&BRD=2731

Joelving, F. (2011, February 14). As sales soar, experts warn about energy drinks – Yahoo! News. The top news headlines on current events from Yahoo! News. Retrieved February 17, 2011, from http://news.yahoo.com/s/nm/20110214/us_nm/us_energy_drinks_1

Richards, C. (n.d.). Red bull overdose stops man’s heart |. Caffeine Products. Retrieved February 18, 2011, from http://caffeineproducts.com/caffeine-news/red-bull-overdose-stops-mans-heart-3/2008/08/23/

Hogan, R. (2010, October 26). 9 Students Hospitalized After Drinking Four Loko Alcoholic Energy Drink » Popular Fidelity » Unusual Stuff. Popular Fidelity. Retrieved February 18, 2011, from http://www.popfi.com/2010/10/26/9-students-hospitalized-after-drinking-four-loko-alcoholic-energy-drink/

Read more

The Dark Side of Energy Drinks

The dark side of energy drinks General purpose: to persuade Organizational outline method or pattern: problem/solution INTRODUCTION Attention getter: Ever since Red Bull came on to the market in 1997, there’s been an explosion in caffeinated energy drinks. Some are marketed as food and others as dietary supplements. But there’s little guidance for the consumer […]

Read more

The Real Science behind Energy Drinks

1. When we say that something gives us “energy”, what does that mean? What is a biological definition of energy? When we say that something gives us “energy” it means we can get sugars or carbohydrates and lipids from that. Humans need to eat carbohydrates and lipids to provide fuel for our body’s metabolism. Human […]

Read more
OUR GIFT TO YOU
15% OFF your first order
Use a coupon FIRST15 and enjoy expert help with any task at the most affordable price.
Claim my 15% OFF Order in Chat
Close

Sometimes it is hard to do all the work on your own

Let us help you get a good grade on your paper. Get professional help and free up your time for more important courses. Let us handle your;

  • Dissertations and Thesis
  • Essays
  • All Assignments

  • Research papers
  • Terms Papers
  • Online Classes
Live ChatWhatsApp