Marketing Strategy of a new energy drinks Essay

All around the world drinking beverage is like an entertainment for everyone. Millions of people have beverages everyday for refreshment. Our report is about the Energy Drinks of Bangladesh. In this report we have explained and analyzed how some of the five top selling energy drink companies are operating in Bangladesh. Energy drinks are becoming a major part of the beverage industry due to the rapid increase of their market competition and consumer awareness. In Bangladesh, Tiger and Speed are the most famous amongst all other energy drinks. Most of the energy drink companies act and carry out their marketing strategies in similar ways. More innovative steps are required to improve their market share. The goal of this report is to find out about the present condition of energy drink market in Bangladesh, major competitors we are likely going to face and how we are going to overcome the challenges in the market when we will launch a new energy drink named ‘Spirit’. With the use of effective marketing mix and other strategies we are going to target the young people of Bangladesh to sell our product. We have done a clear competitive analysis to take advantage of the weaknesses of our competitors and opportunities of the market. We are likely going to invest hugely in the beginning of launching our product to inform our customers about our product. As a new product company we are promising our customers to offer a unique product which will give them energy along with the excitement to enjoy their lives. Section 1: Current Market Analysis 1. 1: Top 5 brands in the market (how we find it) –We have surveyed in some of the areas of Dhaka city, like – Farmgate, Motijheel,Uttara, Gulshan; to find out the names of five most top selling energy drinks. According to the survey we have seen – Tiger, Speed, Shark, Sting and Boost are most popular in the energy drink industry of Bangladesh. We went to different departmental stores as mystery shoppers and randomly asked about the drinks each shop offers and found out the names of the energy drinks customers tend to buy more. 1. 2:Product Analysis -Product Level – Product leveling is the first and most important step taken by product planners to add more customer value to their products. It includes 3 main levels: Core Customer Value, Actual Product and Augmented Product. Core Customer Value – The first thing that comes to everyone’s mind when they talk about energy drink is ‘source of power’. In Bangladesh, all of the energy drink companies basically have the same core customer value, which is mainly about replenishing the energy of their customers through providing them with their energy drinks. However, different brands use different mottos to establish their customer value. For example: Shark’s motto says, â€Å"Real Energy, Real Power†; in other case Speed’s motto says, â€Å"Heavy Energy†. This way each products motto varies from each other and creates a different view about the product in their customers mind. Actual Product – This level includes Brand name, Packaging and Product Attributes. Under Product Attribute comes: Product Features, Design and Quality of the product. i. Brand name: A brand name is an identity of a product, without it no product will even exist. Each brand name establishes their uniqueness with their different names, signs and logos. All of the energy drink companies have a brand name of their products, which differentiates each of them from their competitors. The names ‘Royal Tiger’, ‘Boost Energy Drink’, ‘Speed’, ‘Shark’ and ‘Sting’ – each of them stands as a brand name for their product, marketed by different producers. ii. Packaging: Packaging describes the way a product is protected using a container or wrapper and at the same time provides all the required information regarding a product. The energy drinks – Sting, Speed, Shark and Tiger are all available in both cans and bottles. Only Boost is available in steel can in the market. iii. Product Features and Designs: Features explain the tools which enable a particular energy drink to gain competitive advantage over other energy drinks. The tools include – design, smell, taste and color of each energy drink. The designs of Sting, Speed, Shark, Boost and Tiger energy drinks are more or less the same. They are mostly available in two forms and in two shapes, one in a round shaped plastic bottle (250 ml) and another in cylindrical steel can (250/270 ml). They all taste sweet, expect from Tiger and Boost; which tastes sour as well. iv. Quality: Speed, Tiger, Shark, Boost and Sting have been maintaining a good standard of quality by providing the adequate amount of energy to their customers and helping them to deal with strenuous activity. However, no matter what the quality level is; over consumption of energy drinks can always prove harmful for human beings (even though they might be alcohol free). Augmented Product– There is no after-sales service, delivery service or product support for these perishable products (like – energy drinks). Labeling– Labeling is the most important part of every energy drinks. It informs about the ingredients of the product, who made the product, safety issues regarding the product and the web address of the company. Speed, Tiger, Shark, Sting and Boost all maintain an informative and trendy labeling to help their customers to make the right choice. Their ingredients contain Carbonated Water, Carbonated Sugar, Vitamins, Preservatives, Colors, Antioxidant, Sodium Benzoate, Ca-D-Pentothenate, Citric acid, Tartrazine Yellow and many other things according to the standard or permissible level. They even mention on their labeling that, it can be harmful for children and pregnant women. However, they are manufactured by different companies. ‘Speed’ is manufactured by Food And Beverage Limited, ‘Shark’ is manufactured by Global Beverage Company Limited, ‘Sting’ is manufactured by Transcom Beverage Limited, ‘Tiger’ is manufactured by AST Beverage Limited and ‘Boost’ is manufactured by Boost Drinks Limited. Brand Positioning – One of the challenging things for the energy drink companies to do is, to create a permanent place in the customers mind about a particular brand. To do this, all of these energy drink companies need to locate their brands at 3 levels – i. Product attributes ii. Benefits iii. Beliefs and Values. i. Product Attributes: Even though Tiger, Speed, Shark, Boost and Sting all have the common color of the drink – yellow; their smell is very different from each other. Boost tastes sour, Tiger tastes both sour and sweet, Sting tastes like strawberry and both the Shark and Speed taste sweet. ii. Benefits: The common benefit any consumer can gain from having an energy drink is, ‘spiritual force’ – which will make them more active in their daily life. Still, every energy drink has it’s own way to inform about their benefits to their loyal customers. ‘Royal Tiger’ benefits their customers by recharging their energy physically, ‘Boost’ helps their customers with being more efficient, ‘Sting’ provides their customers with vitamins and other nutrients, ‘Shark’ strengthens the stamina of their customers and ‘Speed’ increases the concentration and performance level of the individuals who are consuming it. iii. Beliefs and Values: Satisfaction comes from the core belief that consumers hold in their minds about a certain product. Customers believe – ‘Sting’ and ‘Tiger’ will give them satisfaction with better taste, ‘Boost’ will boost their energy, ‘Shark’ will give them real power and ‘Speed’ will help them gain extra speed. This way customers share their different beliefs and value for each energy drinks differently. 1. 3: Price Analysis– Size of the Bottle Product Name 250 ml 270 ml 330ml Speed 25 BDT Shark 25 BDT – – Sting 25 BDT – – Boost – – – Tiger – 25 BDT – Size of the Can Product name 250 ml 270 ml 330 ml Speed 30 BDT – – Shark 35 BDT – – Sting – -Boost 170 BDT – – Tiger 30 BDT – – 1. 4: Promotion Analysis – Promotion : Advertising is the most crucial part of a company’s marketing mix. It is the first step to inform and aware the general public or the target group of customers about a product a particular company is offering. The five energy drink companies – Speed, Tiger, Shark, Sting and Boost; all of them are between the introduction and growth stage of their product life cycle. At this stage they are only informing the customers about their product including their benefits. Basically all the companies are following the same way to promote their products and these are some of the most common media channels used by them for doing promotion – television, radio, newspapers, magazines and internet. Target Group: Energy drink companies mainly target the major districts of Bangladesh. The local companies, like – Speed, Tiger have distributed their products in rural areas as well to attract a huge number of customers. Energy drinks are mainly used by the people who are between the age group of 16-30, because they comparatively need more energy in every step of their lives. So all of the companies aim to target them and make the product according to their needs to deliver complete satisfaction through their energy drinks. Their product is priced quite cheaply, so that people of different classes can buy them. Most of the energy drinks are claimed to be halal while considering the religious and social issues of Bangladesh. Message and Effect of the advertisements: Message (Add Story) – Each company make their advertisements differently even though their motive remains the same, which is to inform the customers about the product. Here are some of the advertisement stories of the five energy drink companies – 1. Speed – In one of Speed’s advertisements, they have shown some guys were trying to get up on a bamboo for the whole day without getting tired. Their motto is ‘Heavy Energy’. In other words, they are using emotional appeal. In newspapers, they post a picture from the screen shot of their advertisements and use the same motto, so that people can get a clear brand knowledge. They do not have any brand ambassador for their product and they are constantly sending out the notion to their consumers how Speed can let them gain unlimited energy. 2. Shark – There is an advertisement of Shark ‘20 takay Dhaka’, they showed a guy kicked another person from Chittagong and sent him to Dhaka after having Shark energy drink. They are using the motto ‘Real Energy, Real Power’. In their advertisements they use the rational appeal to attract customers. They have no brand ambassador, because they are not still going for intensive or aggressive promotion. 3. Sting -. In the television advertisement there was one young boy who went to a shooting spot with the hope of being a superstar. On that time one director was taking the shot of riding a motor cycle on that spot. Showing that the young boy moved forward to do that shot but the director did not allow him and insulted him that made the young boy very frustrated. After that the director was supposed to make that shot with the hero but unfortunately the hero failed to ride the motor cycle. Then the director asked the crowd who could do the shot. The first young boy showed up the courage and did that shot in a fantastic way. Everybody praised him a lot. They started celebrating the happiness together by dancing with sting energy drink. They were singing â€Å"Sting, Sting, Sting –Ullasher Shuru Ekhanei†. They are using rational appeal in their advertisements In the radio advertisement they play the same jingle. In newspaper the marketers use the picture of 250ml bottle of sting energy drink and write their jingle. They give the same ad in magazines too. In billboards and posters, the marketers add the picture in a big way that they use for newspaper and magazine. 4. Boost – In one ad they have shown that a young guy, probably of age 20 was walking along the roadside, on the background rap music is going on (sign of young generation). The lyrics was talking about getting energy, confidence and success. The guy had his neck tattoed and wore a sunglass, showing the style of recent youth fashion. He went into a departmental store, went to the refrigerator, there were other drinks (e. g. red rooster and red bull); but he picked up BOOST, then he paid for it, got out, drank it and got himself recharged and the soundtrack was saying as if he could fly now. So this is one example of their rational advertisements. They have not used any brand ambassador yet for their product in Bangladesh, and these two advertisements are not even shown in Bangladeshi channels, they are only available in You tube. 5. Tiger – The tiger energy drink has only one advertisement which is very popular. The brand ambassador Aiyub bachchu is the model for the advertisement. The advertisement showed that, when the popular singer Aiyub Bacchu attended a party, the audience requested him to sing a song. But at that time Aiyub Bacchu felt tired and bored. So he needed to recharge himself to get energy. So he took tiger and then sang a song with more power and energetic voice. In this way they try to attract customers by using the rational approach. They also do radio advertisement with the song of Aiyub Bacchu. In billboard advertisement they promote their motto ‘Recharge Yourself’. Effect – Different advertisements effect’s consumers differently. In general, all of these advertisements encourage people to buy their products. When people get satisfied with one product, they talk positive things about it, this way companies can enjoy the benefits of -word of mouth. Customers get to know through these advertisements how their everyday lives are going to be benefitted if they have these energy drinks. Personal selling: Personal selling is no longer considered as giving door to door service. It is a much wider concept nowadays. Companies not only their sell their product to the customers, they also build a loyal relationship with them. To keep on and for maintaining such a relation, companies must be ready to deal with different problems their customers have regarding their product. Unfortunately, none of these five energy drink companies do these in Bangladesh. They are more focused on advertising only. Sales promotion: In general, energy drink companies do not give any special discount on their product to boost their sales. Companies give incentives to their channel members to keep their product in the front line of their shelves, so that customers choose to have it by first looking at it. Sometimes they give energy drink on their own to the customers, because it make the customers feel the product is of high quality and that is why the salesman is offering it to them. Besides people generally do not look out for products those are kept behind the shelves, as it will be very time consuming. Advertisements do even contribute to generate the sales level sometimes. Though there are many other ways to promote sales, the energy drink companies mainly follow these two ways to carry out their sales promotion activity. Public Relation: To operate in this digital world it is very important for companies to maintain a good relation with both their internal and external publics, example – shareholders, customers. Some of the energy drink companies arranges concerts and sponsors television shows to interact closely with their customers. Example – last year Tiger organized one concert in Doha. Each of the five companies uses different and unique logos for their product. None of them are involved in doing conferences or giving press release. Buzz marketing is also a tool used by these companies to improve their relations with the general public and promote their product as well. Direct Marketing: Energy drink companies have their official websites, but their use is not very effective in Bangladesh. In huge shopping malls or in other areas, none of the energy drinks are available in vending machines. These products are not even sold by the companies directly over online or by using telephone. The only way they carry out direct marketing is through placing the advertisement videos in You Tube. The energy drink companies still lack good customer service, example – no service or facilities provided to give complaints or to share ideas about the product face to face with the customers. Promotion Mix Strategy: The demand for energy drink is not yet very high in Bangladesh. So all the manufacturers of these five energy drink companies use the push strategy. Manufacturers contract with wholesalers or retailers to pass down their products to their final consumers and also to encourage customers to buy the products. Sometimes manufacturers give incentives to the channel members to promote their product as well. Section 02: Marketing strategy for a new brand Figure: Spirit Energy Drink Figure: Logo of Spirit Energy Drink 2. 1: Introducing a new brand for energy drink – After analyzing the present market condition of energy drinks in Bangladesh, we have come up with a new idea of introducing a new brand for energy drink. The name of our energy drink will be ‘SPIRIT Energy Drink’. This new energy drink will hopefully win the hearts of our target customers and please them with the new taste and value of our product that we going to offer. This energy drink will not only make people active physically, it will also motivate them spiritually to move ahead in their lives with confidence. The motto of our energy drink is – ‘ignites you from inside’. With this motto we will give our customers the idea of how Spirit energy drink can add more liveliness in their lives. The name of our company is Spirit Beverage Limited and we are using ‘Spirit Energy Drink’ as our product’s logo. We have used picture of a guy inside the logo to show our customers what we are trying to say through the motto.roduct’inkurny is gy of Shark and make them more active. customers tend to buy more. 20202020202020202020202020202020. 2. 2: Design marketing strategy for the new brand – i. Segmentation We will segment the market of Spirit energy drink on the basis of geography, demography, psychography and behavior. Geographic Segmentation: We are going to serve Spirit energy drink mainly for the people of Bangladesh. We will offer Spirit energy drink within the different territories of Bangladesh, like- Dhaka, Chittagong, Rajshahi, Barisal, Sylhet, Rangpur and Comilla. We will be selecting these territories because these are the biggest district of Bangladesh and most of the people live in these places. We will offer our product throughout every individual district, starting from the departmental stores to the small local and street stalls. We are offering Spirit both in urban and rural areas as well. Demographic Segmentation: Our market will be divided into groups based on variables such as age, gender, family life cycle, occupation and education. We are going to offer our product to both male and female who are between the ages of 15 to 30. We are especially offering the product to the university going students, corporate persons and athletes too. Our product will be for the people of all religion as it will be product is 100% halal. Psychographic Segmentation: Spirit energy drink is for the classes of people who fall under – upper lowers, working class, middle class and upper middles. We are going to use personality variables to segment market like the gregarious and ambitious people. Behavioral Segmentation: We will be segmenting the market of Spirit energy drink on the basis of occasions and benefits. In summer it remains very hot in the middle of the day and for that time we will give a special offer to the customers called â€Å"Make Your Mind Cool†. People will get the same energy drink at a lower price during this time. We will give people other benefits like- we are not using preservatives in our product and our product will be convenient for the customers. ii. Targeting We will target our market within the segmentation. We are mainly targeting Dhaka because, it is the capital city of Bangladesh and highly populated and urbanized. Within Dhaka, we are targeting mostly the teenagers and adults – who are the university students. Female students are going to be a part of it too, because the size and growth rate of this segment is high. As there is going to be other substitute products and tough competitors of Spirit energy drink in the market, we will offer our product directly by setting some temporary stores of Spirit energy drink inside the campus of some big and renowned universities. This will help us gain competitive advantage over our rivals and make people aware of our product. We will explain about the benefits about our product and give other information’s regarding our product. Making people believe that our product is different will be our main target. We will offer the same product at the same price to all our segmented customers. iii. Positioning Our product’s motto is â€Å"Ignites you from inside†, by this motto we are trying to make people believe that, Spirit energy drink encourages people to move on no matter whatever situation they face in their lives. Our product will always remove the frustration from both their body and soul. Spirit is alcohol free and will be made and designed attractively to attract our customers. In this way we will differentiate and create a unique image of our product in our consumer’s mind. iv. Marketing Mix (4p) ? Design and description of the product – Customer Value and Brand Name: The first thing that we are considering about our product before we place it in the market is, it’s core benefit or core values. Customers always seek out for the benefit and the reason behind buying a product. They always value the experience they get after using it. In order to enter the market and establishing our brand successfully, we are going to provide the most refreshing and unique energy drink; which will spread liveliness and create more excitement in our customers life. They will not only buy one Spirit energy drink, they will buy one reason to hold on to being strong and face everything with more spirit in their lives. The brand name of our product is–‘Spirit Energy Drink’. We have named our product Spirit because it is easy to remember and meaningful at the same time. It will help the customers to distinguish and compare our product from others. Product Features and Design: Our energy bottle will be made in the shape of a space shuttle, with a combination of red and black color to give the igniting image. We will design our can just like other energy drink cans, which is made up of steel body with a cylindrical shape. In the middle of both the can and bottle, the name of our product will be written horizontally. The whole bottle and can will be black in color and the name written in pearl white. The shining stars above the name will give it a glowing and sparkling image. The guy standing in the middle of the name will exhibit the idea that Spirit energy drink has the ability to bring back everyone from darkness and add new value to their lives. Like all other energy drink, Spirit’s taste will be sweet and sour and the color of the drink will be red wine color. Packaging and Labeling: We plan to do very careful and colorful packaging to attract our target customers. The products are going to be well packaged and covered so that it stays protected in every condition. All the necessary information’s will be written on the body of bottle and can. Packaging will be done in two ways: 1. Plastic bottle – 300ml (Normal Packaging) 2. Steel Can – 270ml (Prestigious Packaging). Necessary warnings will be provided, like –it might be harmful for pregnant women and children. Manufacturing and Expiring dates will be written on the covers to warn the consumers about the product’s validity. Most importantly, the ingredients we are going to use are – Carbonated water, Refined sugar, Sodium Citrate, Sodium Benzoate, Vitamin B3, Vitamin B6, Touraine, Citric Acid, Preservatives, Antioxidant, Ca-D-Pentothenate, Tartrazine, Mixed Fruit Flavor, Food Grade Flavor, Food Colors. There will be a Nutrition Fact chart too, describing the nutritious contents. Energy80 cal. Proteino gm Saturated fato gm Total fat o gm Sodium 20mg Sugar20 gm Carbohydrate 20. 5 gm Cholesterol0 gm Dietary Fibero gm Product Quality: Providing our customers with the best quality of energy drink is our prime purpose. We have made sure that our energy drink does not contain any harmful substances. It is alcohol free and free from every possible harmful effects. With the amazing taste and other attributes, we assure that our customers will be satisfied and buy Spirit more frequently. Design of pricing policy. Spirit is at the introduction stage of it’s product life cycle and we know the competition of energy drink companies is rising day by day in Bangladesh. We will use cost-plus pricing for Spirit energy drink, considering the present market and demand for energy drink. Though the demand of energy drink in our country is increasing with time, our product is still under pure competition, as there are already some other energy drinks in our local market. We will also consider competitors strategies and prices, how they set their prices and how much they charge from the intermediaries and consumers. We will focus on our target customers willingness and ability to pay for an energy drink. After considering the above issues we are charging 35tk for 270ml can and 30tk for 300ml bottle from our customers. For the 270ml can, our production is 30tk and after setting a standard markup to the cost we will be charging 32tk from our wholesalers, wholesalers will charge 33. 5tk to the retailers and finally the retailers are sell the drink at 35tk o the customers. For 300ml bottle, our production cost per bottle is 25tk and after setting a standard markup to the cost the wholesalers will buy each bottle at 27tk from the us. Wholesalers will charge 28. 5tk to the retailers and finally the retailers will sell it at 30tk each bottle to the customers. In short, we are charging the price for our product moderately to attract huge number of customers to buy it. It will help us to maintain a minimum level of profits for operating and keep running our business. Design of promotional activities – Advertising: For creating awareness and informing the consumers about our product we are going to advertise in more than one media. Our target is to do mass promotion to cover the maximum number of people in Bangladesh. Some of the major media channels through which we will be advertising are –television, radio, newspapers, online media and billboards. Television and internet are the most fastest and effective media channels to promote product, as most of the people spend their time on these. Newspapers though have high believability, do not last for a long period of time. Starting from the poor uneducated people of our society to the educated ones, everyone listens to radio. Therefore radio is also a very effective way to reach a huge number of customers at the same time. Add story – While broadcasting on television, we will show a random university student is sitting on a chair and lost deep inside at the sheer thoughts of failing in exam. Then suddenly one of his friends will come to him and give him a Spirit energy drink. After having the energy drink the boy will jump off and scream energetically that he is not going to give up. He will get motivated and feel more energized while doing his studies. He will realize that he can study longer and give more concentration in his studies after drinking the Spirit energy drink. Then finally when the results come out, he will do the top result in his university. He will then become extremely happy and appreciate how Spirit energy drink has helped him to achieve this success in life. This way we will draw conclusion to the add. In newspapers and billboards we will use the same boy, who will be smiling and holding a Spirit energy drink; conveying the same message about our product’s motto. In radio channels we use the same jingle which we will show in television. As we are launching a new product in the market, we want to deliver the same message to our target customers. It will help them to get a clear and specific idea of our brand and what we intend to provide. Our advertisement is designed in both emotional and rational way. Emotionally we are showing the customer, they can move on in their lives with the help of Spirit and rationally we are giving them the idea that Spirit energy drink is good for their health, as it increases concentration and strength. Sales Promotion: Sales promotion is another major step we will carry out to encourage our customers to purchase our product more frequently. Sales promotion can be done in many ways – giving discounts, giving lotteries, pop-up adds, etc. We will give incentives to the people of our channels to keep our energy drink in front of the shelves in all the stores we are going to supply. Consumers buys the product that are kept in front side, because people have an idea that good quality things are always kept at the front and they will not want to search for other product as that would be time consuming. In times of special occasions like Eid, we will announce special discounts or extra offers. We will sell our products in front of colleges, universities and major shopping malls. Therefore we will be exposing our product more to the public and will gain higher chances of selling our product, thus making more profits. Besides, none of our competitors are doing these things, so we can gain competitive advantage over them as well. Personal selling: Energy drink is a convenience product, and it is quite impossible to reach the mass people by employing thousands of employees for selling our product. This process is very slow and expensive. So we will not be selling our products personally. We will employ experts in offices, who will deal with customer’s view’s and problems. This way we will personally provide/sell our service them beside selling our product. Public relations: At the very first stage we will arrange a press conference to inform everyone about our product. Press media is very crucial, as interacting with them positively will encourage them to promote our product more creatively and positively to our customers. This way we can also have competitive advantage over our competitors. We will organize different concerts and sponsor television shows, this will give us an open platform to interact more closely with our customers and build a strong relation with them. Direct marketing: We are planning to open a Facebook page along with our official website where we will encourage people to share their views about our product. This will help us to keep track of our customers reaction towards our product. None of the other energy drink companies are doing much of these activities, so it is an easier way to grab a huge number of customers and market share this way. Online marketing is therefore more efficient and fast way of direct marketing in terms of receiving our customers reactions, complaints and comments and adapting to those changes to keep surviving and growing. Promotion Mix strategy: We will use push strategy for Spirit energy drink. Contracting with different wholesalers and retailers will help us to provide adequate supplies in every convenient and targeted locations. We will give them incentives to promote and supply our product more frequently to the customers. Design of distribution activities- We will go for intensive distribution for Spirit energy drink, because we want to provide stock our product in as many outlets as possible. We want to ensure that our products must be available where and when consumers want them. As our product is new in the market, we will directly offer our product to the target customers. We will be offering our Spirit energy drink to the customers through wholesalers and retailers. Within our limited resources we cannot afford to have our own distribution facilities, like – warehouses and showrooms and to hire sales people and support stuffs. We would rather contract with the wholesalers, so that they will take those extra costs and risks. Our target customers are the young university students, that is why we are contracting with retailers.