Due to the fast moving pace in Singapore, the population of energy drinks may have risen. Consumers need more energy intake to sustain throughout the day which can be achieved by consuming energy drinks on the go such as Red Bull Energy Drink or Monster Energy.
Energy drinks company claims to be a healthier beverage type and targets towards people that need some sort of energy boost. Their primary consumer group includes extreme sports enthusiasts, young adult and working adults. This may be the result that many energy drinks are sponsored or created by extreme sports teams and stars. However over the recent years, it has come to light that energy drinks may not be that good after all (menshealth).
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Our business report will consist of the detailed description our new startup, EnergyMe and our marketing strategy. Furthermore, it also includes the analysis of our two main competitors, Red Bull and Monster Energy, in order to exploit their weakness and turn it to our strength.
2. New Business
EnergyMe is a new business startup that plans to venture into the industry of healthy energy drinks. It’s tagline – “Extra Energy. Healthy Me” means that consumer will get the extra energy they need from EnergyMe drinks and at the same time be their healthy self. We will be offering a variety of flavoured energy drinks, focusing on ingredients that provide health benefits and allowing consumers to gain an instant energy boost throughout their day. Red Bull and Monster will be our main competitors, as consumers are already familiar with them when it comes to energy drinks. We will be targeting the weakness of our competitors, which will thus showcase EnergyMe as a healthy and nutritious alternative that also provides instant energy boost. (add on)
EnergyMe has identified two distinct groups of target consumers. These two groups of consumers are distinguished by their age. They have been grouped as consumers that are actively working (age between 25 – 65 years old) and are retirees (age above 65 years old). The main characteristics that make both of these groups attractive is their spending power and the uprising trend on energy drinks(source). (add on)
EnergyMe will be promoted as an alternative choice to traditional energy drinks such as Red Bull and Monster Energy, and will be using other sources of energy boosting ingredients such as ginseng, jeju orange, citron, quinoa, kombucha and sweet potato. Instead of using sugar cubes to sweeten our drinks, we will be mainly using honey and stevia as sugar substitutes. All our drinks will be formulated and made in Singapore. As our drinks are different from our competitors which mainly use sugar and caffeine as their main ingredients, we will market EnergyMe as the healthiest alternative to energy drinks. (add on)
EnergyMe drinks are natural and highly nutritional, no caffeine and taurine, 100% fat free and is available in a wide variety of flavours. EnergyMe will be certified to apply for Healthier Choice Symbol to include on our packaging to indicates that our drinks are a healthier options, and is an easy way for consumer to tell our drinks are better for their diet than others. This empowers the consumers to make informed food choices.
As the existing energy drinks are highly priced, EnergyMe will be incorporating the penetration pricing where we will sell our drinks at a low price compared to the competitors to rapidly reach a wide fraction of the market and to create word-of-mouth. For a 330ml drink, we will price it at S$1.50 as compared to Red Bull (250ml for S$2.45) and Monster (473ml for S$2.11). This strategy will allow consumers to switch to EnergyMe because of the lower pricing.
As EnergyMe already has many well set competitors in the market, we need to make sure the public is well informed of our product. EnergyMe will convince its target consumers by promoting the advantages of the drink over its competitors. Working adults will be more active and energetic throughout the day and retirees can take EnergyMe as an additional supplement for their everyday needs. EnergyMe will collaborate with premium gyms like Fitness First, Anytime Fitness Gymmboxx to offer samples to its members. Locations favourable will be gyms near CBD area as compared to those in neighbourhood areas. EnergyMe will also be advertised and promoted on popular social networking websites like Facebook, Twitter and Instagram.
The selection of product distribution channel is important. As a new startup, EnergyMe will incorporate two types of distribution channels – direct and indirect. For the direct method, we plan to sell our products through our campaign outlets directly to the consumer. For the indirect method, EnergyMe drinks will be readily available in giant supermarkets like FairPrice, Sheng Siong, Cold Storage and smaller-scale store like neighbourhood mini-marts and convenience stores like 7-11. The drinks will also be sold on online grocery marketplaces like RedMart, HonestBee, Amazon Prime SG, allowing consumers to purchase EnergyMe at the convenience of their own homes. This will allow ease of purchase for consumers anywhere and anytime they want.
3. Customer-Based Brand Equity Analysis of Competitor
Monster Energy is a series of energy drinks founded by Monster Beverage Corporation (MNST), formerly known as Hansen Natural Company in April 2002. The company is well known for advertising mainly through sponsorship of extreme sports and eSport events such as skateboarding and mountain biking car racing, instead of following conventional methods of advertising through television commercials, ad agencies or billboards.
Monster actively participates in the scene and offer promotions such as exclusive VIP access, going on trips to hang out with top musicians and giving away ‘real gear’ like dirt bikes, rims and BMX bikes.
As evident by their name, Monster Energy have clearly positioned itself in the energy drink category. When consumers want to purchase a energy drink, they will think of Monster Energy as one of their options. This is achieved by exposing the brand to consumers by sponsorship of extreme sports, Esports and musical acts.
The Monster packaging is highly noticeable with their neon-coloured logo adorning the sleek black cans. Monster’s logo is easy to recall and recognise with a stylized “M” for “Monster” designed to invoke the idea of a monster’s claw marks, associating clearly with their slogan “Unleash the Beast”. For a customer considering a purchase, it will prove difficult to pry their eyes from the fancy can designs by Monster Energy as opposed to a generic brand.
Monster had done well in meeting customer’s functional need in the highly competitive market of energy drinks. Monster Energy offers a large can (473ml) which contains more caffeine compared to other competitors at a lower price. Monster offers a large variety of products with
Regarding Monster’s brand meaning, we can say that its products meet consumers’ needs in the highly competitive market of energy drinks. Indeed, Monster is a brand offering a wide range of products, which is not the norm in this market. Plus, its products are known for having a higher ratio in caffeine, which leads consumers to think that Monster’s products are more effective. Finally, Monster’s brand performance is based on price, because it offers a generally bigger can than its competitor, and at a lower price.
Monster became the title sponsor of National Association for Stock Car Auto Racing (NASCAR’s) top series for the 2017 season, effectively renaming it to Monster Energy NASCAR Cup Series. The brand actively contributes to the extreme sports scene through sponsorships with Paid2Podium program, with 453 events and $884,350 up for grabs via self registration and verification from events official. This supports young and aspiring athletes to represent the Monster Energy brand and help them to achieve their goals and dreams, creating a symbiotic relationships where both parties benefit.
Consumers who purchase them want to maximise their lifestyle and increase their productivity. Typical usage situations are for consumers who need that extra energy boost throughout their daily lives such as pre-workout drink or after a sleepless night. As it is widely popular, it is easily available islandwide, allowing consumers to purchase at their own convenience.
Monster has encountered quite a few controversies right from its inception due to its logo and slogan. Conspiracist had said that the brand uses a Hebrew version of 666 in their logo (666). A simple google search on “Is Monster Energy Satanic?” will result in pages after pages of article regarding the antichrist scandal.
The brand has developed a strong attachment with its consumer thanks to its presence in all the events constituting their centres of interests.
After having a can of Monster Energy, consumers usually feel more energised due to the caffeine rush. They also feel happiness, freedom and virility as Monster’s brand image is based on athletes doing extreme sports and taking risks. The adrenaline rush leaves consumers to feel excited and ‘unleash the beast’ within them, giving them just the energy boost they need. Having felt all these feelings, consumers therefore have the sensation like they are connected to the brand, experiencing something special with them.
However, there were also instances whereby certain consumers felt displeasure with the brand due to the controversy regarding their logo. A conspiracist have said that the brand uses a Hebrew version of 666 in their logo (666). A simple google search on “Is Monster Energy Satanic?” will result in pages after pages of article regarding the antichrist scandal.
They then termed Monster as a ‘drink of satan’, causing people to have negative feelings for this brand.
Monster Energy does not follow traditional methods of advertising, they actively engage their consumers using other methods instead – by offering more through their promotions. Monster goes the extra mile by offering promotions such as exclusive VIP access and sports gears, supporting the scene, bands, athletes and fans. This thus sets Monster apart from other energy drink brands as they connect with the fans directly on their needs and wants. Fans are committed to the brand and some have even done tattoos of the brand on their body. It helps the fans bond with others in the same social group who share special interests and common values. Monster Energy provides a platform for its community to connect via different interests by creating Facebook pages under the Monster Brand such as Monster Energy Gaming, Girls and Music. By a providing a platform for communication, it creates customer value by
Red Bull, an Austrian company was founded in the mid 1980’s and was expanded to Singapore in 1989. Today, Red Bull have ventured into other 171 countries such as Germany, UK and USA and over 68 billion cans of Red Bull have been consumed so far. Just alone in 2017, Red Bull has sold more than 6.3 billion cans, an increase of 4.0% from 2016. Red Bull specializes in energy drinks which power consumer through the day, making it the perfect companion to consumer daily energy needs. Red Bull has the second highest market share of any energy drink in Singapore, with a total of 18.0% in the energy drink industry.
Red Bull has a very catchy slogan – “Red Bull gives you wings” R3 which deeply imprints on one’s mind after hearing it. The impression of drinking Red Bull is that it will instantly give energy and power once consumed. The brand awareness is strong as Red Bull is at the top of the mind when consumers consider purchasing energy drinks. The red and blue logo of Red Bull is of two charging red bulls fighting, making it well recognisable and representative of its brand name.
Red Bull pricing strategy is more expensive than its competitors’ which make the consumer to believe in that Red Bull is unique compared to other soft drinks.
The two colours on the Red Bull logo are not just two random colours mashed together, but they are also meaningful in their own way – red: the colour of life, vitality and passion; blue: the colour of strength, confidence and youth. R1 This shows that Red Bull insists on its core ideology and values, to ‘go strong and harder’ as the indispensable factor to the firm.
Red Bull is suitable for anyone that wants to have an energy boost, be it on the on the road, before or after physical training, during studies, at work or at night to party. As it is widely found in convenience stores and supermarkets, it allows consumers to make purchases as and when they want without the hassle of having to travel far.
Red Bull uses creative advertising (such as Red Bull Cartoons) R4 to express their fun and non-conformist free way of life. This therefore creates memorable and entertaining experiences for its consumers. Red Bull is also well associated with extreme sports for example the Red Bull jump in Stratos that captured the attention of people all around the world.
Red Bull has thus established itself into consumers’ minds as a drink that gives them instant energy whenever they need it. Today, people from all walks of life automatically think of Red Bull whenever they think about a energy drink.
Red Bull drinks are full of caffeine, taurine, b-group vitamins, sugar and alpine water, which allow consumers to stay awake all night long. Consumers buy Red Bull due to its efficiency in terms of power. This have led the company to be able to charge a premium price for their energy drink. For consumers who are more health conscious, there are other alternatives like ‘less sugar’ and ‘sugar free’ available.
Consumers may have expressed doubts towards Red Bull of being not the healthiest energy drink due to the high amount of sugar level and caffeine. Research has shown that energy drinks not only spike the blood sugar, but may increase the risk of type 2 diabetes (menshealth). Having high amount of sugar level and caffeine will lead to health risk such as increased blood pressure, kidney damage, anxiety and stress. As caffeine is highly addictive, it will cause consumers to depend on them to feel sufficiently energized.
The feelings that Red Bull give to its consumers are that it is a fun, energetic and exciting brand with their large participation to extreme sports events. Despite having health authorities across the world to concluded that Red Bull Energy Drink is safe to consume, consumers are still skeptical regarding the health benefits it brings to them.
More than just an energy drink, Red Bull is now followed by 48 million fans on Facebook. Red Bull has a very engaged community on social networks such as Facebook or Twitter. Consumers seem to be actually very loyal and involved and people are really fans of Red Bull. Consumer have a sense of community as they chose Red Bull to represent who they are and who they want to be.
Concludes report with assessment of new business/startup’s market success prospects, based on CBBE analysis of competitors. Provides at least 3 possible ideas that the new business/startup can adopt to take advantage of weaknesses in competitors’s CBBE.
Red Bull and Monster Energy both offer sponsorship to athletes partaking in extreme sports and they give an impression that it is only suitable to consumers who have active lifestyles, which will let consumers think twice when they need a burst of energy
Identify on their labels the amount of caffeine from all sources in the beverage.
Not promote mixing energy drinks with alcohol or claim that energy drinks counteract the effects of alcohol.
Advise on their labels that energy drinks are not intended or recommended for children, pregnant or nursing women, or others sensitive to the effects of caffeine.
Not market energy drinks as sports drinks.
Not market or sell energy drinks in elementary, middle, or high schools.
Not market energy drinks to children.
Formulated in JEJU, made in Singapore
Health alternative to energy drink but still marketed as energy drink
GINSENG AS ONE OF THE INGREDIENT
ginseng, jeju orange, citron, quinoa and green tea (from korea)
Coffee? Honey? Lemon? Lime? Cola? Peach?
The first part is to create the business and analyze the source of brand equity for the two main competitors in the industry that your new business will operate in. For example, if you create a fast food business, then your two main competitors may be McDonalds and KFC.
You must create a complete business with a clear idea of what product/service you will offer to the market, and what specific market gap and consumer needs your business will address. You must also justify why you think your product will sell.
Using the CBBE pyramid, you must then analyze the source of brand equity of the two main competitors in the industry that your new business will operate in.
A summary of the objective of the assignment, main findings, and key considerations. It should also include signposting and brief descriptions of the report’s outline.
2. New biz start up
3. CBBE Analysis of Competition (1500)
Identifies two main competitors in the industry/sector of new business/startup, based on market share/revenue. Uses the CBBE pyramid (Lecture 2) to analyse the brand equity of the two main competitors. Analysis is insightful, detailed as possible and covers every aspect of the CBBE