Energy Drinks Market Essay Example for Free

Energy Drinks Market Essay Introduction The objectives of this report are to identify how the Energy Drink market is segmented according to demographic, geographic, psychographic and behavioral variables. The Energy Drink industry which is dominated by Red Bull and V energy drinks is worth 151 million dollars and is growing by 47% per year. Energy drinks is the fastest growing category in the soft drink market. I have chosen three different companies in this report to analysis which segments they target, Powerade, Red Bull and Coca Cola. Red Bull is the market leader in energy drinks and Coca Cola which is very good at mass marketing has fallen behind and needs to adopt new and exciting marketing techniques to appeal to the younger demographic. I have also selected three different sub-brands to explain how the product is positioned. I have chosen Powerade Energy Edge, Red Bull Sugar Free and Coca Cola’s new carbonated green tea drink Enviga. Demographic Demographic segmentation consists of certain variables such as age, gender, income, ethnic background and family life cycle. Energy drinks are targeted to the 20-34 age brackets. Energy drinks target generation y and generation x by using modern labels and exciting ads with dance music, and extreme sports. The older generations such a baby boomer would be more inclined to stick with coffee for a quick pick me up. There is more emphasis on marketing to males but lately there has been an increased interest in marketing to females by producing low calorie, low sugar energy drinks. Income of the consumer is not an important characteristic because of the low price of energy drinks. Geographic Geographic segmentation describes segmenting markets by part of the world, region of the country, market density, market size or climate. Energy drinks practice geographic segmentation by advertising higher in more fast paced, high density urban areas rather than sleep country town. This has to do with the hectic lifestyles most people live that work in high density, big cities. Another contributing factor is the higher population. Also energy drinks would geographic segment a product in countries or regions with higher temperatures because energy drinks are best drunk cold so in colder climates people would tend to purchase a hot drink such as a coffee for a caffeine induced energy burst. Psychographic Psychographic segmentation refers to market segmentation on the basis of socioeconomic status, values, attitudes and lifestyle groupings. Social class does not matter when it comes to energy drinks because any one can purchase a can from the local shop or petrol station at a reasonably cheap price. People’s interest in energy drinks is sometimes affected by their lifestyle. For example people who work long hours, work hard, don’t sleep enough will be more inclined to purchase energy drinks because of the practicality and energy buzz afterwards. And now even energy drinks are targeting people who try to live a healthy lifestyle by promoting their products as low calorie, low sugar and claim they increase your metabolism. Behavioral variables Behavioral segmentation allows companies to group customers and buyers into segments according to the benefits they seek from the product. Occasion status is when customers can be grouped according to the occasion when they get the idea to purchase an energy drink. Energy drinks are often consumed before work and any other part of the day when an individual is feeling tired, but energy drink companies are now promoting the beverage as a good pre exercise drink for an increased physical performance. Benefits sought are an effective way of identifying buyers according to the benefits they seek from energy drinks. The main benefit segments for energy drinks are, taste, economic, health and the energy burst. Some people might prefer to purchase a product that claims to give more of an energy burst then another product, even if the taste is less desirable. Some products that are produced and marketed to have fewer calories and less sugar might be purchased instead of a product that is high in sugar even though it is more expensive. Red Bull/ Powerade/ Coca Cola Red Bull Red Bull targets generation y. High School and university students trying to cope with study. Also red bull mainly targets male with its original product, On the Red bull website there is two whole sections that specialize in extreme sports and motorsports. This shows that Red bull targets males in generation Y and also in generation X. Red Bull sponsor extreme sporting events such as air racing. Also Red Bull targets segments of the population that have little time and often need a refreshing drink that gives them energy. Red Bull also caters for the health conscience individual and females by producing a low sugar energy drink. This drink which is called Red Bull sugar free comes in a light blue can that would target the female population. Red Bull also target long distance driver, this can be seen when you walk into any petrol station by the size and amount of advertising. Powerade. Powerade have four different kinds of products, they have Powerade Energy Edge, which is designed for pre-sports, Powerade Isotonic which is best for during sports or any time during the day, Powerade Recovery which is formulated for after sports because of the protein contained in the beverage. Powerade also make a powder that can be made into a Powerade sports drink after water is added. This powder targets the money conscience individual that would rather make it in bulk to save. It also targets sporting clubs and larger groups who can make a big batch for a team or group of some sort. The logo on each of the three drinks also gives the customer hints to what it’s designed for. Powerade energy has a picture of a athlete about to race, Powerade isotonic has a picture of an athlete during a race and Powerade recovery has a picture of an athlete finishing his race. Powerade mainly target generation y and generation x. The company does not target a specific gender but markets to health conscience people and athletes. This is shown by their advertising and sponsoring of sporting associations, and clubs such as the AFL, The Wallabies, and The Perth Wildcats. Powerade also sponsor world class athletes. Powerade are different from other energy drinks because they do not market so much that the consumer will get a quick burst of energy through caffeine but more of a healthier, burst of energy through high carbohydrate drinks. This is more suited to athletes rather than your average tired person. Powerade also take a much more scientific approach compared to the other energy drinks on the market by claiming to have tested their products on athletes. Coca Cola. Coca Cola is spending a lot of money on marketing a couple new energy drinks to try and break into the massive industry of energy drinks which has long been dominated by Red Bull and V. Coca Cola has emphasized on targeting the young healthy demographic. The first of its products is Mother, an all natural juice based energy drink, which claims to contain a potent Amazonian berry , acai. Another new product by Coca Cola is Enviga, this carbonated green tea beverage claims to burn calories after drinking. Coca Cola have produced two drinks to market to two different segments of the population, Mother which has been marketed to young males and Enviga which is made to appeal to young women. Mother Energy drink is positioned to target young males, an example of this is the logo on the front of the can resembles a tattoo. Products/ Sub-brands Powerade Energy Edge Powerade energy edge is specially formulated to provide fast and effective hydration for pre-sports and they claim it has been scientifically proven. The products attribute which are ingredients that contain caffeine, electrolytes, and B-vitamins position the product to appeal to athletes. It is positioned to be used whenever a person need fast and effect hydration or more predominantly before sports. Its benefits claim to be enhanced physical performance. Powerade’s main competitor Gatorade does not produce a drink specifically designed for pre-sports because of the added caffeine. Red Bull Sugar Free Red Bull Sugar Free is positioned to target young adults and largely women because of the advertised low calorie low sugar attributes of the product. The can of the sugar free variety is different from the standard Red Bull as it comes in an aqua blue can, this would suggest that the product is positioned to be more attractive to females. The benefits of this product are claimed to be increased performance, reaction and speed; improves emotional status, increased metabolism and low calories. Coca Cola’s Enviga Coca Cola’s Enviga is a carbonated green tea beverage that claims to increase your metabolism and burn calories because of the presence of green tea and caffeine. The main attributes of this product are green tea and its low calories (five per can). They claim the amount of green tea in their can is higher than most other green tea drink and they list the benefits of green tea as rich in antioxidants, support cardio-vascular health, help your body fight free radicals and helps your body burn more calories. These attributes position this product to aim at young women who want to be healthy and even the health conscience male. The usage occasions for Enviga are anytime throughout the day but they recommend having three cans a day for maximum calorie burning. The drinks come in three flavours natural green tea, berry and pomegranate, and each can has bright colours on the front which further suggests the drink is positioned for women. Reference 1. Kotler, P. , S. Adam, L. Brown, and G Armstrong. 2006. Principles of Marketing. NSW: Pearson Education Australia. 2. Red Bull. 2008. http://www. redbull. com (accessed September 1, 2008). 3. Powerade. 2008. http://www. powerade. com. au (accessed September 1, 2008). 4. Enviga. 2008. http://www. enviga. com (accessed September 1, 2008). 5. Coca Cola. 2008. http://www. coca-cola. com (accessed September 1, 2008).