Marketing Mix of a New Product Offering - Energy Drink

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  • Energy drinks made news in 2005 when the Central Food Laboratory (CFL) at Mysore, under the direction of the customs authority at Chennai, tested Red Bull as a carbonated beverage. The consignment was seized as the drink did not conform to the standards for carbonated beverages, for which a caffeine cap of 200 ppm was mandated. Red Bull’s caffeine content was about 320 ppm. There was lack of clarity on standards—the PFA authority at the Centre had registered the beverage as a proprietary product; the state food authorities conducted tests keeping in view norms for carbonated beverages.Red Bull challenged the findings of CFL in the Madras High Court. It pleaded that the drink be treated as proprietary product, not carbonated beverage. The court ruled in favour of Red Bull, but CFL continued testing energy drinks as carbonated beverage. The company dragged CFL to court for contempt.Red Bull was in trouble again when regulations for proprietary food were amended in September 2008. The change in Rule 37-A(2) of the PFA Act states that proprietary foods have to conform to the standards under appendices of the PFA Act and Rules. The amendment implied that energy drinks would have to conform to a caffeine cap of 200 ppm, so far applicable to carbonated beverages.
  • Marketing Mix of a New Product Offering - Energy Drink

    1. 1. Mr. StarEnergy Drink GROUP 7 Tirup Patel - 171 Shubham Bhakarh - 167 Vivek Jhala - 175 Nischay Gupta - 148 Roochira Tanwani - 158 Priyanka Kamath - 154
    2. 2. History• Jolt Cola was released in the 1980s.• Jolt Cola pioneered the marketing strategy which has been still used until today by marketers for energy drink.• Targets of the marketing research are younger audience, mostly students, young professionals, and people on-the-go.• Energy drinks become significant in 1997 with products like Red Bull and similar products.• In Japan and UK, energy drinks were known for as far as the early 1960s and 1929 respectively.
    3. 3. Energy Drinks-General Introduction Energy Drink suddenly takes the market of beverage by storms. This type of non-carbonated drink has shrunk carbonate soft drink market in a short period of time. Energy drink claims to be healthier beverage type Energy beverage industry targets towards those people who need some sort of energy boost
    4. 4. Overview of Energy Drink TargetAudience The primary consumer group of energy drinks includes extreme sports enthusiasts, young adults and teenagers. This may be the result that many energy drinks are sponsored or created by extreme sports teams, stars, etc. This crowd is a group excited by speed, energy, flash, and instant thrill.
    5. 5.  Male teenagers and people in their 20s are most likely to believe in the fact that energy drinks will give them the boost they need. The popularity of energy drinks may have risen due to busier schedules and more complicated lives people are going through.
    6. 6. P : Product
    7. 7. ProductFeatures No caffeine, taurine. Natural and Highly Nutritional. 100% fat free. Tasty. Available in various flavours. Original, Martini, Mojito, Tequila sunrise Attractive Designing and Packaging.
    8. 8. P : Price
    9. 9. Price Existing Energy drinks are highly priced. All the existing energy drinks are available for around Rs.90/- Due to such prices many of the masses wanting to buy an energy drink, go for any low priced soft drink to rehydrate, at the expense of nutrition. Mr. Star would be available for Rs.39 which would be affordable for every segment of the society. The powder packet of Mr. star would be available for Rs.20.
    10. 10. P : PROMOTION
    11. 11. Advertisement and Promotion schemes Since our product already has many well set competitors in the market , we have to make sure the public is well informed of our product. Thus we plan to undertake as many as possible advertisement and promotion schemes possible.
    12. 12.  TELEVISION ADVERTISING Ad campaigns on Prime TV Channels such as NDTV good times, MTV, TLC, Channel V, Zoom, VH1, Star World and a few more. RADIO Advertising on popular radio channels like 104.00 fm, red fm, etc BILL BOARD ADVERTISEMENT MAGAZINES
    13. 13.  Free distribution of samples in colleges To promote the drink we will give out 50 free samples outside colleges once a week for the first month. We will also sponsor various college events and festivals where we can distribute free samples.
    14. 14.  Organize various sports events. We will organize sport events like marathons, etc where we can promote “Mr. Star” Associate with gyms. We will have tie ups with gyms to promote our product.
    15. 15.  Interactive website. New Media Promotion: Facebook, Twitter, etc Advertising and promoting on social networking websites will also help.
    16. 16. P : PLACE
    17. 17.  Distribution (or place) is one of the four elements of marketing mix. Frequently there may be a chain of intermediaries, each passing the product down the chain to the next organization, before it finally reaches the consumer or end-user. This process is known as the distribution chain or the channel.
    18. 18. Distribution ChannelOur distribution channel is consistent as followed by mostcompanies and involves a lot of intermediaries. However we plan to sell our products both directly i.e. through ourcampaign outlets and indirectly i.e. via Agents , Wholesalers and Retailers.Since it is new launch, we would primarily like to focus onproduction and quality of the product. But once the product is accepted, we will shift our focus towards distribution as till then even we will be sure of our production plans as per response.
    19. 19. Distribution Channel Manufacturer Agents Wholesaler Retailer s s Consumer s
    20. 20. Product Outlets As per our distribution strategy we plan to make the product advertisements visible every where to the customers. Other than this it is also very important for the product to be easily available to the customers. Thus, we plan to make sure that the product must be available in the following places :- Local drug or medical store Local general stores Malls and Super Markets College and office canteens Clubs
    21. 21. Branding
    22. 22. Why is it required ? New Product Big Competitors Late entry Growing Indian market Misconceptions
    23. 23. Brand Elements Name – Mr. Star Logo – Orange coloured star Tagline – Makes you invincible Colour Scheme – Orange & Black Sounds –
    24. 24.  Brand Ambassador – 1985 NES’s Mario
    25. 25. Ad 1
    26. 26. Brand Equity Added value endowed on products and services. Important intangible asset to the firm that has psychological and financial value. Brand Equity Models : BAV Aaker BRANDZ
    27. 27. Brand Asset Valuator Differentiation (degree of difference) Relevance (breadth of its appeal) Esteem (respect for the brand) Knowledge (How familiar customers are)
    28. 28. Aaker Model Ten attributes of a brand that can be used to assess its strength. HIP OR POPULAT DIFFERENTIATION BRAND PERSONALITYSATISFACTION OR LOYALTY ORGANIZATIONAL ASSOCIATIONS PERCEIVED QUALITY BRAND AWARENESSLEADERSHIP OR POPULARITY MARKET SHARE PERCEIVED VALUE MARKET PRICE
    29. 29. BRANDZ MODEL Strong Relationship Bonding (Nothing beats it) Advantage (compared to others) Performance (Can it deliver) Relevance (Does it offer something) Presence (Do I know it) Weak Relationship
    30. 30. Ad 2
    31. 31. Competitors in the market Red bull Xxx Burn Cloud 9
    32. 32. SWOT ANALYSIS STRENGTHS WEAKNESSESOPPORTUNITIES THREATS
    33. 33. STRENGTHS  Cheap.  Non – carbonated.  Non - caffeine.  Different Flavours.  Instant Energizer & hydrator.  Ready to Drink Concentrate.  Marketing and distribution network. WEAKNESSES  Brand image.  Low marketing budget.  Consumer awareness  Low demand in tier 2- tier 3 cities  Considered as an Artificial/preservative based product.
    34. 34. OPPORTUNITIES Good Market Potential. Upcoming Sector in the Non-carbonated drink Segment. Increasing Awareness about health.THREATS Established & Strong Players. Conventional methods of Hydration still prevalent. Cheaper alternatives.
    35. 35. SEGMENTATION ,TARGET,POSITIONING
    36. 36. SEGMENTING, TARGET,POSITIONING AGE GROUP : 18 TO 28 HEALTH CONCIOUS PEOPLE WHO ARE AVERSE TO ALCHOHOL COLLEGE STUDENTS WHO NEED TO STAY AWAKE LATE AT NIGHT, HECTIC SCHEDULES WORKING CLASS PPL WHO NEED THAT EXTRA BOOST OF ENERGY ATHLETICS WHO NEED ENERGY AFTER EXHAUSTIVE FIELD ACTIVITIES PARTY ANIMALS
    37. 37. SEGMENTING TARGETING ANDPOSITIONING SHOULD BE POPULAR AMONG YOUTH IN THE URBAN AREAS. TARGET : TIER ONE AND TIER TWO CITIES CONCENTRATION IN METRO CITIES IT SHOULD BE PERCIEVED AS A HEALTHY DRINK UNLIKE ITS COMPETITORS EASY SOLUTION TO TODAYS STRESSFUL AND HECTIC LIFE
    38. 38. Porter’s Generic Business Strategy Broad Target Cost differentiation leadershi pCompetitive Scope Focused cost Focused leadership differentiation Narrow target Low cost Differentiated Competitive Advantage
    39. 39. DIFFERENTIATION PRODUCT DIFFERENTIATIONMAINLY THE HEALTHY INGREDIENTS
    40. 40. DIFFERENTIATION
    41. 41. COST DIFFERENTIATION RS 30 to Rs 40 to Rs 60 Above R 40 50 to70 80We have been very sensitive in responding to our customer survey. Thus theproduct is priced at rs 35. its just what the consumers are willing to shell. competito redbull cluud9 burn Mr star r price 80 65 75 35
    42. 42. Effects of the stratergy Major benefit : expected to sell more cans than its competitor in a span of one year. Mr STAR is half the price of its competitors thus later it may invite competative pricing from other small competitors like cloud9 and Burn in the future. There may be an entry of other organic and herbal energy drinks in the future which may eat into our profits. As in the Indian market herbal and organic energy drinks are unexplored. It cannot be called a focus stratergy as we are targeting the same market segment as our competitors.
    43. 43. Timing stratergy We are not the first movers to bring the product to the market, however we are the very first ones to differentiate the product. Redbull was launched in 2002 (first movers) Cloud9 was launched in 2008 Mr star to be launched in 2011
    44. 44. Market challenger stratergy Flank attack : attack the weekness of the competitor. Since redbull is a market leader with a 62% dominance in the market followed by cloud9 with 20 % share.
    45. 45. Flank attack We choose to attack the weakness of the competitor. We will spread awareness on the high caffine content and its ill effects by organzing marathons in colleges and having tie ups with leading gymnasiums and fitness centres whereby our sales representatives will be wearing tshirts reading “say no to caffiene”
    46. 46. Marketing challenger Stratergy
    47. 47. By pass attack Again since it’s a low cost product and has low caffaine contents MR STAR aims to overcome its competitors by positioning itself as a 100 % natural energy drink. Ready drink plus powder form available.
    48. 48. Market Distribution Brand Loyalty for Star Ltd. will be advantageous. Mr.Star will be given to club DJs, empty cans will also be left on tables in hot spots such as trendy bars, clubs and pubs. Wide target audience to grow beyond the boundaries of existing energy drinks. Coverage of a large section of the society in lower cost.
    49. 49. Market Distribution Easily accessible in most retail stores, provision stores, supermarkets. Using pick-up trucks as mobile displays A long term tie up with Star Bazaar Tie ups with gymnasiums and fitness centres. Cans of the drink will be given out free to people on the street who will be identified as being in need of energy.
    50. 50. Conclusion Mr.Star will be a caffeine free and taurine free energy drink for a wide range of audience. Students who need energy for a hectic life style, sportsperson, working class people. Different packaging and designing will gain consumer attraction. Low cost and availability in cans and also in powder form will differentiate the product from competitors.
    51. 51. Conclusion Redbull, our major competitor can currently be considered a monopoly in the Indian market. Targeting the weakness of the competitor. The drink will be healthy and nutritious along with being 100% fat free. Star Ltd. Being a developed company in the market, will be an advantage for Mr.Star.
    52. 52. Conclusion Mr.Star will be an easy and healthy way to acquire energy in the day to day hectic life. THANK YOU

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