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Energy Drinks Market In India (Red Bull Focus)

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Academic Project Summarized Below: ...

Academic Project Summarized Below:

• Concept of Energy Drinks
• Profile of Red Bull as a pioneer in energy drinks
• Energy Drink market in India
• Created and conducted an online survey and captured responses of 100 respondents and conducted Secondary research to determine the following objectives:
- To understand and identify the energy drink market in India
- To understand consumer preference and their consuming habits
- To analyze the market opportunities and drawbacks
• Analysis & Recommendations

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  • Hi Abhizar,
    I loved your report. Very well done, Sir.
    However I could not load the entire report, due to internet issues.
    Could you please email me a copy?
    I would like to reference it for a paper I am writing on Functional beverages and MArket trends in the Indian Market.
    Much obliged.
    axman69@gmail.com

    Cheers, :)
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  • will u plz mail me this report on
    svijay00725@yhoo.com
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  • Has anyone heard of the Vemma Verve Energy drinks? We just opened in India. Let me know if you are interested. Here's my site: www.minhle.vemma.com I would love to expand my team out there from the USA. Thank you.
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  • hey ..... bro its a grt report ..can u please send it 2 me at salman.jalal@indiraisbs.ac.in ...i want it for submission of my project plz its urgent
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  • hi abhizar ..i found your report really amazing ...could you plz mail it 2 me @ salman.jalal@indiraisbs.ac.in
    i want this reort for my project in college
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    Energy Drinks Market In India (Red Bull Focus) Energy Drinks Market In India (Red Bull Focus) Document Transcript

    • ENERGY DRINKS MARKET IN INDIA RESEARCH METHODOLOGYN.L.DALMIA INSTITUTE OF MANAGEMENT STUDIES AND RESEARCHRESEARCH METHODOLOGYRESEARCH REPORTONENERGY DRINK MARKET IN INDIA(MMM-2NDSEMESTER)UNDER THE GUIDANCE OFPROF. NISHANT PANWAR- 1 -Submitted ByGroup No. 2Name Roll No.Punit Bhatt 104Abhizar Bootwala 105Sameera Bootwala 106Stephen Cardoza 107Sanjay Das 115Vaibhav Dave 116Harshal Navghare 151
    • ENERGY DRINKS MARKET IN INDIA RESEARCH METHODOLOGYCERTIFICATEThis is to certify that the research project titled, “Energy Drink Market in India” issuccessfully completed by following students.This project was undertaken in the second semester of Masters in MarketingManagement as the fulfillment of the course.- 2 -Submitted ByGroup No. 2Name Roll No.Punit Bhatt 104Abhizar Bootwala 105Sameera Bootwala 106Stephen Cardoza 107Sanjay Das 115Vaibhav Dave 116Harshal Navghare 151
    • ENERGY DRINKS MARKET IN INDIA RESEARCH METHODOLOGYACKNOWLEDGEMENTWe would like to thank Prof. Nishant Panwar, whose guidance helped us in our effortsto make a successful Project. Most of all we would like to thank all the people who tooktime and effort to take part in our research by sharing their views and perspectiveswhich helped us in or analysis and presentation, without them this project would nothave been possible. Finally we would like to thank N.L.Dalmia Institute of MnanagementStudies and Research for giving us a platform to present our research study which willhelp us to go a long way in our development as future managers.- 3 -
    • ENERGY DRINKS MARKET IN INDIA RESEARCH METHODOLOGYEXECUTIVE SUMMARYEnergy drinks are soft drinks advertised as boosting energy. These drinks usually do notemphasize energy derived from the calories they contain, but rather through a choice ofcaffeine, vitamins, and herbal supplements the manufacturer has combined.Energy Drinks have now become the fastest growing sector within the beverageindustry. Energy drinks are expected to top Coke and Pepsi sales in the next 10 years.However, there has always been a health concern over the market leading brandsbecause of their high sugar and caffeine content.Red Bull is the industry leader. Red Bull has already occupied a giant market shareworldwide (60% by volume) in energy drink segment. In India, the consumer acceptancegrowth rate of Red bull is significantly less in comparison with the market share that ithas already gained globally specifically in US and European market. The positioning ofRed bull in Indian market is limited to the youth especially for BPO people within agelimit of 19-28 years.The research has been conducted on the basis of identifying the reason for limitedacceptance of this brand and exploring the possibility of increasing comsumerizationlevel in India for this brand. Hence, the problem statement of the project is: To identifyand analyze the reason of failure of Red Bull energy drink promotion in Indian Marketand possibility to increase consumer preference.The study carried out will help: To understand and identify the energy drink market in India To understand consumer preference and their consuming habits To analyze the market opportunities and drawbacksFor this purpose Basic Research was carried out. The data collection places wereselected using the concept of stratified Sampling and the respondents were byConvenience sampling. The data collection places were metropolitan cities i.e. Delhi,Kolkata, Mumbai and Chennai.The research indicated that people in India do not prefer to have energy drink. Only 23%of the population prefers to consume the brand. The most important factors affecting- 4 -
    • ENERGY DRINKS MARKET IN INDIA RESEARCH METHODOLOGYthe buying decision were found to be health safety, price, lack of awareness andpreference for other beverages. It was also found that1. 66% of the energy drinks market consists of male consumers2. 20-30 age group people was found to be growing rapidly and turning out to bepotential buyers having an average income of 3-5 lacs3. The awareness about the energy drink among the people is average (60-67%)except age group 25-30 having an average income of more than 5 lacs (Awareness>80%)4. People prefer to have energy drink occasionally (parties, social gathering etc) withsoft drink or neat unadulterated5. People like to drink mostly in home or restaurants and 44% of the respondentsfeel that in the future energy drinks can compete with popular beverages like softdrinks, juices & other non-alcoholic beverages- 5 -
    • ENERGY DRINKS MARKET IN INDIA RESEARCH METHODOLOGYTABLE OF CONTENTSS No. TOPICS PAGE No.1 Introduction 72 History of Energy Drink 8-93 Problem statement 104 Research objectives 115 Background 12-146. Research Methodology 15-377. Limitations 388. Summary of findings 39-409. Recommendation 4010. Future of energy drink 4111. References 4212. Annexure (questionnaire) 43-46- 6 -
    • ENERGY DRINKS MARKET IN INDIA RESEARCH METHODOLOGY1. INTRODUCTIONEnergy drinks are soft drinks advertised as boosting energy. These drinks usually do not emphasizeenergy derived from the calories they contain, but rather through a choice of caffeine, vitamins, andherbal supplements the manufacturer has combined.Generally, energy drinks include methylxanthines (including caffeine), vitamin B and herbs. Othercommon ingredients are guarana, acai, and taurine, plus various forms of ginseng, maltodextrin,carbonated water, inositol, carnitine, creatine, glucuronolactone and ginkgo biloba. Some contain highlevels of sugar, and many brands also offer artificially-sweetened diet versions. The central ingredientin most energy drinks is caffeine, the same stimulant found in coffee or tea, often in the form ofguarana or yerba mate.A variety of physiological and psychological effects have been attributed to energy drinks and theiringredients. Two studies reported significant improvements in mental and cognitive performances aswell as increased subjective alertness. Excess consumption of energy drinks may induce mild tomoderate euphoria primarily caused by stimulant properties of caffeine and may also induce agitation,anxiety, irritability and insomnia. During repeated cycling tests in young healthy adults an energy drinksignificantly increased upper body muscle endurance. It has been suggested that reversal of caffeinewithdrawal is a major component of the effects of caffeine on mood and performance. Restorativeproperties were shown by a combination of caffeine and the sugar glucose in an energy drink, andsome degree of synergy between the cognition-modulating effects of glucose and caffeine was alsosuggested.[7]In one experiment, a glucose-based energy drink (containing caffeine, taurine andglucuronolactone) was given to eleven tired participants being tested in a driving simulator. Lanedrifting and reaction times were measured for two hours post-treatment and showed significantimprovement.Caution is warranted even for healthy adults who choose to consume energy beverages. Consumptionof a single energy beverage will not lead to excessive caffeine intake; however, consumption of two ormore beverages in a single day can. Other stimulants such as ginseng are often added to energybeverages and may enhance the effects of caffeine, and ingredients such as guarana themselvescontain caffeine. Adverse effects associated with caffeine consumption in amounts greater than400 mg include nervousness, irritability, sleeplessness, increased urination, abnormal heart rhythms(arrhythmia), and stomach upset. Energy drinks do not provide electrolytes, and have a higherlikelihood of an energy "crash-and-burn" effect. Caffeine in energy drinks can excrete water from thebody to dilute high concentrations of sugar entering the blood stream, leading to dehydration. If thebody is dehydrated by 1%, performance is decreased by up to 10%.Considering all the pros and cons, globally energy drink market is highly governed by the consumerpreference and the economy growth of the country. The market consumption volume is alsoinfluenced by the demographic, psychographic and behavioral aspect of the particular segments andthe positioning of the brand can be done accordingly emphasizing on holistic marketing and adopting asuitable marketing mix strategy.- 7 -
    • ENERGY DRINKS MARKET IN INDIA RESEARCH METHODOLOGY2. HISTORY OF ENERGY DRINKSAlthough not marketed as such, the Scottish drink Irn-Bru may be considered the first energy drink,produced as "Iron Brew" in 1901. In Japan, the energy drink dates at least as far back as the early1960s, with the release of the Lipovitan. Most such products in Japan bear little resemblance to softdrinks, and are sold instead in small brown glass medicine bottles or cans styled to resemble suchcontainers. These "genki drinks", which are also produced in South Korea, are marketed primarily tothe salaried people.1960 - The first drink marketed as being designed to improve the performance of athletes and sportsstars arrived in the sixties. It was invented for the football team at the University of Florida,known as the Gators — hence its name, Gatorade. Designed to aid hydration and lengthenperformance levels, it claimed that its ingredients were formulated for just such things.However, Gatorade is safer than many energy drinks and is known more as a sports drink.1980 - In UK, Lucozade Energy was originally introduced in 1929 as a hospital drink for "aiding therecovery;" in the early 1980s, it was promoted as an energy drink for "replenishing lost energy."1985 - Jolt Cola was introduced in the United States. Its marketing strategy centered on the drinkscaffeine content, billing it as a means to promote wakefulness. The initial slogan was, "All thesugar and twice the caffeine."1995 - PepsiCo launched Josta, the first energy drink introduced by a major US beverage company (onethat had interests outside just energy drinks), but Pepsi discontinued the product in 1999.1997 - In Europe, energy drinks were pioneered by the S. Spitz Company and a product named PowerHorse, before the business savvy of Dietrich Mateschitz, an Austrian entrepreneur, ensured hisRed Bull product became far better known, and a worldwide best seller. Mateschitz developedRed Bull based on the Thai drink Krating Daeng, itself based on Lipovitan. Red Bull is thedominant brand in the US after its introduction in 1997, with a market share of approximately47%.2000 - In New Zealand and Australia the current leading energy drinks product in those markets V wasintroduced by Frucor Beverages Frucor.2001 - Coca-Cola marketed two Powerade brand energy drinks in bullet-shaped, screw-top aluminumbottle cans produced by Exal Corporation of Youngstown,Ohio. Powerade, the same asGatorade, is better known as a sports drink and is safer than many energy drinks.2002 - CCL Container and Mistic Brands, Inc., part of the Snapple Beverage Group, worked together onthe national launch of Mistic RĒ, which used a recyclable aluminum bottle. Since itsintroduction, many energy drinks are now packaged in the aluminum bottles or bottlecans.Since 2002 there has been a growing trend for packaging energy drink in bigger cans. Since inmany countries, including the US and Canada, there is a limitation on the maximum caffeine per- 8 -
    • ENERGY DRINKS MARKET IN INDIA RESEARCH METHODOLOGYserving in energy drinks, this allows manufacturers to include a greater amount of caffeine byincluding multiple servings per container. Popular brands such as Redbull and Monster haveincreased the amount of ounces per can. Conversely, the emergence of energy shots has gonethe opposite way with much smaller packaging.2007 - Energy drink powders and effervescent tablets were introduced, in the form of a tablet orpowder that can be added to water to create an energy drink. These can offer a more portableoption to cans and shots.2009 - The industry has moved towards the use of natural stimulants and reduced sugar.- 9 -
    • ENERGY DRINKS MARKET IN INDIA RESEARCH METHODOLOGY3. PROBLEM STATEMENTSales of energy drink in India not as competitive as international counterparts- 10 -
    • ENERGY DRINKS MARKET IN INDIA RESEARCH METHODOLOGY4. RESEARCH OBJECTIVESAfter detailed review of the research following objectives are to be determined:I. To understand and identify the energy drink market in IndiaII. To understand consumer preference and their consuming habitsIII. To analyze the market opportunities and drawbacks- 11 -
    • ENERGY DRINKS MARKET IN INDIA RESEARCH METHODOLOGY5. BACKGROUNDEnergy drinks are typically attractive to young people. Approximately 65% percent of its drinkers arebetween the ages of 13 and 35 years old, with males being approximately 65% of the market. A 2008statewide Patient Poll conducted by the Pennsylvania Medical Society’s Institute for Good Medicinefound that: 20 percent of respondents ages 21–30 had used energy drinks in high school or college tostay awake longer to study or write a paper; 70 percent of respondents knew someone who had usedan energy drink to stay awake longer to study or work. Energy drinks are also popular as drink mixers.Critics who suggested that energy drinks were just a passing fad and that the rapid growth rates inmany European and US countries would never be maintained appear to have been proved wrong. Anew report from drinks consultancy Zenith International shows that energy drink sales in WesternEurope, US and Japan showed no sign of slowing and predicts that growth will continue some time yet.The 2009 West Europe Energy Drinks’ report claims that energy drink sales grew by 22 per cent 2009to reach 289 million liters, putting total sales value in Western Europe at around €2,775 million.Currently the energy drink market share in US and European market is around 60-65% by volume ofthe total liquid beverage market. This indicates that possibility for further growth in the market is 40%.By the year 2004, the US energy drink market had grown to nearly 800 million per year in retail sales.Over the next 5 years, it grew an average of over 50% per year, totaling over $30 billion in 2009.Major companies such as Pepsi, Coca-Cola, Molson, and Labatt have tried to match smaller companiesinnovative and different approach, with marginal success.5.1. Indian MarketThe energy drink market in India is at a nascent stage and is estimated at 20-25 crores per annum.Austrias Red Bull, world leader of the energy drink market, dominates the Indian market too, andhas become a popular mixer at clubs since its 2003 launch. But is there a big market for energy drinksin India as the GDP of the country has grown up by 9%. Hence, Red Bull and other competitor and newentrants project a 100 per cent annual growth.Energy drinks consumption is projected at 20-22 million cans in India this year, according to Hasija.While Red Bull is talking about a volume of 5 lakh cans a month, effect seeks to do a moderate 25,000cans a month by 2010.Red Bull, with an "assessed market share of 95 per cent of the market" in Chauhans words, "sees nocompetition with new entrants in the Indian market, as many energy drinks have come and gone,unable to sustain themselves". Now, thats market strength, or should we say, market energy- 12 -
    • ENERGY DRINKS MARKET IN INDIA RESEARCH METHODOLOGYThere are many brands in the market Red bull Cloud 9 Power horse Rhino Current Bullet Amway XL Pepsi SoBe Gatorade Coca-Cola BurnThe market share of the brands isshown in the pie-chart.Overall the current market share ofenergy drink in Indian Market isonly 6% in comparison with soft drinks,alcoholic and other beverages. The percentage of market share is less in comparison with globalstandard though the possibility to promote the brand in the market is huge as Indian economy isbooming and GDP has shown consistent growth of 9% for last three years.5.2. Advantages and Disadvantages of Energy Drink5.2.1. Desirable EffectsA variety of physiological and psychological effects have been attributed to energy drinks and theiringredients. Two studies reported significant improvements in mental and cognitive performances aswell as increased subjective alertness. Excess consumption of energy drinks may induce mild tomoderate euphoria primarily caused by stimulant properties of caffeine and may also induce agitation,anxiety, irritability and insomnia. During repeated cycling tests in young healthy adults an energy drinksignificantly increased upper body muscle endurance. It has been suggested that reversal of caffeinewithdrawal is a major component of the effects of caffeine on mood and performance.Restorative properties were shown by a combination of caffeine and the sugar glucose in an energydrink, and some degree of synergy between the cognition-modulating effects of glucose and caffeinewas also suggested. In one experiment, a glucose-based energy drink (containing caffeine, taurine andglucuronolactone) was given to eleven tired participants being tested in a driving simulator. Lanedrifting and reaction times were measured for two hours post-treatment and showed significantimprovement.Two articles concluded that the improved information processing and other effects could not beexplained in terms of the restoration of plasma caffeine levels to normal following caffeine withdrawal.- 13 -Fig. December, 2009. Source: Bevnet
    • ENERGY DRINKS MARKET IN INDIA RESEARCH METHODOLOGY5.2.2. Adverse EffectsCaution is warranted even for healthy adults who choose to consume energy beverages. Consumptionof a single energy beverage will not lead to excessive caffeine intake; however, consumption of two ormore beverages in a single day can.[10][11]Other stimulants such as ginseng are often added to energybeverages and may enhance the effects of caffeine, and ingredients such as guarana themselvescontain caffeine. Adverse effects associated with caffeine consumption in amounts greater than400 mg include nervousness, irritability, sleeplessness, increased urination, abnormal heart rhythms(arrhythmia), and stomach upset. Energy drinks do not provide electrolytes, and have a higherlikelihood of an energy "crash-and-burn" effect. Caffeine in energy drinks can excrete water from thebody to dilute high concentrations of sugar entering the blood stream, leading to dehydration. If thebody is dehydrated by 1%, performance is decreased by up to 10%.In the US, energy drinks have been linked with reports of nausea, abnormal heart rhythms andemergency room visits. The drinks may cause seizures due to the "crash" following the energy high thatoccurs after consumption. Caffeine dosage is not required to be on the product label for food in theUnited States, unlike drugs, but some advocates are urging the FDA to change this practice.The popular energy drink Red Bull was banned in France after the death of eighteen-year-old Irishathlete Ross Cooney, who died as a result of playing a basketball game after consuming four cans ofthe drink. This ban was challenged in the European Court of Justice in 2004. The French ScientificCommittee (J.D. Birkel) concluded that Red Bull has excessive amounts of caffeine. Denmark alsobanned Red Bull for a while, although the ban has recently been revoked. Britain investigated thedrink, but only issued a warning against its use by pregnant women and children.In 2009 a school in Hove, England requested that local shops do not sell energy drinks to pupils. Headteacher Malvina Sanders added that "This was a preventative measure, as all research shows thatconsuming high-energy drinks can have a detrimental impact on the ability of young people toconcentrate in class." The school has negotiated for their local branch of Tesco to display postersasking pupils not to ask for the products.6. RESEARCH METHODOLOGYThe general purpose of this study is comparative analysis of various brands of energy drink fromconsumer’s point of view. After detailed review of the research following objectives are to bedetermined: To understand and identify the energy drink market in india To understand consumer preference and their consuming habits To analyze the market opportunities and drawbacks- 14 -
    • ENERGY DRINKS MARKET IN INDIA RESEARCH METHODOLOGY6.1. Research DesignThe method used is basic research method (exploratory). Data collection Method: The respondents will be asked to fill up an online questionnaire. Data collection place: We have chosen an online survey as the media. Kwicksurvey.com wasselected to upload the questionnaires and a link was generated and the same was emailed tothe respondents spread throughout major metropolitan cities in India for e.g. Mumbai,Kolkata, Delhi and Chennai. The target respondents were segmented based on variousgender, age group, income range etc.Survey Link: http://www.kwiksurveys.com/online survey.php?surveyID=KKHNKN_5d3318156.2. Sample Design Sampling Method: The sampling method used is Stratified sampling (Probability Sampling Method).As each group has small variation within itself but there is a significant variation between differentstrata’s (groups). Sample Size: As 20-24 crore (Source: B&L site, Business Hindu Line) people drink energy drink inIndia. To determine the sample size we have conducted Pilot Study of 18 respondents. We foundthat out of 18 respondents, 3 respondents prefer to have energy drink and 15 people do not preferto have energy drink.So, p (Estimated proportion of success) = 0.17q (Estimated proportion of failure) = 0.83The formula for estimating sample size in case of proportions isn = (Z / E)2pqZ (95% Confidence level in standard error units) = 1.96E (Maximum allowance for error betweentrue proportion and sample proportion) = 0.07n = (1.96/0.07)2x 0.17 x 0.83= 106.30 =108.89 = 109 (approx)So, the sample size calculated by above formula is 109.After allowing 10% for non-response error, the final sample size is 120. Survey Area: We intent to take survey (questionnaire) from metropolitan city of India. It wasbasically an online Survey where self-administered questionnaire posted on a web site- 15 -
    • ENERGY DRINKS MARKET IN INDIA RESEARCH METHODOLOGY(www.kwicksurvey.com). The link was send to several respondents. Hence, we divided our sampleof 120 in proportion to the population of these areas.Mumbai (37%): 45Kolkata (14%): 17Chennai (15%): 18Delhi (34%): 41Total 120Source: http://en.wikipedia.org/wiki/List_of_most_populous_cities_in_India6.3. Data Processing and analysisData will be processed using standard editing and coding procedures (simple and cross tabulations).Data will be analyzed using: Statistical tools:It is a case of Multivariate Analysis, because the research objectives are multidimensional andmore than three variables (i.e. price, safety, content, brand etc.) are analyzed at one time.The analysis will be done using Non Parametric analysis (Friedman test) which allowssimultaneous investigation of the effect of two or more factors. In this test, values of thevariables are ranked for each case. The Friedman test determines if the average rankings differacross variables.The analysis will also be done by Hypothesis Testing, to test the market acceptance level ofenergy drink in India in comparison with global market standard. Globally the energy drinkmarket is around 60% (It’s an average market share of energy drink in US and European market).Hence, we consider that in a country like India where GDP has grown by 9%, the possibility topromote the energy drink market is possible if at least 40% people prefer to have energy drink inthe metropolitan city.H0 = 40% People prefer to have energy drink in metropolitan cityH1 < 40% People do not prefer to have energy drink in metropolitan cityIt’s a single tail (1-t) test Graphical representations:Bar charts and Pie charts.- 16 -
    • ENERGY DRINKS MARKET IN INDIA RESEARCH METHODOLOGYDATA ANALYSIS AND INTERPRETATION6.3.1. Overall buying and awareness behaviorRespondents Frequency Percent Valid Percent Cumulative PercentAware 50 41.67% 41.67% 41.67%Unaware 70 58.33% 58.33% 100%Total 120 100.00Respondents Frequency Percent Valid Percent Cumulative PercentBuyer 29 23.33% 23.3% 23.33%Non Buyer 91 76.67% 76.67% 100%Total 120 100.00Hence, it can be observed that awareness level is less; around 42% of the total population and23% of the respondents consume energy drink.6.3.2. Demographic Segmentation analysisGender Buyer Analysis- 17 -Gender Frequency Percent Valid Percent Cumulative PercentFemale 10 34.17% 34.17% 34.17%Male 19 65.83% 65.83% 100%Total 29 100%
    • ENERGY DRINKS MARKET IN INDIA RESEARCH METHODOLOGYIt was found from the survey that energy drink segment in Indian market is driven by approx 66%of male consumer.Gender Awareness- 18 -Female Frequency Percent Valid Percent Cumulative PercentAware 26 65% 65% 65%Unaware 14 35% 35% 100%Total 40 100%Male Frequency Percent Valid Percent Cumulative PercentAware 54 67.50% 67.50% 67.50%Unaware 26 32.50% 32.50% 100%Total 80 100%
    • ENERGY DRINKS MARKET IN INDIA RESEARCH METHODOLOGYIt was observed from the study that awareness about the energy drink among the male and femaleis almost same.Age Group- 19 -
    • ENERGY DRINKS MARKET IN INDIA RESEARCH METHODOLOGYIt could be identified that age group 20-25 and 25-30 respondents are most potential buyer andcan be considered as target market for positioning any new brand or vice versa.Income range- 20 -Age Group Awareness Frequency Percent Valid Percent Cumulative Percent15-20 1 2.99% 2.99% 2.99%20-25 24 47.76% 47.76% 50.75%25-30 21 41.79% 41.79% 92.54%30 and above 4 7.46% 7.46% 100%Total 50 100% 100%Age Group Buyers Frequency Percent Valid Percent Cumulative Percent15-20 1 2.86% 2.86% 2.86%21-25 13 45.71% 45.71% 48.57%26-30 12 40.00% 40.00% 88.57%30 and above 3 11.43% 11.43% 100%Total 29 100%
    • ENERGY DRINKS MARKET IN INDIA RESEARCH METHODOLOGYIt can be observed that 3-5 lacs income range people are the main consumer for energy drink andincome range more than 5 lacs is the potential customer that can be targeted for positioning thebrand.Geographical Positioning- 21 -Income Range Awareness Frequency Percent Valid Percent Cumulative PercentLess than 3 lacs 14 28.57% 22.86% 22.86%3-5 lacs 17 33.77% 40.00% 62.86%More than 5 lacs 19 37.66% 37.14% 100%Total 50 100%Income Range Buyer Frequency Percent Valid Percent Cumulative PercentLess than 3 lacs 6 22.86% 22.86% 22.86%3-5 lacs 12 40.00% 40.00% 62.86%More than 5 lacs 11 37.14% 37.14% 100%Total 29 100%
    • ENERGY DRINKS MARKET IN INDIA RESEARCH METHODOLOGYLocation Awareness Frequency Percent Valid Percent Cumulative PercentMumbai 17 34% 41.38% 41.38%Kolkata 10 20% 10.34% 51.72%Chennai 8 16% 17.24% 68.97%Delhi 15 30% 31.03% 100%Total 50 100%Mumbai and Delhi are the maximum consuming cities for energy drink. The awareness level isalso found to be high.- 22 -Location Buyers Frequency Percent Valid Percent Cumulative PercentMumbai 12 41.38% 41.38% 41.38%Kolkata 3 10.34% 10.34% 51.72%Chennai 5 17.24% 17.24% 68.97%Delhi 9 31.03% 31.03% 100%Total 29 100%
    • ENERGY DRINKS MARKET IN INDIA RESEARCH METHODOLOGY6.4.3. Behavioral SegmentationBrand PreferenceBrands Frequency Percent Valid Percent Cumulative PercentRed bull 14 50% 50% 50%Cloud 9 4 16% 16% 66%Power horse 1 2% 2% 68%Rhino 2 8% 8% 76%Current Bullet 1 2% 2% 78%Amway XL 3 10% 10% 88%Pepsi SoBe 1 2% 2% 90%Gatorade 1 2% 2% 92%Coca-Cola Burn 2 8% 8% 100%Total 29 100% 100%It is clearly visible that the preference for red bull energy drink is predominant over other brands.Frequency of usage- 23 -
    • ENERGY DRINKS MARKET IN INDIA RESEARCH METHODOLOGYRespondents Frequency Percent Valid Percent Cumulative PercentEveryday 1 3% 3% 3%A couple of times a week 2 7% 7% 10%Once a week 3 10% 10% 20%A couple of times a month 6 21% 21% 41%On occasions like parties,social gathering etc.17 59% 59% 100Total 29 100%It can be concluded that respondents buying behavior is not regular. It’s only occasional as most ofthe respondents prefer it during parties, social gathering etc.Buying location- 24 -
    • ENERGY DRINKS MARKET IN INDIA RESEARCH METHODOLOGYRespondents Frequency Percent Valid Percent Cumulative PercentNearby retail outlets 7 25% 25% 25%Supermarkets 12 40% 40% 65%Restaurants 6 23% 23% 88%Clubs 1 2% 2% 90%Wine shop 1 4% 4% 94%Others 2 6% 6% 100%Total 29 100%People prefer to purchase the energy drink from supermarket or restaurants or nearby retailoutlets.Consumer preferenceConsumer preference for energy drink while purchasing in terms of price, brand, flavor and contentwere studied. This information can show the expectation pattern of consumer in general. Thisneeds to be identified correctly for promoting and positioning the brand in the market.- 25 -
    • ENERGY DRINKS MARKET IN INDIA RESEARCH METHODOLOGYAnalysis of Factor:Friedman TestRanksMean RankPrice 3.74Brand 2.06Flavour 1.96Content 1.91In Friedman test, the values of the variables are ranked for each case. The table lists the averagerank for each variable. Low rank corresponds to low value of the variables. The Friedman testdetermines if the average ranking differ across variables.From the study, it is can be concluded that content is the most important factor while buying anenergy drink and people do not consider price as the most critical factor.1 2 3 4 5 TotalPrice 4.00 7.00 24.00 41.00 24.00 100.00Brand 33.33 30.30 33.33 3.03 0.00 100.00Flavor 47.00 23.00 20.00 7.00 3.00 100.00Contents 57.58 13.13 13.13 13.13 3.03 100.00The pattern is also exhibited in the graphical form.0.0010.0020.0030.0040.0050.0060.0070.001 2 3 4 5S tarsP riceBrandF lavorC ontents- 26 -Parameter Rank according to importanceContents 1Flavour 2Brand 3Price 4
    • ENERGY DRINKS MARKET IN INDIA RESEARCH METHODOLOGYThe behavioral pattern was studied considering a rating of 1-5 in with 1 being most preferable and 5being the least preferable on the scale. Here the consumer preference was plotted to find theirpreference in terms of price, brand image, flavor and contents. It was observed that the peoplepreferred the contents of the energy drink over its price and other factors while considering a purchaseConsumer outlook towards Red BullFrom the graph it can be stated that only 32% of the population don’t like red bull. Otherwise,people like red bull because of its taste and it’s making an image statement for the individual.People feel red bull is not price competitive as well as the packaging standard need to beimproved.Non responsiveness towards Energy Drink- 27 -Responses Frequency Percent Valid Percent Cumulative PercentI like the taste of their products 12 32% 32% 32%They are priced competitively 3 6% 6% 38%I like the packaging 3 6% 6% 44%It makes an image statement 9 24% 24% 68%I do not buy Red Bull 12 32% 32% 100%Total 39 100%
    • ENERGY DRINKS MARKET IN INDIA RESEARCH METHODOLOGY Health riskHealth Risk Frequency Percent Valid Percent Cumulative PercentYes 29 24% 24% 24%No 3 3% 3% 27%Cant say 88 73% 73% 100%Total 120 100% Reason for disliking Energy DrinksHealth Risk Frequency Percent Valid Percent Cumulative PercentI don’t like it 23 19% 19% 19%I find it too expensive 31 26% 26% 45%I prefer other beverages 66 55% 55% 100%Total 120 100%24% of the respondents believe that energy drink is associated with health risk while 73% of thepopulations are not sure about the effect.People prefer to have other beverage as well as they find it too expensive to afford.6.4.4. Psychographic SegmentationPlacesPlaces Frequency Percent Valid percent Cumulative percentHome 5 16% 16% 16%Office 3 12% 12% 28%College campus 3 10% 10% 38%Pub 3 12% 12% 50%- 28 -
    • ENERGY DRINKS MARKET IN INDIA RESEARCH METHODOLOGYNightclub 3 10% 10% 60%Gym 2 6% 6% 66%Joggers Park 1 3% 3% 69%Sports Club 2 7% 7% 76%Restaurant 4 15% 15% 91%Café 3 9% 9% 100%Total 29 100%People prefer to have energy drink in home as well as in restaurant. This indicates that there is apossibility to promote the brand within the friend circle as well as family members. This can be thetarget group for positioning.Value for MoneyValue for money Frequency Percent Valid Percent Cumulative PercentYes 6 21% 21% 21%No 12 40% 40% 61%Cant say 11 39% 39% 100%Total 29 100%- 29 -
    • ENERGY DRINKS MARKET IN INDIA RESEARCH METHODOLOGYThe Indian market is very price sensitive. The high price of the energy drink is one of thedrawbacks for promoting as well as positioning this brand.Familiarity with Red Bull energy drinkResponses Frequency Percent Valid Percent Cumulative PercentI currently buy their energy drinks 37 31% 32% 32%I have seen it advertised 38 32% 6% 38%I have seen friends using it 23 19% 6% 44%I have seen others using it 16 13% 24% 68%Never heard of it 6 5% 32% 100%Total 120 100- 30 -
    • ENERGY DRINKS MARKET IN INDIA RESEARCH METHODOLOGYThough Red Bull is market leader but it’s awareness among the people is still less. 32% of thepopulation never heard about it.6.4.6. Scope for Energy drink PromotionSubstitution role by Energy drink, can they replace other popular beverages?Substitution Frequency Percent Valid Percent Cumulative PercentYes 53 44% 44% 44%No 38 32% 32% 76%Cant say 28 24% 24% 100%Total 120 100- 31 -
    • ENERGY DRINKS MARKET IN INDIA RESEARCH METHODOLOGYThe possibility of energy drinks to compete with popular beverages like soft drinks, juices & othernon-alcoholic beverages were investigated. The responses are positive.Promotion approaches for energy drinkSubstitution Frequency Percent Valid Percent Cumulative PercentYes 21 17% 17% 17%No 34 28% 28% 45%I don’t care, I wouldbuy anyway 66 55% 55% 100%120 100%- 32 -
    • ENERGY DRINKS MARKET IN INDIA RESEARCH METHODOLOGYIf an energy drink was endorsed by a celebrity or sports star whether that could affect the buyingbehavior. Hence, consumer behavior is dominated by individual taste and preference (price, brandetc) that can’t be influenced by celebrity endorsement.Brand ImageSubstitution Frequency Percent Valid Percent Cumulative PercentEstablished brands 55 46% 46% 46%Willing to try new brands 17 14% 14% 60%No such preference 48 40% 40% 100%Total 120 100%- 33 -
    • ENERGY DRINKS MARKET IN INDIA RESEARCH METHODOLOGYConsumer preference is more towards established brands to influence their consuming behavior.- 34 -
    • ENERGY DRINKS MARKET IN INDIA RESEARCH METHODOLOGY6.5. Hypothesis testingIn hypothesis testing we are evaluating the feasibility of comparing the research results with themarket share of energy drink in India. From the research results it is found that around 23% peopleprefer to have energy drink in metropolitan cities. So hypothesis statement will be:H0 = 40% People prefer to have energy drink in metropolitan cities.µHo = 0.4H1 < 40% People prefer to have energy drink in metropolitan cities.µH1 < 0.4PHO = Hypothesized value of preference (market share of energy drink) = 0.4qHO = Hypothesized value of non preference (market share of other drink) = 0.6n = Sample size = 120.P = Sample proportion preferring energy drink = 0.23Level of Significance for testing the Hypothesis (0.05)σP = ( PHO X qHO ) / n = Standard error of Proportions.= (0.40 X 0.60) / 120 = 0.045.Z = ( P - PHO ) / σP = (0.23 – 0.40) / 0.045= -3.778- 35 -
    • ENERGY DRINKS MARKET IN INDIA RESEARCH METHODOLOGYHence we accept the null hypothesis is not right and conclude that people in India (<40%) do not preferto have energy drink.The fact also revealed the same aspect that in India only 6% people prefer to have energy drink. Hence,a proper marketing mix and strategy is required to promote the energy drink market in India.- 36 -Acceptance RegionZ-1.64-3.778Standard Sample Proportion
    • ENERGY DRINKS MARKET IN INDIA RESEARCH METHODOLOGY7. LIMITATIONSThe following limitations were found: The databases of existing customers were not available. Hence, samples wereapproached in the internet at random Maximum respondents were filled the questionnaire when they are at theirworkplace. Hence, their responses were not that much involving as they werebusy Time constraints did not allow the research to be carried out on an extensivescale- 37 -
    • ENERGY DRINKS MARKET IN INDIA RESEARCH METHODOLOGY8. Summary of findings8.1. Energy drink Market in India It was found that only 23% of the respondents consume energy drink and awareness level isalso less around 42% of the total population Survey result revealed that energy drink segment in Indian market is driven by approx 66%of male consumer though the awareness level is almost same in both the cases It could be identified that age group 20-25 and 25-30 respondents having income range 3-5lacs or above are most potential buyer and can be considered as target market forpositioning any new brand or vice versa Considering awareness and consumption, among metropolitan cities Mumbai and Delhi wasfound to be the faster growing target zones8.2. Consumer behavior and Preference towards energy drink It was found that people buying behavior is not regular. It’s only occasional. People prefer itduring parties, social gathering. Apart from that people also prefer it while driving as well asbefore exam to reduce fatigue and increase the working efficiency. People prefer to purchase the energy drink from supermarket or restaurants or nearbyretail outlets. People prefer to have energy drink in home as well as in restaurant. This indicates thatthere is a possibility to promote the brand within the friend circle as well as family member.This can be the target group for positioning. It was observed that people are price as well as brand sensitive. They want average priceenergy drink from a reputed brand. The flavor should be good as well as the content shouldbe healthy. 29% of the respondents believe that energy drink is associated with health risk while 73% ofthe population is not sure about the effect. People prefer to have other beverage as well as they find it too expensive to afford. The Indian market is very much price sensitive. The high price of the energy drink is one ofthe drawbacks for promoting as well as positioning this brand.- 38 -
    • ENERGY DRINKS MARKET IN INDIA RESEARCH METHODOLOGY8.3. Red Bull market in India It was clearly observed that the preference for red bull energy drink is predominant overother brands. Though Red Bull is market leader but its awareness among the people is still less. 32% of thepopulation never heard about it. From the graph it can be stated that only 30% of the population don’t like red bull.Otherwise, people like red bull because of its test and it’s making an image statement forthe individual. People feel red bull is not price competitive as well as the packaging standardneed to be improved.8.4. Scope of Energy Drink Market in India The possibility of energy drinks to compete with popular beverages like soft drinks, juices &other non-alcoholic beverages were investigated. The responses are positive. Consumer behavior is dominated by individual taste and preference that can’t be influencedby celebrity endorsement Consumer preference is more towards established brand to influence their consumingbehavior.9. RECOMMENDATION• Awareness among the people need to be increased to promote energy drink by introducingproper marketing mix strategy• An integrated marketing is carried out would minimise the illusion among the potential buyersabout the adverse effect of energy drink on health• Aggressive marketing strategy if adopted could benefit the placing of brand image in consumermind particularly the target group age 20-39 years with an income of 3 lacs plus• Price can be reduced further to stimulate more buying tendency9. Future of Energy drink- 39 -
    • ENERGY DRINKS MARKET IN INDIA RESEARCH METHODOLOGYIndian non-alcoholic drinks market has seen robust growth over the past few years. Non-alcoholicdrinks market is broadly classified into carbonated drinks, non-carbonated drinks and hot beverages.These include juices, energy drinks, carbonated drinks, tea, coffee and bottled water. The marketreported a growth of nearly 21% in 2008 on the back of growing economy, increasing income level,changing lifestyle and increasing concerns over health and wellness. Moreover, liberalization in tradepolicies has attracted large investments into the country and transformed into rapid market growth.According to RNCOS’s new research report “Indian Non-Alcoholic Drinks Forecast to 2012”, the Indiannon-alcoholic drinks market is forecasted to grow at a CAGR of 15% during 2009-2012. The segmentlevel analysis shows that the highest growth will be seen by the Fruit/Vegetable juice segment which isexpected to grow at a CAGR of around 30% in value terms during 2009-2012. It will be closely followedby the Energy drinks segment, with future CAGR pegged at around 29% for the same period.Source: http://www.rncos.com/Press_Releases/Non-Alcoholic-Drinks-Market-Set-to-Boom-in-India.htm10. REFERENCES- 40 -
    • ENERGY DRINKS MARKET IN INDIA RESEARCH METHODOLOGY www.kwicksurvey.com www.researchwikis.com www.Indiainfoline.com www.redbull.com www.allinenergy.com www.middayclassfields.com www.energy-drink-ratings.blogspot.com www.just-drinks.com http://www.rncos.com/Report/IM205.htm Business Research Method By William G Zikmund Survey Link: http://www.kwiksurveys.com/online-survey.php?surveyID=KKHNKN_5d33181511. Survey on energy drinks March 2010This survey is intended to study the energy drinks market in India with Red Bull in perspective. Thereare a total of 21 questions about energy drinks and Red bull. Finishing this survey will not take youmore than 5 minutes. We appreciate and value your time and effort for expressing your opinions.- 41 -
    • ENERGY DRINKS MARKET IN INDIA RESEARCH METHODOLOGYQ1. Can you tell us something about yourself?Name:Company:City/Town:*Q2. Are you aware of energy drinks? Yes NoQ3. Do you currently drink energy drinks? (If you choose NO you can directly go to Q17) Yes No*Q4. Are you...? Male Female*Q5. What is your age group? Below 16 16-20 years 21-25 years 26-30 years Above 30*Q6. What is your household income per annum? Less than 3 lacs 3-5 lacs More than 5 lacsQ7. If yes what brands of energy drinks are you aware of? (Select all that apply) Red bull Cloud 9 Power horse Rhino Current Bullet- 42 -
    • ENERGY DRINKS MARKET IN INDIA RESEARCH METHODOLOGY Amway XL Pepsi SoBe Gatorade Coca-Cola Burn XXX Others (Please specify) ____________Q8. If yes how often do you drink energy drinks? Everyday A couple of times a week Once a week A couple of times a month On occasions like parties, social gathering etc. Others (Please specify)____________Q9. From which of the following places do you buy energy drinks? (Select all that apply) Nearby retail outlets Supermarkets Restaurants Clubs Wine shop Others (Please specify)____________Q10. Do you drink alcohol, if yes than with what do you consume it? (Select all that apply) Soft Drinks Fruit Juice Energy Drinks No, I do not drink alcohol Others (Please specify)____________Q11. Which of the following places do you, or would you like to drink energy drinks? (Select all thatapply) Home Office College campus Pub Nightclub- 43 -
    • ENERGY DRINKS MARKET IN INDIA RESEARCH METHODOLOGY Gym Joggers Park Sports Club Restaurant Café Others (Please specify)____________Q12. Rank according to preference. What would you consider is most important while purchasing anenergy drink? (5 stars being most important) Price ***** Brand ***** Flavor ***** Contents ***** Others (Please specify)____________Q13. Do you think that energy drinks are value for money? Yes No Can’t sayQ14. How are you familiar with Red Bull? (Select all that apply) I currently buy their energy drinks I have seen it advertised I have seen friends using it I have seen others using it Never heard of it Others (Please specify)____________Q15.What makes you buy Red Bull over other brands? (Select all that apply) I like the taste of their products They are priced competitively I like the packaging It makes an image statement I do not buy Red Bull Others (Please specify)____________Q16. Do you feel there is any health risk associated with Red Bull? Yes No Can’t say- 44 -
    • ENERGY DRINKS MARKET IN INDIA RESEARCH METHODOLOGYQ17. Why don’t you drink energy drinks? (Select all that apply) (This question is for respondents whomarked Q7 as “No”, others please ignore.) I don’t like it I find it too expensive I prefer other beverages Others (Please specify)____________Q18. Do you think that in the future energy drinks can compete with popular beverages like soft drinks,juices & other non-alcoholic beverages? Yes No Can’t sayQ19. If you were made aware of energy drinks would buy them? (This question is for respondents whomarked Q5 as No, others please ignore.) Yes No Can try onceQ20. If given a choice would you prefer to buy an energy drink from..? Established brands Willing to try new brands No such preference Others (Please specify)____________Q21. Would you buy an energy drink if it was endorsed by a celebrity or sports star? Yes No I don’t care, I would buy anyway- 45 -