Energy Drinks Market In India (Red Bull Focus)

ENERGY DRINKS MARKET IN INDIA RESEARCH METHODOLOGY
N.L.DALMIA INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH
RESEARCH METHODOLOGY
RESEARCH REPORT
ON
ENERGY DRINK MARKET IN INDIA
(MMM-2ND
SEMESTER)
UNDER THE GUIDANCE OF
PROF. NISHANT PANWAR
- 1 -
Submitted By
Group No. 2
Name Roll No.
Punit Bhatt 104
Abhizar Bootwala 105
Sameera Bootwala 106
Stephen Cardoza 107
Sanjay Das 115
Vaibhav Dave 116
Harshal Navghare 151

CERTIFICATE
This is to certify that the research project titled, “Energy Drink Market in India” is
successfully completed by following students.
This project was undertaken in the second semester of Masters in Marketing
Management as the fulfillment of the course.
- 2 -
Submitted By
Group No. 2
Name Roll No.
Punit Bhatt 104
Abhizar Bootwala 105
Sameera Bootwala 106
Stephen Cardoza 107
Sanjay Das 115
Vaibhav Dave 116
Harshal Navghare 151

ACKNOWLEDGEMENT
We would like to thank Prof. Nishant Panwar, whose guidance helped us in our efforts
to make a successful Project. Most of all we would like to thank all the people who took
time and effort to take part in our research by sharing their views and perspectives
which helped us in or analysis and presentation, without them this project would not
have been possible. Finally we would like to thank N.L.Dalmia Institute of Mnanagement
Studies and Research for giving us a platform to present our research study which will
help us to go a long way in our development as future managers.
- 3 -

EXECUTIVE SUMMARY
Energy drinks are soft drinks advertised as boosting energy. These drinks usually do not
emphasize energy derived from the calories they contain, but rather through a choice of
caffeine, vitamins, and herbal supplements the manufacturer has combined.
Energy Drinks have now become the fastest growing sector within the beverage
industry. 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 brands
because of their high sugar and caffeine content.
Red Bull is the industry leader. Red Bull has already occupied a giant market share
worldwide (60% by volume) in energy drink segment. In India, the consumer acceptance
growth rate of Red bull is significantly less in comparison with the market share that it
has already gained globally specifically in US and European market. The positioning of
Red bull in Indian market is limited to the youth especially for BPO people within age
limit of 19-28 years.
The research has been conducted on the basis of identifying the reason for limited
acceptance of this brand and exploring the possibility of increasing comsumerization
level in India for this brand. Hence, the problem statement of the project is: To identify
and analyze the reason of failure of Red Bull energy drink promotion in Indian Market
and 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 drawbacks
For this purpose Basic Research was carried out. The data collection places were
selected using the concept of stratified Sampling and the respondents were by
Convenience 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 -

the buying decision were found to be health safety, price, lack of awareness and
preference for other beverages. It was also found that
1. 66% of the energy drinks market consists of male consumers
2. 20-30 age group people was found to be growing rapidly and turning out to be
potential buyers having an average income of 3-5 lacs
3. 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) with
soft drink or neat unadulterated
5. People like to drink mostly in home or restaurants and 44% of the respondents
feel that in the future energy drinks can compete with popular beverages like soft
drinks, juices & other non-alcoholic beverages
- 5 -

TABLE OF CONTENTS
S No. TOPICS PAGE No.
1 Introduction 7
2 History of Energy Drink 8-9
3 Problem statement 10
4 Research objectives 11
5 Background 12-14
6. Research Methodology 15-37
7. Limitations 38
8. Summary of findings 39-40
9. Recommendation 40
10. Future of energy drink 41
11. References 42
12. Annexure (questionnaire) 43-46
- 6 -

1. INTRODUCTION
Energy drinks are soft drinks advertised as boosting energy. These drinks usually do not emphasize
energy derived from the calories they contain, but rather through a choice of caffeine, vitamins, and
herbal supplements the manufacturer has combined.
Generally, energy drinks include methylxanthines (including caffeine), vitamin B and herbs. Other
common ingredients are guarana, acai, and taurine, plus various forms of ginseng, maltodextrin,
carbonated water, inositol, carnitine, creatine, glucuronolactone and ginkgo biloba. Some contain high
levels of sugar, and many brands also offer artificially-sweetened 'diet' versions. The central ingredient
in most energy drinks is caffeine, the same stimulant found in coffee or tea, often in the form of
guarana or yerba mate.
A variety of physiological and psychological effects have been attributed to energy drinks and their
ingredients. Two studies reported significant improvements in mental and cognitive performances as
well as increased subjective alertness. Excess consumption of energy drinks may induce mild to
moderate 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 drink
significantly increased upper body muscle endurance. It has been suggested that reversal of caffeine
withdrawal 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 energy drink, and
some degree of synergy between the cognition-modulating effects of glucose and caffeine was also
suggested.[7]
In one experiment, a glucose-based energy drink (containing caffeine, taurine and
glucuronolactone) was given to eleven tired participants being tested in a driving simulator. Lane
drifting and reaction times were measured for two hours post-treatment and showed significant
improvement.
Caution is warranted even for healthy adults who choose to consume energy beverages. Consumption
of a single energy beverage will not lead to excessive caffeine intake; however, consumption of two or
more beverages in a single day can. Other stimulants such as ginseng are often added to energy
beverages and may enhance the effects of caffeine, and ingredients such as guarana themselves
contain caffeine. Adverse effects associated with caffeine consumption in amounts greater than
400 mg include nervousness, irritability, sleeplessness, increased urination, abnormal heart rhythms
(arrhythmia), and stomach upset. Energy drinks do not provide electrolytes, and have a higher
likelihood of an energy "crash-and-burn" effect. Caffeine in energy drinks can excrete water from the
body to dilute high concentrations of sugar entering the blood stream, leading to dehydration. If the
body 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 consumer
preference and the economy growth of the country. The market consumption volume is also
influenced by the demographic, psychographic and behavioral aspect of the particular segments and
the positioning of the brand can be done accordingly emphasizing on holistic marketing and adopting a
suitable marketing mix strategy.
- 7 -

2. HISTORY OF ENERGY DRINKS
Although 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 early
1960s, with the release of the Lipovitan. Most such products in Japan bear little resemblance to soft
drinks, and are sold instead in small brown glass medicine bottles or cans styled to resemble such
containers. These "genki drinks", which are also produced in South Korea, are marketed primarily to
the salaried people.
1960 - The first drink marketed as being designed to improve the performance of athletes and sports
stars 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 lengthen
performance 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 the
recovery;" 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 drink's
caffeine content, billing it as a means to promote wakefulness. The initial slogan was, "All the
sugar and twice the caffeine."
1995 - PepsiCo launched Josta, the first energy drink introduced by a major US beverage company (one
that 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 Power
Horse, before the business savvy of Dietrich Mateschitz, an Austrian entrepreneur, ensured his
Red Bull product became far better known, and a worldwide best seller. Mateschitz developed
Red Bull based on the Thai drink Krating Daeng, itself based on Lipovitan. Red Bull is the
dominant brand in the US after its introduction in 1997, with a market share of approximately
47%.
2000 - In New Zealand and Australia the current leading energy drinks product in those markets V was
introduced by Frucor Beverages Frucor.
2001 - Coca-Cola marketed two Powerade brand energy drinks in bullet-shaped, screw-top aluminum
bottle cans produced by Exal Corporation of Youngstown,Ohio. Powerade, the same as
Gatorade, 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 on
the national launch of Mistic RĒ, which used a recyclable aluminum bottle. Since its
introduction, 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 in
many countries, including the US and Canada, there is a limitation on the maximum caffeine per
- 8 -

serving in energy drinks, this allows manufacturers to include a greater amount of caffeine by
including multiple servings per container. Popular brands such as Redbull and Monster have
increased the amount of ounces per can. Conversely, the emergence of energy shots has gone
the opposite way with much smaller packaging.
2007 - Energy drink powders and effervescent tablets were introduced, in the form of a tablet or
powder that can be added to water to create an energy drink. These can offer a more portable
option to cans and shots.
2009 - The industry has moved towards the use of natural stimulants and reduced sugar.
- 9 -

3. PROBLEM STATEMENT
Sales of energy drink in India not as competitive as international counterparts
- 10 -

4. RESEARCH OBJECTIVES
After detailed review of the research following objectives are to be determined:
I. To understand and identify the energy drink market in India
II. To understand consumer preference and their consuming habits
III. To analyze the market opportunities and drawbacks
- 11 -

5. BACKGROUND
Energy drinks are typically attractive to young people. Approximately 65% percent of its drinkers are
between the ages of 13 and 35 years old, with males being approximately 65% of the market. A 2008
statewide Patient Poll conducted by the Pennsylvania Medical Society’s Institute for Good Medicine
found that: 20 percent of respondents ages 21–30 had used energy drinks in high school or college to
stay awake longer to study or write a paper; 70 percent of respondents knew someone who had used
an 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 in
many European and US countries would never be maintained appear to have been proved wrong. A
new report from drinks consultancy Zenith International shows that energy drink sales in Western
Europe, 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 2009
to 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 of
the 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 companies'
innovative and different approach, with marginal success.
5.1. Indian Market
The energy drink market in India is at a nascent stage and is estimated at 20-25 crores per annum.
Austria's Red Bull, world leader of the energy drink market, dominates the Indian market too, and
has become a popular mixer at clubs since its 2003 launch. But is there a big market for energy drinks
in India as the GDP of the country has grown up by 9%. Hence, Red Bull and other competitor and new
entrants 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 25,000
cans a month by 2010.
Red Bull, with an "assessed market share of 95 per cent of the market" in Chauhan's words, "sees no
competition with new entrants in the Indian market, as many energy drinks have come and gone,
unable to sustain themselves". Now, that's market strength, or should we say, market energy
- 12 -

There are many brands in the market
 Red bull
 Cloud 9
 Power horse
 Rhino
 Current Bullet
 Amway XL
 Pepsi SoBe
 Gatorade
 Coca-Cola Burn
The market share of the brands is
shown in the pie-chart.
Overall the current market share of
energy drink in Indian Market is
only 6% in comparison with soft drinks,
alcoholic and other beverages. The percentage of market share is less in comparison with global
standard though the possibility to promote the brand in the market is huge as Indian economy is
booming and GDP has shown consistent growth of 9% for last three years.
5.2. Advantages and Disadvantages of Energy Drink
5.2.1. Desirable Effects
A variety of physiological and psychological effects have been attributed to energy drinks and their
ingredients. Two studies reported significant improvements in mental and cognitive performances as
well as increased subjective alertness. Excess consumption of energy drinks may induce mild to
moderate 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 drink
significantly increased upper body muscle endurance. It has been suggested that reversal of caffeine
withdrawal 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 energy
drink, and some degree of synergy between the cognition-modulating effects of glucose and caffeine
was also suggested. In one experiment, a glucose-based energy drink (containing caffeine, taurine and
glucuronolactone) was given to eleven tired participants being tested in a driving simulator. Lane
drifting and reaction times were measured for two hours post-treatment and showed significant
improvement.
Two articles concluded that the improved information processing and other effects could not be
explained in terms of the restoration of plasma caffeine levels to normal following caffeine withdrawal.
- 13 -
Fig. December, 2009. Source: Bevnet

5.2.2. Adverse Effects
Caution is warranted even for healthy adults who choose to consume energy beverages. Consumption
of a single energy beverage will not lead to excessive caffeine intake; however, consumption of two or
more beverages in a single day can.[10][11]
Other stimulants such as ginseng are often added to energy
beverages and may enhance the effects of caffeine, and ingredients such as guarana themselves
contain caffeine. Adverse effects associated with caffeine consumption in amounts greater than
400 mg include nervousness, irritability, sleeplessness, increased urination, abnormal heart rhythms
(arrhythmia), and stomach upset. Energy drinks do not provide electrolytes, and have a higher
likelihood of an energy "crash-and-burn" effect. Caffeine in energy drinks can excrete water from the
body to dilute high concentrations of sugar entering the blood stream, leading to dehydration. If the
body 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 and
emergency room visits. The drinks may cause seizures due to the "crash" following the energy high that
occurs after consumption. Caffeine dosage is not required to be on the product label for food in the
United 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 Irish
athlete Ross Cooney, who died as a result of playing a basketball game after consuming four cans of
the drink. This ban was challenged in the European Court of Justice in 2004. The French Scientific
Committee (J.D. Birkel) concluded that Red Bull has excessive amounts of caffeine. Denmark also
banned Red Bull for a while, although the ban has recently been revoked. Britain investigated the
drink, 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. Head
teacher Malvina Sanders added that "This was a preventative measure, as all research shows that
consuming high-energy drinks can have a detrimental impact on the ability of young people to
concentrate in class." The school has negotiated for their local branch of Tesco to display posters
asking pupils not to ask for the products.
6. RESEARCH METHODOLOGY
The general purpose of this study is comparative analysis of various brands of energy drink from
consumer’s point of view. After detailed review of the research following objectives are to be
determined:
 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 -

6.1. Research Design
The 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 was
selected to upload the questionnaires and a link was generated and the same was emailed to
the respondents spread throughout major metropolitan cities in India for e.g. Mumbai,
Kolkata, Delhi and Chennai. The target respondents were segmented based on various
gender, age group, income range etc.
Survey Link: http://www.kwiksurveys.com/online survey.php?surveyID=KKHNKN_5d331815
6.2. 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 different
strata’s (groups).
 Sample Size: As 20-24 crore (Source: B&L site, Business Hindu Line) people drink energy drink in
India. To determine the sample size we have conducted Pilot Study of 18 respondents. We found
that out of 18 respondents, 3 respondents prefer to have energy drink and 15 people do not prefer
to have energy drink.
So, p (Estimated proportion of success) = 0.17
q (Estimated proportion of failure) = 0.83
The formula for estimating sample size in case of proportions is
n = (Z / E)2
pq
Z (95% Confidence level in standard error units) = 1.96
E (Maximum allowance for error between
true proportion and sample proportion) = 0.07
n = (1.96/0.07)2
x 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 was
basically an online Survey where self-administered questionnaire posted on a web site
- 15 -

(www.kwicksurvey.com). The link was send to several respondents. Hence, we divided our sample
of 120 in proportion to the population of these areas.
Mumbai (37%): 45
Kolkata (14%): 17
Chennai (15%): 18
Delhi (34%): 41
Total 120
Source: http://en.wikipedia.org/wiki/List_of_most_populous_cities_in_India
6.3. Data Processing and analysis
Data 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 and
more 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 allows
simultaneous investigation of the effect of two or more factors. In this test, values of the
variables are ranked for each case. The Friedman test determines if the average rankings differ
across variables.
The analysis will also be done by Hypothesis Testing, to test the market acceptance level of
energy drink in India in comparison with global market standard. Globally the energy drink
market 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 to
promote the energy drink market is possible if at least 40% people prefer to have energy drink in
the metropolitan city.
H0 = 40% People prefer to have energy drink in metropolitan city
H1 < 40% People do not prefer to have energy drink in metropolitan city
It’s a single tail (1-t) test
 Graphical representations:
Bar charts and Pie charts.
- 16 -

DATA ANALYSIS AND INTERPRETATION
6.3.1. Overall buying and awareness behavior
Respondents Frequency Percent Valid Percent Cumulative Percent
Aware 50 41.67% 41.67% 41.67%
Unaware 70 58.33% 58.33% 100%
Total 120 100.00
Buyer 29 23.33% 23.3% 23.33%
Non Buyer 91 76.67% 76.67% 100%
Total 120 100.00
Hence, it can be observed that awareness level is less; around 42% of the total population and
23% of the respondents consume energy drink.
6.3.2. Demographic Segmentation analysis
Gender Buyer Analysis
- 17 -
Gender Frequency Percent Valid Percent Cumulative Percent
Female 10 34.17% 34.17% 34.17%
Male 19 65.83% 65.83% 100%
Total 29 100%

It 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 Percent
Aware 26 65% 65% 65%
Unaware 14 35% 35% 100%
Total 40 100%
Male Frequency Percent Valid Percent Cumulative Percent
Aware 54 67.50% 67.50% 67.50%
Unaware 26 32.50% 32.50% 100%
Total 80 100%

It was observed from the study that awareness about the energy drink among the male and female
is almost same.
Age Group
- 19 -

It could be identified that age group 20-25 and 25-30 respondents are most potential buyer and
can be considered as target market for positioning any new brand or vice versa.
Income range
- 20 -
Age Group Awareness Frequency Percent Valid Percent Cumulative Percent
15-20 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 Percent
15-20 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%

It can be observed that 3-5 lacs income range people are the main consumer for energy drink and
income range more than 5 lacs is the potential customer that can be targeted for positioning the
brand.
Geographical Positioning
- 21 -
Income Range Awareness Frequency Percent Valid Percent Cumulative Percent
Less 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 Percent
Less 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%

Location Awareness Frequency Percent Valid Percent Cumulative Percent
Mumbai 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 is
also found to be high.
- 22 -
Location Buyers Frequency Percent Valid Percent Cumulative Percent
Mumbai 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%

6.4.3. Behavioral Segmentation
Brand Preference
Brands Frequency Percent Valid Percent Cumulative Percent
Red 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 -

Everyday 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% 100
Total 29 100%
It can be concluded that respondents buying behavior is not regular. It’s only occasional as most of
the respondents prefer it during parties, social gathering etc.
Buying location
- 24 -

Nearby 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 retail
outlets.
Consumer preference
Consumer preference for energy drink while purchasing in terms of price, brand, flavor and content
were studied. This information can show the expectation pattern of consumer in general. This
needs to be identified correctly for promoting and positioning the brand in the market.
- 25 -

Analysis of Factor:
Friedman Test
Ranks
Mean Rank
Price 3.74
Brand 2.06
Flavour 1.96
Content 1.91
In Friedman test, the values of the variables are ranked for each case. The table lists the average
rank for each variable. Low rank corresponds to low value of the variables. The Friedman test
determines if the average ranking differ across variables.
From the study, it is can be concluded that content is the most important factor while buying an
energy drink and people do not consider price as the most critical factor.
1 2 3 4 5 Total
Price 4.00 7.00 24.00 41.00 24.00 100.00
Brand 33.33 30.30 33.33 3.03 0.00 100.00
Flavor 47.00 23.00 20.00 7.00 3.00 100.00
Contents 57.58 13.13 13.13 13.13 3.03 100.00
The pattern is also exhibited in the graphical form.
0.00
10.00
20.00
30.00
40.00
50.00
60.00
70.00
1 2 3 4 5
S tars
P rice
Brand
F lavor
C ontents
- 26 -
Parameter Rank according to importance
Contents 1
Flavour 2
Brand 3
Price 4

The behavioral pattern was studied considering a rating of 1-5 in with 1 being most preferable and 5
being the least preferable on the scale. Here the consumer preference was plotted to find their
preference in terms of price, brand image, flavor and contents. It was observed that the people
preferred the contents of the energy drink over its price and other factors while considering a purchase
Consumer outlook towards Red Bull
From 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 be
improved.
Non responsiveness towards Energy Drink
- 27 -
Responses Frequency Percent Valid Percent Cumulative Percent
I 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%

 Health risk
Health Risk Frequency Percent Valid Percent Cumulative Percent
Yes 29 24% 24% 24%
No 3 3% 3% 27%
Can't say 88 73% 73% 100%
Total 120 100%
 Reason for disliking Energy Drinks
Health Risk Frequency Percent Valid Percent Cumulative Percent
I 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 the
populations 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 Segmentation
Places
Places Frequency Percent Valid percent Cumulative percent
Home 5 16% 16% 16%
Office 3 12% 12% 28%
College campus 3 10% 10% 38%
Pub 3 12% 12% 50%
- 28 -

Nightclub 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 a
possibility to promote the brand within the friend circle as well as family members. This can be the
target group for positioning.
Value for Money
Value for money Frequency Percent Valid Percent Cumulative Percent
Yes 6 21% 21% 21%
No 12 40% 40% 61%
Can't say 11 39% 39% 100%
Total 29 100%
- 29 -

The Indian market is very price sensitive. The high price of the energy drink is one of the
drawbacks for promoting as well as positioning this brand.
Familiarity with Red Bull energy drink
Responses Frequency Percent Valid Percent Cumulative Percent
I 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 -

Though Red Bull is market leader but it’s awareness among the people is still less. 32% of the
population never heard about it.
6.4.6. Scope for Energy drink Promotion
Substitution role by Energy drink, can they replace other popular beverages?
Substitution Frequency Percent Valid Percent Cumulative Percent
Yes 53 44% 44% 44%
No 38 32% 32% 76%
Can't say 28 24% 24% 100%
Total 120 100
- 31 -

The possibility of energy drinks to compete with popular beverages like soft drinks, juices & other
non-alcoholic beverages were investigated. The responses are positive.
Promotion approaches for energy drink
Yes 21 17% 17% 17%
No 34 28% 28% 45%
I don’t care, I would
buy anyway 66 55% 55% 100%
120 100%
- 32 -

If an energy drink was endorsed by a celebrity or sports star whether that could affect the buying
behavior. Hence, consumer behavior is dominated by individual taste and preference (price, brand
etc) that can’t be influenced by celebrity endorsement.
Brand Image
Established 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 -

Consumer preference is more towards established brands to influence their consuming behavior.
- 34 -

6.5. Hypothesis testing
In hypothesis testing we are evaluating the feasibility of comparing the research results with the
market share of energy drink in India. From the research results it is found that around 23% people
prefer to have energy drink in metropolitan cities. So hypothesis statement will be:
H0 = 40% People prefer to have energy drink in metropolitan cities.
µHo = 0.4
H1 < 40% People prefer to have energy drink in metropolitan cities.
µH1 < 0.4
PHO = Hypothesized value of preference (market share of energy drink) = 0.4
qHO = Hypothesized value of non preference (market share of other drink) = 0.6
n = Sample size = 120.
P = Sample proportion preferring energy drink = 0.23
Level 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 -

Hence we accept the null hypothesis is not right and conclude that people in India (<40%) do not prefer
to 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 Region
Z-1.64-3.778
Standard Sample Proportion

7. LIMITATIONS
The following limitations were found:
 The databases of existing customers were not available. Hence, samples were
approached in the internet at random
 Maximum respondents were filled the questionnaire when they are at their
workplace. Hence, their responses were not that much involving as they were
busy
 Time constraints did not allow the research to be carried out on an extensive
scale
- 37 -

8. Summary of findings
8.1. Energy drink Market in India
 It was found that only 23% of the respondents consume energy drink and awareness level is
also 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 3-5
lacs or above are most potential buyer and can be considered as target market for
positioning any new brand or vice versa
 Considering awareness and consumption, among metropolitan cities Mumbai and Delhi was
found to be the faster growing target zones
8.2. Consumer behavior and Preference towards energy drink
 It was found that people buying behavior is not regular. It’s only occasional. People prefer it
during parties, social gathering. Apart from that people also prefer it while driving as well as
before exam to reduce fatigue and increase the working efficiency.
 People prefer to purchase the energy drink from supermarket or restaurants or nearby
retail outlets.
 People prefer to have energy drink in home as well as in restaurant. This indicates that
there 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 price
energy drink from a reputed brand. The flavor should be good as well as the content should
be healthy.
 29% of the respondents believe that energy drink is associated with health risk while 73% of
the 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 of
the drawbacks for promoting as well as positioning this brand.
- 38 -

8.3. Red Bull market in India
 It was clearly observed that the preference for red bull energy drink is predominant over
other brands.
 Though Red Bull is market leader but its awareness among the people is still less. 32% of the
population 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 for
the individual. People feel red bull is not price competitive as well as the packaging standard
need 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 influenced
by celebrity endorsement
 Consumer preference is more towards established brand to influence their consuming
behavior.
9. RECOMMENDATION
• Awareness among the people need to be increased to promote energy drink by introducing
proper marketing mix strategy
• An integrated marketing is carried out would minimise the illusion among the potential buyers
about the adverse effect of energy drink on health
• Aggressive marketing strategy if adopted could benefit the placing of brand image in consumer
mind particularly the target group age 20-39 years with an income of 3 lacs plus
• Price can be reduced further to stimulate more buying tendency
9. Future of Energy drink
- 39 -

Indian non-alcoholic drinks market has seen robust growth over the past few years. Non-alcoholic
drinks 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 market
reported 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 trade
policies 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 Indian
non-alcoholic drinks market is forecasted to grow at a CAGR of 15% during 2009-2012. The segment
level analysis shows that the highest growth will be seen by the Fruit/Vegetable juice segment which is
expected to grow at a CAGR of around 30% in value terms during 2009-2012. It will be closely followed
by 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.htm
10. REFERENCES
- 40 -

 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_5d331815
11. Survey on energy drinks March 2010
This survey is intended to study the energy drinks market in India with Red Bull in perspective. There
are a total of 21 questions about energy drinks and Red bull. Finishing this survey will not take you
more than 5 minutes. We appreciate and value your time and effort for expressing your opinions.
- 41 -

Q1. Can you tell us something about yourself?
Name:
Company:
City/Town:
*Q2. Are you aware of energy drinks?
 Yes
 No
Q3. 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 lacs
Q7. 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 -

 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
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
Q11. Which of the following places do you, or would you like to drink energy drinks? (Select all that
apply)
 Home
 Office
 College campus
 Pub
 Nightclub
- 43 -

 Gym
 Joggers Park
 Sports Club
 Restaurant
 Café
Q12. Rank according to preference. What would you consider is most important while purchasing an
energy drink? (5 stars being most important)
 Price *****
 Brand *****
 Flavor *****
 Contents *****
Q13. Do you think that energy drinks are value for money?
 Yes
 No
 Can’t say
Q14. 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
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
Q16. Do you feel there is any health risk associated with Red Bull?
 Yes
 No
 Can’t say
- 44 -

Q17. Why don’t you drink energy drinks? (Select all that apply) (This question is for respondents who
marked Q7 as “No”, others please ignore.)
 I don’t like it
 I find it too expensive
 I prefer other beverages
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 say
Q19. If you were made aware of energy drinks would buy them? (This question is for respondents who
marked Q5 as No, others please ignore.)
 Yes
 No
 Can try once
Q20. If given a choice would you prefer to buy an energy drink from..?
 Established brands
 Willing to try new brands
 No such preference
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 -

Energy Drinks Market In India (Red Bull Focus)

More Related Content

What's hot

Similar to Energy Drinks Market In India (Red Bull Focus)

More from Abhizar Bootwala

Recently uploaded

Energy Drinks Market In India (Red Bull Focus)