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Energy Drinks

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Energy drinks refer to beverages that contain calories, caffeine and other energy enhancing ingredients like vitamin B and herbal extracts. They first appeared in Europe in the 1960s and have ever been popular since then. The consumption of energy drinks is rapidly increasing and has a large untapped market in India. This paper will demonstrate a chocolate based energy drink, Mozarl energy drink, and demonstrate how the drink will be marketed in India.

Product Description

Mozarl energy drink is a new chocolate energy drink in the market whose purpose is to help the consumer boost his/her energy levels and improve metabolism. The Mozarl energy drink contains caffeine that helps improve strength, endurance and mental function. The Mozarl energy drink is packaged in a large returnable bottle (LRB) and non-returnable/ disposable bottle (NRD).

The Mozarl energy drink gives the consumer extra burst of energy. Its energy comes from two main ingredients: sugar and caffeine. An average 12-ounce Mozarl energy drink contains 85 milligrams of caffeine.

The reasons for picking Mozarl energy drink is that it is actually ‘natural chocolate flavor’ unlike other drinks with artificial chocolate flavors.  Mozarl energy drinks are easily applicable and they need to be reinvented in the Indian market.

The target country in this case is India. As a category, India is a small as far as energy drinks is concerned by conservative estimates but the market has opened up and is growing at a very steady rate (Pinto and Shahana). Pinto and Joshi say that expert estimation show that the market is growing at 25 percent annually. This leaves room that no doubt there is a potential market for energy drinks in India. Chibber further asserts that the energy drink market in India is still in its infancy thus strengthening the fact that we will have a ready market for our product.

Our Mozarl energy drink target audience will be anyone between the ages of 15-45 years; the young, ravers, athletes and even young adults in India. India a country that boosts itself as a sports hub in the Asian continent and sports like cricket and football are very popular. For athletes, we have discovered that they will need to improve stamina on the courts. Older adults will use Mozarl to enhance their physical performance not only in work but also even in bedroom matters. Mozarl is designed in such a way that it is a ‘status’ drink. Therefore, we attract the youth who will want to be caught swallowing a can of Mozarl energy drink due to its designer status. To differentiate our products from competition, we will have to broaden the target market in an effort to reach niche markets. We have discovered that such submarkets in India will include energy drinks designed specifically for women, for the body builders, for the extreme sport enthusiasts and for carbohydrate conscious. We will target the upper and middle income earners but we will also distribute Mozarl to other rural towns in India as well. Energy drinks market in the U.S. is very much developed unlike in India. The U.S. market is very much attractive to the young upper middle class to affluent users.

Statistics from Datamonitor indicate that the global soft drinks market grew at a rate of 3.45 percent from 2005-2009 and new product launches increased by 8.59 percent. The U.S. topped by retail sales while India ranked 25th in retail sales but 13th in terms of number of new product launches in 2009. India has a large population with 47 percent of the people below 30 years of age. Despite this, India has a low consumption average of 5.2 liters against the U.S. average of 300-400 liters or even a world average of 85.22 liters. In 2006, the U.S. consumer drank 900m liters of energy drinks and this was a 47 percent increase from the previous year (Merett). The growth of energy drink consumption was attributed to male oriented energy drinks and a consumer looking for healthy drinks who want to enjoy a new wave of energy products.

The latent demand for energy drinks in India neither actual nor future sales but can go either way especially if its market is inefficient market. Inefficiencies in the Indian market are caused lack of international openness, regulations, cartel like behaviors and cultural barriers. The single most important variable determining consumption in any country is income, the United States is a developed country unlike India and therefore we expect demand in Indi be lower when compared to the U.S. India has some cultural beliefs that may limit consumption while the U.S. has few cultural beliefs, in any does exist. Language is barrier in India due to its many sub-tribes and English is not commonly used throughout the country unlike in the U.S. where almost 100 percent of the target market understands English. As a developed country U.S. citizens have extra money to spend in luxuries and other affluent products like our energy drink. The living conditions in the U.S. are high as to when compared to those in India and therefore we expect a lower energy drink uptake in India as compared to the statistics in the U.S. Indians attitude towards foreign products has been shown to be poor. Therefore, we are planning on using local musicians and Bollywood starts to market Mozarl and have the distinctive nature as being one of their products.

Negotiating Business with Indian Channels

Business regulation varies across the continent and India has stringiest laws unlike in the U.S. where we have relaxed systems. It is important to realize that India has a history of invasion and migration that has influenced its culture, economy and how business is conducted in general. Economic reforms however have ensured that business markets have continued to strengthen and grow. India’s population consists of 80 percent Hindus, 12 percent islands and 8 percent other ethinic groups.  

According to Katz, business meeting in India generally starts with a small friendly talk including personal questions about the family. This is especially important as it is seen as building a good rapport and trust before business. The family unit is highly respected and it is therefore important that a lot of interest is shown towards Indian counterpart’s to help establish successful relationships. During negotiations, it is vital to trust and establish relationships with Indians before any form of business can take place. This is mainly to help bridge cultural and communication gap that we had seen earlier that do exist.  

These negotiations can be done by individuals or a team of negotiators with everyone assigned a specific role. Although Indians may appear in scheduled meetings late, they expect foreigners to be punctual and therefore it is important that agreed time is observed. Although both men and women can take part in introductions, men should wait women to initiate handshakes first as some Indian women may not be ready to make a physical handshake with men prompting a nod from foreigners. Indians value academic and professional titles and is important that they are used. Culture dictates that older people are introduced and greeted first. Namste is a traditional Indian greeting that involves putting both hands together as if in prayer but light handshakes can be done if a foreigner (Katz, p.3).

Challenges in Conducting Business in India

A review by Ansar lists the following as the challenges foreign investors encounter when doing business in India;

Building relationships_ Indian culture focuses more relationship and trust and cultural awareness will help develop strategies to avoid frustrations and delayed projects in order to be able to reach tangible results.

Levels of English_ most university graduate in urban centers have a good command of English but understanding Indian English can be challenging especially with their heavy accents. Being aware of Indian English will help reduce both loss of time and reduce misunderstandings.

Authority_ many Indian cultures places a lot of importance to authority and status. Unless well understood, these complexities of Indian attitudes and how they affect business can make organizations doing business in India struggle and fail to harness value or experience from its employees.

Delays in courts_ foreign companies face the daunting task of case delays in Indian courts some taking even years to resolve. Arbitration has not gained prominence and can also be long.

Corruption_ corruption in India is a big hurdle. India was ranked number 92 out of 159 countries that were surveyed by Transparency International on corruption index. There is rampant bureaucracy as well as many political and regulatory risks can be a big challenge.

Inadequate infrastructure_ India has a poor infrastructure with poor energy supply, ineffective airports and unpaved roads will be a big challenge especially for distribution purposes.  

Strategy

Our strategy will include detailing the advantages of consuming Mozarl energy drink and this will include;

  • Mozarl energy drink will help relieve fatigue for those who suffer from this problem.
  • By raising energy levels, Mozarl energy drink will help enhance mental alertness.
  • Mozarl energy drink is best in providing herbal and mineral substances.
  • Mozarl energy drink is exactly suited for that to perform strong works that need energy.  
  • Helps fight against drowsiness at all times.

Competition

The competitive landscape in India is that one major brand, Red Bull, controls 66 percent of the market while second on the list is coca cola’s burn that controls 12 percent of the market. Others are Goldwin Healthcare PVT’s Cloud9 and JMJ Group’s XXX. This shows that although dominated by Red Bull, there exists opportunities and the market is not saturated.  

Our competitive advantage will be introducing a sugar free product in the market, a sleek package and we will introduce the product in the market by using person to person strategy in order to become a next frontier in branding competition.

Using a Multi-Formatted Promotional Program

Reaching the Target Audience

Will do exactly as the old adage goes start with where you audience is.  We will start by using advertising that can appeal from teenagers to young adults. We will use popular musicians and Bollywood stars in marketing our products as they appeal to our target audience.

Media Format to be Used

There is a good TV viewership in India and our target audiences are people who can afford TV sets. We will use television as the main advertising media due to visual and audio messages.   India has wide and good internet coverage and due to the fact that our products appeals young affluent adults, we will use the internet to advertise on top of using TV. Mobile connectivity in India is the second largest in the world and we will target mobile users by using India’s favorite mobile providers by sending messages for availability of our products in major retail outlets throughout the country.

Other will be use of billboards and POS materials

Retail Stores in India

India has several retail outlets but most of them are located in urban centers. International retail outlet like Mobile Store, McDonalds, Pizza Hut, Big Bazaar and Monginis can be found in India. Other local outlets like supermarkets and hyper-stores are also popular and can be used as distribution points. India’s postal system is not very reliable hence we will not depend it on distribution.

Indian’s love bright things and we will package Mozarl according to their preferred colors; bright red PET and cans. We will package the smallest can at 200ml aimed at the relative small consumers and for the affluent big spenders we will have 500ml bottles. Cans will be sold at 300ml and this way, we will attract our target markets with not only attractive colors but also with the sleekest packages.

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