Energy Drinks Market in Denmark Essay Example for Free

Energy Drinks grocery in Denmark Essay1. Introduction danish pastry flabby take ups sales have recorded positive entire deal growth in recent long time. Strong volume growth was recorded in faculty sop ups sales attri buted to the aggressive trade and new product launches. much or less(prenominal) of the major players in the danish pastry vital force make happy marketplace argon cut down and carmine falsify. Accordingly, the primary(a)(prenominal) aim of this report pull up stakes be to identify and analyze the possible ways for blaze up verve soak up product to contend with the world famous vigour alcoholism rosy-cheeked talk through ones hat which has recently entered into Danish heartiness drink market in 2009. 1. 1 Problem translation In 2009, the Danish Veterinary and Food Administration approved the increase of caffeine level in energy drink. This has devoted a wide-open-door for bever ripen companies to develop in this segment. Taking advant come on of this opportunity, personnel casualty bull the worlds close to famous energy drink company, started to compete within the Danish energy drink market. On the separate hand, Coca-cola Denmark also considered it as an opportunity to further develop product chain of its energy drink tailor.In Denmark, brand has been dominating the energy drink market so utmost but direct with the entry of reddened whoreson into the market it leave now have to strategic bothy develop its marketing mix to find a better way to compete with personnel casualty Bull and maintain its paramount position. 1. 2 Problem Statement We define the problem oral sex for our enquiry as fol mortifieds How could prune compete with red-faced Bull on the Danish energy drink market? To support main question we have formulated some sub questions. They be as follows 1. 2. 1 What is the likeence of customers between open fire and Red Bull?1. 2. 2 How should Burn products be developed and how should t hey be priced? 1. 2. 3 How should Coca-cola Denmark promote and divide Burn? 1. 3 Definitions 1. 3. 1 Energy drink Energy drink force out be delimitate as a drink or the beverage that contains higher doses of caffeine and other stimulating agents that touch you instant energy. The doses of the caffeine and the stimulants argon legally approved by the government health authorities. The main get of drinking an Energy drink is to get an instant energy to your body. 1. 3. 2 Burn energy drink.Burn Energy Drink is a functional beverage, mixture of 14 ingredients that come in a 16 ounce lavatory and is available at almost ein truth grocery store or gizmo store across Denmark. It is one of the products of Coca-Cola caller-out. 1. 3. 3 Red Bull energy drink Red Bull Energy Drink is a functional beverage, specially developed for periods of increased mental and physical exertion. It stinkpot be drunk in virtually any situation during sports, at work, whilst driving and during leisure activities. 1. 4 Demarcations (Scope and limitation of the study) As ein truth report has its limitations, this report is also subject to respective(a) limitations.This report is base on two products, Burn and Red Bull which are the products of The Coca-Cola Company and The Red Bull Company respectively. These two companies have various product categories however this report will be cogitate exactly on those two products among wide category of energy drink in energy drink sector. As far as the market place is concerned, this report is limited to the Danish market. Most of the consumers of energy drinks in Danish market are principally the younger people aged 18-25. Considering this fact we have selected this age group as our target group. 2 Theoretical Background.This section of the report helps to provide the broad theoretic framework used for interpreting the enquiry presented in this report. Various marketing theories have been applied as a background in this report. Theory of Market sectionalisation is used to analyze Burn and Red Bull in the Danish Market. To analyze the competitor between Burn and Red Bull, Competitor benchmark Analysis is used. Finally Using the theory of Marketing Mix (4 Ps), recommendation to Burn has been made to victorfully develop its marketing campaign so that it stooge increase its sales and compete with Red Bull. 2. 1 Market segmentation.Market segmentation will be identified by taking into consideration the demographic variables (like gender, different age group and life style) and geographical locations (various cities of Denmark) like Center of Copenhagen, Sj? lland, Fyn and Jylland 2. 2 combative Benchmark Analysis Competitive benchmark of Burn will be made with its direct competitor, Red Bull. For this we will take various factor ins which are sea tang, taste, sign, price, place ( cheery to vitiate), encase and effectiveness of the products. During our group discussion these factors came up as the most rele vant criteria for making competitive benchmark.Accordingly, respondents were asked to rate and label both Burn and Red Bull on those factors during the online survey. 2. 3 Marketing Mix (4 Ps) Marketing Mix i. e. 4 Ps will be taken as theoretical base for providing recommendation to Burn after the analysis of study and findings are presented. Accordingly, Product, Price, Place and Promotion Strategy will be presented in nine for Burn to successfully compete against its rival Red Bull. Then after, the conclusion will be made. 3 Methodology Description This section of the report accommodates information about the stages that we went through go doing the interrogation and writing the report. 3.1 look for Design We chose exploratory design as our investigate design. We have a enquiry problem which is unstructured. We do not have enough information about our topic for which we have to investigate more on our topic. Both Qualitative and quantitative data hookup methods are used . To gain more and more information and insights about the problem topic, Qualitative research design was chosen. Using qualitative data solicitation method, it became easier for us to change translate and reformulate our unstructured questions. Quantitative method is also used in order to check the validity of the results obtained from qualitative method.For quantitative data collection we tried to get as some respondents as possible who can represent the total population. 3. 2 Primary and secondary data collection For this research we have chosen both Qualitative and Quantitative data collection method for primary data. Similarly, wherever required, we have also used secondary data from the articles, publications and website of the company as well as blogs and other relevant news articles. 3. 3 Qualitative data collection To collect the qualitative data, a focus group hearing was conducted. We prepared the interview guide for the focus group which is attached in the appendix.Th e focus group contained 11 members who are the students from 2nd semester class at Niels Brock. After the completion of interview process we also took a stratagem test among the focus group interview participants plus 15 other students. Students were chosen randomly. Each of them were given to drink two glasses, one filled with Burn and another(prenominal) filled with Red Bull and were asked which one they like and how they taste. The responses from the participants were used for the analysis. 3. 4 Quantitative data collection To collect quantitative data, we prepared structured questionnaire. It consisted of 15 questions (open and closed ended questions).We posted our research questionnaire in the Facebook blogs and invited 600 Facebook users through simple random method. We got only 116 responses and of which only 77 respondents answered all questions of questionnaire. So in this research 77 respondents are our total number of observation. In other words our sample size is 77 whi ch represent the total population of energy drink customers in Denmark. 4 Presentation and analysis of data The presentation and analysis of data has been categorized as Market segmentation and Competitor Benchmark. 4. 1 Market Segmentation of energy drinks 4. 1. 1 Analysis of Focused group interviewDuring the focused group interview, 11 participants were asked about the consumption of energy drink e actually workhebdomad. Among the participants, 1 participant consumes 5 or more cans per week. 4 respondents consume 3 to 4 cans and 1-2 cans as well. Whereas, 2 respondents consume less than 1 can of energy drink. Thus their consumption habit is around 1-4 cans per week. When at that place was a discussion about the cause during which they consume the energy drink, most of the answers was during workout, training or going to sports and when mixing with alcohol. There was also a discussion about having coffee instead of energy drink when one is tired.6 participants give tongue to that they prefer coffee whereas others best-loved energy drink. Regarding price, most of the respondents voted for cheaper one, less than 20 DKK and between15-17 DKK. 4. 1. 2 Analysis of Online questionnaire survey The freeness of various age groups towards energy drink is illustrated in the diagram below. It shows that 56% of respondents from age group 18 to 25 days are interest in energy drink. Figure 1 Willingness of various age-groups towards energy drink denotation Appendix 4 Similarly, 20% of respondents from the age group below 18 and 26-35 years age group showed their interest in energy drink.But only 4% of the elderly respondents are interested in energy drink. Thus, it can be seen that the highest number of people from the age group 18-25 years are interested in the energy drink. Figure 2 Willingness towards energy drink by gender quotation Appendix 5 The above figure shows that 68% of anthropoid population is interested in energy drink whereas only 32% of female p opulation is interested in Energy drink. Figure 3 Willingness towards energy drink by location Source Appendix 6 According to the above figure, most of the respondents from center of Copenhagen are interested in energy drink.68% respondents from the Copenhagen voice and 32% respondents from Sj? land region showed interest in energy drink. While analysisng the age wise consumption of energy drink which is illustrated in the figure below it has been seen that the data is bit conflicting. Figure 4 Age wise consumption of energy drink Source Appendix 7 As shown by the diagram, those who almost never drink energy drinks are higher in age group 18 to 25 years.But again, those drinking from 1-2 cans per week are also higher number in age category 18-25 years but less compared to those who never drink. But what can be reason that those who drinks energy drinks they normally consume 12 cans per week and are higher in 18-25 years category. Analyzing the preferred occasions when customers usu ally like to drink energy drink, the research show that customers usually prefer it to mix with alcohol as their first orientation and then drinking when they are tired. Figure 5 Occasional preference of Energy Drink by gender Source Appendix 8 The above graph shows most of both females and males consume energy drink when they mix with alcohol.22 females out of 35 female respondents (63%) and 19 males out of 42 male respondents (45%) said they consume it when they mix with alcohol. Similarly 43% of female and 40 % of male respondents answered that they take energy drink when they are tired. Likewise, 11% female and 33% male said that they take it when they go to sports. 14% of female and 21% of male chose energy drink when they are thirsty and 6% of female and 7% of male chose for other occasions. Figure 6 Customers willingness to open for the energy drink Source Appendix 9.Relating to the price it can be intelligibly seen from the figure above that 18-25 years age group which i s the target customers for energy drinks are willing to pay 16-20 DKK for the energy drinks where as 26-35 years age group are willing to pay 10-15 DKK for the drink. 4. 2 Competitor Benchmark (Burn and Red Bull) 4. 2. 1 Analysis of Focused group interview During the focused group interview, 8 out of 11 participants preferred Red Bull. Only 3 preferred Burn. When there was a discussion of product features like taste, flavor and effectiveness of the products participants said that effectiveness of the product is key.During the blind test 26 participants were made to taste both Burn and Red Bull drinks blindfolded. Table 1 Preference of product by tasting without knowing the product (Blind Test) BurnRed BullBoth Total no. of participant (26)9152 The research showed that Red Bull was highly preferred by the participants with 58% appreciating the taste of Red Bull. Burn was preferred by only 35% of the participants. 4. 2. 2 Analysis of Online questionnaire survey The illustration of va rious measures to which the consumer gave importance when get energy drink is shown in the figure below. Figure 7 Customers emphasis when grease ones palmsing energy drink.Source Appendix 10 We found data of customers according to the importance they give to various measures or elements when they wishing to buy an energy drink. The above graph shows that 53% of the total respondents said flavor is very Copernican when they buy energy drink. just about taste, 60% said it is very authorized. None of the respondents said that it is not consequential at all. Talking about brand, only 19% said very important, 34% said important, 30% said not so important and 17% said not important at all. About price, 51 %( more than half population) said that it is very important.Only 5% said not so important and no respondents said that it is not important at all. So far as convenient place to buy is concerned, 29% said very important, 54% said important. When advancement is concerned 16% said very important, 29% said important 39% said not so important and 16% said not important at all. When it is about effectiveness, 44% said it is very important, 38% said important. Thus the analysis shows that flavor, taste, price, convenient buying options and effectiveness of the drinks are important for customers where as brand and packaging are not that important in buying decision.Based on the various factors to which the consumers give preference when buying energy drinks, comparative analysis between Burn and Red Bull has been carried out. This can be described from the figure given below. We asked the respondents to evaluate Burn and Red Bull giving them 4 options (Very Good, Good, atrocious, Very Bad). But here in the analysis we have taken only two options as we think these two options are sufficient for comparative analysis. Figure 8 Comparison of Burn and Red Bull based on the various factors SourceAppendix 11 The above figure shows the customers preference between Burn a nd Red Bull on the various factors which are important for their buying decision. 34% of the total respondents said the flavor of Burn is good and 23% said very good opus 48% and 29% said the flavor of Red Bull is good and very good respectively. Similarly, 39% and 13% of the total respondents said the taste of Burn is good and very good respectively composition 52% and 29% respectively chose good and very good for the taste of Red Bull. As far as brand is considered, 39% and 26% said the Burn brand is good and very good respectively while 42% and 45% said Red Bull brand is good and very good respectively.When it is about price, 27% and 12% chose good and very good for Burn while 16% and 12% for Red Bull. 35% and 23% of total population said Burn is good and very good respectively when considering convenient to buy whereas for Red Bull it is 38% and 17% respectively. About packaging 36% and 22% answered good and very good for Burn while for Red Bull its 45% and 18%. Finally for th e effectiveness of the product, 39% and 18% respectively chose good and very good for Burn while it is 45% and 25% for Red Bull.Thus the analysis shows that customers highly prefer Red Bull while relating to flavor, taste, and brand. On the other hand, with relating to price, convenient to buy and nice packaging, customers seemed to prefer Burn. So far as the effectiveness is concerned, Preference towards Red Bull is high but the difference is not so much. 5 Findings and summary of the analysis According to the analysis presented above, it can be seen that the energy drink market segmentation is more concentrated on the costumers between age group of 18-25 and that the customers are dominantly male rather than female. looking at the geographic distribution the market segment is undoubtedly concentrated on Copenhagen with to some expiration also in Sj? land. However, the other fact is also that since Copenhagen is the largest city with dense population this result is sort of obviou s. The other important findings of the study regarding the life style of the customers relating to the consumption of energy drinks is that energy drinks are besides consumed as a mix in alcohol and then it is consumed while people get tired. in like manner energy drinks are often consumed just 1 or 2 cans per week. Normally customers are willing to pay 16-20 DKK for the drink.The analysis shows that in ecumenical the customers give high importance to the flavor, taste, price, effectiveness and buying contraption while making their buying decisions of energy drinks and that the brand and packaging are not of importance for the customers. retentivity this in mind the competitor benchmark of Burn and Red Bull Red Bull clearly shows that though Red Bull being a new entrant in the Danish market it has succeeded in taking good share of energy drink market in Denmark. Red Bull is preferred by customers in terms of its flavor, taste which are important factor in general for customers while making their buying decisions.Similarly, with the effectiveness as well Red Bull is preferred by customers in comparison to Burn. Burn is preferred by customers in packaging which not of important factor for customers. But Burn still dominate Red Bull in terms of its easy availability at stores which is due to the fact that it is distributed by Carlsberg Brewery which is considered to have a very strong distribution origin in Danish market. (footnote) Again at price Burn is rated better owing to the fact that they are cheaper than Red Bull. Of course with the brand Red Bull is rated much better as it is an internationally accept brand.6 Recommendations Based on above findings following recommendations have been suggested for Burn to improve its products, promotion and set strategy. The recommendations will be based on the marketing mix (4 Ps) which is product, price, place and promotion. 6. 1 Product Since the research findings show that Red Bull has dominant preference by customers in terms of flavor, taste and effectiveness, therefore Burn has to come up with innovative product instruction in order to provide added appreciate to its product so that customers preferences divert towards Burn.Therefore, considerable amount of resources and time should be spent on research and development of variety of flavors and appealing taste with its product. Since the market segment of the energy drink is mostly 18-25 years old and that they consume it as mix in alcohol so the taste preference of these age group should be taken into consideration and the flavor and taste should be developed which is appealing while mixing with alcohol as well. 6. 2 Price Relating to the price, Burn is cheaper that Red Bull and realizing the fact that Red Bull is gaining market share it is wise to maintain its low price strategy.6. 3 Place The research show Burn with strong placement but since strong distribution channel is its one of force competencies it has to fully utilize this competences to move ahead form Red Bull to place its products at all the convenient stores. The major priority should be given to Copenhagen since its the main market segment but again taking advantage of its well managed distribution channel it should also focus on other cities where Red Bull are not able to reach due to lack of experience with the Danish market.6. 4 Promotion A well planned advertising strategy should be developed mainly targeting on the 18-25 years age group and again the male customers who are the major customers of energy drinks. though Red Bull is world recognized brand, Burn also has its brand reputation as it is a product of world class Coca Cola Company. Thus advertising campaign should also be focused to create awareness of the Coca Cola brand among the customers while promoting Burn which can positively influence customers choice.7 Conclusion Based on the research analysis and findings, it can be concluded that within the Danish energy drinks market Burn is definitely getting a tough competition from Red Bull despite the fact the Red Bull is a new entrant in Danish market. Its global brand recognition has provided Red Bull with competitive strength which can be a serious threat to Burn in coming future. Therefore it is a must for Burn to take timely action and initiate necessary marketing strategies to compete with Red Bull.Burn has low price advantage as well as strong distribution channel which provide Burn with an edge in the competitive market and therefore it needs to look more into product development and promotion strategy in order to compete with Red Bull and thus gain success in the competitive energy drink market. 8.References Books David Jobber. (2007). Principles and Practice of Marketing. UK. McGraw-Hill cultivation Pervez GH, Kjell Gr. (2005). Research Methods in Business Studies. UK. Pearson Education Bryman, A. and Bell, E. (2007). Business Research Methods. 2nd Ed. UK.Oxford University Press Burns, A. C. and Bush, R. F. (2006) Marketing Research, 5th ed. , Prentice Hall Kotler, P. and Keller, K. L. (2006) Marketing Management, twelfth ed. , Prentice Hall Svend Hollensen, (2007) Global Marketing a decision-oriented approach, Websites http//www. euromonitor. com/Soft_Drinks_in_Denmark http//advantageaustria. org/dk/news/local/Red-Bull-und-Shark. en. jsp http//www. aeofooddrink. com/34. php http//www. dietspotlight. com/burn-energy-drink-review/ http//www. redbull. com/cs/Satellite/en_INT/Products/Red-Bull-Energy-Drink-021242751115866?p=1242745950125/product-FAQ 9 Appendices Appendix.1 Questionnaire Dear respondents, we make this survey in order to obtain more all-round(prenominal) knowledge about the energy drink sector in Denmark, particularly the two big brands Burn and RedBull. So we would highly appreciate if you spend a few minutes answering our questionnaire. Your information will be treated anonymously 1. How interested are you in energy drinks? oVery interested oInterested oNot very interested oNot intererested at all 2. How often do you drink energy drinks? oAlmost never oFrom 1 2 cans per week.oFrom 2-5 cans per week oMore than 5 cans per week 3. ON WHAT OCCASIONS DO YOU DRINK ENERGY DRINKS? oWhen Im tired oWhen Im thirsty oWhen I go to sports oWhen I mix with alcohol oOther (please specify in the box below) 4. Where do you often buy energy drinks? oIn the super markets oIn the bars oIn Seven Eleven oIn small shops (eg gas station, kiosk etc) oOther (please specify in the box) 5. How much would you like to pay for an energy drink? o10 15 Kr o16 20 Kr o21 25 Kr oMore than 25 Kr 6. How important are the following factors when you buy energy drinks?Very important Important Not so important not important at all Good flavor Good taste Good brand Reasonable price Convenient to buy Nice packaging The effectiveness of the drinks 7. Which of these brands do you know? oBurn oRed Bull oNone of them 8. Which one of these brands do you prefer? oBurn oRed Bull oNo ne of them 9. How do you evaluate RED slob in the following factors? Very goodGoodNot good-not badBad Very bad Brand Taste skag Price Convenient to buy Packaging authorisation 10. Do you have any recommendations for RED BULL to better meet your satisfaction?oI dont know oIm already very satisfied oI would recommend as follows 11. How do you evaluate BURN in the following factors? Very good Good Not good-not bad Bad Very bad Brand Taste Flavor Price Convenient to buy Packaging Effectiveness 12. Do you have any recommendations for BURN to better meet your satisfaction? oI dont know oIm already very satisfied oI would recommend as follows 13. What is your age? oYounger than 18 years old oFrom 18 25 years old oFrom 26 35 years old 14. What is your gender? oMale oFemale 15. Which part of Denmark do you live in?oCenter of Copenhagen oSj? lland oFyn oJylland Appendix 2 Interview guide for focus group What criteria do people choose when they buy energy drink products? Are different fla vors important? What occasion do they drink energy drink? Eg when theyre tired, or mix with strong alcohol, etc. What product name(s) do they like? Why? Do they know Burn/Red Bull? Where do they buy? Do they like Burn/Red Bull products? How much should a can of energy drink cost? Appendix 3 Fokus gruppe give way 2. Semester klasse Niels Brock Lien, Niraj, Silas og Michelle Market researchAlle kender begge 11 deltager 8 ud af 11 kan lide red bull Dog viste det at 6 ud af 11 faktisk kun valgte Red Bull efter blinde smagning Smagen er bedre, burn er for sodt. (inden smagning af begge m? rker) Hvor mange energidrinks drikker du per uge? 1 drikker 4-5 cans a week 4 3-4 cans 4 1-2 cans 2 mindre end 1 Hvornar drikker du energidrinks? Sprut, tr? ning, Det er meget i forhold til det at man drikker alkohol. Enighed blandt minimal 8 af deltagerne Dog drikker mange det ogsa hvis de er tr? tte eller skal til tr? ning efter en lang dag i skole.Kaffe frem for energi drink hvis man kan lide det hvis man er tr? t og skal videre, dette mener 6 ud af 11 af deltagerne hvor de andre ikke kan lide kaffe eller mener at en energi drik er bedre Hvor meget vil du betale for en energidrink? Ikke clean end 20kr, mellem15-17kr ca er de fleste villige til at betale Men ville kobe den billigste hvis de stod mod hinanden pa hylden i super marked. Energien er mere vigtig end smagen. Irriterende reklamer for meget nogenhed provokerende reklamer mener 2 af deltagerne, Red Bull promoverer ikke sadan (I Dk hvert fald).