MONSTER ENERGY DRINK

Situation Analysis

Team 3Whitney Norris, Bianca Pisegna, Nate Reeser, Darian Seese, Ali St. Clair, Andy Strager, Ahmed Zainal

Executive Summary

This Monster Situation Analysis addresses the company’s sale revenues, media spend, and current and past marketing communication efforts to analyze and evaluate these important factors in order to develop a more effective campaign approach. Our strategic direction involves creating corporate partnerships with a popular fast-food chain, which will allow consumers to receive a quick meal and energy boost on-the-go.

Monster currently is ranked 2nd in market share, trailing behind Red Bull. Monster however, spends a small amount on it’s Advertising, relying heavily on Earned Media and Sponsorship.

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Table of ContentsI. Sales Revenue & Growth..................................................4

– Media SpendII. Current & Past Marcom Campaign Efforts........................7

– Sponsorship Approach– Partnership Approach– Campaign Evaluations

III. Product.............................................................................11IV. Consumers.......................................................................13V. Competition......................................................................16VI. Problems & Opportunities................................................18VII. Strategic Direction............................................................19VIII. References.......................................................................20

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Sales Revenue & Growth

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Total U.S Sales & Forecast for Energy Drink Market

The market is beginning to reach a saturation point, as shown in 2013 the percent change drastically drops.

Mintel 2016

Sales & Profit Growth

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2013 2014 2015 20160

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30

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Market Share 2013-2016Pe

rcen

tage

Mintel Oxygen

The Gap between Monster and Red Bull has gone from a 7% (2013) to 4% (2016).

Media Spend: Fiscal Year 2015

*Note: Spending on Hispanic Newspapers have a 262.5% increase since 2014.

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Monster only spent $813,802 and Red Bull spent over $70 million. It is possible that Monster could increase market share and/or sales revenue if they increased media spending. It is important to note that Monster’s media spent has decrease every year since 2013 while Red Bull’s is increasing

Spot TV37%

Network TV12%

Newspaper25%

Outdoor11%

Other13%

Hispanic News-papers

2%

Advertising Redbooks

Current & Past Marcom Campaign Efforts

Marcom Campaign Strategies: “Unleash The Beast”

Target: Young, extreme-sport minded, enthusiasts (age 18-34)

Popular MarCom Strategies:

■ “Unleash the Beast” slogan to attract this target audience of young, aggressive individuals.

■ Reliance on brand loyalty through hats, stickers, bumper stickers, t-shirts■ “Get the shirt off our back” Campaign- Tab collection for FREE athlete shirt■ Model appearances and giveaways at Extreme Sport Events

It is apparent that these strategies have been successful since there is such little spent on media yet, they have been consistently 2nd in market share.

Competitors often use similar strategies. For example, Red Bull’s sponsorship of extreme sports athletes and events.

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monsterenergy.com

Sponsorship Approach ■ Sponsorships within:

– DreamHack festival – Dave Bautista -Muscle Monster Gym Kits– New York Fashion Week– Monster Energy Cup in Las Vegas– Transworld Motocross FMX High Rollers Contest

■ The brand has many loyal consumers who know about the sponsorships, however new consumers are not being reached. New consumers are not being reached because the sponsorships are not advertised well unless the consumer already follows the brand.

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Partnership Approach

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These partnerships allow monster to reach another audience outside extreme sports. Also rewards loyal consumers by given them in-game bonuses.

Campaign Evaluations■ With little media spend of only $800,000 compared Red Bull’s media

spend of $70 million, Monster remains ranked 2nd in the market– If Monster could increase its media spend, they could potentially

take the lead in the market

■ Emphasis on Sponsorships is a huge aspect of Monster’s brand awareness. This approach isn’t effective due to only loyal customers being aware of these sponsorships and new audience’s not being reached.

■ “Unleash The Beast” slogan has created a poor brand reputation with controversy of satanic representations of the Monster brand.

■ The Partnership approach seems to be successful in order to reach new consumers through extreme-sport platforms and likeable consumer habits.

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Product

●Monster Energy now offers a variety of products including: Monster Energy, Monster Ultra, Monster Rehab, Juice Monster, Punch Monster, Extra Strength, Java Monster and Muscle Monster. Having many flavors might seem beneficial, however Red Bull only has 8 flavors and they are leading the market share.

●Each product line has a variety of flavors including: zero-calorie, low-calorie, low-carb and zero-sugar options, compared to Red Bull’s one surgar-free option.

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Product Con’t■Benefits:

– Monster Energy provides four out of the B vitamins. – One, 8-ounce serving, has 80 Mg of caffeine compared to an 8-ounce cup

of coffee, which has 130 -240 Mg of caffeine. – People choose Monster because of the lower price strategy, whereas

Red Bull is viewed as premium energy drink.

■Concerns: – 2-3 normal servings per can of Monster, which means consumers are

getting double or triple of the recommended serving, which is not better than Red Bull. A 250ml can of Red Bull only has 80 Mg of Caffeine.

– Energy drinks can increase the risk of heart problems even among younger consumers, which is the target audience.

*According to the FDA website, there have been many reported causes of individuals seeking medical attention after drinking Monster Energy.

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Consumers■67% of Consumers are Male■34% are aged 25-34■30% are 18-24

■The largest Household Income is $75K-$149,999K– 32% of Consumers falling into that category

■The Second largest Household Income is <$20– With only 12.5% of Consumers falling into this category

■ 26% of Consumers are Occupied as Construction and Maintenance Professionals (blue collar jobs)

■ This shows that the majority of Consumers fall into either the lower or middle class with a small percentage in the middle class

Mediamark Spring 2015

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Consumers Con’t

■ Majority of Current Consumers have not attended College – 44% falling into that category

■ The next largest educational bracket is 33% having attended College

■ The third largest category is 31% having graduated College

■ The Lack of Higher Education is a direct correlation to Blue Collar Jobs

■ The high amount of Blue Collar Jobs relates to manual labor often accompanied by shift work (non-traditional hours) this is reflected by high energy drink consumption

Mediamark Spring 201514

Consumers Con’t

■Whites have by far largest sample size yet index is only 98

■Hispanics have largest index at 144

■Largest potential is to capitalize on the white demographic–While diverse in interests, it is highly recommended to conduct focus

groups to find out specific characteristics to lockdown this demographic

■Monster must retain Hispanic demographic due to the fact that it is the largest growing demographic

■Statistically, Monster Consumers have little higher education and work Blue Collar Jobs, many coming from Hispanic Families

–By appealing to Hispanic Heritage, the potential exists to lockdown this market

Mediamark Spring 2015

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Competition - Red BullAbout:

■ Founded in 1987■ 42.3% of Market Share■ $1.04 billion in 2015■ 2,140,892 Twitter followers■ 46,368,998 Facebook likes

Benefits: Two healthier options (total zero, sugar free). 8oz cans

■ First Energy Drink introduced to U.S. Market in 1997

Tastes: Less flavor’s and options. May be less confusing when picking a flavor

Target Demographics: Men, Millennials (Ages 18-34)

Strategy: Red Bull focuses on extreme sports (such as mountain biking, cliff diving, etc.) and more recently, video games. They often sponsor athletes involved in extreme sports and in 2015 sponsored a professional video game player. Famous for its tagline, “gives you wings”. The strategy is that with Red Bull, you are capable of amazing things such as extreme sports. They also tend to sponsor sports such as soccer (New York Red Bulls). Differences:- - Red Bull is more well distributed when it

comes to HHI. For example, Red Bull has 37.2% of consumers in $30,000-$59,000 while Monster only has 34%.

- - Red Bull is also available for purchase at many bars. This helps them appeal to people outside the extreme sports market.

16Advertising red book, Mintel 2016, MRI Reporter

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Problems Opportunities

Satanic Representation: - There have been complaints that the

Monster slogan and logo have satanic implication.

Hispanic Population:- Target hispanic consumers due to

large index and rapidly growing demographic

Occasionality: - Energy drinks are thought of as a ‘pick

me up’, rather than a daily drink.

Fast-Food:- Correlation between Monster

consumers and heavy fast food consumers.

Creating Better Reputation:- Reform the brand with a new slogan- Make drinks available at gyms to

reach the work-out population

Strategic Direction■ Create a Corporate Partnership with a popular fast-food chain such as

McDonald’s

■ Fast-food restaurants have yet to offer energy drinks

■ Fast-food consumers mirror the heavy consumers of energy drink consumption due to fast, on-the-go mentalities.

■ Would reach to a new audience outside the extreme sports and video game markets

■ Since these consumers share similar consumption habits, these products need to be made available in the same establishment and within one purchase. (Blue – Collar lifestyle)

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References■ Bailey, Sharon. (2015). Monster Beverage’s extensive line of energy drinks. Retrieved on

October 10, 2016, from: http://marketrealist.com/2015/01/monster-beverages-extensive-line-energy-drinks/

■ Corleone, Jill. (2015). What are the Benefits of Monster Energy Drinks? Retrieved on October 10, 2016, from: http://www.livestrong.com/article/308744-what-are-the-benefits-of-monster-energy-drinks/

■ FDA. (2012). Voluntary and Mandatory Reports on 5-hour Energy, Monster Energy, and Rockstar Energy drink. Retrieved on October 10, 2016, from: http://www.fda.gov/downloads/AboutFDA/CentersOffices/OfficeofFoods/CFSAN/CFSANFOIAElectronicReadingRoom/UCM328270.pdf

■ Heneman, Karrie. (2007). Nutrition and Health Info-Sheet. Retrieved on October 10, 2016, from: http://nutrition.ucdavis.edu/content/infosheets/fact-pro-energydrinks.pdf

■ C.Ingram, F., Stansell, C. M., & Covell, J. L. (2012). Monster Beverage Corporation. In J. P. Pederson (Ed.), International Directory of Company Histories (Vol. 137, pp. 301-304). Detroit: St. James Press. Retrieved from http://go.galegroup.com/ps/i.do?p=GVRL&sw=w&u=morg77564&v=2.1&it=r&id=GALE%7CCX2577200066&asid=471d488045a259454b7b682bb77f61a7

■ Monster Energy. (2016). Products. Retrieved on October 10, 2016, from: https://www.monsterenergy.com/us/en/products/monster-energy

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