monster energy drink-market analysis paper

[SRH HOCHSCHULE HEIDELBERG-IBE2016]

PRESENTED BY

SHREEYOG RAJOPADHYE

ROSHAN JADHAV


SR NO CONTENT PAGE NO

1 INTRODUCTION 2

2 TARGET SEGMENT 3

3 SINUS MILIEUS 3

4 COMPETITORS 5

5 SIZE OF THE MARKET 6

6 SWOT ANALYSIS 7

7 TENDENCY OF MARKET GROWTH 9

8 COMPANY'S IMAGE IN MARKET 10

9 MARKETING CAMPAIGNS 11

10 REFERENCES 12


INTRODUCTION

In 2002 Hansen Beverage Company launched their energy drink brand, Monster Energy

Drink. The headquarter of the company is in Corona, California. The slogan of the company

is Unleash The Beast, depicting the attitude of those who is going to enjoy this.

Similarly the logo, large “M’” in neon green colour with black background is to show

the kick that people will get after drinking this energy drink. The idea behind the logo is of

McLean Design, which is based in California.

Today Monster Energy Drink is world’s second biggest energy drink brand. They have

sold 10 billion energy drinks in past 12 years. The company has the strongest portfolio. It is

one of the world’s most innovative companies. A survey by Forbes Magazine gave 15th place

to Monster for being innovative.


TARGET SEGMENT

Today’s lifestyle is exhaustive. People get tired at the end of the day. To carry out their routine they need

energy. Especially male teenagers, people in their 20s and working adults are susceptible to the effects of

exhausting lifestyle. Hence, for Monster Energy Drink these people are the target segments.

Initially,Monster Energy Drink was prepared by keeping sportspersons in mind. Later on,The company

started to focus on gamers and hip-hop crowd. Even the slogan of the drink “Unleash the beast” reflects

the group of consumers to be targeted.

The Study has found that college going students and working adults need more energy than an

average person. Hence Monster Energy Drink has targeted this customer group precisely.

Company has a range of products in Energy drink segment

THE DOCTOR: - In this variety company added a refreshing citrus flavor to suit speed

loving people.

MEGA MONSTER: - Conventional Monster Energy Drink in new OPEN BY ONE HAND

feature for athletes and musicians.

MONSTER ULTRA: - A zero calorie zero sugar variant of Monster Energy Drink for diet

conscious people.

MONSTER REHAB: - A blend of Tea, Lemonade and Energy Drink for those who want to

enjoy a cocktail like a flavor.

SINUS-MILIEUS

In the following chart, the segmentation based on Sinus-Milieus for Monster Energy Drink is

shown.


HIGH ACHIEVER MILIEU

People coming under this group have a high standard of living. Hence, these people are

considered as target customers for Monster Energy Drink.

MOVERS AND SHAKERS MILIEU

As these people love to live an adventurous life and always want something new from it, so

these people come under Monster’s category.

ADAPTIVE PRAGMATIST MILIEU

People of pragmatic nature are highly ambitious and their approach towards life is straight

forward. Mostly such attitude we can find in young generations. So this group of customers

preferably comes under Monster’s group.

NEW MIDDLE – CLASS MILIEU

This group of has wide scope. People of this milieu have a tendency to follow new trends.

Irrespective of traditions these people focus on modernization and individualization. Hence,

this group falls under Monster’s group of customers.

SOCIO-ECOLOGICAL MILIEU

Because of certain kind of geography and biology of particular region people living there

may get exhausted early. Also, the society must match to the geological changes in the

region. Hence, people under this milieu are a group of customers for Monster Energy Drink.


COMPETITORS

Competitors

Red Bull

Rockstar

Amp

NOS

Full throttle

Currently,the biggest competitor of Monster Energy Drink is Red Bull. Still in the

world,Red Bull is the biggest energy drink brand with a market share of 43%. Other

energy drink brands which are in competition are Rockstar (10%), NOS (3%), Amp

(3%) etc.

2013, Monster purchased Coca-Cola’s energy drink brands namely NOS, Burn and

Relentless.

As a part of marketing campaign Monster Energy Drink sponsors music shows and

action sports like motorsports to be in the competition with other rivals.


SIZE OF THE MARKET

Although Monster Energy Drink has many competitors, the company has done a

recognizable job to grow their market size. Currently, Monster Energy Drink is sold in 114

countries.

These days Monster Energy Drink and Coca-cola are working together

to grow their market.

Coca-cola purchased 16.7% equity stake of Monster for $2.15 billion by

selling them their energy drinks such as NOS, FULL THROTTLE, and

BURN etc.

Since Coca-cola has a distribution network developed in 200 countries,

so now Monster can use the same network to increase their market

globally.

In last two years company made a sale of $3.147 million and captured

80% of US energy drink market with Red Bull.

By the survey of Euromonitor International, about 14% of the global

market is captured by Monster.


SWOT ANALYSIS

Strengths, weaknesses, opportunities and threats for Monster energy drink.

STRENGHTS

WEAKNESSES

STRONG BRANDNAME FINANCIALLY STRONG 2ND BIGGEST ENERGY DRINK BRAND INNOVATIVE ATTRACTIVE PACKAGE DESIGN

LESS ADVERTISEMENT LITHAL IF CONSUMED HEAVILY

STRENGTHS

Since Monster has expanded globally so they have a strong brand value. People buy it

because it looks trendy. They have underground, a provocative identity which matches to

the attitude of their customers. The Company has their network in more than 110 countries

so they are financially strong. Monster Energy is the second biggest brand in the world.

They always show their innovative mind through their packaging and promotion methods.

WEAKNESSES

Although Monster Energy Drink is a famous brand but still they have weaknesses in them.

While promoting their products Monster rely on the mouth to mouth publicity by doing

promotional events. They do promote too little on TV, Radio, Social networking sites and in

print medias also. The major problem with an energy drink is, it is lethal if consumed

heavily.

Since it contains caffeine, it’s lethal for those who have heart problems. It causes Cardiac

Arrest within few drinks.


OPPORTUNITIES

THREATS

ACHIEVING 1ST POSITION IN GLOBAL

MARKET. EXPANSION

COMPETITION PRICE REGULATIONS ON ENERGY DRINK

OPPORTUNITIES

Monster has customer network spread in 114 countries. Still they have scope to grow.

Currently, they are at the 2nd position in global energy drink market so they have the

opportunity to grow their business and become leader globally.

THREATS

Globally, Red Bull is leading energy drink market. So monster has a threat from this

company. Along with Red Bull, few other companies are also in the race but Monster has

done well compared to them. Price is another issue for Monster Energy Drink. Though

Monster is less expensive than Red Bull (Red Bull- can size 473 ml for 2.08Euros Monster-

can size 500 ml for 1.59 Euros) but another rival of Monster, Rockstar is much cheaper than

it (Rockstar- 2 cans for 3 Euros and Monster- 2 cans for 4 Euros or 3 for 5 Euros)

Considering rules and regulations energy drink companies have to follow many rules and

regulations. Since monster has grown globally so in each country company has to follow the

rules and regulations given by respective governments.

STRATEGIES BASED ON SWOT ANALYSIS

Since Monster Energy Drink has a strong brand name, hence they have the chance to

grow globally. By doing campaign on social media, TV, magazines etc. they can attract

more number of customers.

Heavy consumption of this drink is hazardous to health. So the company should think

to substitute the harmful ingredients by safe ones.

Even though Monster Drink is less expensive than Red Bull, but still it’s expensive

than other energy drinks. Therefore, the company should think of minimizing the

price.


Recently Monster has purchased Coca-Cola’s energy drink brands, hence now they

have an opportunity to use Coca-Cola’s worldwide network to grow.

TENDENCY OF MARKET GROWTH

For Monster Energy Drink 2014 was a very successful year. It was 22nd consecutive

year recorded as a year of increased gross sales.

Previously in 2013 gross sales recorded by this energy drink brand was around $2.59

billion. In 2014, it grew to $2.83 billion. The growth was due to increase in sales

internationally

The Year 2014 was important for the company in another aspect; Monster Energy

Drink sold their 16.67% of stakes to Coca-Cola thereby purchasing Coca-Cola’s energy

drink brands.

Comparison in increase of rate of share for year the 2014 and year 2015 given below

YEAR ENDED DEC. 31,2015

SHARE PRICE HIGH ($)

SHARE PRICE LOW($)

First Quarter 143.90 106.77

Second Quarter 144.69 124.18

Third Quarter 155.83 115.62

Fourth Quarter 160.50 127.34

YEAR ENDED DEC. 31,2014

SHARE PRICE HIGH ($)

SHARE PRICE LOW($)

First Quarter 75.63 66.31

Second Quarter 73.38 63.00

Third Quarter 94.93 63.82

Fourth Quarter 113.50 89.56

For current year until this month, the growth of company can be seen through given graph


COMPANY’S IMAGE IN MARKET

WHAT COMPANY THINKS.

In 2002, Monster Beverages launched their energy drink. They launched this drink by

considering today’s exhaustive lifestyle.

So, the target group is mainly young generation, sports enthusiasts, people loving

adventurous life.

Through their marketing campaign, they always try to reflect their enthusiastic

attitude. That’s why the logo is claw of monster. The slogan also says UNLEASH THE

BEAST means, try to uncover your inner energy.

It totally shows that company wants the product to be used as an energy drink on a

daily basis.

They say consumption of this drink enhances energy. Improves physical and mental

performance.

ACTUAL IMAGE IN MARKET

Due to aggressive promotion, Monster has acquired reputation in energy drink

market.

In past few years, they have successfully maintained their image in the market.

But this brand has also faced some crisis. On 23rd October 2012, FDA investigated

5 deaths. In Maryland, a 14 years old girl died after drinking Monster Drink. FDA

claimed that the reason was high caffeine content in the drink. She died after a

week of consuming the drink.

On 27th April 2015 a lawyer named Kevin Goldberg filed a case against the

company. He had many pieces of evidence regarding the caffeine content of the

drink which caused heart attacks and deaths.

People who died due to consumption were mainly teenagers.

It blotched company’s image. But the energy drink was not the only cause of

deaths. Otherwise it would have banned throughout.


MARKETING CAMPAIGNS

To attract the target customers Monster does promotion campaigns on TVs, social

networking sites and in print media also.

But their main campaigning method is direct promotion through promotional events

which they organize each year.

Monster Energy Drink is official partner of BMX championships. It also has own music

band named Monster Energy Music.

They also sponsor adventurous sports like Motocross, Skate and Snowboard etc.

ATHELETE SUPPORT PROGRAM.

A worldwide program to support athletes.

The program supports athletes in moto, bike, skate, surf etc.

Athletes coming under age group 13-21 are invited to show their skills under

Monster’s name. It promotes the brand.

TO ATTRACT TARGET CUSTOMERS

Company does advertisement on social media and other publishing medias, but it’s

not as effective as Red Bull.

They only promote few sports. So they can’t reach all the customers

Instead of promoting adventurous sports only, if they promote their brand during

other events e.g. during FIFA World Cup, they will able to reach more number of

people at a time.

Since few years, monster has been facing problems regarding the ingredients used in

their drink. Actually they have a great chance to introduce a wholly new energy drink

which will be safe to consume. They can do more R&D to replace or remove

hazardous ingredients.

For example if monster introduces an energy drink with zero caffeine content then

the people having heart troubles will not hesitate to buy it. Company could do

advertisement based on it. Ultimately company’s market would grow.

Company should do advertisement campaign on personal level also. It means, like

Red Bull they should create their mobile application to reach each and everyone who

knows Monster Energy brand.

Collaborations may also help the company to grow. E.g. Coca-Cola has collaborated

with McDonalds. So customers get a cup of Coca-Cola with McD’s burger. Similarly

Monster can also collaborate with such restaurants.


REFERENCES

http://www.investopedia.com/articles/investing/022315/energy-drinks-industry.asp

http://marketrealist.com/2015/01/overview-monster-beverage-corporation/

http://www.webmd.com/food-recipes/20121023/death-reports-monster-energy-drink

https://www.lawyersandsettlements.com/articles/monster-energy-drink-deaths-

hospitalizations/interview-monster-energy-drink-deaths-6-20539.html

http://www.famouslogos.us/monster-energy-logo/

http://www.investopedia.com/articles/investing/022315/energy-drinks-industry.asp

http://marketrealist.com/2015/01/overview-monster-beverage-corporation/

http://www.webmd.com/food-recipes/20121023/death-reports-monster-energy-drink

https://www.lawyersandsettlements.com/articles/monster-energy-drink-deaths-hospitalizations/interview-monster-energy-drink-deaths-6-20539.html

https://www.lawyersandsettlements.com/articles/monster-energy-drink-deaths-hospitalizations/interview-monster-energy-drink-deaths-6-20539.html

http://www.famouslogos.us/monster-energy-logo/

monster energy drink-market analysis paper

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