Energy Drink Consumer Research Proposal
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The consumer research proposal to introduce a new energy drink to the market was the final assignment for the Marketing 554/Consumer Behavior course during the MBA (marketing concentration) program. The Assignment: You are the VP of Marketing Development for the TRIAAD Research Group, a full-service marketing research company. Your client, has asked you to prepare a proposal to conduct an in-depth study of consumer behavior to analyze the market for their new high sugar, high caffeine energy drink. You must develop marketing strategies to attract 18 to 25-year-old customers. Push it to the Limit Energy Drink has a $25 million advertising budget for the new product. Please visit my blog at www.stephenzoeller.com Follow me on twitter @stepzoellermktg Pinterest @stephenzoeller
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Energy Drink Consumer Research Proposal
- 1. TRIAAD Consumer Research Proposal
- 2. The Background The consumer research proposal to introduce a new energy drink to the market was the final assignment for the Marketing 554/Consumer Behavior course during the MBA (marketing concentration) program.
- 3. The Assignment You are the VP of Marketing Development for the TRIAAD Research Group, a full-service marketing research company. Your client, has asked you to prepare a proposal to conduct an in- depth study of consumer behavior to analyze the market for their new high sugar, high caffeine energy drink. You must develop marketing strategies to attract 18 to 25-year-old customers. Push it to the Limit Energy Drink has a $25 million advertising budget for the new product.
- 4. The Assignment The proposal should contain: Introduction Project Definition Program Objectives Scope Schedule Sampling Procedure Methodology Plan—Deliverables Ethical Issues Concerning Consumer Protection Professional Fees References
- 5. Agenda 1. Introduction 2. Project Definition 3. Program Objectives 4. Scope 5. Schedule 6. Research Methodology 7. Marketing Plan a. Product Positioning b. Marketing Strategies c. Promotion Strategies 8. Ethical Issues 9. Professional Fees 10. References
- 6. Introduction Energy Drinks Red Bull 1997 Functional Beverage Category Monopolistically Competitive • Easy entry/exit • Product differentiation
- 7. Introduction Energy Drinks Red Bull, Monster, Rockstar 92% market share Negative Perceptions Growth Market
- 8. Introduction Proposal Primary Research/Secondary Research Marketing Plan Positioning Marketing Strategies Promotional Strategies Enter Market and Achieve Objectives
- 9. Project Definition 18 to 25 Energy Drink Consumer in the U.S. Identify Negative Publicity & ConsumerPerception • High Sugar, High-Caffeine Products Market Research & Consumer Behavior Insight
- 10. Program Objectives Objective One: Analyze Energy Drink Market Research • Internal and External Environment • SWOT Analysis • Wheel of Consumer Analysis
- 11. Program Objectives Objective Two • Develop strategy Objective Three • Enter market & achieve objectives
- 13. Schedule
- 14. Research Methodology Sample Design • Primary Research • 385 Sample Size • 5% Margin of Error • 95% Confidence Interval • 20% Response Rate • 1925 Invitations
- 15. Research Methodology Data Collection Design Quantitative & Qualitative Data Demographics, Usage, Attitudes (4p’s) Random Sample Panel - 4 Geographic Clusters
- 16. Research Methodology Instrument Design • 29 Questions • Screening • Demographics • Usage • Attitudes • Energy drinks • Product, Price, Place, and Promotion
- 17. Marketing Plan
- 18. Marketing Plan Product Positioning Product Positioning • Benefit Segmentation • Energy Boost • Alternative to Coffee • Product Attribute Segmentation • Variety of flavors (millennials and subculture) • Safe caffeine and sugar • Labeling – Comprehensive Ingredient content
- 19. Marketing Plan Product Positioning Cognitive Segmentation • Lifestyle brand – self-expresion • Active, energy, youthful • Aspirational and relatable • More focused on activities (no presence/ltd presence) Product Positioning
- 20. Marketing Plan Millennial Strategies Millennial Strategies • More technologically advanced • Most educated • Variety of media • View of Brands – partnership/form of expression • Action/Loyalty • Ethnically/Racially diverse • Desire: • Authenticity • 2-way communication • Social responsibility • Personal touch/connection
- 21. Subculture Strategies • Product line extensions • Tailor promotion to each subculture • TV/Radio • Events • Product Placement (Grocery/Convenience) • Digital Media Marketing Plan Subculture Strategies
- 22. Marketing Plan Promotion Strategies (Millennial) Promotional Strategies • Cognitive processing model of decision making • Influence the Consumer Decision Making process • Wheel of Consumer Analysis • Research of internal/external environment
- 23. Marketing Plan Promotion Strategies (Millennial) Millennial Strategies • Differentiation • Events (Cognition) • Sponsorship (Cognition) • Television and radio (Cognition) • Digital and social media (Cognition) • Trade Promotion (Behavior) • Promotions and Coupons (Behavior) • Pricing (Behavior) • Logo (affect), Packaging (Environment), and Promo displays (Environment)
- 24. Marketing Plan Promotion Strategies (Subculture) Subculture Strategies • African-American • Location: Fast food, Grocery, Convenience • Television • Depiction of culture/aspirations • BET and TBS • Sponsorship • Beyonce, Pharrell, John Legend tours • Digital and Social Media • YouTube • Facebook • Twitter
- 25. Marketing Plan Promotion Strategies (Subculture) Subculture Strategies • Hispanic • Location: Starbucks and Dunkin Donuts • Television commercials • Safety, culture (family/soccer), Univision/ESPN • Digital/Social Media: YouTube, Facebook, Twitter mobile delivery
- 26. Marketing Plan Promotion Strategies (Subculture) Subculture Strategies • Asian • TV Commercials • Concentrated, negative perceptions, correlate with education • Cable and Asian programming • Sponsorship: Music festivals/Asian student orgs • Digital/Social media: Scholarship competitions on Facebook/Twitter
- 27. Ethical Concerns • Negative Perceptions • Lawsuits, proposed regulation, media attention • Marketing high caffeine/high-sugar energy drink • Conflict with AMA Code of ethics: Potential harm of others, fit for intended use, full disclosure of risk • 39% worry about health/safety • Majority seek packaging w/daily consumption • Hispanic and African-American SSB beverages and preferences Ethical Concerns
- 28. Recommended Solutions • High-caffeine/High-sugar beverage does not resonate with target audience • Better Positioning as equally effective, safe/healthy • Regular flavor 65mg caffeine and 19g sugar/8.4 fl oz. • Flavor and taste varieties for subcultures • African-American: 5% fruit juice • Hispanic: dual-fruit and organic • Label – Ingredients, cautions, education • Resonates with target audience Ethical Concerns Recommended Solutions
- 29. Professional Fees Task Cost Secondary Research $1,500.00 Research and Design Questionnaire $9,000.00 Code Questionnaire $2,500.00 Distribute, maintain web link for questionnaire, and data collection $10,750.00 Coding/Content Analysis $2,500.00 Programming/Data Processing $3,750.00 Presentation $1,500.00 Total $31,500.00
- 30. References Banach, C. (2014, January 20). Energy drinks need a kick. Retrieved from http://www.cmnevents.com/sites/default/files/resources/whitepaper-energy-drinks- need-a-kick.pdf Black Entertainment Television. (2014). Nominees. BET. Retrieved from http://www.bet.com/shows/bet-awards/2014/nominees Benizri, C. (2012, September 20). Energy drinks the new coffee. Retrieved from http://community.mis.temple.edu/cdbenizri/files/2013/03/energy-drink-pdf.pdf Capps, O., Jr., & Hanselman, R. (2012, November). A pilot study of the market for energy drinks. Journal of Food Distribution Research, 43 (3), 15-29. Retrieved from http://fdrs.tamu.edu/FDRS/JFDR_Online_files/JFDR%2043(3)%202%20Capps.pdf Chen, L. (2014, August 30). What’s Next In Advertising To Asian Americans? Asian Fortune. Retrieved from http://www.asianfortunenews.com/2014/04/whats-next-in-advertising-to-iels-americans/
- 31. References Clear Seas Research. (2014). Solutions. Retrieved from http://www.clearseasresearch.com/full-service- market-research-solutions/finding-the-right-solution-for-your-needs/ Cohen, H. (2014, February 21). 30 millennial demographics you need. Retrieved from http://heidicohen.com/30-millennial-demographics-chart/ Cooper, D., & Schindler, P. (2011). Business Research Methods (11th ed.). New York, NY: McGraw- Hill/Irwin. Dierckx, D., (2013, February 13). How to estimate your population and survey sample size? Retrieved from https://www.checkmarket.com/2013/02/how-to-estimate-your-population-and-survey- sample-size/ Dolan, K. (2005, March 28). The soda with buzz. Forbes. Retrieved from http://www.forbes.com/global/2005/0328/028.html
- 32. References Edelman Insights. (2012, December 3). 8095 Refreshed: The evolving role of brands for the world’s largest and most impactful generation. Retrieved from http://www.slideshare.net/EdelmanInsights/8095- global-external-final?ref=http://blog.hootsuite.com/the-evolving-role-of-brands-for-the- millennial-generation/ Feil, S. (2012, March 11). The best of both worlds Hispanic millennials embrace their bicultural birthright. Adweek. Retrieved from http://www.adweek.com/sa-article/best-both-worlds- 138826 Katje, C. (2013, March 10). 5 reasons to avoid monster beverage shares. Retrieved from http://seekingalpha.com/article/1261111-5-reasons-to-avoid-monster-beverage-shares Lee, F. (2007, March 14). Consumer behavior – ethinic, racial, religious and Age sub cultures. California State University, Los Angeles. Retrieved from http://web.calstatela.edu/faculty/flee/www/mkt342/www/Lectures/week9a.pdf
- 33. References Marketing Charts. (2014, July 3). Who’s Regularly Going Online While Watching TV? Retrieved from http://www.marketingcharts.com/wp/television/whos-regularly-going-online-while-watching- tv-43723/ Marketing Charts. (2014, May 12). Radio Reaches 9 in 10 Millennials Weekly. Retrieved from http://www.marketingcharts.com/wp/television/whos-regularly-going-online-while- watching-tv-43723/ McClave, J. T., Benson, G., & Sincich, T. (2011). Statistics for Business and Economics (11th ed.). Boston, MA: Prentice Hall. Mintel. (2014, January 3). Nearly six in 10 US energy drink consumers worry about their safety. Retrieved from http://www.mintel.com/press-centre/food-and-drink/energy-drink-safety Monster. (2014). Monster 2013 Annual Report. Retrieved from http://investors.monsterbevcorp.com/annuals.cfm
- 34. References Nielsen. (2014). Millennials – breaking the myths. Retrieved from http://www.nielsen.com/content/dam/corporate/us/en/reports- downloads/2014%20Reports/ielsen-millennial-report-feb-2014.pdf Nielsen. (2014). Top ten. Nielsen. Retrieved from http://www.nielsen.com/us/en/top10s.html Nielsen. (2013, June). The African-American Consumer 2013 Report. Nielsen. Retrieved from http://nnpa.org/wp-content/uploads/2013/06/African-American-Consumer-Report- 2013.pdf Odesser-Torpey, M. (2013, January 24). New products fuel energy drink sales. Retrieved from http://www.csdecisions.com/2013/01/24/new-products-fuel-energy-drink-sales/#_ Peter, J. P., & Olson, C. J. (2008). Consumer behavior & marketing strategy. (8th ed.). New York, NY: McGraw-Hill Ruiz, R., Pena, B., Patlovich, K., Hacker, G., Friedman, R. (2012, May 8). How Sweet It Is: Perceptions, Behaviors, Attitudes, and Messages Regarding Sugary Drink Consumption and Its Reduction. Retrieved from http://www.interlexusa.com/736-ILX-SSBresearchreport.pdf
- 35. References Scarborough Research. (2012). OMG! Is Your Medium Reaching Millennials? A Complimentary Study on the Unique Ways Millennials Engage with Media. Retrieved from http://www.therussogroup.com/wp-content/uploads/2012/12/Scarborough-Millennials- Complimentary-Study.pdf Sherry, K. Gonzalez de Mejia, E., & Heckman, K. (2010, April). Energy drinks: an assessment of their market size, consumer demographics, ingredient profile, functionality, and regulations in the United States. Comprehensive Reviews in Food Science and Food Safety, 9 (3), 303-317. Retrieved from http://onlinelibrary.wiley.com/doi/10.1111/j.1541- 4337.2010.00111.x/pdf Simons, D. (2013, December 17). How energy drinks can power up in 2014. Retrieved from http://blog.gfk.com/2013/12/how-energy-drinks-can-power-up-in-2014/ Singraber, M., Pope, L., Morris, J., & Morris, A. (2013, March). Amp energy drink media plan. Retrieved from http://mollysingraberportfolio.files.wordpress.com/2013/03/amp-final-merged.pdf
- 36. References Target Market News. (2010). First multicultural millennial study released by IMAGES USA, The Futures Company. Retrieved from http://www.targetmarketnews.com/storyid02251002.htm Tornoe, J. (2013, August 1). Hispanic adult millennials’ changing drink preferences. Retrieved from http://www.hispanictrending.net/2013/week31/ Widrich, L. (2013, October 6). Why is Facebook blue? The science behind colors in marketing. Retrieved from http://www.fastcompany.com/3009317/why-is-facebook-blue-the-science-behind-colors-in- marketing Wong, E., Vicioso, K., Liesse, J., Humphreys, J., Hillsman-Sagers, C., Francese, P., Bunish, C. (2012, April 23). In plain sight: the black consumer opportunity. Adage. Retrieved from http://brandedcontent.adage.com/pdf/CABblackconsumer.pdf
Editor's Notes
- Introduction
- Go over agenda
- Go over agenda
- Go over agenda
- Go over agenda
- Energy Drinks were first introduced in the United States in 1997 when Red Bull entered the market (Dolan, 2005). The energy drink market is a segment in the larger functional beverage category including sports and nutraceutical drinks (Sherry, K. Gonzalez de Mejia, E., & Heckman, K., 2010). The energy drink market is monopolistically competitive based on a large number of competitors, easy entry and exit from the market, and product differentiation (Capps & Hanselman, 2012).
- Energy Drinks were first introduced in the United States in 1997 when Red Bull entered the market (Dolan, 2005). The energy drink market is a segment in the larger functional beverage category including sports and nutraceutical drinks (Sherry, K. Gonzalez de Mejia, E., & Heckman, K., 2010). The energy drink market is monopolistically competitive based on a large number of competitors, easy entry and exit from the market, and product differentiation (Capps & Hanselman, 2012).
- Proposal The TRIAAD research proposal consists of the project definition, program objectives, scope, schedule, and research methodology. TRIAAD recommends a comprehensive marketing plan to bring the Push it to the Limit energy drink brand to the market based on the findings of the primary and secondary research. The marketing plan consists of positioning, marketing strategies, and promotional strategies, used to enter the market and achieve the brand’s objectives. The proposal also includes a discussion of ethical concerns and TRIAAD’s professional fees to conduct the market research project.
- Project Definition Push it to the Limit requires market research and consumer behavior insight for the 18 to 25 age energy drink consumer in the United States to develop effective marketing strategies that resonate with the target audience for the launch of the Push it to the Limit energy drink. In, addition Push it to the Limit requires further insight identifying any negative publicity or consumer perception about high sugar, high-caffeine products to develop strategies to address any negative perceptions.
- Program Objectives The objectives of the study are to analyze the energy drink market with research of the internal and external environment used to develop strategies to attract the 18 to 25 year old demographic. TRIAAD will conduct thorough research that includes the internal and external environment, SWOT analysis framework, and the wheel of consumer analysis to provide the necessary information to assist in the development marketing strategies.
- Program Objectives Consumer research provides the other core element in developing marketing strategies. Consumer research provides specific insight involving affect and cognition, consumer behavior, and the consumer environment that the company can use to reach its target audience effectively guiding the knowledge structure and decision process of the consumer (Peter & Olson, 2008). Objectives are linked to the strategies involved specifying a target measure to assess the effectiveness of the implemented strategies.
- Scope The scope of the research includes the United States geographic area with segmentation based on usage categories including insufficient sleep, energy need, alcohol mixer, studying, driving long distances, and hangover treatment (Capps & Hanselman, 2012). The focus of the study will be on the 18 to 25 age demographic segment of the larger 18 to 36 target market (Sherry, K. Gonzalez de Mejia, E., & Heckman, K., 2010; Simons, 2013; Benizri, 2013). The customer groups include teens (high school at least 18 years old), college students (18-25), and adults (18-25). The prime consumer is the 18 to 25 year old primarily male demographic. The research involves energy drink consumers within the defined age and geographic segments.
- Schedule The market research project duration is 11 weeks, in order to perform the necessary tasks such as panel recruitment, questionnaire design, compose sample questionnaire, deliver and receive survey data, and qualitative debrief (See Appendix F: Push it to the Limit Project Gantt Chart). After the initial primary research is performed, the secondary research, analysis, presentation development, and client presentation will be conducted (See Appendix A: Push it to the Limit Project Gantt Chart). The project is scheduled to start on September 8, 2014 and end on November 24, 2014 (See Appendix A: Push it to the Limit Project Gantt Chart).
- Research Methodology Research methodology is based on primary and secondary research. Primary research includes an online survey of energy drink consumers within the target audience. Secondary research includes industry publications, articles, analyst reports, and trade associations obtained from the Internet. The research methodology provides a detailed description of how the research yields insight into the consumer behavior in the United States energy drink market. The research methodology details the sample design and data collection design, instrument design, and the data analysis design. Sample Design The primary research uses a sample size of 385 based on the population of approximately 25 million United States energy drinks consumers (Statista, 2014). The sample size is based on a five percent margin of error and 95% confidence interval (McClave, Benson, & Sincich, 2011). Based on a sample size of 385 we assume an estimated response rate of 20% for an online survey from a customer panel of energy drink consumers (Dierckx, 2013). Invitations will be sent to 1925 energy drink consumers, to achieve the desired 385 sample size, assuming a response rate of 20% (Dierckx, 2013).
- Research Methodology Data Collection Design Both quantitative and qualitative data will be collected using surveys to obtain data. The survey provides quantitative and qualitative data required to gain insight into the demographics, usage, attitude toward energy drinks and attitudes toward product, price, place, and promotion. The survey format includes a self-administered survey distributed via e-mail to the 1925 invitees clustered based on four geographical areas (Northeast, Southeast, Southwest, and Northwest). The survey uses a random sample method from Clear Seas Research panel of energy drink consumers within each geographic cluster to obtain data ensuring a sufficient response from each area (Cooper & Schindler, 2011). Clear Seas Research is a trusted partner TRIAAD outsources with because of their expertise in the beverage category recruiting significant participation in their consumer panel providing a representative sample of energy drinkers in the United States. Clear Seas Research will provide the energy drink consumer panel used to facilitate the online survey. In addition, Clear Seas Research will also distribute, maintain the web link used for the questionnaire, and collect the survey data on a contractual basis for a fee of $10,000 (Clear Seas Research, 2014) (See Appendix B: Clear Seas Pricing). Clear Seas provides the ability to respond to the survey in multiple formats (PC, laptop, mobile, tablet formats) that increase the likelihood of attaining a higher than 20% response rate (Clear Seas Research, 2014).
- Research Methodology Instrument Design The instrument design consists of 29 questions used to determine the demographics, usage, attitudes related to energy drinks, and energy drinks related to product, price, retail channel, and promotions (See Appendix C: Energy Drink Survey). The questions will involve a mixed format of questions specified in the following sections. The online survey software provides the ability to restrict an answer to one selection, provide multiple answers, and unrestricted fields to answer specific questions detailed at the answer level field. The survey contains questions including screening, demographics, usage, and attitudes related to energy drinks, and energy drinks related to product, price, retail channel, and promotions (See Appendix C: Energy Drink Survey).
- Product Positioning Product positioning for Push it to the Limit uses research methodology based on primary and secondary research. Primary research includes an online survey of energy drink consumers within the target audience. Secondary research includes industry publications, articles, analyst reports, and trade associations obtained from the Internet. Benefit segmentation. Energy drinks offer consumers a boost of energy, for their daily activities and help to feel less sleepy (Rose, 2014). The millennial target audience views energy drinks as an alternative to cola based products and coffee used to give a boost of energy (Sherry, K. Gonzalez de Mejia, E., & Heckman, K., 2010; Simons, 2013; Benizri, 2013). Push it to the Limit will take a healthier approach to the energy drink market using informative labeling that includes caffeine, sugar content, and other information. Product attribute segmentation. Push it to the Limit Energy Drinks will be offered in different varieties based upon; taste, flavor, and safe and labeled caffeine and sugar content. A more health conscious regular flavor product with product line extensions that include sugar-free and no calories, carbohydrates, or sugar options will be offered to appeal to the generic millennial market. For the African-American and Hispanic subcultures, Push it to the Limit offers product line extensions (5-% juice, dual fruit-flavor, and organic options) because of the taste and flavor preferences of these large segments within the millennial population (Tornoe, 2013; Ruiz et al., 2012). In addition, labeled product information is also very important to millennials and these subcultures and Push it to the Limit Energy Drinks intends to be an authentic and transparent energy drink company. Each product will have a label that provides comprehensive ingredient contents that include items such as specific and accurate caffeine and sugar content.
- Product Positioning Cognitive segmentation Push it to the Limit Energy Drinks will be focused on three key considerations; appealing to the millennial target market, appealing to the various subcultures within the target market, and differentiation from competitors in the energy drink segment. Kitesurfing, mountain climbing, and soccer present a unique opportunity for Push it to the Limit to appeal to the millennial audience and associate the lifestyle brand with “high energy” activities. Push it to the Limit can capitalize where the other energy drink brands do not have a presence. In addition, Push it to the Limit will also sponsor sporting events and music festivals or concerts supported by digital and social media that provides a way to reach the target market effectively. The company will also use television commercials intended to change the perception about energy drinks, implying that Push it to the Limit Energy Drinks are a safer alternative to other energy drinks. Push it to the Limit seeks to promote a cool and more relatable image than Red Bull and will use a more focused strategy compared to Red Bull, Monster, and Rockstar using a lifestyle and self-expression brand image that appeals to the younger segment of the millennial generation.
- Millennial Marketing Strategies Push it to the Limit will use a generic strategy of focused differentiation based on the somewhat high number of competitors in the energy drink segment and competition is formed on the basis of product differentiation. Push it to the Limit will use a two-pronged millennial and subculture marketing strategy to achieve its objectives. Push it to the Limit will use a homogeneous millennial culture marketing strategy and marketing strategies based on subculture to reach the target audience effectively. The combination of the two-marketing strategies will be used in the areas including logo design (affect), events, social media and digital media, television and radio, sponsorships (cognition), product options, trade promotion, pricing, discounts, and coupons (environment). The marketing strategy using a combination of promotional strategies are designed with the marketing mix (product, place, promotion, and price) in mind to influence the consumer stimulating trial and creating brand loyalty. The focus of the millennial strategy includes concepts unique to all millennials with characteristics that include more technologically advanced, use of a variety of media, and view brands as a partnership and form of self-expression (Wong et al., 2012; Edelman Insights, 2012). Other millennial characteristics include action on behalf of brands millennials are loyal to and significant brand loyalty with brands and products of preference (Wong et al., 2012; Edelman Insights, 2012). In addition, the millennial generation is more educated and most racially and ethnically diverse. The millennial generation likes music and events and requires authenticity, two-way communication, social responsibility, and connection with a personal touch (Nielsen, 2014).
- Subculture Marketing Strategies The cultural differences play a major part in the product options offered (product line extensions). In addition, the subculture promotions strategies further elaborate on the generic millennial promotions strategies and tailor the promotion to each subculture. Each subculture will be targeted using placement of commercials on television programs and radio stations, events (music), product placement (convenience and grocery), and digital media that resonates with the target audience within each subculture.
- Promotional Strategies The cognitive processing model of decision making provides insight into the effect of promotions on consumers. A consumer in the cognitive processing model has to be exposed to the promotion, give the promotion attention, and understand the intended meaning (Peter & Olson, 2008). The beliefs, knowledge, and meanings are integrated with other knowledge that form brand attitudes that influence purchase intentions (Peter & Olson, 2008). A less complicated consumer decision-making process includes five steps consisting of when purchasing goods or services, 1) need recognition, 2) information research, 3) evaluation of alternatives, 4) purchase, and 5) post-purchase behavior (Peter & Olson, 2008).
- Millennial Strategies Millennial promotion strategies. The marketing mix uses a combination of affect and cognition, behavior, and the environment to influence the consumer purchase decision-making process. The events, sponsorship, television and radio, and digital and social media components are used to create a cognitive segment differentiating Push it to the Limit from the other energy drink brands. The logo acts as a paired stimulus across all communication channels triggering an association in the purchasing environment with the additional influence of price, package design, and promotion display playing a part in the process. Trade promotions allow the product to enter the environment with widespread availability on off-premise and on-premise retailers. Each promotional element provides a purpose that assists in reaching objectives that include sales, market share, and profitability targets. Television and radio. Television commercials and radio spots are used to focus on change in negative consumer perception followed by scheduled product focused commercials and radio spots. Television commercial placement will be on cable channels that include ESPN, History, Discovery, and TBS. Push it to the Limit will also place commercials on broadcast channels including Fox, ABC and CBS. The cable and broadcast channels are the channels most viewed by millennials (Scarborough Research, 2012). Television and radio are used to create awareness of the brand and change negative perceptions of energy drinks assisting to create and influence affect and cognition and placing stimuli in the television and radio environment that best reaches the target audience. Promotional events. The promotional events for the company consist of music festivals, regionally selected festivals, and events used to create and maintain brand awareness. Push it to the Limit uses a positive cognitive association pairing fun, memorable events with the brand to influence affect and cognition in a pleasurable environment. At promotional events, free product samples will be provided to attendees to influence brand awareness, stimulate trial, and achieve brand loyalty. Social and Digital Media. Social media and digital media supports the promotional events allowing Push it to the Limit to continue to engage with the customer after an event and to provide a medium to continue to influence the target consumer’s cognition. A content marketing strategy using extensive use of video and pictures on the website and social media will be used to market to the target audience’s cognition and leverage engagement. The social and digital media strategy is based on several brand factors critical in marketing to millennials including, need for entertainment, authenticity, two-way communication, connection, and online content (video, photos, games, and blogs) (Nielsen, 2014; Edelman Insights, 2012). The social and digital media strategy continues to focus on affect and cognition providing valuable content the target millennial audience desires resulting in connection and engagement with the consumer driving brand loyalty. Sponsorships. Sponsorships include music festivals, music events, regionally selected festivals and events, and sports sponsorship. The sponsorships based on the millennial target audience include sponsoring the Pro Kiteboard Riders Association (PKRA) world events and other kiteboard competitions in the United States. The Sponsorship strategy provides a meaningful way to engage with millennials with events that are important to them while cognitively differentiating the brand from competitors. Push it to the Limit will create value in areas where Red Bull does not have a significant presence by segmenting music and sports (Red Bull, 2014). For example, Push it to the Limit will focus on soccer and kitesurfing where Red Bull does not have a presence and expand into other extreme sports such as snowboarding (Red Bull, 2014). Red Bull also has a limited presence in tennis and basketball (Red Bull, 2014). Push it to the Limit will use a more limited and focused traditional and extreme sports mixture that gives the feel of aspirational sports while relating to the sports that people play more often within the target audience. Music is extremely important to the millennial generation with facts that include millennials stream and download more music than any other generation, one-fourth of millennials will try a product or brand that sponsors a music event (Cohen, 2014). The results of music and brand have shown to increase market share 2.4 points and increase purchase rate by 25% (Cohen, 2014). Sponsorships also include adult amateur soccer leagues and tournaments, professional soccer teams in the United States, the United States national soccer team, and ESPN’s coverage of the World Cup. Soccer is the second most popular sport amongst all ethnicities in the United States (Banach, 2014). According to Banach (2014), millennials are more inclined to purchase (95%) a brand after participating in an event and have significant (70%) positive associations with the brand. Sponsorship also provides an influence over affect and cognition providing a paired stimulus with a fun and positive environment that is linked with the energy drink brand. The samples provided stimulate trial to drive consumer behavior to purchase the brand. Trade Promotions. The trade promotion tools used by Push it to the Limit will use a per case promotional allowance and a per case display allowance to obtain the desired off-premise retailers to achieve the highest availability. Trade promotions are used to effect consumer behavior and without product availability; the brand will not have the required exposure and result in lost sales opportunities. Promotions and coupons. Consumer promotions and coupons will also be used to influence purchase behavior in the on-premise retail environment. Push it to the Limit will also distribute in-store samples as a stimulus to create consumer trial in the on-premise retail environment. Pricing. Push it to the Limit will price its products just below Red Bull and on par Monster and in some cases Rockstar to gain entry into the energy drink market and influence overt behavior. A premium pricing strategy will assist to give the consumer the desired lifestyle brand that Red Bull has acquired, but pricing just below will entice consumers to the product. Consumer-Product relationship. Energy drinks are a functional beverage used for an energy boost. Push it to the Limit customers’ will derive added value from sponsored and promotional events and content marketing with content that is psychologically and socially important to the targeted audience. The competitive advantage for Push it to the Limit exists in the taste of the product and cognitive differentiation as a brand. The Push it to the Limit brand will be transparent and authentic differentiated based on the premise of a healthy energy drink that acts responsibly as a lifestyle brand that is both relatable and aspirational. Millennials want brands that represent them, and the combination of the marketing mix elements provides an energy drink and a lifestyle brand that resonates with the target consumer (Nielsen, 2014). Environmental situation. The energy drink market is monopolistically competitive based on a large number of competitors, easy entry and exit from the market, and product differentiation (Capps & Hanselman, 2012). Role of price in marketing strategy. Pricing is a critical role in identifying with consumers at a cognitive level as a lifestyle brand positioned below Red Bull slightly. Push it to the Limit will price its products slightly above or on par with Monster and Rockstar based on price in order to gain entry into the energy drink market (See Appendix G: Grocery Price Strategy; Appendix H: Convenience Price Strategy). The price identifies the brand as a premium product on par with Red Bull. Relevant production and marketing costs. Push it to the Limit will use Monster Beverage Corporation’s relevant production costs which are 41.5% of gross sales and marketing costs at 13.63% of gross sales as the basis for estimating costs (Monster, 2014). In addition, Push it to the Limit’s marketing budget is $25 million which is 7.1% of Monster’s marketing expense of $352,603,000 (Monster, 2014). Push it to the Limit will calculate its estimated gross sales as 7.1% of Monster’s 2013 gross sales ($2,246,428) (Monster, 2014). The relevant production costs are $69,133,399 based on estimated units of 15,715,708 at $10.60 average cost per case resulting in $166,586,505 gross sales (See Appendix D: Relevant Production Costs). The marketing cost for Push it to the Limit is $22,705,741 per year based on 13.63% of gross sales (See Appendix E: Relevant Marketing Costs). Pricing objectives. The pricing objectives include profit, sales, and non-competition objectives. Push it to the Limit’s target return on investment from production cost and marketing costs are 25% (See Appendix F: Pricing Objectives). The sales oriented objectives include a target of $166,586,505 with a one percent market share by the end of year one (See Appendix F: Pricing Objectives). Specific pricing strategy. Push it to the Limit will use a premium pricing strategy with pricing each product just below Red Bull and competitively priced compared to Rockstar and Monster products. The pricing strategy employed will assist to gain entry into the energy drink market and influence overt behavior in the grocery store and convenience retail environments (See Appendix G: Grocery Price Strategy; Appendix H: Convenience Price Strategy). A premium pricing strategy will assist to give the consumer the desired lifestyle brand that Red Bull has acquired, but pricing just below will entice consumers to the product in a market experiencing continuous growth. Pricing is not the basis for competition in the energy drink market and, therefore, Push it to the Limit will not compete on price. Logo, packaging, and promotional displays. The Push it to the Limit logo design uses a mixture of red that reflects emotions of excitement and youth that fits with the energy drink category. The logo will also use the color green that reflects qualities of natural, youth, and adventurous that speaks to the millennial target audience (Nielsen, 2014; Widrich 2013). The packaging, labels, promotional items, and all visual communication tools will feature the brand and product logo used as a stimulus. The packaging will be designed to influence the target audience in the different retail environments to acquire customers and achieve brand loyalty at off-premise retailers (grocery, convenience store, pharmacy, and club) and on-premise retailers (restaurant, club, pub, and bar). Packaging and the logo are used to influence the customer and provide a stimulus activating the knowledge, beliefs, and meanings from the Push it to the Limit television commercials, radio spots, events, and content marketing paired with the energy drink brand. The paired stimulus using the logo and packaging influences the consumer’s purchase behavior in a retail environment with the brand logo stimulating affect and cognitive elements in the evaluation of alternative stage of the decision-making process. The package sizes at the on-premise retailers concentrated in the grocery and convenience channel include product offerings that compete directly with the competition (Red Bull, Monster, and Rockstar). Push it to the Limit will offer all products (varieties) in single-serve 8.4-ounce and 16-ounce cans. The regular flavor and sugar-free products will be offered in 12-ounce single-serve cans (See Appendix G: Grocery Price Strategy; Appendix H: Convenience Price Strategy). Four-packs will be offered in the 8.4-ounce size for all product lines including 1) regular, 2) sugar-free, 3) dual-fruit flavor, 4) organic, 5) energy drink with five percent juice, and 6) no calories, no caffeine, and no carbohydrates options (See Appendix G: Grocery Price Strategy; Appendix H: Convenience Price Strategy). Other four-pack offerings include 12 and 16 ounces (cans) limited to the regular and sugar free products. Eight packs of 8.4-ounce cans will be offered in the regular and sugar free products. Push it to the Limit will only offer regular flavor and sugar free in 16-ounce ten packs and 8.4-ounce 12 packs (See Appendix G: Grocery Price Strategy; Appendix H: Convenience Price Strategy).
- Subculture promotion strategies. The cultural differences play a major part in the specific content and selections used for the media mix. The content within the media mix will vary based on the subculture targeting specific television programs, radio stations, events, and websites that resonate with the target audience within each subculture. African-American marketing mix strategies. African-Americans have differences in product taste, location or purchase, and the depiction in advertising that is different from other subculture segments. Location. Based on African-Americans higher frequency of fast food visits placement and partnership with fast food companies where African-Americans eat most often. Partnerships with McDonalds, Burger King, KFC, Popeye’s, Church’s, Domino’s, and Papa Johns are critical to reaching this segment (Nielsen, 2013). Convenience store and pharmacy locations provide primary shopping destinations, and grocery stores are secondary shopping locations used to target African-Americans. African-Americans visit convenience stores and pharmacy more frequently than any other subculture (Nielsen, 2013). African-Americans also have a higher frequency of shopping visits to the grocery store providing important opportunities to market to this subculture (Nielsen, 2013). Television commercials. Television commercials (primary) will be used to eliminate or reduce the negative perceptions of energy drinks especially in terms of safe levels of sugar important in the African-American subculture (Ruiz et al., 2012). The secondary (followup) commercials will provide a positive correlation with energy drinks and the depiction of African-American values and culture, aspirations of money and material possessions, and ethnic pride. The television commercials to reach the African-American millennial consumer will be aired on BET and TBS. Sponsorship. Push it to the Limit will sponsor music artists and hip-hop events with artists such as Pharrel Williams, Drake, Ariana Grande, John Legend, Rihanna, and Beyonce that align with the brand values. Push it to the Limit will sponsor tours from these artists and various events based on the mass appeal of these artists from a list of BET award winners and nominees for 2014 (Black Entertainment Television, 2014). Digital and Social Media. A content marketing strategy will be used that include YouTube videos with distribution on Facebook and Twitter to deliver valued content to the African-American subculture. YouTube will be based on the fact that the African-American subculture spends less time watching TV and more time on YouTube than the other subcultures (Target Market News, 2010). The African-American subculture also goes online while watching TV, which is more than the other subcultures (Marketing Charts, 2014).
- Subculture promotion strategies. The cultural differences play a major part in the specific content and selections used for the media mix. The content within the media mix will vary based on the subculture targeting specific television programs, radio stations, events, and websites that resonate with the target audience within each subculture. Hispanic marketing mix strategies. Hispanic millennials have culture differences that include family values, language, mobile technology consumption, taste and flavors, sugar-sweetened beverage consumption, and the passionate influence of soccer that differentiates this subculture. Location. Partnering with Starbucks and Dunkin Donuts provides the ability to target Hispanics at the on-premise locations they frequent most in their leisure time. Providing an alternative beverage option at these locations allows access to the Hispanic millennial target audience. Television commercials. Television commercials (primary) will be used to eliminate or reduce the negative perceptions of energy drinks especially in terms of safe levels of sugar important in the Hispanic subculture (Ruiz et al., 2012). The secondary (follow-up) commercials will provide a positive correlation with energy drinks and Hispanic values and culture with themes including family and soccer. The television commercials will be aired on Univision (Spanish language) and a mix of English speaking and Spanish speaking cable channels such as ESPN, ESPN Deportes, and BEIN Sports. An emphasis on BEIN sports commercials that broadcasts Barcelona games will be used more frequently (Banach, 2014). Soccer will be used as a method to reach the Hispanic millennial consumer on the specific channels they watch the most (Banach, 2014). Digital and Social Media. A content marketing strategy will be used that include YouTube videos with distribution on Facebook and Twitter to deliver valued content to the Hispanic subculture. Because the Hispanic millennial uses more mobile media a heavy focus on providing a mobile website experience and heavy use of YouTube, Facebook, and Twitter to distribute content. The content provided includes traditional Hispanic sporting events (soccer) and action sports (emerging interest) valued by the Hispanic subculture (Feil, 2013; Banach, 2014).
- Subculture promotion strategies. The cultural differences play a major part in the specific content and selections used for the media mix. The content within the media mix will vary based on the subculture targeting specific television programs, radio stations, events, and websites that resonate with the target audience within each subculture. Asian marketing mix strategies. The Asian emphasis on education, family, and community are used with in-language television commercials and college scholarship giveaways. Television commercials. The high-concentration in limited and specific geographic areas provides an easy and effective manner to reach the Asian millennial with television commercials (Singraber et al., 2013). Television commercials (primary) will be used to eliminate or reduce the negative perceptions of energy drinks. The secondary (followup) commercials will provide a positive correlation with education and energy drinks that resonate with the target Asian millennial consumer (Singraber et al., 2013). The television commercials will be aired on cable and broadcast programs most viewed by Asian Millennials and on TV Asia to reach the Asian millennial consumer effectively (Singraber et al., 2013). Sponsorship. Push it to the Limit will sponsor music festivals and Asian student organizations (Singraber et al., 2013). Sponsorships of music festivals especially electronic dance music festivals have a high attendance of Asian millennials providing an effective event experience to target this group. Sponsoring Asian student organizations help the brand relate and associate the brand with the cultural emphasis on education (Singraber et al., 2013). Digital and Social Media. Scholarship competitions for undergraduate and graduate school will be used associated with a digital and social media campaign using Facebook and Twitter (Singraber et al., 2013). Education is very important in the Asian subculture and association of the brand with education. Social media channels to reach the Asian millennial using the most frequented media provides an effective way to reach this group (Singraber et al., 2013).
- Ethical Concerns Consumers have formed negative perceptions of energy drinks based on lawsuits, proposed legislation, and media attention the category must address (Mintel, 2014). Despite the negative perceptions, the energy drink category continues to experience growth (Mintel, 2014). Marketing a highly caffeinated and high-sugar content energy drink provides an ethical conflict based on the AMA’s code of ethics. The concerns are related to the potential harm of others with the high levels of caffeine and the high-sugar content, products that are fit for intended use, and full disclosure of risks (Peter & Olson, 2008). In addition, from a consumer perspective, marketing this type of beverage to the millennial target audience lacks insight of the millennial values that include authenticity and social responsibility (Nielsen, 2014; Edelman Insights, 2012). According to Mintel (2014), 59% of Americans that consume energy drinks are worried about safety with 39% stating that they are not healthy. The significant majority of energy drink consumers agree that energy drink companies should include daily consumption recommendations on the packaging (Mintel, 2014). Educating the consumer on health and safety are critical functions energy drink consumers seek from energy drink manufacturers. Push it to the Limit has an opportunity to occupy the safe, healthy, and effective energy drink position in the mind of the target consumer that TRIAAD is confident will produce significant results (Mintel, 2014). Ethical considerations regarding subcultures also provide important characteristics related to marketing to these groups. The African-American subculture is the heaviest consumers of energy drinks, and along with the Hispanic subculture are more likely to consume beverages that are sugar-sweetened beverages daily compared to whites (Ruiz, Pena, Patlovich, Hacker, & Friedman, 2012; Odesser-Torpey, 2013). In addition, Hispanic millennials are seeking to reduce sugar consumption reducing high-sugar drinks with 60% selecting sugar free juice options and eliminating soda consumptions (Tornoe, 2013). Millennial values, concerns from energy drink consumers, and subculture considerations provide important ethical components used by TRIAAD when recommending solutions effective in reaching the target audience.
- Ethical Concerns Consumers have formed negative perceptions of energy drinks based on lawsuits, proposed legislation, and media attention the category must address (Mintel, 2014). Despite the negative perceptions, the energy drink category continues to experience growth (Mintel, 2014). Marketing a highly caffeinated and high-sugar content energy drink provides an ethical conflict based on the AMA’s code of ethics. The concerns are related to the potential harm of others with the high levels of caffeine and the high-sugar content, products that are fit for intended use, and full disclosure of risks (Peter & Olson, 2008). In addition, from a consumer perspective, marketing this type of beverage to the millennial target audience lacks insight of the millennial values that include authenticity and social responsibility (Nielsen, 2014; Edelman Insights, 2012). According to Mintel (2014), 59% of Americans that consume energy drinks are worried about safety with 39% stating that they are not healthy. The significant majority of energy drink consumers agree that energy drink companies should include daily consumption recommendations on the packaging (Mintel, 2014). Educating the consumer on health and safety are critical functions energy drink consumers seek from energy drink manufacturers. Push it to the Limit has an opportunity to occupy the safe, healthy, and effective energy drink position in the mind of the target consumer that TRIAAD is confident will produce significant results (Mintel, 2014). Ethical considerations regarding subcultures also provide important characteristics related to marketing to these groups. The African-American subculture is the heaviest consumers of energy drinks, and along with the Hispanic subculture are more likely to consume beverages that are sugar-sweetened beverages daily compared to whites (Ruiz, Pena, Patlovich, Hacker, & Friedman, 2012; Odesser-Torpey, 2013). In addition, Hispanic millennials are seeking to reduce sugar consumption reducing high-sugar drinks with 60% selecting sugar free juice options and eliminating soda consumptions (Tornoe, 2013). Millennial values, concerns from energy drink consumers, and subculture considerations provide important ethical components used by TRIAAD when recommending solutions effective in reaching the target audience. Recommended Solutions to Ethical Concerns The millennial characteristics of the target audience include authenticity, healthy lifestyle, and brands that are ethically responsible provide important attributes that Push it to the Limit must consider (Nielsen, 2014; Edelman Insights, 2012). Providing a high-caffeine and high-sugar product that contributes to health concerns does not align with the values of the target audience. Positioning the product as an equally effective and healthy alternative with targeted products that resonate with the millennial generation with 1) regular flavor, 2) sugar-free, and 3) no carbohydrates, no calories, and no sugar are better suited products for the target audience. TRIAAD recommends a regular flavor with 65 milligrams of caffeine and 19 grams of sugar in an 8.4-fluid ounce serving size that is below all the competitors (Sherry, K. Gonzalez de Mejia, E., & Heckman, K., 2010). TRIAAD also recommends all flavors contain 65 milligrams of caffeine and 19 grams of sugar or less. In addition, providing products targeting subculture segments that represent more than half the millennial population (African-American and Hispanic) is critical to the success of the brand (Banach, 2014). TRIAAD recommends a product with five percent juice flavor with vitamins B and C with safe and healthy levels of caffeine and sugar. The juice flavored product caters to the African-American millennial consumer taste profile and meets their subculture needs that include a safe energy boost with reduced sugar than the competition (Ruiz et al., 2012). TRIAAD also recommends an organic product, combined fruit flavors product targeting the Hispanic subculture based on taste and health preferences (Tornoe, 2013). Additionally, TRIAAD recommends voluntarily labeling with ingredient content (especially caffeine and sugar) with the recommended caffeine and sugar consumption levels per day ranging from 300 to 400 milligrams and 100 to 300 calories of additional sugar (Sherry, K. Gonzalez de Mejia, E., & Heckman, K., 2010; Renee, 2014). The label would further detail how many of that particular can size would be a safe level of consumption for both caffeine and sugar content per day. TRIAAD also recommends including content that educates the consumer that caffeine dehydrates and should not be taken to rehydrate along with the required water hydration for athletic activity (Sherry, K. Gonzalez de Mejia, E., & Heckman, K., 2010). Voluntarily labelling provides the element of authenticity and social responsibility that will resonate with the target millennial values and assist to achieve target sales, profit, and market share objectives.
- Professional Fees The professional fees for the Push it to the Limit market research project are broken down into individual, line-item components including secondary research, research and design questionnaire, and code questionnaire (See Appendix H: TRIAAD Professional Fees Push it to the Limit Project). TRIAAD will use Clear Seas Research to distribute, perform web link maintenance for the questionnaire sent via email, and data collection. In addition, coding and content analysis, programming and data processing, and presentation charges are listed per item (See Appendix G: TRIAAD Professional Fees Push it to the Limit Project). The total fee for the project is $31,500 for the 11-week project (See Appendix I: TRIAAD Professional Fees Push it to the Limit Project).
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