Marketing Monster Energy Drink in Ukraine - Essay Example

Marketing Monster Energy Drink in Ukraine Marketing Monster Energy Drink in Ukraine Since the product was initially launched by the Hansen Beverage Company in 2002, Monster Energy Drink has been able to steadily rise from being an obscure and relatively unknown product to now become one of the top profit-earning products in its category (Burton, 2007). In 2005, the product’s successful marketing strategy both in the United States and across the world saw its stakeholders witness and impressive 333% gain in the value of their shares from an initial $18.20 to an amazing $78.81 at the end of the year. This paper will seek to show that by using a successful marketing strategy, it is possible for Monster Energy to emerge as the leading energy drink brand in Ukraine. Monster Energy in Terms of the Four Utilities of Customer Value Economists assume that customers always act to make themselves as well off as possible. This is a belief that is in line with the economic model of consumer behavior which postulates that, customers will always choose to try and buy a combination of services and goods that they believe will serve to make them as well off as possible, from among all the available combinations that their budgets allows them to buy. To this end, it is possible to analyze Monster Energy so as to determine its impact on the four utilities of customer value. Functionality: The functionality utility basically includes all the various tangible aspects of a service or product (Dutta, 2011). These include durability, aesthetics, atmosphere of the place and comfort. Monster Energy’s healthy formulation provides great functionality to consumers as it allows them to fight both physical and mental fatigue. Time: The time utilities entails the availing of services and products to consumers at the time that these consumers require them (Dutta, 2011). Monster Energy has laid in place a good supply network that ensure that the product is easily made available to its consumers around the world when they want it. Consumers can be able to easily purchase the product at local convenience stores. Monster energy is also made easily available at the various extreme sports events that it sponsors from motor cross to surfing. Place: According to Dutta, (2011), the place utility generally includes where and how the given products and services are eventually delivered. In addition to being made available at convenience stores and supermarkets across the world, monster energy drinks is also widely sold at various sporting events. Ease of Possession: The possession utility basically includes the customer’s payments and warranties. This assurance is seen to greatly add value in addition to it’s also helping to distinguish the brand from a competitor (Dutta, 2011). Monster Energy consumers can be able to easily obtain the product by purchasing the product at most stores. These stores normally take diverse forms of payment in cash or credit. On its website Monster Energy promotes a policy of replacing faulty products. Monster Energy’s Target Market at Home and in the Ukrainian Foreign Market In the United States, Monster Energy’s base target market is seen to mainly comprise of students and young professional of ages ranging between 16-34 years. This target market demographic is noted to prefer consuming this “New Age Beverage” due to the fact that it exudes what is considered to be an edgy and hip vibe that reflects heavily on their lifestyle. In its marketing campaign, Monster Energy is also seen to target the creation of a greater presence among relatively large groups of people by sponsoring things like sporting events, city events or even college events (Norwood, 2011). The products targeted marketing has seen it shun the use of conventional traditional advertising avenues such as radio, TV commercials and billboards. Instead of using of using these avenues, the Monster Energy attempts to try and promote the concept of lifestyle in a can. By sponsoring events such as VIP parties, concerts and sporting events, Monster Energy is able to not only live the lifestyle, but also effectively promote it in an interactive manner among the brand enthusiasts. In selecting a target market within Ukraine, the Monster Energy drink should look into targeting the same demographic of 16-34 year old students and young professionals as targeting this particular demographic has been met with great success in the different countries in which the product has been made available. Despite the fact that the energy drinks category in Ukraine is relatively new, it has been able to experience double-digit growth rates over the years. the main drivers for sales over the years have been the lower-end products that were produced by the smaller market players. These players have taken to introducing energy drinks that are packed in larger metal cans and PET bottles that tend to be more appealing to the financially-restrained consumers (euromonitor.com, 2014). As the energy drinks product category continues to grow and reach maturity in the Ukrainian market, euromonitor (2014), points out that forecast period growth will most likely be expected to experience a significant slowdown. Energy drinks will on overall grow by a CAGR of about 3% in terms of the total volume, on the other hand, the total constant value of sales is widely expected to reduce by a CAGR of 1%. This decrease will see it eventually reach UAH1.3 billion by 2017. It is expected that the main driver of this market’s future sales growth will not only continue to be the economy and mid-priced products, but also the expected significantly larger volumes of off-trade sales. As the currently political climate and Russian incursion into Ukraine has caused the country’s economic climate to remain uncertain, it can be expected that consumers in the country will continue to remain price conscious. This will see them attempt to try and search for lower-priced products that will be perceived as being of similar quality to the most expensive but widespread brands such as Red Bull and Burn. Monster Energy’s Product Category Competition in both the United States and Ukrainian Markets In the United States market, Monster Energy not only faces competitive challenges in its own industry, but also on the outside of its industry. This competition generally includes soda beverages, water as well as a number of other athletic drinks. Within the energy drink industry, Monster Energy faces stiff competition from products such as Red Bull, Rock Star and Full Throttle (Gitman & McDaniels, (2008). Rockstar has positioned itself to mostly target the musical world, while Full Throttle and Red Bull seem to share numerous similarities as pertains to their target markets. In the United States market, Red Bull has managed to gain the advantage of a higher pricing power for smaller amounts as it cans generally weight in at only 8.3 oz which is almost half of the 16 oz that the Monster Energy can is renowned for (White, Duncan &Baumle, 2010). According to an analysis conducted by euromonitor international, Coca-Cola beverages continue to dominate the energy drinks market in Ukraine where the undisputed energy drinks category leaders continues to be the Burn brand. This brand is noted to account for an estimated 38% o the of-trade value of sales as recorded in 2012. Another key competitor in this market is red bull which though its aggressive expansion strategy has caused the market share held by Coca-Cola’s Burn product to decrease. Currently Red bull’s eponymous brand holds about 25% of the market share and is ranked as being second. The Non Stop brand produced by Novi Producty and the Adrenaline rush product that is produced by PepsiCo are ranked as being in third and fourth places respectively (euromonitor.com, 2014). Application of Segmentation, Targeting, and Positioning (STP approach to the Marketing of Monster Energy in the Ukrainian Market 1.0 Segmentation In targeting the Ukrainian market, I would apply a number of different segmentations so as to effectively target this market. Some of the segmentations that I would prefer to use demographic segmentation, psychographic segmentation, and socio-economic segmentation. Demographic Segmentation: In the application of demographic segmentation, I would divide the Ukraine market into groups on the basis of a number of variables such as gender, income, age and occupation (Lamb, Hair & McDaniel, 2009). I would target the 16-30 year old age group as this has consistently been shown to account for the major share of the products’ customer base in different markets across the world. Persons below the age of 16 years often tend to account for sales of soft drinks and beverages while the middle age and elderly demographic could be attracted by products having zero calories. This segmentation would also see me target both genders although more emphasis will be placed on targeting males. Monster Energy is widely associated with a certain degree of luxury and will therefore segment the market so as to cater to those who can be deemed to be well-off in terms of income. Some of the occupations that will be targeted in this segmentation will include sports enthusiasts, students, athletes and working professionals. Psychographic Segmentation: This will entail the use of psychology so as to better understand the psychology of Monster Energy consumers (Lamb, Hair & McDaniel, 2009). It will be necessary for Monster Energy to ensure that it copes with new emerging trends. This will enable it to come up with a variety of new flavors and offers that will serve to help it in attracting more customers. Socioeconomic Segmentation: Monster Energy will be marketed to athletes and individuals with high job profiles. These individuals have the necessary purchase potential to afford buying this product. 2.0 Targeting In targeting the promotion of Monster Energy into the Ukraine market, I would focus on targeting athletes engaged in both extreme and college sports. This demographic is considered to be Monster Energy’s primary market. The products will also aim at targeting students as they will be more likely to be attracted by Monster Energy’s Lifestyle in a Can concept. In addition to this, more emphasis will be placed on targeting the male demographic as compared to the female demographic. This is because data from the various markets that Monster Energy has been marketed in has consistently shown that the male demographic tends to consume more of the product as compared to the female demographic. 3.0 Positioning The Monster Energy drink product will be positioned in a manner that will allow for it to appeal to higher income consumers and persons participating in some of the more popular extreme sports events. The Major Environmental Facts and Trends in Ukraine that might Affect the Sale of Monster Energy A key environmental factor that will most likely affect the sale of Monster Energy in Ukraine is the current unstable political situation. This might potentially have the effect of reducing the sale of the product in the areas that have severely affected by the instability. Ukraine’s economy has recently been quite unstable and this can be expected to have a negative impact on the product as it might not be affordable to most of its targeted consumers in that market. The popularity with which Monster Energy is expected to enter into the Ukrainian market will probably greatly boost its sales as it will be perceived by most of its consumers to be a popular status symbol. Ukraine is known to perform relatively well in European sports and especially in events such as weight lifting and in extreme events such as the World’s Strongest man competition. Monster Energy can capitalize on the social popularity of these sports to help it in appealing to a wider segment of the population and consequently be in a position to significantly boost its sales. The Development, Execution and Measure of a Campaign for Monster Energy considering the Four P’s Prior to the designing of a marketing campaign, a market research will be conducted to determine the best possible size and color for the product within the Ukrainian market. At first the product will be made available in supermarkets and convenience stores in the major cities within the country, effective distribution channels will also be developed to ensure that the product is supplied to these convenience stores and supermarkets. The research will also seek to establish a suitable price for the product within the market. This price will help it in effectively competing against already established brands such as Burn and Red Bull. The marketing campaign that will be used in campaigning for Monster Energy will be developed to utilize targeted marketing that will see print ads being designed and used for a period of two months. These ads will specifically appear in sports magazines such as ESPN the magazine, Extreme Sports magazines in addition to being posted around various campuses across Ukraine. To promote the product, the marketing campaign will also be designed such that the print media campaign will run consecutively with a social media campaign. The social media campaign will target platforms such as Twitter, Facebook and popular extreme sports blogging sites in Ukraine. In contrast to the print media campaign, the social media marketing campaign will be conducted on an indefinite period. In addition to the print and social media campaigns, the marketing campaign will also engage in sponsoring college events and other bigger events such as BMX and Extreme Sports. The products will retain the world famous Monster Energy brand (Gitman & McDaniels, (2008). The success of this marketing campaign will be measured by increased awareness of the product within the Ukrainian market. The goal of its social media campaign will be targeted to reach a combined total of 200,000 fans on Twitter and Facebook within a time period of 12 months. The direct marketing of the product at Extreme sports events should be able to boost the popularity of the product and have a direct impact on its overall sales. Smaller cans of 8oz can be designed and marketed at these events to make the product more accessible to the fans. After the launch of the campaign, its success will be measured by determining if there will be an increase in the volume of sales. It is hoped that these measures will be able to see product attain an increase of 15-20 percent within three months. The United States and International Ethical Marketing Considerations The ethical marketing considerations in the products United States and international markets are regarded to be similar to each other. In both instances, Monster Energy should ensure that it does not engage in any unethical behavior such as engaging in selective advertising, price wars and deceptive marketing (Pride & Ferrell, 2010). In marketing its products, Monster Energy should ensure that its market research is not seen to infringe on the privacy or stereotype its target market as these can potentially result in a number of ethically undesirable results. Monster Energy should also ensure that it avoids predatory pricing practices where it the product is offered at very low prices with the intention of eventually driving competitors out of the market (Pride & Ferrell, 2010). Conclusion Ukraine is an emerging and exciting market for energy drinks and if well positioned, Monster Energy will be able to successfully enter this market that is already being controlled by Red Bull and Burn. Given the immense popularity that Monster Energy enjoys in the markets it has entered around the world, it is evidently clear that the same can be replicated in the Ukrainian market and as such, by using a successful marketing strategy, it is possible for Monster Energy to emerge as the leading energy drink brand in Ukraine. References Top of Form Top of Form Bottom of Form Bottom of Form Top of Form Bottom of Form Burton, K. (2007). Hedge hunters: Hedge fund masters on the rewards, the risk, and the reckoning. New York: Bloomberg Press. Dutta, B. (2011). Sales and distribution management. S.l.: I K International Publish. euromonitor.com. (2014). Sports and Energy Drinks in Ukraine. Retrieved from http://www.euromonitor.com/sports-and-energy-drinks-in-ukraine/report Gitman, L. J., & McDaniel, C. D. (2008). The future of business: The essentials. Mason, OH: Thomson South-Western. Lamb, C. W., Hair, J. F., & McDaniel, C. D. (2009). Marketing. Mason, Ohio: South-Western Cengage Learning. Norwood, R. (2011). Young Athletes and Energy Drinks: A bad mix?. Retrieved from http://usatoday30.usatoday.com/sports/story/2011-12-01/young-athletes-and-energy -drinks-a-bad-mix/51556148/1 Pride, W. M., & Ferrell, O. C. (2010). Marketing. Australia: South Western Cengage Learning. White, L., Duncan, G. & Baumle, W. (2010). Foundations of Adult Health Nursing. Cengage Learning. Read More