Investigating of British Consumer Behavior for Red Bull - Essay Example

? EXECUTIVE SUMMARY Beverages market in the UK has been of interest to the marketers because of the trend of engaging in health and energy drinks. Red Bull is a kind of energy tonic, which has the potentiality to strengthen physical power and concentration level up to the mark. No study is available that particularly deals with consumer behaviour towards RED BULL. With the aim to gain an insight in to British consumer behavior towards RED BULL, four objectives have been set. This would be a study where data would be collected through both quantitative and qualitative methods. Survey questionnaires would be administered to select (about 100) college students with prior permission of the college authorities, after informing them of the purpose of the research. Qualitative date would be collected through face-to-face interview with proper analytical questions that can bring out the actual need of the consumer. Data from the survey questionnaires would be analysed through bar charts and pie charts while primary data from the interviews would be interpreted along with the theories of consumer behavior. Project time scale has been presented in the research proposal. Investigating of British Consumer Behavior for Red Bull Introduction Beverages market in the UK has been of interest to the marketers because of the trend of engaging in health and energy drinks. The key driver of sales growth in the energy drinks market has been healthy diet choices and healthy alternatives of which energy drink is a part. According to Langlois (2005) energy drinks market including soy-based/yoghurt drinks, sports/energy drinks are preferred over soft drinks. Health products can attract premium pricing and premium pricing means higher profit margins. Stimulants are believed to have a bad taste but this is not the case with Ant Natural Stimulation, which raises energy levels, helps fight ageing and enhances sexual vigour. The British consumers have become health conscious and would prefer to consume energy drinks (Functional Ingredients, 2002). Red Bull too is an energy drink and its selling proposition is that increases stamina and mental concentration (Berg, 2005). Red Bull is a kind of energy tonic, which has the potentiality to strengthen physical power and concentration level up to the mark. They advertise for their product as a drink “for the morning after over-doing it” (Smit & Rogers, 2002). Red Bull containing sucrose and caffeine has the potential to boost the energy levels. With a very high level marketing strategy, this energy drink is available in 100 countries all the world. It also boasts of a successful ratio of selling among its targeted mass, the young people and the athletes. Skillful marketing campaign and excellent distribution with good attractive packaging, this energy drink has owned the market with a successful grade. The main targeted mass for the owner of this health business, Dietrich Mateschitz, is to get the commercial approval. This was tough to get as the drink contains three times more caffeine than any normal health drinks. The European mass was unfamiliar with such energy drinks and as a result almost 50% of the consumers labeled it as something acidic. However, with a proper distribution and marketing strategy with young icons this drink sustain in the market (web, 2004). This paper proposes to investigate British consumer behavior for Red Bull. This is considered important because there have been reports that Red Bull has been banned in France, classified as a medicine in Norway, and in Japan it was available only at the pharmacies (BBC News, 2001). Three people are believed to have died in Sweden following drinking the Red Bull. Deaths in Europe and America have also been linked to Red Bull without proof of course. It is still considered as a drink that ‘gives you wings’ and has become the epitome of cool for the dot.com revelers at clubs and pubs from Los Angeles to Singapore. Question and Justification of This Paper: The quality of the product is not important for the study here; how the marketing strategy and the global consumer behavior have made this a renowned one, is sought to be investigated. People create an impression about any consumer drink based on what the television and other advertisements say; consumers have no time to verify the quality with their own judgment. The advertising and marketing strategies target to capture the attention of the mass through a proper and very attractive method of presenting the product. Hence, presentation of any product is to some extent, responsible for the success or failure of the product. Brand loyalty was given importance earlier but today equally good products are available all over the world. People base their decision on aesthetics, appearance, performance and most importantly the emotional value (Berg, 2005). RED BULL is now a global brand and understanding consumer behavior behind its popularity and purchase would be of interest to the academics as well as the marketers. This has stimulated the interest to research on this topic. Research aims and objectives With the aim to gain an insight in to British consumer behavior as far as Red Bull is concerned, the objectives of the paper are: To evaluate the energy drinks market in the UK To evaluate the factors that influences the purchase decision for the British consumer for Red Bull To investigate the image and perception that the British consumers have of Red Bull Significance of the study Several beverages and energy drinks have inundated the British market and claim benefits for the consumer. However, the British consumer is not typical as it comprises of a high number of immigrants from different nations. This diversity in consumers is challenging for the marketer. In addition, obesity is a rising concern in the UK which too is a factor that influences energy drinks market. Hence, the marketers need to understand the various perspectives that the British consumer looks into when making the purchase decision for Red Bull. This would help other consumer product marketers also. Literature Review Consumer behavior Consumer behavior is the process and the activities that people engage in when searching for, purchasing, evaluating, using and disposing of products and services to satisfy their needs and wants (Belch, 2003). Purchase decision is preceded by a long information search process which may also include brand comparisons and evaluations. Sometimes prominent display and presentation of the product also enables the time-starved consumer to make a decision. Marketers’ success lies in an understanding of consumer behavior. They need to know the consumer needs that the consumer seeks to satisfy with the purchase of the product. This should be highlighted in the presentation of the product because such information influences the purchase decision. Consumers differ across several factors and the marketers also need to know these differences which would impact their marketing strategy as the consumer differences influence their purchase decisions. Weight gain results from a positive energy balance where energy intake exceeds energy expenditure which can be altered through changes in physical activity. Sedentary lifestyle such as television viewing and soft drink consumption are consumer behaviours that exert pressure to a positive energy balance. Consumer attitude towards drinks is based on the Theory of Planned Behaviour (TPB) because it is believed that the behavior occurs whfeelings en there in an intention to perform this behavior (Bruijn & Patte, 2009). Changing the behaviour to consume energy drinks during television viewing may involve contextual changes like making healthier food more readily available. Consumer decision-making process A typical consumer decision making undergoes the different stages as shown below: Problem recognition Information search Alternative evaluation Purchase decision Post-purchase evaluation The consumer first perceives a need and then feels motivated to find a solution. The problem recognition can also differ across consumers. Two consumers may recognize that a watch needs to be purchased – one for functional purpose and another for aesthetic purpose. The motivations differ which influences their purchase decisions. Similarly, the need or problem recognition for a drink may also differ. The motivation also may differ as per Maslow’s Hierarchy of Needs. The motivation influences the information search process. Purchase decision depends upon brand loyalty that the consumer develops. Moreover, the purchase decision differs for durable and non-durable products. Some consumers may not engage in all the five steps in decision making. Thus consumer behavior is a complex process, the knowledge of which is essential for the marketers. Purchase decision depends on the lifestyle and personality of the targeted consumers. To get the business it is important to know such core factors of the consumers first. Consumer behavior can be defined as a mechanism how a consumer buys a product according to the need (Hoyer, & Macinnis, 2009). It involves other factors including use of services, activities, experiences and use of ideas. Consumer psychology helps to know what is lacking and what can inspire the decision of consumer. Such factors can help the marketers to promote their product highlighting such features of the product. Consumer decision to purchase product or services is based on the process of learning (Sproles & Sproles, 1990). Learning style pertains to the way an individual perceives the information about a product be it through the media or through word-of-mouth. Novelty and fashion-conscious consumers have their own learning styles while those seeking best results have a particular learning style. Then there are the price customers and the high recreational shopping customers. Then there are the impulsive and those confused for choice. The last category is that which interests most marketers and it is easy to lure then with enticing advertisements. Compulsive buying and impulsive buying has also been seen in many consumers. Those with low self-esteem have addictive behaviours and they engage in compulsive buying (Roberts, 1998). Because of the fear guilt they carry from childhood they are unable to control their purchasing habits and compulsive buying helps them overcome these feelings temporarily. They associate compulsive buyi9ng with social status and even if the need does not exist they would buy something. However, target market selection is critical to success. Each and every section of society has different values and ideas and this is important to emphasis on the difference. The society is changing and so are the values. What appeals to one consumer may not appeal to another (Hawkins, 2010). Energy drinks market – consumption view Energy drinks are being advertised as being able to provide alertness and energy and to combat sleepiness (Smit & Rogers, 2002). The advertisements entice people by claiming that energy drinks can help people feel more energized, as it helps in exam revisions and during car journeys. They are also being promoted for their stimulant effects and they claim to offer several benefits to the consumer such as increased attention, endurance and performance, weight loss, and providing fun with a difference (Reissig, Strain & Griffiths, 2009). Advertisements of energy drinks are targeted to young males with alluring and suggestive tag lines such as FULL THROTTLE. The UK consumer has become more cosmopolitan as is demonstrated through the increased preference for food and drinks from mainland Europe (Saunders & Saker, 1994). This is the result of the spread of wealth evenly in the society. Consumers now spend increased amount of time on leisure and they easily adapt to new consumer goods and trends. The energy drinks market in Britain has registered phenomenal growth because of the health conscious consumers that look for healthy alternatives and healthy diet choices (Langlois, 2005). People now prefer soy drinks and yoghurt drinks over soft beverages as is evident from the table presented in Annexure A. Health and energy drinks have emerged as the most profitable and growing segment (Reuters, 2008). They score over the carbonated drinks of which sales have been declining while the sale of energy drinks has been increasing. This is because energy drinks are carbonated soft drinks with a mix of herbs, caffeine, sugars and vitamins that stimulate the brain and provide extra energy (Williams, 2009). Many also include an amino acid derivative that converts fat to energy. Energy drinks are popular with long distance drivers who prefer it over double espresso for staying alter. According to analysts Mintel, sales of drinks containing sugar or stimulants such as caffeine have risen by 75% since 2000 despite such drinks being too expensive (BBC News, 2005). A study of three energy drinks – Lucozade, Lucozade Energy and Red Bull revealed that these drinks are more popular in families with children. Only 31% of families without children got a boost while 44% parents with families could feel the difference the drinks make. The UK has long working hours and such drinks provide the kick the consumers need at the end of the day. The energy drinks market had moved from the niche market to mass market which shows the mass appeal that such drinks have in the British market. UK consumers are conscious of energy drink and this is evident from the report that states that an energy drink with an Asian ant as its principal agent made a successful entry in the UK (Functional Ingredients, 2002). According to a research by the Mintel group 484 million litres of sports and energy drink have been drunk in the UK in 2008 (Williams, 2009). The energy drink keeps the people awake at work or at the wheel. It is affordable as Red Bull is sold with vodka for as little as a pound. All the energy drinks sell because of their strong brand identities and flashy websites. They sponsor sporting events, music festivals and movies. However, energy drinks has also been the subject of criticism as children have been suffering from heart palpitations, dizziness and nausea. Links have also been found between energy drinks and risky behavior (Williams, 2009). Despite these, energy drinks market has been thriving in Britain. Red Bull – brand image Red Bull is a new kind of energy drink which is flooding the market; it has washed away the cola war between Pepsi and Coke. This suggests that there is something different about Red Bull. It belongs to the functional drinks market in the UK. This sparkling, still and dilutable product helps replace lost minerals, sugars and fluids after exercise (Bized, 2005). It replaces lost energy after illness or even general weariness, apart from stimulating alertness. Red Bull’s marketing strategy apparently has led to its immense global success as an energy drink. Realizing that it would not be possible to convince the Vienna factory workers to give up their morning coffee, they targeted the young urban professionals who work equally long hours but are richer in cash (BBC News, 2001). Red Bull was given a designer image that had immediate appeal with the youth as it was also associated with glamorous sports and lifestyle. Competitors have been found to copy Red Bull but it still manages to remain ahead of them because of its marketing strategy. When the drink was initially launched in 1997, there was no such energy drinks available in the market but within four years of its launching, the market increased with a statistic of $500 of which Red Bull possesses 70% of the whole (Belch, 2003). Red Bull is an absolute example of making a market with a sudden buzz. It was described as a “new sex drink” along with various other phrases making the market boost up. All these come not on the basis of the quality. Nobody verifies the contents rather everybody believes in the buzz. The success of this drink is as an energetic drink but several marketers claim that its marketing strategy is somehow “nonmarketed” can never be accepted. The success of the drink lies in its several grass-root marketing strategies including packaging and all. Moreover, it puts back 35% of its revenue for advertisement and promotion of the product. This explains the consumers’ attention towards presentation and not on quality of the product they consume. The supermarket shelves now are full of energy drinks with Red Bull having a large market share (BBC News, 2001). It controls 86% of the market despite 23 new functional drinks being introduced into the UK market. The advertising appeal of this energy drink is popular because of its unusual treatment and nontraditional concept. It has used the traditional media but in a nontraditional way; their marketing approach has been completely different. They have gone in for the sponsorship of alternative sports which plays an important role in the marketing strategy. Mainstream media is used in some unusual methods such as using animated spots in Red Bull campaigns where the devil tries the product and sprouts wings. Such advertising has been able to capture mass appeal. Red Bull has targeted the young adults who feel more energetic through such drinks. This enhances the enthusiasm and the marketers should have the motto to instigate young consumers through proper marketing strategies. This can be only done with proper analysis of the behavior of young adults. Such marketing policy can be compared with Pepsi and other drinks. All of them have the target of this sector of consumer but Red Bull has succeeded with its Bull's effect (Chura, 2001). Red Bull scores because of its distinctive logo, name, symbol and design, all of which gives it a distinctive identity. Based on the principles of consumer behavior and taking into consideration the energy drink market in Britain, the methodology to investigate into British consumer behavior towards Red Bull would be developed. Research Methodology Motivation research is very important to know the psychological sphere of the consumer. Amaratunga, Baldry, Sarshar, and Newton (2002) define research methodology as the procedural framework within which the research is conducted. It takes into accounts facts and opinions, theories and concepts. Different types of research philosophies exist and each has its own advantages and disadvantages. The two most commonly used methods are positivism (quantitative with hypothesis testing), and interpretivism (qualitative with hypothesis generalizations), realism is also used to some extent. Qualitative and Quantitative method of research Quantitative method is numerical in nature and is based on figures. Under this paradigm questionnaires and interviews are the usual data collection methods. Some researchers are of the opinion that unless human behavior is expressed in numerical terms it cannot be accurately measured (Jones, 2004). Qualitative data, on the other hand covers a wide range of sources from which data is gathered. This includes credible sources such as previous research, literature review, case studies and unstructured interviews. Some consider qualitative approach a better approach. Overall, there is no unique method and the approach would depend on the size of the sample, the purpose of the research, the topic to be researched and the subject. Research Phenomenon Research can involve examining an existing question, some new information or bring together existing information in a new way. This study involves investigating British consumer behavior towards Red Bull, the popular energy drink. Some previous research is available on how the company markets its products, its distribution channels and its packaging. However, whether they have investigated into consumer purchase process is not known. This study proposes to examine the consumer behavior. Research design This study proposes to use a mix of the qualitative and the quantitative methods of research. The quantitative approach requires independence of the observer from the subject being observed and the hypotheses have to be formulated in advance. The explanation under this approach can be reduced to the simplest possible terms. Emphasis in the quantitative approach is on opinions and concepts. Quantitative data permits comparability of data, statistical analysis and repeatability of data collected to enable verification. Qualitative approach too is essential to understand the consumer viewpoint and this requires deeper investigation. The focus in this approach is on words and observations and it enables observing people in their natural situations (Amaratunga et al). The researcher’s role is merely that of an observer and hence enables accurate data collection. Implementation of quantitative approach Sample size The questionnaires would be administered to select college students with prior permission of the college authorities, after informing them of the purpose of the research. It is proposed to distribute at least 100 questionnaires so that substantial information is obtained. However, it is likely that many colleges may not grant permission. It is also not known how many students would actually respond to the questionnaires although no coercion would be used or incentives offered to participate in the study. Data collection Both primary and secondary data will be collected for this study. Primary data is specific to any study and hence the questionnaires and the questions would be suitably designed keeping in mind the purpose of the research. Quantitative data can be collected through published sources, through survey questionnaires and interviews (Gable, 1994). Survey questionnaires would be used to collect quantitative data. Surveys enable data collection from the mass in large numbers which is essential for this study. Questionnaires would contain questions on the purchase process such as the source of purchase, what motivates them towards energy drink, whether they are attracted towards Red Bull because of its packaging, or because of its logo or catch lines. The questionnaires would also collect data on the demographics such as age and sex. Questions would also probe into the minds of the consumer as to what they expected from the drink and if their need was satisfied. It would also seek to investigate whether they use the drink on recommendation or because of advertisements. Some questions would be directed to ascertain whether the need for the drink existed unknown to them. This implies that Red Bull could have helped the consumer to discover a need of which they were not aware of. Lastly the questionnaires would probe into post-purchase evaluation – why they continue buying Red Bull when competitive products are available in the market. The questionnaires would help reveal whether the product catches the attention of the consumers or not. The promotion should have the capacity to change the decision from the part of the customers. Qualitative date would be collected through face-to-face interview with proper analytical questions that can bring out the actual need of the consumer. Such situations can really help the marketers to know about the intense demand of the consumer of any specific sector. Qualitative interviews help understand an experience and the meaning that an individual makes of that experience (Eggenberger & Nelms, 2006). Interviews are a social encounter where knowledge is constructed. The individual in-depth interview permits the interviewer to probe into social and personal matters (DiCicco-Bloom & Crabtree, 2006) while unveiling a person’s emotions, beliefs, problems, experience and actions (Eggenberger & Nelms). Such an approach is considered essential for this study as the purpose is to investigate consumer behavior and attitude towards energy drinks in general and Red Bull in particular. It would also give an insight into how the marketers should devise the marketing strategy for energy drinks. Interviews can be close-ended or open-ended. For this study the interviews would be open-ended and this would be conducted of consumers at the stores. Consumers that have picked up red Bull would be approached and asked to spare some time. This would be random sampling as it is not known how many consumers can be approached in a day or at any particular store. The researcher would also observe the consumer buying process and it would help to ascertain if it is a repeat customer or a new customer buying for the first time. Efforts would be made to interview both the first timers and the repeat customers as this would reveal greater insights of two different types of minds and purchase processes they engage in. To support the primary data, extensive literature review would be conducted and then the data from the two sources corroborated. Data analysis Data from the survey questionnaires would be analysed through bar charts and pie charts while primary data from the interviews would be interpreted along with the theories of consumer behavior. Secondary data from literature review would be presented in an organized format which helps understand the principles at a glance. No statistical analysis would be conducted. Primary and secondary data collected will be compared which will help to understand the gap and devise strategy accordingly. Ethical concerns Ethical concerns in any research can arise from the time of literature review and can be experienced throughout the process including designing the questionnaires or even during data collection. However, all efforts would be made to ensure that ethics are not compromised with. Interviews and survey would be conducted after prior consent. Efforts would be made to ensure the researcher has no influence over the survey respondents as well as the interviewees. As far as secondary data is concerned, all references and citations would be provided to ensure that intellectual property rights have been observed. Validity and reliability For any research reliability of the data collected and the validity are important criteria. Validity is the ability of the instrument to measure what was intended to be measured (Amaratunga et al). Reliability is the extent to which the outcome of the study is repeated even if the instruments are different and under different circumstances. Project time scale Once the research proposal has been approved work would begin. Literature review is the first important data collection as the questionnaires would be designed based on that. This would require extensive search for published studies and data and hence at least 3 months would be allotted for that. Questionnaire design would take at least 15 days based on the literature reviewed. Interview questions design would take at least 7 days. Administering of questionnaire – one week – as this would be done at different colleges during different times of the day Collection of questionnaire – one week Interviews – one week Synthesis and analysis of data – one month Conclusion and writing the dissertation – one month Total time expected to be taken after the proposal has been approved – six months and 15 days. Conclusion With the aim to gain an insight in to British consumer behavior for the energy drink Red Bull, four objectives have been set. This would be a mix of qualitative and quantitative study with data being collected through questionnaires as well as in-depth interviews. Literature from reliable sources would be reviewed and the framework for the study would be formed. While all efforts would be made to adhere to the proposal, no research method is unique. As mentioned, each research method has its own advantages and disadvantages. It is not known how many students would be willing to respond to the questionnaires, how many colleges would permit distribution of questionnaires, and to what extent students would provide honest responses. It is also known how many in-store customers would be willing to respond to questions and whether they would register true and honest opinions. The researcher would try to conduct all interviews personally but it is likely that some assistance may be needed if travelling to different stores is deemed necessary. 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