Product and Pricing of the Energy Drink - Research Paper Example

Market Research Report on Product & Pricing Energy Drink Table of Contents Introduction……………………………………………………………………….. 3 2. Define the problem……………………………………………………………….. 4 3. Research Methodology…………………………………………………………… 4 3.1. Data Gathering and Tabulating………………………………………………….. 5 4. Data Analysis and Discussion ………………………………………………………5 4.1. Primary Research Analysis………………………………………………………. 5 4.2. Report on the Findings…………………………………………………………… 7 5. Recommendation…………………………………………………………………. 8 6. Conclusion………………………………………………………………………… 9 Reference………………………………………………………………………………….. 10 Appendices………………………………………………………………………………… 11 1. Introduction Marketing is an essential activity for generating profit that ensures the sustainability of business. For developing proper marketing activity, it is mandatory to formulate relevant marketing strategies in view of the particular goods or services. The success of a product or service depends on the effectiveness of its marketing strategies. Generally, the core marketing strategy includes the four Ps of marketing i.e. product, pricing, promotion and place. Every organization must develop relevant and effective strategies after taking into account these four Ps of marketing. While formulating appropriate strategies for any product or services, the decision makers must analyze various internal and external factors like the strengths & weaknesses of the company and macro-environmental factors like demography, economy etc. In case of developing or launching a new product, the taste and preferences of the target consumers is the prime determinant for the success of that new product. The tastes and preferences of customers tend to change with time and hence to understand their preferences, the organization must conduct a proper market research. Kotler defines marketing research as “the function that links the consumer and public through information- information used to identify and define marketing opportunities and problems; generate, refine and evaluate marketing actions; monitor marketing performance; and improve understanding of the marketing process” (Axelbym, p146). This research paper will attempt to develop marketing strategies for a new energy drink by conducting a proper marketing research. In order to understand the objective of this paper, the research problems will be defined. This will be followed by a research methodology that will explain the method of data gathering and tabulation. In the following section named data analysis and discussion, the data collected through primary research will be analyzed and its findings will be reported. On the basis of the findings, some relevant recommendation will be proposed aimed at drafting the marketing strategy for the new energy drink. 2. Define the problem Before launching the new energy drink, necessary information will be acquired for drafting the strategies meant for marketing. Product design, its features, price and effective advertisements are some of the factors that should be kept in mind while making marketing strategies. The manufacturers have to realize the consumers’ taste and preference while determining such criterions. This research paper will analyze consumers’ behaviors and perception related to the various aspects of energy drinks. The primary objective of this research paper is to develop a suitable set of marketing strategies for the new energy drink by understanding the consumers’ taste and behaviors. Another objective of this research paper will be to identify the target consumer group. In order to increase the sale of the new product, it is very essential to target its potential consumers. The creation of value for the environment is also very necessary for the company. This research paper will also analyze the consumers’ perceptions regarding environmental awareness and green marketing as these two factors are significant for effective marketing strategies. 3. Research Methodology To understand the consumer behavior regarding energy drinks, a descriptive research will be conducted through primary data collection. Descriptive research is helpful for analyzing the market situation and is the most appropriate research techniques for identifying the potential market for new products along with consumers’ attitude and demographics. This type of survey includes questionnaire, interview, etc. “Descriptive research is more of fact-finding enterprise, focusing on relatively few dimensions of a well defined entity” (Richey & Klein, p.43). The process of descriptive research will entail the collection of primary data through a set of questionnaire related to the research problems and its objectives. The questionnaire is very important to ensure the accuracy and relevance of research findings and hence it must be developed after taking into account relevant factors. The questionnaire will include 10 relevant questions related to the demographics, tastes and preferences of the consumers. 3.1. Data Gathering and Tabulating To minimize the biasness of the research findings, the respondents have been chosen carefully. These respondents have been approached for gathering the primary data. The prepared questionnaire has been given in the appendix 1. For obtaining the accurate data, the questions have been explained to the best of the ability of the respondents. 20 respondents have been interviewed to gather the primary data. The obtained data is tabulated in MS Excel spreadsheet for analyzing the results through charts and graphs. The tabulated data have been given in the appendix 2. 4. Data Analysis and Discussion 4.1. Primary Research Analysis With the help of the relevant questionnaire, 20 respondents have been interviewed for collecting the primary data related to energy drinks. The energy drink is quite popular among youngsters and they constitute the potential consumer group. Most of the respondents belong to 16 years to 25 years old group. The table given the appendix 2 depicts the demographics of the respondents. As per the pie-chart given in the appendix 3, the market for energy drinks enjoys a wide consumer group. Around 25% and 30% of the total respondents consume energy drinks twice and once in a day respectively. In order to analyze consumer’s preferences towards energy drinks, they were asked to list those factors that influenced their buying behavior. As per appendix 4, nearly 35% of the respondents are concerned with health and the rest 35% of the respondents are brand loyal. According to the brand loyal consumers, the products of a good branded company are healthier as compared to the other companies. In the beverage sector, the threat from substitute products is very high. Various types of substitutes for energy drinks are available in market like cola drinks, juice, other health drinks etc. Appendix 5 shows the best substitute for the energy drinks. Around 30% of the respondents believe that other health drinks are the most important substitutes of energy drinks. However, 35% of the respondents believe that energy drinks are unique in features and taste and hence no substitute can replace it. The next question was asked to understand the consumers’ perception regarding the new energy drink. This question is quite important for launching the new product. The respondents were asked about the improvements they want in a new energy drink. According to the appendix 6, nearly 35% of the respondents have mentioned health as their primary concern and 25% of them have talked about the taste. Another 25% of the respondents seemed to be brand-loyal as they have replied that no further changes are required in their existing energy drink. For promoting the new energy drinks, consumers were questioned regarding the most influential medium of advertisement. Appendix 7 represents the consumers’ answers graphically. According to 35% of the respondents, the most influential medium of advertisement is the TV commercials. Another 50% of the responded believes that the advertisements through internet and newspaper are more up to date mode of attracting attention. To understand the importance of green marketing in respect to the consumers’ buying behaviors, a question was asked on environmental context. As per the appendix 8, 70% of the respondents are concerned with the environmental welfare and they believe that green marketing helps to attract more number of consumers. 4.2. Report on the Findings The analysis of the primary data has disclosed many facts about the consumer behavior related to energy drink. Energy drinks have become very popular in the beverage sector. The lifestyle of people and their food habits have changed significantly in recent years. Convenient food items and beverages have become very popular in society. Basically, the young generations are the most important consumer group. The market for the energy drinks is very profitable and promises higher growth. The disposable income of the people has increased and they are ready to pay for buying high quality products. The modern consumer group is more concerned with health related issues. Brand is another factor that attracts consumers’ attention. Many people perceive that an established brand feels committed to produce high quality products and hence they heavily rely on the products offered by these brands. Beverage industry is highly competitive and threat from substitute products is also very high. The consumers of the beverage sectors are also spoilt with options. The consumers have now become aware of the issues related to global warming and they tend to buy products from companies following green marketing strategies. They believe that companies which are more concerned with environmental issues also maintain that high quality in their products. For effective promotional activity, TV commercial is judged to be the most influential in attracting the consumers. For the tech savvy consumer groups, advertisement through internet is more important. 5. Recommendation The above analysis and discussion have disclosed important findings that will prove to be helpful in launching the new energy drink and for drafting the marketing strategy of the product. As per the findings of this research paper, some plausible recommendations have been suggested below. The unique feature of the new energy drink is to boost the immune system of human body. The company must develop this product in line with health of their potential consumer. The ingredients for the product should not contain any harmful chemical. The price is another important factor for marketing strategy. The company must analysis the pricing strategies of other competitors. The price must be in tune the quality of the product. Brand is another major criterion that attracts many consumers. Therefore, the company must focus on its brand development strategy by maintaining proper communication with their consumers through feedback. The company should always try to recognize the changing consumer behavior and as per their taste and preferences, the necessary modifications must be introduced in the product line. The promotional strategy helps to make the consumers aware of the product features. The new energy drink helps to boost the immune system of human body and this unique feature must be properly communicated to the potential consumer through effective advertisement. Energy drinks are more popular among the youth of the society. Therefore, the company must focus on this particular segment of the consumer group. Health conscious consumer groups are also important for the success of the product. The company must implement green marketing in their strategy formulation process. The packaging should be made of recycled materials and the operating activities of the company should have “positive impact on the environment” (Hawkins et al, p.98). 6. Conclusion The market for the energy drinks is growing at a stupendous rate due the changing lifestyle of the society. In such a lucrative market, the new energy drink that promises to boost the immune system of human body is expected to capture a large market share. Despite such unique attributes, a proper marketing strategy is very essential to draw the consumers. Before launching the new product and developing proper marketing strategies; analyzing consumers’ behaviors is of paramount importance. Market research is a technique that is helpful in this process. For marketing a new energy drink, a descriptive research has been conducted by gathering and analyzing primary data with the help of relevant questionnaire. Discussion and analysis disclosed many vital factors that are important for drafting the marketing strategy for the new energy drink. Health consciousness and effective promotional activities are the most important criteria for developing a successful market for the new product. Reference Axelby, G. CIM Coursebook 02/03 Management Information for Marketing Decisions. Elsevier. 2003. Hawkins, D. I., Best, R. J., Coney, K. A. and Mookerjee, A. Consumer Behavior. Tata McGraw-Hill. 1986. Richey, R. and Klein, J. D. Design and development research: methods, strategies, and issues. Routledge. 2007. Appendices Appendix 1: Questionnaire for the gathering the primary data 1. Age 16yrs to 25yrs 26 yrs to 40yrs 40yrs to 55yrs 55yrs + 2. Gender Male Female 3. Employment Status Businessman Employee Professional Student 4. Income Group (Annually) More than $6000 $6000 to $4000 Less than $4000 5. How many times you drink energy drinks? Twice daily Once daily Trice in a week Once in a week 6. What are the factors that you consider while buying energy drinks? Health Brand Price Convenience 7. Which drinks do you believe to be the substitute of energy drink? Soft drinks Juice Other Health Drinks Nothing 8. What is the improvement do you want in your energy drink? Taste Packaging Healthier Nothing 9. Which medium of advertisement can easily attract your attention? Television commercial Newspaper Internet Promotions in different market places: 10. Do you believe green marketing will attract more consumers? Yes No Appendix 2: Demographics of the Respondents Appendix 3 Appendix 4 Appendix 5 Appendix 6 Appendix 7 Appendix 8 Read More