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Study on Consumer Buying Behavior towards Energy Drink

Executive Summary
This study was conducted to know the consumer buying behavior and purchasing pattern towards energy drink in Mumbai city. The project begins with an introduction of Energy drinks and research of market demand, market leader and product awareness to consumer. In this project I did some research through questionnaire, to know the consumer perception and brand awareness.

Table of Contents

Sr. No.

Topics

Pg. No.

Introduction

1-4

Research objective, Research methodology Scope of the study ,Limitations Data analysis and interpretation

6-15

Conclusion

16

5 Finding and Recommendation

17

18 6 Bibliography

INTRODUCTION Energy Drinks Industry in India Energy drinks are beverages which contain legal stimulants, vitamins, and minerals, including caffeine, guarana, and taurine, various forms of ginseng, maltodextrin, carnitine, creatine, and ginkgo biloba. Some may contain high levels of sugar or glucose. This category traditionally included caffeine based drinks which are energy boosters. Currently, the energy drink segment in India is dominated by two firms, Red Bull and Cloud 9. Cloud 9 somehow breaks the ice by introducing an energy drink with natural source of caffeine such as Guarana, Ginseng and Taurine. According to the market research firm, Data monitor Plc; the market for energy drinks in India was estimated at Rs. 499.2 crores in the year 2008, still at a young stage when compared with carbonated drinks, which was valued at Rs. 6,027.9 crores. Between 2002 and 2007, the market for energy drinks in India grew at about 50% a year. In contrast to that, growth of carbonated drinks in India observed a slowdown by 0.5% during the same period. With an increasing number of modern retail stores, the energy drinks market is expected to reach Rs 1,100 crores by the end of 2010. This decrease in the carbonated drinks market and the high growth of the energy drink market can be attributed to the positive changes in the perception of health and fitness among the Indian youth. The industry foresees a huge potential for Energy Drinks. The energy drink segment is the fastest growing segment in the ready to drink category, reason being that India has a youth centric population and the fast urbanization.

Energy drinks in India till a year back were dominated by players such as Rhinos Bullet, Cloud 9 and Red Bull. Sales started picking up post the entry of established players such as Pepsi, Amway and the latest entry of Coca Cola & GT&T has shown the market potential of the Energy Drink market in India. Market players in this product category are adopting unique marketing strategies like free sampling at schools and colleges before launching their products, sponsoring major sporting events and fashion shows. These promotions enhance the brand recall. Brands in the Energy Drink market are Red Bull, Cloud 9, SJ XXX, Power Horse, and Rock star, Burn, SoBe and Amway. Energy drink industry in India is growing with very convincing speed. It can be said that the foundation pillars of this industry was put forth by Red Bull. It entered the Indian market sometimes back in the year 2003 and since then the energy drink market took its way. Energy drink market was of Rs.100 Cr. till 2005 but it gained acceleration from then on and the energy drink market in India is growing rapidly above 50%. It estimated that the metros are populated by young, trend setting adults which are also the largest energy drink consuming markets in India. Today it has a market potential of Rs.500 Cr. Plus in India. The energy drinks market in India is double in size as a host national and international players venture into the segment. The market for such drinks is expected to double in size to Rs.1, 000 Cr. From Rs.500 Cr. presently. Energy drinks in India till a year back were dominated by players such as Rhinos, Bullet, Cloud 9 and Red Bull among others has suddenly spruced. Sales, however, started picking up post the

entry of established players such as Pepsi, Amway and the latest entry of Coca Cola & GT&T in this segment has shown the market potential of the Energy Drink segment. Pepsi has been marketing its energy drink So Be since November 2008, while Amway XL has been around since September 2009, Red Bull and Power Horse, who have been around for some years now, perhaps were the only existing players to be marketing such products aggressively. It is believed that the fun drinks such as colas segment has declined by 5% since 2007. With the positive changes in the perception of health and fitness in India, the industry foresees a huge potential for supplementary drinks like the Energy Drinks. Amway sells health drinks under the Amway XL label which comes in 2 flavors Citrus Blast and Tropical Blast, priced at Rs.450 for a pack of 6. The energy drink segment is the fastest growing segment in the ready to drink category. The reason being that India has a youth centric population and we are urbanizing very fast. Players are taking to unique marketing strategies to expand the market for energy drinks in India. There are many companies who entered into this energy drink segment after Red Bull. Some of them are Power Horse, Burn (Coca Cola), Cloud 9, SJ XXX (JMJ launched this year). Among these brands Red Bull holds the market share of about 83%, followed by Power Horse with 9%, Cloud 9 and Rock Star with 3.2% and 3% and the rest by other brands including SJ XXX, Burn, So Be, etc.

Market of Energy Drinks in India The food and beverage (F&B) market in India is worth $232 billion and it has experienced a compounded annual growth rate (CAGR) of approximately 18% over the past few years. Despite the size and growth of the industry, related sub sectors such as store-bought nonalcoholic beverages remain underpenetrated, offering substantial growth opportunities to beverage companies and their subsidiaries. This is due to a lack of overall consumption, a lack of routine daily consumption, poor brand differentiation and ineffective or irrelevant product positioning. Energy Drink Market Share in India Edge 0.7%

Power Horse 8% SJ XXX 3% Cloud 9 6%

Rock on Rock Star 1.4% 4%

white tiger.. 0.9%

Red Bull 76%

Energy Drink Market Share (INDIA)

Research Objectives
To find out the average no of customers in various demographic segmentation taking energy drinks. The main objective is consumer Buying behavior towards Indian energy drinks. To know the consumption pattern of energy drink.

Research Methodology Information was collected from a sample size of 100 respondents in the Mumbai city, which include both males and females. Demographic details are provided in the report. Information obtained from the respondents was analyzed and interpreted with the help of chart and graphs. Simple tabulations were calculated for each question.

Scope of the study


This study will provide me data and information about Indian energy drinks and its competitors position in the market and this will help me to analyze the market potential and consumer buying behavior of energy drink. I have taken 100 customer consumption pattern and buying behavior of about energy drinks. Limitations of the study This project is limited to the region of Mumbai only. The sample size taken for the study is too small.

Data Analysis & Interpretation Graphical analysis of consumers perception towards energy drinks: The analysis and interpretation is based on the data collected through questionnaire: Q.1) Your age

Age
3% 2% 9% 11% 14-18 18-24 31% 24-30 30-40 40-50 44% 50-60

From the above figure it can be interpreted that 9% of the consumer between age group of 14-18, 31% from the age group 18-24, 44% of the consumer from 24-30,11% of the consumer from age group of 30-40,3% of consumer from 40-50 age group and 2% of the consumer from the age group of 50-60 consume the energy drink. Majority of the consumer who consumes energy drink are in the age group of 24-30.

Q.2) Your gender

Gender

26% Male Female 74%

From the above figure it can be analyzed that the 74% of the male population and 26% of the female population drinks energy drink. Q.4) what is your current status?

Current Status

45% 55%

Student Working

From the above data it can be interpreted that the 55% of the working people and 45% of the students consumes energy drink.

Q.4) Your family monthly income?

Family monthly income


35 30 25 20 15 10 5 0 32 30 20

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From the above figure it can be concluded that majority of the consumer who spend money on buying energy drink are of the income group of15, 000-25,000. Q.5) what energy drink do you consume?

Consume energy drink


Cloud 9 Edge 49% 11% 7% 7% 5% Rock On XXX White Tiger Other Brand

21%

According to my survey in Mumbai Cloud 9 is dominant player with 49 % and doing well and Red bull the international brand also capturing market share of 21%, and other brands like White tiger has 11% share, Rock On and XXX has 7% and Edge capture the market with 5% share in the Indian market. Q.6) How much do you spend monthly on energy drinks?

Monthly spending on energy drink


3% 6% Less than 200 28% 63% 200-300 300-400 400-500

From the figure it can be interpreted that majority of the consumer that is 63% spend less than 200 rupees per month for buying the energy drink, 28% spend 200-300 for purchasing the energy drink. While only 6% spend monthly 300-400 and 3% spend 400-500 monthly on the energy drink. Majority of the consumer spend less than rupees 200 for consuming energy drink.

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Q.7) The inclusion of vitamins and minerals in energy drinks increase your likelihood of drinking?

Vitamins and minerals in the energy drink


5% 10% 37% 23% Agree Strongly Agree Somewhat Agree Disagree Strongly Disagree 25%

From the survey it can be interpreted that majority of the consumer agree that the vitamins and minerals in energy drink increase their likelihood of buying energy drink. Q.8) How often do you drink energy drink?

Energy drink consume

23% 38% More than once a week Once a week 18% 1-3 times a week

21%

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It was found that 38 % of the respondent buy energy drink less than Once a month, 23% of the respondents buy more than once a week , 21% of the respondents buy 1-3 times a week, and 18% of respondent buy once in a week. Q.9) where do you buy energy drink?

Interested to buy
2%

22% 45%

Retail shops Local shop Super market Others

31%

From the survey it was found that 45% were purchase from the retail outlets, 31% of the respondents were purchase from the local shops, and 22% of the respondents were purchase from super market and only 2% of the respondents purchase from the others. Majority of the consumer purchase energy drink from the retail shop.

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Q.10) what makes you try a new energy drink?

Factor influencing
Brand 5% 12% Price 39% Packaging 22% Advertising 10% 12% Celebrities

From the survey it was found that most influencing factors while purchasing of energy drink is Brand name of the product, advertisement,price and recommendations of the friends. Q.11) The color and graphic of an energy drink can play a role in your purchase of an energy drink?

Can color and graphic design


14%

21%

Agree Strongly Agree

18% 21% 26%

Somewhat agree Disagree Strongly Disagree

From the figure it can be interpreted that majority of the people agree that the can design of an energy drink can play a role in their purchase decision of the drink.

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Q.12) You prefer taste and flavor when buying energy drink?

Taste and flavor


3%

27%

39%

Agree Strongly Agree Somewhat Agree Disagree

31%

From the survey it can be analyzed that 39% consumer agree that they prefer taste when buying energy drink, 31% said they are strongly agree with the statement,27% said that they are somewhat agree with the statement and only 3% are disagree that they dont prefer taste when buying energy drink. Q.13) Are you influenced by the promotion when buying energy drinks?

Promotion

44% 56%

Yes No

From the survey it can be interpreted that more consumer attracted towards the brand when promotion is there. Product promotion plays an important role in the selling of the product 14

Q.14) Your friends or family influence what energy drinks you consume?

Influenced by family or friends


5% 20% 31% Agree Strongly Agree Somewhat Agree Disagree 19% 25% Strongly Disagree

It can be concluded that majority of the people agree that their family and friends influenced them for trying energy drink available in the market. Q.15) Have you ever tried XXX energy drink?

Ever tried XXX

21%

Yes No

79%

From the survey it can be interpreted that majority of the people are not tried the XXX energy drink and most of the people are not even aware of the product XXX.

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Q.16) If no, would you like to experience it?

Like to experience XXX

40% Yes No 60%

In the survey I find that most of the people are ready to try XXX energy drink even though they have not heard of this energy drink before.

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Conclusion: From the data we can say that for consumer only cloud 9 is loyal Brand. From the analysis of the data collected I found that most of the people are aware of the cloud 9 energy drinks in Mumbai, some people know very well about the each products of energy drink but some people havent heard of the new products of energy drink. The awareness of Red bull is very strong in the Indian market. Majority of the people influenced by advertisement and promotion to buy the energy drink. The regular customer of drinking energy drinks is very few in Mumbai, only the people who belong to upper class use to drink energy drinks regularly and most of customer drink more than once in a week or a month. The energy drinks mainly consume by people of the age group 24- 30, and this kind of consumer mostly prefers Brand to create an image among society and friend. The majority of the decision regarding purchase of energy drink was depending up on family or recommendation of friends. . The important factors for purchase of energy drinks is easy availability in the nearest retail stores and also good test of energy drink. Of the data collected I got the mixed reaction for can graphic and design of an energy drink in terms of customer buying behavior.

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Findings: The observation was that Indian energy drinks in Mumbai have tough competition With foreign brand Red Bull. Whenever there is any occasion the first brand among the Indian energy drink comes in the consumers mind are Cloud 9.

Majority of respondents known through television as the source of energy drink brands.

knowing about

Recommendation: Merchandise should be installed against the sale performance of the outlets as well as the need of the market. The companys should focus on more promotion. The companys should give some advertisement through media to expand the awareness and market share. The attention should be paid to the consumer Perception. Companies should provide Retailers sign boards to attract customers. Market research should be done by the companys for those outlets who are selling foreign energy brands. Company should be make good relation with retailer by providing them good services, margin and sales tie-up.

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Bibliography: Howstuffworks.com www.Researchwikis.com/Energy_Drinks_Markew www.Energydrink.com www.thexxxenergy.com www.cloud9.com

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1) Your age 14-18 55-65 19-24 25-35 35-45 45-55

2) Your Gender

Male Student

Female working Below 10,000 others 10,000-15,000

3) Your current status

4) Your family monthly income?

15,000-25,000 25,000 and above 5) What energy drinks do you consume? Full throttle Redline Red Bull Amp (Mt Dew) Rock star other please specify Monster

6) How much do you spend monthly on energy drinks? Less than 200 200-300 300-400 400-500 more than 500

7) The inclusion of vitamins and minerals in energy drinks increase your likelihood of drinking? Agree Strongly Agree Somewhat Agree Disagree Strongly Disagree

8) How often do you drink energy drink? More than once a week Less than once a month 9) Where do you buy energy drinks? Retail shops Local shop Super market once a week 1-3 times a month

10) What makes you try a new energy drink? Brand Price Packaging Advertising Celebrities

Recommendations of friends 11) The color and graphic design of an energy drink can play a role in your purchase of an energy drink? Agree Strongly Agree Somewhat Agree Disagree Strongly Disagree

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12) You prefer taste and flavor while buying energy drink? Agree Strongly Agree Somewhat Agree Disagree Strongly Disagree

13) Are you influenced by the promotion when buying energy drinks? Yes No

14) Your friends or family influence what energy drinks you consume? Agree Strongly Agree Somewhat Agree Disagree Strongly Disagree

15) Have you ever tried drink? Yes No

16) If yes then what was your experienced?

17) If no, would you like to experience it? Yes No

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