PROJECT REPORT

NAME:- ZAYEEM NASHIT RAHMAN

SEMESTER:- VI
SPECIALISATION:- MARKETING
ROLL No. :- 663
GUIDE PROFESSOR :- Mr. TRIDEEP SENGUPTA
DATE OF SUBMISSION :- 30-03-2015
PROJECT TOPIC:- DETERMINATION OF VARIOUS
FACTORS AFFECTING THE GROWTH AND SALES OF ENERGY
DRINK.
PROJECT REPORT TO BE SUBMITTED IN PARTIAL FULFILMENT
OF THE
REQUIREMENTS OF THE GRADUATE DEGREE
BACHELOR OF COMMERCE(MARKETING SPECIALIZATION)
ST. XAVIERS COLLEGE(AUTONOMOUS)

Signature of the Student

Signature of the

Supervisor

DECLARATION

I declare the following:1. The material contained in this dissertation is the end result of my own work
and that due acknowledgement has been given in the bibliography and
references to the sources, be they printed, electronic or personal. The word
count of this 17,927.
3. That unless this dissertation has been confirmed as confidential I agree to an
entire electronic copy or sections of the dissertation to be placed on the elearning portal it would be made available for no longer than five years and that
students would be able to print off copies and download. The authorship would
remain anonymous.
4. I agree to my dissertation being submitted to a plagiarism detection service
where it will be stored in the database and compared against work submitted
from this or any other school or from other institutions using this service.
5. In the event of this service detecting a high degree of similarity between
content within this service this will be reported back to my supervisor and
second maker who may decide to undertake further investigation that may
ultimately lead to disciplinary actions should instances of plagiarisms be
detected.
6. I declare that ethical issues have been considered, evaluated and properly
addressed in this term paper.
Signed:
Date:
Name: Zayeem Nashit Rahman
Roll No- 663
Batch: 2012-15
Supervisor: Prof. TridibSengupta

ACKNOWLEDGEMENT
2

This dissertation examines the parameters affecting the growth and sales of
Energy drink industry in India. The report has been written as part of the course
program

for

Bachelors

of

Commerce(Marketing

Management

Specialization). The work could not have been complete without the kind
support of Reverend Father Dr Dominic Savio ,the Vice-Principal, St. Xaviers
College, Kolkata for incorporating such an exercise into the course since it has
presented me with an excellent opportunity to explore and enjoy my analytical
and report-writing skills, consequently preparing me for my corporate future.,
and Dr Shivaji Banerjee, the Head of the Deparment, Marketing Management,
Commerce (Morning).
for his generous support and guidance and for always being available in case of
any help required. In addition, No word of gratitude is enough to express my
fathomless indebtedness to Professor Tridib Sengupta my supervisor at
St.Xaviers College who was the supervisor, guide and a constant source of
inspiration in the entire course of the study. I may be failing in my duty if
gratefulness is not expressed to Rachit Mehta(Field Marketing Manager)
Redbull India Limited, Eastern Zone Marketing Organisation (EMO) who gave
me a rare opportunity to undertake the study even while I am an

an

undergraduate student.
I would like to express thanks to the librarians for the use of various textbooks
from the learning resource center at St.Xaviers College, which provided me
with background information about the academic topics that have been applied
in the project.
It has been a pleasurable challenge and I look forward to many more such
experiences.

TABLE OF CONTENTS
3

NO.
1.

CONTENTS
INTRODUCTION

PAGES
7-13

1.1) Beverage industry

1.2) Global scenario

1.3) Indian scenario

1.4) Research objectives

1.5) Scope

1.6) Research and methodology

1.7) Future scope

2.

LITERATURE REVIEW

9-46

2.2.1) Industry Profile

9-11

2.2.2) Market Metrics

11

2.3) Ingredients
2.3.1)
2.3.2) Effects
2.3.3) Attempts to ban
2.4) Porters 5 Force Analysis
2.5) Needs, Wants and Demands
2.6) SWOT Analysis
2.7) Brand Choice Rationale
2.8) Red Bull
2.8.2) History
2.8.3) 5 C Analysis
2.8.4) Industry Player
2.8.5) Ansoff Product Market Expansion Grid
2.8.6) Life Cycle Analysis
2.8.7) SWOT Analysis of Red Bull
2.8.8) The Product/Competition/ Industry of Red Bull
2.8.9) The Marketing Management Philosophy

12
13
14
14
15
16-17
17-18
18-20
21
22
23
23-27
27-32
32-34
34
35

CHAPTER 1: INTRODUCTION
1.1 BEVERAGE INDUSTRY
The beverage Industry refers to the industry that produces drinks. Beverage
production can vary greatly depending on which beverage is being made. The
website manufacturingdrink.com explains that bottling lines they operate and
the types of product they can run. Other bits of required information include
the knowledge of if said beverage is canned or bottled. Hot filled or cold-fill,
and natural or conventional. Innovations in the beverage industry, catalyzed by
requests for non-alcoholic beverages, include beverage plants, beverage
processing and beverage packing.

1.2 GLOBAL SCENRAIO (ENERGY DRINK INDUSTRY)

Energy drinks are non-alcoholic beverages which are intended to provide a
quick burst of high energy to the consumer. An energy drink is a type
of beverage , which strives to boost mental or physical energy. There has been
an upward growth of energy drink Industry in the global market despite of the
drink being associated with various problems.

1.3 INDIAN SCENARIO

The Energy Drink Industry in India is growing at a rapid rate. One of the major
reasons for this is the influence of the western culture in India. Also, the
increasing middle class population, rapid urbanization and rising disposable
income plays a vital role.
Currently, two firms, Red Bull and Cloud 9, dominate the energy drink segment
in India. Players such as Rhino s Bullet, Cloud 9 and Red Bull.

1.4 RESEARCH OBJECTIVE

Complete overview of Energy Drink Industry in India.
To analyze the impact of various performance indicator for the sales and
revenue of the energy drinks.
To do a exploratory case study on various performance indicator for the
energy drink company Red bull
To study the effectiveness of the consumers perception.
To evaluate the levels of awareness and acceptance among people
towards the product.
To know the reasons influencing the consumer in selecting the
brand of energy drinks.
To analyse the various strategies in terms and advertisements,
promotions etc., for improving the volume of sales of the company
products.

1.5 SCOPE
The study was undertaken to analyze the growth of the Energy Drink industry
and also the various problems associated with it. The study helps us to examine
the various factors or parameters, which have a positive influence on the growth
of the Energy Drink industry in India, namely investments, FDI, Import and
market size.

1.6 RESEARCH AND METHODOLOGY

Like every subject this topic of the energy drink sector has also been
thoroughly researched and the relevant information has been rightly used.
Though there is two types of data primary data that has been collected
through questionnaire and the project comprises of the extensive research
that is done through the secondary data and thus as we proceed and see the
data analysis we will come to know about it in a more detailed way.
Secondary data will be obtained from data sources like indiastat.com,
Economic Intelligence Software (EIS), web journals, etc.
Statistical tools like tables, graphs will be included. The data will be analyzed
and then presented.

1.7 FUTURE SCOPE

The term paper gives an overview of the Energy Drink industry and the changes
which incurred in the beverage industry due introduction of the energy drinks.
With the use of secondary data the term paper has been prepared. With the use
of first hand information, which would include current data, more accurate
result could be achieved.

CHAPTER 2: LITERATURE REVIEW

According to a study done by Hazel Huang, Durham University on the
Marketing Strategy, Red Bull should expand its original targeted group of
young active men (Euromonitor,2012) to ordinary students, as even though this
target group may not be as wildly social or participate in adrenaline-fuelled
sports, they nonetheless need to stay awake and concentrate for long hours on
end studying. Moreover, the ageing consumers from 25 to 45, who had in the
past been moving away from Red Bull consumption (Kumar, 2005)must also be
targeted, as they can also benefit from Red Bull's positive effects (e.g., vitalises
body and mind) (Reynolds, 2011).

Famous Online Marketing Strategy blogger, Mark Collier says how Red Bull
is winning marketing wars. Red Bull does a fabulous job of re-purposing its
content. Red Bull creates long-form content and videos chronicling how these
amazing athletes prepare to engage in their activities. This is for the hardcore
extreme sports fans that want to learn more about these athletes and how they
train for and perform these amazing jumps, stunts and tricks. Then Red Bull
takes the actual footage from the event and shows it by itself, and also works it
into its commercials as well. Red Bull got a ton of publicity from Felix
Baumgartners freefall from space. The brand divided footage from that
amazing event into a highlight video that currently has almost 36 million views.

According to Business Wire, a Marketing Research Consultancy Firm on

Research and Markets: Red Bull: A Trailblazer in Marketing Strategy, Red Bull has
forged an entirely new market segment with its unique product, and today is the
number one worldwide energy drinks company. Its current sales volume
exceeds 4 billion cans sold and it operates in 160 countries. Red Bull's way of
showing off its products and becoming recognized by its target audience is
unusual but hugely successful, and despite its extensive investment is actually
more economical than traditional advertising methods. The company runs and

owns numerous sporting events and teams, all showing the Red Bull logo in
pride of place. The company may face some tough challenges from its
competitors as they are now using similar techniques to get their own products
recognized, which may negate Red Bull's current advantage. Some of Red Bull's
main competitors are well-funded and operated by multinational corporations.
According to a Forbes Magazine write up named, The Wind behind Red
Bulls Wings, by Nitin Pangankar and Mohit Agarwal states that more than
just another global brand, Red Bulls runaway success also spawned an entirely
new category in the global and Indian F&B market: the energy drink. There are
some well-known strategies behind Red Bulls success including its
involvement with extreme sports such as hang gliding and bungee jumping and
its participation in the F1 circuit through its eponymous team. Its slogan Red
Bull gives you wings has seen the firm attach its brand (and considerable
financial resources) to some high risk adventures in the world of aviation,
including last years highest ever free-fall parachute jump from 39 kilometers
above the Earth. This adventurous spirit is a reflection of Red Bulls
freewheeling corporate culture that has enabled the company to build an
enviable performance record over the last 25 years in global market and over
the years in India.
Article:Amid the recent wave of negative publicity surrounding energy drinks, and
some of the elected leaders calling for greater oversight and regulation of the
category, consumer perception of the top energy drink brands has fallen to its
lowest level since 2009, according to consumer research firm You Gov.You
Gov, which measures the impact that word of mouth, news, and advertising has
on brands, found that consumer perception of Monster Energy, Red Bull, and 5
Hour Energy has plummeted over the past two weeks following a rash of
negative publicity surrounding energy drinks. Most of the damaging exposure
stemmed from widespread media coverage of a recent lawsuit filed against

Monster, which alleges that the high caffeine content in its flagship beverage
caused the death of a 14 year old girl last December.
Also impacting consumer perception of energy drinks are reports of a energy
drink related incident maintained by U.S. Food and Drug Administration
(FDA), which linked consumption of Monster Energy to six deaths and 15
hospitalizations since 2009, according to the agencys Food Safety Adverse
Event Reporting System.
To measure brand perception, You Gov interviews 5,000 U.S. consumers each
weekday and asks respondents: If youve heard anything about the brand in the
last two weeks, through advertising, news or word of mouth, was it positive or
negative? The responses are compiled and measured by You Govs Brand
Index and each brand is assigned a buzz score.

Fig.08 YouGov Brand Indexs Buzz Score, October 1 - 25, 2012

10

INDUSTRY PROFILE
The report on the global energy drinks market studies this industry based on
parameters such as types, end-users, leading brands, market trends and
distribution channels. With this, the report acts as a definitive source for market
forecasts, market share and value estimation, trends analysis and competition
mapping in the global energy drinks market. The report relies on premium
databases and latest research methodologies to present an overview of the
global revenue and compounded annual growth rate of the energy drinks
market.
The report lays special emphasis on clearly and quantifiably assessing factors
that are expected to drive the market forward and also those that will inhibit
growth. Thus, the report is a comprehensive offering that answers the concerns
of brand and marketing managers, supply managers, suppliers and distributors,
and other top personnel in the energy drinks market worldwide. Segmenting the
market into several segments and sub-segments gives lends our analysts an
opportunity to study the market deeply.
Overview of the energy drinks market
This report estimates that the market for energy drinks will grow at a CAGR of
over 10% by 2016. This healthy growth rate is expected to be a result of the
rising popularity and consumption of energy drinks by all age groups.
Energy drinks, as the name indicates, are formulated with ingredients that help
boost energy levels. They are often marketed as being a healthy alternative to
other carbonated and sugar-saturated drinks. However, this remains a point of
contention as certain energy drinks brands have been found to contain
ingredients that are potentially harmful to children. Energy drinks are chiefly
consumed by sports persons, athletes, and those leading a hectic lifestyle in a
11

bid to replenish their energy levels, and experience physical (and often mental)
stimulation.
This market is poised to grow on account of the escalating health consciousness
of consumers across the world. The young and aged alike are attracted to
products that bear a promise of helping them remain active and in top physical
shape. This desire has proven to be a lucrative opportunity for manufacturers of
energy drinks. Fancy and innovative packaging, creative advertising, and
scientifically advanced formulations are being seen as platforms for growth by
companies selling energy drinks. The segment of sugar-free energy drinks holds
significant potential for both new and established companies in the energy
drinks market. Low-calorie and sugar-free drinks are especially attractive to
female consumers. Incorporating a larger share of organic and natural
ingredients in energy drinks is yet another aspect that will gain prominence in
the energy drinks market.
This market research report estimates that energy drinks will penetrate untapped
market segments, including the older population. The introduction of new
formulations will be essential if companies are to claim a larger share of the
market revenue. From the geographical market standpoint, North America was
the largest market in 2012, holding over 35% of the global energy drinks
market. The Asia Pacific region came a close second, with over 30% of the
market for energy drinks. The largest market share in the energy drinks industry
was held by two brands: Red Bull and Gatorade.
Segmentation of the global energy drinks market
The global market for energy drinks is segmented on the basis of types and endusers. By type, the market is further segmented into non-alcoholic energy drinks
and alcoholic energy drinks. By end-users, the energy drinks industry is split
into: adults, kids and teenagers, and geriatric population.

MARKET STRUCTURE

12

The primary consumers of this industry are under 35 years of age and
are predominantly male. Teenager and college students are core target market
segments for the manufacturers and consist of the core age group of 12 to 30.
A recent survey estimates that around 35% percent of energy drink consumers
are above 35 years old. Furthermore energy drinks with high sugar levels are
more popular among children and women, while energy drinks with strong
taste and flavor are more preferred by male consumers. Recent studies also
indicated that 65% of the energy drinks market consists of male consumers.
There are several types of energy drinks products. Different varieties of tea and
coffee along with green tea forms one group. Second are traditional energy
drinks such as Red Bull and others. In emerging market, however, several
producers have introduced new products. Combining energy drinks with alcohol
has resulted in new products including Hair of the Dog. Mixing energy drinks
with smart drinks has also created new brand names such as NOS.Added sugars
- sugars and syrups to be added to foodstuffs in the process of preparation. The
composition of this added sugar is artificial, not naturally produced.
Antioxidants - chemical composites which defend the body from cell loss by
retaining oxidation Certified organic -certified by the U.S. Department of
Agriculture that the firms goods meet distinct organic standards.

2.3.1 ENERGY SHOTS Product port

Energy shots are a specialized kind of energy drink. Whereas most energy
drinks are generally sold in cans or bottles, energy shots are usually sold in
50ml

bottles.

Energy

shots

can

contain

the

same

total

amount

of caffeine, vitamins or other functional ingredients as their larger siblings, and

therefore they may be considered concentrated forms of energy drinks.

2.3.3 ATTEMPTS TO BAN

13

The popular energy drink Red Bull was banned in France after the death of an
18-year-old Irish athlete, Ross Cooney, who died within hours after playing a
basketball game and consuming four cans of it. This ban was challenged in
the European Court of Justice in 2004. The French Scientific Committee (J.D.
Birkel) concluded that Red Bull had an excessive amount of caffeine. Norway
also banned Red Bull for a while, although the ban has recently been revoked.
The United Kingdom investigated the drink, but only issued a warning against
its use by children and pregnant women. In the Philippines, Red Bull was also
banned because of the suspected effects of infertility for men.[16]
In 2009, a school in Hove, England requested that local shops do not sell energy
drinks to students. Headteacher Malvina Sanders added that "This was a
preventative measure, as all research shows that consuming high-energy drinks
can have a detrimental impact on the ability of young people to concentrate in
class." The school has negotiated for their local branch of Tesco to display
posters asking students not to ask for the products.
Similar measures were taken by a school in Oxted, also in England which
banned students from consuming drinks and sent letters to parents. This was
featured on the regional news programme BBC South East Today.
New Mexico Military Institute, a military high school and junior college located
in Roswell, New Mexico, does not allow sales of energy drinks at the campus
"Cadet Store" after an incident of a young Cadet drinking too many drinks in
one period and having to be hospitalized.
On June 7th, 2012, the parliament of Latvia approved changes in the legislation
of sale of consumable goods, to prohibit sale of energy drinks to persons under
the age of 18.
JUST SAY NO TO ENERGY DRINKS

14

Roy-Bornstein,Carolyn discusses on the disadvantages that energy drinks render

to children and adolescents. She is critical on the quantity of caffeine contained
in such drinks, as well as its role as central nervous system stimulants. She also
mentions that the ingredient can cause anxiety and constriction of brain and
heart blood vessels. She mentions the conclusion of American Academy of
Pediatrics (AAP) that the said drinks offer no benefit for the health of children.
She mentions that in March 2011, a special article outlined the health effects of
energy drinks on youth. Later in June, a clinical report examined the role of
energy drinks in the lives of children and adolescents. The conclusion? They
don't have one. Energy drinks may contain sugar, sweeteners, vitamins, herbal
supplements and taurine, but the main ingredient in energy drinks is caffeine.
Caffeine content in some energy drinks can be 3 to 5 times what's in an 8-ounce
cola.
Author feels disturbingly, the drinks may contain even more caffeine than
what's listed on the label. That's because some drinks contain additives such as
guaran, kola nut and yerba mate, all of which contain caffeine. Every gram of
the plant guaran contains 40 to 80 mg of caffeine, which can double the drink's
caffeine content without you or your child even knowing about it.
Energy drinks are the fastest growing U.S. beverage market. Thirty to fifty
percent of youth report consuming energy drinks. They are marketed to young
people through athlete sponsorship, product placement on Facebook and in
video games targeted to young people. Because the manufacturers classify these
drinks as "dietary supplements," energy drinks are not subject to regulation by
the Food and Drug Administration like soda is. In contrast, over-the-counter
caffeine stimulants like NoDoz must list things like the minimum age for
purchase (12 years), negative side effects and recommended doses.

15

2.4 PORTERS FIVE FORCES ANALYSIS

THREATS OF NEW ENTRANTS-HIGH
As energy drink market is growing very rapidly, new entrants are eying this
market. Big soft drinks brands like Coca Cola and Pepsi already have plans to
launch energy drinks in Indian market. Since cost of entering in this market is
not very high new companies can easily enter in this market.
Bargaining power of buyers-high
Bargaining power of buyers is high because of availability of many similar
products. The competition in the market in high with many products with
similar functionality , tastes etc in the same market.

BARGAINING POWER OF SUPPLIERS-LOW

Suppliers have low bargaining power because constituents of energy drinks are
easily available and any company may produce them easily.
CURRENT RIVALS OF INDUSTRY-HIGH
There are already many brands in the market. Red bull is a very strong brand
capturing a major share of market. Big companies are coming up different
products. There are many players in the market.
PRESSURE DUE TO SUBSTITUTES-HIGH
Pressure due to substitutes is high because there are many alternate products in
the market. Soft drinks, fruit juices. sodas and various caffeinated products are
available in the market. Consumers have many choices to fulll their need of
caffeine or energy.

16

2.5 NEEDS, WANTS & DEMANDS ANALYSED

NEEDS
Energy Drinks satises three primary needs:
PHYSICAL NEEDS
When tired drivers are feeling the need to fall asleep due to fatigue; and this can
compromise their safety. A driver needs to stay awake and alert when driving to
avert danger and this need is satised by Energy Drink.
FUNCTIONALITY NICHE EXPANDING.
Jacobsen, Jessica [34] discusses the functional benefits that consumers are
looking for with energy drinks and shots other than energy booster. According
to Garima Goel Lal, senior analyst at Mintel International Group Ltd., the top
three reasons that people consume energy drinks include energy boost, mental
alertness and to stay awake. The author also stresses the turning to ingredients
of several beverage manufacturers in order to address the top health positions
for energy and sports drinks.
The author underlines the fact that BEVERAGES HAVE BECOME MORE
THAN JUST A SOURCE OF REFRESHMENT.
Consumers also are turning to beverages for functional benefits. Sports drinks
as well as energy drinks and shots have become a source to provide a variety of
functionalities.
There are quite a number of functional benefits that consumers are looking for
with energy drinks and shots besides [an energy] boost, says Garima Goel Lal,
senior analyst at Mintel International, Chicago. Goel Lal says the top three

17

reasons that people consume energy drinks are for an energy boost, mental
alertness and to stay awake. She says that 68 percent of all energy drink users
say they drink energy drinks for an energy boost, with 21 percent saying they
use them for relaxation. Other functions are hydration at 25 percent, health and
nutrition at 19 percent, and weight management at 17 percent, she adds. With
energy being so important for consumers, it also is a popular health position for
beverages. Energy/ alertness made up 71 percent of global energy and sports
drinks product launches tracked from the first half of 2010 to the first half of
2011, according to Innova Market Insights, Duiven, The Netherlands. Next was
sports and recovery at about 33 percent, followed by low-calorie and no
additives/preservatives, both at 10 percent, respectively. Vitamin/mineralfortified rounded out the top five at nearly 10 percent. Consumers are seeking
sustained energy, says Holly Petty, senior product innovation scientist with
Glanbia Nutritionals, Evanston, Ill. When energy levels are decreasing and
perceived exertion is increasing, energy should be assimilated quickly after
beverage consumption.

SOCIAL NEEDS
A need for example is where humans have a social need for belonging and this
need is satised by belonging to a group. A group could be people with the same
interests such as extreme sports. Red Bull associates itself with energy, danger
and youth culture, and markets its product through its sponsorship of youth
culture and extreme sports events. Consumers who drink Cloud9 are
automatically introduced to the Cloud9 culture, and their social need is then
satised. again matches with other punch line Dink and Dance...Get high every
time you drink'
INDIVIDUAL NEEDS

18

An individual may have a need for concentration or self-expression and this

could be inhibited by fatigue or weariness. Energy Drinks could satisfy this
need by energizing and stimulating the mind. For example, if he/she is
fatigued, a university student may experience the inability to retain knowledge
and therefore an inability to express him/herself.
WANTS
A want can be dened as the form taken by human needs as they are shaped by
culture and individual personality Extreme athletes want to accelerate their
performance and to revive themselves quickly after each event and this want is
satisfied by Energy Drinks. Energy Drinks promote its consumption to increase
physical

endurance,

improve concentration and reaction

speed,

improve

vigilance and stimulate metabolism through natural stimulants.

DEMANDS
Demands

are

human wants

backed up

by

buying

power

and

given their resources, people demand products with benefits that add up to the
most satisfaction. Demand for a product, is both willingness and an ability to
pay for the product that will satisfy a particular want. Energy Drinks are
arguably one of the most expensive drinks on the non alcoholic beverage
market, a can of Coke generally costs aroundRs.20 for 300ml whereas a smaller
250ml can of RedBull is sold at Rs.95. Consumers are willing to pay the higher
price for Energy Drinks because it satisfies their needs and wants, it also
delivers on its promise to Drink and Discover

2.6 SWOT ANALYSIS OF ENERGY DRINK INDUSTRY

19

STRENGTHS

WEAKNESS

Natural ingredients

Low awareness

Focus on health

Low market share

Non alcoholic Variety of flavors

No prior expertise

FDA approved

Priced

above

average

beverages in the market.

Internationally accepted

OPPORTUNITIES

THREATS

Fruit Juices Venturing into caffeine

free cola

Lucrative market
Many big players

Gaming ventures
Consumer

much

recognition

Easy entry in the market

through

Sponsorship of Fashion shows and

college festivals
More emphasis of youth on health
food

Relatively lower pricing by big

rivals
Political, social, economic and
technological environment of the
country.

Rapid market growth of 50% YoY

2.7 BRAND CHOICE RATIONALE

20

 RedBull Energy Drink is a revolutionary product, being Indias first

natural energy drink made purely from natural ingredients that adhered
to FDA standards and regulations.
The energy drinks market in India is growing at a fast rate, it is in a
booming phase.
An international brand and the market leader in many countries, including
India.
It would be interesting to see what RedBulls market strategy would be in
response to that of the new players in the market.
Moreover, being a new product in the market, RedBull energy drink
provides us ample opportunities in brainstorming to devise various
promotion methodologies.
These are the major reasons behind our choice of RedBull Energy Drink
for the purpose of this project.

COMPANY PROFILE
2.8 REDBULL
2.8.1 WHAT IS REDBULL?

21

Red Bull is an energy drink sold by Austrian company Red Bull GmbH, created
in 1987. In terms of market share, Red Bull is the most popular energy drinks in
the world, with 4.5 billion cans sold each year.
The company slogan is "Red Bull gives you wings and the product is marketed
through advertising, events (Red Bull Air Race, Red Bull Crashed Ice), sports
team ownerships (Red Bull Racing, Scuderia Toro Rosso, EC Red Bull
Salzburg, FC Red Bull Salzburg, Red Bull New York, RB Leipzig, Red Bull
Brasil), celebrity endorsements, and with its record label, Red Bull Records,
music. Red Bull has been the target of criticism concerning the possible health
risks associated with the drink. A restudy by the European Food Safety
Authority (EFSA) concluded that in the levels used in popular energy
drinks, taurineand glucuronolactone

(D-glucurono-gamma-lactone)

are

safe. The amounts of guarana, taurine, and ginseng found in popular energy
drinks have been found to be far below the amounts expected to deliver either
therapeutic benefits or adverse events.
2.8.2 HISTORY
Chaleo

Yoovidhya,

the

self-made

Thai

billionaire

founded

T.C.

Pharmaceuticals. In the 1970s, it formulated an energy drink prototype called

Krathing Daeng, or Red Bull in English. It was popular among Thai truck
drivers and laborers.[19]
Chaleo then co-founded a company in 1984 with an Austrian partner who
helped turn Red Bull into a global brand. The creation of Red Bull was inspired
by the tonic drinks category of Japan and a drink in Thailand called Krating
Daeng. Dietrich Mateschitz, an Austrian entrepreneur, developed the Red Bull
Energy Drink brand. Mateschitz was the international marketing director
for Blendax, a toothpaste company, when he visited Thailand in 1982 and
discovered that Krating Daeng helped to cure his jet lag. Between 1984 and

22

1987, Mateschitz worked with TCBG Pharmaceutical (a Blendax licensee) to

adapt a flavor and marketing strategy for the European market.

At the same time Mateschitz and Chaleo Yoovidhya founded Red Bull GmbH;
each investing $500,000 of savings and taking a stake in the new company.
Chaleo and Dietrich each held a 49% share of the new company. They gave the
remaining 2% to Chaleo's son Chalerm, but it was agreed that Mateschitz would
run the company. The product was launched in 1987 in Austria, in a carbonated
format.
In 1992, the product was expanded to its first international markets, Hungary
and Slovenia. It entered the United States market (via California) in 1997 and
the Middle East in 2000. In 2008, Forbes magazine listed both Chaleo and
Mateschitz as being the 260th richest people in the world with an estimated net
worth of $5.0 billion. [20]

PRODUCT PORTFOLIO
FUNCTIONALITY OF REDBULL ENERGY DRINK
Red Bull Energy Drink has been proven to reduce driver sleepiness and to
enhance driving performance during prolonged highway driving. This was
shown in research from psychopharmacologist Dr. Joris Verster and his
colleagues at Utrecht University, The Netherlands. The study was published in
the peer-reviewed scientific journal Psychopharmacology and has been
published with open access at Springerlink.com.[22]

INGREDIANTS OF REDBULL ENERGY DRINK

23

Red Bull contains caffeine, taurine, glucuronolactone, B-group

vitamins , sucrose, and glucose. Red Bull Sugarfree is like Red Bull Energy
Drink, but with the artificial sweeteners acesulfame K and aspartame instead of
sucrose and glucose.
Red Bull is sold in China in two versions: a regular strength version in a short,
wide gold and red can; and an "extra-strength" version in a taller, thinner, blue
and silver can resembling the cans sold in western countries. Neither version is
carbonated.[23]
HEALTH EFFECTS
A review published in 2008 found no documented reports of negative or
positive health effects associated with the amount of taurine used in energy
drinks, including Red Bull. However, caffeine and sugar levels in Red Bull are
comparable to coffee and fruit juices respectively. Another publication found
that "the number of available publications that really go into the details in this
topic is also rather poor".[24]
Main article: Caffeine
Commonly reported adverse effects due to over-consumption of caffeine can
result in a state of central nervous system over-stimulation called caffeine
intoxication.
Energy Drinks are not sports drinks and have not been formulated to deliver rehydration. Water should be consumed in addition to Energy Drinks during
exercise.
A 2008 position statement issued by the National Federation of State High
School Associations made the following recommendations about general energy
drink consumption for young athletes:

24

1. Water and appropriate sports drinks should be used for rehydration as

outlined

in

the

NFHS

Document

Position

Statement

and

Recommendations for Hydration to Minimize the Risk for Dehydration

and Heat Illness.
2. Energy drinks should not be used for hydration.
3. Information about the absence of benefit and the presence of potential
risk associated with energy drinks should be widely shared among all
individuals who interact with young athletes.
4. Athletes who are dehydrated should not consume energy drinks.
5. Athletes taking over the counter or prescription medications should not
consume energy drinks, without prior medical approval.

CARDIOVASCULAR EFFECTS
A review of the scientific literature on caffeine concluded that moderate caffeine
intake (less than 400mg per day) does not adversely affect cardiovascular
health. A can of Red Bull, 250ml, contains 80mg of caffeine which is similar to
a cup of coffee.

The results of a study showed that the ingestion of one, 250mL can of sugar-free
Red Bull, in a sample of 30 healthy young adults, had an immediate detrimental
effect on both endothelial function, and normal blood coagulation. This
temporarily raised the cardiovascular risk in these individuals to a level
comparable to that of an individual with established coronary artery disease.

25

Based on their results, researchers involved with the study cautioned against the
consumption of Red Bull in individuals under stress, in those with high blood
pressure, or in anyone with established atherosclerotic disease. Red Bull
representatives, however, stated that this observed increase in cardiovascular
risk was not felt to be different from that associated with drinking a regular cup
of coffee. They also stated that they believed that Red Bull must be safe, as it
was felt the only way Red Bull could have such substantial global sales is if
various health authorities had concluded the drink safe to consume.[25]

There has been at least one case report of Red Bull overdose causing postural
orthostatic tachycardia syndrome in a young athlete. A February 3, 2009 article
in The Daily Telegraph called, "Red Bull 'may have triggered heart condition
that killed student'" reported the death of a 21 year-old woman who died after
drinking four cans of Red Bull as well as alcohol at "social levels". It was
believed, but had not been proven, that she suffered from a rare heart condition
called long QT Syndrome. She was on medication for epilepsy and had an
abnormally large heart. A medical examination found that there were no illegal
drugs in her system. The article quoted a doctor as saying, "The coroner
recorded that the 21 year-old woman died of natural causes."

CAFFEINE CONTENT
The caffeine content of a single can of Red Bull is 80 mg/250 ml. This is about
the same as a normal coffee, or slightly less depending on the brewing
method. The actual caffeine level in Red Bull can vary depending on country, as
some countries have legal restrictions on how much caffeine is allowed in
drinks.

26

As is the case with other caffeinated beverages, Red Bull drinkers may
experience adverse effects as a result of overuse.[26]
LEGAL STATUS
Red Bull did not get market approval in France, Denmark, and Norway for
several years, but the energy drink is now on sale in all 27 EU Member States
and in 164 countries globally.

The French approval process started in 1996 with concerns about taurine, a
normal body constituent and also naturally present in the human diet (e.g.
scallops, fish, poultry). This meant the drink could not be sold as-is in France.
Instead, a different recipe that didn't contain the ingredient was introduced. The
refusal of market approval was challenged by the European Commission and
partially upheld by the European Court of Justice in 2004, before the French
food safety agency relented in 2008 after being unable to prove definitively the
existence of any health risk, taurine-related or not.[27]

ADVERTISING
Red Bull has an aggressive international marketing campaign. The numerous
sponsored activities range from extreme sports like mountain biking, BMX,
motocross,

windsurfing,

snowboarding,

skateboarding,

kayaking,

wakeboarding, cliff-diving, surfing, skating, freestyle motocross, rally, Formula

1 racing, and break dancing to art shows, music, and video games. In keeping
with their target market of young males, Red Bull has also enlisted help from
celebrities, such as Eminem that would appeal to this group (sponsoring the Red
Bull "Em See Battle Rap championships"). It also hosts events like the "Red

27

Bull Flugtag" (German for "flight day" or "flying day") and other such contests.
Red Bull also sponsors association football teams, with clubs in Austria,
Germany, the United States and Brazil featuring the Red Bull trademark in their
names. By associating the drink's image with these activities, the company
seeks to promote a "cool" public image and raise brand power. In addition, the
slender container is used to suggest a "sexier" image than some other cola
counterparts. Hence, this one energy drink has helped create a market for over
150 related types of merchandise, like Red Rooster and Blue Lightning.[28]

Red Bull's slogan, "it gives you wings", is widely used in these marketing
activities. Claims about the drink's effects and performance have been
challenged on various occasions, with the UK's Advertising Standards
Authority imposing advertising restrictions in 2001 in response to complaints
first recorded as early as 1997. Even with all of the concerns regarding Red
Bull, in 2000 the corporation earned around $1 billion in worldwide sales and
Red Bull held 65% of the market share. [37] In Malaysia, however, Red Bull does
not use its "Gives you wings" slogan, but instead a single one-word
slogan, Bullleh!, a word play on the Malay word Boleh (lit: Can be done) and
the word Bull.

In the PlayStation 3's social gaming platform, PlayStation Home, Red Bull has
developed its own in-game island, specifically advertising its energy drink and
the Red Bull Air Race event (for which the space is named) released in January
2009. In late November 2009, Red Bull brought out two new spaces, the Red
Bull Illume space, and the Red Bull Beach space featuring the Red Bull
Flugtag, both released on the same day. In January 2012, Red Bull released its

28

first personal space called the Red Bull House of Skate featuring an indoor
skate park.[29]

In the video game Worms 3D, Red Bull could be drunk by the worms, giving
them the effect of faster movement.
Red Bull is displayed on virtual track-side billboards during game play and in
the opening cinematic in the video game Wipeout 2097.
2.8.3 5 C ANALYSES
1. COMPANY
RedBull is an energy drink sold by Austrian company RedBull GmbH, created
in 1987. In terms of market share, Red Bull is the most popular energy drink in
the world, with 4.5 billion cans sold each year.
The company slogan is "Red Bull gives you wings and the product is marketed
through advertising, events (Red Bull Air Race, Red Bull Crashed Ice), sports
team ownerships (Red Bull Racing, Scuderia Toro Rosso, EC Red Bull
Salzburg, FC Red Bull Salzburg, Red Bull New York, RB Leipzig, Red Bull
Brasil), celebrity endorsements, and with its record label, Red Bull Records,
music. Red Bull has been the target of criticism concerning the possible health
risks associated with the drink. The company is involved in various sporting
activities and has various successful teams:[30]

RB

Leipzig

football

team

currently

playing

in

the

German Regionalliga Nord

New York Red Bulls (officially Red Bull New York) a soccer franchise
competing in the United States' Major League Soccer
29

Red Bull Racing a Formula One team based in Milton Keynes,

England, World Constructor's Championship winner of 2010 and 2011, and

produced the car for the 2010 and 2011 F1 World Champion Sebastian Vettel.
Scuderia Toro Rosso (Italian translation of Racing Team Red Bull)

Another Formula One team based in Faenza, Italy.

Team Red Bull a racing team competing in the US based stock car

racing competition NASCAR. The team ceased operations after the Sprint Cup
Series' 2011 season.
FC Red Bull Salzburg an Austrian football club based in Salzburg and

competing in the Austrian Bundesliga

EC Red Bull Salzburg a member of the Austrian Hockey League based

in Salzburg, Austria
Red

Bull

Brasil

football

team

currently

playing

in

the

Brazilian Campeonato Paulista Srie A2 based in Campinas, Brazil

1.2 PRODUCT LINE

The companys agship beverage brand, RedBull, is one of the leading players
in Energy drinks segment due to its positioning as a nutritive and healthy drink.
as certified by many official healthcare bodies. It also has a number of variants
like Original, Sugarfree, Cola, Total Zero, cranberry, blueberry and lime. A
restudy by the European Food Safety Authority (EFSA) concluded that in the
levels

used

in

popular

glucurono-gamma-lactone)

energy
are

drinks, taurineand glucuronolactone (D-

safe. The

amounts

of guarana,

taurine,

and ginseng found in popular energy drinks have been found to be far below the
amounts expected to deliver either therapeutic benefits or adverse events.

30

1.3 TECHNOLOGY AND EXPERIENCE

Red Bull is manufactured using cutting edge technology and plethora of
ingenious solutions and indigenous know-how. RedBull has a one point
production strategy which helps in to maintain its quality standards. This
strategy although tends to add up the cost due to extensive logistics as the
production takes place in the headquarters at Salzburg , Austria.
A major reason for this is the natural availability of the ingredients of the drink
locally in Salzburg and also the alpine spring water that is used which is not
available in all parts of the world.

1.4 GOALS
The main goal of Red Bull is having a worldwide expansion of its product. Red
Bull has been giving wings from the beginning and has started to spread its
own

wings

around

the

world

quickly.

While the consumption was doubling year on year in Austria, Red Bull arrived
in its first foreign markets, Singapore (1989) and Hungary (1992). The
authorization for Germany was granted in 1994, the UK followed in 1995 and in
1997, the US business started in California. Red Bull has been available
since 1987.
Today Red Bull has annual sales of approx. 4 billion cans in more than 160
countries. A total of 4.631 billion cans of Red Bull were sold
worldwide in 2011, representing an increase of 11.4% against
2010. Company turnover increased by 12.4% from EUR 3.785
billion to EUR 4.253 billion.[31]

31

In all key areas such as sales, revenues, productivity and operating profit, the
figures recorded were the best in the company's history so far.The main reasons
for such positive figures include outstanding sales, especially in key markets
such as the USA (+11%) and Germany (+10%), and also in other markets such
as Turkey (+86%), Japan (+62%), France (+35%) and Scandinavia (+34%),
combined with efficient cost management and ongoing brand investment.

Besides winning both the constructors' and drivers' Formula 1 championships

for a second year running, 2011 also saw the extremely dynamic expansion of
our media activities. In terms of further expansion, Red Bull is targeting the
core markets of Western Europe and the USA, as well as the growth markets of
Brazil, Japan, India and China. Growth and investment will as is customary at
Red Bull continue to be financed from the operating cash flow. As of the end
of 2011, Red Bull employed 8,294 people in 164 countries (end 2010: 7,758 in
161 countries).

In spite of the still very difficult and uncertain financial and global economic
climate, our plans for growth and investment in 2012 remain just as ambitious
and we envisage a continued upward trend.

2.COLLABORATORS
RedBull India Pvt Ltd

has an experienced and dedicated professionally

managed distribution partner team, Narang Enterprises across the nation, which
monitors market segments like malls, multiplexes, retail, five star hotels and
restaurants, pubs, discotheques, gym, spas, cafes and airlines. Each tie-up is
supported with Promotional &Merchandising Materials, loyalty programmes
and consumer offers etc.
32

3.CUSTOMERS
Consumers of energy drinks are in the age group 18-35. Most of consumers
are college students and middle aged working class. With rapid urbanization and
increase in purchasing power of people the demand has increased significantly.
Growing middle class is around 350 million. Consumers also include females
and young people who do not drink alcohol. For health conscious people who
are averse to alcohol, energy drinks are the perfect substitutes. Consumer profile
include college-goers who feel need to stay up late nights during exams ,
working class professionals who need extra boosts of energy and athletes
who need energy after exhaustive field activities.
4. COMPETITORS
4.1 XXX ENERGY DRINK
It is a premium brand targeting the niche market of youths and trendy
consumers with high income. Entering lndia with a bang as the primary spomor
for the Kolkata Knight Riders (KKR) in the DLF IPL T20 cricket tourrmment, it
was launched with the objective of providing an
alternative energy drink to the consumer and hence giving him a winder
extremely high on energy and high on life.
The brand XXX energy comes in two variants currently- REJUVE and
NICOFIX. The USP of NICOFIX" is that it is formulated with NPR which
reduces the Nicotine urgeand REJUVE" is an exciting energy drink specially
formulated to suit India taste buds." REJUVE rejuvenates the mind and body
and enhances your immunity, thusincreasing stamina. Both the cans are
very competitively priced at Rs.75/- for 250 ml.

33

4.2 MONSTER ENERGY DRINK

Depicted by a logo of three claws, Monster energy drink is distributed by
distributed by Hansen Natural Corporation, Corona California. With ingredients
like guarana,caffeine and glucose, monster artificially stimulates energy. With a
fairly tolerable taste, this energy drink sparks one up and packs quite a vicious
punch. Though Monster Energy is not widely advertised in the media it receives
a large amount of recognition from its sponsorship of various sporting events..
4.3 FULL THROTTLE
Produced by the Coco Cola company, Full Throttle debuted in late 2004. This
energy drink contains ingredients such as carbonated water, high fructose corn
syrup and/orsucrose, citric acid, natural and artificial flavors, sodium citrate,
sodium benzoate (to protect taste), d-ribose, caffeine, acacia, niacinamide
(vitamin B3), calciumpantothenate, (vitamin B5), glycerol ester of wood rosin,
yellow 5, pyridoxinehydrochloride (vitamin B6), cyanocobalamin (vitamin
B12). Available in great flavors like citrus, full throttle energy drink has
great flavors
5.CLIMATE
POLITICAL AND LEGAL FACTORS:
In India, there are no standards for energy drinks under PFA Act,1954. The
standards of carbonated water under PFA Rules, 1955 specify the maximum
limits of caffeine of 200ppm which subsequently on recommendations by
Central Committee on Food Standards were reduced to maximum level of
145ppm.Food Safety and Standards Authority constituted an expert group to

34

examine the scientific literature and global position on use of caffeine and noncarbonated beverages and their labeling and to recommend the limit of caffeine
in energy drinks and non-carbonated beverages under Food Regulations. The
Group was also asked to suggest whether any standards need to be laid down for
energy drinks keeping in view the assessment of risk. It made the observation
that Caffeine is not an additive but a chemical with addictive property. Caffeine
up to 200 ppm is added as a flavoring agent but above 200 ppm it is a functional
ingredient. The functionality of caffeine at 320 ppm needs to be ascertained
along with justification for fixing a cut-off limit at320ppm.
ECONOMIC FACTORS:
Economic factor affects the purchasing power of potential customers and firms
cost of capital. The following are the examples of factors in macro-economy:
economic growth, interest rates, exchange rates, inflation rate. The inflation rate
in India was last reported at 13.73 percent in June of 2010. The economy is not
much developed and wide variations among states and regions within states are
there due to which we might have to make different promotional strategies.
SOCIO- CULTURAL FACTORS:
The key emerging health concerns amongst Indians include diseases of the heart
and digestive system, obesity, bone and joint pain, depression and anxiety, lack
of energy and stamina and sleeplessness. The growing awareness amongst
Indian consumers regarding several ingredients and their associated health
benefits is making them more inclined to use nutritional information very often
to make product choices. Hence there is a demand for food and beverages with
health claims.
TECHNOLOGICAL FACTORS:

35

The technological factors can lower barriers to entry, reduce the minimum
efficient production levels and influence outsourcing decisions. Some of the
technology incentives. RedBull is manufactured by RedBull Energy Drink Pvt.
Ltd, the specialists in the manufacture of 100% Natural Lifestyle Energy Drinks
and Caffeine-Free Cola, using its cutting edge technology and plethora of
ingenious solutions and indigenous know-how. Hence, company is highly
advanced in development of product. R&D and machinery.

2.8.4 INDUSTRY PLAYER

Red Bull is the industry leader. There are constantly new energy drinks
manufacturers unveil such as yerba mat, green teaand ginkgo biloba. And also
they are utilizing other revitalizing elements such as schizandra.The top energy
drinks players are as follows based on December 2006:
Some of the famous marketing strategy adopted by Red Bull is given below
1.STUDENT BRAND MANAGERS : The brand tried to reach the trend
setters and opinion leaders by appointing ( informal agreement )student brand
managers across campuses. These members were given free Red Bull cans
and was encouraged to organize parties for other youngsters.
2.IDENTIFY HOT SPOTS : The brand identified hot spots where the majority
of consumers /opinion leaders gather. This could be a bar or a party area.
Once these hotspots are identified, the brand campaigns in that spot.
3.EXTREME

SPORTS

Red

Bull

is

adopted

following

brand

qualities : Energy , Danger and Youthfulness. Hence the brand chose to sponsor
or associate with extreme sports. At one point of time the brand also owned a
Formula 1 racing team.
36

4. ATHLETES : Rather than roping in expensive celebrities, Red Bull sponsors

high performing athletes who are not celebrities. One advantage of doing that
is that the brand gets a highly dedicated brand loyalist from the fans of these
athletes. According to Forbes Magazine, Red Bull sponsors more than 500
athletes.
5.QUIRKY ADS : Red Bull is a brand which was built without depending too
much on advertising. The brand used advertising for reinforce brand identity
rather than for selling the product. The ads of Red Bull has the classical cartoon
format with a touch of humor.
Since the launch the brand has managed to dominate the Indian market with
more than 60 %market share . The popularity of Red Bull has prompted many
cola majors to launch their energy drinks brand in India. There are news reports
of Coca Cola and Pepsi bringing their global brands in this category into the
Indian market.
Red Bull is the most popular energy drink in the world, with 3 billion cans sold
each year

Their slogan is "Red Bull gives you wiiings" and the product is aggressively
marketed through advertising, tournament sponsorship(Red Bull Air Race, Red
Bull Crashed Ice), sports team ownerships(Red Bull Racing, Scuderia Toro
Rosso, EC Red Bull Salzburg, FC Red Bull Salzburg, Red Bull New York, RB
Leipzig), celebrity endorsements, and with its record label, Red Bull Records,
music. In 2009 it was discovered that Red Bull Cola exported from Austria
contained trace amounts of cocaine.

37

Red Bull has also been the target of criticism concerning the possible health
risks associated with the drink. Red Bull has an aggressive international
marketing campaign. The numerous sponsored activities range from extreme
sports like mountain biking, BMX, motocross, windsurfing, snowboarding,
skateboarding, kayaking, wakeboarding, cliff-diving, surfing, skating, freestyle
motocross, rally, Formula 1 racing, and break dancing to art shows, music, and
videogames. In keeping with their target market of young males, Red Bull has
also enlisted help from celebrities, such as Eminem that would appeal to this
group (sponsoring the Red Bull "EmSee Battle Rap championships"). It also
hosts events like the "Red Bull Flugtag"(German for "flight day" or "flying
day") and other such contests. Red Bull also sponsors association football
teams, with clubs in Austria, Germany, the United States and Brazil featuring
the RedBull trademark in their names. By associating the drink's image with
these activities, the company seeks to promote a "cool" public image and raise
brand power. In addition, the slender container is used to suggest a "smarter"
image than some other cola counterparts. Hence, this one energy drink has
helped create a market for over 150 related types of merchandise, like Red
Rooster and Blue Lightning.
Red Bull's slogan, "it gives you wings", is widely used in these marketing
activities. Claims about the drink's effects and performance have been
challenged on various occasions, with the UK's Advertising Standards
Authority imposing advertising restrictions in 2001 in response to complaints
first recorded as early as 1997.
Even with all of the concerns regarding Red Bull, in 2000 the corporation
earned around $1 billion in worldwide sales and Red Bull held 65% of the
market share.
In Malaysia, however, Red Bull does not use its "Gives you wings" slogan, but
instead a single one-word slogan, Bullleh! , a word play on the Malay word
Boleh (lit: Can be done ) and the word Bull .In the PlayStation 3's new social

38

app, PlayStation Home, Red Bull has developed its own in-game island,
specifically advertising its energy drink and the Red Bull Air Race event. In late
November 2009, Red Bull brought out two new spaces, the Red Bull
Illume space, and the Red Bull Beach space featuring the Red Bull Flugtag,
both released on the same day. In the video game Worms 3D ,Red Bull could be
drunk by the worms, giving them the effect of faster movement. Red Bull is
displayed on virtual track-side billboards during game play and in the opening
cinematic in the videogame Wipeout 2097
2.8.5 ANSOFFS PRODUCT MARKET EXPANSION GRID

CURRENT

NEW PRODUCT

PRODUCT
CURRENT

MARKET

PRODUCT-DEVELOPMENT

MARKET

PENETRATION

STRATEGY

STRATEGY
NEW MARKET

MARKET-

DIVERSIFICATION STRATEGY

DEVELOPMENT
STRATEGY

Red Bull is a product that is not totally new to the market. There already exists a
market for energy drinks. Also, since the energy drinks market is very well
defined and has limited scope in terms of broadening, we are looking at the
Current Market instead of a new one. Thus, adopting a Market Penetration
Strategy seems to be most appropriate, within which, the aim should be to
39

maximize market share. Aggressively marketing and advertising the product to

make the target segment aware of the value propositions on offer can do this.

2.8.6 LIFE CYCLE ANALYSIS

Out of the four life cycle stages, Energy Drinks are in the growth stage. Since
energy drinks have been around for many years, they are no longer in the
introductory stage. New products and new emerging brands have expanded
consumer choice in the energy drink market, which has pushed them in the
growth stage. The branded energy drinks sector in India is growing at the rate of
60% as compared to 10% growth rate of the Rs 7,000-crore soft drinks market.
On the back of an increasing number of modern retail stores, the energy drinks
market is expected to reach Rs 2,500 crore by 2012.

40

2.8.6 SWOT ANALYSIS OF REDBULL

STRENGTHS

WEAKNESSES

~ Market leadership- Within the energy ~Above-average prices.

drinks market Red Bull is the industry
leader throughout the world except
USA
.

campaigns

competitors in the market and they

have their own USP which leaves Red

Marketing

promotions

~ Lack of innovation- there are a lot of

Effortsand

and

well

lot

of Bull behind.

targeted

sponsorship

e.g.

formula 1 helps to expand Red bull

brand and increase consumer brand
awareness.

~ Reliant on small product base- The

company only markets one branded
product, Red Bull Energy Drink (along
with a sugar free variety).
~inexperience: is only 6 years old in
India.

~ Strong , fresh & fashionable brand

identity.

~Lack of patent on RB s recipe means

anyone can copy it.

41

OPPORTUNITIES

THREATS

~Extension of product line- this will ~Health concerns- tougher rules from
help to retain market share.
~

*Hardcore

government on high caffeine content.

Advertising

and ~ Consumer awareness of health and

Promotions especially through field well being- people may start to drink
marketing.
~

Consumer

other alternatives as it is associated

recognition

through

sponsorship of sports events.

~New ventures like partnership with
Facebook.

with healthier life style.

~This Drink might not be accepted in
the new markets due to a false
presumption of alcohol content.
~Organic energy drinks might steal
RB's market share.

42

2.8.8 THE PRODUCT/ COMPETITORS/INDUSTRY OF RED BULL

PRODUCT
Red Bull is a sweet, caffeinated drink aimed to give consumers the high energy
kick. Available only in rather expensive 250ml cans, 350ml bottles, with 4 packs
and only twoflavours (original or sugar-free). It contains caffeine, taurine,
glucuronolactone, and B vitamins. Founded in 1984 by Austrian businessman
Dietrich Mateschitz, Red Bull has become the worlds leading energy drink, a
staple in many young, and active peoples lives.[32]

COMPETITORS
Big global companies such as Coca Cola and Pepsi have introduced their own
energy drink versions to their product base. Mother (by Coca Cola), Amp
(Pepsi), V, Battery, 180, RedEye and Bennu being just some in the ever-growing
energy drink market. Competition also presents itself in original sports drinks,
such as Gatorade (Pepsi) and Powerade(Coca Cola). Furthermore, premixed
alcoholic drinks like the Smirnoff range form part of the competition.
INDUSTRY
Red Bull has becoming hugely successful and operates within the global soft
drink marketplace. Within the soft drink industry its niche is the energy
drink market, of which Mateschitz was largely responsible for creating. Red
Bull currently is the leading energy drink across the entire globe. It holds 70%
of the market worldwide (Gschwandtner, 2004). Once the drink was passed by
health ministries, Red Bull entered the Austrian market, soon thereafter then
moved into Germany, United Kingdom and the USA by 1997.
2.8.9 THE MARKETING MANAGEMENT PHILOSOPHY

43

In our opinion, Red Bull fits into three of the marketing management
philosophies. When it first entered the market it could be viewed in the selling
concept phase. Founder Dietrich Mateschitz even stated. If we dont create the
market, it doesnt exist.(Gschwandtner 2004). Mateschitz used buzz marketing
to promote the product by giving consumers free samples. Once Red Bull
established itself it then moved into the product concept philosophy. It seems
that many consumers buy the Red Bull product wholly based on what benefits it
can give them, i.e. increased well being and energy. Red Bull cans are branded
with the tagline Vitalizes body and mind and it is well known by consumers
that drinking Red Bull can alleviate tiredness. The final philosophy the product
fits into is the marketing concept. This is where an organization delivers target
market satisfactions more effectively and efficiently than competitors. (Kotler
et al. 2006). This can be done by researching its target audience and the
company has shown this by the fact that Red Bull has a 70 to 90 percent market
share in over 100 countries worldwide. (Gschwandtner 2004). This clearly
indicates that Red Bulls current marketing strategy is working well and they are
ahead of their competitors in the market place.

2.8.10 THE MARKETING CHALLENGES

COMPETITION
This is probably one of the biggest threats to Red Bull to date. Major
competitors such as Coca Cola and Pepsi are continually seeking to regain
market share off Red Bull. Coca Cola and Pepsi have launched their own energy
drink versions to compete directly with RedBulls product, yet with no real
impact on the market, examples of this are Think V Energy Drink and Cokes
version Mother.
NEGATIVE PUBLICITY

44

Various media worldwide have reported that Red Bull is harmful for ones
health. The French Health Authority has gone one step further by not approving
the Red Bull product for sale in France believing it is not in compliance with the
countrys health and food regulations. Other media reports have been targeted
towards parents stating the caffeine levels in Red Bull can be dangerous if
consumed by children/teenagers, which coincidentally is exactly who is in the
product target market. Red Bull has gone to the extremes of seeking scientific
proof that its product is safe for consumption and released numerous statements
to curb the negative media attention and reiterate that their product is safe for
consumption by all (Red Bull, 2008).
INABILITY TO MOVE FORWARD WITH THE PRODUCT
Red Bull is well known for its innovative advertising however the product could
be in danger of becoming stale. By shunning conventional advertising methods
and opting for online advertising and Generation Y cartoon adverts, the aim of
attracting 15 30 year olds is working, but for how long? Combine this with
their large investment in extreme sport events ie Red Bull Air Race and athlete
sponsorship, it has to be asked what do they do next? Has it already been done?
Ability to gain new customers and retain current customer loyalty
With Red Bulls target market currently aimed at the Generation Ys (15 30
year olds) there is the question of whether this generation will continue to drink
Red Bull as they grow older. And will the next upcoming generation accept this
product as their own.

HEALTH AND SOCIAL IMPLICATIONS

Due to growing pressure on organizations in society, Red Bull now promotes
their product with current societal and health issues in mind. Childhood obesity
and type 2-onset diabetes has become a major issue across western developed
45

nations. By introducing sugar free Red Bull this has opened up a new
opportunity to the health conscious and diabetics. Managing this issue will be
a constant process and Red Bull must be seen to be adjusting their product to
suit society.
ONLY HAVING ONE PRODUCT
One particular issue Red Bull has to consider is their limited product range.
Unlike their major competitors such as Coca Cola and Pepsi, who have various
different products indifferent beverage classes (water, soft drinks, electrolytes)
Red Bull does not. Only having one product can be a positive however, for
example Red Bull can concentrate 100% effort on their product while not being
distracted by other influences, however the downside is that should the market
share of that product decrease in the future, Red Bull has no back up product to
cover the loss.

BEING CUSTOMER ORIENTATED/MARKET DRIVEN

THE CONSUMER
Customers are more sophisticated and educated in the market place today; they
can now research products before making a purchase. For example there are
specialist magazines to assist in the decision on (the) brandbut more likely
(consumers) turn to the internet for information on what might be described as a
complex product (Kotler et al. 1998). Another reason could be that competitors
are more innovative than ever with advertising and marketing campaigns. Kevin
Rudd for example achieved this when he used the MySpace website as a
medium to mount his prime ministerial marketing campaign.
POINT OF DIFFERENCE

46

Further to this notion marketing organizations need to create a point of

difference(POD) in the market place. In such a saturated market consumers look
for a POD, when opening a coffee shop a businessperson would find themselves
up against competition. So how do they differentiate themselves from another
caf? How can they become top of mind to their target market? Gloria Jeans
Coffee is a good example, when they entered the market they provided not only
a service but also an experience. They designed their coffee shops like lounge
rooms, with big couches to create a homely feel. They also offered wireless
internet (WiFi) services to attract the businessmen and women who wanted to
work online while having a coffee.

COMPETITION
Competition is becoming more intense in any industry. For example super
market giants like Coles and Woolworths are flooding their stores with selfbranded products, which is often pushing independent brands off the
supermarket shelf and driving small businesses out of the market. These giants
have bulk buying power which means they have the ability to pass savings to
their

customers.

Self-branded

products

are

marginalizing

the

smaller independent brands.

47

CHAPTER 3: PROBLEM CASE

The study tries to understand the factors that affect the sales and growth of the
energy drink Red Bull in India.

48

49

3.1 HYPOTHESIS

1. H10 - Increase in investment increases the growth of the Energy Drink

Industry.
H11 - Increase in investment does not help in the increase growth of the
Energy Drink Industry.
2. H20 - Increase in FDI increases the growth of the Energy Drink Industry.
H21 - Increase in FDI does not help in the growth of the Energy Drink
Industry.
3. H30 - Increase in Market size increases the growth of the Energy Drink
Industry.
H31 - Increase in market size does not help in the increase of growth of
the Energy Drink Industry.
4. H40

- Increase in import increases the growth of the Energy Drink

Industry.
H41 - Increase in import does not help in the increase of growth of the
Energy Drink Industry.

50

CHAPTER 4 RESEARCH METHODOLOGY

INTRODUCTION TO RESEARCH METHODOLOGY

A research methodology defines what the activity of research is, how to
precede, how to measure progress, the type of data used in the research and
what constitutes success. According to Clifford Woody research comprises
defining and redefining problems, formulating hypothesis or suggested
solutions, collecting, organizing and evaluating data, making deductions and
reaching conclusions; and at last carefully testing the conclusions to
determine whether they fit the formulating hypothesis. Like every subject
this topic of the energy drink sector has also been thoroughly researched and
the relevant information has been rightly used.
Though there is no primary data that has been collected but the project
comprises of the extensive research that is done through the secondary data and
thus as we proceed and see the data analysis we will come to know about it in a
more detailed way.[33]

QUALITATIVE AND QUANTITATIVE RESARCH DATA

Qualitative is used to describe certain types of information. The data collected
here is quantitative data relating to the graphs and the statistics required to
analyze the data.

TypesofResearch

51

1) Descriptive vs. Analytical Descriptive research includes surveys and factfinding enquiries of different kinds. In analytical research, it use facts or
information already available, and analyze these to make a critical evaluation of
the material.
2) Applied vs. Fundamental Applied research aims at finding a solution for an
immediate problem facing a society or an industrial/business organization
whereas fundamental research is mainly concerned with generalizations and
with the formulation of a theory.
3) Quantitative vs. Qualitative Quantitative usually involves collecting and
converting data into numerical form so that statistical calculations can be made
and conclusions drawn. Qualitative is about recording, analyzing and attempting
to uncover the deeper meaning and significance of human behavior and
experience, including contradictory beliefs, behaviors and emotions.
4) Conceptual vs. Empirical- Conceptual research is related to some abstract
idea(s) or theory. It is used to develop new concepts or to re-interpret existing
ones. On the other hand, empirical research relies on experience or involves
observation alone. It is a databased research, with analyses coming up with
conclusions, which are capable of being verified by observation or experiment.
THERE ARE 2 TYPES OF DATA
PRIMARY DATA
It is a term for data collected on source, which has not been subjected to
processing or any other manipulation. It is the Data that has been compiled for a
specific purpose, and has not been collated or merged with others. Primary data
is always collected from first hand experience.

SECONDARY DATA
52

Secondary data is data collected by someone other than the user. Common
sources of secondary data for social science include censuses, surveys,
organizational records and data collected through qualitative methodologies
or qualitative research. Secondary data analysis saves time that would otherwise
be spent collecting data and, particularly in the case of quantitative data,
provides larger and higher-quality databases than would be unfeasible for any
individual researcher to collect on their own. The material found has been
summarized, analyzed and interpreted to prepare the report.
STATISTICAL TOOLS USED
CORRELATION
The word correlation is used to denote the degree of association between
variables. If two variables x and y are so related that variations in the magnitude
of one variable tend to be accompanied by variations in the magnitude of other
variables, they are said to be correlated. If y tends to increase as x increases, the
variables are said to be positively related. If y tends to decrease as x increases
the variables are negatively correlated. If the values of y are not affected by
changes in the value of x, the variables are said to be uncorrelated.
REGRESSION
It includes any techniques for modeling and analyzing several variables, when
the focus is on the relationship between a dependent variable and one or more
independent. More specifically, regression analysis helps us understand how the
typical value of the dependent variable changes when any one of the
independent variables is varied, while the other independent variables are held
fixed.

Most

commonly,

regression

analysis

estimates

the conditional

expectation of the dependent variable given the independent variables that is,
the average value of the dependent variable when the independent variables are
held fixed. Regression analysis is widely used for prediction and forecasting,
53

where its use has substantial overlap with the field of machine learning.
Regression analysis is also used to understand which among the independent
variables are related to the dependent variable, and to explore the forms of these
relationships. In restricted circumstances, regression analysis can be used to
infer causal relationships between the independent and dependent variables.
MULTIPLE REGRESSION- It is done just in a manner like a normal
regression, but the main difference is that all the independent factors are kept
with the one dependent factor and the result is found out. The outcome basically
shows us the relation amongst the different independent factors shows us
whether they are positively or negatively related to the dependent factor
WHAT IS HYPOTHESIS?
Hypothesis testing is a common practice in science that involves conducting
tests and experiments to see if a proposed explanation for an observed
phenomenon works in practice. A hypothesis is a tentative explanation for some
kind of observed phenomenon, and is an important part of the scientific method.
The scientific method is a set of steps that is commonly employed by those in
scientific fields to give scientific explanations for various phenomena.

NULL HYPOTHESIS:
A type of hypothesis used in statistics that proposes that no statistical
significance exists in a set of given observations. The null hypothesis attempts
to show that no variation exists between variables, or that a single variable is no
different than zero. It is presumed to be true until statistical evidence nullifies it
for an alternative hypothesis.
ALTERNATIVE HYPOTHESIS:

54

The alternative hypothesis is the hypothesis used in hypothesis testing that is

contrary to the null hypothesis. It is usually taken to be that the observations are
the result of a real effect (with some amount of chance variation superposed).

QUESTIONNAIRE ANALYSIS: A Questionnaire is a research instrument consisting of a series of questions and

other prompts for the purpose of gathering information from respondents.
Although they are often designed for statistical analysis of the responses, this is
not always the case. Sir Francis Galton invented the questionnaire.
Questionnaires have advantage over some other types of surveys in that they are
cheap, do not require as much effort from the questioner as verbal or telephone
surveys, and often have standardized answers that make it simple to compile
data. However, such standardized answers may frustrate users. Questionnaires
are also sharply limited by the fact that respondents must be able to read the
questions and respond to them. Thus, for some demographic groups concluding
a survey by questionnaire may not be practical.

As a type of survey, questionnaires also have many of the same

problems relating to question construction and wording that exist in
other type of opinion polls.
Types of questionnaire: A distinction can be made between questionnaires that measure separate
variables, and questionnaires with questions that are aggregated into either a
scale or index. Questionnaires within the former category are commonly part of
surveys, whereas questionnaires in the latter category are commonly part of
tests.
Questionnaires with questions that measure separate variables could for instance

55

include questions on:

1.

Preferences (e.g. political party)

2.

Behaviours (e.g. food consumption)

3.

Facts (e.g. gender) Questionnaires with questions that are aggregated into either
a scale or index, include for instance questions that measure:

Latent traits (e.g. personality traits such as extroversion)

Attitudes (e.g. towards immigration)

An index (e.g. Social Economic Status)

Types of Questions: Usually, a questionnaire consists of a number of questions that the respondent
has to answer in a set format. A distinction is made between open-ended and
closed-ended questions. An open-ended question asks the respondent to
formulate his own answer, whereas a closed- ended question has the respondent
pick an answer from a given number of options. The response options for a
closed-ended question should be exhaustive and mutually exclusive. Four types
of response scales for closed-ended questions are distinguished:
Dichotomous, where the respondent has two options
Nominal-polytomous, where the respondent has more than two unordered
options
Ordinal-polytomous, where the respondent has more than two ordered
options
56

 (Bounded) Continuous, where the respondent is presented with a

continuous scale
For the analysis of the questionnaire we perform a factor analysis
(multivariate analysis): There are two objects of factor analysis. First, it simplifies the data by reducing
a large number of variables to a set of a small number of variables. Second, it
analyses the interdependence of interrelationships among a total set of variables.
In marketing research, factor analysis can be useful in several ways; First, it can
bring out the hidden or latent dimensions relevant in the relationships among
product preferences. Sometimes, the product characteristics influencing the
consumer preferences are not clear. In such cases, factor analysis can be helpful
by revealing more important characteristics of the product, underlying the
relationships among product preferences. Second, factor analysis can also be
used to find out certain relationships among observed values which, though they
exist, are obscure. Third, it is extremely useful when a large mass of data is to
be simplified and condensed. Finally, it can be used in clustering of products or
people.
Certain terminologies used in the factor analysis are: Varimax: An orthogonal rotation method that minimizes the number of
variables that have high loadings on each factor.
Communality Matrix: Communality matrix indicates the amount of variance in
each variable that is accounted for. The initial communalities is the estimate of
the variance in each variable accounted for by all components/factors.
Extraction communality is the estimate of the variance in each variable
accounted for in the factor solution.
The smaller value indicates that they do not fit well with the factor solution.
57

Total variance matrix: The total variance matrix provides us with the values
which are based on initial eigen values. The total column gives the amount of
variance in the observed variable accounted for by each component/factor.
Scree Plot: The scree plot explains the change in variation at each factor.
Rotated Component Matrix: From the rotated component matrix we take the
components which is better represented and have higher position on the screen
plot i.e, these factors are highly loaded and contribute to the resultant output.
Factor Transformation Matrix: The factor transformation matrix describes the
specific rotation applied to your factor solution.
Component Plot in Rotated Space; Component plot in rotated space provides a
graphical representation of the variable in the component space.

COMPUTATION TOOLS: -

Microsoft Excel
Excel is an electronic spreadsheet program that can be used for storing,
organizing and manipulating data. When you look at the Excel screen you see a
rectangular table or grid of rows and columns. The horizontal rows are
identified by numbers (1, 2, 3) and the vertical columns with letters (A, B, C).
The types of data that a cell can hold include numbers, text or formulas. Just as
in maths class, formulas are used for calculations usually involving data
contained in other cells. Excel and other electronic spreadsheets include a
number of built in formulas used for common tasks known as functions.
Excel and financial data: Spreadsheets are often used to store financial data. Formulas and functions that
are used on this type of data include: 58

Performing basic mathematical operations such as summing columns and rows

of figures
Finding values such as profit or loss
Calculating repayment plans for loans or mortgages
Finding the average, maximum or minimum values in a specified range of data.

SPSS
SPSS is a computer program used for statistical analysis. Between 2009 and
2010 the premier vendor for SPSS was called PASW (Predictive Analytics
Software) statistics, while copyright issues for the name were settled. The
company announced July 28, 2009 that it was being acquired by IBM for US$
1.2 billion. As of January 2010, it became SPSS: an IBM company.
Statistics included in the base software:
Descriptive statistics: Cross tabulation, Frequencies, Descriptives, Explore, and
Descriptive Ratio Statistics.
Bivariate statistics: Means, t-test, ANOVA, Correlation (bivariate, partial,
distances), Non parametric tests.
Prediction for numerical outcomes: Linear Regression
Prediction for identifying groups: Factor analysis, cluster analysis (two-step, Kmeans, hierarchical), Discriminant.

59

CHAPTER 5: DATA ANALYSIS

The Data has been collected from Red Bull University database, which is
represented in various Table form. This Table shows the relationship between
and the other factors such as FDI, import, investment, market size etc in the
form of the table. It is on the basis of the table that further regression analysis is
done. Growth is the dependent variable and the others are independent.

INFLUENCE OF INVESTMENT ON GROWTH OF ENERGY DRINK

INDUSTRY
(Table 1)
Taking investment as the independent variable and growth as the dependent
variable the following regression equation is constructed.
R square = 0.888214 that = 88%
Y=+x
Y=10.7948+0.04757x
In the above equation is given by 10.7948 and is given by 0.04757. The
hypotheses stated are as follows.
Ho: =0(No influence of investment on growth)
Ha: 0 (influence of investment on growth).
60

If the computed p <significance level (0.05) then the alternate hypothesis is

accepted. Since, p value is 4.48 which is more than the 0.05 so Ho is accepted.
Therefore investments does not have an impact on the dependent variable i.e.
growth and so the null hypothesis is accepted and the alternative hypothesis is
rejected. It does not have a significant impact on the dependent variable.

INFLUENCE OF FDI ON GROWTH OF ENERGY DRINK INDUSTRY

(Table 2)
Taking FDI as the independent variable and growth as the dependent variable
the following regression equation is constructed.
R Square= 0.848849 that = 84%
Y= +x
Y= 6.9797+0.1537 x
The two hypotheses stated:
Ho: =0(No influence of FDI on Growth)
Ha: 0 (influence of FDI on Growth)
If the computed p <significance level (0.05) then the alternate hypothesis is
accepted. Since, p value is 0.00015 which is less than the 0.05. Therefore FDI
has an impact on the dependent variable i.e. growth and so the null hypothesis is
rejected and the alternative hypothesis is accepted. It has a significant impact on
the dependent variable.

61

INFLUENCE OF MARKET SIZE ON GROWTH OF ENERGY DRINK

INDUSTRY
(Table 3)
Taking the amount of market size as the independent variable and Growth as the
dependent variable the following regression equation is constructed.
R Square=0.8135 that = 81%
Y=+x
Y=14.0865 +0.0328x
The two hypotheses stated:
Ho: =0(No influence of market size on growth)
Ha: 0 (influence of market size on growth).

If the computed p <significance level (0.05) then the alternate hypothesis is

accepted. Since, p value is 0.00035 which is less than 0.05. Therefore market
size has an impact on the dependent variable i.e. growth and so the null
hypothesis is rejected and the alternative hypothesis is accepted. It has a
significant impact on the dependent variable.
The table shows the market size of the energy drink industry in India. The data
is from the years 2002-2013 We can see that increasing market size has a major
impact on the overall growth of the energy drink industry. The market size has
been growing at a very fast pace since the year 2002. In the year 2002, it was
110 crore, which more than doubled in the next 2 years to around 260 crore. We

62

can see that the increasing market share has a very strong influence on the
growth of the industry. We infer that the least growth was in the year 2006: 79
crore which was also not too low. After 2007, we can see that the growth has
been almost more than 200 crore each year. Its expected to reach 1892 by the
end of this year which is almost 18 times of what it was in the 2002.
INFLUENCE OF IMPORT ON GROWTH OF ENERGY DRINK
INDUSTRY
(Table 4)
Taking import as the independent variable and growth as the dependent variable
the following regression equation is constructed.
R Square= 0.971763 that = 97%
Y=+x
Y=-6.53214 + 0.164949 x
The hypotheses stated are as follows.
Ho: =0(No influence of import on growth)
Ha: 0 (influence of import on growth).
If the computed p <significance level (0.05) then the alternate hypothesis is
accepted. Since, p value is 1.76 which is greater than the 0.05. Therefore
imports does not have an impact on the dependent variable i.e. growth and so
the null hypothesis is accepted and the alternative hypothesis is rejected. It does
not have a significant impact on the dependent variable.

DATA ANALYSIS OF THE QUESTIONNAIRE

PRIMARY DATA ANALYSIS (FACTOR ANALYSIS)

63

75 out of 75 respondents have answered the questions related to the factors

affecting growth and sales of red bull in India
Interpretation of these results through the Factor Analysis method

There are 10 major factors or variables influencing the consumer buying

behavior when it comes to buying an energy drink.
They are: price of the energy drink, availability of the energy drink, the
brand image of the energy drink, the different advertisement of the energy
drink, promotional schemes of the energy drink, quality of the energy
drink, the kind of packaging of the energy drink, the types of ingredients
used to make the energy drink, the taste of the energy drink and the
quantity available.
DATA INTERPRETATION FOR FACTORS AFFECTING SALE AND
GROWTH OF REDBULL
Kaiser-Meyer-Olkin (KMO) and Bartletts Test: The KMO measures the sampling adequacy, which should be greater than 0.5
for a satisfactory factor analysis to proceed. Referring to KMO AND
BARTLETTS TEST, the KMO measure is 0.640. From the same table, we can
see that the Bartletts test of sphericity is significant.
Communality Matrix: The communality matrix indicates the amount of variance each variable is
accounted for. As per the test results the variables having highest variance are
PRICE (0.863)
AVAILABILITY (0.863)

64

TASTE (0.756)
QUANTITY (0.714)
The above factors fit well with the factor solution.
Determination based on Eigen values: In this approach, only those factors with Eigen values greater than 1 are
considered. Other factors are not included in this model. Here, from the SCREE
PLOT and the table TOTAL VARIANCE EXPLAINED, 4 components can be
identified whose Eigen values are more than 1.

Determination based on percentage of variance:

The number of factors extracted can be determined in a way so that the
cumulative percentage of variance extracted by the factors reaches a satisfactory
level.
Here, according to the analysis, the cumulative percentage of variance extracted
by the 4 components is 79.686 which is quite satisfactory.

Factor Interpretation: Factor interpretation is facilitated by identifying the variables that have large
loading on the same factor. That factor can be interpreted in terms of variables
that load high on it.
In the ROTATED COMPONENT MATRIX
Factor 1 has high 0.835 coefficient for the variable THE QUANITY
AVAILABLE followed by 0.826 for PACKAGNG OF THE PRODUCT.

65

Factor 2 has high coefficient of 0.722 coefficient for BRAND IMAGE

followed by 0.619 for PROMOTIONAL OFFERS
Factor 3 has high coefficient of 0.920 for PRICE OF THE PRODUCT
followed by 0.865 for EASE OF AVAILABILITY OF THE PRODUCT
Factor 4 has high coefficient of 0.920 for BRAND IMAGE followed by
0.278 for PACKAGING OF THE PRODUCT

Factor 1 can therefore be identified as THE QUANTITY AVAILABLE .

Factor 2 can therefore be identified as BRAND IMAGE.

Factor 3 can therefore be identified as PRICE OF THE PRODUCT

Factor 4 can therefore be identified as BRAND IMAGE

As Component 1 is treated as principal component, so, in this case, factors:
THE QUANTITY AVAILABLE, PRICE OF THE PRODUCT , BRAND
IMAGE, should be the most important factor affecting the growth of
ENERGY DRINK IN INDIA, followed by other factors.

66

CHAPTER 6: RESULTS AND FINDINGS

This study has tried to identify various Growth indicators of the
energy drink Red Bull in India.
The different findings, which have been established in this research
paper, have been summed up as:

There has been upward growth of the energy drink industry since 2002
due to the broadening up of the Indian economy.

The energy drink industry is one of the fastest growing industry in the
world

The Growth Of the energy drink Industry is Due to the Increase in the
adoption of the western culture.
In 1999 the first energy drink was launched in India by and Austrian
company but the nearly 35% of the market share is with Indian
manufacturers.
It is a growing Industry creating employment and profit on a large scale.
This industry is growing at a much higher rate than the other beverage
sectors in the industry.
The Industry showed a profitable and growth trend even in the world
economic crisis .

 The turnaround in the energy drink Industry came when the Indian
competitors entering the market and giving the international players good
competition.
In contrast to a lot of health and functionality related issues arising the
industry has shown a upward growth trend always.
RECOMMENDATIONS

The energy drink industry has a significant presence in the Indian economy as
well as in the international economy.
Therefore it is important to determine the day to day threats and opportunities,
which comes along its way

Indian brands should Develop ways to Increase the Export of their

products in order to exploit the foreign potentials
A research should be conducted in order to find the reasons for the failure
of the brand in capturing more market.
The governments participation is really needed if the industry needs to be
grow more and capture more markets.
Energy drink industry needs to invest in research and development to
develop new products that over come the critics of the contents of the
product and make them more naturally beneficial.
The industry should diversify in other activities and events that attract the
target customers.

 The sector needs the support of high quality and cost-effective processing
facilities and flexible legal status to expand its market to rural India
more.

The markets should welcome other larker brands like Coca Cola and
pepsi with their energy drinks in the market.

CHAPTER: 7 CONCLUSIONS

FUTURE SCOPE
The term paper gives an overview of the Energy Drink industry and the changes
which incurred in the beverage industry due introduction of the energy drinks.
With the use of secondary data the term paper has been prepared. With the use
of first hand information, which would include current data, more accurate
result could be achieved.
LIMITATIONS
Due to the limitations in the time-frame within which the project had to be
submitted had limited the research that could be undertaken as the data which
was already collected through research had to be presented.
A detailed scrutinized analysis was undertaken to ensure the reliability of the
secondary data in order to achieve the objectives of the project and find the
ground level standings of the industry and its future prospective and trends.

EXECUTIVE SUMMARY
India is now a fast emerging market inching to reach half a billion middle
income population by 2030. All these factors are good for the energy drink
industry in the long run. Even though the global economic crisis seems to be
worsening day-by-day, as long as economies are emerging and growing as those
in South and South East Asia, energy drink industry is here to grow provided it
takes competition and innovation seriously.

Indian economy has been on a growth path since last few years. The growth in
the Indian economy has not only increased the standards of living but also
provided an opportunity to the entrepreneurs to tap the new opportunities which
arise as a result of growth. Energy Drink being one such industry. This sector
has not only seen expansion in the consumer base but also in the number of
service providers. The current industry is estimated to be worth 1500 crore
rupees and expected to grow at 25% CAGR for next five years. The scope of the
industry seems to be bright as there is a vast scope in increase in consumer base.
Initial years of energy drink in India were characterized my monopoly of Red
Bull but that too a very limited extend and very few Television Commercials.
The Product was unknown then and very few people actually knew about what
the energy drink did. Although the queasy adds of RedBull did create a buzz
among people of what it actually was. With no knowledge of the product to the
people the brand had faced various challenges as the First mover .However it
even enjoyed many advantages and is still enjoying the advantage as people still
refer to to energy drink as a whole as RedBull. The brand became the face of
the industry in India.
Other competitors in the form of power horse, blue ox etc did enter the markets
soon but could get hold of the nerves of the Indian customer. The market
remained dominant until Indian players realized the tremendous growth and
potential of the Industry and soon popped in.
The most dominant being Cloud9 and XXX. They placed their products
strategically in the market knowing the Indian consumers sentiments. The
brands did quite well but could not match RedBulls marketing and distribution
channels.

The sector faced a lot of difficulties with the Food And Drug Administration
Of India with the caffeine content in the drink and very recently a lot of the
stock was seized in Mumbai by the same organization causing huge losses to the
Brand.The main problem reported here was that India does not have any
separate import regulations for energy drinks unlike other countries which
makes it fall under the aerated beverages which have lesser level on caffeine as
it has separate funcnationality.A petition is filed with the supreme court to grant
energy drinks as a separate sector.

With major player like coca cola and pepsi entering the market and several
small player even coming up with attractive products at cheap prices to attract
the rural customers the market is gonna expand at a higher growth rate making
the industry one of the buggest in the FMCG sector.

CHAPTER 8: ANNEXURE

TABLE 1

YEAR

GROWTH

INVESTMENT

0000000

2002

79

2003

16

108

2004

22

196

2005

34

359

2006

39

446

2007

41

537

2008

43

779

2009

44

804

2010

52

833

2011

57

989

Source: Red Bull, India database

GRAPH 1

Growth %
Investment(crores)

SOURCE: FROM TABLE 1

CORRELATION

Column 1

Column 2

Column 1

Column 2

0.942451

REGRESSION BETWEEN GROWTH AND INVESTMENT

SUMMARY OUTPUT
Regression Statistics
Multiple R
R Square
Adjusted R

0.942451
0.888214

Square
Standard Error
Observations

0.874241
5.86485
10

ANOVA
df
Regression
Residual
Total

1
8
9

Coefficient

Standard

Error

SS
2186.428
275.1717
2461.6

t Stat

MS
2186.428
34.39646

P-value

F
63.5655

Significance F
4.48E-05

Lower

Upper

Lower

Upper

95%

95%

95.0%
2.54147

95.0%

Intercept
X Variable

10.79482 3.579066

3.0161 0.016658

2.541479 19.04816

9 19.04816
0.03381

0.047573 0.005967 7.972798 4.48E-05

0.033814 0.061333

4 0.061333

TABLE 2

GROWTH
YEAR

FDI 0000000

2002

55

2003

16

69

2004

22

86

2005

34

109

2006

39

169

2007

41

211

2008

43

292

2009

44

243

2010

52

298

2011

57

303

Source: Red Bull, India database

GRAPH 2

Growth %
FDI (crores)

10

SOURCE: FROM TABLE 2

CORRELATION

Column 1

Column 2

Column 1

Column 2

0.92133

REGRESSION BETWEEN GROWTH AND FDI

SUMMARY OUTPUT
Regression Statistics
Multiple R
R Square
Adjusted R Square
Standard Error
Observations

0.92133
0.848849
0.829955
6.819761
10

ANOVA

df
Regression
Residual
Total

SS
2089.527
372.0731
2461.6

1
8
9
Coefficie

Standard

nts

Error

MS
2089.527
46.50914

t Stat

F
44.92724

P-value

Significance F
0.000152

Lower

Upper

Lower

95%

95%

95.0%

Upper
95.0%
-

4.73042

1.47550

0.17831

17.8881

3.9286

Intercept
X Variable

6.979776

6
0.02294

7
6.70277

4
0.00015

-3.92861

6
0.20669

1
0.1008

17.88816

0.153789

0.10088

0.206698

TABLE 3
GROWTH OF THE
INDUSTRY IN
INDIA
YEAR

MARKET SIZE IN
CRORES
( RUPEES)

2002

110

2003

16

182

2004

22

260

2005

34

411

2006

39

490

2007

41

545

2008

43

757

2009

44

996

2010

52

1278

2011

57

1411

Source: Red Bull, India database

GRAPH 3

Growth %
Market Size (crores)

10

SOURCE: FROM TABLE 1

CORRELATION

Column 1

Column 2

Column 1

Column 2

0.901955

REGRESSION BETWEEN GROWTH AND MARKET SIZE

SUMMARY OUTPUT

Regression Statistics
Multiple R
R Square
Adjusted R

0.901955
0.813522

Square
Standard

0.790213

Error
Observatio

7.574902

ns

10

ANOVA
df

SS
2002.56

MS
2002.56

Significance F

34.9006

Regression

7
459.033

7
57.3791

Residual
Total

8
9

2
2461.6

Coefficien

Standar

ts

d Error
4.30240

t Stat
3.27410

P-value
0.01128

14.08655

6
0.00555

9
5.90767

7
0.00035

0.0328

Intercept
X Variable
1

TABLE 4

0.000359

Lower

Upper

Lower

Upper

95%

95%
24.0079

95.0%
4.16518

95.0%
24.0079

4.165181

1
0.04560

1
0.01999

1
0.04560

0.019997

YEAR

GROWTH OF

IMPORT IN CRORES

THE INDUSTRY

(RUPEES)

IN INDIA %

2002

90

2003

16

118

2004

22

156

2005

34

257

2006

39

274

2007

41

285

2008

43

323

2009

44

308

2010

52

331

2011

57

388

Source: Red Bull, India database

GRAPH 4

Growth %
Import(crores)

10

SOURCE: FROM TABLE 4

CORRELATION

Column 1

Column 2

Column 1

Column 2

0.985781

REGRESSION BETWEEN GROWTH AND IMPORT

SUMMARY OUTPUT
Regression Statistics
Multiple R
R Square
Adjusted R

0.985781
0.971763

Square
Standard

0.968234

Error
Observatio

2.947612

ns

10

ANOVA
df

SS
2392.09

MS
2392.09

F
275.319
8

Regression

3
69.5073

3
8.68841

Residual
Total

8
9

2
2461.6

Coefficien

Standar

ts

d Error
2.68225

t Stat
-

P-value
0.04086

Significance F
1.76E-07

Lower

Upper

Lower

Upper

95%

95%

95.0%

95.0%

Intercept
X Variable

-6.53214

1
0.00994

2.43532
16.5927

2
1.76E-

-12.7174

0.34685
0.18787

12.7174
0.14202

0.34685
0.18787

0.164949

07

0.142025

ANNEXURE-II

QUESTIONNAIRE OF FACTORS AFFECTING SALE AND GROWTH

OF RED BULL

NAME:
GENDER: MALE

FEMALE

OCCUPATION: HOUSEWIFE
SERVICE

STUDENT

BUSINESSMAN

SELF-EMPLOYEED

RATE THE FOLLOWING FACTORS :

EXCELLENT

VERY
GOOD

PRICE
AVAILABILITY
BRAND IMAGE
OFFERS
ADVERTISEMENTS
QUALITY
PACKAGING
INGRDIENTS
TASTE
QUANTITY

TABLE 1

GOOD

SATISFACTORY

POOR

Correlation Matrix
Price

avail

Correlatio price

1.000

.721

avail

.721

image

.299

offers

image

offers

advt

qual

pack

ingre

tast

quan

.299

.279

.076

.181

.024

.249

.273

.147

1.000

.598

.253

.233

.158

.040

.287

.392

.305

.598

1.000

.559

.487

.342

.215

.249

.493

.541

.279

.253

.559

1.000

.617

.396

.264

.174

.286

.418

advt

.076

.233

.487

.617

1.000

.584

.472

.294

.304

.253

qual

.181

.158

.342

.396

.584

1.000

.699

.322

.401

.194

pack

.024

.040

.215

.264

.472

.699

1.000

.359

.221

.129

ingre

.249

.287

.249

.174

.294

.322

.359

1.000

.594

.145

tast

.273

.392

.493

.286

.304

.401

.221

.594

1.000

.577

quan

.147

.305

.541

.418

.253

.194

.129

.145

.577

1.000

TABLE 2
KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy.
Bartlett's Test of Sphericity

Approx. Chi-Square
Df
Sig.

TABLE 3

.640
345.481
45
.000

Communalities
Initial
price
avail
image
offers
advt
qual
pack
ingre
tast
quan

Extraction

1.000
1.000
1.000
1.000
1.000
1.000
1.000
1.000
1.000
1.000

.863
.863
.753
.740
.747
.777
.768
.778
.870
.810

Extraction Method: Principal

Component Analysis.

TABLE 4
Total Variance Explained
Extraction Sums of Squared
Initial Eigenvalues
Comp
onent

Total

Loadings

% of

Cumulative

Variance

1
2
3
4
5

4.086
1.698
1.155
1.029
.607

40.858
16.983
11.552
10.292
6.068

40.858
57.842
69.394
79.686
85.754

.483

4.832

90.586

.362

3.620

94.206

.289

2.891

97.097

.162

1.624

98.721

10

.128

1.279

100.000

Total
4.086
1.698
1.155
1.029

Extraction Method: Principal Component Analysis.

TABLE 5

Rotation Sums of Squared Loadings

% of

Cumulative

Variance

40.858
16.983
11.552
10.292

40.858
57.842
69.394
79.686

Total
2.404
2.154
1.881
1.530

% of

Cumulative

Variance

24.039
21.535
18.813
15.299

24.039
45.575
64.387
79.686

Component Matrixa
Component
1
price
avail
image
offers
advt
qual
pack
ingre
tast
quan

2
.479
.615
.776
.684
.698
.674
.526
.562
.721
.595

3
.581
.621
.222
-.089
-.406
-.518
-.645
-.054
.146
.211

4
.314
.156
-.319
-.462
-.223
.165
.251
.606
.193
-.417

.444
.274
-.001
.225
.213
.164
.111
-.305
-.540
-.487

Extraction Method: Principal Component Analysis.

a. 4 components extracted.

TABLE 6

Rotated Component Matrixa

Component
1
price
avail
image
offers
advt
qual
pack
ingre
tast
quan

2
.045
.022
.270
.518
.764
.835
.826
.286
.121
-.015

3
.030
.288
.722
.619
.395
.103
-.052
.001
.510
.857

4
.920
.865
.386
.230
.087
.083
-.068
.202
.155
.005

Extraction Method: Principal Component Analysis.

Rotation Method: Varimax with Kaiser Normalization.
a. Rotation converged in 13 iterations.

TABLE 7

.115
.174
.092
-.190
-.028
.248
.278
.810
.756
.273

Component Transformation Matrix

Compo
nent
1
2
3
4

2
.580
-.720
.060
.377

3
.581
.222
-.697
-.358

4
.425
.657
.278
.557

.382
.023
.658
-.648

Extraction Method: Principal Component Analysis.

Rotation Method: Varimax with Kaiser Normalization.

CHAPTER 9: BIBLIOGRAPHY
Website, Webpages and Journals
1. Meaning of Red Bull from the dictionary
2. http://anrcatalog.ucdavis.edu/pdf/8265.pdf
3. http://www.topix.com/forum/business/investment-services

4. http://www.encyclopedia.com/doc/1O39-energydrinks.html
5. http://www.hc-sc.gc.ca/fn-an/legislation/pol/energy-drinks-boissonsenergisantes-eng.php
6. http://www.chacha.com/question/when-did-the-first-energy-drink-comeout
7. Title: Drinks and shots see energized sales. Author: JACOBSEN,
JESSICA Source: Beverage Industry, Aug2011, Vol. 102 Issue 8, p12-18,
4p, 4 Color Photographs,
8. http://well.blogs.nytimes.com/2010/12/08/phys-ed-do-energy-drinksimprove-athletic-performance/
9. energydrink-sales.com/history-of-energy-drinks-part-2
10.http://dc205.4shared.com/doc/rkg6K51m/preview.html
11.www.actoronto.org/home.nsf/pages/energydrinks
12.http://www.healthfiend.com/nutrition/energy-and-recovery-foodsupplements-and-drinks/
13.www.powerexenergydrink.com/energydrink.htm
14.nutrition.ucdavis.edu/content/infosheets/fact-pro-energydrinks.pdf
15.www.medicalnewstoday.com/releases/5753.php
16.en.wikipedia.org/wiki/Energy_drink
17.www.ovguide.com/red-bull-9202a8c04000641f8000000000074917
18.www.telegraph.co.uk News World News Asia Thailand
19.en.wikipedia.org/wiki/Red_Bull
20.www.redbull.hu/cs/RedBull/.../SafeDriving_University_Utrecht.pdf
21.http://www.springer.com/medicine/internal/journal/10238
22.www.21food.com/product/100705-p1/energy-drink.html
23.www.lettsproductsandservices.com/Red-Bull-Energy-Drink.html
24.http://en.wikipedia.org/wiki/User:Todd092609
25.en.wikipedia.org/wiki/Energy_drink
26.www.qatarliving.com/node/3064517 - Qatar
27.www.squidoo.com ... Sporting Events World Series
28.wn.com/Drainage_ditch_half_pipe__Red_Bull_Drenaje
29.en.wikipedia.org/wiki/Red_Bull_GmbH
30.http://www.redbull.com/cs/Satellite/en_INT/World-wideexpansion/001242939605518?
pcs_c=PCS_Article&pcs_cid=1242937560430
Books Referred

31.Das, N.G., Statistical Methods Volume 1, Tata Mcgraw Hill Publications,

New Delhi, Pages 287-39
32.Title: Just say no to Energy drinks Author: Roy-Bornstein,
CarolynSource: Pediatrics for Parents, Jul/Aug2011, Vol. 27 Issue 7/8,
p11-12, 12p
33.Title: Functionality niche expanding. Author: Jacobsen, Jessica Source:
Beverage Industry, Oct2011, Vol. 102 Issue 10, p48-52, 4p, 3 Color
Photographs
34.Title: Sales of Energy, Sports Drinks Perform Like a Rock Star. Author:
Source: Dairy Foods, Mar2012, Vol. 113 Issue 3, p18-18, 1p