CUSTOMER AND DYNAMICS

Customer and Dynamics

Customer and Dynamics

Introduction

Energy drinks contain caffeine, glucuronolactone and taurine and important carbohydrates and vitamins, claimed to help people with improved concentration, speed and reaction, physical endurance and a feeling of well being. Currently, over a billion cans of energy drinks are consumed in a year across the globe.

In 2001, a survey was conducted by Zenith International, which revealed that consumer preference over energy drinks is increasing day by day, behind Pepsi Cola and Coca-Cola. In the sector of sport and energy, it is estimated that energy drink industry worth about £750 million, and by 2012. The energy drinks had a share of 64% in the beverage industry, over double the combined sales of soft drinks. Energy drinks capture the market share of 42.3%, 31.5%, 22.2% and 4% in United States, Asia-Pacific, Europe, and countries excluding US (inside.cm.mahidol.ac.th).

The industry of energy drinks become popular among men particularly; with its largest customers consist of night-clubbers, students and athletes in a late night lift need. In contrast, energy drinks primary market is hard-working people and opinion leaders with active lifestyles. Moreover, customers have varied behaviour and attitudes towards energy drinks, which also differs among age groups, which is important to understand attractive and potential consumer segment to approach and target.

This assessment examines the consumer attitudes and behaviours and how consumers can be better targeted before the launch of energy drink. The report will include the consumer segmentation and subsequent aspects of market research.

Macro Environment

Political

Energy drinks are banned in most of the EU countries. There is no regulation on energy drinks labelling. Governments have banned to sell 6 mg of caffeine per ounce to any person who aged less than 18 years, mainly because health risks associated with energy drinks. USDA does not regulate en energy drinks, and categorises it as a dietary supplement (Evans, Jamal & Foxall, 2009, pp.11-125).

Economic

The economic downturn of 2008 badly hit the beverage industry of UK. Customers search for different beverage alternative based as prices were too high. There was a direct relationship between the decline across the world and in the United Kingdom, in substitution consumption of beverages. There has been a decline witness in the sales of energy drinks between 2005 and 2009 (www.gotomanager.com). Moreover, increasing disposable incomes encourage purchases on premium. Key manufacturers of soft drinks have been attracted to the energy and sport market to a certain extent by high process that presently present for these products of the market.

Social

In pertaining social forces, health factors have a vital and very important role to alternative drinks, especially energy drinks. People become a concern about their personal health as increased use of energy drink leads to insomnia, mild heart problems, reckless behaviour, physical warning, and effects of mixing the products with alcohol were drastically highlighted in the media. Over the last decade, there has been a significant increase road traffic and trends of longer working hours drastically lead to an increase in consumption of energy drinks (Kotler, ...