Marketing Energy Drinks to Americas Youth Essay Example for Free

Marketing Energy Drinks to Americas Youth Essay As I started collecting information for this paper, I soon realized that the energy drink industry is a very small (18 percent) part of the beverage industry, but a very dominant part to say the least. Interestingly, the major players in the industry, Monster Energy, Red Bull, and Rockstar, have intentionally veered away from the conventional mediums used to promote products. They instead have chosen marketing mediums that appeal more to their target markets and the â€Å"live life on the edge† lifestyles that they live. Monster for example, shies away from mass market advertising; instead they focus all of their sales efforts and marketing muscle on sponsoring action sports athletes, artists and musical, events and tours. All of this ties in with the company’s overall philosophy that Monster isn’t just a beverage, but a lifestyle brand (Landi). â€Å"The key is for us (Monster) to retain what we do best, which is marketing in an unconventional way and keep that feel for the brand,† said Rodney Sacks, CEO of Hansen Natural Corp. â€Å"Monster is all about action sports, punk rock music, partying, girls, and living life on the edge† (Landi). The companies that produce energy drinks are using the current popularity of action sports such as motocross, skateboarding, BMX, etc. , to showcase their products and to further brand awareness. It’s not coincidental that the demographic that participates in these sports and idolizes its professional athletes are also the same demographic that consumes energy drinks. You’ll see very few TV commercials or print ads promoting energy drinks but when you turn on the ESPN produced X-Games, just about every athlete participating is sponsored by Red Bull, Monster, or Rockstar. John Lee, director of sports marketing for Monster Energy Drink says, â€Å"We don’t do print ads or television. We strictly have promoted our brand through athletes and the events that the athletes compete in. † With our current generation (Gen – Y) of young Americans being the first to really grow up with the Web, it is important for marketeers to embrace the use of the internet as a vital marketing tool and communication medium (Ness). â€Å"This group has a lot of lifetime ahead of them and that makes their Lifetime Value (LTV) high for marketers,† says Greg Ness, Chief Strategy Officer, Burst Media. Ness was also quick to point out that, â€Å"one-third of current college students spend 10 or more hours online per week and one-fifth spend 20 hours or more online. † Ness concludes, â€Å"Their time online exceeds the amount of time they are spending watching TV or listening to the radio. † Monster has recently starting using the internet as a recruiting / marketing tool of sorts when they introduced the â€Å"Monster Army. † The Army is a â€Å"grassroots marketing outreach community that also locates up-and-coming athletes seeking sponsorship opportunities† (Campanelli). In the past few years, more than 50,000 athletes (recruits) have signed up as members of the Monster Army where more than 1,000 of them are currently sponsored through the program. â€Å"It’s been a very successful program, our Army members are out there spreading the word about our products, telling ten of their friends who in turn tell ten of their friends, it’s a snowball effect† (Lee). In addition Monster has also recently announced an exclusive relationship with the Loop’d Network, a social media platform exclusively for online sports communities. The Loop’d Network currently boasts more than 200,000 members worldwide (Campanelli). The history of energy drinks is much deeper than most would imagine. Japan is credited for pioneering the energy drink phenomenon, but the first mass produced energy drink was called Lucozade, and was launched in 1929, in the UK (Research Wikis). It wasn’t until Red Bull, which was first launched in 1987, and introduced the United States to the world of energy drinks a decade later that the energy drink industry really took off (Reuters). Red Bull might have had the first big impact on the market in 1997, but Monster, launched in 2002, by Hansen Natural Corp. has clearly made a strong impression on the market. With its initial market share of 12 percent in 2003, Monster now has a 30 percent hold on the market while Red Bull maintains 25 percent (Reuters). Past portrayals of energy drinks were for the most part all negative as energy drinks are not regulated by the FDA and most contain large amounts of sugar, sodium, and caffeine, among other things. Some brands and flavors have a caffeine content that can range from a modest 50 mg. to an alarming 505 mg. per can (Reissig). For example, an 8. 3 oz. can of Red Bull contains 76 mg. of caffeine which is about twice what a 12 oz.can of Coke contains (LeBlanc). A 16 oz. can of Monster contains about 14 teaspoons of sugar and 200 calories (LeBlanc). So what are all of these â€Å"negative† energy boosting drinks doing to our bodies? A recent study done by Wayne State University in Detroit showed that consumption of energy drinks increased blood pressure and heart rate levels in healthy adults that drank two cans a day (LeBlanc). With all of those negative aspects there must be something good in energy drinks. There is a long list of beneficial ingredients that can be found in most of the energy drinks on the market today. They include; vitamin B-complex, antioxidant vitamins C and E, the amino acid taurine, bee pollen, inositol, glucuronolactone, and herbal extracts from ginseng, guarana, ginkgo biloba, horny goat weed, milk thistle, yerba mate, damiana, rosemary, skullcap, black seed, royal jelly, and white willow, among others (Berry). The overall benefits that energy drinks are said to produce include stress relief, sobering effects, an improved love life, increased stamina, sharper reflexes, heightened alertness, virility, and they’ll stimulate your metabolism (Berry). The demographic that energy drink companies are after is rather broad. While their number one consumer fits the description of a young white male between the ages of 16 to 25, energy drink companies are broadening their marketing horizons and are now looking at men, women, and children between the ages of 12 and 40 (LeBlanc). â€Å"Younger kids see drinking energy drinks as something their parents might disapprove of,† says Jim Karwowski of Power Brands. A market that has yet to be fully tapped into is the female consumer. While the number of female consumers has grown 74 percent over the last five years, women are still considered the minority population when it comes to energy drinkers. Almost 20 percent of men say they drink energy drinks while only 10 percent of women say they do (Francella). I’ll be using information gathered from a number of different research papers as well as reports produced from beverage industry insiders to substantiate my findings on the marketing techniques being used to lure America’s youth into becoming loyal consumers. Method: During this study I coded 60 magazines. I reviewed issues of Racer X Illustrated and Motocross Action Magazine looking for ads from energy drink companies. My goal was to find print ads directly from the energy drink companies themselves that promoted their product. Once found (if found), I would evaluate what the ad was about and what demographic the ad was targeting. I watched and coded 10 TV commercials (via YouTube) in an attempt to figure out if the messages shown were directed towards a particular market. The only â€Å"corporate made† TV commercials I was able to find were from Red Bull and Rockstar. I found a variety of homemade Monster commercials but none that would have been endorsed by the corporate office. With Red Bull, four of the ads were animated and four were of Red Bull sponsored athletes. The two Rockstar commercials were based around music, one having a more psychedelic look while the other had a guitar player helping a stranded woman. My goal here was to evaluate what the ads were about and what demographic the ads was intended for. I reviewed and coded four web sites, three from energy drink companies and one from an action sports promotion company. My objective while evaluating these sites was to see what groups of people, whether it was men or women, and what age range was the information intended for. I found a vast amount of information to dissect and code from companies that are within the beverage industry. These are companies that do product reviews, market analysis, and product introductions, among other things. Two common messages that I repeatedly found in these articles revolved around college kids using energy drinks to mix with alcohol and the overall abuse of energy drinks. My objective here was to get an idea of how many college kids fall into one of these two groups. Although my options were limited due to a lack of documentation from other academic researchers, I was able to find, evaluate, and code information from four other academic research papers. I was able to find these documents after an exhaustive search using Lexis Nexis, Psychinfo, and the Social Science Citation Index via the Joyner Library. I came across a huge inventory of other academic research papers that were based on similar subjects, but to gain access to more than the first paragraph I would have had to sign up for subscriptions and pay fees. I’m hoping that my frugalness will not negatively impact my grade and hope the information that I was able to obtain and evaluate will satisfy the requirements of this paper. While evaluating and coding the different mediums I looked at the overall tone of the material. Was the tone very harsh and bold, which would possibly be directed more towards college aged males? Was the tone very light hearted and fun which would be more appealing to a younger population and/or women? Or lastly, did the ad have some sexual overtones and innuendos which could either be directed at young men or women? Results: Being a subscriber of Racer X Illustrated and/or Motocross Action Magazine for the last 30 years, I have found that I look at many of the ads in those magazines in a rather numb, non-consuming state of mind. I’ve seen the ads so many times that I know all about the companies and their products so I don’t pay much attention to them. To my surprise, after looking at 60 different magazines that were printed over a span of five years, I didn’t find a single ad that was specifically advertising the actual energy drink. I found a large variety of ads that were promoting energy drink sponsored events, but none for the drinks themselves. The majority of the sponsored events were either motocross races, action sports events, or alternative rock concerts (the Vans Warped Tour) and bands (Linkin Park). If I was to describe the age, sex, and race of the attendees of these events it would probably be predominantly 16 – 25 year old, white, males. Although I didn’t find any product ads in the magazines it was nearly impossible to turn a page and not find pictures of riders or motorcycles that didn’t have the name or logo of an energy drink showing. I felt the four animated Red Bull commercials could be perceived as trying to target the very young viewers and the female market as much as anything else. They were light hearted, funny cartoons that weren’t big, bold, and overbearing. The four Red Bull commercials featuring their sponsored athletes were very action packed and intense. They included Robbie â€Å"Mado† Madison jumping his motorcycle onto the roof of a building in Las Vegas, â€Å"B-boy Ronnie† freestyle break dancing, big wave surfer Ian Walsh, and stunt plane pilot Kirby Chambliss. While the animated commercials carried the pitch, â€Å"Red Bull Gives You Wings,† the commercials with the athletes concluded with the athlete saying, â€Å"Welcome to my World, the World of Red Bull. † These action driven commercials were in my opinion made for the thrill seeking male consumer between the ages of 16 to 25. I also found that Red Bull’s marketing plan has the brand pursuing traditional advertising such as TV commercials as its last phase of product market development (Hein). â€Å"Media is not a tool that we use to establish the market,† says Red Bull’s Vice President of Marketing, David Rohdy. â€Å"The idea is to reinforce, not introduce the brand. Only when a market is deemed mature does the company begin a media push,† concluded Rohdy. Red Bull typically creates two new TV spots each year and runs them in their â€Å"mature markets† (Hein). The four web sites that I reviewed and coded were the corporate web sites of Red Bull: http://www. redbull. com/ , Rockstar Energy Drink: http://www. rockstar69. com/ , Monster Energy: http://www. monsterenergy. com/. In addition to the three top selling energy drink brands I also looked at Alli Sports: http://www. allisports. com/ the promoter of some of the biggest action sports series and events in the world. Themes that were consistent with all four of the sites were action, youth, and energy, energy, energy. The Red Bull site was the most clean cut and professional looking site out of the three beverage sites. I’m not saying that the Rockstar and Monster sites were cheaply made, or have an unprofessional appearance, but the Red Bull site looks like something you would present to share holders of the company. It has the least amount of â€Å"boldness† of the three beverage sites, but is packed full of well filmed video clips showing off their sponsored athletes. I don’t know if the fact that the corporate base for Red Bull is in Austria has anything to do with the web sites visual appeal, but it’s definitely a different approach than its competition took. With the look and accessibility of this site and its features I felt like it was geared for an older more mature audience. I didn’t see the sight selling the sexual appeal of women as much as I did on the Rockstar site. I think Red Bull’s site would appeal to both men and women ages 15 to 40. The Rockstar site was definitely the edgiest of the three beverage sites. Just on the home page alone you see ads for mixed martial arts fights and heavy metal concerts that the brand is sponsoring. If you look further down you can watch a short video clip of five beautiful, big breasted women posing on motorcycles and race cars. There’s also links that talk about the variety of products they offer as well as links to the various music and sports events that they sponsor to include the sponsored bands and athletes that participate in those events. I felt that the Rockstar site was definitely geared for young, white, males, ages 15 to 30. Overall I thought that the site had a very harsh tone to it and women probably wouldn’t appreciate it. With a mix of the fighters and rock concert promotions flashing on the screen a viewer might even feel some rage building inside while viewing the site. The Monster site was all about speed. The home page had a constantly changing look that showcased many Monster sponsored racers. The site overall was neatly laid out. It didn’t have as clean and crisp of a look as Red Bull had but it wasn’t as busy as the Rockstar site was. The site was easy to navigate and was very appealing to the eye. I feel the overall look of the site and the message that it gives was directed more towards the young, white, male between the ages of 15 and 35. The site is very dark, as the background is black, and has a hardcore feel and tone. I think women might be turned off by that. One feature on the Monster site that is inviting to a broader fan / consumer base is the Monster Army. I think the idea of being a part of something is a selling point for many of today’s youth. I think the Monster Army is an appealing environment for both sexes with an age range of 12 to 40. The Alli Sports web site focuses on the promotion of the action sports events that they promote. Although Alli Sports doesn’t have direct sponsorship deals with any of the leading energy drink companies, all of the athletes that are sponsored by those companies participate in Alli Sports produced events. The same demographic that participates in BMX, motocross, wakeboarding, skateboarding, and other alternative action sports that Alli promotes also consume energy drinks. I feel the Alli site is geared more towards the fans of action sports which could be male or female between the ages of 12 and 40. It’s a very bright web site and has a low key and fun overall tone to it. Both the articles I found from industry insiders as well as the academic research papers that I found voiced similar issues and concerns. One issue of concern and importance addressed the use of energy drinks by college students. I was unaware of the fact that many energy drinks are on the list of nutritional supplements banned by the NCAA. Caffeine is a stimulant and college athletes will fail a drug test if the concentration of caffeine in their sample is 15 micrograms per milliliter. That would be the equivalent of slamming five to 10 cups of coffee before a game (Moritz). Another concern that researchers have is the increasing number of college students that are consuming alcohol mixed with energy drinks. In the fall of 2006, 4,271 college students from 10 universities in North Carolina were surveyed about their consumption of energy drinks, alcohol, and the combination of the two. The results of the survey showed that 697 of the students had consumed one or more energy drinks within the last 30 days, and one-quarter of the students said that they mixed alcohol and energy drinks. Looking at the amount of energy drinks consumed by the two sexes it was discovered that men drank on average 2. 49 energy drinks per month while women drank 1. 22 drinks per month. Students who were young, male, white, intramural athletes, and fraternity members or pledges, were significantly more likely to drink energy drinks that those in other demographics (O’Brien, Miller). With college students’ taking heavier class loads and the ever present concern of one’s grades, caffeine abuse has been on the rise on college campuses. There has been an increase in reports of caffeine intoxication from the mass consumption of energy drinks as well as an overall an increase in the number of students that are dealing with caffeine dependence and withdrawal issues (Reissig). The poison control center in Chicago has handled 265 cases of caffeine abuse involving energy drinks in the last three years. The users’ average age was under 21 (LeBlanc). Interpretation: Based on information I reviewed, I feel that the energy drink industry is very strong and will continue to grow. I think the marketeers of the energy drinks are doing a great job at getting visibility for their products and they’re focusing on a set consumer demographic that has huge spending power. The youth and college students today are easily influenced and have a strong influence on the products their peers buy. The studies show that because these energy drink companies are gaining brand loyalty from their consumers at a young age that the odds are in their favor that they will become lifelong consumers. Taking the unconventional route to marketing may or may not be any cheaper than doing normal TV spots that Coke and Pepsi do. Either way, the leaders of the energy drink market are making it work for them. From a financial standpoint, I think the return on investment will come faster in the energy drink industry than it ever has in any other aspect of the beverage industry. Selling 8 oz. cans for over $2 a can is a quick way to make money. Red Bull, Monster, and Rockstar are dominating the energy drink industry when it comes to consumer preference with white male’s ages 12 to 40, but what about the ladies? The industry has yet to scratch the surface of the young female consumer market. Granted, there aren’t too many professional female athletes participating in alternative sports yet, but there are other lines of approach that the industry needs to consider. I remember seeing a bumper sticker once that said, â€Å"Girls Kick Ass. † It is that same kick ass mentality that has made energy drinks as popular as they are today. I think it will only be a matter of time before we see one of the power players in the energy drink industry come out with a product specifically marketed towards women. Maybe a black Monster can with a hot pink claw mark rather than the green one, who knows?! I foresee the FDA getting involved sooner than later with regulations on how much sugar, sodium, and caffeine can be in each product. I don’t feel that mixing energy drinks and alcohol is that big of a problem and personally hope laws don’t get created to prohibit such mixes. I think that if an individual is going to consume alcohol irresponsibly, they are going to do it regardless on the fact that an energy drink is or isn’t part of their drink selection. Bibliography: Campanelli, M. and Lee, J. , eMarketingandCommerce. com (2007). â€Å"Social Media Tips from Monster Energy† (accessed June 9, 2009). Available at: http://www. emarketingandcommerce. com/view/106 Landi, H. , Hall, M. , and Sacks, R. , Beverage World (2009) â€Å"Monster Energy: A Mighty Force† (accessed June 9, 2009) Available at: http://www. beverageworld. com/content/view/35687/ Scribd, BevNet, Research Wikis (2006) â€Å"Research Wikis Energy Drink marketing Research† (accessed June 10, 2009) Available at: http://www. scribd. com/doc/3259151/ResearchWikis-Energy-Drinks-Marketing-Research Rajan, A. , Reuters (2009) â€Å"Hansen’s Monster Takes the Fight to Red Bull’s Turf† (accessed June 10, 2009) Available at: http://www. reuters. com/article/ousiv/idUSTRE5313N320090402 Francella, B. , CS News Online (2008) â€Å"Energy Drink Sales Growth Running Out of Steam? † (accessed June 10, 2009). Available at: http://www. csnews. com/csn/index. jsp Search: â€Å"Energy Drink Sales† Berry, B., Agri-Food Trade Service (2008) â€Å"The Energy Drink Segment in North America† (accessed June 11, 2009) Available at: http://www. ats. agr. gc. ca/us/4387_e. htm LeBlanc, P. , Austin American Statesman (2008). â€Å"The Buzz on Energy Drinks – Energy Drinks Booming in Popularity† (accessed June 11, 2009) Available at: http://www. statesman. com/ Search: â€Å"The Buzz on Energy Drinks† Hein, K. , and Rohdy, D. , Brandweek (2001) â€Å"A Bull’s Market – the Marketing of Red Bull Energy Drink† (accessed June 11, 2009) Available at: http://findarticles. com/p/articles/mi_m0BDW/is_22_42/ai_75286777/?tag=content;col1 Moritz, A. , Tribune Business News (2008). â€Å"Think Before Using an Energy Drink: Colleges† (accessed June 11, 2009) Available at: http://proquest. umi. com. jproxy. lib. ecu. edu/login? COPT=REJTPUc2 Search in the ProQuest Research Library database: â€Å"Think Before Using an Energy Drink: Colleges† Reissig, C. J. , Department of Psychiatry and Behavioral Sciences, Johns Hopkins University School of Medicine, Baltimore, MD (2009) â€Å"Caffeinated Energy Drinks – A Growing Problem† (accessed June 11, 2009) Available at: http://web. ebscohost. com. jproxy. lib.ecu. edu/ehost/search? vid=1hid=6sid=5b788385-77d0-43c3-8372-037638da0fc6%40SRCSM2 Search in the PsycINFO database: â€Å"Caffeinated Energy Drinks – A Growing Problem† O’Brien, M. C. , Wake Forest Univ, Bowman Gray Sch Med, Dept Emergency Med, Winston Salem, NC (2008) â€Å"Caffeinated Cocktails: Energy Drink Consumption, High-Risk Drinking, and Alcohol- Related Consequences Among College Students† (accessed June 11, 2009) Available at: http://apps. isiknowledge. com. jproxy. lib. ecu. edu/summary. do? qid=2product=WOSSID=1BONI6HlgO3hemOl6fPsearch_mode=GeneralSearch. Miller, K. E. , SUNY Coll Buffalo, Res Inst Addict, Buffalo, NY – Journal of American College Health (2008) â€Å"Wired: Energy Drinks, Jock Identity, Masculine Norms, and Risk Taking† (accessed June 11, 2009) Available at: http://apps. isiknowledge. com. jproxy. lib. ecu. edu/summary. do? qid=5product=WOSSID=1BONI6HlgO3hemOl6fPsearch_mode=GeneralSearch Ness, G. , Chief Strategy Officer, Sundog. net (2006) â€Å"Marketing to College Students 101 (accessed June 11, 2009) Available at: http://www. sundog. net/sunblog/posts/marketing-to-college-students-101/.