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Marketing Research Project

Submitted to:
Dr. P Sathyapriya & Dr. Prasanna Mohanraj
School of Business-Alliance University, Bengaluru.

Submitted by:
Group-11, [Marketing C]

AMITESH(07) Deepika(19) Jyoti(25)

Puja(41) Ramesh()


Sincere gratitude is here by extended to the following without the cooperation of whom the paper wont have been structured. We here by extend our sincere gratitude towards Dr. P Sathyapriya and Dr. Prasanna Mohanraj, without whose guidance and help the paper wont have been completed. We would also like to thank our fellow mates and colleagues without whose feedback, support and contribution the research paper wont have been a successful one. Above all utmost appreciation to the almighty god for helping through this academic endeavor.

The research team


Introduction: Energy drinks are popular, and with exciting names like Red Bull, Adrenaline Rush, 5Hour Energy, and Hype, they promise to offer an energy boost and greater alertness of mind. These beverages are a huge business and they are directly targeted to teens and young adults, particularly males. What is an energy drink? Energy drinks are soft drink-like beverages that contain caffeine in combination with other ingredients such as taurine, guarana, and B vitamins, and that claim to provide extra energy. It claims to increase the physical and mental strength of humans. History: In Japan, the energy drink dates back to the early 1960s, with the release of the Lipovitan. These energy products in Japan bear little resemblance to soft drinks, and are sold in small brown glass medicine bottles or cans styled to resemble such containers. In the UK, Lucozade Energy was originally introduced in 1929 as a hospital drink for "aiding the recovery;"later was promoted as an energy drink for "replenishing lost energy." In 1985, Jolt Cola was introduced in the United States. Its marketing strategy portrayed on how the main ingredient- caffeine helped in improving stamina. The slogan was, "All the sugar and twice the caffeine." This was followed by the launch of pepsi Co s Josta in 1995. In Europe, the S. Spitz Company launched a product named Power Horse, before the business savvy of Dietrich Mateschitz, an Austrian entrepreneur, ensured his Red Bull product became far better known. He went on to develop red bull as a prominent brand in US with a market share of 47%.In New Zealand and Australia, Frucor Beverages came out with prominent energy drinks. By 2001, the US energy drink market had grown to nearly 8 million per year in retail sales. Over the next 5 years, it grew an average of over 50% per year, totaling over $3 billion in 2005. The energy drink market became a $5.4 billion dollar market in 2007. Major companies such as Pepsi, Coca-Cola, Molson, and Labatt were now facing competition from the smaller companies. Energy drinks are typically attractive to young people 65% percent of its drinkers are between the ages of 13 and 35 years old, with males being approximately 65% of the market. A 2008 statewide study at pennislavya said that 20% of respondents aged 2130 had used energy

drinks to stay awake longer for academic purposes; 70% of respondents knew someone who had used an energy drink to stay awake. In 2001, Coca-Cola marketed two Powerade brand energy drinks packed in aluminium cans. In 2002, CCL Container and Mistic Brands, Inc., worked together on the national launch of Mistic R, which used a recyclable aluminum bottle. Since its introduction, many energy drinks are now packaged in the aluminum bottles or bottle cans. In competition with Red bull CocaCola launched, 'Sprite 3G', in a similar 250 mL can and has also launched 'Relentless', a juicebased energy drink in 500 mL cans. UK supermarkets have launched their own brands of energy drinks at lower prices than the major soft drink manufacturers. All have similar kind of packaging. Since 2002 there has been a growing trend for packaging energy drink in bigger cans. Since in many countries, including the US and Canada, there is a limitation on the maximum caffeine per serving in energy drinks, this allows manufacturers to include a greater amount of caffeine by including multiple servings per container. Popular brands such as Redbull, Hype Energy Drinks and Monster use this technique of packaging. In 2007, energy drink powders and effervescent tablets were introduced. These tablets could be added to water to create and energy drink. These can offer a more portable option to cans and shots. In 2009, the industry moved towards the use of natural stimulants and reduced sugar content. Even caffeine content was considerably reduced. [ source: wikipedia] Ingredients: CaffeineCaffeine in the form of coffee is a stimulant used by people all over the world. Because of the widespread use of coffee, people tend to forget that caffeine is a drug, with lots of side effects. Some energy drinks do not list caffeine as an ingredient or state the amount of caffeine on the label. Instead, they may label their drinks as containing guarana or yerba mate, substances that naturally have as much as 40mg of caffeine per gram. Energy drinks can contain between 75150mg of caffeine per serving. However, each container may hold 13 servings, which can result in some drinks having over 450mg of caffeine per bottle. The amount of caffeine in a single energy drink is probably not harmful for most adults. A recent study determined that consumption of 400 mg of caffeine daily by healthy adults is not associated with adverse effects. The American Academy of Pediatrics suggests adolescents should limit caffeine consumption to less than 100 mg daily. TaurineTaurine is an amino acid that the body is able to produce naturally. It is also found

naturally in protein-containing foods such as meat and dairy products. Many energy drinks contain as much as 1,000 mg of taurine per 8-oz (225-ml) serving; and the long-term safety of such large doses is not known. B VitaminsB vitamins include thiamin (B1), riboflavin (B2), niacin, folate, pyridoxine (B6), pantothenic acid, cyanocobalamin (B12), and biotin. B vitamins are an important part of a healthy diet and are essential for the metabolism of carbohydrates, protein, and fat. Some energy drinks contain as much as 2000%8000% of the Daily Value for some B vitamins. It might cause harm so its better not to consume extremely high levels of B vitamins. HerbsMany energy drinks contain herbs, such as gingko biloba, ginseng, and others. These popular herbs boast many health benefits. Most of these herbs have not been shown to improve athletic performance or sharpen focus. And although the level of herbs added to most energy drinks is low, these substances can cause adverse interactions with some medications. GlucuronlactoneGlucuronlactone is an ingredient found in some energy drinks, with the claim that it detoxifies the body and protects against cancer. [Source:] Energy drinks versus sports drinks: Energy drinks and sports drinks are quite different:

Energy drinks are soft drinks with high levels of sugar, caffeine, taurine, ginseng and/or B vitamins that are said to enhance our stamina. They are marketed on a large scale, targeting athletes, youth, and even the elderly. Sports drinks, on the other hand, generally contain from 6%8% carbohydrate, plus electrolytes like sodium. These drinks are designed to fuel working muscles and maintain optimal hydration as a means of boosting athletic performance. Sports drinks have been extensively studied and have been shown to be safe and effective for athletes.

Energy drinks and sports: Many athletes use caffeine before and during competitions to help boost performance. Energy drinks are heavily marketed toward young men as performance enhancers. It is aimed at athletes, seniors and students claiming to improve performance, endurance, reaction time, and concentration due to exotic herbs and other ingredients. Research has found that consumption of moderate levels of caffeine prior to and during

heavy exercise can be safe and effective. Also, the high concentration of glucose in many energy drinks results in slower absorption of fluids from the gut, and may lead to gastrointestinal distress and dehydration. Sports drinks are specially formulated to contain the appropriate balance of glucose and electrolytes for easy absorption, thereby providing fuel to working muscles, as well as water and electrolytes to maintain optimal hydration. Sports drinks are specially formulated to contain the appropriate balance of glucose and electrolytes for easy absorption. Latent demand by year in india: The Latent Demand for Sports and Energy Drinks: 2008 2014 Year India Market US $ million 2008 2,064.125 2009 2,261.253 2010 2,476.513 2011 2,712.902 2012 2,972.559 2013 3,257.845 2014 3,571.371 [Source: Philip M. Parker, INSEAD, copyright 2008,] Top 10 Cities Sorted By Rank in India: place Greater Mumbai (13,260,463) Maharashtra Delhi Municipal Corporation (12,068,136) Ahmedabad (3,958,866) Gujarat Kolkata (4,920,397) West Bengal Chennai (4,475,653) Tamil Nadu Hyderabad M. Corp (3,683,925) Andhra Pradesh Bangalore (4,638,086) Karnataka Pune (2,827,041) Maharashtra Indore (1,788,421) Rank 1 US$ million 90.011 % in India 3.98



3 4 5 6

38.194 36.411 33.188 28.701

1.69 1.61 1.47 1.27

7 10 15

28.382 19.190 13.144

1.26 0.94 0.58

Madhya Pradesh Bhopal (1,605,300) 17 11.798 0.52 Madhya Pradesh [Source: Philip M. Parker, INSEAD, copyright 2008,] Why research on energy drinks: Energy drinks are an interesting category because there are tons of of new product launches every year in this particular sector. There are very low barriers to entry,which bring in lot of innovation and new ideas in the product development. A lot of smaller companies have chosen to attack the energy drink market leaders of the segment. Its a category with a melting pot of different influences. (Tom Vierhile, Director, Productscan Online, The Gourmet Retailer, 6/1/07). Because of this reason we have selected energy drinks as our theme for our research project and because of so many energy drinks that are available in todays market, we are interested to know what makes people to select a particular brand of energy drinks. We want to know which factor plays an important role in selection of an energy drink. We have taken some factors like brand name, logo, price, taste, last energy drink that was consumed, brand ambassador, availability, nutritional value(calories), and some other factors into consideration, to know the effect of these factors on consumers buying the energy drinks. Research objective: The objective of the research is to do a Factor analysis of the consumers preference attributes for the consumption of energy drinks in Alliance university. The aim of the research is to understand the underlying factors in influencing the consumption pattern of energy drinks of alliance university students. To examine consumer preference variables in the consumption of energy drinks. To identify which variables play an eminent role in the minds of the consumer while choosing a particular energy drink.

Research methodology and data collection: The study has been conducted in the premises of alliance university-school of business. In this we have chosen the respondents by the method of convenience sampling technique. For this we have taken 100 respondents, we have collected the data through an online questionnaire, which consists of 24 questions. In order to identify the various factors influencing the consumption of energy drink, an in depth interview of 10 students of Alliance University has been conducted. The data collected as such is used for factor analysis in order to draw conclusion. The data is analyzed with the help of SPSS. It is done by the principle component analysis method for 14 components (PRICE, ). The output of the data has been interpretated below.

CONCLUSION: On the basis of the factor analysis we have been able to extract 7 factors(APPEARANCE,BRANDING,PSYCHOLOGICAL ASPECTS,WORD OF MOUTH,EXPERIENCE,AVAILABILITY,TASTE) which are important for the consumers (students of alliance university) when it comes to the consumption of the energy drinks. BIBLIOGRAPHY: