Energy Drink Essay

Submitted By prim3
Words: 2145
Pages: 9

Caffeine Cowboys
Introduction:
The recent growth in the energy drink market across the United States has created a buildup of curiosity surrounding its success. The four core players in this highly competitive industry are Monster, Red Bull, 5-hour Energy, and Rockstar. These companies were established in the 1990’s and early 2000’s and have formed an industry that produced over $12 billion in 2012. There are multiple explanations for the success of these four energy giants. The market has proven its dynamic nature by growing 60 percent from 2006 to 2012. Through innovative marketing techniques, these companies have honed in on consumer consumption patterns by effectively targeting three unique segments, strategically positioning their brand, and effectively analyzing the motives and needs of said segments.

Segmentation: A fundamental reason behind the success of Monster, Red Bull, Rockstar, and 5-hour Energy is each company’s ability to effectively separate the market into certain customer segments among all users. There are three major segments that produce the most lucrative benefits for these major brands. They are the “sugar kings”, the “workaholics”, and the “thrill-seekers”. All three of these customer segments possess unique characteristics that each company attempts to capture. The “sugar kings” are comprised of mainly young adult males between the ages of 12-29. In data collected by the United States Department of Agriculture, the mean amount of sugar consumed from 2009-2010 by males age 12-19 was 161 grams and for males 20-29 it was 146 grams. The highest two amounts by any age range. This segment comprises the middle to upper class with no specific income. These young adults have a variety of educational experience but are mainly looking to complete either their high school diploma or college degree. The segment’s main occupations are high-income jobs or full to part-time students. This group of consumers participates in activities that allow the energy drink giants to effectively reach them. One activity where energy drink consumption is common is when students are waking up early in the morning or staying up later at night to study. Staying up late sometimes requires an extra boost, which is why Monster, Red Bull, Rockstar, and 5-hour Energy market their products in a way that makes these beverages look helpful at any time of day. Another activity that is common for this segment is the late-night party. A very popular drink in dance clubs are a combination of an energy drink and vodka, which to no surprise captures a high volume of young males and females in their early twenties as well as consumers who live lavish lifestyles and spend money more freely. In addition, this segment contains a large amount of medium to heavy users because of the amount of people encompassed in the segment’s age range. While the “sugar kings” segment relies on sugar consumption and high incomes, the next segment goes a step further in an attempt by the energy drink industry to depict a productive environment. The “workaholics” are a special niche of consumers that offer unique opportunities that the “sugar kings” can’t provide. One of the ways this segment is exclusive is simply by the number customers the companies can reach. The workaholics have an emerging group of new users and those are young, busy mothers. Working mothers are typically in their late twenties to thirties. The reason for the rise of this group is the impact that children have on the energy parents has. The most common activities for this group involve people working 9 to 5 jobs, people with workout regiments, and also people who travel. Their lifestyles revolve around a hard work ethic and sometimes an extra boost is what they need to get through a day. More importantly, this segment allows companies to target one of biggest age segments in the United States, the baby boomers. The baby boomers are made of up 76 million people that were born…