How Would You Characterize the Energy Beverage Category, Competitors, Consumers, Channels, and Dpsg’s Category Participation in Late 2007?

MKTG 3349

2/26/2017

DPSG Case

1. How would you characterize the energy beverage category, competitors, consumers, channels, and DPSG’s category participation in late 2007?
   
   

In late 2007 the energy beverage category was well developed and had a variety of options that met energy drink needs.  It was mostly defined by Red Bull, Monster Energy, Rockstar, and similar brands. The available beverages weren’t particularly differentiated other than by their brands. Major competitors included Red Bull, Hansen Natural Corporation (Monster Energy), Pepsi-Cola, and Coca-Cola. Most consumers were seeking a drink that offered a larger dose of caffeine for an energy burst or refreshment and taste. There was also the matter of hybrid energy drinks, which were disrupting the market with energy water, fruit drinks, energy colas, etc. The energy beverage heavy users were males from age 12 to 34 and most energy beverages are consumed at home, work/school, or in the car.

In 2007, Dr. Pepper Snapple Group was introducing their first product in energy beverage market, Accelerade RTD, which was a relaunch of the recently acquired asset Accelerade, which was already popular with athletes. Their launch didn’t occur until May 2007, making their participation in late 2007 new but highly active as DPSG initiated marketing and branding campaigns and reintroduced the product as a drink for a larger audience than just hard core athletes.

2.  Does your characterization bode well for a new energy beverage brand introduction generally and for Dr. Pepper Snapple Group, in particular?

Yes, the characterization bodes well for both. The energy beverage category does not have much differentiation between brands so that serves as a perfect opportunity for a new product to introduce itself into the market that does differentiate itself and stand out. Since Dr. Pepper Snapple Group has not yet entered the energy beverage category, they are set up well to introduce a new and innovative energy beverage. In the past, DPSG has had success with introducing new products because of their strong relations with large bottlers and distributors in addition to major retailers like Walmart, Kroger, Safeway, and Target. Their broad geographic manufacturing and distribution coverage also enables them to have greater control over the coordination and timing of new product launches.

3. What target consumer market should be chosen for a new energy beverage brand?

        The energy beverage consumer consists of males between the ages of 12 and 34. These consumers are estimated to account for 70% of energy beverage consumption. Consumers typically drink the energy beverages in the morning and afternoon and drink the energy beverages in order to get an energy boost and refresh mental awareness, as well as enjoying the taste.  With this in mind, the target market for a new energy beverage brand should be aspiring young male athletes, particularly high school and college football and basketball players, both male and female. Another possible avenue would be more health-conscious and athletic adults who are looking for energy that has other nutritional value, like the protein Accelerade offers. The initial launch should focus on heavy users as they are more likely to be very particular about what they drink and therefore more likely to recognize the unique formula Accelerate RTD offers and promoting the brand’s protein content, distinguishing itself from its rivals.. Light users may also offer quite a bit of revenue as it is more than just an energy drink because it offers carbohydrates and protein, once again making it different from anything they have ever seen before.

4. What product should be introduced and how should it be positioned/differentiated?

They should introduce a 16.9 ounce aluminum bottle with a resealable screw cap with increased amounts of caffeine, herbs, and B vitamins to make the “energy” and “mental alertness” factors seem more effective than its competitors. The differentiated bottle shape would also make it stand out on shelves and intrigue consumers. The resealable cap on the bottle adds a new level of convenience and functionality to the product because the consumer does not have to drink the product in one sitting and instead can take it with them easily without the risk of spilling it. The resealable cap also makes it more logical to have the larger 16 oz can because they can space out when they drink it and it seems like they are getting more bang for their buck. Because of this resealable factor, they should position themselves as having an “on the go” energy drink since consumers can easily put the cap on and throw it in a bag for later which cannot be done with any other energy drinks currently on the market. This “on the go” term would also appeal to energy drink users because they are often consumed in cars and people who are “on the go” often would resonate with needing an extra boost of energy to get through their day.