Rockstar Energy Drink was founded by Russell Goldencloud Weiner. a physician of nutritionary enthomedicine. harmonizing to the Rockstar web site. His parents. two celebrated herb doctors. helped to bring forth the Rockstar preparations. Today. three expressions of Rockstar are on the market: Original. Cola. and Diet. The original expression was foremost launched in 2001. doing the company merely 4 old ages old. The company is based in Las Vegas. Nevada. one of the trendiest venues of the United States. loaning to the high-strung “Rockstar” image. To heighten their image. Rockstar’s catchy motto is “Party like a Rockstar” .
The Rockstar company is non publically traded. but in some provinces is distributed by Dr. Pepper. Recently. Rockstar has teamed up with Coca-Cola Consolidated ( CCBCC ) . Coca-Cola’s 2nd largest distributer. as another means to administer the popular drink. Rockstar is an industry pioneer ; by first presenting a 16oz sized can it has differentiated itself from typical energy drinks which come in an 8-8. 4oz “slimcan” . One of Rockstar’s sole key ingredients. milk thistle. is a liver-protectant. detoxifier. and serves as a intervention for depression. every bit good as a katzenjammer redress.
Red Bull. ruling the market portion. is in shop for some heavy competition against the energetic Rockstar. II. MARKETING RESEARCH A. Market Potential. Industry Gross saless. and Forecasts The energy drink industry is turning rapidly. and it doesn’t expression like it will be decelerating down anytime shortly. The growing of energy drinks can be attributed to their voguish image. convenience and multiple utilizations. Energy drinks can be used as sociables at nines and bars or as java replacements. Harmonizing to Information Resources Inc. . the energy drink dollar gross revenues in 2004 increased 54 per centum from the old twelvemonth. with unit gross revenues up 31 per centum.
Although its indirect rivals. such as athleticss drinks or teas. have higher dollar gross revenues. the comparatively new energy drink industry has a much larger growing rate. Energy drink gross revenues are forecasted to increase to about $ 500 million in 2006. Appendix Exhibit B shows graphs of the energy drink industry gross revenues and prognosiss. The dislocation of the market portion in the energy drink industry are shown in Appendix Exhibit A. Rockstar. the 2nd best-selling energy drink in the US behind Red Bull. had $ 15. 7 million in gross revenues in 2004. reflecting a 250-percent addition from the old twelvemonth.
Rockstar energy drink is available in an 8oz. or 16oz. can in three spirits: original. diet and Cola. The drink includes a assortment of vitamins. herbs and amino acids mixed into a blend of vanilla. bubble gum and citrous fruit spirits to supply a healthy. effectual and tasty drink. Rockstar is a favourite among consumers due to its good gustatory sensation. alone ingredients. good value ( $ /ounce ) . effectivity and convenience. The placement and wanting properties of Rockstar give it great market potency for deriving more of the energy drink market portion. Industry Gross saless By Year: Direct Rivals 2003 2004 2005* .
Brand $ in 1000000s Market Share $ in 1000000s Market Share $ in 1000000s Market Share Red Bull 68. 8 54. 8 120. 0 59. 2 188. 8 65. 0 Rockstar 6. 2 5. 0 15. 7 7. 7 21. 9 7. 5 Sobe Adrenaline 12. 6 10. 0 14. 0 6. 9 26. 6 9. 2 AMP 11. 6 9. 2 13. 0 6. 4 24. 6 8. 5 Monster 2. 3 1. 8 9. 4 4. 6 11. 7 4. 0 Sobe No Fear No Info No Info 7. 5 3. 7 N/A N/A Hansen’s Energy 3. 5 2. 8 3. 5 1. 7 7. 0 2. 4 KMX 6. 6 5. 2 3. 4 1. 7 10. 0 3. 4 *Predictions: based on % alteration from anterior old ages Beginning: Information Resources Inc. For 2004: old 52 hebdomads stoping July 11. 2004 For 2003: old 52 hebdomads stoping June 15. 2003.
Industry Gross saless By Year: Indirect Rivals Industry $ in 1000000s % alteration from 2003 Energy Drinks 195. 54 54. 29 % Sports Drinks 1. 139. 77 13. 45 % Ready-to-drink Coffees 138. 99 16. 49 % Canned/Bottled Teas 592. 78 5. 34 % Beginning: Information Resources Inc. for 52 hebdomads stoping June 13. 2004 US Energy Drink Industry Gross saless Prognosiss Year $ in 1000000s 2001 12. 0 2002 42. 0 2003 75. 0 2004 142. 4 2005 312. 7 2006 479. 0 B. Competitor Matrix The Competitor Matrix in Appendix Exhibit F shows the different parent companies that ain several of the energy imbibe trade names on the market today.
The parent companies include Coca Cola. Hansen’s. and Pepsi. merely to call a few. These three corporations are all publically traded and have been in the drink market for many. many old ages. We were non able to recover informations refering Red Bull and Rockstar. two independently operated labels which are both comparatively new to the market. Most of the energy drinks we observed have a planetary presence. Hansen’s was non really clear on whether it was sold globally. and Rockstar intends to spread out into international markets in the close hereafter.
However. on the Rockstar can. many popular “party” metropoliss are listed. but we are diffident if the merchandise is really readily available in those topographic points. Rockstar’s closest rival. Red Bull. is a Thai merchandise. but is based in Austria ; hence. it has great international presence. There is great possible for Rockstar to rule planetary markets outside of the United States. C. Positioning Of Self and Competitors Although Rockstar is merely the 2nd best-selling energy drink. its competitory border can be seen in a placement matrix. as seen in Appendix Exhibit C.
Energy drink consumers have rated Rockstar high in quality. convenience. signaling and pricing. doing it on par with the taking Red Bull. In footings of quality. Rockstar is equal or better than its rivals. including Red Bull. in effectivity. gustatory sensation. ingredient content and handiness of low sugar. low saccharide or low Calorie versions. Rockstar is the strongest in ingredients because the drink is packed with vitamins. herbs and aminic acids. many of which are alone to Rockstar.
One of these alone ingredients is the powerful herb milk thistle. known to assist with katzenjammers and protect and renew the liver. A comparing of ingredients in the energy drinks is shown in Appendix Exhibit D.
Rockstar has a high buying convenience because it is available at most shops. It is even available for purchase in majority bundles at jobbers. such as Costco. However. Rockstar’s transportability is limited by its big can size as opposed to the little can size of some of its rivals. Red Bull is at the top in footings of both handiness and transportability. The placement matrix besides shows the immense advantage of Rockstar’s competitory pricing at $ 0.
12/ounce over other energy drinks selling at $ 0. 25/ounce. Rockstar’s high quality. buying convenience and good monetary value make it a strong rival in the energy drink market. However. Rockstar’s signaling in footings of its trade name name. packaging and mixability need to be improved upon if it is traveling to vie with Red Bull. Rockstar energy drink has a unique. voguish “rock star” image with the slogan “party like a stone star” . Although it has a good image. the trade name name does non hold adequate power to vie with Red Bull in pulling clients because it is non every bit good known.
The packaging of the can is well field with a gilded star against a black ( original ) . white ( diet ) or ruddy ( Cola ) can. The SWOT analysis below summarizes the strengths and failings of Rockstar energy drink every bit good as the chances and menaces confronting the company as they try to capture more of the market portion. 1. SWOT Analysis Strengths * Great value: duplicate the size for the same cost as other energy drinks * Ingredients: contains many vitamins. herbs. aminic acids and alone milk thistle * Diverse merchandise: offers three different spirits ( original. diet and Cola ) * US-based company * Turning market portion.
* Company specializes merely in one merchandise ( Rockstar energy drink ) * Good spirit: blend of vanilla. bubble gum and citrous fruit spirits * Unique. voguish “rock star” image. “party like a stone star” slogan Weaknesses * Low market portion ( compared to Red Bull ) * Advertisement is non to a great extent promoted * Low trade name consciousness. low trade name value * Can is a spot field and simple Opportunities * Turning market portion * Young. advanced company * Global market * Mixability * FDA blessing Threats * Main rival Red Bull holds more than half of market portion ( with many loyal clients ) * Energy drinks have unknown long-run wellness effects D.
Sections in the Market Since it appears that most energy imbibe consumer are college pupils. three sections of energy drink consumers were considered within the college-aged population. The first section consists of heavy users who find effectivity. gustatory sensation. handiness. trade name name. mixability and monetary value to be the of import.
The heavy user section can be farther divided into two classs: Red Bull users and non-Red Bull users. Segment two is made up of wellness witting users. The effectivity. transportability. monetary value and handiness of low sugar. low saccharide or low Calorie versions are of import to users in this class.
The 3rd section is made up of jocks who find effectiveness and handiness of low sugar. low saccharide or low Calorie versions to be the two most of import properties. The cleavage matrix in Appendix Exhibit E contains each section and their evaluation of the importance of each property. D.
Costss. Contribution Margins The costs for any drink. and peculiarly Rockstar. are wide. In add-on to development costs. Rockstar’s costs besides include packing. transportation. distribution and retail costs. in add-on to selling and employee costs. Ad costs entirely were 7.
3 % and across the soft drink fabrication industry. costs of operations in 2003 were 49. 6 % of entire runing income ( Almanac of Business and Industrial Financial Ratios ) . The net income border before and after revenue enhancements of the industry were 10. 1 % and 7. 0 % severally. E. Marketing Diagnosis Following the Decision Tree for Marketing. we have decided to concentrate on test for our mark section. Industry Gross saless are increasing. and there is a great potency for Rockstar to excel Red Bull as the industry leader. Since Red Bull is to a great extent used in nines and bars. Rockstar is every bit capable of infiltrating the nine scene to replace Red Bull.
Based on client interviews. consciousness and cognition of Rockstar are already present. Most people purchase Red Bull because of the repute and handiness. Some consumers in our interviews said that Rockstar is really similar to Red Bull in gustatory sensation. quality. and effectivity. and because of its competitory monetary value compared to Red Bull. it is the preferable pick. If more people really see this similarity every bit good. Red Bull users may change over to Rockstar. Compared to Red Bull. Rockstar has a minimum to non-existent advertizement run. which besides plays a factor in its place in the energy drink industry.
Schemes to increase Trial will be to administer samples and vouchers. set-up point of sale shows. and engage gross revenues staff to offer presentations at promotional sites. III. Selling DECISIONS A. Target Segment The ingestion of energy drinks by the heavy user section contributes to the rapid growing of the industry. The bulk of energy drink consumers are in their late to early mid-thirtiess. It is assumed that college pupils make up the bulk of this group because college pupils frequently use energy drinks as watchfulness tools or energy supporters when analyzing or partying.
Therefore. it is sensible that we should aim heavy users within the college pupil population. Our mark section will be heavy Red Bull users in nines and bars. Harmonizing to Rockstar executive Todd Infurna. merely 15 per centum of Rockstar’s gross revenues come from bars and cabarets. However. exposure to the Las Vegas-based Rockstar energy drink in popular Las Vegas nightclubs and bars is doing an addition in the drink’s popularity. Rather than doing alterations to an already working nucleus section. we will seek to increase the per centum of gross revenues that come from users in the bars and cabarets.
Since Red Bull is the chief trade name being used as a sociable ( with vodka ) and it contributes to over 50 % of the market portion. change overing Red Bull users to going Rockstar users will take to big additions in Rockstar’s market portion. It is non recommended to aim section 2 and 3 because the focal point of these sections do non correlate with Rockstar’s ends. Segment 2. the wellness witting section. chooses merchandises based on factors such as monetary value. transportability and low sugar. low saccharide or low Calorie picks. It is likely that this section will buy cheaper. healthy teas over energy drinks.
Although Rockstar contains many healthy herbal ingredients. its chief focal point is to supply an effectual drink that provides energy to its consumers. The jocks in section 3 are more likely to purchase athleticss drinks with low sugar/carbohydrate/calories than an energy drink. B. Product Positioning Rockstar’s great savoring expression and competitory value will be maintained. The similarity in gustatory sensation and mixability between Rockstar and taking rival Red Bull creates a large advantage for Rockstar. In add-on to holding a great tasting expression. Rockstar exceeds Red Bull in its quality ingredients.
As seen in Appendix Exhibit D. Rockstar contains many ingredients non found in other energy drinks. It contains more vitamins. herbs and amino acids that any other energy drink. Rockstar’s alone herb milk thistle. which is known to move as a liver defender and regenerator. besides makes the merchandise highly suited for ingestion in nines and bars. The milk thistle in Rockstar is besides great for those who want aid with their katzenjammers. Rockstar is offered at a much greater value. with its 16oz. can bing the same as Red Bull’s 8oz. can.
This difference in value makes it highly cost-efficient to hold Rockstar replace Red Bull as a sociable. Rockstar’s trendy. stone star image will be emphasized when marketing the drink in nines and bars. These consumers will imbibe the energy drinks to “pump them up” for partying all dark. The stone star image is likely to appeal to immature. hep people who are interested in music. holding merriment and partying like a stone star. To do the merchandise more appealing to energy drink users in nines and bars. the packaging will be modified while retaining the same expression.
The can will be changed so that it can glow in the dark or under a black visible radiation. This will do the drink stand out and hold a “coolness” factor associated with it. Since energy drinks are presently merely being combined with vodka. we will put new sociable recipes each can. By increasing the drink’s mixability. it will increase the utilizations for the merchandise and cause Rockstar to go more popular as a sociable. The packaging will besides be modified by doing the smaller 8oz. can of Rockstar more popular in nines and bars.
Although the larger can size is more economical. such a big can is non required for blending with intoxicant. A smaller can should be used in nines and bars to guarantee quality by keeping the carbonation and coldness of the drink. However. the 16oz. can size should stay an option to consumers who are buying Rockstar outside of nines and bars. C. Price One of the of import properties offered by Rockstar is its competitory monetary value. which we will keep at $ 2 for the 16oz. can. The monetary value will be proportionately decreased for the smaller 8oz. can. which will be sold for $ 1 to aim the users in nines and bars.
Its competitory monetary value will give it an advantage over its rivals when seeking to bring on test within the mark section. D. Channel Rockstar will go on distribution through its normal channels. such as supermarkets and retail shops. However. extra channels will be added to assist aim consumers in nines and bars. One recommendation is organizing contracts with nines and bars to acquire them to function Rockstar on pat. Since Rockstar entreaties to people who like to listen to music. particularly college pupils. the drink can be sold at concerts. set competitions or music locales on college campuses.
This will assist to increase test of the merchandise. E. Promotion Rockstar presently has a few ads. one of which is shown in Appendix Exhibit G. but most consumers have non been exposed to them. We have developed several publicities and advertisement programs to assist travel our possible consumers from consciousness to reiterate buyers. Our most developed publicities focus on acquiring consumers to seek Rockstar energy drinks. specifically at nines or music locales with the hopes that they will widen their use to everyday. 1. Ads.
In add-on to advancing test. consciousness of the Rockstar energy drink trade name is another of our concerns. To turn to this concern we will get down by puting full-page ads in popular. national magazines. Because the ads will non be tied to any specific publicity it is possible to publish those on remnant empty infinite. therefore salvaging on advertisement costs. To get down with we will put ads in FHM and Maxim. In the ads will we utilize a successful instrumentalist to solidify Rockstar’s image as an energy drink used by nine and concert departers. Using a famous person besides helps to raise the regard of the trade name. every bit good as addition trade name association.
To track the range and effectivity of the advertizements the ad will include a web reference consumers can travel to and publish out a voucher for a Rockstar drink. To entree the voucher consumer will necessitate an entree codification that will besides be featured on the advertizement. Use of these entree codifications will let us to track which ad reached more consumers. These advertizements can subsequently be extended to other publications. 2. Trade-In Once consumers are cognizant of Rockstar as an alternate energy drink option we want to seek and specifically change their trade name penchant from Red Bull. the most often consumed energy drink. to Rockstar.
To aim Red Bull users we will co-sponsor a local concert. or team up with a music locale. and allow consumers to merchandise in their Red Bull energy drinks for a Rockstar. If consumers are repeat buyers of Red Bull. so they have an chance to merchandise their energy drink for a Rockstar which has twice the value of Red Bull. every bit good as a alone image which is associated with the club/music scene. In add-on. circulars advancing the event will include a voucher for a discounted Rockstar ( see Appendix Exhibit H ) . Consumers who trade in their Red Bull would besides acquire discounted or free admittance to the event.
This publicity specifically marks Red Bull users while still keeping Rockstar’s image as a club/party/concert drink. An alternate to this publicity is to offer discounted admittance to consumers who bring in empty tins of Rockstar. At the door frequenters would so have a voucher for Rockstar purchase at the locale. or other Rockstar promotional points. 3. Mixer/Recipe In add-on to advancing Rockstar’s image and value. we would besides wish to show that it is merely as miscible with intoxicant as Red Bull. This publicity will concentrate on bars or nines that serve intoxicant.
Consumers would have a voucher circular at the door of the constitution that includes a formula for an alcoholic energy drink ( see Appendix Exhibit I ) . Attached to the formula would be two vouchers. One voucher would offer a $ 1 off that specific drink if ordered from the saloon. the other voucher would be for a discounted Rockstar at a retail shop so that consumers can seek blending the drink at their ain place. The voucher and formula would be easy separated so that consumers can salvage the formula. 4. Other Promotions In add-on to the three major publicities. we developed several other consciousness and test runs:
– When a Red Bull merchandise is purchased at a food market shop. a voucher for Rockstar will publish out. In this manner we can concentrate on change overing Red Bull consumers to Rockstar users. – Team up with an intoxicant company whose intoxicant can be used to blend with Rockstar. Place shelf speakers on their merchandises that feature the drink formula. every bit good as offer price reductions on Rockstar. – Consumers can roll up and direct in Rockstar UPCs or cogent evidence of purchase to have Rockstar ware. F. Rejected Promotion Alternatives In add-on to the suggested publicities. we considered others that were similar to Red Bull’s publicity runs.
However. we rejected them because they are dearly-won and targeted general consumers. instead so a specific section. For illustration. we considered utilizing telecasting commercials but they are expensive and offer small interaction between the client and the merchandise. While commercials may assist increase consciousness of the trade name. they don’t offer any test chances. Sponsoring featuring events is another run Red Bull has used. We rejected such sponsorships for the clip being because they are really dearly-won and these featuring events do non project the Rockstar image.
In the future Rockstar may see patronizing large-scale concerts. We besides rejected utilizing “Rockstar mobiles” like the Red Bull “can cars” that can be seen driving about college campuses. While the freshness of the vehicles may pull attending. they besides do non concentrate advancing test to a specific group and would be dearly-won to develop.
IV. IMPLEMENTATION A. Mock Up Flyers Appendix Exhibit H shows a sample circular for the Red Bull trade-in publicity discussed above. The first cardinal component is the name of the featured creative persons and the topographic point and clip of the event.
The 2nd component is the existent offer that tells consumers they can convey a full can of Rockstar to the peculiar locale to merchandise it in for a full can of Rockstar. Consumers who use Red Bull on a regular footing will hold an chance to seek something new without holding to pass any extra money. Furthermore. they will be able to acquire into the locale without paying the usual screen charge. In add-on to the critical information. the circular besides includes a voucher for those consumers who did non convey a can of Red Bull with them but still wish to seek the merchandise.
This allows us to raise consciousness of the merchandise and have it available for consumers to seek on the topographic point. Another sample circular. shown in Appendix Exhibit I. is for the Mixer/Recipe publicity. Its chief characteristic is the new formula for an alcoholic Rockstar drink. This circular will be printed on heavy card stock and be calendered. Attached to the circular will be two vouchers that can be detached on a pierced line. One voucher will offer a price reduction to consumers if they order the alcoholic Rockstar drink at the saloon where the circulars are being handed out.
The 2nd voucher will supply a price reduction on Rockstar at retail shops so that the consumer can buy the ingredients and seek doing the drink at place. B. Work Plan A 12-month work program is shown below harmonizing to the undertakings and the start/end day of the months. 12 month Work Plan Task Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Idea Generation and Screening for new Can Concept Test with Club goers/owners/workers Make Appropriate alterations based on concept trial Retest Create undertaking budget Identify Test City Contract Gross saless rep Create promotional collateral Distributor Promotions Club Promotions.
Small Music Venue Promotions Assessment of Marketing Plan C. Budget and Break Even Analysis for Sacramento Metro Area The budget and break-even analysis for Sacramento are discussed below for each publicity. 1. Trade-In Our trade-in publicity is an effectual manner to acquire Red Bull users to seek the Rockstar trade name and get down to change over them to reiterate clients. The break-even analysis of this publicity varies depending on the location or event and can be applied at a broad scope of locales. To cut down costs. Rockstar would team up with the peculiar locale and in exchange for advancing the set or event.
The locale would beckon the screen charge for all clients take parting in the trade in as advertised ( see Appendix Exhibit H ) . Since the approximative part border is 50 % and a 16oz. can of Rockstar retails for $ 2. 00. the part border would be $ 1. 00. Assuming that the concert draws in 300 people per dark. and a 3rd of those people bring in a can to merchandise. so the cost of giving out a free can of Rockstar is $ 200. If two tierces of the music lovers received a circular with the extra 50-cent voucher. so that is an extra cost of $ 100.
The entire costs for the publicity. presuming the locale waves the cover charge. are $ 300. With a part border of $ 1. an extra 300 tins of Rockstar would hold to be purchased either at the gross. or subsequently at a retail shop. 2. Mixer/Recipe This publicity would be better implemented at a larger nine locale that can suit more people. The part border would still be $ 1 but the possible figure of consumers would increase. It would be $ 319 to bring forth 5. 000 calendered circulars that feature the Rockstar formula and vouchers ( quotation mark from dash. com ; see Appendix Exhibit I ) .
The cost per circular is 6 cents. Assuming 500 people come to the locale. the cost for the circulars would be $ 32. If one tierce of those people use the 50 cent voucher to buy a Rockstar subsequently at a retail merchant. that is an extra cost of $ 83. If half of the people who received a circular bought the new assorted drink in the nine. that cost would be $ 250. ( However. the part border on assorted drinks in the nine possibly different. and so existent cost to Rockstar may be less. ) Entire costs would be $ 365. bespeaking that 365 extra Rockstars would hold to be purchased at the nine or subsequently at a retail shop.
D. Evaluation of publicities All three of our chief publicities include vouchers or voucher codifications which can easy be tracked through point of gross revenues. By tracking these vouchers within a hebdomad or two of the event or publicity. we will be able to measure whether or non our program is working. This speedy rating can be done because people will non keep onto a voucher for a long period of clip after having it. We can besides track the success of our publicity by measuring gross revenues of Rockstar within the locales themselves. on the dark of the publicity.
This rating will rapidly state us how many consumers we reached at the door. and how many bought a Rockstar to seek.
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