Study on

Consumer Buying Behavior towards Indian Energy Drink

Executive Summary

This study was conducted to know the consumer buying behavior and purchasing pattern

towards energy drink in Mumbai city. The project begins with an introduction of Energy drinks

and research of market demand, market leader and product awareness to consumer. In this

project I did some research through questionnaire, to know the consumer perception and brand

awareness of Indian Energy Drink.

Table of Contents

Sr. No.

Topics Pg. No.

1 Introduction 1-4

2 Research objective, Research methodologyScope of the study ,Limitations

5

3 Data analysis and interpretation 6-15

4 Conclusion 16

5Finding and Recommendation

17

6 Bibliography18

INTRODUCTION

Energy Drinks Industry in India

Energy drinks are beverages which contain legal stimulants, vitamins, and minerals, including

caffeine, guarana, and taurine, various forms of ginseng, maltodextrin, carnitine, creatine, and

ginkgo biloba. Some may contain high levels of sugar or glucose.

This category traditionally included caffeine based drinks which are energy boosters. Currently,

the energy drink segment in India is dominated by two firms, Red Bull and Cloud 9. Cloud 9

somehow breaks the ice by introducing an energy drink with natural source of caffeine such as

Guarana, Ginseng and Taurine.

According to the market research firm, Data monitor Plc; the market for energy drinks in India

was estimated at Rs. 499.2 crores in the year 2008, still at a young stage when compared with

carbonated drinks, which was valued at Rs. 6,027.9 crores. Between 2002 and 2007, the market

for energy drinks in India grew at about 50% a year. In contrast to that, growth of carbonated

drinks in India observed a slowdown by 0.5% during the same period. With an increasing

number of modern retail stores, the energy drinks market is expected to reach Rs 1,100 crores by

the end of 2010.

This decrease in the carbonated drinks market and the high growth of the energy drink market

can be attributed to the positive changes in the perception of health and fitness among the Indian

youth. The industry foresees a huge potential for Energy Drinks. The energy drink segment is the

fastest growing segment in the ready to drink category, reason being that India has a youth

centric population and the fast urbanization.

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Energy drinks in India till a year back were dominated by players such as Rhino’s Bullet, Cloud

9 and Red Bull. Sales started picking up post the entry of established players such as Pepsi,

Amway and the latest entry of Coca Cola & GT&T has shown the market potential of the Energy

Drink market in India.

Market players in this product category are adopting unique marketing strategies like free

sampling at schools and colleges before launching their products, sponsoring major sporting

events and fashion shows. These promotions enhance the brand recall. Brands in the Energy

Drink market are Red Bull, Cloud 9, SJ XXX, Power Horse, and Rock star, Burn, SoBe and

Amway.

Energy drink industry in India is growing with very convincing speed. It can be said that the

foundation pillars of this industry was put forth by Red Bull. It entered the Indian market

sometimes back in the year 2003 and since then the energy drink market took its way.

Energy drink market was of Rs.100 Cr. till 2005 but it gained acceleration from then on and the

energy drink market in India is growing rapidly above 50%. It estimated that the metros are

populated by young, trend setting adults which are also the largest energy drink consuming

markets in India. Today it has a market potential of Rs.500 Cr. Plus in India.

The energy drinks market in India is double in size as a host national and international players

venture into the segment. The market for such drinks is expected to double in size to Rs.1, 000

Cr. From Rs.500 Cr. presently.

Energy drinks in India till a year back were dominated by players such as Rhino’s, Bullet, Cloud

9 and Red Bull among others has suddenly spruced. Sales, however, started picking up post the

2

entry of established players such as Pepsi, Amway and the latest entry of Coca Cola & GT&T in

this segment has shown the market potential of the Energy Drink segment.

Pepsi has been marketing its energy drink So Be since November 2008, while Amway XL has

been around since September 2009, Red Bull and Power Horse, who have been around for some

years now, perhaps were the only existing players to be marketing such products aggressively.

It is believed that the fun drinks such as colas segment has declined by 5% since 2007. “With the

positive changes in the perception of health and fitness in India, the industry foresees a huge

potential for supplementary drinks like the Energy Drinks.

Amway sells health drinks under the Amway XL label which comes in 2 flavors Citrus Blast and

Tropical Blast, priced at Rs.450 for a pack of 6.

The energy drink segment is the fastest growing segment in the ready to drink category. The

reason being that India has a youth centric population and we are urbanizing very fast.

Players are taking to unique marketing strategies to expand the market for energy drinks in India.

There are many companies who entered into this energy drink segment after Red Bull. Some of

them are Power Horse, Burn (Coca Cola), Cloud 9, SJ XXX (JMJ launched this year).

Among these brands Red Bull holds the market share of about 83%, followed by Power Horse

with 9%, Cloud 9 and Rock Star with 3.2% and 3% and the rest by other brands including SJ

XXX, Burn, So Be, etc.

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Market of Energy Drinks in India

The food and beverage (F&B) market in India is worth $232 billion and it has experienced a

compounded annual growth rate (CAGR) of approximately 18% over the past few years. Despite

the size and growth of the industry, related sub sectors such as store-bought nonalcoholic

beverages remain underpenetrated, offering substantial growth opportunities to beverage

companies and their subsidiaries. This is due to a lack of overall consumption, a lack of routine

daily consumption, poor brand differentiation and ineffective or irrelevant product positioning.

Energy Drink Market Share in India

4

Red Bull76%

Cloud 96%

SJ XXX3%

Power Horse8%

Rock Star4%

Rock on1.4%

Edge0.7% white tiger..

0.9%

Energy Drink Market Share(INDIA)

Research Objectives

To find out the average no of customers in various demographic segmentation taking

energy drinks.

The main objective is consumer Buying behavior towards Indian energy drinks.

To know the consumption pattern of energy drink.

Research Methodology

Information was collected from a sample size of 100 respondents in the Mumbai city,

which include both males and females. Demographic details are provided in the report.

Information obtained from the respondents was analyzed and interpreted with the help of

chart and graphs.

Simple tabulations were calculated for each question.

Scope of the study

This study will provide me data and information about Indian energy drinks and its

competitor’s position in the market and this will help me to analyze the market potential

and consumer buying behavior of energy drink.

I have taken 100 customer consumption pattern and buying behavior of about energy

drinks.

Limitations of the study

This project is limited to the region of Mumbai only.

The sample size taken for the study is too small.

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Data Analysis & Interpretation

Graphical analysis of consumer’s perception towards energy drinks:

The analysis and interpretation is based on the data collected through questionnaire:

Q.1) Your age

9%

31%

44%

11%

3% 2%

Age

14-1818-2424-3030-4040-5050-60

From the above figure it can be interpreted that 9% of the consumer between age group

of 14-18, 31% from the age group 18-24, 44% of the consumer from 24-30,11% of the

consumer from age group of 30-40,3% of consumer from 40-50 age group and 2% of the

consumer from the age group of 50-60 consume the energy drink.

Majority of the consumer who consumes energy drink are in the age group of 24-30.

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Q.2) Your gender

74%

26%

Gender

MaleFemale

From the above figure it can be analyzed that the 74% of the male population and 26% of

the female population drinks energy drink.

Q.4) what is your current status?

45%

55%

Current Status

StudentWorking

7

From the above data it can be interpreted that the 55% of the working people and 45% of

the students consumes energy drink.

Q.4) Your family monthly income?

Below 10,000 10,000-

15,000 15,000-25,000 25,000-

40,000 40,000 and Above

05

101520253035

711

3230

20

Family monthly income

From the above figure it can be concluded that majority of the consumer who spend

money on buying energy drink are of the income group of15, 000-25,000.

Q.5) what energy drink do you consume?

8

49%

5%7%

7%

11%

21%

Consume energy drink

Cloud 9EdgeRock OnXXXWhite TigerOther Brand

According to my survey in Mumbai Cloud 9 is dominant player with 49 % and doing well

and Red bull the international brand also capturing market share of 21%, and other

brands like White tiger has 11% share, Rock On and XXX has 7% and Edge capture the

market with 5% share in the Indian market.

Q.6) How much do you spend monthly on energy drinks?

63%

28%

6%

3%

Monthly spending on energy drink

Less than 200200-300300-400400-500

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From the figure it can be interpreted that majority of the consumer that is 63% spend less

than 200 rupees per month for buying the energy drink, 28% spend 200-300 for purchasing the

energy drink. While only 6% spend monthly 300-400 and 3% spend 400-500 monthly on the

energy drink.

Majority of the consumer spend less than rupees 200 for consuming energy drink.

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Q.7) The inclusion of vitamins and minerals in energy drinks increase your likelihood of

drinking?

37%

25%

23%

10%

5%

Vitamins and minerals in the energy drink

AgreeStrongly AgreeSomewhat AgreeDisagreeStrongly Disagree

From the survey it can be interpreted that majority of the consumer agree that the vitamins and

minerals in energy drink increase their likelihood of buying energy drink.

Q.8) How often do you drink energy drink?

11

23%

18%

21%

38%

Energy drink consume

More than once a weekOnce a week1-3 times a week

It was found that 38 % of the respondent buy energy drink less than Once a month, 23% of the

respondents buy more than once a week , 21% of the respondents buy 1-3 times a week, and 18%

of respondent buy once in a week.

Q.9) where do you buy energy drink?

45%

31%

22%

2%

Interested to buy

Retail shopsLocal shopSuper marketOthers

From the survey it was found that 45% were purchase from the retail outlets, 31% of the

respondents were purchase from the local shops, and 22% of the respondents were purchase from

super market and only 2% of the respondents purchase from the others.

Majority of the consumer purchase energy drink from the retail shop.

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Q.10) what makes you try a new energy drink?

39%

12%10%

22%

5%

12%

Factor influencing

BrandPricePackagingAdvertisingCelebritiesRecommendations of friends

From the survey it was found that most influencing factors while purchasing of energy drink is

Brand name of the product, advertisement,price and recommendations of the friends.

Q.11) The color and graphic of an energy drink can play a role in your purchase of an energy

drink?

21%

21%

26%

18%

14%

Can color and graphic design

AgreeStrongly AgreeSomewhat agreeDisagreeStrongly Disagree

From the figure it can be interpreted that majority of the people agree that the can design of an

energy drink can play a role in their purchase decision of the drink.

13

Q.12) You prefer taste and flavor when buying energy drink?

39%

31%

27%

3%

Taste and flavor

AgreeStrongly AgreeSomewhat AgreeDisagree

From the survey it can be analyzed that 39% consumer agree that they prefer taste when buying

energy drink, 31% said they are strongly agree with the statement,27% said that they are

somewhat agree with the statement and only 3% are disagree that they don’t prefer taste when

buying energy drink.

Q.13) Are you influenced by the promotion when buying energy drinks?

From the survey it can be interpreted that more consumer attracted towards the brand when

promotion is there. Product promotion plays an important role in the selling of the product

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56%

44%

Promotion

YesNo

Q.14) Your friends or family influence what energy drinks you consume?

31%

25%

19%

20%

5%

Influenced by family or friends

AgreeStrongly AgreeSomewhat AgreeDisagreeStrongly Disagree

It can be concluded that majority of the people agree that their family and friends influenced

them for trying energy drink available in the market.

Q.15) Have you ever tried XXX energy drink?

From the survey it can be interpreted that majority of the people are not tried the XXX energy drink and most of the people are not even aware of the product XXX.

15

21%

79%

Ever tried XXX

YesNo

Q.16) If no, would you like to experience it?

60%

40%

Like to experience XXX

YesNo

In the survey I find that most of the people are ready to try XXX energy drink even though they

have not heard of this energy drink before.

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Conclusion:

From the data we can say that for consumer only cloud 9 is loyal Brand.

From the analysis of the data collected I found that most of the people are aware of the

cloud 9 energy drinks in Mumbai, some people know very well about the each products

of energy drink but some people haven’t heard of the new products of energy drink. The

awareness of Red bull is very strong in the Indian market.

Majority of the people influenced by advertisement and promotion to buy the energy

drink.

The regular customer of drinking energy drinks is very few in Mumbai, only the people

who belong to upper class use to drink energy drinks regularly and most of customer

drink more than once in a week or a month.

The energy drinks mainly consume by people of the age group 24- 30, and this kind of

consumer mostly prefers Brand to create an image among society and friend.

The majority of the decision regarding purchase of energy drink was depending up on

family or recommendation of friends.

. The important factors for purchase of energy drinks is easy availability in the nearest

retail stores and also good test of energy drink.

Of the data collected I got the mixed reaction for can graphic and design of an energy

drink in terms of customer buying behavior.

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Findings:

The observation was that Indian energy drinks in Mumbai have tough competition

With foreign brand Red Bull.

Whenever there is any occasion the first brand among the Indian energy drink comes in

the consumers mind are Cloud 9.

Majority of respondents known through television as the source of knowing about

energy drink brands.

Recommendation:

Merchandise should be installed against the sale performance of the outlets as well as the need of the market.

The company’s should focus on more promotion. The company’s should give some advertisement through media to expand the awareness

and market share.

The attention should be paid to the consumer Perception.

Companies should provide Retailers sign boards to attract customers.

Market research should be done by the company’s for those outlets who are selling

foreign energy brands.

Company should be make good relation with retailer by providing them good services,

margin and sales tie-up.

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Bibliography:

Howstuffworks.com

www.Researchwikis.com/Energy_Drinks_Markew

www.Energydrink.com

www.thexxxenergy.com

www.cloud9.com

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1) Your age

14-18 19-24 25-35 35-45 45-55

55-65

2) Your Gender Male Female

3) Your current status Student working others

4) Your family monthly income? Below 10,000 10,000-15,000

15,000-25,000 25,000 and above 5) What energy drinks do you consume?

Full throttle Red Bull Rock star Monster

Redline Amp (Mt Dew) other please specify

6) How much do you spend monthly on energy drinks?

Less than 200 200-300 300-400 400-500 more than 500

7) The inclusion of vitamins and minerals in energy drinks increase your likelihood of drinking?

Agree Strongly Agree Somewhat Agree Disagree Strongly Disagree

8) How often do you drink energy drink?

More than once a week once a week 1-3 times a month

Less than once a month

9) Where do you buy energy drinks?

Retail shops Local shop Super market

10) What makes you try a new energy drink?

Brand Price Packaging Advertising Celebrities

Recommendations of friends

11) The color and graphic design of an energy drink can play a role in your purchase of an energy drink?

Agree Strongly Agree Somewhat Agree Disagree Strongly Disagree

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12) You prefer taste and flavor while buying energy drink?

Agree Strongly Agree Somewhat Agree Disagree Strongly Disagree

13) Are you influenced by the promotion when buying energy drinks?

Yes No

14) Your friends or family influence what energy drinks you consume?

Agree Strongly Agree Somewhat Agree Disagree Strongly Disagree

15) Have you ever tried drink?

Yes No

16) If yes then what was your experienced?

17) If no, would you like to experience it?

Yes No

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