LAUNCHING UK BASED ENERGY

DRINK IN INDIA

Ghazi Rehman latif

BSU code 373018

International marketing

  
Contents
Introduction.................................................................................................................................................2
Company background..................................................................................................................................2
Country background India...........................................................................................................................3
Energy drink trend in India......................................................................................................................3
Competitiveness in market India.............................................................................................................4
The relation between India and UK.........................................................................................................5
The factor that affects the energy company................................................................................................5
Political factors........................................................................................................................................5
Economic factors.....................................................................................................................................6
Social factors...........................................................................................................................................6
Legal factors............................................................................................................................................6
India’s market attractiveness.......................................................................................................................7
Entry strategy..........................................................................................................................................7
Direct exporting.......................................................................................................................................7
Distribution of product............................................................................................................................8
Marketing plan............................................................................................................................................8
Marketing mix.........................................................................................................................................8
Product................................................................................................................................................8
Packaging.............................................................................................................................................9
Price.....................................................................................................................................................9
Place....................................................................................................................................................9
Promotion..........................................................................................................................................10
Future strategy..........................................................................................................................................11
Conclusion.................................................................................................................................................11
References.................................................................................................................................................12
Introduction
International Marketing is defined as the plan of business activities provided to customers in
more than one nation. It involves detailed planning of business activities involving price,
promotion, and direct the flow of a company's goods after carefully analyzing the foreign market
(Shaw and Onkvisit, 2008). Globalization is increasing day by day and it is a challenge to all
companies that they must enter different foreign markets if they want to remain in the
competition.

In this report, we will be discussing the international marketing strategy of “Emerge Energy
drink” which is based in the UK and is planning to be launched in India. This report is basically
divided into 4 main parts. The first part contains background analysis of the company and India
discussing the competitiveness of the market, market trends. The following part contains a PEST
analysis of the factors that might affect the business. The next part contains the market entry
strategy which outlines how the company plans to offer products in India. The last part contains
an action plan or marketing plan of the company discussing the products, price, place and
promotion strategy of the company and the future plans and targets of the company.

Company background
Emerge energy drink is the United Kingdom-based carbonated energy drink company, founded
in 2004 (Emerge Energy Drinks, 2019). According to Statistica report Emerge is ranked the 9th
most selling energy drink in the United Kingdom (2018). Italy and Germany have the highest
number of consumers of the emerge energy drink. The company has divided the energy drinks
into 5 major groups, which are subdivided into a range of flavors and packaging
(Britishcornershop, 2020).

1. The original emerge drink in 250ml and 1-liter packaging.

2. The reduced sugar range in 250ml and 1-liter packaging.
 Sugar-Free Energy
 Zero Sugar Energy
3. The sport range available in 500ml packaging.
 Orange Isotonic Sport
 Tropical Berry Isotonic Sport
 Mixed Berry Isotonic Sport
  Citrus Isotonic Sport
4. The flavored range is available in 250ml packaging.
 Tangy Tropical Energy
 Juicy Berry Energy
5. The dual range
 Dual Energy
 Mixed Berry Energy
 Dual Sugar-Free Energy

All the energy drink groups contain taurine, caffeine, B vitamins, sugar and sweeteners in a
different amount. The company is investing in marketing its products and improving packging
and diversity the products.

Country background India

India is one of the largest countries in South Asia with 29 republic states. India is ranked the
second most populous country around the world, holding one-sixth of the world’s total
population (Encyclopedia Britannica, 2020). There are 22 officially used languages in India yet
English holds the status of being the secondary official language and is considered vital for
political, commercial and national communication (Central Intelligence Agency, 2020). The
Indian currency is Rupee. The official religion of the country is Hinduism. The country has its
borders with 7 countries Myanmar, Bangladesh, Bhutan, Nepal, China, Afghanistan and
Pakistan. The total distance between India and UK is 7,658 km and it takes around 10 hours to
travel from India to United Kingdom (Travel Math, 2020)

Energy drink trend in India

The Indian population has relied on lemon and glucose drinks traditionally. But due to the
affordability and accessibility people have shifted towards a more sophisticated approach
towards the beverages they consume. The energy drink market has been affected by this shift,
and the young population has moved towards the consumption of energy drinks as they offer
refreshing energy with each consumption. Moreover, Indian youth has increased the demand for
energy drinks due to a rise in urbanization, disposable income and health consciousness.
The energy drink market in India is still under development and has a high potential for growth.
According to a report published by Mordor Intelligence (2020), India’s Energy Drink market is
projected to grow at a CAGR of 9.22% from 2019 to 2024.

Figure 1.1 India Energy Drinks Market trend (Mordor Intelligence, 2020)

According to a report by Euromonitor (2015), Redbull is the leader when it comes to market
share but is losing the share price to other international brands of energy drinks who don’t have
the first-mover advantage like Monster energy drink and Cloud9+.

A study report published by the Indian Pediatrics Journal (2014), shows that despite the cost
factor 71% of adolescents in urban centers of India consume energy drinks.

Competitiveness in market India

India is an attractive market for conducting international trades due to many factors. The factor
that makes India ideal for international trade it has an increasing middle class that makes it the
fastest-growing economy can make it increasingly attractive.

Red bull has the first-mover advantage of being the first company to launch energy drink in the
Indian market in 2002, and to date is entitled to be the best energy drink in India. Indian energy
drink sector is dominated by multinationals with brands like Red Bull, Coca-Cola, PepsiCo,
Monster Beverage, and local brands like a sting, Heinz India, Bisleri, Vedantika Herbals, Dabur,
etc (Kulkarni, 2014).

The relation between India and UK

The trade relation between India and UK are highly positive. There is a 17 percent per annum
growth observed in the bilateral trade between Britain and India. In addition to this Crispin
Simon, UK’s Director-General of the Department for International Trade, in an interview to
Economic Times of India (2019) said that imports to India were USD 13 billion, while exports
from India was USD 12 billion.

Moreover, India and UK have a past relationship of the trade before India got independence from
the British Empire. This creates the foundation of culture, history and language between India
and the UK. According to the British Council (2015), the priorities, sympathies and values of the
two nations today are increasingly aligned.

Profound ties of already give the UK a potentially strong foundation upon which to further
deepen its relationship with India. Although the legacy of the colonial era is complex, the
priorities, sympathies, and values of the two nations today are increasingly aligned. Young
people in both countries say they appreciate the culture of the other. And there are many areas
where the UK can benefit from such stronger relations as India continues to rise as a world
power

The factor that affects the energy company

In this section, we will do a detailed PESTLE analysis of India in which we will be covering the
political, Economic, Social, and legal factors as they are more relevant for creating a marketing
plan for the emerge energy drink brand. PESTEL analysis is a tool used to analyze the external
marketing factors that might have an impact on an organization (Senter and Edmonds, 2003).

Political factors
India is a federal parliamentary republic country, which means it follows a voting
system. Even though India is a democratic country it enjoys a relatively stable political
environment (BBC, 2019).

The percentage of corruption in India is quite high, which is a major area of concern as it is
posing a challenge in economic growth and will be crucial to the business.
Economic factors
In terms of GDP India is ranked among the largest economies in the world which was around
$2.72 trillion (Plecher, 2019). When it comes to taxes, India has the lowest percentage of co-
operating tax and it is being reduced since the highest rate of 39.95% in 2001 to 22% for existing
companies and 25% for new companies in September 2019 (Trading Economics, 2020).

India is one of the largest economies in the world in terms of nominal GDP. Its GDP in 2018 was
worth around 2726.32 billion US dollars (Trading Economics, 2020).

Social factors
India is the second-most populous country in the world, approximately 1.2 billion, which shows
the diversified consumer market of India. People of India are multi-ethnic, multi-lingual, and
multi-religious yet there is a cultural harmony observed, however, there are certain disputes
within the Muslim and Hindu communities of India. India has the most well-known film industry
and is also renowned for sports like Cricket and Hockey. IPL (Indian Premier League) is a
cricket match series that attracts many international brands to get market their brand image on a
large platform.

According to the World Bank, 1 in 5 people in India is poor which shows that India is suffering
from issues like poverty, which is gradually changing with the gradual increase in the standard of
living. India’s labor force is expected to reach 160-170 million by 2020, which has attracted
many multinational companies to outsource their business operations to India. (IBEF, 2019). 

Legal factors
companies that need to operate within India need to comply with the Companies Act, 2013. 

India has very strict labor laws that each company needs to follow to avoid fines which are to be
followed by all companies unaffected by the nature of the company. These rules and regulations
are about minimum wage, disability discrimination, waste management, recycling, employee
benefits, etc. some of the regulations are (PESTLE Analysis, 2014) :

 Employees’ State Insurance Act 1948 (ESI Act)

 Industrial Disputes Act 1947 (ID Act)
 Maternity Benefit Act 1961 (MBA)
 Payment of Bonus Act 1965 (PBA)
India’s market attractiveness
India is considered highly favorable for launching emerge energy drinks from the analysis in the
previous sections. In this section, we will be discussing how the company intends to introduce
products.

Entry strategy
Market entry strategy is a plan of how the organizations want to enter and offer goods or services
in a new market. There is a number of methods that one can use for entering into a new market
for example:

Emerge energy drink’s entry to the Indian market we would go for export. Exporting is a
traditional method for market entry, and is defined as transferring goods produced in one country
to another country. This strategy is cost-efficient as no direct manufacturing is done overseas,
however marketing expenses are high as the business directly gets affected by sales.

The advantages of this market entry are that it saves costs for setting up a plant and investing in
human resources, planning managing, production etc., and becomes less risky to enter a foreign
market. Secondly, it gives an opportunity to learn how a foreign market would react to an
organization’s products or services providing opportunities to learn before investing in bricks
and mortar. Lastly, it has fewer risks of bankruptcy and loss and the business stays safe from
shutting down in case of failure. However, the disadvantage of this entry method is the lack of
control the main organization has and dependency on the "mercy" of overseas agents (Jaffe,
1993).

Direct exporting

Exporting can also be of different types. We will be going for direct exporting. Direct exporting
is selling directly into the market. After developing a sales plan the companies tend to hire agents
or distributors who will represent them in the foreign market. Agents and distributors work
closing in developing the brand and they become a part of the product or service offered. Hence
it vital to find an agent or distributor that is well aware of both the foreign market and the local
market. This type of exporting lets the parent company to have more control over the distribution
process, get more involved in what the customers want and get better protection for trademarks,
patents, and copyrights, but it requires more time, energy and money (Delaney, 2019).
Distribution of product
The Company will hire a distributor who will work with his team in India having full awareness
of the Indian market. Energy drinks are considered to be “foreign or urban products” hence to be
a success in the Indian market and achieve high sales it will be important for promotion and sales
to collaborate with clubs, cafes, fitness centers etc. The distributor's job will be to personally
contact all the communications will all these retailers. Moreover, the managers from the parent
company will be closely involved during the initial stages ensuring the product demands are met
and inventory is maintained to meet high demands from distributors. In addition to this, the
marketing will also be planned and executed by the parent company, however, the company will
take the help of external marketing organizations in India to better understand and communicate
their mission and product to the Indian Consumers.

Marketing plan
Marketing plan by definition is a route map that shows how to penetrate, capture and maintain
positions in an identified market. It is a combination of the marketing mix and action plan that
shows what, when, where and how to achieve profit, target customers, and other goals set by an
organization (Westwood, 2002).

Marketing mix
A marketing mix is a tool that is used by organizations to promote the product to the target
customers. The marketing mix typically consists of the 4Ps which are the Product, Price,
Promotion and Place. There is an extended version of the marketing mix which is the 7p’s which
includes factors like packaging, positioning and people. In the next section, we will be discussing
the 4’s Ps of marketing and packaging form the extended marketing mix (Codita, 2011).

Product
Red bull, the biggest competitor of Energy energy drink is available in 8 variants, monster
energy drink in over 34 variants, and mountain dew is variable in 30 variants (Kader, 2019).

Emerge will be launching 1 group of flavor within the gap of 6 months, rather than launching all
the variants in one go which will increase confusion among the consumers. This strategy will be
also a unique selling point for the company. in addition to the reduced sugar, sport, flavored, and
dual ranges, the company will also launch products that will be inspired by the local flavors and
names of India. This is to attract more customers as people in India are attracted to international
brands that have a local blend. This strategy is also followed by mountain dew offering Baja
Blast and other local energy brands like Tzinga and sting.

Packaging
The energy drinks in India are sold in 3 different packaging which are:

 Pet Bottle
 Can
 Glass Bottle

Emerge energy drink is originally sold in a can and bottle packaging. The packaging strategy for
products in India will remain the same, however, the design of the can and bottles will be slightly
modified to make it more attractive and maintain a style statement.

Price
Emerge energy drink’s selling point is that it is known for being cost-efficient. Their mission
statement consists that they aim to let their customers save money and spend it on something
better. This will be the basis of the pricing strategy used in the launch of the product in India.
Emerge Energy drink’s pricing will reflect on the cost of manufacturing, production, and
transportation costs (Kader, 2019). Moreover, a market skimming strategy will be used which
will ensure that prices are kept realistic and delivers value to customers. To promote sales, the
emerging brand is planning to involves different pricing tactics that will offer a discount on bulk
purchases and discrimination strategy which will enable the retailers to sell the emerging energy
drinks at different prices in bars, clubs, restaurants, depending on their pricing strategy.

Moreover, the company will have to have a higher input in marketing and distribution costs as
the input and production costs are very low, hence the initial profit margin can lie somewhere
between 20-35%.

Place
In India, the energy drinks are accessible to consumers by many different distribution channels.
Some of the main channels are given below:

 drug store,
 online retail,
 convenience store,
  supermarket
 hypermarket
 mass merchandiser,
 sports nutrition chain
 food service
 clubs and bars

Initially, after the launch ceremony of the emerge energy drink, the drinks will be sold through
the maximum distribution channels possible. the marketing company will first focus on the well-
known hypermarket's stores, sports nutrition chains, clubs and bars. However, Convenience
stores will remain the main focus as they have recorded the highest number of sales of energy
drinks, according to a report by Mordor Intelligence (2020).

Promotion
The energy drink brand popular in India like mountain dew, monster, and red bull relies heavily
on marketing and promotion. The mountain dew’s market strategy is promoting its brand by a
locally well-known brand ambassador and showing stunts in their video promotions. Red bull
heavily rely on collaborating for sports events and also on promoting physical activities like
mountain hiking, cycling, camping, etc. monster

When deciding the promotion strategy of Emerge energy drink, the management team would
initially focus on creating a brand image and awareness. This will be done using online
marketing, events, collaborations, etc.

The emerge energy drink will need a well-known face as a brand ambassador. However, this will
increase the expanses of the company, but it will also provide a competitive advantage as India is
a very cinematic country with a strong film and television industry. Hence the awareness of the
energy drink will be expected to be achieved quicker among the target market rather than
spending on traditional methods like billboards and banners.

The launch of the emerge energy drink will be announced by releasing a commercial using
“Sharuk Khan” which is a well-known face in India. Moreover, Social Media campaigns will be
launched which will involve creating brand awareness through social media platforms like
Instagram, Facebook, Pinterest, Tumblr, YouTube, twitter, foursquare, google+, etc.
The target market will not be just athletes or people who are into sports, but males within the age
range of 20-40. This will be the main marketing segment.

Future strategy
In the long term, emerging energy drinks would expand into all the different 29 states in India.
The aim will be to create value for money and offer a high-quality product. The company will
also plan on being a sponsor of the Indian cricket team within the 5 years of launch, this will give
momentum and high brand image as Indian people are very fond of the cricket sport. The emerge
energy drink brand will look at the trend of sales within a two-year gap and if the business
reaches the break-even point in the planned time, the company will go for other market entry
options like making a plant and producing energy drinks in India as the labor costs are low and
this will also help the brand to grow within Asia.

Conclusion
India is an attractive place to launch Emerge energy drink however the initial investment to
create awareness and brand image will be high. Moreover, red bull will stay the biggest
competitor of emerging as it takes the highest percentage of the market share of energy drinks.
As we are opting for direct exporting the risks have been minimized but still, as the energy drink
market is growing at the moment we can expect to have fewer profits in the beginning. If the
brand succeeds in getting a good customer and market share the company can make a
headquarter in India and plan to expand into other countries in Asia. India’s location will provide
a competitive edge to Emerge energy drinks in Asia. Moreover, the company will have to
heavily rely on marketing and promotion to attract the target market. Hence, the conclusion is
that the high acceptance of foreign products in India the company needs the right distributors and
agents, and promotion and marketing strategies, Emerge energy drink can create a strong
consumer base in India.
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