Posted in Marketing & Strategy Articles, Total Reads: 6416
, Published on 26 December 2013
What looked like a premature and novice market a few years back, dominated by a single brand; with competition from localized Indian drinks, even battling it out against the big cola giants, has done well to establish itself in the Indian beverage industry. Yes, you might have guessed it right—I am talking about the energy drink market in India. Strangely enough, looking ahead, the market seems already up for a heated or rather if we should say a ‘cool’ war of sorts.
Get Energized —is exactly what energy drinks do to you. Energy drinks are soft drinks which are advertised as a source to boost energy. Apparently, there seem to be many reasons for energy drinks to be an outright success in India. Long and erratic working hours and the increasing occurrence of social gatherings are driving Indian consumers towards the consumption of energy drinks. Over the past few years, energy drinks sales have been driven by changing consumer lifestyle and increasing demand for alcohol mixers. Increased urbanization, rising disposable incomes and growing health consciousness among the Indian youth has fuelled the demand for non-carbonated drinks market such as energy drinks. Overall, the hot and humid climate conditions in India make it a conducive market for cold, non-alcoholic and energy giving beverages.
According to the latest data available in the public domain, the energy drink market in Indian is somewhere around the USD 150 million dollar mark and is expected to continue its growth at a CAGR of almost 25%. In the present scheme of things RedBull emerges as a clear winner in terms of volume, market share and growth percentage. The market share breakup of Indian energy drink market is:
Also, in an extremely peculiar contest, the energy drink market in India faces stiff competition from:
• Indian substitutes (Lassi, Jaljeera, Nimboo-paani)
• Milk and its products
• Quick to make (water-based) drinks like RoohAfza, Rasna, Tang, etc.
• Natural fruit/vegetable juices
• Tea and coffee
The curious case of Tzinga’s 4Ps:
Within a few years of a nationwide launch, Tzinga is available in most of the mom and pop stores in urban India which allows the Gurgaon factory to churn out around 10 lakh pouches of the drink. There is already a strong network of about 40,000 outlets in 50 cities and across most of the states. Doing justice to the name of its parent company Hector Beverages, Tzinga has shown a fighting spirit to emerge as a market leader in places like Goa, Bangalore and Hyderabad. Moreover, its packaging being flexible, is more attractive and much cheaper than the cans.
With all of us who have even a slight interest in marketing nearly obsessed with the letter ‘P’, it makes sense to put forth the theory (as preached by lord Kotler Sir; if I may call him that!) for some practical implications. Not sure if the makers of Tzinga too thought on similar lines, we can be rest assured that Neeraj Kakkar, director of Tzinga being an MDI alumnus knows in equal amounts or even more about the following 4Ps of marketing.
1. Product: So what really is Tzinga doing differently in terms of their product line or mix? I believe the answer is simple—“they are doing almost everything right.” Tzinga has done well to capture the mindset of the Indian youth by providing a product by clearly identifying the gap in terms of taste, price and usability factors.
Tzinga has hit the right cord in terms of innovative flavours¬—Tropical Trip, Mango Strawberry and Lemon Mint. The drink contains natural flavours, is non-carbonated, contains less caffeine but a herb named ‘guarana’ which performs the same function as caffeine, without the side effects though. Tzinga also contains ginseng as the main energy imparting agent.
2. Price: And this is where Tzinga’s success story lies. Tzinga’s 250 ml pouch costs Rs. 25, as compared to Rs. 95 for 250 ml RedBull can. To top it up, Tzinga supposedly gives more energy than RedBull at 1/4th of the cost.
3. Promotion: Tzinga, being a much smaller player than its competitors, it can’t really afford to imitate, say what RedBull is doing, in terms of the advertisements which have the ‘hipness' factor. Tzinga has used small posters and cut-outs to connect to its customers, rather than the free distribution of drinks as done by RedBull! (I always wished I could get it too at the undergraduate college level, but then RedBull rarely visits engineering colleges for the same “devoid of hipness” reason).
When Red Bull is targeting merely 3% of population with its glam stunt oriented “Red Bull gives you wings”, Tzinga is waving towards the rest.
4. Place: Tzinga has tried to have a presence in the cafeterias of corporate chambers, thus targeting and connecting with a very potential, and strong buying power community.
Let’s take this ‘P’ game forward. There is another ‘P’ in which Tzinga has done well.
5. Packaging: Tetra packs, with a cap on top—simple, yet brilliant. Why doesn’t RedBull understands that there might be a situation when I want to have a sip, or say two of their drink, and then wait a little before I have the next gulp (“hold the drink” as they say). Tetra packs have other superb advantages like easy storage and handling (I just wish to say; what an idea, Sirjee!).
The energy drinks segment is still more of an urban phenomenon limited to the metros and mini metros. The distribution largely takes place through organized channels which is relatively easy. However, jostling for a shelf space in retail stores, as against the huge cola or other popular energy drink brands is a daunting task for Tzinga in particular. That said, there is definitely a huge scope for a new entrant given the huge potential in the market.
The biggest challenge for this segment will be to ensure that its distribution system is flexible enough to cater to spikes in demand and encourage consumption through marketing. The promotional strategies of Tzinga have to move beyond the small cut outs and other poster presence in local stores to more consumption occasions which could include the sporting extravaganza like IPL, festivities round the year and even chess matches (to keep up with “be awake” tagline!) to boost sales.
Overall, this niches and still nascent segment of energy drinks market in India will continue to expand on the pillar of changing lifestyle, product and marketing innovations.
Finally, I believe that the energy drink market is set to increase many folds in India. Some of this owes to the newly found desire of urban Indians to consume something healthier, organic, or maybe giving more energy. What happens is left to be seen, we can be rest assured that the stage is surely set for a new kind of ‘cola’ war—I’ll like to call it “The Tzinga War.”
This article has been authored by Dhruv Anand from SIBM Pune
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