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Abstract
The current business climate influences any marketing strategys success. The marketing manager must thoroughly analyze the market while designing a marketing strategy to identify the most influential environmental factors. Regulators and the general public are becoming concerned about the potential dangers of energy drinks. The marketing managers job is to ensure that products are safe and acceptable to consumers. The companys strengths and weaknesses, as well as possible threats and opportunities, must be reflected in the strategy. The energy drink industry is affected by several macro-environmental factors, including market segmentation and positioning system, market segmentation, competitive pressures, and price strategy.
Introduction
One of Campbell Soup Companys most successful brands, V8, is launching two new energy drink products, V8 V-Fusion + Drinks and Shots, all of which will be sold under the Campbell Soup Company Symbol (CPB). The companys corporate responsibility program aims to positively contribute to the workplace, the marketplace, and the communities where it operates (Visram et al., 2017). The new drink will be manufactured with components people love and trust, making them healthier solutions to most caffeinated beverages on the marketplace. Drinks like this contain one serving of fruits and veggies and a healthy dose of herbal tea.
Market Environmental Factors
The fact that energy drinks deliver quick Energy and mental and physical stimulation is a significant factor in the expansion of the market for energy drinks. These variables are the primary predicted drivers for the global energy drinks industry, and we should adopt the same to compete in this field (Visram et al., 2017). Moreover, the development of the worldwide market is driven by the increasing popularity among adolescents.
However, caffeine overload can result in hypertension, nausea, irritability, and other health problems that limit the expansion of the energy drinks market. In contrast, throughout the forecast period, a shift in customer preferences toward beverage consumption and a healthy lifestyle is predicted to generate attractive growth prospects for the market (Visram et al., 2017). The market is categorized by product type, end-user, and geographic location, and all these environmental factors are crucial for our success In the United States as an energy drink company. The rise of the worldwide market for energy drinks as a result of their availability on a variety of channels, such as contemporary trade and the Internet, has been facilitated by their accessibility on a variety of distribution channels, including modern commerce and the Internet.
Social Factors
The degree of employment significantly impacts energy drinks in the United States. Demand for energy drinks is expected to increase when there is a lot of work. In addition, the aging population harms the consumption of energy drinks. Sugary products have a more significant impact on older clients. Compared to the younger generation, they are less tolerant of energy drinks. While older people are concerned about the health effects of energy drinks, younger consumers associate energy drink intake with a feeling of fashion. The V Fusion + Energy marketing manager should take advantage of the growing trend of drinking energy drinks with alcoholic beverages to maximize the products commercial viability. Social and environmental factors heavily influence the energy drink industry.
Ecological Factors
Environmental issues are one of the most influential aspects of the energy drink market in the whole world, not just the U.S. Climate and weather patterns, as well as the natural environment, are examples of ecological components that affect human actions and decisions (Grewal & Levy, 2020). The environmental climate might influence the number of natural elements consumed daily. The energy drink industry is threatened by the perception that its products are produced, rather than natural foods, due to the environmental impact Fusion + Energy product can overcome this notion by using natural products such as vegetables and raw fruits to manufacture their energy drink to be more natural than manufactured.
Economic Environment
The economy is among the most potent environmental elements. Recent disruptions to international trade have brought most economies close to recession. In moments of recession, the loss of income diminishes the spending power of consumers and has a detrimental effect on the sector. Energy drinks are considered premium, relatively expensive items. Consequently, market conditions affect the product (Grewal & Levy, 2020). Most likely, customers will swiftly switch to other, lower-cost traditional beverages. Given the current uncertain economic climate, I, as the V Fusion + Energy marketing manager, can overcome this challenge by selling V Fusion + Energy reasonably feasible in the United States.
Political and Legal Environment
Political and legal authorities in the United States are exerting growing pressure on the energy drink industry to enact legislation protecting consumers from the noticeable detrimental effects of sugar-rich foods. This means that V Fusion + Energy Company should develop an energy drink that meets the regulatory agencies permitted caffeine limits while delivering the intended value. There is a significant likelihood that the industry will be subjected to more pressure due to new regulations. As a result, the energy drink market will be significantly affected. The energy drink sectors interests must be protected, and as a marketing executive, I must collaborate with other industry actors to design legislation that does just that.
Competitive Analysis
Several significant companies top the energy drink market. The competitors have nearly identical capabilities. The dominant industry participants are Red Bull, Coca-Cola, and Pepsi Cola, especially in the United States (Rambe & Jafeta, 2017). These brands have considerable market share, making them formidable rivals. Each of their market offerings is equally appealing to customers. For example, competitors use product marketing techniques emphasizing the products most essential features.
Monster highlights the drinks immediate and long-lasting effects in its advertising. Consumers will likely move from the energy drink to another product relatively low. Finding a caffeine-free beverage thats as good as the present offerings from energy drink manufacturers is impossible, so those who arent content will have to settle. In the energy drink industry, new competitors pose little threat. Successful marketers rely on brand recognition to sell their products (Grewal & Levy, 2020). Due to safety concerns, customers favor brands with a safety track record. New entrants must have difficulty gaining a foothold in the fiercely competitive industry. This means that V Fusion + Energy product needs to come up with a very competitive advertisement targeting the youth population in the United States to dominate the energy drink industry.
Segmentation, Targeting, and Positioning
Segmentation is how a corporation divides varied customer demographics into smaller units based on their unique differences. Segmentation facilitates the evaluation of the most attractive section for achieving business objectives. Targeting, on the other hand, refers to selecting the segment on which to focus the marketing process. Brand positioning concludes with creating a mental image that customers may associate with the product. V Fusion + Energy Company needs to position itself using the same product but with a little adaptation, an advantageous positioning method discussed in Grewal and Levy in their book (Grewal & Levy, 2020).
This is crucial since the energy drink market in the United States is most successful depending on the age of potential consumers. Most teenagers love to try similar products but with a little difference (Rambe & Jafeta, 2017). Work, social and economic standing, and gender are other determinants. Energy drinks are regarded as premium products closely associated with the working class. Targeting for the V Fusion + Energy would include young adults with solid income and jobs. For example, the younger generation in the U.S is less responsive to beverages containing caffeine than the older generation.
Similarly, the stable income of the working class affords purchasing power. They equate energy drinks with distinction, making them a lucrative customer base. The products visual identity focuses on conveying a strong but low-caffeine image. Customers concerned about the high levels of caffeine and sugar in most energy drinks will be drawn to this product positioning.
Pricing Strategies
V Fusion + Energy is an excellent product in a market where consumers are attracted mainly by well-known brands. The products success in the United States will rely on the companys capacity to penetrate market segments that the high cost of energy drinks may hamper. For the new product Fusion + Energy, it will be best if it uses the most common pricing strategy used in European countries, as mentioned in Grewal and Levys book, where in certain jurisdictions, retailers are prohibited from selling things below cost. In contrast, others cannot promote sale pricing or discounted items until they have been on the shelves for more than a month.
These constraints jeopardize the companys critical competitive stance as the lowest-cost provider on the market. Other factors, such as taxes, quotas, anti-dumping rules, and currency conversion policies can influence pricing decisions. Still, these extra intermediaries often add costs and raise the products final selling price. Due to these economic considerations, there is an ongoing demand for streamlining distribution networks whenever possible.
As Marketing Manager, I will utilize the market research methodology stated in the M: marketing book by Grewal and Levy to identify the price plan for our new product. I will begin by saying the objectives and requirements for research, which are: Determine the cost of the V Fusion + Energy drink in the United States (Rambe & Jafeta, 2017). I will then design the research. Observational data will be my primary source of information. Thus qualitative research is most appropriate in this case. Qualitative research is a social study that focuses primarily on how individuals construct meaning from their knowledge in the environment in which they reside.
Additionally, it pertains to the comprehension of their daily experiences. Observation allows researchers to determine whether qualities, differences, or similarities are pertinent to this comparison. In this circumstance, qualitative research must address all of our queries. Thirdly, I will begin collecting data, most of which will be primary as I will be conducting the observation in the field. I will then examine the data, produce an insight based on the results, and estimate the optimal pricing for V Fusion + Energy in the United States.
Conclusion
For the energy drink industry, macroeconomic factors matter greatly. Climate change, societal unrest, and political-legal uncertainty are important influences on the energy drink sector. To gain a presence in the fiercely competitive industry, V Fusion + Energy may want to consider marketing to the young and working-class and implementing a penetration price plan.
References
Grewal, D. & Levy, M.(2020).M: Marketing (7th ed). McGraw-Hill. South University Online Library
Visram, S., Crossley, S. J., Cheetham, M., & Lake, A. (2017). Children and young peoples perceptions of energy drinks: A qualitative study. PloS one, 12(11), e0188668.
Rambe, P., & Jafeta, R. J. (2017). Impact of social media advertising on high energy drink preferences and consumption. Journal of Applied Business Research (JABR), 33(4), 653-668.
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