Monster Energy and The Marketing Mix

Introduction

Hansen Natural Corporation (HANS) introduced Monster Energy in Corona, California, April 2002. HANS originally offered various preservative-free soft drinks and natural smoothies, but seen a potential market for our increasingly busy society and the need to do more and sleep less. Now, the Monster Beverage Corporation (MNST) is a multi-billion dollar company who owns over a third of the US energy drink market.

With an aggressive neon green claw ripped brand logo on a black background, as well as their "Unleash the Beast" slogan, Monster Energy can boast an enduring brand image that separates them from the competition. This blog will demonstrate how Monster Energy displays their use of the marketing mix as well as illustrate their rapid rise to success. 

The Marketing Mix

Marketing products or services requires various activities. Organisations undergo these activities to facilitate exchanges. These activities are associated with the marketing mix variables, Product, Place, Price, and Promotion (Ferrell, Dibb and Simkin, 2016). This is what is known as the 4Ps of marketing, however this can also be extended to become the 7Ps which includes the original 4, plus Physical Evidence, Process, and People. To put it simply, the marketing mix is the 4Ps combined and incorporated in to a business venture. 

Product

A product is either a tangible good or intangible service that meets the need of the consumer. It is important for a company to know their product and what makes it valuable in the market as well as how it meets the needs of the consumer. There are many questions pertaining to a product or service for any business. What does the customer want from this product? How are these needs met? What does it look like and how will consumers perceive it? How is it to be Branded? How does this vary from competitors?

"Monster is way more than an energy drink. Led by our athletes, musicians, employees, distributors and fans, Monster is...
A lifestyle in a can" - Monster About Us, Available at https://www.monsterenergy.com/gb/en/about-us

In today's society we live at a fast pace and sometimes need that extra kick to keep us at our best. As a relatively young enterprise, Monster jumped on the energy drink bandwagon early on where they could capitalise and establish themselves as an energy drink powerhouse. Red Bull, created by Red Bull GmbH in Austria, 1987, is the highest selling energy drink in the world with over 5 Billion cans being sold per year, however it took them 12 years to launch their product in America via California. Although this was 5 years ahead of Monster Energy, there was still a gap large enough in the market for Monster Energy's inception. Monster have created a niche market which is targeted at those who want to lead that "extreme lifestyle" and endorse the "party lifestyle". Furthermore, Monster have recently tapped in to the gaming market to offer gamers their much needed gamer-fuel. Their main target market mainly consists of males between their mid-teens to their forties who show an interest in these lifestyles. It could also be said that Monster Energy is speaking to their target markets "inner child" through appealing to their desires and ambitions stating that with Monster this alternate lifestyle can be obtained. 

The Monster packaging is highly discernible. as well as attractive. It epitomises their lifestyle in a can mantra, as well as their "Unleash the Beast" slogan. Even the name, Monster, is rather contentious which again, embodies the Monster brand and what they are all about. The product is often put in the hands of athletes and musicians for promotion. Their lifestyle in a can mantra says that you can be like said athlete or musician, but not without the help of Monster. Monster offers a high-caffeine drink with a colossal amount of sugar. With their neon-coloured logo adorning the sleek black cans, Monster have a product that most consumers would easily recognise. For a customer it would prove difficult to pry their eyes from Monster Energy's fancy can designs and towards a more generic brand.

 

Monster Energy was the original brand, however to cast out the net further, Monster added new products, Monster Energy Ultra, which is the original product but with less sugar which targets those who are perhaps a little more health conscious. It should also be noted that this product is also targeted towards a wider female market. The product is the polar-opposite of Monster Energy. Although the branding is still somewhat aggressive, instead of the typical jet black can associated with Monster Energy, the can is white. Further products include Monster Rehab, which consists of tea, lemonade, energy. There is also Juice Monster which is simply juice combined with Monster Energy. All of these products contain part of the original product, as well as the branding. The only differences are a wider variety of flavours and a new target market depending on the product. Currently this is all that is available within the UK market, but Monster Energy offers further products in the United States such as Muscle Monster which is branded as your "coach in a can", the energy shake that targets fitness fanatics and bodybuilders.

Clearly Monster have tried to target various demographics offering each demographic unique drinks to cater to their wants and needs. This has resulted in Monster having dozens of different energy drinks with different flavours and purposes. Red Bull however have generally remained unchanged since their inception. Although they do have several different flavours, they are still somewhat similar and don't branch out to a wider range of consumers the same way that Monster has attempted to do.

It should also be noted that many countries including France, Denmark, Norway, and Uruguay have banned selling energy drinks to youths under the age of 16 due to concerns over the amount of taurine in these drinks. Rodney C. Sacks, Chairman of Monster Energy (2013) states that "Regrettably, criticism of energy drinks continues to be politically and emotionally charged, which, in our view, is neither supported by the science or the facts. We believe that Monster Energy® drinks are and have always been safe."

Due to government legislation in these countries, Monster Energy can't aim to sell at this demographic, however since it currently isn't illegal within the UK to sell to young teens, this is not an issue here yet.

According to a press release by The Coca-Cola Company on August 14th, 2014, The Coca-Cola Corporation entered a long-term strategic partnership with Monster Beverage Corporation (MNST). (http://www.coca-colacompany.com/press-center/press-releases/the-coca-cola-company-and-monster-beverage-corporation-enter-into-long-term-strategic-partnership ) For a cool invested $2.15 Billion Coca-Cola have bought a 16.7% share in MNST. In this exchange MNST now own Coca-Colas energy drinks including Burn and Relentless which results in exchange for MNSTs soft drinks. This was a great move for both parties seeing as both received an increased market share within their respective markets.

Place

It is common within marketing to hear the expression "putting the right product, at the right price, at the right place, at the right time,"  as well as "location, location, location." A company must evaluate where the best place is to sell their product or service and in what capacity. Where should your product be sold? This can be the difference between making and breaking a product or service. It's not just a matter of having a product that people want, but where and when. How will your product be distributed?

Bailey (2015) states that the Monster Beverage Corporation (MNST) doesn't manufacture and distribute its products, but instead outsources these processes to third-party bottlers and packers. The reasons for this are that it is significantly cheaper due to reduced freight costs and reduced transportation-related damages. It also means the beverages are produced closer to the markets where they are sold. 

Figure 1. (Monster Beverage Corporation, 2015) Figure 1 shows the global distribution of Monster Energy as well as the bottling/distribution outlets. Red are Coca-Cola, Green areas are independent distribution outlets, and white are the areas currently with no distribution coverage. With almost all the Americas and Europe covered it is easy to see how Monster Energy have such a large market share.

Figure 2. (Monster Beverage Annual Report, 2013) Figure 2 shows Monster Beverages key customers/distribution channels per their 2013 annual report. Over half of their revenue comes from Full Service Distributors. Distribution is the process of making a product or service available to the customer which can be done directly by the distributor or by intermediaries. There are various types of distribution, intensive, selective, and exclusive distribution. Monster are known as an intensive distribution company, which means that the producers products flood the market and are stocked in a variety of outlets instead of relying on a specific store or outlet to sell their product such as Gucci. Intensive distribution is common when concerning food and drinks. In the modern age, Monster has taken to the Internet to promote their product. Although their product is widely distributed, almost all of their promoting tools are used online to attract new customers. Although a transaction isn't made online for their product, it creates more brand awareness for the company that consumers can seek out at their own leisure instead of being bombarded with advertising via television. Price What is the value of the product or service? How does the price compare with competitors and why? Would reducing the price attract more customers? Pricing decisions have to be made after there is a complete understanding of what the product or service is actually worth to the consumer. Is your product aimed to be inexpensive or is it a premium product which can sell for higher than average? Is this going to be considered reasonable for your consumer? Although prices of energy drinks can vary from brand to brand, most are roughly about £1 per can from most retailers. Supermarkets often sell their own brands of energy drinks which can be as low as 39p per can. More well known brands such as Monster and Red Bull are at the more expensive end of the spectrum, costing roughly £1.50 and £2 respectively. However, it should also be noted that Monster offers a 500ml can, though the largest can Red Bull offer is 473ml meaning that Monster not only offer you more, but for a lower price on average.  Figure 3. (Caffeine Informer: Top selling energy drink brands, 2016) Figure 3 shows that Monster currently lie second in terms of market share of energy drinks, second only to Red Bull showing that a lot of consumers are willing to pay a premium for an energy drink which has half the contents over its main competitor. With Red Bull being positioned as the premium within the energy drinks industry it uses a premium pricing strategy. Monster however can't do this and uses a lower price strategy. According to Tesco prices in the UK, a 4-pack of 500ml cans of Monster costs £3.99, but a 4-pack of Red Bull at 250ml each costs the same. Promotion How is your product advertised? Where and how can you get your message across to your target markets? Promotion is all about how you get your product across to the consumer through the likes of advertising, public relations, social media marketing, and video marketing. Monster Energy's About US states "Most companies spend their money on ad agencies, TV commercials, radio spots, and billboards to tell you how good their products are. At Monster, we choose none of the above. Instead, we support the scene, our bands, our athletes, and our fans. We back athletes so they can make a career out of their passion. We promote concert tours, so our favourite bands can visit your home town. We celebrate with our fans and riders by throwing parties and making the coolest events we can think of a reality."  Through market coverage, Monster has become a popular brand within the extreme sports scene, meaning that Monster and extreme sports can now be perceived as going hand in hand with one another. Events can be sponsored by Monster making them the exclusive drink for an event. An example of this would be the Gymkhana Grid events sponsored by Monster. Professional rally driver Ken Block brought his Gymkhana brand in to the mainstream through social media. YouTube allowed these high-octane motorsport skills to be viewed by the masses and it has resulted in giant advertising contracts from the likes of Monster Energy. Gymkhana, an Indian term meaning a place where skills-based contests are held, is now described as a form of motorsport where drivers must negotiate a high-speed precision driving course with a predetermined sequence of drifts, figure 8's, donuts and slaloms.  In this video, you can see how the Monster logo is adorned everywhere and how Monster Energy drinks are exclusive to the event. Although there are other sponsors there such as Ford, GoPro and Hoonigan, Monster is clearly the main sponsor of this event. Spectators can be seen with cans of Monster in their hand, as well as models and celebrities being seen wearing Monster merchandise.  Red Bull have their own Formula 1 teams, Red Bull and Toro Rosso, but they also have owned football clubs, the two most prominent being Red Bull Salzburg and New York Red Bulls. Monster also have their own racing teams within rally and motocross sports. Kawasaki who are traditionally known for their neon green bikes were a perfect fit for Monster who have now become Monster Kawasaki which can be said to correlate with how Ferrari and Marlboro went hand in hand within Formula 1 during the 90s. Perhaps Monster and Red Bull will face the same fate Marlboro did within race advertising, but for the time being they hold a firm grasp within promotion and advertising in motorsports. Although Monster Energy have cemented their place within the motorsports industry they haven't branched out the same way as their main competitor Red Bull has. Red Bull still advertises within the same branches as Monster, but they also offer spectacular promotional events outside of motorsport and have already taken to the skies in events such as the Red Bull Air Race. As exciting and aggressive as Monster Energy's promotional image is, Red Bull offers something equally exciting, yet with a little more finesse. With a wider variety of promotion and advertising from Red Bull, their slogan "Red Bull gives you wings" is taken to a literal level during these events. Furthermore Red Bull offer a friendlier approach to advertising through their Flugtag events which encourages contestants to attempt to build their own flying machine/glider to see who can travel the furthest.  In 2012 Felix Baumgartner jumped from the edge of Earth's stratosphere (roughly 24 miles) and fell at speeds climbing up to 843.6 mph. This epitomises Red Bulls slogan of giving the consumer wings, but also a unique and exciting form of promotion that to date no other company has managed to replicate.  In recent years pro-gaming has become a fast growing trend. Monster have capitalised on this and sponsor several professional teams such as the UK team, FNATIC. Red Bull also promotes within e-sports through teams such as Dignitas. Monsters promotional mindset is similar to Red Bulls, but almost the polar opposite at the same time. Red Bull offers a more traditional form of promotion through events which is perhaps considered more mainstream than Monsters alternate lifestyle, yet both have near to an equal market share. However Red Bull is still in pole position through their eye-catching advertising, which is clearly less aggressive, yet approachable than Monsters. Wacken Open Air 2016, which is a German music festival which caters to fans of Metal was promoted by Monster who also sponsor popular bands within the industry such as Caliban. They also sponsor the Slovenian Metal music festival, MetalDays, as well as the Popular UK Download music festival. Since 1998 however, Red Bull have offered a more grass roots approach where they teach as well as promote aspiring musicians through fostering creativity within music.  "Sex Sells" is not a new concept, but sex in advertising is prevalent in Monster's promotions. They adhere to the self-proclaimed party lifestyle and show videos promoting this with scantily clad women wearing green and black swimwear. These women are known as the "Monster Girls" who are essentially models used to promote Monster. This form of promotion can be heavily criticised and perhaps even considered as a poor marketing tactic, but it is a way of catching the majority of their target markets attention. Baron (1982) states that the relationship between sex and advertising is examined from 4 different perspectives, attention, affect, arousal, and information processing. Monster uses these highly attractive women and shows them living life to the fullest (from Monsters point of view) whilst promoting the Monster lifestyle that consumers should adhere to. The affect being that "Red Bull Gives You Wings" is a slogan that Red Bull have adhered to for years. Their television adverts stick in the minds of many through their unique cartoons which portray a character drinking Bull which ultimate gives them wings allowing them to solve the situation they are in. This is completely unlike Monster who promote through exciting racing events and sexy videos online. The lack of television exposure for Monster can reduce the amount of consumers of there product, whereas Red Bull has a well-established television advertising reputation with their family friendly commercials. In terms of social media statistics, Red Bull has over 5 million YouTube subscribers, whereas Monster has just over 1 million. Although a million subscribers is still impressive, Monster really fall short of their main rivals. Via Facebook Red Bull have over 46.5 million likes, compared to Monster Energy who have just over half that amount at a still respectable 25 million likes. Although likes do not directly reflect what Monster and Red Bull promote, it does show that Red Bull is getting their promotional campaigns across to far more people which ultimately will be helping them with their sales. Conclusion Monster currently lie second in terms of global sales of energy drinks, but are hot on the tail of their main competitor, Red Bull. In comparison to other brands, it truly feels like a two-horse race between Monster and Red Bull. Through catering to a more "alternative" target market Monster has racked up loyal followers who believe that Monster promotes not only their product, but also the lifestyle that their consumers adhere to. To further their sales Monster have introduced new products which cater to new demographics such as the newly released Muscle Monster which appeals to the more health conscious and fitness driven consumers. During their short lifespan Monster has released more products than Red Bull which offers their consumers a variety which Red Bull has yet to emulate. Consumers can be price-driven, so Red Bull offering a premium price for being the premium product could soon come to an end. Monster offer a still expensive product compared to other rival companies, but they are still relatively cheaper than Red Bull. Through their strategic partnership with Coca-Cola, Monster now have an increased market share through the promotion of formerly Coca-Cola owned energy drinks such as NOS and Relentless. Although Red Bull still lead the way, Monster have essentially purchased some of their competitors for a few extra percent in terms of global sales. This deal was also beneficial to Coca-Cola who received the same bonus for the soft drink industry after acquiring Monsters (Hansen) soft drinks. In terms of promotion Monster are perhaps a little lacking in comparison to Red Bull. Although they offer fantastic brand promotion within their desired niche-markets, they fall short of Red Bull due to their lack of television advertising and attempting to attract a wider audience through exciting events such as the Flugtag. Perhaps this doesn't adhere to the Monster concept, but without adjustment Red Bull will probably always be superior in terms of promoting their products due to the intensity and variety of how they choose to promote Red Bull. To sum up Monster Energy and their marketing strategy in a word: Aggression. Monster use aggressive names for their products and promote an anti-establishment lifestyle that basically says if you aren't with us, then you aren't one of us. Although this marketing strategy has brought them up to second in terms of sales, their rise to success can be greatly awarded to Nelsons gamble to jump on to the energy drinks bandwagon proving that timing and place are vital in a products life-cycle. References ABOUT US (no date) Available at: https://www.monsterenergy.com/gb/en/about-us (Accessed: 22 November 2016).  Bailey, S. (2015) Monster beverage’s distribution network. Available at: http://marketrealist.com/2015/01/monster-beverages-distribution-network/ (Accessed: 22 November 2016).  Baron, Robert S. (1982), "Sexual Content and Advertising Effectiveness: Comments on Belch Et Al. (1981) and Caccavale Et Al. (1981)", in NA - Advances in Consumer Research Volume 09, eds. Andrew Mitchen, Ann Arbor, MI : Association for Consumer Research, P428-430 Caffeine Informer: Top selling energy drink brands (2016) Available at: http://www.caffeineinformer.com/the-15-top-energy-drink-brands (Accessed: 22 November 2016). Company, T.C.-C. (2014)  Available at: http://www.coca-colacompany.com/press-center/press-releases/the-coca-cola-company-and-monster-beverage-corporation-enter-into-long-term-strategic-partnership (Accessed: 22 November 2016).  Ferrell, O.C., Dibb, S. and Simkin, L. (2016) Marketing: Concepts and strategies. London, United Kingdom: Cengage Learning EMEA Monster Beverage Annual Report - Available at: http://files.shareholder.com/downloads/HANS/3229551491x0x746046/8bb1c204-a666-4a75-a933-178abd4742d9/Monster_Beverage_2013_Annual_Report.pdf (Accessed: 22 November 2016). Monster Beverage Corporation (2015) Available at: https://www.sec.gov/Archives/edgar/data/865752/000110465915002105/a15-2119_1ex99d1.htm (Accessed: 22 November 2016).