Consumer Behavior, Market Segmentation & Positioning of Monster Energy

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Consumer Behavior, Market Segmentation & Positioning Monster Energy

Part 1

Consumer Decision-Making Process

Consumer buying is not merely a random behavior. Instead, it is a continuous process that involves six main steps that the buyer goes through to achieve the satisfaction of their needs from this product. The marketing strategist of any product must understand these steps to ensure that all six steps maximize the purchase conversion rates. The six steps that the consumer goes through during a purchase include: recognizing the problem or need, researching for a solution, assessing the available alternatives, deciding on the most appropriate choice, purchasing the product or service, and post-purchase evaluation Disposal of the Product (University of Minnesota, 2015).  Below is how Moster Energy can influence consumer decisions through marketing at each of these six steps.

Step 1: Recognizing The Problem

The first stage that a consumer goes through is recognizing the need they have to satisfy (University of Minnesota, 2015). In this case, the type of needs that the Monster Energy customers may have include the need for extra energy for practice, gym, or any other physical activity, the need for an energy drink to use with alcohol, and the need to relieve fatigue when they have not had a good sleep (Bechtel et al., 2017). At this stage, Monster energy can influence consumer behavior by showing them that their drinks offer value and satisfy their need. Some of the strategies that Monster may use are sponsoring advertisements at the liquor stores and the gym or any area designated for physical activity, using billboards around the college streets and roads with a high likelihood of road traffic during the times when the target audience, the young adults and teenagers, is on the move. These advertisements are strategically placed to give the individuals the urge to use the monster energy drinks if they are fatigued or need a drink to use with alcohol.

Step 2: Researching A Solution

The second step happens after the customer recognizes their needs and they seek to search for information or for products that may satisfy their wants (University of Minnesota, 2015). Luckily the Monster Energy loyal consumers often go to the store and make a direct purchase. However, the Monster Energy potential customers are more likely to search for this information on the internet sites such as Amazon, or stores such as Walmart, or simply heading to the store and asking for a particular brand or the best brand available (Bechtel et al., 2017). Therefore, at this stage, Monster energy can influence sales by ensuring it is available at physical stores and has an online presence to find it during their search easily.

Step 3: Product Evaluation

  The third stage involves the evaluation of a variety of products found online or at the store. At this stage, aspects such as the primary packaging, marketing information, brand reputation, and nutrient contents are of significance to customers (Heckman et al., 2010). Therefore, Moster Energy can influence the decision through its primary packaging, marketing messages, and great brand reputation.

Step 4: Product Choice and Purchase

The fourth stage involves deciding on which product to buy and where to buy from. Monster Energy can influence these choices by driving sales at specific areas through promotions, merchandise, price reduction offers, and free shipping if ordered online (University of Minnesota, 2015). The strategy may be aimed to increase sales from specific retail arenas.

Step 5: Postpurchase Use and Assessment

At this stage, Monster Energy can influence future purchases by ensuring that their products are of high quality, great taste, and satisfy the consumers’ need for energy replenishment (University of Minnesota, 2015). The customer is more likely to use the above assessment criterion. Also, Monster can ensure that reviews are prompted to gain consumer feedback through online store reviews.

Step 6: Disposal of the Product

The disposal of product occurs after its utility has been achieved. Monster Energy can influence this process by ensuring that the empty cans are recyclable, motivating the consumers to dispose of them in a recycling bin to avoid environmental pollution, and enhance corporate social responsibility.  

Segmentation 

The two distinct market segments for Monster Energy Drinks are teenagers and college students and young athletic adults. The first market segment, teenagers and college students, are one of Monster’s most prominent market segments. These consumers are mainly aged between 18 and 25 years and are regular users due to their lifestyles where they often have little sleep, drink a lot of alcohol, and need energy replenishment to sustain their on-the-go way of life at an affordable price. Also, the group is often hyperactive and requires frequent energy replenishment, and therefore they may use the product daily or weekly. The segment is mainly saturated in the urban areas, and they have a medium-income but high expenditure rates. Lastly, both the male and female subgroups of this segment use the drink, but the men tend to use it more than the females. Therefore, the segment is well-conceptualized, and their behaviors are easy to monitor and analyze. 

The second segment, the young athletic adults, is men and women aged between 24 years and 35 years, primarily looking for quick energy replenishment benefits. The frequency of use varies depending on the number of times they engage in athletic activities or are fatigued. Notably, the group has a high disposable income, but their employment status and occupation vary significantly. Lastly, the segment is mainly saturated in the urban areas and primarily engages in athletic activities such as athletes.  The lifestyles for this market segment may vary significantly.

Part 2

Target Market & Strategy

The market segment of choice is the young athletic adults, both male and female. The market segment gives growth potential since it presents various aspects that Monster Energy can explore significantly to their benefit. First, the market segment is large enough since it encompasses both genders and a broad age gap of up to ten years, a significantly large number in the United States of up to 45 million. Secondly, an increased number of people in this age strive to lead healthy lifestyles, and therefore the market segment is growing significantly, which makes it attractive for this brand. Also, in this regard, it has a high disposable income which can allow Energy Monster to make high-end healthy energy drinks at a higher cost to satisfy some of their health concerns. The group is also easily accessible through various social and technological arenas, making it a prime population for targeting at low costs. Lastly, the group’s needs and characteristics align with the organization’s mission: providing high-quality, healthy products and affordable prices (Masek et al., 2016). Therefore, given the above factors and conditions of the market segment, it presents Monster with a growth opportunity. 

The prime name for this market segment is the ‘Fitness and health fanatic millennials.’ Although the target market presents high growth potential, it is because the company has over-focused on the needs of its primary consumers, the teenagers and college students, and ignored some of this segment’s needs (Masek et al., 2016). Therefore, shifting all the resources to this market segment will lead to massive losses and give the competitors a competitive advantage since teenagers and college students make up the highest number of recurrent loyal customers. Monster Energy should therefore adopt a multi-segment marketing strategy. The multi-segment marketing strategy involves diversification of products to meet various market segments’ needs (University of Minnesota, 2015). Since the consumers’ demographic and psychological aspects are constantly changing, the brand should adopt this strategy to make it more flexible to changes and respond swiftly to the shifts in consumer behaviors and market makeup (University of Minnesota, 2015). However, satisfying the market niches in this new market is crucial in ensuring their specific needs are met without necessarily ignoring those of the leading market segment.  

Positioning 

The positioning of a product is a customer’s perception of the product compared to the competitor. A perceptual map is a visual graphical representation of the brand’s product current or anticipated positioning compared to the competitors (University of Minnesota, 2015). Below is the perceptual map for the energy drinks industry in the minds of the fitness and health fanatic millennials in the United States:


According to the market segment, Rockstar is very unhealthy but affordable, while Monster energy and Redbull are a bit healthy but less affordable. Notably, Monster has not differentiated itself from its main competitor, Redbull, since they are almost at the same level in terms of affordability and health benefits. Monster Energy should remap its products and occupy an uncontested space in the perceptual map. Making healthier drinks will occupy a better positioning in the market, which will increase its competitive advantage amongst the fitness and health fanatic millennials who have high disposable incomes. 

References

Bechtel, T., Panek, A., & Tiempo, J. (2017). Monster Energy Corporation. Retrieved 25 March 2021, from https://people.emich.edu/tbechte1/monsterenergymarketinganalysis.pdf

Heckman, M. A., Sherry, K., & De Mejia, E. G. (2010). Energy Drinks: An Assessment Of Their Market Size, Consumer Demographics, Ingredient Profile, Functionality, And Regulations In The United States. Comprehensive Reviews in food science and food safety, 9(3), 303-317.

Masek, J., Reagan, B., Dyn, A., & Nguyen, A. (2016). Monster Energy Company. Retrieved 25 March 2021, from https://static1.squarespace.com/static/576327ade6f2e191d563173c/t/592f279aa5790abb6b07c053/1496262557358/MDI_CaseStudy_Monster.pdf
The University of Minnesota. (2015). Principles of Marketing (2nd ed.). University of Minnesota Libraries Publishing edition.

 

Instructions for this assignment are below:

Part 1

1. Consumer decision-making process. Go through the six steps of the purchase process outlined in the readings and identify where marketing can influence each of the six steps. For example, if a consumer just identified a need for your product in step one, then the company can advertise how your product fills that need. Or, if a consumer purchased your product, the consumer can be called and asked about their satisfaction with the product and if there is any dissatisfaction steps can be taken to ensure the customer satisfaction. Be sure to be more specific with respect to your product or service than this example.

2. Segmentation. View Table 5.1 of your Week 4 Reading, in Section 5.2, How Markets are Segmented. Using the various criteria of the segmentation bases described in Table 5.1, identify at least two distinct market segments for your product or service. Each market segment description must include at least three (more if needed) of the characteristics from amongst any of the four bases categories (e.g. one from demographic variables, one or two from psychographic variables, and one from behavioral variables, or a similar scheme). Be sure to explain your choices based on what customer need the product or service offering can fill for each segment.

Part 2

1. Target market & strategy. Select one of the market segments you described in your segmentation response as the one you believe is or can be the most profitable for your product or service offering and explain why you feel they can represent growth for the company. Refer to the six criteria for an attractive market segment as described in Section 5.3 of the reading ‘Selecting Target Markets’. Name your target market so you can use this name throughout all of your remaining writing assignments. Your name should be descriptive of the segments' characteristics like 'savvy young shoppers' or 'educated baby boomers', or 'urban hipsters', or the like. The goal is for your faculty member to get a mental image of your target market for the remainder of the semester. Should the company focus all their resources on this new target market (concentrated marketing) or should they continue to pursue both the new and the existing target market as well as other market segments (multi-segment marketing)? Alternatively, is the market so saturated might they be more successful by focusing solely on an even more narrow market segment, perhaps an even narrower version (niche marketing) of your selected target market, as their best chance for growth? What is your reasoning?

2. Positioning. Draw a perceptual map as illustrated in the week's readings or the website in the directions. Be sure to pick two criteria that are important to your new target market for your two axes, perhaps two of the criteria you used in Week 1 in your competitive analysis. Map at least the two major competitors you noted in the previous writing assignment and add any others that you may have discovered since then. You may want to visit this resource for more information on how to construct a perceptual map. Describe what the perceptual map is telling you regarding how each product is perceived in the minds of the new target market you described above. You may have to make a series of educated guesses for some of the data points. Ideally, you want to find uncontested space. If your product overlaps with a competing offering discuss whether or not your product or service should try for an ‘uncontested’ space on the map and ‘reposition’ itself; or if it should keep the same position and compete head on with the other product.