5 Hour Energy Marketing Analysis
Dissecting A Marketing Strategy: 5 Hour Energy
As he returned from a natural products trade show, Manoj Bhargava wondered to himself, “If I’m tired, do I also have to be thirsty?” As he contemplated this realization, he began to process it as a comparison of treatment of both a stomachache and a headache. Six months later he was entering one of the most saturated markets in the country, with a revolutionary product and a marketing plan that evolved from the placeholder name it still bears on the 3.5 million units sold each year. 5-Hour Energy grossed north of $600 million last year and currently holds a 90% market share in the energy-shot business. Much of the company’s success can be attributed to a stringent customer-focused marketing plan, intent on distinguishing themselves in a competitive market by sharply reacting to customer focus groups. In dissecting the marketing strategy of Living Essential LLC’s 5-Hour Energy, I will detail how the company was able to successfully target a market and position its’ product for sustained, long-run profitability. “Market segmentation” is described as dividing a market into distinct segments that have similar needs or behaviors and behave in similar ways. Living Essential’s Bhargava had a product he believed could compete in the rapidly expanding energy drink market. The focus now shifted to identifying target groups of individuals that could be pulled away from the major players, such as Red Bull and Monster. With a goal to ambush the energy drink market with a customer-responsive product, Living Essential began laying out a $60 million research plan to identify a target market and develop a solid positioning strategy. The team of statisticians and psychologists embarked on a 36 month, nationwide research quest, utilizing focus groups, behavioral data collection, survey research and cross-sectional market analysis. At the core of this effort was a belief that in a monopolistically competitive market, the product
As he returned from a natural products trade show, Manoj Bhargava wondered to himself, “If I’m tired, do I also have to be thirsty?” As he contemplated this realization, he began to process it as a comparison of treatment of both a stomachache and a headache. Six months later he was entering one of the most saturated markets in the country, with a revolutionary product and a marketing plan that evolved from the placeholder name it still bears on the 3.5 million units sold each year. 5-Hour Energy grossed north of $600 million last year and currently holds a 90% market share in the energy-shot business. Much of the company’s success can be attributed to a stringent customer-focused marketing plan, intent on distinguishing themselves in a competitive market by sharply reacting to customer focus groups. In dissecting the marketing strategy of Living Essential LLC’s 5-Hour Energy, I will detail how the company was able to successfully target a market and position its’ product for sustained, long-run profitability. “Market segmentation” is described as dividing a market into distinct segments that have similar needs or behaviors and behave in similar ways. Living Essential’s Bhargava had a product he believed could compete in the rapidly expanding energy drink market. The focus now shifted to identifying target groups of individuals that could be pulled away from the major players, such as Red Bull and Monster. With a goal to ambush the energy drink market with a customer-responsive product, Living Essential began laying out a $60 million research plan to identify a target market and develop a solid positioning strategy. The team of statisticians and psychologists embarked on a 36 month, nationwide research quest, utilizing focus groups, behavioral data collection, survey research and cross-sectional market analysis. At the core of this effort was a belief that in a monopolistically competitive market, the product