Project Report On Cloud 9 Energy Drink

Cloud 9
Energy Drink
Marketing Management Project

Submitted to: Prof. Rahul Kumar Sett
SECTION E
Group 11
SUBMITTED BY:
ALOK KUMAR PGP/14/258
LOKESH SINGH PGP/14/279
MAHTAAB KAJLA PGP/14/280
NAVEEN VYAS PGP/14/283
SHRUTI KABDAL PGP/14/303
SNEHA RAMTEKE PGP/14/304
Cloud 9 – Sky is no more the limit
Table of Contents
1 Executive Summary ................................................................................................................ 4
2 Cloud 9 .................................................................................................................................... 5
3 Energy Drinks Industry in India ............................................................................................. 6
4 Brand Choice Rationale .......................................................................................................... 8
5 Situation Analysis ................................................................................................................... 9
5.1 5 C Analysis ..................................................................................................................... 9
5.1.1 Company ................................................................................................................... 9
5.1.2 Collaborators ........................................................................................................... 10
5.1.3 Customers ............................................................................................................... 10
5.1.4 Competitors ............................................................................................................. 11
5.1.5 Climate (context) .................................................................................................... 14
5.2 Porter‟s Five Forces Analysis ........................................................................................ 15
5.3 Needs, Wants & Demands – Analysed .......................................................................... 16
5.4 SWOT Analysis.............................................................................................................. 17
5.5 Ansoff‟s Product Market Expansion Grid...................................................................... 18
5.6 BCG Matrix .................................................................................................................... 18
5.7 Life Cycle Analysis ........................................................................................................ 19
6 Segmentation, Target & Positioning ..................................................................................... 20
6.1 Segmentation .................................................................................................................. 20
6.2 Target ............................................................................................................................. 21
6.3 Positioning...................................................................................................................... 22
7 Marketing Action Program ................................................................................................... 23
7.1 Marketing Mix................................................................................................................ 23
PGP14 | SECTION E | GROUP 11 2

7.1.1 Product Strategy ...................................................................................................... 23
7.1.2 Price Strategy .......................................................................................................... 23
7.1.3 Promotion Strategy ................................................................................................. 23
7.1.4 Distribution Strategy ............................................................................................... 24
7.2 Marketing Research........................................................................................................ 24
7.2.1 Data Collection from Secondary resources ............................................................. 24
7.2.2 Data collection from Primary resources ................................................................. 25
7.2.3 Descriptive research ................................................................................................ 25
7.2.4 Data analysis Procedure .......................................................................................... 25
7.2.5 Analysis of data....................................................................................................... 26
7.2.6 Demographic characteristics ................................................................................... 26
7.3 Implementation............................................................................................................... 39
7.3.1 Implementation Plan ............................................................................................... 39
7.3.2 Budget ..................................................................................................................... 40
7.3.3 Activity Schedule .................................................................................................... 40
8 Financial Summary ............................................................................................................... 41
9 Bibliography ......................................................................................................................... 42
10 Annexure – A ........................................................................................................................ 44
Cloud 9 - Market Research Survey ........................................................................................... 44

1 Executive Summary
Market for energy drinks has witnessed an increase of about 50% from 2002 to 2007, Crossing
Rs 500 Cr mark in the year 2008. Goldwin Healthcare Pvt limited, a new entrant in the energy
drinks market, which was pitted against the Austrian Multinational, has gained significant market
share within a span of less than 2 years. The company‟s „Cloud 9 energy drink‟ has positioned
itself as the first healthy energy drink in India, as certified by FDA.
The market is dominated by Red Bull, and other brands like drinks like Monster, XXX and Full
Throttle are also giving Cloud 9 a competition. Cloud 9 energy drink comes in 4 variants: Wild
Berries, Pomegranate, Premium and Red grapes. This document explains in detail how the new
product “Cloud 9 energy drink” should be marketed in order to gain market share and increase its
sales volume. It contains information on present market situation, marketing objectives of the
product and also the marketing actions to be taken to achieve the objectives.
Cloud has been the official sponsor of IPL team Chennai Super Kings, but still the awareness
about the product is not widespread in the market as is with the case of Red Bull, even after the
publicity campaigns of the product.

2 Cloud 9
Cloud 9 is a brand of Energy Drink launched by the Goldwin Healthcare Pvt. Ltd. Cloud 9 is
different from its other competitors as it is made of natural ingredients.
Vision of Cloud 9 has always been to provide India with drinks that give the consumers the
desired energy boost, yet are completely healthy and have no side effects associated with other
drinks. Before entering into the market, Cloud 9 management did a thorough study of the energy
drink and cola market in India. The study revealed that the market was mainly dominated by
foreign players and the ingredients used in most of the popular drinks were harmful to the human
body.
Keeping in mind the revelations of the study, they came up with an energy drink and also
caffeine-free cola which were made from completely natural ingredients and adhered to the FDA
standards.
Cloud 9 has penetrated the market at a lightning speed and is now the second biggest player in
the country. Usually children are discouraged from consuming colas due to the level of caffeine
present, but the Cloud 9 cola can be consumed by one and all.

3 Energy Drinks Industry in India
Energy drinks are beverages which contain legal stimulants, vitamins and minerals including
caffeine, guarana and taurine, various forms of ginseng, maltodextrin, carnitine, creatine and
ginkgo biloba. Some contain high levels of sugar and glucose.
This category traditionally included caffeine based drinks which are energy boosters. Currently,
the energy drink segment in India is dominated by two firms, Red Bull and Cloud 9. Cloud 9
somehow breaks the ice by introducing an energy drink with natural source of caffeine such as
Gaurana, Ginseng and Taurine.
According to the market research firm, Datamonitor Plc., the market for energy drinks in India
was estimated at Rs. 499.2 crore in the year 2008, still at a young stage when compared with
carbonated drinks, which was valued at Rs. 6,027.9 crore. Between 2002 and 2007, the market
for energy drinks in India grew at about 50% a year. In contrast to that, growth of carbonated
drinks in India observed a slowdown by 0.5% during the same period. With an increasing
number of modern retail stores, the energy drinks market is expected to reach Rs 1,100 crore by
the end of 2010.
This decrease in the carbonated drinks market and the high growth of the energy drink market
can be attributed to the positive changes in the perception of health and fitness among the Indian
youth. The industry foresees a huge potential for Energy Drinks. The energy drink segment is the
fastest growing segment in the ready to drink category, reason being that India has a youth
centric population and the fast urbanization.
Energy drinks in India till a year back were dominated by players such as Rhino‟s Bullet, Cloud
9 and Red Bull. Sales started picking up post the entry of established players such as Pepsi,
Ambway and the latest entry of Coca Cola & GT&T has shown the market potential of the
Energy Drink market in India.
Market players in this product category are adopting unique marketing strategies like free
sampling at schools and colleges before launching their products, sponsoring major sporting

events and fashion shows. These promotions enhance the brand recall. Brands in the Energy
Drink market are Red Bull, Cloud 9, SJ XXX, Power Horse, and Rock star, Burn, SoBe and
Amway.
Power House SoBe

2% Rock Star Burn 1%
1%
Monster 4%
4%
XXX
3%
Cloud 9
23%
Red bull
62%
Figure 1Energy Drink Market Share (India)

4 Brand Choice Rationale
 Cloud 9 Energy Drink is a revolutionary product, being India‟s first natural energy drink
made purely from natural ingredients that adhered to FDA standards and regulations.
 The energy drinks market in India is growing at a fast rate, it is in a booming phase.
 Its major competitor is Red Bull, an international brand and the market leader in many
countries, including India.
 It would be interesting to see what Cloud 9‟s market strategy would be in response to that
of the dominant player.
 Also, its target segment will be the youth, so the project would give us a deep insight into
the consumer behavior and how to popularize the product among them.
 Moreover, being a new product in the market, „Cloud 9 energy drink‟ provides us ample
opportunities in brainstorming to devise various promotion methodologies.
These are the major reasons behind our choice of Cloud 9 Energy Drink for the purpose
of this project.

5 Situation Analysis
5.1 5 C Analysis
5.1.1 Company
Cloud 9 Energy Drink is a Goldwin Healthcare product. Owned by the Mumbai based Shree
Jalaram Group and headed by Priyesh Ganatra (MD), Goldwin Healthcare Pvt. Limited provides
Health Care Business Process Management Services, Health Care Research Services, Home
Health Care Services, Medical and Health Care Software, Personal Health Care Products,
Personal Health Products in India.
It was established in the year 2008 and is headquartered in Mumbai, Maharashtra. Apart from
Goldwin Healthcare, Shree Jalaram Group also owns companies including Lotwin online lottery,
Jalaram Jyoti Builders and Developers, Goldwin Entertainment, Goldwin Film Production and
Goldwin Mobile Gaming.
Product line
The company‟s flagship beverage brand, Cloud 9, is one of the leading players in Energy drinks
segment due to its positioning as a nutritive and healthy drink, as certified by many official
healthcare bodies. It also has a number of variants like Pomegranate, Wild Berry and Red Grapes
especially for ones who do not consume alcohol, which helps the brand to maintain its position.
The company is also set to enter the soft drinks, juices, mineral water and soda business.
Moreover, they are looking at launching Aloe Vera juice, a special juice for women, and first-of-
its kind in India.
Technology and experience
Cloud 9 is manufactured using cutting edge technology and plethora of ingenious solutions and
indigenous know-how. Initially, the product was manufactured in Malaysia. But soon, Goldwin
Healthcare started manufacturing all their products at the company‟s state-of-the art facility in
Nandur, 40 km from Pune (Maharashtra), spread across 27 acres. This facility is ISO 9001:2000,

ISO 22000, IASC (USA) and FDA certified, and adheres to Good Manufacturing Practices
(GMP). All cans are made from 2 piece tin Aluminum.
Cloud 9 attempts to achieve the exact balance of energy and health through the perfect
combination of naturally occurring, energy rich resources with high-tech manufacturing
techniques.
Goals
In the future, Cloud 9 Cloud 9 aims to consolidate and grow its Indian presence all the while
expanding into the overseas market. The name, Cloud 9, itself gives a prelude to the ambitions of
the company where, “Sky is no more the Limit".
The aim is also to use the profits from these ventures to contribute towards invigorating the
economy of India. Cloud 9 wants Indians to support and be part of this initiative to energize and
empower India‟s people, its economy, and the thereby India as a whole.
5.1.2 Collaborators
Goldwin Healthcare has an experienced and dedicated distribution team across the nation, which
monitors market segments like malls, multiplexes, retail, five star hotels and restaurants, pubs,
discotheques, gym, spas, cafes and airlines. Each tie-up is supported with Promotional &
Merchandising Materials, loyalty programmes and consumer offers etc.
5.1.3 Customers
Consumers of energy drinks are in the age group 18-35. Most of consumers are college students
and middle aged working class. With rapid urbanization and increase in purchasing power of
people the demand has increased significantly. Growing middle class is around 350 million.
Consumers also include females and young people who do not drink alcohol. For health
conscious people who are averse to alcohol, energy drinks are the perfect substitutes. Consumer
profile include college-goers who feel need to stay up late nights during exams , working class
professionals who need extra boosts of energy and athletes who need energy after exhaustive
field activities.

For the purpose of this project, we conducted a survey to find out the drinking habits of various
people. Majority of respondents were in the 23-26 years of age category and were predominantly
males. The most extensive usage of energy drinks was revealed to be one during nightouts or
during weekend parties. Taste and recommendations from friends surfaced as major factors for
trying out a new energy drink. Also, people perceived Cloud 9 as an energy drink and not as any
alcoholic drink or a soft drink.
5.1.4 Competitors
Red Bull Energy Drink
Red Bull operates within the energy drinks sector of the beverages market. The product is an
example of a 'functional' drink. Functional foods respond to consumer interest in well-being and
performance. The major multinational soft drinks companies are investing in the area of
functional drinks, developing their own brands and buying up existing ones. This is seen as being
important, given that their traditional soft drinks markets are at the maturity stage in many
countries. For these multinationals, new functional drinks offer opportunities for renewed
business growth.
Red Bull – Positioning
 General positioning strategy

The brand was positioned as something that,
"revitalized body and mind." It was also
intended that Red Bull be drunk whenever
consumers needed a lift, whether it was
morning, noon or night. This broad positioning
was designed to enable growth into a variety of
market segments. Red Bull's advertising did not
specify any consumption occasions, which
further facilitated an elastic positioning"
Figure 2 Red Bull Energy Drink Advertisement

 Positioning through pricing strategy
In every market, Red Bull set a price at least 10 percent greater than the most expensive
competitor in order to maintain a "best of class" positioning. The 250mL can of Red Bull
cost up to 300 percent more per ounce than traditional soft drinks.
Market share
Since its launch, the brand has managed to dominate the Indian market with more than 60 %
market share.
Strengths
 Market leadership – within the energy drinks market, it is the industry leader throughout
the world.
 Marketing efforts- many promotions and well targeted campaigns and sponsorship e.g.
F1 helps to expand Red Bull Brand and increase customer brand awareness and recall.
 Strong, fresh and fashionable brand identity
Weakness
 Above average prices

 Reliant on small product base – the company only markets one branded product, Red
Bull Energy Drink (along with a sugar free variety).
 Lack of patent on its recipe means anyone can copy it.
XXX Energy Drink
It is a premium brand targeting the niche market of youths and trendy consumers with high
income. Entering India with a bang as the primary sponsor for the Kolkata Knight Riders (KKR)
in the DLF IPL T20 cricket tournament, it was launched with the objective of providing an
alternative energy drink to the consumer and hence giving him a winder extremely high on
energy and high on life.

The brand XXX energy comes in two variants currently- REJUVE and NICOFIX. The
USP of “NICOFIX" is that it is formulated with NPR which reduces the Nicotine urge
and “REJUVE" is an exciting energy drink specially formulated to suit India taste
buds." REJUVE” rejuvenates the mind and body and enhances your immunity, thus
increasing stamina. Both the cans are very competitively priced at Rs.75/- for 250 ml.
Monster energy drink
Depicted by a logo of three claws, Monster energy drink is distributed by distributed

by Hansen Natural Corporation, Corona California. With ingredients like guarana,
caffeine and glucose, monster artificially stimulates energy. With a fairly tolerable
taste, this energy drink sparks one up and packs quite a vicious punch. Though
Monster Energy is not widely advertised in the media it receives a large amount of
recognition from its sponsorship of various sporting events.
.
Full Throttle
Produced by the Coco Cola company, Full Throttle debuted in late 2004. This energy
drink contains ingredients such as carbonated water, high fructose corn syrup and/or
sucrose, citric acid, natural and artificial flavors, sodium citrate, sodium benzoate (to
protect taste), d-ribose, caffeine, acacia, niacinamide (vitamin B3), calcium
pantothenate, (vitamin B5), glycerol ester of wood rosin, yellow 5, pyridoxine
hydrochloride (vitamin B6), cyanocobalamin (vitamin B12). Available in great flavors
like citrus, full throttle energy drink has great flavors.
.

5.1.5 Climate (context)
Political and Legal Factors: In India, there are no standards for energy drinks under PFA Act,
1954. The standards of carbonated water under PFA Rules, 1955 specify the maximum limits of
caffeine of 200ppm which subsequently on recommendations by Central Committee on Food
Standards were reduced to maximum level of 145ppm.
Food Safety and Standards Authority constituted an expert group to examine the scientific
literature and global position on use of caffeine and non-carbonated beverages and their labeling
and to recommend the limit of caffeine in energy drinks and non-carbonated beverages under
Food Regulations. The Group was also asked to suggest whether any standards need to be laid
down for energy drinks keeping in view the assessment of risk. It made the observation that
Caffeine is not an additive but a chemical with addictive property. Caffeine up to 200 ppm is
added as a flavouring agent but above 200 ppm it is a functional ingredient. The functionality of
caffeine at 320 ppm needs to be ascertained along with justification for fixing a cut-off limit at
320ppm.
Economic Factors: Economic factor affects the purchasing power of potential customers and
firm‟s cost of capital. The following are the examples of factors in macro-economy: economic
growth, interest rates, exchange rates, inflation rate. The inflation rate in India was last reported
at 13.73 percent in June of 2010. The economy is not much developed and wide variations
among states and regions within states are there due to which we might have to make different
promotional strategies.
Socio- Cultural Factors: The key emerging health concerns amongst Indians include diseases of
the heart and digestive system, obesity, bone and joint pain, depression and anxiety, lack of
energy and stamina and sleeplessness. The growing awareness amongst Indian consumers
regarding several ingredients and their associated health benefits is making them more inclined
to use nutritional information very often to make product choices. Hence there is a demand for
food and beverages with health claims.
Technological Factors: The technological factors can lower barriers to entry, reduce the
minimum efficient production levels and influence outsourcing decisions. Some of the
technological factors include: R&D activity, automation, rate of technological change,
technology incentives. Cloud 9 is manufactured by Goldwin Healthcare Pvt. Ltd, the specialists
in the manufacture of 100% Natural Lifestyle Energy Drinks and Caffeine-Free Cola, using its
cutting edge technology and plethora of ingenious solutions and indigenous know-how. Hence,
company is highly advanced in development of product, R&D and machinery.
5.2 Porter’s Five Forces Analysis
Threat of new Entrants– High
As energy drink market is growing very rapidly new entrants are eying this market. Big soft
drinks brands like Coca Cola and Pepsi already have plans to launch energy drinks in Indian
market. Since cost of entering in this market is not very high new companies can easily enter in
this market.
Bargaining power of Buyers- High
Bargaining power of buyers is high because of availability of many similar products.
Bargaining Power of suppliers-Low
Suppliers have low bargaining power because constituents of energy drinks are easily available
and any company may produce them easily.
Current rivals in Industry-High
There are already many brands in the market. Red bull is a very strong brand capturing a major
share of market. Big companies are coming up different products. There are many players in the
market.
Pressure due to substitutes– High
Pressure due to substitutes is high because there are many alternate products in the market. Soft
drinks, fruit juices, sodas and various caffeinated products are available in the market.
Consumers have many choices to fulfill their need of caffeine or energy.

5.3 Needs, Wants & Demands – Analysed
Needs
Cloud 9 Energy Drink satisfies three primary needs:
 Physical needs
When tired drivers are feeling the need to fall asleep due to fatigue; and this can
compromise their safety. A driver needs to stay awake and alert when driving to avert
danger and this need is satisfied by Cloud9, which perfectly matches with their tagline,
“Drink and Drive…Get high every time you drink”
 Social needs
A social need for example is where „humans have a social need for belonging‟ and this
need is satisfied by belonging to a group. A group could be people with the same interests
such as extreme sports. Red Bull associates itself with energy, danger and youth culture,
and markets its product through its sponsorship of youth culture and extreme sports
events. Consumers who drink Cloud9 are „automatically‟ introduced to the Cloud9
culture, and their social need is then satisfied, again matches with other punch line ”Dink
and Dance…Get high every time you drink”
 Individual needs
An individual may have a need for concentration or self-expression and this could be
inhibited by fatigue or weariness. Cloud9 could satisfy this need by „energizing and
stimulating the mind‟. For example, if he/she is fatigued, a university student may
experience the inability to retain knowledge and therefore an inability to express
him/herself.
Wants
A want can be defined as „the form taken by human needs as they are shaped by culture and
individual personality‟ Extreme athletes want to accelerate their performance and to revive

themselves quickly after each event and this want is satisfied by Cloud9. Cloud9 promotes
its consumption „to increase physical endurance, improve concentration and reaction speed,
improve vigilance and stimulate metabolism through natural stimulants.‟
Demands
Demands are human wants backed up by buying power and given their resources, people
demand products with benefits that add up to the most satisfaction. Demand for a product, is both
willingness and an ability to pay for the product that will satisfy a particular want. Cloud 9 is
arguably one of the most expensive drinks on the market, a can of Coke generally costs around
Rs.20 for 300ml whereas a smaller 250ml can of Cloud9 is sold at Rs.75. Consumers are willing
to pay the higher price for Cloud9 because it satisfies their needs and wants, it also delivers on its
promise to Drink and Discover.
5.4 SWOT Analysis
Strengths Weakness
Indian product Low awareness
Natural ingredients Low market share
Focus on health No prior expertise
Non alcoholic
Variety of flavors
FDA approved
SWOT Analysis
Opportunities Threats
Fruit Juices Lucrative market
Venturing into caffeine free cola Many big players
Gaming ventures Easy entry in the market
Consumer recognition through Sponsorship Relatively lower pricing by big rivals
of Fashion shows and college festivals
More emphasis of youth on health food
Rapid market growth of 50% YoY

5.5 Ansoff’s Product Market Expansion Grid
Current Product New Product

Current Market Penetration Product-Development
Market Strategy Strategy
Market-Development
New Market Strategy Diversification Strategy
Cloud 9 is a product that is not totally new to the market. There already exists a market for
energy drinks. Also, since the energy drinks market is very well defined and has limited scope in
terms of broadening, we are looking at the “Current Market” instead of a new one. Thus,
adopting a Market Penetration Strategy seems to be most appropriate, within which, our aim will
be to maximize market share. This can be done by aggressively marketing and advertising the
product to make the target segment aware of the value propositions on offer.
5.6 BCG Matrix
The relative position of Cloud 9

Energy Drink in the market dominated
by Red Bull is quite low and the
potential for market growth is very
high. Thus Cloud 9 falls in the
“question marks” quadrant, where it
has high potential to increase market
share and move to the “stars”
quadrant, and eventually to “cash
cows” where the market growth will
slow down. Also it is to be noted that
if Cloud 9 does not succeed in
becoming a market leader, then there
is a possibility that after years of cash

consumption it will degenerate into “dogs” when the market growth will decline.
5.7 Life Cycle Analysis
Out of the four life cycle stages, Energy Drinks are in the growth stage. Since energy drinks have
been around for many years, they are no longer in the introductory stage. New products and new
emerging brands have expanded consumer choice in the energy drink market, which has pushed
them in the growth stage. The branded energy drinks sector in India is growing at the rate of 60%
as compared to 10% growth rate of the Rs 7,000-crore soft drinks market. On the back of an
increasing number of modern retail stores, the energy drinks market is expected to reach Rs
1,100 crore by 2010.
Energy Drinks
Figure 3 Product Lifecycle stages

6 Segmentation, Target & Positioning
6.1 Segmentation
Below shown is a map showing the various factors taken into consideration while the
segmentation takes place.
Demographic Analysis Psychographic Analysis

Age Features: taste, caffeine content etc
Gender Attitudes to Social change: eg.
Income conservatives, upmarkets
Segmentation
Behavioral Analysis Geographic Analysis

Occasions Metros, major cities and towns
User Status: eg Regular, first timers etc
User rate: Regular, heavy etc
Loyality Status : hard core loyalists,
switchers
Accordingly, based on the above factors and the responses from a survey conducted on cloud 9,
the following 4 segments were identified:
 College students
Comprising of an age-spectrum ranging from teenagers to Post Graduates, this segment
witnesses a variety of constituent individuals in terms of energy, purchasing power,
preferences, vulnerability to alcoholic beverages. This group has taken up to snacking as
a way of life as they keep missing regular meals due to erratic schedules. Energy Drinks
are percieved to be something “above soft drinks” but not alcohol, hence a cult among this group.
Besides, studying late nights, energy drinks have gained popularity among them.

 Working Professionals
These represent the young working population, mainly the employees of MNCs and
BPOs. This group has resorted to energy drinks for chilling out on weekends after a long
hectic weekend for a change, or when meeting colleagues or friends at place. Working
long for hours, creates distress, monotony and fatigue, leading to burnout. Energy drinks
serve as energy boosters and hence an obvious choice for them in the short run.
 Health Conscious people/ Sportsmen
This group has seen a rise in the past decade. More and more people are turning health
consious and hence choose their diet selectively. They mostly join fitness programmes i.e
physical workout, aerobics etc or jog regularly as they are confined in their jobs, hence
they want to work out. Another category is that of sportsmen, who constantly thrive on
energy drinks to get instant kick helping them maintain high energy levels.
 Socialites / Party Animals

Socialites are mostly in a habit of paying regular visits to pubs, discotheques and parties.
Hence Energy drinks are a normal part of consumption habits of such consumers.
Besides, energy drinks act as an an apt alternative to alcoholic beverages, while in
socializing a group, where in the socialite prefers not drink, as mostly is the case with
females. Besides, Energy drinks mixed with alcohol, serves as a perfect combo during
parties.
6.2 Target
Cloud 9 is targeted at the youth population in the age group of 18 to 35 years. This age group
consists of working professionals and students. The young working professionals of India face
high stress levels at their work places which causes physical as well as mental exhaustion.
Today‟s students also lead a stressful and hectic life. These working professionals and college
students are the target segment for Cloud 9 energy drink. Many pubs in Indian cities are
frequented by people belonging to this age group which might be capitalized upon by offering

Cloud 9 as a complement at these high end pubs and lounges. These pubs are popular hangouts
for the party animals and socialites who are the target segment of Cloud 9.
As many as 64% of the youth feel that alcohol consumption is not at all acceptable. This segment
of the youth population is also being targeted. Being health conscious this segment of the youth
population might be a potential market for Cloud 9
6.3 Positioning
The product is a non-alcoholic healthy energy drink with natural sources of caffeine and is
targeted primarily at youngsters in urban areas. Although the target age group is 18 to 35 year
olds, currently the product has a greater appeal to the younger end of the group. The name
„Cloud 9‟ gives preludes to the ambitions of the company, as it plans to surpass all its earlier
successes and aim for higher and bigger goals in the future. The name also signifies a light,
happy and elevated state of mind which is exhilarating, alertness backed with stamina and
concentration, in which the consumer finds himself after having cloud 9 energy drinks, yet it is
not intoxicating. The „high‟ in „Cloud 9‟ comes from its natural energy boosters: Taurine,
Guarana and B- group vitamins that safeguard health.
As the market has been dominated by foreign brands, Cloud 9 energy drink‟s indigenous origins
can act as the differentiating factor. Likely to be more popular among the youth in the urban
centers of the country like Mumbai and Goa, it should be perceived as a funky, cool and in-tune
with any age group, yet healthy drink, unlike its competitors. Besides, the advertisements should
claim that Cloud 9 Energy Drink can boost physical activity and alertness. It should be projected
as a great solution to today's stressful and hectic lifestyle.

7 Marketing Action Program
7.1 Marketing Mix
7.1.1 Product Strategy

Cloud 9 is a healthy energy drink, fortified with essential nutrients and herbs that help boost up
anyone with a lull in their energy and focus. Cloud 9 is a healthy and tasty alternative to a high
sugar soda or energy drink. Also a good alternative to coffee and expensive espresso drinks.
With a proprietary blend of herbs that contain a mix of Gandoderma, Ginseng, Astragalus,
Purpurea, 'B' group vitamins and Schisandra also amino acids L-Taurine and L-Glutamine, that
give this healthy energy drink its blast of natural energy needed to keep drinkers gain back their
spunk. Cloud 9 comes in a convenient 250 ml aluminium can, which is the perfect size to throw
in a purse, backpack, gym bag, or brief case. Every flavour comes with its own colour and design
on the can distinguishing it from the others.
7.1.2 Price Strategy

Cloud 9 currently provides competitive prices ranging from Rs. 75 to Rs.90 for different
flavours. We would like to see the company branch out and start selling bulk packs in
convenience stores, and vending machines like its major competitor and market leader Red Bull
does. They provide a bulk pack of four cans in Rs. 275. We would like to keep a competitive
price of Rs. 60-70 per can as respondents gave the choice in survey. Also to offer incentives of
buying more than one can at a time, offer two cans for Rs.110
7.1.3 Promotion Strategy

To promote Cloud 9 to our target market of teens and young adults, we want to focus on
promotions in schools and university/college campuses. We also propose to offer incentives for
students to spend their money on Cloud 9 drinks by offering deals on buying more than one.
Currently Cloud 9 has major focus on non-alcohol drinking people so we want to keep the
strategy of buying in bulk through Amway/Reliance Fresh/Spencers for that demographic. To
advertise to the new younger target market we also would like to team up with dance clubs,
sports teams, and music producers. With dance clubs we would offer alcoholic and non-

alcoholic drinks in the club made with Cloud 9. For sports teams we want to sponsor new and
edgy sports such as Adventure Sports, boxing, and extreme sports to get our logo out in the
action. Lastly with music producers we hope to help sponsor musical tours and have a booth at
concerts to give out samples and also sell Cloud 9 to consumers.
Red Bull provides free cans during tech-fests, cultural fests, management fests same kind of
strategy can also be adopted for market penetration.
7.1.4 Distribution Strategy

As of now Cloud 9 is only available to the customer by buying through either an IBO
(Independent Business Owner) or through retailers directly. We want to make Cloud 9 available
to everyday customers in gas stations, grocery stores, convenience stores, and through vending
machines. We can enter into contracts with Reliance Fresh, Hotel Chains, etc; for distribution
purposes. The next goal would be to have Cloud 9 available in outlets and retail stores in other
countries. Currently Cloud 9 is transported through general mailing companies. In the next few
years we would like Cloud 9 to have its own distribution centre with its own delivery trucks.
7.2 Marketing Research
We began with exploratory research and identified many resources of econdary data available on
the internet about energy drinks which included previous marketing research reports on energy
drinks and prominent websites.
After the first step, which involved the collection of secondary data, we collected Primary data
by directly interviewing various segments of population including IIM K Campus. The type of
questions asked while collecting primary data was mostly open ended.
After this, we designed a comprehensive Questionnaire which was going to be our primary
source of Data collection.
7.2.1 Data Collection from Secondary resources

A number of secondary resources about the energy drinks market were available on the web. We
have taken the help of previous marketing research reports on industry to know the most

essential features required to formulate the plan of action.This provided us a basic overview of
the features that play a significant role in the selection of an energy drink.
7.2.2 Data collection from Primary resources

We have interviewed various segments of the people in depth to know their criteria to select an
energy drink. We have used an online spread sheet to interview people of various demographic
profiles. Our objective of exploratory research is to find the questions that need to be included in
the questionnaire for descriptive research.
7.2.3 Descriptive research

We have prepared a comprehensive questionnaire using the inputs of exploratory research. The
soft copies of the surveys were mailed to various sections of the people. We have distributed the
hard copies of the questionnaire to the people who don‟t have email ids.
The questionnaire was a prepared exhaustively as this is the primary source of data collection for
the project. The questions were designed to do a study marketing mix, segmentation, and
positioning and target market. The questions helped us to know their perceptions and awareness
about energy drinks.
7.2.4 Data analysis Procedure

Methodology and plan
The data collated from the survey was categorically input into data analytic software SPSS.
Using the tool, specific feature variables were defined and details from the survey were
transferred into the software.
Pre-processing the data
Editing
We have eliminated the responses, which were obviously incorrect. To ensure consistency of the
responses we have considered the responses which don‟t have null value.

7.2.5 Analysis of data
Methodology
We first describe the demographic characteristics of the respondents and later the source of
information from which they came to know about cloud 9 energy drink, current positioning,
pricing, attributes of an energy drink to try it, and respondents‟ characteristics about
consumption of alcohol, health consciousness, avoiding caffeine etc;
7.2.6 Demographic characteristics

The predominant response was from the age group of 23 to 26 years with a percentage 61.9%.
75% of the total respondents were males.
Age * Sex Crosstabulation
Sex
Female Male Total
Age 19-22 Count 24 59 83
% within Age 28.9% 71.1% 100.0%
% within Sex 39.3% 32.2% 34.0%
% of Total 9.8% 24.2% 34.0%
23-26 Count 36 115 151
% within Age 23.8% 76.2% 100.0%
% within Sex 59.0% 62.8% 61.9%
% of Total 14.8% 47.1% 61.9%
<18 Count 0 1 1
% within Age .0% 100.0% 100.0%
% within Sex .0% .5% .4%
% of Total .0% .4% .4%
>27 Count 1 8 9
% within Age 11.1% 88.9% 100.0%
% within Sex 1.6% 4.4% 3.7%
% of Total .4% 3.3% 3.7%

Total Count 61 183 244
% within Age 25.0% 75.0% 100.0%
% within Sex 100.0% 100.0% 100.0%
% of Total 25.0% 75.0% 100.0%
Age * To what extent do TV Advertisements, newspaper ads, billboards etc affect your choice of energy drink?
Crosstabulation
Count
To what extent do TV Advertisements, newspaper ads, billboards etc affect your choice of
energy drink?
1 2 3 4 5 Total
Age 19-22 11 17 34 20 1 83
23-26 20 32 47 44 8 151
<18 0 0 1 0 0 1
>27 1 3 2 3 0 9
Total 32 52 84 67 9 244
In the majority age group, i.e 23-26 years, around 60.3% people were somewhat strongly
influenced by advertisements.

Age * I am health conscious
Crosstabulation
Count
I am health conscious
1 2 3 4 5 Total
Age 19-22 0 8 26 31 18 83
23-26 2 14 49 65 21 151
<18 0 1 0 0 0 1
>27 0 0 3 2 4 9
Total 2 23 78 98 43 244
A majority of respondents in the 23-26 age group were found to be substantially health
conscious.
Age * I tend to avoid alcohol
Crosstabulation
Count
I tend to avoid alcohol
1 2 3 4 5 Total
Age 19-22 11 9 9 11 43 83
23-26 21 23 24 24 59 151
<18 0 0 0 0 1 1
>27 2 2 3 1 1 9
Total 34 34 36 36 104 244
Majority of respondents in all age groups were found to strongly avoid alcohol. Hence, the drink
can make full use of its “healthy” drink image.

Age * I avoid caffeine Crosstabulation
Count
I avoid caffeine
1 2 3 4 5 Total
Age 19-22 13 14 17 19 20 83
23-26 23 42 44 22 20 151
<18 0 1 0 0 0 1
>27 1 3 1 1 3 9
Total 37 60 62 42 43 244
Around 29.14% of the respondents in the 23-26 age group were found to be moderately averse to
caffeine, with majority tending towards the lower side.

The above figure shows how respondents first came to know about cloud 9 energy drink, the
marketing is predominantly based on viral marketing, although television advertisements,
promotional campaigns, newspaper ads, internet advertisements are there. Mostly 23-26 age
group can be targeted.

The respondents clearly see Cloud 9 as an energy drink, even the above analysis shows that
86.89% of females and 79.23% of males see it as energy drink therefore respondents are aware
of product category.

On what occasions do you consume energy drinks?
Frequency Percent Valid Percent Cumulative Percent
Valid 1 .4 .4 .4
Before/During/After a workout
65 26.6 26.6 27.0
(like aerobics)
During studies/ Before deadlines,

71 29.1 29.1 56.1
exams etc.
Weekend party (after a hectic

70 28.7 28.7 84.8
week)
While hitting the pub 37 15.2 15.2 100.0
Total 244 100.0 100.0

The people in the age group 23-26 yrs. consumed energy drinks mostly during weekend parties
or studies, while in the age group 19-22, majority consumed during/ after workout. The
proportion of people consuming energy drinks while hitting the pub was comparatively lesser.

Sex * What in your opinion is the ideal price for a can of Cloud 9?
Count
What in your opinion is the ideal price for a can of Cloud 9?
60 – 70 70 – 80 80 - 90 Above 90 Total
Sex Female 36 20 4 1 61
Male 122 50 4 7 183
Total 158 70 8 8 244
The ideal price for a can of Cloud 9 as perceived by majority of the consumers was between Rs.
60-70.

Sex * If you were to search for Cloud 9 in a supermarket, which section would you go to?
Count
If you were to search for Cloud 9 in a supermarket, which section would

you go to?
Alcoholic Drinks Energy Drinks Juices Soft Drinks Total
Sex Female 1 53 4 3 61
Male 17 145 7 14 183
Total 18 198 11 17 244
Majority of the surveyed people would search in the energy drinks section of a supermarket
while searching for Cloud 9.

Given the fact that it is a healthy drink that offers many flavors and
provides an instant kick, would you be willing to try Cloud 9?
Cumulative
Frequency Percent Valid Percent Percent
Valid No 47 19.3 19.3 19.3
Yes 197 80.7 80.7 100.0
Total 244 100.0 100.0
About 80.7% of the surveyed people were willing to try Cloud 9 if it offered many flavours and
provided instant kick.

Would you be willing to participate in a promotional campaign that offers

free trials of Cloud 9?
Cumulative
Frequency Percent Valid Percent Percent
Valid No 78 32.0 32.0 32.0
Yes 166 68.0 68.0 100.0
Total 244 100.0 100.0
About 68% of the surveyed people were willing to participate in the promotional campaigns that
offered free trials of cloud 9.

What makes you try a new energy drink?

<18 19-22 23-26 >27
Packaging 0 15 17 0
Taste 1 43 75 4
Price 0 20 43 0
Composition 0 27 43 2
Variants 0 9 15 0
Brand 0 24 30 2
Celebrities 0 3 5 0
Advertisements 0 14 26 1
Recommendations of Friends 0 35 81 5
Recommendations_of_Friends
Advertisements
Celebrities
Brand
>27
Variants 23-26
19-22
Composition <18
Price
Taste
Packaging
0 10 20 30 40 50 60 70 80 90
Majority of people considered taste and recommendations of friends as major attributes that
makes them try a new drink.

7.3 Implementation
7.3.1 Implementation Plan:

Cloud 9 Energy Drinks are currently marketed as Energy Drinks with Natural Caffeine Sources.
Through our marketing plan, we are aiming to launch our product to a younger audience as a
“Health Drink that Promotes Energy”. Since our product contains B-Vitamins and Amino Acids
that are healthy for the body and promote brain function, we would like our drink to be perceived
as healthy rather than pure energy drinks.
Our plan is to market to an audience of young adults. We are hoping since the drink contains
vitamins and nutrients healthy for the body, parents will find it to be a good alternative to the
other sugar filled energy drinks currently in stores.
Vending machines throughout college campuses, and selling our products individually through
stores will help increase awareness among younger consumers. Vending machines create
impulse buys when placed in high traffic areas, which is an area where Cloud 9 is currently
lacking. They have remained a private company and strictly provide their product through IBO‟s,
but we are hoping to get the name well known among a younger crowd through wider
distribution channels.
We are going to market the product as a health drink that promotes energy. When people think of
energy drinks they automatically think of high sugar and high carbohydrates, which is the exact
opposite of our product. Our main emphasis will be getting our consumers the energy they need
without all the added sugars and carbohydrates that no one needs to add to their diet. Health has
been an increasing trend in today‟s society and Cloud 9 Energy Drinks can be a positive addition
to one‟s daily diet. In order to get our name in the campuses, we need to put vending machines in
places that students can easily access on-the-go. Students are living in a fast paced world, and
our product needs to keep up with them. The option of buying it in campus gives an alternative
source of attaining the product. Fliers will also be placed throughout the campus in high traffic
areas to increase brand recall.

Sporting events and entertainment are very popular on college campuses, so we would like to
use banners of our product during basketball games or even during student concerts to get our
names in the mainstream of students. Athletes and nutrition-conscious students will notice our
“Health drinks that promote energy” signs, and realize they can get energy without adding sugars
that can ruin their workout and performance. When students see our signs promoting healthy
energy, they will be eager to try the new product that not only tastes good, but also is good for
them.
All in all, our main goal is to be seen as a healthy alternative to the other high sugar energy
drinks in the market. Vending machine sales are constantly increasing, and edging Cloud 9 into
that market will continually increase revenues. Through product placement in high traffic areas
and fliers throughout the school, we are hoping students will notice our diverse product and
boost sales in a new market for Cloud 9.
7.3.2 Budget
The expenses of the company for marketing include mainly that of an advertising budget. We
would like to use the percentage of sales method. For 2010, the expected revenue generation is
Rs. 25,30,000,000. Hence if we consider 30% revenue will be the first advertising campaign for
the product, the total budget for advertising is Rs 759,000,000.
7.3.3 Activity Schedule

The activity schedule around the advertising campaign will revolve around the product launch
that happens every year. 3 months prior to the product launch, the advertisements in the media,
print, television and radio, should start that create curiosity regarding the product. During the
product launch, along with the advertisements, the messages regarding natural health drinks
should be sent across to the public to facilitate conversion of Red Bull‟s buyers into Cloud 9‟s
customers.

8 Financial Summary
Purchases include packaging materials, beverage bases, and beverage ingredients. Distribution
costs arise from product delivery to a large number of markets. Cloud 9 must ship products to
Independent Business Owners, who then ship products to their customers. Other costs include
depreciation, rent, utilities, interest, and other organizational sustaining costs (Industry Report).
These costs consist of estimates throughout the soft drink industry.
Market Share Projections
Energy Drink Market Analysis

Total Market size (crore) 1100
Growth rate 50%
Cloud 9 market share (crore) 23%
Cloud 9 Price Rs 75/can
Cloud 9 market share growth rate 7%
Year 2010 2011 2012 2013 2014 2015
Total Market Size 1100 1650 2475 3712.5 5568.75 8353.125
Market share of cloud 9 23% 25% 26% 28% 30% 32%
Coud 9 Revenue 253 406.065 651.7343 1046.034 1678.884 2694.609
Marketing Expenditure for cloud 9 75.9 121.8195 195.5203 313.8101 503.6652 808.3826
9000
8000
7000
6000
5000
Total market size (crores)
4000 Cloud 9 (crores)
3000
2000
1000
0
2010 2011 2012 2013 2014 2015
Figure 4 Financial Projections

9 Bibliography
 http://www.financialexpress.com/news/twothird-of-indias-youth-find-drinking-
unacceptable/484312/
 http://www.allbusiness.com/sports-recreation/sports-games-outdoor-recreation-
cricket/14558967-1.html
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Red-Bull-Energy-Drink
 http://marketingpractice.blogspot.com/2008/08/red-bull-it-gives-you-wiings.html
 http://www.indiaprwire.com/pressrelease/food/2010021643698.htm
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india/

 http://www.dnaindia.com/money/report_coke-s-burn-to-fire-up-rivalry-in-energy-
drinks_1270542
 http://economictimes.indiatimes.com/news/news-by-industry/cons-products/liquor/USL-
prepares-for-a-big-push-in-energy-drinks-segment/articleshow/5653686.cms
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touch-Rs-1000-Cr-in-year-201011
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 http://www.adgully.com/agtalk/cloud-9-we-are-more-than-ready-to-take-on-any-national-
or-international-giants.html
 http://www.cloud9energydrink.com/about.php
 http://www.cloud9energydrink.com/marketing.php
 http://www.livemint.com/2010/05/31224142/Energy-drink-firms-keen-to-lau.html
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 http://www.bmj.com/content/338/bmj.b929.full?view=long&pmid=19325180

10 Annexure – A: Survey Questions
Cloud 9 - Market Research Survey
Question 1: Age
<18
19-22
23-26
>27
Question 2: Sex
Male
Female
Question 3: Where did you first come to know about Cloud 9?
Newspaper
Television Advertisements
Internet
Friends
Promotion Campaigns / Others
Never heard of it!
Question 4: If you were to search for Cloud 9 in a supermarket, which section would you go to?
Soft Drinks
Alcoholic Drinks
Energy Drinks
Juices
Question 5: What in your opinion is the ideal price for a can of Cloud 9?
60 - 70
70 - 80
80 - 90
Above 90

Question 6: What makes you try a new energy drink?
Packaging
Taste
Price
Composition
Variants
Brand
Celebrities
Advertisements
Recommendations of friends
Question 7:On what occasions do you consume energy drinks?

Before/During/After a workout (like aerobics)
Weekend party (after a hectic week)
During studies/ Before deadlines, exams etc.
While hitting the pub
Question 8:To what extent do TV Advertisements, newspaper ads, billboards etc affect your
choice of energy drink?
1 2 3 4 5
Doesn't affect at all Very Strongly
Please indicate the extent to which you agree or disagree with the following statements:
Question 9: I am health conscious

1 2 3 4 5
Strongly disagree Strongly agree
Question 10: I tend to avoid alcohol

1 2 3 4 5
Strongly disagree Strongly agree

Question 11: I avoid caffeine

1 2 3 4 5
Strongly Disagree Strongly Agree
Question 12: Given the fact that it is a healthy drink that offers many flavors and provides an
instant kick, would you be willing to try Cloud 9?
Yes
No
Question 13:Would you be willing to participate in a promotional campaign that offers free
trials of Cloud 9?
Yes
No

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Cloud 9

Marketing Management Project

3 Energy Drinks Industry in India ............................................................................................. 6

4 Brand Choice Rationale .......................................................................................................... 8

5 Situation Analysis ................................................................................................................... 9

5.1 5 C Analysis ..................................................................................................................... 9

5.1.1 Company ................................................................................................................... 9

5.1.2 Collaborators ........................................................................................................... 10

5.1.3 Customers ............................................................................................................... 10

5.1.4 Competitors ............................................................................................................. 11

5.1.5 Climate (context) .................................................................................................... 14

5.2 Porter‟s Five Forces Analysis ........................................................................................ 15

5.3 Needs, Wants & Demands – Analysed .......................................................................... 16

5.4 SWOT Analysis.............................................................................................................. 17

5.5 Ansoff‟s Product Market Expansion Grid...................................................................... 18

5.6 BCG Matrix .................................................................................................................... 18

5.7 Life Cycle Analysis ........................................................................................................ 19

6 Segmentation, Target & Positioning ..................................................................................... 20

6.1 Segmentation .................................................................................................................. 20

6.2 Target ............................................................................................................................. 21

7 Marketing Action Program ................................................................................................... 23

7.1 Marketing Mix................................................................................................................ 23

PGP14 | SECTION E | GROUP 11 2

7.1.2 Price Strategy .......................................................................................................... 23

7.1.3 Promotion Strategy ................................................................................................. 23

7.1.4 Distribution Strategy ............................................................................................... 24

7.2 Marketing Research........................................................................................................ 24

7.2.1 Data Collection from Secondary resources ............................................................. 24

7.2.2 Data collection from Primary resources ................................................................. 25

7.2.3 Descriptive research ................................................................................................ 25

7.2.4 Data analysis Procedure .......................................................................................... 25

7.2.5 Analysis of data....................................................................................................... 26

7.2.6 Demographic characteristics ................................................................................... 26

7.3.1 Implementation Plan ............................................................................................... 39

7.3.2 Budget ..................................................................................................................... 40

7.3.3 Activity Schedule .................................................................................................... 40

8 Financial Summary ............................................................................................................... 41

Cloud 9 - Market Research Survey ........................................................................................... 44

PGP14 | SECTION E | GROUP 11 3

PGP14 | SECTION E | GROUP 11 4

PGP14 | SECTION E | GROUP 11 5

PGP14 | SECTION E | GROUP 11 6

Power House SoBe

Figure 1Energy Drink Market Share (India)

PGP14 | SECTION E | GROUP 11 7

PGP14 | SECTION E | GROUP 11 8

Technology and experience

PGP14 | SECTION E | GROUP 11 9

PGP14 | SECTION E | GROUP 11 10

Red Bull – Positioning

 General positioning strategy

PGP14 | SECTION E | GROUP 11 11

 Above average prices

XXX Energy Drink

PGP14 | SECTION E | GROUP 11 12

Monster energy drink

Depicted by a logo of three claws, Monster energy drink is distributed by distributed

PGP14 | SECTION E | GROUP 11 13

5.2 Porter’s Five Forces Analysis

Threat of new Entrants– High

Bargaining power of Buyers- High

Bargaining power of buyers is high because of availability of many similar products.