Introducing V-Energy Drink into the German market

This article discusses the introduction of V-Energy Drink into the German market. It includes a SWOT analysis, competitor identification, and future scenario. The article also provides a description and justification for the country recommendation and a PESTEL analysis of Germany.

Introducing V-Energy Drink into the German market 1
INTRODUCING V-ENERGY DRINK INTO THE GERMAN MARKET
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Introducing V-Energy Drink into the German market 2
Introduction
V-drink is a soft drink produced by an Australian company called Frucor. The drink falls in the
category of Energy drinks as it contains ingredients such as caffeine which is a stimulant and
keeps a person alert and also boosts a person’s energy. Through excellent marketing strategies,
Frucor has pushed the V-Energy drink to dominate the soft drinks market in New Zealand,
Australia, and Asia. Also, the drink has a significant market share in the UK energy drinks
market. Following success in these markets, the company has decided to introduce the drink into
the German market (Australian Brands 2018).
Description and justification for the country recommendation
V-Energy drink is a potent soft drink touted as having stimulant effects on the body making the
person who consumes it to feel more alert and energized.
V-Energy Drink’s SWOT Analysis
Strength
Has a strong financial basis
Strong brand name recognition
Dominant market share in Australia and New
Zealand
Attractive packaging design
Weaknesses
Company has limited resources compared to
the competitors such as Red Bull
Low market share outside of Australia and
New Zealand
Opportunities
The performance in the UK indicates a
potential for the drink to expand in the
European market starting with Germany
Threats
Stiff completion from established energy
drinks such as Monster and Red Bull.
The competitors have more resources

Introducing V-Energy Drink into the German market 3
compared to Frucor.
Health conscious populace
Maturing market
Frucor focuses its efforts on selling its V-energy drink to the young consumers (18-24 years),
who need the extra energy to keep on top of their hectic lifestyle. There have been challenges in
marketing to this group as they have a hectic lifestyle with a short concentration span (Cadogan
2009). However, it has discovered that using the old methods effectively brings in better results
compared to the new media fads. Frucor advertises on TV and cinema among other media, and
the company CEO believes that this has made all the difference (Datamonitor (Firm) 2008).
Germany Market
The choice of Germany as a market on which to expand the V-Energy drink was informed by a
PESTEL analysis of the country. Germany has all the important features necessary for the
success of a business launch.
Politics
Germany has a stable democratic form of government with regular elections where the citizens
choose their favorite leaders based on competing for political, social and economic policies of
the candidates. Political stability is a crucial ingredient in providing an enabling environment for
establishing and running a business.
Economy
Germany is one of the biggest economies in Europe, with an economy with resilient expansion
and a low employment rate. The country’s economy is based on manufacturing with brands such
as BMW, Mercedes, Lufthansa, and Nivea among others supplying the world market with their

Introducing V-Energy Drink into the German market 4
products (Peichl & Pestel 2011). The steady economic growth, coupled with low unemployment
rates ensures that a large portion of the population are gainfully employed and have disposable
income which they can use to purchase luxury energy drinks like the V-Energy Drink.
Social and Cultural Factors
Germany is a multicultural society composed of a population of over 80 million people with
different cultural and religious backgrounds. Most Germans enjoy a good lifestyle and can afford
their basics and have surpluses that they use for luxuries and enjoyment (Jonas & Roosen 2008).
However, they have joined the health bandwagon as a trend for most people in developed
countries. The health-conscious individuals relate the food they take with the illnesses in the
society. Sugar and some stimulants are considered especially harmful to health, a fact which
makes most people avoid products with the said ingredients. The health considerations might
have an impact on the energy drinks market (Peichl, Pestel, & Schneider 2010).
Technology
Germany is a country known for its technological advancement in most of its operations. If the
Frucor decides to manufacture its products in the country, the productions cost will be much
lower because it will take advantage of the efficient production processes. At the same time, the
development in the information technology systems such as the internet allows the company to
advertise its products online and also allows consumers to buy and pay for products online to be
delivered at their doorsteps (Shahzad, Khattak, Khattak, & Shahzad 2015).
Environment
The Environment in Germany is conducive to the establishment and running of businesses. The
four seasons (summer, winter autumn, and spring) are mild with rare extreme temperatures.
Legal

Introducing V-Energy Drink into the German market 5
The legal environment in Germany is conducive to establishing the business as there are few
legal restrictions unless the products have the potential of harming the populace.
Competitor Identification
The energy drink market has shown resilience even in economically tough time indicating
consistent growth. There are a few brands of energy drinks that dominate the market including
Red Bull (43%), Monster Energy (39%), Rockstar (10%), and AMP (3%). The same brands
dominate the German beverage market and will constitute the significant competitors that V-
Energy drinks will have to contend with, and overcome to make inroads in the market.
Furthermore, the market has experienced growth in new launches which will further complicate
the success chances for the V-Energy drink. In 2015, the beverage market experienced 29%
growth in new launches with Germany the leading light in the sector with 9% followed closely
by the US at 8% (Energy Drink Launches Grow 29% In Five Years as Global Sales Reach 8.8
Billion Litres, 2018)
In Europe, the beverage market has expanded significantly with new players entering the
competition and spurring growth. Western Europe countries consumed 1.3 billion liters of energy

Introducing V-Energy Drink into the German market 6
drinks in the FY 2016 with Germany and the UK leading the park with 262 million liters and 545
million liters respectively (Mothersbaugh, Hawkins, Mothersbaugh, & Tom 2016).
(Statista 2018)
Innovation in the beverage market drives the entrance of new products and spikes the
completion. The main drivers in innovation are the competitive forces in the environment and the
consumer preferences.

Introducing V-Energy Drink into the German market 7
Figure 1 drivers of innovation (Lauster 2016)
The scenario in the Next five years
The main driving force in the energy market in the future will be on the healthy varieties which
are sugar-free and made from natural ingredients. Already, the market is bracing for the
introduction of healthy varieties of energy drinks from major manufacturers such as Red Bull
and Monster, with new entrants the following suit. In Germany, 15% of all the new energy
drinks launched in the market had natural caffeine ingredients from coffee. The health-conscious
individuals market is driving the demand for naturally flavored products, and the trend is likely
to hold in the future.

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Introducing V-Energy Drink into the German market 9
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