CHAPTER ONE: INTRODUCTION
Chapter one provides the introduction to
the study and outlines the background, statement of the problem, objectives,
justification and assumptions of the study. It aims at providing a clear
understanding of the research project.
1.1 Background of study
Energy drinks are soft beverages
designed to increase the rate of metabolism in the body. They are characterised
by content of caffeine, taurine, vitamins and sugar: ingredients responsible
for increasing metabolism as well as improving mental alertness and
concentration (Musaiger and Zagzoog, 2014). These properties make energy drinks
appropriate for persons involved in physical activity to help them either
perform better or recover quickly after strenuous exercise. In addition to the
physical product attributes that can be associated with their ability to boost
physical performance, energy drinks brands tend to be very effective in
building a strong image (Miller, 2009). Energy drinks are closely associated
with thrill, performance, and excitement. These are attributes that make them
very attractive to youthful populations around the world.
The purchase intention of consumers is
influenced by a number of factors. Understanding these factors requires a
theoretical background on the decision making processes and philosophies
embraced by consumers (Mallett et al, 2013). Every consumer prefers to think of
themselves as rational and therefore likely to make conscious purchase
decisions based on an objective assessment of the products (Kapeller, Schütz
and Steinerberger, 2013). This aspect of the consumer is partial. In reality,
there are many influencers of consumer decisions that cannot be described as
rational. For instance, when consumers are influenced by their peers to
purchase a product, such decisions are rarely based on a rational assessment of
the products and their functionalities. Nevertheless, they are important
factors that business strategists should understand in order to implement
effective marketing strategies.
Some of the factors that drive consumer
purchasing decisions are product characteristics, the brand associated with the
product, the price, availability, and peer pressure (Klepacki, 2010). The
degree to which different markets are affected by each element varies. This
means that studies need to be tailored to specific markets to ensure that the
unique characteristics of the consumers studied are established and factored in
the business strategy. Studies conducted in many developed countries indicate
that the consumption of energy drinks has little to do with actual engagement
in physical activity (McGuinness and Fogger, 2011; Flotta et al, 2014).
Instead, the brand image that associates the product with thrill and physical
performance tends to be the main driver of consumption in such markets. This
assumption is justified by the finding that few people actually conduct
physical experiments to ascertain that energy drinks boost their performance.
Nevertheless, the ability of the energy drinks to boost metabolism and mental
awareness is a fact that has been endorsed by most scientific studies (Miller, 2008;
Nordt et al, 2012). The combination of alcoholic drinks with energy drinks is
also a growing trend among young consumers of energy drinks. This is in line
with the need to experience thrill as well as fit into a group.
In addition to understanding the
influencing factors, it organisations need to understand unique media
consumption trends (Robertson, 2013). This is an important ingredient for
understanding how an organisation can market its products effectively in the
market. Trends such as the emergence of the social media as an important
platform for communication are expected to be highly relevant to the Chinese
consumers (Sherwood, 2010). The aim of this study is to establish the
characteristics of the young consumers in China and factors that influence
their purchase intention for energy drinks.
1.1.1
Energy
drinks in China
China is an important market and is
characterised by a large population and rapidly growing disposable incomes
(Hennessey, 2013). This is expected to drive demand for energy drinks. It is
estimated that over 54% of the urban population will comprise of the upper
middle income level with earnings of 106,000 to 229,000RMB annually (Hennessey,
2013). Brands such as Red Bull, Pocari Sweat and Jianlibao are among the
leading energy drinks in China (Euromonitor International, 2014). Red Bull is
the clear favourite with a command of 40% of the market (Euromonitor
International, 2014). The consumers of energy drinks are mainly the youthful
populations in the country’s urban centres. Energy drinks companies rely on
established retailers and supermarket chains to distribute their products. The
products are therefore easily accessible to the consumers. The marketing
approaches by leading energy drinks brands is the same as that embraced worldwide
where energy drinks are associated with achievement and thrills(Reuters, 2013).
Sponsorship of sporting events is a major element in marketing for the energy
drinks and the result is a strong association between the brands and the
youthful populations.
In spite of growing demand, it is
projected that the energy drinks’ sector will become more competitive in
future. Many of the world’s manufacturers of energy drinks are moving into
China hence likely to increase the level of competition in the market (Euromonitor
International, 2014). This is in addition to soft drinks’ manufacturers seeking
to diversify into this sector to tap into the growing demand. With the
projected increase in competition, it is necessary for organisations to
understand the market preferences. Understanding factors driving consumer
purchase decisions is necessary for competitive strategies to be designed and
implemented. This is the focus of this study.
1.2 Statement of the problem
The fit between organisational
strategies and market preferences is the key to success (Stasio, Curry, Wagener
and Glassman, 2011). Organisations should invest in marketing research to
ensure that businesses strategies conform to unique market preferences in the
targeted markets. The Chinese market has been cited as one of the markets that
are distinctly different from Western markets. In fact, many companies have
failed in the Chinese market due to inaccuracy in understanding unique aspects
of the market. This establishes the rationale for market based research. The
perspectives of consumers of energy drinks in China ought to be established.
This is to facilitate evaluation of the strategic fit between strategies
employed in the market. It is also to provide a guidance on which marketing
strategies are likely to be effective in delivering a competitive edge for the
organisation.
1.3 Objectives of the study
This study seeks to establish the
factors that influence consumer purchase decision among users of energy drinks
in China. This aim can be broken down into the following specific objectives:
- To
establish the factors that influence the purchase intention for energy
drinks’ among young consumers in China
- To
examine how the influencing factors affect the purchase intentions of the
consumers
- To
determine the product or brand preferences that would be most influential
in affecting consumption decisions for energy drinks
- To
establish the level of effectiveness in marketing energy drinks
The corresponding
research questions are as follows:
- What
factors influence the purchase intention for energy drinks in China?
- In
which ways does the influencing factors impact purchase intentions?
- What
brand attributes influence consumption decisions of energy drinks the
most?
- How
effective are the marketing initiatives implemented by energy drink brands
in China?
1.4 Justification for the study
The factors that influence purchase
intent have been studied extensively in many previous studies. These studies
have largely been based on the developed markets which form the core market for
most of the energy drinks companies (Alford, Hamilton-morris and Verster,
2012). The interest in developing markets such as China makes it important to
deepen the understanding that brands have about certain markets. Customer
preferences and factors that influence purchase decision making are part of the
market characteristics that business managers should seek to understand.
This study seeks to seal the knowledge
gap that exists on factors influencing purchase decision making among consumers
of energy drinks in China. There is absence of comprehensive studies on
consumer purchasing behaviour in relation to energy drinks. The study is
expected to be of immense value to business strategists who can use the
understanding gained to create and implement effective marketing strategies.
This research provides the benefit of comprehensiveness in covering factors
influencing consumer purchasing decisions. It also provides the benefit of
currency where the findings are based on perceptions as they currently are in
the market.
1.5 Assumptions and limitations
The main assumption made is that there
are no significant differences between the consumers of Red Bull and the
general consumers of energy drinks in the market. This assumption is based on
past studies which have observed that brand loyalty tends to be very low among
consumers of energy drinks in most markets (Woolsey, 2010; Sherwood, 2010;
Musaiger and Zagzoog, 2014). This means that the consumers will tend to sample
other brands while making frequent purchases on their preferred brands. The
significance of this assumption is that it makes the targeting process much
easier as only consumers of Red Bull will be factored in the research.
The main limitation in this study was
the scope. It requires an intensive review of consumers across the market where
comparisons would be made among consumers of different energy drinks. This
needed a qualitative approach where complex emotions that influence purchase
decision making can be expressed. However, a comprehensive qualitative study
involving an acceptable sample size would have involved more resources and time
than was available. The quantitative design used is the next best alternative
whose design was a concerted effort to ensure that as many factors as possible
could be expressed during the study.
CHAPTER TWO: LITERATURE REVIEW
This chapter seeks to provide a
theoretical foundation for the study. It focuses on the consumer and how
purchasing decisions are made. It also highlights the experiences of energy
drinks companies and consumption patterns around the world. These provide a
basis for understanding the Chinese consumption drivers of energy drinks and
for identification of uniqueness in the consumption habits of the Chinese
consumer.
2.1 Theoretical framework
The theories and models relevant to this
research are the purchase decision making model and the rational behaviour
theory. The decision making process is about stages that consumers go through
before making a purchase and each stage has implications for marketers on how
marketing can be projected to influence sales (Moreira, Chauvel and DaSilva,
2013). The rational choice theory discusses how consumers make purchasing
decisions and the factors that influence such decisions. It finds that even
though the applicability of the rational model may be restricted, it is still
useful in informing organisations on production and marketing strategies to be
embraced (James, 2012). These theories are discussed in the sections below:
2.1.1 Purchase decision making
process
Understanding of the purchase decision
making process is very important in understanding the consumer psychology,
factors that drive consumption choices, and how to organisations can capitalise
on marketing opportunities for effectiveness (Moreira, Chauvel and DaSilva,
2013). The typical purchase decision making process has five stages which
include: problem or need recognition, information search, alternatives
evaluation, purchase decision, post purchase evaluation. Each of these
processes has a significant impact on the strategies that the marketers ought
to implement for success. Even though the processes are clearly defined in
terms of their roles and process, the consumers may at times go through the
processes within very short spans of time (Moreira, Chauvel and DaSilva, 2013).
The process and the implications of each stage are explained below.
Need recognition is the first stage in
the consumption process. At the need recognition stage, the consumer becomes
aware of the need to satisfy a certain need (Comegys, Hannula and Váisánen,
2009). Marketers have to contend with either waiting to satisfy the needs of
the customers who’ve already recognised the needs or seek to induce such needs
(Essoussi and Mehdi, 2009). Needs are induced through marketing of products in
a manner that makes the consumer more aware of the needs they have and
therefore initiate the purchase decision making process. The rationale for this
is that the consumer will generally be a latent player in the process until the
point they realise that there is a need that they’d want to have satisfied.
After the need recognition, consumers go
into a stage where they search for information about products and services that
can satisfy those needs (Livette, 2007). The information search process follows
a hierarchy where internal sources are exhausted before external sources are
engaged. The internal sources mainly comprise the memory of the consumer where
they draw from past experiences on consumption or draw from branding and
advertisements that they’d readily remember (Liotta et al, 2012). In the
external information search, consumers actively look for product information
from friends, relatives, and in other media such as the internet in order to
identify products and services that would satisfy those needs (Martin and
Morich 2011).
In the third stage, alternatives are
evaluated. This evaluation is often done hand in hand with the information
search process, with consumers often making a purchase as soon as they identify
what they are looking for (Comegys, Hannula and Váisánen, 2009). It is only in
complex purchase decisions such as during group purchases that information
search is distinct from the alternatives’ evaluation process. The evaluation
compares the product features to the needs identified and the effectiveness
with which such needs can be met. For the energy drinks, factors such as brand
image, usage among peers, and price are among the most important considerations
taken. The influence of peers and family comes in at this point where the
customers look for guidance before settling on the best alternative (Comegys,
Hannula and Váisánen, 2009).
After the evaluation, the purchase
decision is made. Where positive, the product is purchased, and where positive,
the product is rejected (Cubillo, Sánche and Cerviño, 2006). In the final
stage, the post purchase cycle begins where the consumers evaluate their
decision, often feeling that they’d be better off if they had purchased a
different product. Brands at this stage focus on making consumers feel good
about using their products to reduce the purchase dissonance and encourage
future purchases from the same customer (Essoussi and Mehdi, 2009). Where there
is satisfaction, the consumer is able to make repeat purchases with the
information search being concluded at the internal stage and the process of
evaluating alternatives already having a predetermined end.
2.1.2 Perspectives on the Rational
Behaviour Theory
Consumers are believed to make rational
choices. According to the rational behaviour model, the consumer objectives
assesses their needs, carefully evaluates alternatives for consumption, and
makes a decision based on the ability of the products to satisfy the needs
identified (James, 2012). This model envisions the decision making process as a
straight one where the consumer recognises their needs, lists their
expectations of the products to be purchased, gather information on all the
products available in the market, and make an informed choice based on which
products are expected to provide the greatest utility.
However, studies indicate that most
consumer decisions are unconscious and often having little to do with need
identification or consideration of the capacity of the products to satisfy those
needs (Martin and Morich, 2011). These unconscious decisions are based on
factors such as behaviour mimicry, non-conscious goal pursuit, beliefs, and
stereotype activation. While it is important to acknowledge these elements of
unconscious behaviour, marketers are expected to presume that the average
consumer is rational. This assumption promotes effectiveness in marketing.
Behaviour mimicry is about people
imitating each other. Human beings are social in nature and will tend to mimic
each other. This breeds an atmosphere were common trends are easily established
in consumption. Martin and Morich (2011) give an example of the influence of
behaviour mimicry by drawing from ice cream eating habits where people tended
to eat larger pieces of ice cream if people they are with were observed to also
purchase larger pieces. Marketers exploit this part of the human behaviour by
making offers at specific intervals. This is with the expectation that once a
few people have been attracted through the offers, behaviour mimicry takes
effect and more consumers use the products (Spiegler, 2011). It would also
appear to be the rationale used in sports sponsorship as is common in sporting
events. Under normal circumstances, sporting events are characterised by
exclusive rights in the sale of products. The persons attending the events
therefore consume the products in line with the behaviour mimicry trend hence
the events sponsorship acts as a good platform for introducing attendants to
products and inspire future purchases (Kapeller, Schütz and Steinerberger,
2013). Behaviour mimicry also plays a role in the use of celebrities who act as
brand ambassadors. This is done with the expectation that customers who regard
such celebrities highly will consciously or unconsciously opt to use the
products.
Trait and stereotype activation refers
to the tendency of products and brands to be associated with certain groups
within the society (Martin and Morich, 2011). This is one of the most common
approaches to branding where brands seek to be associated strongly with certain
segments of the market. Marketing communications are therefore designed
strategically to reflect the communication approach and lifestyle of the groups
being targeted. In successful stereotyping, brands become the emblems of the
groups targeted hence motivating consumers to purchase the products as a way of
identifying with the defined group (Spiegler, 2011). This brings to the fore
the question of consumption as a tool for self-expression where consumers seek
to declare their identity and association with certain classes or sections of
the society. By creating a strong connection with events, consumers are
unconsciously influenced to purchase the products while consciously defending
their consumption choices using the rational choice models (Kapeller, Schütz
and Steinerberger, 2013). A good example is the approach by many energy drinks
manufacturers who capitalise on their strong association with athletics and
sports (Musaiger and Zagzoog, 2014). This association makes them very
attractive to the youthful population, especially those interested in
identifying with physical fitness and excellence in sports, exciting strenuous
events, and other competitions.
The unconscious motivators discussed
above are not in conflict with the theory of rational choice. They affirm the
understanding that there will always be cognitive bias in understanding their
needs and how to satisfy such needs (Vida and Reardon 2008). Uncertainty
avoidance becomes a major ingredient in the process where consumers would tend
to rely on proven experiences. This makes customer reviews very influential in
the marketing process with marketers often encouraging existing customers to
make referrals. In the food industry, encouraging referrals has often taken the
form of referees getting a discount or even free meals (Abaidoo, 2010). In
other cases, companies simply invest in customer loyalty programs with the
expectation that loyal customers will provide referrals that will play an
important role in driving future demand.
Kapeller, Schütz and Steinerberger
(2013) describe the existence of rational consumer choice as impossible. They
outlined the conditions for rational choice to exist as completeness,
ordinality, consistency, and optimisation. Completeness refers to the customer
being informed of all possible alternatives. It presumes the existence of a
very knowledgeable customer with adequate information of all products in the
market. Ordinality is about the customer being able to rank the alternatives in
order to establish which ones are better, and this needs to be backed by
consistency in terms of criteria and motivation for ranking (Kapeller, Schütz
and Steinerberger, 2013). The interference of subconscious processes in ranking
is bound to render the choices made irrational. To optimise is to ensure that
the choices made are the best in terms of utility expected from the products.
These conditions may be difficult to fulfil in light of the existence of
complex and multidimensional influencers of consumer behaviour.
In a study based in Europe, Vida and
Reardon (2008) found that rational considerations were among the lowest drivers
of consumption decisions. The customers tended to emphasise more on emotions
such as patriotism and consumer ethnocentricism instead of rational choice
based on the product quality and the tangible benefits that they are likely to
get from consuming such products. The rational model is, however, not to be
ignored. Product tangible attributes such as price still play an important role
in influencing consumer choices. This was proved by Abaidoo (2010) who
conducted a study to establish the readiness of consumers to use green energy.
Despite the good image associated with green energy, consumers tended to opt
for fossil fuel energy due to the fact that going green would entail them
spending more. This is a demonstration of the fact that rational choice still
exists and that marketers would be unwise to ignore it completely.
Need recognition is one of the main
drivers for consumption where the consumer recognises the existence of a need
and sets out to have it satisfied (Naimzada and Tramontana, 2010). Rational
choice therefore plays an important role when it comes to the initiation of the
information search process and the listing of alternatives. This implies that
even though other factors may come into play in influencing the final decision
made, the underlying goal is to ensure that the needs recognised can be
satisfied by consuming the products to be bought (Kapeller, Schütz and
Steinerberger, 2013). This is why companies invest in research and development
with the focus on ensuring that product quality and utility is high. This is
the basic minimum that customers would expect. This means that organisations
would be best placed if they embraced the rational behaviour model in product
development while acknowledging the subconscious influencers in designing their
marketing and branding campaigns.
2.2 Overview of energy drinks
Red Bull, one of the world’s leading
energy drink brands is associated with the slogan “Red Bull gives you wings”
(Miller, 2008). Red Bull, like other energy drink brands has been consistent in
linking itself to active lifestyles featuring extreme sports and good
performance among athletes. In the USA, Red Bull is said to be very popular in
the market and a reflection of the trends in the energy drinks market where it
is recorded to have grown by 400% in the period between 2003 and 2007 (Howard
and Marczinski, 2010). Other main manufacturers of energy drinks include
Monster, Rockstar and Full Throttle. Energy drinks are designed to meet the
energy needs of consumers during and after physical exercise. While in
exercise, energy drinks hasten the absorption rates and boost performance while
after exercise, they help with quick body recovery. Additional contents in
energy drinks include taurine, caffeine, vitamins and sugars which contribute
to enhanced alertness, rehydration and restoration of electrolytes.
Energy drink brands bank on a strong
association with sports and athletic events. These events are normally
characterised by thrill and the desire to achieve more (Yang et al, 2006). For
the athletes, the energy drinks boost concentration, performance and recovery
after the exercises. For the spectators, consuming the energy drinks provide a
platform through which the consumers can identify with their favourite athletes
and sportspersons involved in the events. Sports marketing works effectively
with fans tending to seek ways with which they can identify with their
favourite athletes or teams (Viedma et al, 2009). This is evident in the trend
by supporters of teams to wear uniforms associated with their favourite teams
and athletes. Sports can be a unifying force for youths across cultures and
identifying with it provides brands with an invaluable opportunity to create a
strong relationship with the target market.
Red
Bull leads the way in sponsoring sporting events and owning teams such as the
Red Bulls soccer team in New York, Formula One racing teams, and several soccer
and ice hockey teams in Australian (Miller, 2008). A study conducted on Red
Bull indicates that the drinks have an impact on improving the reaction time,
concentration, and short term memory (Miller, 2008). These findings are
reiterated by Stacio, Curry, Wegener, and Glassman (2011) who cite the positive
impact of the drinks as improved alertness, visual vigilance, reduction of
fatigue and shortening of reaction time. However, these advantages are only
experienced by occasional consumers of energy drinks with habitual consumption
known to moderate and even eliminate the effects. A study conducted in Ontario
Canada also confirmed the benefits of energy drinks as discussed above
(Hamilton, Boak, Ilie and Mann, 2013). There’s therefore a general consensus on
the benefit of energy drinks in boosting body energy and promoting
concentration.
An additional benefit is weight loss
capabilities Hoffman (2010) which are associated with the capacity of energy
drinks to aid in the breaking down of body fats. These were associated with
some of the ingredients in Red Bull such as taurine and caffeine. Parallel
studies have however disputed the hyped impact of energy drinks on performance
in physical exercises. Hoffman (2010) describes parallel studies have often
indicated that the impact of energy drinks on physical performance was only
psychological. To prove this point, athletes would be asked to rate their
performance after exercise where only some were exposed to energy drinks prior
to the exercise. Those who had consumed the energy drinks would rate their
performance better than those who hadn’t even though independent observations
revealed no significant differences between the two groups. The process was
repeated several times to eliminate the influence of bias. This contradiction
of the dominant narrative brings to the fore the lack of scientific research to
verify the impact of energy drinks on the physical performance of consumers
(Sünram-lea et al, 2012). Most studies base their projections of the impact of
energy drinks on the body based on the content of the ingredients with caffeine
being acknowledged as one of the most famous and effective stimulants in the
world.
Energy drinks are therefore commonly
consumed by people involved in physical activities (Sanaei-Zadeh, 2013). This
is done most commonly before or shortly after engaging in physical exercise.
The timing is strategic in that the consumers tend to consume them for energy
giving purposes. As has been described above, energy drinks can also be
consumed as a source of identity and this is common among peers attending
common functions or events. Having a sport-related identity is different from
being an athlete (Dikici et al, 2013). A person who identifies with a
sport-related image would tend to consume the energy drinks even when they have
no intention to engage in physical exercise. This brings out the property of
sports as a personality which is replicated as the brand image of many of the
leading energy drink brands. A sports personality is linked with the tendency
to stretch the body to achieve the best results possible (Sanaei-Zadeh, 2013).
It is also associated with risk tolerance where one is willing to risk injury
and even fatalities in order to achieve what they desire. A sports personality
is about stretching to know how much potential a person has; and this is very
attractive to the youthful generations who are mostly still in the process of
self-discovery.
The consumption of energy drinks has
been observed to take a new trend where they are increasingly being consumed
with alcohol (Peacock, Bruno and Martin, 2013). This is becoming very common in
nightclubs where the consumers seek to continue taking alcohol without being
drunk. Drunkenness is associated with temporary impairment and slow responses.
It also causes memory problems. Energy drinks on the other hand increase
alertness, concentration, and short term memory (Jones, 2011). The two drinks
are therefore mixed with the expectation that the consumers will be able to
consume alcohol while retaining their alertness, response rates and memory. The
energy drinks are therefore believed to enable the consumer take more alcohol
and still be able to function normally. In real sense, this has been criticised
as highly risky with analysts warning that consistent consumption of energy
drinks reduces the impact that it is projected to have on the body (Dikici et
al, 2013; Alford, Hamilton-morris and Verster, 2012). The users of energy
drinks blended with alcohol are therefore likely to be under the false
impression that drunkenness has not affected their reflexes and put their lives
in danger. Arguably, this risk taking behaviour is an attribute of
sport-related identity which energy drinks brands work hard to project.
Sport-related identity is one that can
be described using terms such as youthfulness, and risk taking. This informs
the tendency of energy drinks to sponsor extreme sports that are associated
with thrill and remarkable strain. Some of the negative attributes of this
risk-taking attribute are sexual risk taking, interpersonal violence, and
tolerance for excessive drinking (Miller, 2008). This finding is similar to
that by Howard and Marczinski (2010) who established a strong connection
between the frequency of intake of energy drinks and the prevalence of risky
behaviour. These are attributes associated with the youthful populations who
are the main source of demand for energy drinks. Miller (2008) confirms an association between
risk tolerance and energy drinks consumption. Jones (2011) investigates the
consumption trends of consumers who combine alcohol and energy drinks. She
points out that this consumption trend is hazardous as consumers may be under
the false impression that they are sufficiently sober only to put themselves in
a situation they may be unable to control. This demonstrates the connection
between energy drinks consumption and riskiness.
In academic situations, students are
believed to consume energy drinks to improve on their concentration levels,
especially when it comes to delaying sleep and studying for long hours (Stacio,
Curry, Wegener, and Glassman, 2011). Studies indicate that students do not
decrease their consumption of energy drinks during exam seasons and this is
attributed to the fact that when they are not taking it to experience thrill
and drink alcohol, they will consume it to enable them study long into the
night (Stacio, Curry, Wegener, and Glassman, 2011). The demand for energy
drinks is therefore very high, especially among college students. This has
often led to the growth of sleep disorders among the consumers of such drinks. The
rationale for consuming the drinks is explained in greater detail in section
2.3 below.
2.3 Factors driving consumer demand
for energy drinks
In a study based on 1061 students in
Saudi Arabia, Musaiger and Zagzoog (2014) found the factors that drive consumption
of energy drinks as follows: taste and flavour, need to increase body energy,
body building needs, imitation of peers and friends, and for purposes of sampling
or adventurous consumption. This finding negates earlier studies which termed
rational choice as an impossibility with the influencers of consumption being
mainly based on the product tangible attributes of the energy drinks consumed.
Nevertheless, the influence of the brand image and referrals was evident with
the attributes such as taste and energy-giving properties being attributed
mainly to shared perceptions between the consumers. The study also found that
advertisements were the main source of product information followed by peers
(Musaiger and Zagzoog, 2014). This reinforces the growing importance of the
social media with many peers being those who are connected through the social
media networks.
Taste is a product-tangible attribute
that is expected to be unique and appealing to the customers (Attila and Çakir,
2011). In most cases, energy drink manufacturers create tastes which are
designed to be unique. This is done to make the customers attached to the
products, especially when they find the taste appealing (Goldfarb, Tellier and
Thanassoulis, 2014; Attila and Çakir, 2011). Regular consumers of a product
ought to be able to identify the taste and brands tend to conduct blind taste
tests to identify the extent to which their products can be identified based on
taste alone. Pepsi is one of the companies that have been known to score highly
on blind taste tests when compared to its main rival Coca Cola (Goldfarb,
Tellier and Thanassoulis, 2014). This is an important attribute that gives
Pepsi grounds with which it can challenge Coca Cola’s market leadership. Many
energy drinks have been described as having a weird taste by first-time
consumers. They are, however, unique and consumers state that they find the
energy drinks tastier with each subsequent intake. On the extent to which taste
influence consumption decisions, findings are that taste has a little impact as
customers go for other attributes such as peer pressure and the perception of
the brand.
The need to increase body energy is one
of the most common reasons given by consumers of energy drinks (Robertson,
2013). In consistency with studies that endorse energy drinks as capable of
increasing body energy or hastening recovery after physical exercise, consumers
tend to believe in these benefits of energy drinks. This is evident in random
tests that have often shown that athletes believe that they have performed
better when they’ve taken energy drinks than when they haven’t. These findings
are consistent despite the presence of contrary evidence based on objective
observations on the performance of the athletes (Chiou, Wu and Lee, 2013). This
image is reinforced by the strong association that companies have created
between them and risky/strenuous sporting events such as extreme sports and thrilling
events such as motor racing events. Closely related to the need to enhance body
energy is the need to increase alertness and avoid falling asleep. This is a
common need among consumers in night clubs and students who tend to prefer
studying late into the evenings.
The youthful population are the main
consumers of energy drinks. These are sections of the market that are known to
be risk takers and often ready to try out new products (Torpy, 2013). It’s
therefore not surprising that the need for adventure forms one of the
significant reasons for consuming energy drinks. Curiosity is sparked by
several factors including marketing and branding approaches used by energy
drink brands. The energy drinks are advertised as having the potential to
promote super performance in physical exercises (Miller, 2008; Lara et al, 2014).
In some cases, successful athletes are chosen as brand ambassadors and a
perception created that they owe their success to the consumption of such
drinks. This raises curiosity with a large number of customers seeking to prove
whether the views are true.
While the adventurous nature of the
youth may be useful in getting them to try out energy drinks, it may also be a
source of a problem (Hoffman, 2010; Avci, Sarikaya and Büyükcam, 2013). The
youthful population is adventurous and often ready and willing to try out new
products. This means that they are likely to be bored with a brand while they
seek to experiment and find out whether other products can provide the same
benefits that they seek from a product. Brand switching is also quite common
where brands are almost identical in terms of the brand promise. Most of the
brands selling energy drinks promise thrill, energy and longevity. They are
characterised by flashy marketing campaigns and attractive packaging which
appeal to the young people (Sherwood, 2010). This means that in the absence of
switching costs among energy drinks consumers, the risk of losing customers is
perpetually high. Brands seek to guard against this risk by investing in
segment based branding where groups identify strongly with a brand. This keeps
the customers loyal to the brand for as long as they also identify strongly
with the groups or lifestyles projected. It informs the significant investment
that brands have on sports and related events. It also informs the emphasis on
specific groupings within the youthful population segment seeking to tap into
the significant influence of peers in shaping consumption.
Peer influence is directly linked to the
need for consumers to have a sense of belonging. Peers have an immense
influence on each other, especially where members of the specific groups start
to consume certain products as a mark of identity (Gretebeck, Kimerlee and
Titelbach, 2002; Trapp et al, 2014). Peer groups tend to be vulnerable to group
think where a few dominant members influence the group by setting a trend on
consumption and later having such trends endorsed as the acceptable practice
within the groups. Peer influence impacts habits, lifestyles, consumption, and
even general behaviour. The reason why energy drinks are very popular in
colleges and among the young people is that young people have strong bonds
between friends and peer groups. This reason is connected to the perception
that consumption of products is not just about utility: it is also about
identity (Gretebeck, Kimerlee and Titelbach, 2002). Consumers purchase products
and services as a sense of identity, and in many cases, it is to conform to the
norms established within peer groups and societal classes that they are linked
to. Peer groups tend to be less volatile than individuals. This is why a strong
affiliation between brands and groups of consumers tend to yield higher levels
of brand loyalty.
Some of the customers of energy drinks
are concerned about the safety of energy drinks as discussed by Cheng, Hsu and
Cheng (2013). These safety needs are related to the ingredients of most energy
drinks. The basic ingredients of the sports drinks include salt, glucose,
electrolytes, potassium, calcium, magnesium and sodium (Cheng, Hsu and Cheng,
2013; Flotta, et al, 2014). These ingredients are very easy for the body to
absorb and this makes them quick sources of energy during physical activity. McGuinness
and Fogger (2011) describe the fact that the legal loopholes allow energy
drinks to contain higher levels of caffeine than other foods. For instance, the
US regulations for soft drinks is that caffeine should not exceed 65mg per
12-ounce. Energy drinks are, however, able to have higher caffeine
concentrations due to its classification as a food supplement with an 8-ounce
can of Red Bull containing 80mg of caffeine (McGuinness and Fogger, 2011; Bell,
2002). Another key ingredient in energy drinks is guarana, an element contained
in a South American plant which is commonly known to aid with weight loss. When
taken in excess, these elements can be harmful to health. In spite of this
acknowledgement, consumers continue to demand for this product, an occurrence
associated with the risk taking nature of most of the youthful consumers.
The need to boost masculinity levels is
also a common reason for consumption of energy drinks. Chiou, Wu and Lee (2013)
conducted a study to determine the level of association between energy drinks
and the level of masculinity. This association was found to be positive with
customers tending to consume more energy drinks where they feel that their
level of masculinity is threatened. In the figure below, Chiou, Wu and Lee
(2013) demonstrate the association between masculinity and energy drink
consumption hence bringing out the fact that consumers tend to use energy
drinks when they feel they need to affirm their gender identity.
An emerging trend in the consumption of
energy drinks is the mixture of energy drinks with alcohol as established by
Peacock, Bruno and Martin (2013). The main motivator was the need to feel more
energetic with the second most popular motive being the attractiveness of the
taste when alcohol and energy drinks are put together. Other motives included
the ability to be able to drink more with a few others stating that the
combination was settled on improve their moods (Marczinski et al, 2012;
Jeffers, Vatalaro and Benotsch, 2014). The behaviour mimicry trend was also
evident in the findings where students stated that they tended to consume the
alcoholic drinks because their friends were doing the same. The combination
between Vodka and Red Bull was found to be the most popular one among the
students sampled (Peacock, Bruno and Martin, 2013).
A strong association with brand names
that appeal to the youthful generation is also a strategy that is embraced by
many of the energy drink brands. For instance, Red Bull brings semblance to the
highly risk bull fighting sporting events characterised thrill and risk taking
(Heidemann and Urquhart, 2005; Hamilton, Boak, Ilie and Mann 2013). This image
is further reinforced by Red Bull’s association with sponsorship of extreme
sports and ownership of sporting teams in different countries. Other brand
names that can be considered strategic include Rockstar which draws semblance
to the liveliness that characterises the night club atmosphere; Redline which
draws semblance to thrill and extreme risk; and Full Throttle which draws
semblance to a person’s potential being fully unleashed (Hamilton, Boak, Ilie
and Mann, 2013; Klepacki, 2010). The resultant buzz is so valuable to the
consumers that they do not mind paying high prices for the products (McGuinness
and Fogger, 2011). Effective strategic management is also enhanced through
effective marketing.
The youthful generation are among the
most active users of the internet and the social media. This makes them easy
targets for social media marketing and viral marketing (Peacock, Bruno and
Martin 2013). This is in line with the need for organisations to monitor
changes in communication preferences. The messages have also tended to be
flashy and often accompanied by thrilling themes. School based marketing
campaigns as well as event marketing targeting events that are filled by the
youthful consumers. This is an approach that has been proven to work. As is
explained in section 2.4 below, challenges faced by the industry have not
stopped the rapid growth in the consumption of energy drinks. This is
attributed to the effective marketing campaigns that are implemented by leading
industry players.
2.4 Challenges for energy drinks
The strongest challenge to energy drinks
in different markets has been scrutiny over their impact on the state of
health. In many cases, these criticisms are said to be based on scientific
research hence a credible source of information on the impact of energy drinks
on human health. Senthilkumaran (2013) brings out this concern by linking the
consumption of energy drinks to an increase in seizures in patients. This is
linked to the make-up of body cells where energy drinks are said to have the
capacity to alter the potassium and sodium levels within the body. This could
lead to caffeine intoxication which often leads to a condition known as
hypokalemia, which could cause an abnormality in the functioning of body cells
if sustained (Senthilkumaran, 2013; Kumar, Park and Onufrak, 2014). These
findings are similar to Liotta et al’s (2012) finding which linked the
excessive consumption of energy drinks with caffeine intoxications which could
be fatal in some instances.
Goldfarb, Tellier and Thanassoulis
(2014) conducted a study aimed at establishing the impact of energy drink
consumption on cardiovascular complications. The result was a positive
correlation with excessive consumption and co-ingestion with alcoholic
substances being an aggravating factor (Goldfarb, Tellier and Thanassoulis,
2014). Mallet et al (2013) reinforces these findings by pointing out to the
danger of addiction in the consumption of energy drinks. This addiction can
lead to caffeine intoxication which has the capacity to increase the risk of
developing cardiovascular complications. McGuinness and Fogger (2011) describe
caffeine as the most popular psychoactive substance in the world. It helps in
keeping people awake even when fatigued. However, excessive consumption can be
fatal. 400mg of caffeine is safe for a healthy adult while higher amounts as
high as 1gram can be dangerous.
The dangerous impact of excessive
caffeine intake is demonstrable in an incident where a man died after consuming
3 cans of energy drink (Avci, Sarikaya and Büyükcam, 2013; Costa, Hayley and
Miller, 2014). In this incident, a 28yr old man took 3 250-ml cans of energy
drink just before a basketball match. He developed palpitation before the match
and collapsed 30 minutes after the match. This incident brought to the fore the
dangers associated with consumption of energy drinks.
Further evidence of the risk of
consuming energy drinks is published by Stacio, Curry, Wegener, and Glassman
(2011) who cite ingredients contained in energy drinks as antagonistic to the
adenosine which promotes sleep and nervous system arousal. Even though caffeine
may have a positive impact on health, excessive intake can lead to anxiety and
sleep disorder. The danger of intoxication is high as energy drinks are often
taken as social drinks where it is possible for one to take a much larger
number. This means that caffeine intoxication is more likely from energy drinks
than it would be from drinks such as coffee where the custom is to take a few
cups. Mainstream energy drinks have lower levels of caffeine than a cup of
coffee (Sherwood, 2010; Klepacki, 2010; Phan and Shah, 2014). However, the
intake of several energy drinks is more likely than the intake of cups of
coffee. Sleep quality is said to be high
when a person is able to fall asleep within a few minutes of going to bed and
sleep uninterrupted until the time they’d need to wake up. Poor sleep quality
leads to poor health and loss of long term productivity. It can also lead to
anxiety, irrational behaviour, memory lapses, and poor judgement.
In spite of these challenges to the
safety of energy drinks, the products continue being popular across the world,
especially among the young people. In a cross sectional study across Saudi
Arabia, it was established that 46% of the young people have consumed energy
drinks with 64% of them consuming the products on a daily basis (Faris, 2014).
The health based campaigns appeared to have had an impact with most of those
who did not consume energy drinks citing health concerns as their reason for
opting out of energy drinks consumption. On the level of awareness of the
components of energy drinks that may be unhealthy, only 23% knew about the
drinks containing caffeine with only 4% knowing about its taurine components.
When excessive taurine intake is combined with caffeine under physical strain,
scientists hold that it could lead to cardiovascular complications (Faris,
2014). In spite of these coordinated studies on the impact of energy drinks,
consumers still mistrust the sources of information hence ignoring advice to
halt their consumption.
Like illustrated above, a 2011 survey on
young people in Canada also confirmed a very high level of energy drinks
consumption with 49.6% of those sampled having consumed energy drinks in the
previous year (Hamilton, Boak, Ilie and Mann, 2013).
2.5 Summary and conceptual
framework
From the literature review above, some
of the influencers of consumption of energy drinks include need for enhanced
body energy, adventure, desire for thrilling experiences, uniqueness of taste,
price, accessibility of products, brand image, and peer pressure. It is based
on these metrics that the consumption attitudes among Chinese consumers of
energy drinks have been evaluated.
The influencers of the decision making
process are distinguished from the type of influence that they are likely to
have on the purchase decision. The product and brand attributes play an
important role in the evaluation of alternatives hence the reason to focus on
it separately. Marketing effectiveness is also expected to influence consumer
purchase decisions by impacting internal memory, influencing satisfaction
levels, and shaping the brand/product perceptions.
CHAPTER THREE: METHODOLOGY
This chapter discusses the methods used
to undertake the research. It discusses the philosophy, data collection
methods, and ethical considerations taken together with justification for each
of the choices made.
3.2 Research philosophy
Research philosophies dictate the
overall thinking of the researcher and attitude towards the research question
(Bryman and Bell, 2007). The three main research philosophies are realism,
constructionism, and positivism. Positivism holds that realities are all
objective and provable through statistical or scientific means while
constructionism holds that all realities are subjective and subject to personal
views and experiences (Charmaz, 2006). Realism is a combination of both
constructionism and positivism. In this study, the philosophy of choice is
constructionism. This is because the individual respondents were expected to
provide responses in line with their feelings, perceptions, preferences, and
experiences. They needed not be objective but provide responses that were based
on how they perceived energy drink brands.
3.3 Research approach
The research approach in research can
either be inductive or deductive. While the deductive approach is based on
known theories and hypothesis, the inductive approach seeks to build up a
theory or conclusion based on the information collected during research (Collis
and Hussey, 2003). The former relies on a thorough assessment of theories
related to the field of study while the latter is largely dependent on the
ability of the researcher to pick out and interpret evidence collected (Hussey
and Hussey, 2001). For this study, the research approach selected was an
inductive research. This was found to be appropriate for purposes of trying to
discover unique preferences in the consumption of energy drinks among the young
Chinese consumers.
3.4 Research strategy and design
The common
research designs in research include exploratory, explanatory, and descriptive
research. Exploratory research is designed to find information in an area that
is insufficiently researched hence little is known about it (Saunders, Lewis
and Thornhill, 2007). It is ideal for qualitative studies whose main focus is
to follow up on leads and discover any new information that is discoverable
about the topic of study. Explanatory research is ideal in research studies
that emphasise on a narrow area of study; often with the goal of explaining the
relationship between a limited numbers of variables (James and Vinnicombe,
2002). Descriptive research is ideal for making detailed analyses of the
characteristics of the population or phenomenon being studied (Saunders, Lewis
and Thornhill, 2007). It is designed to ensure that the phenomenon under study
is thoroughly understood by highlighting different aspects of it. In this
study, descriptive research was found to be appropriate as it focused on
creating an in-depth understanding of consumption habits and preferences of the
young consumers of energy drinks in China.
Research can either be based on primary
data or on secondary data. While basic literature review is paramount in both
research designs, research based on secondary data would include a thorough
empirical analysis of secondary sources while primary research would largely
concentrate on collecting fresh evidence from the field of study (James and
Vinnicombe, 2002). This research is based on primary research. The
justification for this design is based on the fact that primary research is
more reliable when it comes to collecting fresh evidence in a poorly researched
field. It is also ideal for collecting information in fields that are known to
be highly dynamic and therefore likely to render fairly recent secondary
information irrelevant (Kumar, 2005). Nonetheless, a fair amount of secondary
research has been done to inform the literature review and provide a
theoretical and practical basis for analysing the results of the primary
survey.
In terms of approach to data collection
and analysis, the research is quantitative in design. Quantitative studies are
empirical in nature and focus on exploiting statistics to explain the
relationship between the variables being studied (Saunders, Lewis and
Thornhill, 2007). These are explained further in section 3.7 below.
3.5 Target population
Relevance and knowledge about the
subject of investigation are the most appropriate measures for a good choice of
population (Kumar, 2005). In this study, the appropriate population was the
consumers of Red Bull. The expectation that their views would be relevant to
all energy drinks in China is based on the assumption that the level of brand
loyalty among the consumers is very low. The consumers of Red Bull are
therefore expected to have consumed or planning to consume other energy drinks.
They were also expected to be remarkably young, a fact that was proven through
the data collected during the primary survey.
3.6 Sample and sampling approach
The rationale for sampling is based on
the fact that complete censuses can be impractical in the sense that it is
impossible to reach all members of a population within a reasonable time
(Saunders, Lewis and Thornhill, 2007). They can also be very expensive. The
sampling on the other hand produces a limited number of respondents whose views
are expected to be reflective of the views of the entire population (Kumar,
2005). Sampling therefore makes research less costly and faster. However, it
comes with the risk of researcher bias which would in turn lead to the
generation of responses that are not reflective of the view of the population
represented. Steps to minimise researcher bias are therefore very necessary by
ensuring that the sample size is large enough and the sampling process is not
designed to exclude some consumers.
The sample size considered appropriate
for this study was initially 150 customers. This was viewed as manageable and
large enough to be reflective of the entire population. Nevertheless, the
response to the questionnaire was overwhelming with 290 responses being
received. Out of this, 262 results were analysed as they were found to be
valid. The sampling process is the means through which a researcher determines
which members of the population become actual participants in the research
(Hussey and Hussey, 2001). The sampling process can be random, judgemental,
convenience, and advanced versions of the three. In this case, the appropriate
approach was convenience sampling. In convenience sampling, the respondents
that can be accessed with ease are enlisted to take part in a research process
(Saunders, Lewis and Thornhill, 2007). This saves time and can ensure good
representation where the criteria for accessing them provide room for a variety
of respondents to be contacted.
3.7 Data collection instruments and
process
The data collection instrument is the
tool that is used to obtain information from the respondents or participants in
a research process. For primary research, the most common tools used are
interviews, questionnaires, observations, and experiments (Saunders, Lewis and
Thornhill, 2007). In this research, the questionnaires were the tools used.
Questionnaires are forms of written interviews where the respondent reads the
questions and provides answers in writing (Saunders, Lewis and Thornhill, 2007).
They are very convenient for the form of research where the researcher and the
respondent are unlikely to be together at the time the study is being
conducted. They provide the advantage of providing data in a written form which
is permanent and unlikely to result in data loss. On the other hand, they are
prone to misunderstandings are the researcher is not present to make
clarifications as may be needed from time to time. This weakness can be
remedied by engaging in a pilot study whose details are explained in section
3.8 below.
The questionnaire design can either be
open or closed/structured where the latter involves multiple choice options for
the respondents to pick the most appropriate answer (James and Vinnicombe,
2002). This design is appropriate for purposes of interpretation and analysis
where the respondents confine themselves to the options provided. While it may
make analysis easier, it can also be highly restrictive, especially where the
questionnaires are either too brief or the options provided failing to
anticipate all the relevant answers (Collis and Hussey, 2003). This risk is
reduced through a pilot study as explained in section 3.8 below.
The process in this case was as follows.
The researcher’s Weibo account, a social media platform, was used to invite
consumers of Red Bull to take part in the survey. This invitation was extended
to personal friends and visitors to Red Bull’s Weibo account handler and those
who consented were contacted directly through their personal inboxes. This
approach was found to be convenient and less costly to the researcher. However,
there were no guarantees and the response rates very low, prompting
redistribution of more questionnaires to ensure that the desired sample size of
150 is achieved.
3.8 Pilot study
A pilot study is a mock research attempt
that is done to gauge the appropriateness of the questionnaire in covering the
subject area (Charmaz, 2006). The subjects of the pilot study should therefore
be persons who are conversant with both the subject of study and the concept of
questionnaire design. In this study, a pilot study was conducted on 7
colleagues who are also frequent consumers of energy drinks. After the study,
each participant was requested to evaluate the questionnaire and the feedback
provided to enable a review of the instruments.
3.9 Validity and reliability
Validity is the extent to which a
research finding can be said to be reflective of the views of the population
and it is assured through appropriate research design (Bryman and Bell, 2007).
In this research, an evaluation of personal biases by the researcher was done
and considered carefully to ensure that it did not influence the approach to
the study or choice of respondents. Reliability reflects on the extent to which
respondents can be said to have understood the research questions (Charmaz,
2006). This means that when one question is asked in different ways, the
respondents ought to be able to provide the same or similar answers. In this
research, reliability was found to be very high. Two questions were asked: What
benefits do you attribute to energy drinks? and In view of 2.3 above, what
benefits do you seek in consuming energy drinks? for questions 2.3 and 2.4 in
the questionnaire attached in the appendices. The expectation would be that the
respondents ought to be seeking the benefits in consuming energy drinks that
conform to how they perceive such drinks, at least to a very significant
extent. When a correlation test was done on answers provided for both
questions, the Phi and Cramers index was at 0.816, signifying a very strong and
positive relationship. This was an indication for very high reliability levels.
3.10 Data analysis and presentation
Data analysis can either be qualitative
or quantitative. The latter uses statistical figures based on averages,
frequencies, and correlations to bring out the relationship between the
variables under investigation (Collis and Hussey, 2003). Quantitative analysis
was selected for this study because it is appropriate for analysing a vast
amount of information. The presentation was organised in line with the research
question alongside brief summaries to promote clarity in understanding the
content of the research.
3.11 Ethical considerations
Ethical conduct is very crucial to the
research process. The researcher ought to invest in ensuring that the study is
conducted in an acceptable manner; taking into consideration measures to
protect confidentiality, voluntary participation, anonymity, and accuracy in
referencing.
Plagiarism is unethical and it involves
presenting another writer’s work as one’s original work (Kumar, 2005). In this
research, this has been catered for through accurate referencing giving credit
to other authors as appropriate. Confidentiality relates to ensuring that the
research content is not used in a manner that can compromise the interests of
the respondents and that it is only exposed to the relevant parties (James and
Vinnicombe, 2002). The stakes tend to be higher in qualitative interviews where
interviewees are likely to provide off-the-record information during the
conversations (Bryman and Bell, 2007). Anonymity refers to the need to ensure
that the identity of respondents is protected. This is a general principle in
research that helps to avoid unnecessary bias by the audience towards the
findings of the research.
In this study, the questionnaire design
was such that the respondents would both be anonymous and unlikely to provide
information that can be of injury to their person if exposed. Nevertheless,
there was a firm commitment that the research report would only be used for
academic purposes and only be submitted to the relevant university authorities.
CHAPTER FOUR: RESULTS AND
INTERPRETATION
This chapter contains the results of the
primary research survey which was conducted on consumers of energy drinks. A
total of 262 responses were analysed as in the chapter below. For purposes of
analysing correlation; the Phi and
Cramer’s Index was used. Phi and Cramer’s index is a measure of correlation
and it is generated automatically when conducting correlation tests (Norwegian
Institute for Urban and Regional Research, 2008). It expresses the extent to
which one set of data can be said to be related to another. The measurement
helps in understanding the extent to which views vary depending on personal
characteristics of the respondents or how an opinion on one question affects
people’s opinions on another question (Warmbrod, 2001). Phi and Cramer’s index
varies from 0 to 1 where 0 signifies no relationship and 1 signifies a very
strong relationship. The variations of the indexes are as tabulated below:
Table 4.1 Phi and Cramer’s Index
Phi and Cramer’s index
|
Strength of relationship
|
± (0.1 – 0.3)
|
Weak
|
± (0.4 – 0.7)
|
Moderate
|
± (0.7+)
|
Strong
|
Adopted from: Norwegian Institute for
Urban and Regional Research, 2001; Warmbrod, 2001
The chapter is organised into
subsections that logically represent dimensions under investigation for
clarity.
4.1 Bio data
The age distribution of the sample was
strongly leaning on the younger segments of the population with 86% of the
respondents being aged 30 and below. This is as shown in the tabulation below:
Table
4.2 Age statistics
Frequency
|
Percent
|
||
Student
|
46
|
17.6
|
|
Employed
|
173
|
66.0
|
|
Unemployed
|
13
|
5.0
|
|
Entrepreneur
|
30
|
11.5
|
|
Total
|
262
|
100.0
|
|
The age distribution indicates that the
consumers of Red Bull/Energy drinks in China are very young with the products
barely having any customers above the age of 41. This is indicative of the fact
that the researcher was effective in targeting the young consumers of energy
drinks to participate in this research. This is because it is the young
consumers that are the main focus of this study.
The findings mark out
the Chinese market as slightly different from the Western markets. The
expectation was that students would form about 50% of the consumers as based on
the general energy drinks consumption trends globally (Hamilton, Boak, Ilie and
Mann, 2013). However, in the Chinese context, it is the young and employed that
form the decisive majority of 66% of the consumers of energy drinks.
The gender distribution was strongly in
favour of the females at 61.8% as compared to the males at 38.2% (Appendix 3).
This can be termed as revolutionary in a market that has traditionally been
dominated by male consumers (Euromonitor International, 2014). It alludes to
the growing economic strength of young women in the Chinese economy. As shown
in appendix 3, the majority of the consumers were holders of Bachelors’ Degrees
at 61.5%. The bio data in this section has been used to analyse correlations
with an aim of linking various demographic characteristics to the views held by
the respondents.
4.2 Factors influencing purchase
intention of energy drinks
About 53%
consumes a can in 2 weeks while 18% consumes a can a week. This means that over
71% of the market consume a can or less in a week; signifying a low consumption
rate.
When compared with age, there was a
positive but correlation between consumption and age with the Phi’s index being
at 0.322 (Appendix 3). The younger consumers tended to consume more energy
drinks than the older consumers. The correlation between consumption and
occupation was also very weak with Phi’s index being at 0.219. The weak
correlation was also observed with gender. Even though consumption was slightly
high among the males, the correlation was quite weak with the Phi’s index
0.347. From these correlations, there is no strong basis for a segmentation
strategy. Segmentation would be more realistic if there was a moderate to
strong relationship between consumption and any of the demographic
characteristics (Kapeller, Schütz and Steinerberger, 2013).
The taste was the highest factor
considered followed by perception on benefits, the brand, peer influence,
price, and availability in that order. The implication of this ranking is that
the consumers are quite rational and that they will mainly be influenced by
factors that are tangible in the products. Correlation tests for these
variables indicate that the views were quite common across the board with no
significant relationship between any of the demographic characteristics and
views given. The highest correlation was between taste and age at Phi’s index
of 0.192 with the older being more specific to taste. However, this correlation
is weak and unlikely to significantly impact business strategies for the
organisation.
The rationale for the rankings could be
interpreted in 2 ways: presence/lack of issue with the attribute, or awareness
of the importance of the attribute. In this interpretation, an attribute like
accessibility is considered. Availability can be of greater strategic
importance where the products are scarce. Its low ranking in this question
could be an indication that the distribution of the drinks is so efficient that
consumers rarely have to worry about their availability. This view is
collaborated by research findings indicating that energy drinks distribution in
China and other countries is very efficient with most of the leading retailers
being able to stock the products in their shelves (Euromonitor International,
2014).
In a follow-up to the question above
focused on the benefits that the consumers attribute to the energy drinks.
TFurther correlation tests indicate the
presence of a positive but very weak relationship with gender, age and
occupation where the Phi’s indexes for the correlations were below 0.1;
signifying a very weak relationship.
The rational nature of the Chinese
consumer is further reinforced by an understanding of the benefits that the
consumers seek from energy drinks. These were ranked as below with emphasis
being on attributes that can directly be linked to the consumption of the
products such as energy boosting and increasing mental alertness.
Young consumers are known to be quite
prone to peer-pressure and the need to fit into a certain group (McGuinness and
Fogger, 2011). However, this influence tends to be subtle. The low ranking of
peer influence shown in the table above may therefore not be an indication that
the young consumers are in any way acting independent of any peer influence. It
conforms to the theoretical view that every consumer likes to think of
themselves as rational hence are likely to cite product tangible attributes as
the main influencers even where the main motive for consumption may have
nothing to do with them (Martin and Morich, 2011). This makes it difficult to
create highly reliable results based on consumer feedback. It necessitates the
recommendation to engage in experiments to gauge how different attributes
impact consumption decisions.
On comparative basis, the correlation
between age and benefits sought was higher than that based on gender and
academic qualification. Phi’s index between the benefits sought and age was at
0.290 while that based on gender was at 0.240 with the academic qualification
one being at 0.250. In spite of these variations, the correlations can be said
to be weak and unsustainable as a basis for any segmentation strategy that the
brands could wish to engage in.
The motive for consumption of energy
drinks can be understood by examining the occasions when the drinks are
consumed.
The responses provide a strong indication that the consumers are consistent in their view
that the energy drinks have the impact of boosting physical performance. An
overwhelming majority at 174/262 consume energy drinks before, during, or just
after exercising. There was no significant correlation between the responses
provided above and any of the demographic characteristics describing the
sample.
Even though not dominant, the percentage
that consumes energy drinks while studying was significant with 57 of the
participants affirming this. This can only be attributed to the benefit of
boosting mental alertness; a property that is commonly used by students during
the exam seasons to prolong study times (Mallett, et al, 2013). This property has
also been abused by energy drinks consumers when used together with
intoxicating drugs for purposes of prolonging pleasure and delaying the
intoxication process.
The growing trend of using energy drinks
as a party drink is yet to gain popularity among the Chinese consumers as is
evident in ‘partying’ being the least common occasion where energy drinks are
used. This sets the Chinese market apart from many of the Western markets where
the culture of consuming energy drinks while indulging in parties and alcohol
drinking is on a rapid growth (Goldfarb, Tellier and Thanassoulis, 2014). This
finding is consistent with the finding on the tendency to mix alcohol with
energy drinks. Asked if they prefer to mix alcohol with energy drinks, only 12%
of the respondents made a positive affirmation. The majority appeared to prefer
using energy drinks in their pure forms.
The implication of this finding is that
partying and risky behaviour is not as popular among Chinese consumers of
energy drinks. This is different in Western countries where energy drinks
consumption is linked to risky behaviour, often culminating into abuse by
having energy drinks mixed with alcohol to slow down the drunkenness process
(Faris, 2014). From past studies, it has generally been expected that risky
behaviour would be more common among the males than it was among the females
(Faris, 2014). This thought that has been affirmed in many past studies was
also confirmed meekly in this study. About 61.8% of the sample comprised of
females while the males comprised of 38.2%. However, the respective number of
consumers mixing alcohol and energy drinks was 17 females and 15 males.
Considering the disparity in samples, a conclusion can be drawn that the habit
was relatively more common among the male consumers. Non-the-less, a
correlation study between the variables in question failed to produce a
significant relationship with a Phi’s index of 0.067 being generated. This conflict
makes it necessary for a comparative study to be conducted in future to
establish the accuracy of this finding.
The fact that peer pressure is among the
lowest factors cited is a likely indicator that the Chinese consumers are
generally independent. Nevertheless, it could also mean that they are unaware
of the subconscious strength of peer influence where a consumer is likely to
create rational arguments to support decisions they’ve made primarily due to
peer influence. For a decisive finding on this, an experiment approach would be
necessary to gauge the level of behaviour mimicry involved in energy drinks consumption.
The finding that the majority would mix alcohol with energy drinks to enable
them consume more alcohol is similar to the behaviour of energy drinks
consumers in the West. Like is the case with China, the Western consumers seek
to exploit the mental alertness properties of energy drinks to slow down the
intoxication process and enabled prolonged partying (Attila and Çakir, 2011).
4.3 The Brand
Brand loyalty is a property that helps
in gauging the extent to which a consumer will keep purchasing the same product
in future (Musaiger and Zagzoog, 2014). Brand loyalty translates into a stable
demand for products hence high levels of profitability. In this primary
research, the level of brand loyalty was ranked at 19.5%.
The implication of the findings shown
above is that the customers would tend to try out different brands most of the
time. For the organisation, the implication is that marketing efforts are
likely to bear fruits in terms of enticing the market to try new energy drink
brands that are being introduced in the market. For Red Bull, the low level of
exclusive consumption does not necessarily mean that the brand is unpopular. In
fact, only 20.6% of the consumers state that they try out other brands very
often as outlined in appendix 3 below.
Sentiments on brand loyalty were quite
common across the sample with various correlation tests indicating the presence
of very weak relationships. Nevertheless, the male consumers appeared keener to
try out other brands than their female counterparts. The correlation between
gender and the tendency to consume many brands was positive but weak as
signified by the Phi’s index of 0.258 generated.
Brands invest in marketing
communications to project the desirable image among the consumers (Subba Rao,
2010). For most energy drinks, the associated brand image tends to be that of
thrill and intense physical activity. The strength with which there is unity in
perception is an indicator on whether branding exercises have been successful
in projecting a common brand identity in the given market (Kotler, 2010). For
Red Bull, the customers associated the brand with the attributes outlined in
the figure below:
Table 4.8 Brand association with
Red Bull
Brand identity
|
Frequency
|
A sense of thrill and excitement
High energy in exercise
Fun and party
Association with peers
|
92
173
14
30
|
The highest brand identity associated
with Red Bull was related to the products’ ability to boost body energy in exercise.
The relatively high concentration of views on this is an indication that the
brand image is strong and that most consumers perceive it the same way. As is
the case with other results above, there was a very weak correlation between
the demographic characteristics and the responses provided. This means that the
slight differences observed cannot be used as a plausible basis for the
creation of a sustainable segmentation strategy.
Nevertheless, it is a different thing to
understand the brand promise and another to believe in such promise (Kotler,
2010). This distinction was brought out when the consumers were asked whether
they trusted that energy drinks help in improving their physical performance.
Only 40.5% answered that they had this belief
The implication of this finding is that
consumers tend to be aware of the fact that perception may be different from
reality. It indicates that the association of Red Bull with provision of body
energy has more to do with the branding initiatives of the company than it has
to do with the beliefs of the consumers. This interpretation has been
reinforced in the question on whether consumers had made efforts to test the
impact of the products or were aware of anyone who had conducted the test. The
result was a dismal 26.3% affirming this as tabulated in appendix 3.
As has been noted in the literature
review, there have been many studies that have pointed out the dangers of
consuming energy drinks. The studies have largely sought to discourage the
consumption of the products with their frustrations being that the danger signs
are largely ignored by the consumers (Woolsey, 2010). This study sought to find
out why the warnings tend to be ignored.
Over half of the consumers at 53.4%
stated that they were aware of some of the dangers associated with the
consumption of alcohol. While this may be the majority, it should be
appreciated that the 46.6% that were found to be unaware of the dangers is a
significant percentage. This signifies a relative low level of success among
health practitioners and anti-energy drinks activists in sensitising the
Chinese market about the dangers of consuming energy drinks. Even among those
who stated to be aware of the dangers, energy drinks consumption was still
ongoing prompting a query on why they’d ignore the health warnings.
The leading reason provided was that the
consumers only take a small amount of energy drinks while others dismissed the
danger warnings as unsubstantiated claims. Among those in the ‘others’
category, the responses varied with many alleging that the health claims were
malicious stories generated by competing products to protect their market
share. There was also a general sense of lack of understanding on the claims in
question and lack of trust that those raising the claims were being objective
with their findings. Also common were views that consumers who have consumed it
for a long time have never had a health reason to complain about the energy
drinks. The responses provided therefore indicate a relatively high level of
confidence that energy drinks are safe for consumption and that there is no
strong basis for disputing their safety for human consumption. It means that
safety concerns are not an important factor for the Chinese consumers of energy
drinks. For the brands, this is a cue to avoid gifting the health activists
with unnecessary attention and simply concentrate on highlighting the product
dimensions that the market associates with the brands.
In marketing communications, it is
crucial for the organisation to understand media consumption preferences of the
target market (Karunakaran, 2008). The first question posed in this regard was
on which advertisement mediums influence the consumers most.
Advertisements on the mass media were
cited as having the greatest influence followed by recommendation from peers.
Online advertisements had the least influence. These results were surprising
considering past studies that have placed the online platforms as one of the
communication mediums that are fastest growing in influence within China
(Euromonitor International, 2014). Nevertheless, the responses can be qualified
against the reach of the mediums in question with the mass media having the
capacity to communicate to hundreds of millions at a time.
The strong showing of event marketing is
testimony of the fact that energy drinks brands tend to capitalise on sporting
events to market their brands where many will even sponsor teams to endear
themselves to the fans of the sporting activities in concerned (Klepacki,
2010). This is the dominant approach to marketing in developed markets with
brands such as Red Bulls sponsoring teams and events across the USA and Europe
(Mallett et al, 2013). The results displayed above indicate that there is
consistency in applying a similar strategy in the Chinese market. However,
other forms of marketing have proven to be ill-informed when compared to their
level of influence on the customers.
In relation to the word-of-mouth
approach, there is a lost opportunity where consumers would be heavily
influenced by this approach to marketing while energy drinks brands tend to use
it less. Emphasis on the social media appears to be excessive as it only has a
significant influence of 9.5% when compared to other forms of marketing
communication. The results in this question indicate that there is need for
more marketing research to improve the effectiveness of the marketing
initiatives.
In general, the advertisements were
found to be fairly appealing to the consumers with 54.2% affirming this.
Marketing message design plays an
important role in determining the extent to which a marketing campaign would
influence the purchasing intention of the consumers (Kotler, 2010). The
marketing message ought to be relevant, informative, and interesting enough to
attract and sustain the attention of the target audience. With only 54.2% of
the consumers finding the advertisements interesting, it may be an indicator of
the need to invest in market research and create marketing programs that can be
more effective in driving demand for the energy drinks.
When ranked against the areas of
emphasis, the advertisements were said to emphasise most about the drinks being
a source of energy as described below:
When compared to results in section 4.3
above where the drinks are largely attributed to the boosting of body energy
during exercise, it should be concluded that the advertising and branding
campaigns have been successful. It justifies the conclusion that advertisement
and branding exercises are among the drivers of consumer purchase decisions
among energy drinks consumers in the Chinese market.
4.5 Results summary
In order of influence, the factors that
influence the purchasing intention of the customers are: taste, perception on
benefits, the brand, peers, price, and availability. The 2 most influential
factors are directly related to the tangible benefits of the products hence
bringing out the fact that the consumers are rational consumers. The
perspectives were common with correlation tests indicating the existence of
very weak relationships. This means that segmentation cannot be sustained in such
a case.
The main motive for consumption is
energy boosting as well as the improvement of mental alertness. The least
benefit cited was ‘weight loss’; implying that this may not be a major source
of concern. This was consistent with the finding that most consumers tend to
take energy drinks before, during or after physical exercise. The importance of
taste as a driver for consumption was also evident among the consumers who tend
to prefer mixing energy drinks and alcohol. When asked about their motive for
this consumption trend, taste and the need to consume more alcohol, were the
leading motives cited. Quite remarkable was the absence of safety concerns.
Even though over 54% stated that they were aware of safety concerns raised
about energy drinks, they continued to consume the products for various
reasons.
Advertising and branding were also found
to be strong influencers of purchasing decisions. This influence was manifested
through shaping brand perceptions as well as creating awareness about the products.
The use of television was found to be most effective, followed by event
marketing and word-of-mouth marketing approaches respectively. Throughout the
findings, the influence of friends and peers was consistently ranked as low.
Nevertheless, this could be explained as a possible indicator of the subtle
nature of peer influence where most people being influenced by peers are
unlikely to acknowledge the fact. The results have been discussed in greater
detail in chapter 5 below.
CHAPTER FIVE: DISCUSSION,
CONCLUSION AND RECOMMENDATIONS
5.1 Chapter introduction
In this chapter, the findings of the
primary research have been analysed in light of the theories and empirical
findings detailed in the literature review chapter of this paper. The aim is to
bring out the similarities and differences between the knowledge contained in
the secondary literature and the knowledge uncovered through this research.
5.2 Discussion of results
The factors that influence the purchase
of products and services can stem from the products and brand, the company’s
marketing communication activities, or from the consumers (Subba Rao, 2010).
The influencers of purchasing decisions for energy drinks as established
through the primary research can be said to fit into these 3 categories. The
list of factors that influence consumers were in this study listed as taste,
perception on benefits, the brand, peers, price, and availability. These
factors that are largely inherent in the products or brand can be divided into
2 classes of attributes: product tangible and product intangible attributes.
Taste and benefits of consumption are tangible attributes that the consumer can
reasonably expect to experience when consuming or after consuming the products.
The brand and association with peers are intangible attributes that would often
have little to do with how the consumer feels during and after consumption of
the products.
Emphasis on product tangible attributes
is at the heart of the rational behaviour model of the consumer (Vida and Reardon,
2008). Under this model, every consumer prefers to view themselves as perfectly
rational and always weighing consumption options carefully before making a
purchasing intention (Vida and Reardon, 2008). This sees them evaluate the
suitability of products based on the product-tangible attributes of the
products. In this case, taste and tangible benefits were ranked highest.
Further results help in understanding the nature of these benefits which were
mainly attributed to energy boost for the body during exercise and the
improvement of mental alertness. This
understanding is common across the market. Correlation tests conducted to
compare views along demographic characteristics such as age, occupation,
academic level, and gender indicated that there was a very weak relationship in
all counts. This means that the views are fairly common across the market;
hence no rationale for the pursuit of a segmentation strategy.
Notably, the majority of the consumers
had not experimented to verify the impact of the products on the body energy
levels. This means that the linking of energy drinks to boosting of body energy
was mainly a matter of perception and not out of actual experience. This brings
focus on the brand. The brand is the representation of a product, group of
products, or organisation (Karunakaran, 2008). It tends to represent an
identity that the market can identify with. This identity may or may not be
connected to the actual characteristics of the products. When quizzed on the
brand image that they have of energy drinks brands, the consumers prioritised
energy boosting attributes as well as the representation of fun and excitement.
This brand identity conforms to the global image that is associated with energy
drinks around the world where emphasis is on energy, thrill, and risk taking
(Costa, Hayley and Miller, 2014). While the non-tangible attributes appear
quite popular in the West, this study showed that the Chinese consumer appears
more focused on the tangible benefits associated with the products.
For students, energy drinks are often
used as stimulants helping to delay sleep and facilitating longer periods of
study (Kumar, Park and Onufrak, 2014). Research findings; however; are that the
ability of the energy drinks to boost mental concentration reduces with
frequency of use. This means students who use them continually tend to realise
little benefit in terms of improved mental alertness (Stasio, Curry, Wagener
and Glassman, 2011). Instead, the excessive use leads to the sleeping disorders
which can in turn adversely impact the performance of students. In China, this
appears to be a relatively small problem with the proportion of students that
take energy drinks while studying being very low. Another benefit that was
rarely insisted on by the respondents was the ability of energy drinks to
contribute to weight loss. While there may be scientific evidence to prove that
energy drinks contain elements that help with the metabolism of body fats, most
weight loss candidates are yet to embrace the drinks as their preferred
solution (Woolsey, 2010). This was found to be common to both Chinese and
Western markets.
The influence of peers was found to be
significantly low within the Chinese context with factors such as product
benefits playing the decisive role in driving purchasing decisions. Findings
based on countries such as the USA indicate that a growing trend in the
consumption patter of individuals is emphasising less on the energy boosting
properties of energy drinks (Lara et al, 2014). Instead, focus appears to be on
using the drink as a social product through which they can express identity and
belonging to the target circles (Lara et al, 2014). This has seen the product
become more of a social drink which would often be used in events such as partying
and general relaxation (Torpy, 2013). As a matter of fact, this evolving use of
energy drinks has seen them being turned into a popular party drink which is
combined with alcohol to help reduce the rate of intoxication. Taste stood out
as the most influential factor considered. This was not only in the consumption
of energy drinks but also in the decision to mix energy drinks with alcohol.
Nevertheless, the proportion of energy drinks consumers that opt to mix alcohol
and energy drinks was found to be very low. This distinguishes the Chinese
consumer of energy drinks as being less keen to engage in risky consumption
trends that have been associated with energy drinks in most developing markets.
Peer influence can be understood under
the precepts of the theory of behaviour mimicry (Peacock, Bruno and Martin,
2013). As has been described in chapter 2 above, the theory of behaviour
mimicry states that human beings are social in nature and are likely to be
influenced by the consumption behaviour of those around them (Peacock, Bruno
and Martin, 2013). This means that a person is likely to consume products if
their friends or people around them are consuming the same product. This
influence is believed to be so subtle that the person being influenced would rarely
acknowledge such influence (Trapp et al, 2014). In this study, the influence of
peers over the consumption decision of energy drinks consumers in China was
ranked as being very low. However, applying the theory of behaviour mimicry, it
is expected that such influence would grossly be understated hence an
inaccurate assessment provided by the consumers being surveyed.
Another influencer of purchasing
decisions is the marketing communication efforts by organisations.
Advertisements and branding exercises serve different purposes to the consumer
depending on where they are in the purchase decision making process (Kotler,
2010). As has been explained in chapter 2 above, consumers are faced with
different considerations at every stage of the purchase decision making
process. Organisations mostly exploit the information search process and the
pre-need recognition stages to either provide the information needed or to
furnish consumers with the information they seek (Kotler, 2010). The
effectiveness of these marketing initiatives is dependent on the ability of the
organisation to understand the consumer, media consumption preferences, and
preferences for the marketing message.
Two questions were posed to the
customers in regards to media consumption choices with the verdict being that
mass media/television ads were most influential followed by event marketing,
word-of-mouth, and online advertisement in that order. However, findings were
that energy drinks brands tended to use mass media/television ads, online ads,
word-of-mouth, and event marketing respectively. This means that online ads are
unnecessarily emphasised and unlikely to yield the results needed.
Word-of-mouth marketing is, for instance, ranked higher in terms of influence
and the organisations would be well-advised to use them more and be able to
influence consumer purchase of energy drinks among young Chinese consumers.
In summary, the study has clearly
brought out factors that ought to inform energy drinks brands on strategies
that need to be embraced for success in the market. Importantly, no basis for
recommending a segmentation strategy as views was largely well-distributed
across demographic characteristics with correlations largely revealing the
presence of positive but very weak relationships.
5.3 Conclusion
This study has sought to identify and
explain the factors that influence the purchase intention of energy drinks
consumers among young Chinese consumers. Energy drinks have in this paper been
described as beverages that are designed to help in increasing the rate of body
metabolism hence making them suitable for use before or after physical exercise
(Flotta et al, 2014). The energy drinks are known to contain elements such as
caffeine, taurine, vitamins and sugars. Collectively, these elements help in
increasing the rate of body metabolism (Mullie, Aerenhouts and Clarys, 2012).
The consumption of energy drinks is said to be very high among the youthful
populations.
This study established three broad
factors that influence purchase intentions: product tangible attributes,
product intangible attributes, and organisations’ marketing communication
efforts. The product characteristics were manifested in terms of the benefits
that the consumers would want to benefit from the products. These included the
energy boosting capabilities, improving mental sharpness, taste, price, and
availability. The brand-related attributes include the theme of thrill and
excitement as well as taking risks to make grand achievements. These as in
addition to the product tangible attributes that are directly related to the
benefits derived from the products. Company communication initiatives such as
brand awareness and advertising exercises have also been found to be
significant in influencing purchasing decisions.
In conclusion, a number of outstanding
findings were made. Firstly, Chinese consumers of energy drinks were found to
be less indulgent than their Western counterparts. The use of energy drinks
during parties was found to be much lower and the trend of mixing them with
alcohol even less prevalent. Secondly, the hyped growth of the internet as an
influential marketing communications platform was disputed with consumers
ranking online advertisements as among the least effective forms in terms of
influence on their decisions. The third observation is that is on the relative
homogeneity of views. Correlation tests revealed no significant variations
hence no rationale for a segmentation strategy. Contrary to empirical
literature and theory, the influence of peers in influencing consumption
decisions among the Chinese consumers was found to be low.
5.4 Recommendations
The main weakness in this study was its
relative weakness in relying on subtle forms of influence that often work
subconsciously. This includes factors such as peer influence that are subtle in
nature. Besides, the study was solely focused on the Chinese market and not on
comparison with a different market. In future, a comparative study is
recommended with an aim of linking differences in preferences to cultural
differences. The study would also be designed to ensure that an objective
observation is made and that subconscious sources of influence are captured and
conceptualised.
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