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Read the article “Meet the challenger brands taking on the soft drink giants” and answer the following questions.
Carabao adopts a “much more inclusive” marketing strategies. What segments does Carabao target? What are the advantage and disadvantages of targeting the segment/s?
If you are asked to create a perceptual map for Carabao, what product attributes would you use and where would you place Red Bull and Carabao on that map? (You can draw a sketch map if you will).
How does Carabao position itself?
Meet the challenger brands taking on the soft drink giants
Despite current health worries around sugar, new soft drink brands are determined to take on market incumbents such as Coca-Cola and Red Bull.
Soft drink brands have not had the easiest of years. In March, then Chancellor George Osborne announced plans to introduce a sugar tax, which will put a levy on all sugary drinks by the end of 2018.
Mintel figures also show that 32% of soft drink consumers say sugar concerns have prompted them to limit their intake of non-diet variants. Energy drinks appear to be doing slightly better. Value sales of energy drinks in the UK increased from £974m in 2011 to £1,2bn in 2016, but are slowing.
Nevertheless, new challengers are relentlessly entering the British market to take on the soft drink giants.
One such brand is energy drink Carabao, which launched in the UK in August. Like its main competitor Red Bull, Carabao has Thai roots. The brand recently launched an outdoor campaign to gain awareness among the British public and is putting a heavy focus on sampling in commuter hubs.
1. The brand believes it can make its mark on the UK market by adopting a “much more inclusive” marketing strategy and focusing on both sexes.
“Current energy drinks brands are losing relevancy among large numbers of consumers. High- octane sports and rock music have proved themselves successful in engaging young men, but older drinkers, particularly women, are being ignored,” John Luck, CMO at Intercarabao, tells Marketing Week.
“Our approach to our marketing, advertising, product range and our partnerships is much more inclusive compared to our competitors and as such, our consumer base is broader.” Luck believes current associations with sport or needing an instant lift do not offer a wide enough opportunity for the brand. As a result, Carabao is looking to produce products that look and taste more like “soft drinks than energy drinks” by including higher levels of carbonation and choosing more “grown-up” flavours such as green apple.
“Our consumer testing confirms this is the right strategy as we’re seeing preferences for our product among older men and women over our competitors, which is driven by Carabao’s flavour profile and higher carbonation. This is why mass sampling makes up such a large part of our ongoing plans,” says Luck.
Carabao’s marketing tries to appeal to both men and women, something the brand says sets it apart.
2. Carabao’s sponsorship strategy
Red Bull already has a successful monopoly on sponsoring extreme sports like car racing, air racing or cliff diving. This is why Carabao has been forced to take a different route, and believes targeting a sport loved by the masses is a better approach.
Current energy drinks brands are losing relevancy among large numbers of consumers. High- octane sports and rock music have proved themselves successful in engaging young men, but older drinkers, particularly women, are being ignored
It has signed a three-year sponsorship deal with Chelsea Football Club and a similar contract with Reading FC that includes home and away kit sponsorship. Earlier this month, it also announced its title sponsorship of the English Football League (EFL) Cup, to be renamed the Carabao Cup from the 2017/18 season.
“This latest deal is a real game changer allowing us into the lives of over 16 million men and women who walk through the turnstiles at EFL matches every season,” Luck explained. “Football is a fantastic platform for us because it is global and appeals to men and women of all ages, which means there’s probably a football fan or two in every household across the UK.”