5-Hour Energy
Media Plan
Joey Lopez
Table of Contents
Executive Summary
1
Situation Analysis
2
S.W.O.T Analysis
4
Competitive Analysis
5
Target Audience
5
Budget/ Reach/ Frequency
6
Geography
6
Ostrow Model
7
Media Objectives /Strategies
7
Media Must Have
8
Personal Reflection
9
5-Hour Energy
5-Hour Energy
Media Plan
Executive Summary
Manoj Bhargava, 56, is founder and CEO of Living Essentials, which
produces and sells 5-Hour Energy, the leading energy shot in the United States. Mr.
Bhargava is a successful entrepreneur with extensive management, operations and
marketing experience that he applies to new business start-ups. Living Essentials is
a consumer retailer and wholesaler company located in Novi, MI. Living Essentials
had experienced tremendous success with their popular Chaser Plus
product. Living Essentials had successfully penetrated the retail market nationally
with Chaser Plus. To build on that success he was in search of a new product. 5
Hour Energy was to be the next product to market for Living Essentials.
What is 5-Hour Energy? It is a liquid energy shot that can help you feel sharp
and alert for hours. It contains a blend of B-vitamins, amino acids and nutrients.
There is zero sugar, zero herbal stimulants and four calories. Original 5-hour
Energy contains about as much caffeine as a cup of premium coffee. Extra Strength
contains about as much as 12 ounces of premium coffee, while Decaf 5-hour Energy
contains only as much caffeine as a half cup of decaffeinated coffee. 5-Hour Energy
is now well known nationally and in Canada. It fast became Living Essentials
anchor product and is found in all major retailer locations where health, lifestyle
and sporting goods products are sold as well as POS in many quick mart type
locations.
5-Hour Energy
1
Situation Analysis
Energy Drink Market:
• Already huge industry and is expected to grow at more than 10% from 2011 to
2016
• Everyone is looking for energy, either to stay awake longer or kick start their
morning
• Used heavily for mixing alcoholic drinks (Redbull and Vodka)
• Everyone is going bigger with higher levels of caffeine
• Dominantly aimed at teenagers and young adults looking who live “extreme”
lifestyles
• It is estimated that the current United States market share for Red Bull is
approximately 40%, with Monster behind at about 23%, Rockstar at 8%
• Some companies are now becoming more health cautious and making
alternatives
• Energy shots are expected to grow 98% in sales between 2011 and 2016. In
2011, the energy drinks and shots category brought in about $7 billion
combined and expecting to see an 11-12% annual increase in the combined
categories until 2016
5-Hour Energy Market:
• Avoiding the already competitive energy drink market and thinking, “smaller
is bigger”, 5-Hour Energy was the first “energy shot” to come to market. Many
competitors have attempted to duplicate the packaging, look and feel;
however, 5-Hour Energy remains the top seller in this type of energy drink
genre with about 90% market share
5-Hour Energy
• 5-Hour sales teams call on doctors, giving them coupons to pass out to older
patients. Staffers tells physicians that 5-Hour's main ingredients appear
naturally in foods and include niacin, often prescribed to lower cholesterol,
and citicoline, used to fight dementia
• $9 of every $10 spent in the energy shot category is 5-Hour Energy
• Sales surged from 35.78% to $924.448m in 52 weeks ending August 7th
(covering supermarkets, drugstores, gas stations, mass market retailors)
• Beverage Digest reported that 5-hour Energy, which overwhelmingly
dominates the energy shots category, grew about 23% in 2011 across all four
channels: c-stores, drug stores, mass and supermarkets
• Sales of brand extension 5-Hour Energy Extra Strength jumped 91.47% to
$13.626m or 1.3% of the market
• "5-hour Energy has seen huge growth in the last year. They control about 12
percent of the overall energy drink market, which is about $9 billion in sales,"Ad Age
• Just like the product itself, 5-Hour Energy’s advertising is nothing fancy. The
TV ads feature testimonials from real users. “It’s an old fashioned Procter &
Gamble message,” Sperber tells Ad Age. “Here’s the product, here’s the
features; here’s the benefits.”
• In January, 5-Hour began running full-page ads in the AARP Bulletin, which
is delivered to 22 million households. The ad shows John Ratzenberger, best
known as postman Cliff Clavin on "Cheers," holding a bicycle. "Getting older is
fine, but not having the energy to do the things I enjoy isn't."
• “America’s Hottest Brands” for 2009 - Ad Age
5-Hour Energy
3
S.W.O.T Analysis
Strengths:
• Leader in energy shot market with 90% market share
• Competitors attempting to coping their small size
• It contains a blend of B-vitamins, amino acids and nutrients. There is zero
sugar, zero herbal stimulants and four calories
• 12% market share of overall energy drink market
• Small, portable, quick to consume
• They are separated from all other refrigerated energy drinks. Does not require
refrigeration
• Variety of flavors
• Aimed at adults and not kids
• Sold on countertops of supermarkets, drugstores, gas stations, and mass
market retailors like Dick’s Sporting Goods, The Home Depot, Kroger, and
Wal-Mart
• One reason energy shots continue to resonate with an older demographic is
that they are perceived as safer than energy drinks, as well as lower in
calories, sugar and caffeine
Weakness:
Fairly new to the energy drink market
People lack knowledge of benefits
Just as much caffeine as a cup of coffee
Bad taste
Low budget ad’s
Expensive
Going against established brands in the energy drink market (Redbull,
Monster)
• Cant be combined with alcohol
•
•
•
•
•
•
•
Opportunity:
• Sponsorship with Pro NASCAR driver Clint Bowyer. NASCAR Demographic:
40% of fans are women
• Women
• Sponsorship with Pro Golfer Jim Furyk. Golf demographic is ideal: 38, male,
married, attended college, HHI 100k+
5-Hour Energy
•
•
•
•
5-Hour Energy Cycling: Professional cycling
50+ adults
Coffee drinkers
Energy drink drinkers
Threats:
•
•
•
•
•
Health concerns regarding energy drinks
Competitive energy drink market
Coffee
Water
Sports drinks
Competition
Direct:
•
•
•
•
•
Redbull
Monster
Rockstar
Full Throttle
Amp
Indirect:
•
•
•
•
Gatorade
Water companies
Soft Drinks
Coffee
Target Audience
5-Hour Energy targets a completely different group of people compared to
everyone else in the energy drink market. While other energy drink companies
are targeting teenager boys who live extreme lifestyles, 5-Hour Energy targets
working adults between the ages of 25-49 looking for more energy to fulfill their
alert-critical job positions. These busy and on the go men and women are looking
for a boost in the mornings, to get over that “2:30” feeling all workers dread, and
whenever they feel the need for some more energy. These adults are wary of
5-Hour Energy
5
energy drinks because of the high levels of sugar, caffeine, calories, and of course
of the fears of getting the ‘jitters’, or even worse ‘crashing’. For these reasons, the
older demographic believes 5-Hour Energy is a safer substitute for energy and a
more health cautious choice.
Demographic:
•
•
•
•
Adults ages 25-49
Busy, active, working professionals
On the go lifestyles
Parents
Psychographic:
• “Experiencers” - Like to try new things
• Productive to get work done
• Health cautious
Budget
• 80 Million
• National contingency: 1% = 800,000
Reach
• 70%
Frequency
• 3
Geography
•
•
Top 50 Markets
The top 50 markets were chosen because it covered all major urban cities
where majority of the working professionals would be reached.
5-Hour Energy
Media Objectives /Strategies
Objective
•
My objective is to reach 70% of American adults with a frequency of at least 3,
from the ages of 25-49. These working adults will be exposed to 5-Hour Energy
advertising 9 months out of the year using the combination of multiple media
vehicles.
Strategies
•
I used mostly a continuous ad campaign during the year but also incorporated
the pulsing method during the months I felt necessary. I also didn’t advertise
couple months to take a break from the market, only to come back with a
strong presence.
•
The months I chose to advertise were because of popular trends I found that
would fit 5-Hour Energy’s target market. These trends would include: health
and fitness, sports seasons, summer/ warm months, end of the quarter
months.
•
January – March: These first 3 months coming out of the New Year means
that people are beginning their resolutions, the most popular of course is
loosing weight and getting back into shape. Part of living a healthier lifestyle
means more exercise and becoming more cautious with what they are
consuming. This is where 5-Hour Energy comes in. Not only will they want
and need the extra energy to reach their resolution goals, but also wont have
to feel guilty consuming an energy drink like 5-Hour Energy.
•
February – March: The reason I chose these 2 months is because they are
the biggest months for sports lovers due to the Superbowl in February, and
the season opener of MLB baseball in March. As we all know, everyone waits
all year for the moment Superbowl commercials come out, which means this is
the best time of year to catch people who actually want to watch commercials
and keep up with them afterwards. I’m not saying run an ad in the Superbowl,
but better yet make that months campaign football related and relevant to the
topic so there is also a high pass along and buzz about it. This also goes for
baseball season. Adults who watch baseball are 65% men and 35% women. Of
5-Hour Energy
7
those adults, 62% of them are between the ages of 18-49. As for HHI, nearly
60% of viewers have a HHI of 75k+. I strongly feel both the NFL and MLB are
2 markets with great potential.
•
May – September: This 5-month span makes up for the spring and summer
seasons, are also known as the warm months. During these warming months
of the year, adults are more prone to be more active and get out on the
weekends. These adults have active lifestyles outside of the office but need the
energy to do so. Like the 5-Hour Energy bottle shows, a man hiking in the
mountains, they continue to be health cautious and get exercise whenever
possible. They just need that extra energy to do so.
•
March/ June/ September/ December: These 4 months represent the end
of the quarter months of the fiscal year. At the end of the month, these
working professionals are going to need that extra energy to get through these
long workdays. Many will be working overtime just to finish sales and meet
that quarter’s quota so they are going to depend on staying focused at their
work with 5-Hour Energy.
Media Must Have
•
•
•
•
TV
Radio
Internet
Print
•
TV: 5-Hour Energy’s main media vehicle is TV. Majority of my budget is going
towards commercials not only educate the audience of the benefits but also
demonstrate how easy and simple 5-Hour Energy is to consume. I plan on
running it on various networks such as morning, early news, sports,
primetime and also syndication. 5-Hour Energy has had much success with
their low budget TV ads because it’s very simple and straightforward. They
are nothing fancy because they don’t need to be, just to the point.
•
Radio: My second highly used medium would be radio. Using radio targets
the busy, working professionals on their morning drive while in traffic.
Because they are always on the go, I flooded the morning radio spots to help
influence them to pick one up as they make a stop for food, gas, or even a
coffee. When they hear how simple and easy 5-Hour Energy is to consume,
5-Hour Energy
•
•
they’ll double guess making coffee or waiting in line for one
.
Internet: Working professionals spend a lot of time on the Internet while at
their work desk. From searching the web, to browsing, 5-Hour Energy ads will
pop up in keyword searches and also be seen as banners. This way when they
are yawning in their office, they’ll grab a 5-Hour Energy on their break or at
2:30, when they need to get through that groggy feeling.
Print: Although there isn’t much spending in print, running ads in ‘General
Interest Magazines’ will capture some of the target market. Some magazines
that would run the 5-Hour Energy ads are the AARP Bulletin, which they ran
ads in last year, and also the National Inquirer Magazine.
Personal Reflection
Where to begin? When I first started this assignment I was so overwhelmed.
At first I had a difficult time just finding the budget, which is essential before you
even step foot in Media Flight Plan. However, from there everything started falling
into place. I feel the more I failed at MFP playing with the numbers, the more I
learned from my mistakes. I was able to give and take and learned how to spend my
money on good buys, instead of just wasting money on mediums that didn’t make
sense for my target market.
I also learned a lot about 5-Hour Energy, their target market, and also how
they have become so successful in the competitive energy drink market. I became a
big fan of the 5-Hour Energy brand over the course of this assignment. Everything
from their simple message, their small 2oz size, and how they positioned themselves
away from the competition and created their own niche market the energy “shot”,
all stood out to me. When I first started this assignment, energy drinks and coffee
was what kept me up, and by the end of the semester here I was throwing back
grape and berry flavored 5-Hour Energy’s. Coincidence? I think not shot.
5-Hour Energy
9