COMPETITIVE ANALYSIS: DIRECT AND INDIRECT COMPETITION
Monster Energy is an example of a monopolistic competition as described in a market structure where many sellers produce similar, but slightly differentiated products. Each producer can set its price and quantity without affecting the marketplace as a whole. A central feature of monopolistic competition is that products are differentiated.
There are four main types of differentiation:
Physical product differentiation, where firms use size, design, colour, shape, performance, and features to make their products different. For example, Monster energy drink comes in a larger can than Red Bull.
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Monster Energy has many direct competitors within its industry, the top seven being (in order of market share): Red Bull, Rockstar, Amp, Nos, Full Throttle, Xyience Xenergy, and VPX Redline.
Here is a brief comparison of Monster’s three top direct competitors:
• The average size of Red Bull is 8 ounces, conveniently found in the standard 8.3oz can. The serving contains 110 calories, 27 grams of sugar, and 80mg of caffeine. Additional ingredients include taurine, glucuronolactone, and B Vitamins.
• Red Bull, which accounts for 42% of the market, is currently the main direct competitor for Monster Energy drinks.
• The standard size of a Rockstar can is 16 ounces. Per serving, Rockstar contains 140 calories, 31 grams of sugar and 80mg of caffeine. Additional ingredients include taurine, ginkgo biloba leaf extract, inositol, I-caratine, panax ginseng extract and milk thistle extract.
• Rockstar accounts for approximately 11% of the energy drink market.
Amp- Pepsi Co
• The standard size of an Amp can is 16 ounces. Per serving, Amp contains 110 calories, 28 grams of sugar and 71mg of caffeine. Additional ingredients include guarana seed extract, maltodextrin, taurine and ginseng root.
• Pepsi introduced Amp in November 2001 which accounts for 4% of the energy drink market.
*Nielsen data shows that more than 70% of energy-drink dollar share was split between two manufacturers: Red Bull GmbH and Monster Beverage Corp. (formerly Hansen Beverage Co.)
The positioning of these three competitors has similarities as they all go to great extents to reach their target market when it comes to attracting consumers to their products. Rockstar and Full Amp seem to be closely related to Monster Energy when it comes to their overall product, using price and size creating an obvious advantage. However, Red Bull has the advantage of higher pricing power for a smaller amount with a can weighing at only 8.3oz.
Being the market leader, Red Bull obviously has a large advantage and is seen as the most effective in their marketing, the most popular and dominating competitor regardless of how many other energy drinks there are available on the market. Rockstar and Amp all have growing fan bases and have grown significantly in market share, popularity and company profits from when they first started a few years back but have a long way to go to catch up to Red Bull. The least effective of these three competitors would be Amp. Rockstar and Red bull seem to have a larger following and have used their product to create a larger range...