CLIENT MANAGEMENT (COMM2384)

Lecturer: Lukas Parker

Assignment 2: Case Study Research

ABC ENERGY DRINK

(Due date: 27 August 2010)

Cao Thuy Trang –s3220744

 ABC ENERGY DRINK

Executive Summary

First established in Indonesia in 1994, ABC now is the dominant energy drink in the

Indonesian and Philippine market (Akhyari 2010). This paper aims to analyze the creative

strategies of ABC in Indonesia and give a recommendation for this brand to launch its products

in Vietnam in 2011.In the first part, there is a discussion about the positives and negatives of the

ABC PR and Advertising strategies in Indonesia. Indeed, ABC launched many appropriate

strategies dealing with the target market and two environmental factors, economic and social, in

this nation. Besides that, the contradictory message of ABC energy pack and the variety in ABC

messages are analyzed as negatives of the strategies. In the second part, the paper advices ABC

to keep the same brand name, packaging and distribution when launching its product in Vietnam.

In addition, ABC should deliberate about advertising an energy drink which has created

controversy about its caffeine and taurine ingredients in Vietnam. The Vietnamese music stars-

Tra My Idol and Noo Phuoc Thinh also are proposed as endorsers for the power energy drink.

Finally, the paper also recommends ABC sponsor the sport of skateboarding for Vietnamese

youth, for the purpose of gaining public attention and improving public relationship.
Part I. Analyze the creative strategy in Indonesia

Positives

ABC established strategies which have many positive aspects for the consumer decision

making process. The consumer decision making process has five stages, namely problem

recognition, information search, alternative evaluation, purchase decision and post-purchase

evaluation (Belch & Belch 2009). Problem recognition occurs when consumers perceive a need

and want to solve the problem (Belch & Belch 2009). There are many sources of problem

recognition, including out of stock, dissatisfaction, new needs or wants and related products

(Belch & Belch 2009). ABC solved the out of stock problem everywhere by nationwide

distribution from small roadside outlets to modern hypermarkets (Kotler, Philip, Kartajaya,

Hermawan, Huan & Hooi Den 2007). ABC not only encouraged consumers to buy it based on

physical needs, like thirst and tiredness. ABC energy sachet created dissatisfaction about the high

cost of the bottled and canned drink. Besides that, the brand aimed to meet consumers’ wants by

shaping the brand’s characters. Due to many strategies related to sport, the no-fuss energy drink

centered upon providing a young, healthy and active product (Kotler, Philip, Kartajaya,

Hermawan, Huan & Hooi Den 2007). After doing recognition problems, consumers go to the

second stage – information search, including internal and external search. If the internal search

does not provide enough information, some prefer conducting an additional external search

which is from personal sources, commercial sources, public sources and personal experience

(Belch & Belch 2009). ABC strategies revealed commercial sources by using TV commercial

during sport events in Indonesia. After the information searching process, consumers move to the

third stage – alternative evaluation, in which consumers compare features and qualities of
products and services between his/her current identified brands and others (Belch & Belch 2009).

If the purchase is a low-involvement, such as buying a soft drink or chewing gum, customers will

spend less time and deliberation for the decision, and vice versa (Schiffman & Kanuk 2007). The

ABC drink belongs to fast moving consumer goods that need to have top-of-mind brand

awareness. By launching TV commercials, promotion and publicity campaigns (Kotler, Philip,

Kartajaya, Hermawan, Huan & Hooi Den 2007), ABC energy drink successfully established

evoked set in target audiences. Next is the purchase decision stage whose the brand loyalty factor

takes important role (Belch & Belch 2009). As mentioned above, many advertising and public

relation campaigns helped ABC keep top of mind brand awareness and consumers’ loyalty.

Finally, post-purchase evaluation is the last stage for comparing product’s or service’s

performance with customers’ expectation and satisfaction (Belch & Belch 2009). With its

affordable price, ABC has been a successful brand by satisfying most target audiences as it has

promised.

The creative strategies of ABC in Indonesia appropriately deal with external environment

factors. ABC launched segmented pricing strategy which offers different product forms for

different consumers’ degrees of demand (Kolter, Armstrong, Ang, Leong, Tan & Hon-Ming

2009). ABC had energy packs for low-income drinkers and also no-fuss energy cans for middle

and high-income segments. Indonesia is the fourth most populated nation in the world with the

fast growing population, especially in urban areas (Hodgson 2007). However, the urban areas are

also leading for a high rate of unemployment and poverty (Hodgson 2007). Indonesia is still a

developing country where approximately 40 percent of the population depends heavily upon

agriculture (Lesmana 2010). The cheap energy sachet was the right track for the brand to reach

low-income consumers by reducing the high cost of bottling and canning production. In addition,
the tagline “Ini Biangnya Buat Apa Beli Botolnya” (Why buy the bottle?) delivered a direct and

simple message to the “biang” (Y-why) generation who were young, active, innovative, dynamic

and outgoing (Kotler, Philip, Kartajaya, Hermawan, Huan & Hooi Den 2007). With the

affordable price, ABC was the leading sachet energy drink with the biggest market share, more

than 50 % in 2008 (Zanbri 2008). Furthermore, the ABC strategies had a right focus on

advertising in the Indonesian market. In Indonesia, young adults and adults aged 20-54 are

important segments of consumer marketing because they make 75 % of the country’s gross

income (Hodgson 2007).

Last but not least, before the dependent Day, Indonesia’s government had pronounced 9

September - the national sport day in order to encourage “Sport for all” (‘Sports and Recreation’

1990). Since then, every year, on this day, the government holds sport events for participants

throughout the country. Therefore, sport has been considered as the ‘symbol of unity’ for

Indonesian (‘Sports and Recreation’ 1990). Sport is important in Indonesia because of the

enthusiastic participation of the people in this nation (‘Sports in Indonesia’ 2007). Throughout its

knowledge about sport in Indonesia, ABC had many suitable strategies related to sport events for

public likeability. ABC has used celebrity endorsers for the no-fuss energy drink. This energy

drink is for physically demanding jobs, thus sport athletes were appropriate endorsers. In

Indonesia, sport is popular with both participants and spectators (‘Sports in Indonesia’ 2007).

Football is the most popular sport in this country, followed by badminton, then table tennis and

traditional sports (‘Sports in Indonesia’ 2007). Therefore, Alesssandro del Piero and Christiano

Ronaldo, the football stars, created a sporty personality for the ABC brand and also create

preference among public. Besides that, ABC had promotional and publicity campaigns which

communicated to active customers by favorite activities, such as music, soccer and boxing.
These campaigns played roles in enhancing public awareness as well as maintaining public

relations.

Negatives

The prominent negative aspect of the ABC strategies was the contradictory message of

the ABC energy pack. The official tagline of ABC pack in Bahasa Indonesia “Ini Biangnya Buat

Apa Beli Botolnya” (Why buy the bottle?) and its core value about reducing the high cost of

bottles and cans unconsciously created a strong competitor for the no-fuss energy can – another

product in the same product line of the ABC pack. Furthermore, the variety of ABC messages

possibly distracted consumers. They might find it hard to remember all the messages of ABC

drinks. In order to create top-of-mind brand awareness, ABC should launch one unique message.

Part II. Recommendation for ABC launching in Vietnam in 2011

Because of its position near the equator, Vietnam has a tropical climate (‘Weather &

Climate of Vietnam’ 2010), hence the beverage production is considered as potential industry in

Vietnam (‘Thi truong nuoc giai khac con nhieu tiem nang’ 2010).

When launching ABC energy drink in Vietnam, the brand should keep its original brand

name. According to a Grey Group survey in 2007, nearly 70% of Vietnamese citizens like using

foreign products (Hanoinet 2008). Despite having many campaigns for ‘Nguoi Viet dung hang

Viet’ (Vietnamese people use Vietnamese products), most Vietnamese people believe that

foreign products will have better quality than Vietnamese ones, and are ready to spend more

money for foreign products (Tran 2009). For the foreign brand name, ABC will enhance

preference among the Vietnamese public.

 Besides that, Vietnamese culture is impacted by Chinese cultural influences (Phan 2000).

In China, the golden or yellow is the symbol of emperor, wealth and happiness (Yansen 2008).

Likewise, Vietnamese people perceive yellow as a color of power, wealth and prosperousness

(‘Y nghia cua mau sac qua thoi gian’ 2006). Therefore, the original yellow packaging of ABC

will be appropriate for Vietnamese culture. Similar to Indonesia, Vietnam is still a developing

country with a 27.5% poverty level in 2008 (Hong 2008). Consequently, the sachet energy drink

will successfully reach low-incomers in Vietnam. Also, the canned products should be used to

attract middle and high incomers. For these reasons ABC will not need to change packaging

when launching a branch in Vietnam.

In Vietnam, soft drinks is available everywhere from small stalls on the pavements and

markets to luxury coffee shops and supermarkets (Viet Bao 2007). As mentioned in the first part,

ABC drink is the fast moving consumer good, so creating intensive distribution is acquired. As a

result, this paper suggests ABC still keep the local distribution pattern for Vietnam market.

In the past, carbonated drinks were very popular in the Vietnam market; however,

recently, Vietnamese consumers have shown a trend towards un-carbonated drinks made from

fruit or tonics (TTTM News 2010). Vietnamese consumers also demand other features of soft

drinks, such as beauty, low calorie levels and the ability to cure diseases (TTTM News 2010).

Thus many no gas and healthy drink products, such as green tea, herbal tea and fruit judge have

been produced to satisfy ‘strict’ consumers (TTTM News 2010). Because of containing a large

amount of taurine and caffeine, ABC should be deliberate about advertising its products. In

order to insure consumers’ benefits, in Vietnam, the advertising for energy drink should not

mislead customers that energy drinks are the best solution for reducing stress and tiredness (Thu
Vien Phap Luat 2009). ABC is a new product in Vietnam so informative advertising about the

presence of this energy drink is essential. In addition, due to the ethical requirements of

advertising energy drinks in Vietnam, the ABC ads should avoid misleading consumers that

ABC is a tonic drink. Besides, reminder advertising is a good choice for ABC. Reminder

advertising helps to maintain customer relations and keep them thinking about the product

(Kolter, Armstrong, Ang, Leong, Tan & Hon-Ming 2009). Funny ads along with exciting sound

tracks and young and active music stars, such as Tra My Idol and Noo Phuoc Thinh, will be

effective because the target audience is Vietnamese youth. For many top hit songs, Tra My Idol

and Phuoc Thinh are quite famous in Vietnam with thousands of teenager and young adult fans

(Sao Net 2010). More importantly, they have not been endorsers for any other soft drink brands

yet. In Vietnam, music stars are more popular than national sport athletes. If ABC wants to

launch ads with sportsmen endorsers in Vietnam, the brand should choose international sport

stars instead of Vietnamese ones. However, the cost for international sport stars is very

expensive, so this paper recommends using Vietnamese music celebrities who will play sports in

the TV commercial ads. These ads will efficiently raise public awareness as well as keep the

sporty image of the brand.

Finally, a publicity and promotion campaigns are quite necessary for the new brand in

Vietnam. In Vietnam, energy drink market grew dramatically in 2008 with internal leaders, such

as Redbull and Lipovitan and local brands, such as Saigon Ice, Number One, M150, and Buffalo

(Asia Scout Network 2009). The usual marketing tactic of local brands is sponsoring Vietnamese

sports (Asia Scout Network 2009). In 2008, Number One energy drink brand successfully

sponsored the Binh Duong TV Football Cup and the first Vietnamese hiking team reaching the

top of Mount Everest (Asia Scout Network 2009). In order to distinguish ABC brand with others,
this paper suggests the sponsorship of skateboard teams in Vietnam. Although present in

Vietnam for over ten years ago, skateboarding is still considered as new a sport in Vietnam

which attracts a lot of spectators by exciting skateboarding actions (Viet Bao 2008). Most

skateboarders are teens and young adults because this sport demands players to be brave and

practice frequently. The main reason why skateboarding has not developed yet, is the lack of

skate parks and professional skating circuits (Viet Bao 2008). By building professional skating

circuits, establishing skateboard club and funding for the training, ABC will create its brand

personality of a young, sporty, and brave product. Moreover, ABC also would launch

skateboarding competitions across Vietnam to attract publicity and improve its relationship with

the public in the whole nation.

2150 words

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