NORWAY Elizabeth Erickson Allie Thrane Justine Gab Jory

NORWAY Elizabeth Erickson, Allie Thrane, Justine Gab, Jory Miller

Purpose, Overview of Points Purpose: Evaluate whether or not Norway is a viable market to pursue in considering the global expansion of Rockstar Preview: General/ Economic Overview Demographic Comparison Risk Assessment/ Energy Drink Challenges Market and Product Overview Target Market Comparisons 3 Levels of Product/ Product Adaptations Product Positioning (Price, Distribution, Promotion) Summary: Should Rockstar Enter Norway?

Norway – General Overview Constitutional Monarchy Socio-demacratic 86% Protestant Lutheran Temperate climate, colder along northern coast 8. 7% Export with United States. 5. 2% Import 100% Literacy, widely spoken English (under the age of 60) GDP: $274. 1 billion Personal income per capita: $54, 400 Positive trade balance/low foreign debt Government budget surplus of 13. 90% of GDP 1 Norwegian Krone =. 17 U. S. Dollar

Demographics Comparison United States • Population- 316, 128, 839 • Age distribution-15 to 24: 13. 9%, 25 to 54: 41. 4% • Sex distribution- 15 to 24: 1. 04 males/females, 25 to 54: 0. 99 males/females • Personal income per capita$45, 336 • Boston population- 636, 479 • Over 150 educational institutions Norway • Population- 5. 019 million • Age distribution-15 to 24: 13. 4%, . 25 to 54: 39. 4% • Sex distribution- 15 to 24: 1. 04 males/females, 25 to 54: 1. 02 males/females • Personal income per capita- $54, 400 • Oslo population- 593, 045 (12% of total population) • Over 50 schools, colleges and universities in Oslo

Risk Assessment Overall Risk: very low • stable political and macroeconomic conditions • Economic Freedom Score: 70. 9 - 32 nd freest in the 2014 Index Tariffs • low 0. 5% average tariff rate • few government barriers to international trade and investment Strengths Weaknesses Current account balance and public finances strengthened by rich energy resources Budget in deficit without oil and gas Solid Banking System Very high household debt Job market tensions alleviated by immigration Competiveness eroded by high wages

Energy Drink Challenges in Norway Norwegian Food Safety Authority (NFSA) • Adults should not ingest more than 400 mg of caffeine per day • For children: 2. 5 mg of caffeine per kilogram of body weight per day • 80 pounds = 90 mg • 160 mg of caffeine in a 16 oz can of Rockstar • Beverages containing caffeine and various combinations of other bioactive compounds such as vitamins, taurine, and glucuronolactone were preciously regarded as medicine in Norway • The Norwegian Medicines Agency overturned this provision fall of 2008 • The first license to sell an energy drink in Norway was giving in spring 2009 Marketing to Youth • Controversy of marketing to youth under the age of 18 • However this has proven to be a large consumer group of energy drinks • Must be at least 14 years old to purchase an energy drink in Norway • Market to 14 to 18 year olds and face ethical issues?

Target Market Primary Market • Demographic: 18 -24 Male • College student who parties, plays sports, and seeks social awareness through entertainment Secondary Market • Demographic: 14 -18 Male • High school students Note: secondary market, 14 -18, not a lot of information. Ethical considerations Simmons Report - Boston 27. 8% ages 18 -24 drink Rockstar 67. 3% are male 32. 7% are female 30. 9% High school graduate/less than one year of college 19. 4% make $75, 000 -99, 999 13. 7% make $25, 000 -49, 999 46% of 18 -24 drink 3 to 4 Rockstars monthly 39. 2% of 18 -24 drink 5 or more Rockstars monthly

Energy Drink Market Comparisons United States -In 2010, the U. S. consumed 16, 812 million liters of energy drinks (about 15 liters person) -Red bull was introduced into the market in 1997 -From 2008 to 2012 the market grew 60% Norway -In 2010, Norway consumed 8. 7 million liters of energy drink (almost 1. 8 liters person) -Energy drinks only allowed to be sold in pharmacies in Norway until 2009 -Red bull was illegal until 2009 -From 2009 to 2010, sales have doubled, growth in number of liters sold is 70% Analysis: Norway is a relatively new market for energy drinks with a promising future and high growth thus far

Energy Drink Market Share

Three Levels of Product Core Product Provide energy Quench thirst Actual Product Features, Packaging, Styling, Quality, Brand Name Benefits 16 fl oz/24 fl oz container Adequate liquid to quench thirst and provide energy “Rockstar”/ Star logo Easily recognizable/ consistent packaging Nearly 20 different flavors Accommodating to different flavor preferences Aluminum can Easily disposable/ recyclable List of Key ingredients around top of can Convenient and informative Small lip above top of cylinder Comfortable drinking/ deters spilling Rounded in at the bottom of can Stable on a flat surface Aluminum pull tab opening Easy to use/ consumed in one sitting (more energy) Tall, cylindrical shape Convenient for holding/ grabbing Nutrition label Provides health information (calories, carbs, etc. ) Augmented Product

Product Adaptations 16 oz can to 500 ml can (16. 9 oz) • Norway uses the metric system (liters) Nutrition label and potential ingredient alterations • Modify flavors to Norwegian palette (new flavors? ) • Potential ingredient alterations due to regulations Introduce 3 energy drinks into the market (original, two new flavors)

Product Positioning – Price Ranges in the United States Energy Drink Red Bull Monster Rockstar Full Throttle Amp Can Size 8 oz 16 oz Meny Supermarket - Oslo Cost Per Can $2. 00 - $4. 00 Cost Per Ounce $0. 25 - $0. 50 $1. 50 - $3. 00 $0. 09 - $0. 18 $1. 50 - $2. 50 $0. 09 - $0. 16 $2. 00 - $3. 00 $0. 13 - $0. 18 $1. 50 - $2. 50 $0. 09 - $0. 16 Conclusion: Price Rockstar similar to Monster Energy Drink Can Size Cost Per Can Cost Per Liter Red Bull 250 ml NOK 21. 90 NOK 87. 60 Red Bull 325 ml NOK 26. 90 NOK 82. 77 Burn 500 ml NOK 23. 90 NOK 47. 80 Battery 500 ml NOK 26. 90 NOK 53. 80 Monster (Green) 500 ml NOK 21. 90 NOK 43. 80 Monster (Blue) 500 ml NOK 23. 90 NOK 47. 80 Monster (Orange) 500 ml NOK 24. 90 NOK 49. 80 Urge 500 ml NOK 24. 90 NOK 49. 80

Product Positioning – Price (cont. ) United States Energy Drink Monster Can Size Cost Per Ounce $1. 50 - $3. 00 $0. 09 - $0. 18 16 oz $1. 50 - $2. 50 $0. 09 - $0. 16 Monster 16. 9 oz $3. 66 - $4. 17 $0. 22 - $0. 25 Rockstar 16. 9 oz $3. 50 - $4. 00 $0. 21 - $0. 24 Rockstar 16 oz Cost Per Can Norway High = 6. 26437 Low = 5. 42601 Average = 5. 8775 5. 99 NOK to 1 USD (February 28, 2014) Price of Rockstar in Norway: NOK 21. 90 – NOK 23. 90

Product Positioning – Distribution United States Norway Distributed by The Pepsi Bottling Group (PBG), Pepsi. Americas, Pepsi Bottling Ventures and other independent Pepsi-Cola bottlers in most of the United States and all of Canada Distributors Intensive distribution - stocked in a majority of outlets Local Distribution - Ringnes bottles and distributes Pepsi in Norway; this is how Rockstar will enter the market Off-trade Volume Sales (2012) Energy Drinks Distributed Coca-Cola Enterprises Norge AS 31% Burn, Urge Ringnes 24% Battery, Pure Rush, Rockstar? Red Bull Norge 20% Red Bull

Product Positioning – Promotion Norway United States Red Bull Content marketing, extreme and dangerous sports, “Red Bull gives you wings” Red Bull Monster Sex appeal , extreme sports, concerts “Unleash the monster within” Burn Rockstar Sex appeal, extreme sports, entertainment, “Party like a Rockstar!” Battery Sponsors sports stars (skiing) and a Formula 1 motor racing team, free monthly magazine Sponsors various cultural events Sponsors a Formula 1 motor racing team and athletes, engages in various types of music Analysis: Promote Rockstar in a similar fashion to the promotion in the United States, focusing more on entertainment and sex appeal

Media Environment - Norway Users of different kinds of cultural activities last 12 months, by activity and year. Percent 1991 2000 2008 Cinema 58 65 70 Sports event 57 57 56 Public library 49 52 51 Museum 41 45 43 Teater/ musical or revue 44 50 53 Exhibition of pictorial art or handicrafts 41 44 42 Concert 48 58 62 Ballet or dance performance 8 11 13 Opera or operetta 5 6 7 Cultural fesival. . 32 Religios and ethical meeting. . 41 39 Source: Statistics Norway 2012 67 55 49 41 45 38 61 14 8 31 34

Product Positioning – Promotion (cont. ) Entering the Norwegian Market - Pølse and Rockstar promotion (airports, convenience stores, etc. ) - Sponsor a Russ party in Oslo -free Rockstar energy drinks, stickers, hats, etc. - Sponsor an athlete (skiing, soccer)

Summary Should Enter Market Shouldn’t Enter Market Stable economic and political conditions Already established energy drink brands in Norway Fast growing energy drink market Potential large set up costs with promotions Only slight product adaptations Health regulations and concerns Few barriers to entry Similar demographics in comparison to the U. S. Previous success in markets with similar U. S. energy drinks (Monster, Red Bull) Should Rockstar Enter Norway? Based on our analysis and comparison to the U. S. market we believe Rockstar should enter into the Norwegian market.