Marketing-wise, Monster needs to consider how to position itself and what story to tell to win the young consumers’ hearts. TC Pharmaceutical’s Red Bull held the Red Bull Hip-Hop Challenge and set up the Red Bull Style Hip-Hop Party, which were popular among Hip-Hop and fashion fans. It also launched “Extreme Domino”, showing a variety of extreme sports to create a domino effect, and bringing its audience a rich world of imagination as well as vividly embodying the brand’s “personality”. Shenzhen Eastroc Beverage Co Ltd reported that it splashed out RMB107 million to obtain advertising rights on prime-time CCTV in 2014. Likewise, Monster may be looking for an association with a national sports team, a film star or even a well-known US star for endorsement purposes. Even the Chinese translation of the brand name needs to be distinctive, attractive and easy to remember. So far, Monster’s Hong Kong Chinese website does not seem to have a Chinese version name. As things stand, the energy drinks market is very much a manufacturer-led industry, in which the targeted consumers tend to be influenced by clever and continuous marketing campaigns. Some brand names are acceptable in certain cultures, but may not sound right in others. The direct translation of Monster into Chinese would be “an ugly object” – and Monster is unlikely to want to be associated with this not so favourable meaning.
TC Pharmaceutical has several production sites in China, scattered around the Beijing, Hubei, Hainan and Guangdong provinces. The multiple locations of the production facilities help to reduce the transportation costs, thus ensuring affordable pricing for local consumers. No doubt Monster will leverage TCCC’s vast and ever expanding production locations around the country, but it still needs to think carefully as to how to set its initial retail price. If the price is too high, it may limit repeat purchase. Consumers would immediately question the price and compare it with their familiar brands such as Red Bull.
China, Selected Energy Drinks Brands, Shanghai, 2013
| Brands | Company Name | Outlets | Pack Size | Price (CNY) |
| Hi-Tiger | Fujian Dali Food Co Ltd | Convenience store | 380 ml | 5.50 |
| Qi Li | Hangzhou Wahaha Group | Convenience store | 350 ml | 5.50 |
| Red Bull | Red Bull Vitamin Drink Co Ltd | Independent small grocers | 250 ml | 5.00 |
| Ichi More Lemon | Shanghai Tohkin Beverage Co Ltd | Supermarket | 600 ml | 3.50 |
| Thaibull Enhanced Energy Drink | Guangdong Thaibull Vitamin Drinks Co Ltd | Convenience store | 500 ml | 5.00 |
| Xinyinli Vitamin Drink | Zheng Zhou Da Zi Ran Food Co Ltd | Convenience store | 580 ml | 4.00 |
Source: Euromonitor International
Handling the media and the government
Finally, like elsewhere, energy drinks have been the increasing focus of media stories and criticised by health organisations. This is primarily because energy drinks are perceived by some as products having restorative or recuperative functions by containing ingredients that stimulate the metabolism, such as caffeine. Thus, the health credentials of energy drinks are regularly challenged, which is expected to continue in the next few years. How Monster will handle regulatory approval and how it is going to formulate its flavour and taste for the local market is important.
The traditional media, such as the printed press, are mostly controlled by the government; but the new media, such as social networks like Wechat, are more open and quicker to reach consumers. Wechat’s regular users are reported to number around 400 million, not far off the total population of Western Europe of 492 million in 2013. Any negative news about a brand can be shared by millions of potential customers within a flash. Therefore, Monster may want to consider its marketing coverage, ensuring that it reaches all areas of the media and addresses its targeted young audience in a timely and effective manner. All media discussions should be closely monitored or even manipulated.
In terms of the relationship with the Chinese government, Alibaba founder Jack Ma’s famous words resonate, “Fall in love with them, understand them, but don’t marry them.” Fortunately, the state-owned conglomerate China National Cereals, Oils & Foodstuffs Corp (COFCO) is TCCC’s largest local bottling partner. The tie-up with one of the country’s “economic backbones” is certainly a positive start. A good relationship such as this can still open up viable commercial opportunities in China. In terms of trial locations, as first-tier cities have the most purchasing power and are responsive to Western fmcg brands, Monster may want to first launch its products in big cities, before then progressing to second-tier cities. Overall, foreign soft drinks brands – apart from carbonates – do not seem be doing particularly well in China, TCCC/Monster needs to learn from its past experiences and step into the water carefully.