BRAND BATTLES: Energy drinks pump up the volume in Thailand

The launch of Carabou Daeng last year turned the largely sedate energy drinks sector into one of the fiercest brand battlefields in Thailand.

In the three months following its entry, Carabou Daeng spent 103 million baht (US$2.6 million) in making its presence felt - over half of what market leader M150 spent the entire year - and within weeks, achieved one of the highest recall rates in the country.

The response from M150 and number two player, Krating Daeng, known overseas as Red Bull, was swift and strong, reflected by an increase in marketing budgets by three and five times respectively in the first 10 months of this year, compared to the same period last year.

The losers in the three-way fight have been the smaller brands - the shares of Wrangyer, Magnum, 357 and a host of lesser-known names have dwindled. New brands that had planned to launch their own contenders - including Japan's Ajinomoto and Coca-Cola - are still waiting in the wings.

Few dispute the fact that Carabou Daeng could not have achieved all it has without co-founder and country music legend Ad Carabau behind it.

"I don't think anyone else could have done it - Ad Carabau is the equity of the brand, he's the DNA of the brand," says Sirikul Laukaikul, executive chairman of branding company EnterpriseIG.

The brand's marketing director Kamoldist Samuthkochorn, acknowledges this. "We launched with a brand that had already been in the market for 20 years," he says. "People found it a lot easier to grab the bottle." Having said that, the brand left little else to chance. Pepsi bottler Serm Suk was roped in and had the drink in 400,000 outlets nationwide within four days of its launch. Meanwhile, agency Far East DDB struck gold with its TV campaign focusing on the country's historical heroes.

Krating Daeng quickly hit back with its 'Real man' campaign, which projected the ordinary man in the street performing little acts of kindness as the true hero. It recently launched a sequel to the campaign, calling upon consumers to send in real stories of people doing good deeds, and received 4,000 entries.

"This year we've won their hearts and increased our marketshare by three per cent," says Witawat Jayapani, CEO of Creative Juice\G1 which created the campaign. The aim is to grow 13 per cent in two years and be "the brand leader again within five years".

Launched more than three decades ago, Krating Daeng successfully went global as Red Bull, now boasting worldwide marketshare of 70 per cent and sales of 100 billion baht, a figure that dwarfs Thailand's 14 billion baht energy drinks market. Its international focus, however, cost it domestically, and it lost market leadership to M150 in the early 1990s.

Determined to regain its dominance, the company is covering all bases, recently creating its own distribution company, Derbell, and launching Look Tung, an energy drink priced and pitched slightly below Krating Daeng.

M150, meanwhile, has roped in Grammy artists to star in its TVCs but much of brand owner Osotspa's work has been below-the-line and in relationship management, offering incentives and rebates to keep sales up.

To date, the battle rages even more fiercely, but the rules have changed, with new regulations restricting TV advertising. "The smaller brands will disappear and at the same time, it will be hard for any newcomer to have an impact under the new advertising rules," says Witawat. "It will be down to these three."