Red Bull Case Study

Table of contents

The pure and strong cola drink comes with all power packs. By looking at Red bull cola drink and its profile, I would prefer to target two market segments specifically; behavourial and psychographic. I will pre-dominantly be focusing at behavourial segmentation. As it going to speak much about product’s quality.

Behavourial Segmentation

Behavourial segmentation is the major segmentation which I would like to focus in order to be succeeded in capturing market. The very vital point through I feel that market of Red Bull cola can flourish is the quality and awareness to people of its product.

Quality

Red bull cola that holds natural and pure ingredients plus there are no sweeteners, preservatives and artificial colour in the drink. Just a simple dedicated pure drink which enhance the quality of brand. Product quality must be differentiation point from competitors.

Awareness

This is perhaps the best option where Red Bull cola can flourish their self. One way or another; this is the most important part of segmentation. This is where they have to get their strategy right, Red bull cola making awareness to particularly people of UK, who are very conscious about their health and diet.

The message which can be send by Red Bull cola about their drink is that; it is fully designed to people’s preference diet. As it is the only drink which contains the original kola nut and coca leaf with more caffeine that helps people to stay active in their day to day life. There is no artificial colour, preservatives and sweeterners. Therefore, it is build to serve your health most than other cola drinks. It’s ‘100% natural and strong’.

Psychographic

Marketers are increasingly segmenting their market on consumer’s lifestyle. Red Bull cola must also target psychographic segments as it appeals to be iconic brand. They have more focus on life style and social class of people. They are trying to be trendy.

Social Class

I would further like to divide social class into disco club, gig, sporting venues and musical concerts. Red bull segmenting social class may also prove to be a fruitful venture. This segment target those people who loves to go gigs, concert, sporting venues and disco clubs. Red bull cola will be main organizers of above areas and that create an icon in consumers mind about Red Bull cola essentials.

Life Style

The reason I have chosen lifestyle segmentation is because the people of UK more renown as the nation who loves to be healthy and fit. Perhaps we can say them mainstreams, these people need security. They will buy well known, safe brands and avoid risk. Therefore Red Bull cola is just tailor made for those who loves to go secure. Red Bull cola is 100% pure and strong and dismiss the philosophy of artificial flavour. You can take it with you on exercise, you can use it as appealing product. Red Bull brand name says it all.  Red bull cola wants to sparkle in a way with their product ingredients information.

Therefore, their message is clear; they want to captualize the market on basis of pureness and naturalism of their product. As they have used slogan “strong and natural” prominently. According to them “we use high quality, authentic ingredients that create a greater tasting out of other cola”. However, Red bull campaign for their energy drink went successful when represent their brand by cartonize advertisement and appealing slogan “Red bull gives you wings”. Red Bull Cola marketing campaign much focusing strategically on psychographic segmentation particularly than any other segment. 00% natural ingredients may get customer toward them but high caffeine; once again prove to be a barrier in their targeting customer. Before I get to strategic segments let me post the article which Red Bull cola has disclosed. “LONDON: Red bull unveils 2 million campaigns for simply cola – Red Bull is rolling out a  2m marketing drive to support its entry into the ultra-competitive cola market, which will push the naturalness of the product” .

Strategic Segments

Market and service segments which require changes in marketing mix can be distinguished from strategic segments. Strategic segments are those segments which are aligned by company for long period of return. In other words they look out for longer vision of company which compromises strategic planning. They can by outlined by 4 P’s, let me explain the Red Bull Cola’s strategy on 4P’s which I believe they belong to. 4 P’s; product, price, promotion and place.

Product

This is the very important point and red bull cola trying a lot to stick with it. Product’s information, as they defines it’s a 100% natural product, contains no artificial colour, sweeteners and preservatives. Truly a pure blend of 100% natural sources. Perhaps, they want to create product differentiation from competitors by adding natural ingredients, this is where they strengthening their product knowledge. This is where their main target is; to catch the market on the basis of product quality. Thus, for that they have to put the message right to the people. However, product is sold in 25cl and 35. 5cl cans, and it also comes in multipack of containing 4 bottles in it.

Price

Price which are red bull cola charging is varying in different stores, Tesco selling it at  1. 0, Waitrose selling at  1. 20 and Budgens at  1. 09. By looking out the prices they are charging we can say that they are charging premium price for their product where as their giant competitors (PEPSI and COCA-COLA) sell their cola drink mostly on 60pence. Therefore, they are charging almost double of their competitors drink. The value added for their premium price is that red bull cola blended from 100% natural sources “Strong and Natural. ”

Promotion

Red bull cola, particularly promoting their drink by slogan “Natural drink”; through which customers normally are attracted. They have achieved a great amount of success by setting energy drink slogan “Red bull gives you wings”. However, as far as their promotion activities are concern, they are putting banners and advertisement in almost every store, and also offering free fridge to stores for placing their cola drink in unique and catchy way for customer.

Place

The product is also in clubs, bars, restaurants and stores. Whereas Coca-Cola and Pepsi cola drink are normally not available in most of clubs and bars; where they have targeted places like clubs and bars. As per red bull cola’s initial strategy was capture the people who attends musical and sporting events, thus in cola drink they are also targeting the same genre.

Concluding 4p’s Strategy of Red Bull Cola

The main thing which I have observed that Red Bull Cola targeting is specifically product and promotion. Even though they are not emphasizing enough on price and place. Product information which underlay product topic plays evenly crucial and important role to push Red Bull Cola one step ahead of competitors. However for that they have to get promotion strategy right.

How is Red Bull differentiated from its competitors? Red Bull Cola is differentiates itself in four main ways from its competitors (Coca-Cola and Pepsi Cola). Those four ways are ingredients, taste, appearance and price.

Ingredients

The Red Bull Cola drink is only cola drink which contains original coca leaf and kola nut. Other ingredients which they have used are;

  • Galangal
  • Lemon/Lime
  • Vanilla
  • Cinnamon
  • Cardamom
  • Orange
  • Corn mint ea
  • Ginger
  • Mace
  • Coca
  • Mustard seeds.
  • Clove
  • Liquorice

Pine Whereas, Pepsi and Coca-Cola use ingredients like caffeine, caramel flavour, natural flavour, phosphoric acid, carbonated water and high fructose corn syrup (sugar).

Taste

Apparently the taste of Red Bull Cola is much different than the taste of its competitors, and that is quite understandable as well, as Red Bull Cola contains original sources of Cola drink; like original coca leaf and kola nut. In my survey; which is enclosed at the end of question 5, lot of people are quite surprised to taste original cola drink taste (Red Bull cola) as they were very much addicted of Coca-Cola and Pepsi Cola taste.

Appearence

The can of Red Bull cola is very much different than the can of Coca-Cola and Pepsi cola. Pepsi and Coca-Cola has almost same type of can. However, Red bull can is much taller and thinner in size as compared to Pepsi and Coca-Cola.

Price which is charged by Red Bull Cola drink is almost double of price which is charged by their competitors; however they are also giving value added as their drink is extracted from 100% natural sources.  Target market is basically a breaking of market in segments and then focusing on particular key segments. It helps business to be cost effective when 4Ps are applied within the selected or desired market segments. Red Bull Cola mainly targeting the psychographic segmentation, and at some extent Red Bull nergy drink is also targeting psychographic segmentation. Now let me explain some of the advertisement of Red Bull energy drink that has made on athletes. On their website I have seen video and testimonials of people which were something like this. A girl 24 year old doing climbing rock because she drinks red bull energy drink; she got the energy which she ever wanted. A 23 year old guy who’s a motor cycle champion in 2008 uses same drink because he wants energy to perform exceptionally well, same with the person who is 34 year old and doing water sports. So the main theme is that if u wants to feel energy use red bull energy drinks.

Whereas, Red Bull cola for those who wants to drink fresh and natural drink because Red Bull cola is made of natural ingredients, no sweeteners, no artificial flavour and no artificial colour – 100% natural. However, Red Bull GmbH targets the social and sporting events specifically to leave a note on people’s mind, for example that they proudly presents x games; in one way or another they are playing a mind game here, they are encoding a indirect message that passionate and extra ordinary athletes having a drink like Red Bull; so if you have similar passion or desire then you also try Red Bull.

Comparing Target Market

To some extent Red Bull cola and energy drink; both are falling into a same target market; as Both are being sold in same stores normally. They both are trying to capture market on basis of psychographic segmentation, as red bull cola is targeting health conscious people and red bull energy drink targeting lifestyle of people who wants to feel pure freedom, who wants to try something new, energetic and innovative generation. However both underlay in psychographic segmentation. Both drinks are meant to boost up energy level. One is “Strong and Natural” so other is mainly energy drink. Both products are proud organizers of musical, games and social events.

Positing

Positing is simply that how customer recall your product. By looking Red Bull Cola slogan “Natural and Strong” one can say; whenever customer think about original cola drink; first thing which they will get in their mind is Red Bull Cola drink as it is 100% natural.

Whereas, Red Bull energy drink has now a firm grasp in world as one of leading energy drink, therefore whenever some one think about energy then he must think about Red Bull energy drink, further more their slogan says it all which is proving to be a very successful slogan for capturing market “Red Bull Gives You Wings. ”  Through my research and findings, I came to this point that red bull cola can not survive for long in market. There is not reason but reasons that can leave red bull’s step of introducing cola in vain. Many have come and many have failed in sector of cola.

After my qualitative research I would like to mention the things which are potential threats to red bull cola’s fancy entry, competitors, alternatives of product, price, taste and expectations. First thing which is consistently giving red signal to red bull cola entry is their giant competitors; Coca Cola and Pepsi Cola. The reason I all them giant competitors is because they are the oldest companies in cola sector and has world wide distribution mechanism. Through their product life they have targeted the every market segmentation; plus they hold customer loyalty status that has positive response to their cola drinks.

Second thing which is bothering to Red Bull Cola at the moment is alternatives to a product. Basically we can say it change of people preference culture. As per healthy requirement; people are now moving to a product which offers more nutrition and energy; just like natural fruit drink and energy drinks. Thus change in preference culture has not only affected the Red Bull cola but also to giant companies (Pepsi and Coca Cola); as their profits of last two year has slimed. But at this point, some may say this is the right time to capture market but I personally dismiss this idea.

Thirdly, their pricing strategy didn’t work out properly. In other words, barrier from Red Bull cola to their customer is high ‘price’. Even if above two threats (competitors and alternatives to product) satisfy the product needs – still price problem will stand firm. Therefore, product’s price is not at good value. Fourth thing which I want to languish here is the taste of Red Bull Cola differs a lot from the taste of others cola drinks. People are so used to taste of Coca Cola and Pepsi Cola that even if they taste pure cola like Red Bull Cola they dismiss its taste preference.

Now last and final threat through which I think they can’t be succeeded into the UK market is that they haven’t lived up to the people’s expectation. People were expecting something innovative and energetic from Red Bull Company, but unfortunately it hasn’t come out to be a product which people were expecting. However, bottom line is that Red Bull Cola has come up with flop strategy that seriously need to be reviewed because the threats that are standing as barrier for Red Bull Cola for flourishing in markets are very competitive and strong.

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Red Bull’s Marketing Strategy

Table of contents

Marketing Strategies and product performance: a study on red bull

Executive Summary

A marketing plan plays an important role in building up a successful business. It helps the business in focusing on its objectives and goals. There are several steps that the manager should follow before designing his marketing plan. The first step emphasizes on collecting enough information about both his competitors and the custumers so that the most attractive market segmentation will be targeted using the most effective strategies.

This project, with the referential of a case analysis of Red Bull Energy Drink Company, aims to give guidance for the organizations on how to create and sustain certain strategic planning by using the 4 Ps. Moreover, this paper covers the mission, vision and values of Red Bull Energy Drink Company; along with its marketing strategies.

Throughout a Company, the strengths, weaknesses, opportunities and threats will be identified. In this project, the company’s segmentation planning, positioning and targeting; along with evaluation will be covered.

The end of the project will uncover some findings which summarize that Red Bull Company might face some challenges due to growing competition and competition from emerging products, and the demand of new trends. In order to minimize those challenges and their negative effects, the company might adopt the 4 Ps of innovation in their marketing strategies, along with penetrating the market throughout product innovation in order to create a strategic marketing plan. It is also known that improving the used process will lead to a better product; which will consequently result in a better paradigm. The used method in this study is mainly secondary.

Introduction:

 

An Overview of Red Bull Company:According to Oxford Dictionary (2001), energy drink is “a soft drink containing a high percentage of sugar, caffeine, or another stimulant, typically consumed during or after sporting activity or as a way of overcoming tiredness”. One of the pioneering energy drinks is known as Red Bull. Red Bull “is an energy drink sold by Austrian company Red Bull GmbH, created in 1987. In terms of market share, Red Bull is the most popular energy drink in the world, with 5.387 billion cans in 2013.” Retrieved from www.redbull.com (Dec. 8, 2018)

1485905039360As it was mentioned in the Red Bull official site, Red bull was first inspired by an existing energy drink named Krating Daeng; sold and introduced in Thailand by Chaleo Yoovidhya. Dietrich Mateschitz, the owner of Red Bull, was a traveling sales representative when he launched his brand in the year 1987. Red Bull started in the Austrian market, and then spread its wings in the year 1992, and became an international company and brand. Now Red Bull is considered as a worldwide company that sells its products in over 171 countries around the world.

Kallmyer (2015) mentioned that for over decades, Red Bull had relied on their simple product line that included few flavors such as cola or lemon. Later, they took more diverse flavor line to match their competitors, such as Monster. Their lines included Total Zero Orange Edition, Total Zero Cherry Edition, Red Bull Yellow Edition, Red Bull Red Edition and Red Bull Blue Edition. Each edition has its own flavor and formula.

Keller (2009) defines a brand as the “name, term, sign, symbol, or design or a combination of them, intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of the competition”
Red Bull has built its brand by associating itself with a wide range of people, teams and events. Moreover, Red Bull doesn’t simply sponsor teams or events; it rather owns them. That ownership strategy has helped them by turning the buzz machine into a profit center. Also, their on-brand activities have helped them in building their suburb personalities as serious athletes who participate in hard tasks, and the fun, adventurous and humorous that is represented by their popular slogan “Red Bull gives you wing”, and other advertised funny cartoons found on their website. (Aaker, 2013)

Aaker (2013) added that throughout the years, red bull has widened its horizon by sharing in many overwhelming activities such as wakeboarding, motorcycle racing, music events and sponsoring athletes and teams such as the racer Ashley Fiolek and the soccer team New Red Bulls and much more. Moreover, their website includes fun features like Red Bull Soapbox Racer, video games, music and TV shows. Those entertainment features are also found on their Facebook page that includes more than 37 million followers.

Red Bull Mission, Vision and Values:

The mission statement is known as the company’s objectives and the approaches to reach those objectives. As it is mentioned in Red Bull official site, “Be the premier marketer and supplier of energy drink across the globe by building long-term relationships with the people who can make it become a reality” is the mission statement of the company; using the Red Bull’s mission statement; we can understand the company’s business objective and its method to reach those objectives. “Be the premier marketer and supplier of energy drink across the globe” is the Red Bull’s business objective. Moreover, “build long-term relationships with the people who can make it become reality” is the company’s method of achieving their objective.

Red Bull has identified their vision statement by saying that “Red Bull GmbH are dedicated to upholding Red Bull standards, while maintaining the leadership position in the energy drinks category when delivering superior customer service in a highly efficient and profitable manner. We create a culture where employees share best practices, dedicated to coaching and developing our organization as an employer of choice.” Retrieved from www.redbull.com (Dec.8, 2018). Furthermore, Red Bull claims to value people, ideas and culture.

The Significance of Red Bull Company as a Case study

As it was mentioned by Aaker (2013), Red Bull is set to be one of the leading energy drinks for almost three decades. Its sales were estimated for $3 billion, and its profits over 400 million with a 43% of US dollar market. Cornelissen (2017) stated that  “investing in the development of a corporate image for the organization has further strategic advantages for organization”. Hence, it is important to work on improving and developing the company, rather than being satisfied by its states. The best way to do so is to imitate a market leader; it is the company that has the largest market share and leads in price changes, new product introduction, distribution, coverage and promotion intensity. Throughout following the lead of the market leader and avoiding his drawbacks, a company would reach its fullest potentials.

Objectives of the Project:

The objective of this project is to give an overview of the Marketing Strategy followed by the pioneering energy drink company, Red Bull. Throughout analyzing the company’s Swot, 4 Ps, its porter’s forces; and how they affect the company, its defensive and attacking strategies; along with its advertising and promotion tools and the way they affect its market’s shares, certain conclusion will be built. That conclusion will be a general guideline to understand how to follow the company’s lead to increase the profits, and to avoid its errors and hardships to gain a better posture, position and market share.

The company’s SWOT analysis“Good performance within a company is the result of correct interaction of business management with its internal and external environment. Therecognition of internal strengths and weaknesses, as well as external742955187315opportunities and threats, takes place the basis of a SWOT-analysis.”(Houben et al., 1992)

Internal (within the organization)Strength:Red Bull is considered as the market leader since the company has sold all over the world the amount of 5.226 billion can by the year 2012, as it is shown in the given figure. Also, the company is set to be a global leader since it has 70% in the world market share, even though that it faced a great competition from other brands.

Moreover, Red Bull has gained its strength by launching new categories of drinks and developing the shape of their cans into smaller and more fashionable. Also, according to Red Bull official site, “Numerous scientific studies on the product and the individual ingredients prove that Red Bull Energy Drink: increases performance, increases concentration and reaction speed, improves vigilance, stimulates metabolism, and makes you feel more energetic and thus improves you overall well-being”. (redbull.com)

Weakness:

Despite Red Bull’s popularity and strengths, Red Bull still faces some points of weaknesses. Since the energy drinks category is set to be a small part when compared to the soft drinks market, Red Bull faces a certain weakness concerning their products. As it was mentioned above, Red Bull only has 5 products with only three flavors (Blueberry, Cranberry and Lime). So, the Company is still vulnerable the market swings.

Since the manufacturing of Red Bull is only stranded to Austria factories, supplying the product to other parts of the world will be costly when it is compared to other products, due to laws and regulations, distribution costs and taxes.

External (outside the organization)Opportunities:To start with, since Red Bull has only few products, the company has to take the opportunity and start creating new products. Also, Red Bull is set to be the biggest sponsor of sports and outdoors activities, so it has the ability to advertise and promote its brand more widely. Finally, Red Bull can eliminate the distribution cost by opening new manufacturing units in different parts of the world.

Threats:

The biggest threat the Red Bull faces is the competition of other brands. For examples, a brand named Monster is producing their own energy drink with the privilege of using natural ingredients; which will be more desirable for the costumers. The ingredient of the product is not FDA approved. Moreover, the high amount of caffeine and sugar are extremely dangerous on the health.

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Marketing strategy of Red bull

One of the main questions that can be emphasized in respect of this case is the approach to the marketing strategy of Red Bull. Does the company still benefit from its non-traditional and “anti-brand” approach or Red Bull needs to change its marketing direction to a more common way? One of the root of this question lies in a statistics of market growth provided in the case study (p. 2) which shows its decline in volume for energy drinks from 44% in 2000 to 6. 5% in 2003.

Another reason is connected with the increasing competition in this segment of beverage industry where such giants as Coca-Cola and Pepsi began to promote their energy drinks. The problem with the second reason is that these companies have more traditional marketing approach and target wider market while Red Bull is focusing on a narrow segment like extreme sports alternative lifestyle and music, which may endanger Red Bull’s market share (Sherbin, 2012).

Also it is stated in the case that only in 2000 23 new energy drinks were introduced in the UK alone and in Finnish market the drink Battery managed to outsell better that Red Bull (p. 8). Moreover, these new competitors attempted to imitate several buzz marketing techniques. As a result now Red Bull have to compete both with giant as Coca-Cola and Pepsi, which cover wider audience by using more traditional marketing approaches, and a lot of new smaller energy drink companies which apply strategy that to some extent is similar to Red Bull’s.

Hence, the most critical issue is the risk of decreasing of brand loyalty among the customers because of appearing of copycats which are similar to Red Bull by their strategies and they also provide some advantages like cheaper prices for bigger volume of a drink. Thus, the main question is how should be adjusted to the changing external environment or should this non-traditional buzz-marketing approach be maintained in order to increase market share in soft drinks and effectively compete with rivals.

Marketing strategy Concerning the allocated critical issue, the strategic direction should be focused on fostering of brand loyalty to Red Bull among potential and competitor customers and maintain current customers at the same time. The action plan that will help to achieve the aim of the strategy will be based on weaknesses of Red Bull that competitors began to exploit, because it is supposed that fixing of these disadvantages will strengthen the market dominancy of Red Bull and enhance the brand loyalty with other things being equal.

Analyzing the current position of Red Bull it is possible to highlight four main drawbacks: small product line, high price and small quantity compared to competitors, unhealthy, not as well liked by females (Gillander, 2011). Talking about the product line it is difficult to argue that Red Bull’s offer is narrow and concentrated only on the one drink, while Pepsi or Coca-Cola provide a lot of different products and flavors of their energy drinks also vary. That allows them to satisfy different taste preferences that their customers may have. Read also about heritage of operations management

That is why one of the way how Red Bulls strategy may be improved – is expending of its product line by introducing of new flavors in order to attract those people who for example do not like the taste of red bull. Furthermore, it is worth to note, that releasing of new non-energy drinks will entice new consumers who are adverse to the energy drinks concept (Walker, 2010). Another problem of red bull drink is that its price is relatively high, compared to the main competitors.

For example, can of Monster drink is almost twice cheaper than Red Bull in the same volumes, while the content of caffeine and other energy substances is even lower in red bull (Polis, 2013). At the same time, the factor of pricevolume ratio is very important for one of the focus audience of energy drinks producers – students (Gillander, 2011), what may have the negative impact on brand loyalty of customers. Hence, to compete better with Coca-Cola’s Monster and Burn, Pepsi’s Adrenaline Rush and others it is essential to release bigger cans.

Furthermore, it will allow decreasing the relative price due to the economy of scale. 1 The third aspect that threaten Red Bull’s brand loyalty is that public concern has been raised regarding the lack of information that is provided on energy drink labels as well as people become more concern about their health (Heckman, 2010). However, Red Bull standard can has more than double dose of caffeine than in Coke (Dolan, 2005) and 473mL can has 13 teaspoons of sugar (Webb, 2012), what looks unattractive for those people, who are take care of their health.

Thus, since Red Bull offer the 473mL can it should begin to provide sugar free option in this volume of drink like with standard 250ml cans. Besides the fact that energy drinks market is a growing industry (Heckman, 2010) it is essential for Red Bull to pay attention to the aspect of making their drink healthier by releasing new products with less harmful ingredients and conduct a campaign which will show that moderate consumption of the drink will not harm the health. This may be more clearly demonstrated by attracting athletes sponsored by Red Bull and showing that red bull helps them to achieve higher results.

According to Gillander (2011), Red Bull is not popular among females compared to males. As a result, there is a big customer niche that could be filled. Therefore, Red Bull could differentiate their product by releasing special “female” energy drink with different taste, color or ingredient content. In addition, it may be promoted by female sportsmen and by new special TV advertisement cartoons. This action is supposed to attract new female customers and foster their loyalty since other competitor brands do not have any specific energy drinks for females.

Another action plan that could enhance Red Bull’s brand loyalty is connected with the promotion of the product. Generally, it is possible to allocate two types of promotion: Above-the-line and Below-the-line (Manral, 2011). First type helps to cover the wider audience as it uses such media sources as TV, press or radio, but it is more difficult to deliver a memorable message that is tailored to a specific target market and cost of this type of promotion is high. The difference with Red Bull’s approach is that it is mainly concentrated on the “Below-the-line” promotion by organizing different sport, dancing and music events.

Red Bull can be called one of the leader in conducting the Below-the-line promotion as its events like Flugtag, Red Bull Air Race and others are famous all over the world. As these festivals create such a big “buzzing” effect, which generate word-of-mouth advertising and tend to bring people to the product, Red Bull should continue to organize them. In addition, these events is a good site for testing new products (for example red bull for females) using sampling and demonstrating the association between healthy life-style and red bull drink.

However, it would be useful to mix these two approaches and use Above-the-line advertising more intensively by creating new TV commercials apart from cartoons that will promote active life-style, attract female audience and ensure people that moderate consumption of red bull does not harm their health. Potential weaknesses The first problem that Red Bull may face by fulfilling the recommended action plan of the strategy is connected with expanding of product line. According to Walker (2008) “brand heritage is crucial in the beverages industry and companies need to be very astute when they start messing with the wires that make it work”.

The problem is that people used to associate Red Bull only with its energy drink and broadening of product line by entering new non-energy beverage segment may undermine the Red Bull’s brand essence. Consequently, besides the fact that releasing of new non-energy drink potentially may attract people who adverse red bull there is a risk of losing brand’s image what will not have a positive effect on brand loyalty of those customers who admire Red Bull for its special style. However, it is possible to test such drink by sampling on some of Red Bull’s events in order to understand is it going to be successful or not.

Another weakness of the strategy that is directed to enhance brand loyalty relates to the economic risk of releasing the bigger volume of can of red bull. Introducing new 473mL allows company to compete with rivals who try to exploit Red Bull’s volumeprice ratio of 250mL can (like Monster or Mother). However, the larger can likely provide lower margins since there is no big difference in the retail prices. Furthermore, there is a risk of “cannibalization” factor where more profitable 250mL cans will sell less than its bigger analogue (Bevwire, 2009).

Nevertheless, despite these risks, such innovation expands the customers’ choice and allows to satisfy needs of those who used to consume more than one can of and casual users that change from energy drink to energy drink depending on price or quantity per can. Moving to the next weakness it is worth to note that there is a strong belief among people that energy drinks are unhealthy and this point is difficult to be argued, because lot of researches prove this this statement.

For example, it is proven by Higgins (2010) that excess of caffeine have negative impact on health, while positive effects of other ingredients like taurine and glucuronolactone, remain unproven. Moreover, it is known that 473mL can has 13 teaspoons of sugar (Webb, 2012). As a result these factors endanger not only the brand loyalty of those customers who are concerned about their health, but also impugn the attraction of new customers. However, there are some points that allow to ignore this weakness. First, there is no clear justification of the fact of negative long-term effect of energy beverages on human body (Higgins, 2010).

Secondly, in Red Bull’s product line it offers sugar free drink that may entice those consumers who are concerned about moderate sugar consumption. In addition, current Red Bull’s marketing promotion is closely connected with sports what create positive image associating red bull with healthy life-style. The last weakness that format of the paper allows to consider is the unclear perspective of targeting the female audience. According to the statistics (Appendix 1) only 26% of female students used to drink energy beverages, while among males this percentage is about 54.

This statistics proves that females tend not to form the target market of Red Bull. However, 26% is still a big number and potential market niche of untouched 74% looks alluring. Moreover, there is no appropriate energy drink for females (except sugar free red bull) with special flavors, color and can design on the energy beverages market. That is why entering this segment might be profitable for Red Bull. Furthermore, it also can be tested on one of the events organized by Red Bull.

Conclusion

To sum up this paper it should be added that although suggested marketing strategy directed on enhancing of brand loyalty has some disadvantages, current market dominancy of Red Bull and brand heritage and image that it has created allows the company to fulfill proposed action plan with discounted risks. The main thing that should be taken into account is that accomplishing of this plan should be corresponded with specific company’s image, because it is supposed to be one of the main reason why Red Bull holds the leading position on energy beverages market.

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Brand Report – Monster v Red Bull

At the heart of every great organization, Is a world class product or service and in any competitive business market, organizations rival to be every consumer’s “first choice”. Effective brand management Is essential to every business – building strong brands that not only reflect value and credibility, but also outlive the product or service the business offers, Is a challenge for many organizations today.

The FMC (Fast Moving Consumer Goods) industry is one of the biggest industries in the world, simply because of the rand’s and products that make up this sector such as Colgate, Dove, Palmolive and the list goes on. This report will compare two FMC brands within the Australian market, namely Monster Energy and Red Bull, and the consumers levels of brand awareness towards the selected brands. It will also discuss the importance of brand association and how this is measured.

Through the use of these brands, Monster Energy and Red Bull, the report will illustrate the importance of an organization’s ability to continuously build brand awareness with its consumers. Launched by Hansen Natural In 2002, Monster Energy penetrated the Australian market In 2009 ND has since bumped up the consumption of energy drinks In Australia to 225 million liters, resulting In gross sale of $2. 37 billion, according to Monster Corps’s 2012 annual report. This figure also includes Australia’s number one selling energy drink company, Red Bull, with a market share of 40%.

As defined by Kettle (2009), a brand can be a name, sign, logo, symbol or a combination of these, that identifies an organization’s product or service, differentiating them from other competitors. According to Keller (1993), brand equity is conceptualized from the perspective of the individual consumer. He also asserts that customer-based brand equity (CUBE) occurs when the consumer is familiar with the brand and whilst holding favorable, strong and unique brand associations in memory (1993). CUBE (Customer-Based Brand Equity) is further defined by Keller (1993, up. ) as the differential effect of brand knowledge on consumer response to the marketing of the brand. Brand knowledge Is defined In In terms of two components; brand awareness and brand Image. According to Keller (1 993), brand awareness relates to brand recall and recognition performance by consumers, whilst brand image refers to the set of associations that consumers hold in memory. Since its launch in 2002, Monster Energy has developed strong brand salience, despite its non-evocative brand name.

Placing the word ‘energy’ with ‘Monster assists the customer to associate the product with the correct category. Brand salience is the first step in Seller’s CUBE model (2008) and where organizations must establish who they are and what the brand represents to consumers. Establishing an identity and creating brand awareness is important at this stage, as it is when customers initially create perceptions about the brand. McDonald & Sharp (2003) assert that a brand that has some level of brand awareness Is more likely to be selected by the consumer, than a brand unknown to the consumer.

A challenge FMC companies must consider, Is the consumer’s lack of decision making process Involved at the time of purchase, making It difficult for new brands to penetrate an already infiltrated industry. When Monster was initially low. Despite heavy marketing promotions and sporting associations, Monster’s position within Australia’s energy drinks category was relatively low, in comparison to market dominator and competitor, Red Bull. In comparison to its rival, Red Bull, Monster’s brand salience lacks depth in the minds of Australian consumers.

Although the Monster’s logo of a monster claw shaped as an ‘M’ is easily recognizable internationally, Australian consumers still lack the ability to recognize or recall the product category in which Monster belongs. The breadth of brand awareness concerns the range of purchase and usage situations in which the brand comes to mind (Keller, 2008), which largely depends on the organization of the brand and the product knowledge in consumers’ memory.

Today, Red Bull is the most recognized ND profitable energy drink in the world and is a beverage consumed at any time throughout the day. Both Red Bull and Monster offer a range of energy products, targeting consumption at different times throughout a given day. Both brands have broad brand awareness, consumers associating them with extreme sports, beverage for consumption early, mid or late in the day and an energy booster. Experiment 1 A research survey was conducted with a sample of 30 participants, 1 5 of which were male and 15 female (Fig 1 & 2).

The objective of the survey research was to: Determine if males or females consume energy drinks and how frequently To determine the position of both Monster Energy and Red Bull in the mind of consumers Determine when and where the energy drink is most consumed Procedure The survey was formed with the appropriate questions to provide the data required to support brand awareness research on the energy drinks category. Participants were recruited from Speeches Australia Pity Ltd and also several students from the University of Western Sydney, Parameter campus.

Results The first question was to determine how frequently males and females drink energy drinks throughout any given week (Fig 3). 19 participants reported drinking 1 or less energy drinks throughout the week with only 2 drinking 5 times a week. The next question asked what energy drink they consume and Red Bull came in at 43% popularity and Monster ranking third place at 20% Fig 4). The third question was asked to determine when and where the participants consumed their selected energy drink (Fig 5). 17 participants reported having an energy drink in the afternoons, with mornings being the time energy drinks were least consumed.

Consumption within the workplace was reported as being the most common place of consumption with social events ranking in second with a reported 9 participants (Fig ). Summary Although the sample was small, the data research supports the statistics that Red Bull Energy rates higher in consumer’s minds than Monster Energy. Despite both brands being strongly associated with humor, fun, excitement and extreme sports, one can conclude that because energy drinks are most consumed during the day and within the workplace, the breadth of brand awareness for both Monster and Red Bull is relatively broad.

According to Asker (1992), brand association is anything linked in memory to a brand associations enable a company to differentiate their brands in the market and can be tildes as an organization’s competitive advantage. Keller (2013) classifies brand associations into three categories; attributes, benefits and attitudes. Attributes are the features of the brand, benefits are the values the consumer attaches to the brand and attitudes refers to the consumer’s overall evaluation of the brand. Building brand equity can also be done through the leverage of related or secondary brand associations (Keller, 2013).

Secondary brand association can be an effective way for an organization to reinforce existing strong, favorable and strong associations if the existing brand is deficient. Red Bull uses celebrity endorsements, sporting, cultural and community events as secondary brand associations. Low & Lamb (2000) discusses the importance of firms measuring being able to measure associations with their brands and the techniques that can be used to accurately measure consumer brand associations. Brand image, attitude and perceived quality have been used to measure brand associations for many years.

After much research, Low & Lamb concluded that not all brand scales such as personality or attributes can be applied across all categories, therefore, acting as separate constructs as opposed to nee-dimensional brand associations. This gives rise to the idea that consumers now have more developed memory structures for more familiar brands. The authors also suggest that care must be taken when measuring associations of familiar brands – as quoted by the author ‘Familiarity moderates the dimensionality of brand associations’.

Asker (1996) asserts that in order for organizations to perform optimally and allocate resources fairly across its portfolio of brands, it must implement common measures of performance. Managers should seek new branding strategies, to always from the same category as their product, but from the other brand categories. This will provide fresh ideas and new insight, resulting in new product positioning in the market. Kara also discusses the use of ten different measurements used to measure brand associations.

He also asserts that the one measurement of brand equity that can be used is price premium. The reason behind this is that regardless of brand, any driver of brand equity will affect price premium. The consumer’s association with any given brand is important to any organization wishing to maintain competition in the business market. Suppresses (2000) discusses the lack of knowledge regarding brand association relevant to other brands in other product categories. Suppresses points out the challenges brought about by private label brands.

Suppresses also discusses the ways by which firms can research consumers’ brand associations including lengthy personal interviews as opposed to group interviews and validating given answers to questions. By validating answers, one can increase the probability of detecting hidden associations. Suppresses concludes that brand managers need to attain a deeper understanding f the sources of brand equity in order to implement optimal brand strategies and to maintain effective communication. The way by which firms undertake research should delve into the unconscious and non-verbal associations that consumers have for their brands (2000).

Experiment 2 Personal interviews were conducted with two participants, male and female, aged 27 and 19 respectively. The objective of the survey research was to: the emotions associated with Red Bull’s secondary association through sporting imagery Determine the emotions evokes when the participants brand Red Bull Procedure The interview was conducted to determine the emotions consumers have Bull and its secondary brand association. Both participants (Male A and were students of University of Western Sydney, Parameter campus. Rest The words ‘RED BULL” was vocalizes to each participant two times.

The FL to measure their initial reaction and the second was to validate that area reacted immediately with instant recognition and slight excitement. Fem. recognition but not of excitement. When validating their reactions, Male loves the brand and is a regular consumer however, Female B said she c Red Bull but is not a fan of the taste. A picture of the Red Bull logo (Fig. 5; to both participants and both reacted similarly, with recognition. Male A recognition and affordability for the brand with the use of facial express head gestures.

Similar to the reacted of Female B, although she wasn’t t the product. The third measurement was through the use of imagery re Bull’s secondary association, sporting endorsements (Fig. 8). Male Bi’s ex. increased and he vocalizes his interest in X-tree sporting events and of Red Bull’s consistent involvement in the sporting arena. Female Bi’s en however, dropped and was visible by her posture and lack of verbalism Brands can evoke strong emotions and memory associations from consul that one’s negative perception of the brand as a result of taste or expert difficult for organizations to change.

The research also illustrates that the association consumers hold with Red Bull is a positive one. Following Ex and Experiment 2, the results reflect the premise that the selected bran extensive brand salience with consumers and that if consumers are expo positive marketing, perceptions tend to remain. Red Bull is a superior BRB otherwise saturated energy drink category, posing increased competition riveter label beverages and other energy brands. By continuously impair strategic branding, firms can be certain that with these strategies, it will competitive edge within the business market.

Brand management with industry is of utmost importance, as monopoly retailers continue to dicta brands to display on their shelves, minimizing consumer choice and the increasing competition within all product categories. The energy drinks exception, with consumers increasingly becoming more health conscious industry battling to remain competitive with an increasingly globalizes market. With the right brand strategies and managers to drive and imply strategies, one can be confident that Red Bull will continue to dominate energy market share. Appendix Fig 7.

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Market research on red bull india

Fresh coca leaves were replaced by “spent” ones in 1904 because of concerns over the use of cocaine in food products, and the federal lawsuit United States v. Forty Barrels and Twenty Kegs of Coca-Cola forced the company to cut back the amount of caffeine in the formula by 1916, thus bringing an end to the first wave of energy drinks. An energy drink is a type of beverage containing dominant drugs, chiefly caffeine, which is marketed as providing mental or physical stimulation.

They may or may not be carbonated, and generally contain large amounts of caffeine and other stimulants, and many also contain sugar or other sweeteners, herbal extracts and amino acids. They are a subset of the larger group of energy products, which includes bars and gels. There are many brands and varieties of energy drinks. Energy drinks have the effects caffeine and sugar provide, but there is little or no evidence that the wide variety of other ingredients have any effect.

However, a variety of physiological and psychological effects have been attributed to energy drinks and their ingredients. Two studies reported significant improvements in mental and cognitive performances as well as increased subjective alertness. Excess consumption of energy drinks may induce mild to moderate euphoria primarily caused by stimulant properties of caffeine and may also induce agitation, anxiety, irritability and insomnia. During repeated cycling tests in young healthy adults an energy drink significantly increased upper body muscle endurance.

It has en suggested that reversal of caffeine withdrawal is a major component of the effects of caffeine on mood and performance. Sports and energy drinks are heavily marketed to children and adolescents, but in most cases kids do not need them – and some of these products contain substances that could be harmful to children. “Energy and sports” is one of the fastest growing and most innovative segments of the drinks market. Daring innovations on the formulation side are matched by bold new packaging concepts and marketing approaches. Energy drinks are typically attractive to young people.

Approximately 66% percent of its drinkers are between the ages of 13 and 35 years old, with males being approximately 65% of the market. A 2008 statewide Patient Poll conducted by the Pennsylvania Medical Society’s Institute for Good Medicine found that: 20% of respondents ages 21-30 had used energy drinks in high school or college to stay awake longer to study or write a paper; 70% of respondents knew someone who had used an energy drink to stay awake longer to study or work. Energy drinks are also popular as drink mixers. Since 2002, there has been a growing trend for packaging energy drink in bigger cans.

Since in many countries, including the US and Canada, there is a limitation on the maximum caffeine per serving in energy drinks, this allows manufacturers to include a greater amount of caffeine by including multiple servings per container. Popular brands such as Red Bull, Hype Energy Drinks and Monster have increased the amount of ounces per can. (For example, when Red Bull first came on the U. S. Market, it was primarily in sells a can as big as 32 oz. (946 ml). ) Most energy drinks in the United States, with a few exceptions, primarily sell their drinks in 16 oz. 73 ml) cans, a trend provoked in part by companies such as Rockiest Energy promoting the 16-ounce cans over Red Bull’s smaller ones in the mid-sass. Conversely, the emergence of energy shots has gone the opposite way with much smaller packaging. Variants Energy shots are a specialized kind of energy drink. Whereas most energy drinks are sold in cans or bottles, energy shots are usually sold in smaller ml bottles. Energy shots can contain the same total amount of caffeine, vitamins or other functional ingredients as their larger versions, and may be considered concentrated forms of energy drinks.

The marketing of energy shots generally focuses on their convenience and availability as a low-calorie “instant” energy drink that can be taken in one swallow (or “shot”), as opposed to energy drinks that encourage users to drink an entire can, which may contain 250 calories or more. Rank 2012 2012 sales ($millions) 2011 2011 sales ($millions) 5 Hour Energy 896 2 6 Hour Power 30 Red Bull Shot 25 Word 14 4 Monster Whitman 10 Stacker 2 Intro 2 GO 3. 4 Redline Power Rush 3. 5 7 Redline 3. 2 Spike Double Shot 8 Vital 41. 1 3. Energy shots continue to resonate with an older demographic because they are received as safer than energy drinks, and are lower in calories, sugar and caffeine. They also don’t come with the crash usually associated with energy drinks. Consumers who don’t want energy drinks, but are looking for the functional benefit of an energy boost are gravitating to the shots. Energy drinks such as Red Bull are often used as mixers with alcoholic beverages, producing mixed drinks such as Vodka Red Bull which are similar to but stronger than rum and coke with respect to the amount of caffeine that they contain.

They are also sold in a wide variety of formulations such s Four Look and loose which combine caffeine and alcohol. Four Look, a product of Passion Projects, was originally promoted through young employees who were hired to introduce the product to their peer group. Red Bull continues to dominate as the energy drink leader, but Monster has experienced huge growth in the last few years. The energy drink market continues to grow even in light of the tough economy and increased health scrutiny. Soda sales have been declining steadily over the same period, while energy drink sales have been booming.

Rank Red Bull 2,950 Monster 2,600 1 ,900 80 Rockiest Amp 300 330 NOSE 250 Doubles 6 Full Throttle 140 220 Science Synergy 130 vex Redline North America, and particularly the US, leads the world in energy drink consumption due to the convergence of consumers seeking both functional and lifestyle beverages. Western Rupee’s number two position in value terms reflects the popularity of the beverage as a premium product, particularly in the on-trade, where the drink is still commonly combined with alcohol. This on-trade presence also aids in the lifestyle and premium positioning of the beverages.

Asia Pacific, birthplace of energy drinks, is growing, but still trails North America and Western Europe in terms of value. In many of these markets, energy drinks are a working class tonic, viewed more for function than lifestyle. Latin America holds the most promise, as consumers are embracing lifestyle beverages, but the novelty of energy drinks is not as effective since functional beverages are widely known in markets like Brazil. The global energy drink market is likely to benefit from moving into untapped markets and marketing toward an older population.

Following consumer trends will prove equally important, tit leading companies including natural and organic ingredients in their products. Parents concerned about the rising rate of child obesity are also likely to respond to lower sugar and caffeine content product offerings. With rising consumer interest in health and natural foods, there’s a rush by all beverages companies to capture a new segment -? the energy drinks category. According to Beverage Marketing Corporation, the energy drink market grew by more than 102 percent worldwide over the past year and continues to grow tremendously.

Though there are over 2,500 brands available worldwide, it’s Just the start for India. No official figures are available on the size of the energy drinks market, but industry sources peg it around RSI 5-8 core. Says Japed Kapok, chairman and managing director,”let’s Just a fad. The market’s minuscule. As of now, there’s a niche in the market and no market for the niche. ” According to FMC analysts, the concept of energy drinks is new to the Indian consumer. And it will take a long time to develop the market. A major obstacle is said to be the pricing.

These drinks contain ‘vitiating’ ingredients like terrine, ginseng, Guarani and L-carnation, which are very expensive. This gives them a premium over other soft drinks and beverages in the market. As the category has shown strong growth internationally, the functional soft drinks market has attracted many of the world’s leading multinational soft drinks firms to India. Pepsi has plans of launching one of their international brands Adrenaline Rush or AMP here by the end of next year. But Coca-Cola India has the first mover’s advantage with its Shock.

Says Shrimps Nadir, vice-president, marketing, Coca- Cola India, “The company’s vision is to lead the beverage revolution. Shock volumes eave been as per our expectations. It’s now clearly the leader in its segment. “let may be easy for Coke as its pricing is more acceptable to the Indian consumer. Shock is priced at RSI 40 and is available across 150 outlets. But for other brands it may be a tough road ahead. “In 2001, Red Bull sold 1. 6 billion cans. This was an 80 per cent increase over 2000 and there’s still a huge untapped potential,” says Norte Kramer, global director, marketing and sales, Red bull.

Red Bull can’t really boast of such figures for the Indian market. It is available for RSI 200 upwards at high-end CICS and pubs. Mesh Gouda, director, Gnarl’s Hospitality Services, says popular places like Velocity and Fire and Ice in Iambi order 30-40 cases every week. Though many brands have ambitious plans of spreading to local retailers, Neared Podia, deputy general manager, purchasing and operations, Foothold feels, “In the long run, these drinks may not survive because of their pricing. Red Bull used to sell around 75 to 100 cans in a month as compared to two cases of Shock! K every day. While reluctant to reveal actual figures, Rave Augural, director, Tradition Exam, the company hat distributes Dark Dog here in India, says, “Our brand’s Just been introduced in the market and we still have to spread our wings and introduce our product in many more cities. The market is not matured and it’s difficult to provide statistical data to show how much we’re selling. ” In a market where soft drink giants find it to survive, despite all their glam advertising, brands like Red Bull and Dark Dog may find it tough to break through. “Dark Dog usually refrains from above-the-line advertising.

The most effective marketing tool Dark Dog has is word-of-mouth advertising. The on- meeting new in a relaxed and fun atmosphere,” says Tanta Cocker, marketing manager, Dark Dog. Red Bull, on the other hand, occasionally organizes theme parties at popular hangouts in the cities it’s available in. “Though the vision of one billion Indians rushing to buy Red Bull is most exciting, we have realistic expectations. The quality and right mix of sampling, promotion and targeted distribution to build a loyal base of consumers in India is the key, and will be our focus when we launch Red Bull,” says Chit Harriet, managing director, Red Bull, Asia.

Worldwide, each passing ear brings greater demands on body and mind. However, one does wonder if all these newfangled energy drinks are worth the money! Start-up Hector Beverages is out to prove its energy drink Taking has enough zing to take on giants. Start-up Hector Beverages is out to prove that its energy drink Taking has enough zing to take on giants Start-up Hector Beverages is out to prove its energy drink Taking has enough zing to take on giants. “Here’s what the outsider would see: a new entrant, in an unproven space, out to take on giants with the deepest of pockets (any guesses on hat Coke pays Mari Khan, or Pepsi gives to MS?

Or how much does Red Bull’s Formula 1 team cost? ) And the company goes on and calls itself Hector, who lost to Achilles. But that, people, is the trip: the audacity of the underdog. We decided to take the big guys on. We decided to not be cowed down by the big bullies who make their fortune selling sweetened, fizzy water. And we know that Achilles does not have the most powerful heels. “BE asked the founders of energy drink Taking about this rather unusual approach to the company website and the brains behind it.

They tell us it’s to the doing of a radical creative boutique or hot shop, it came from within. To the point where the entrepreneurs actually wrote the copy themselves, and were happy enough with this bristling with bravado manifesto to actually put it on the website. And that’s not the only example of conventional wisdom that Taking has attached dynamite to. Hector Beverages was set up about two years ago by four individuals who have experienced everything from working for multinational corporations to dipping their feet in entrepreneurial ventures.

They are setting themselves up against both the Goliath, and the other Davis, who exist in the RSI 350-500 core Indian energy drinks market. The ruling matador in this arena is Austrian brand Red Bull that has been the drink of choice in many a Jeroboam and during brutally long study sessions. Then there are others in the market, from pedigree players like Coca- Cola’s Burn, local brands like Golden Healthcare Cloud 9 and KS an unlikely extension from a condom brand, besides a horde of sporadic imports from Monster to Pepsin’s Sobs. So we go back to the start -? is another energy drink brand a good idea or a foolish one?

According to co-founder Nearer Karma, in their shared beverage experience (a significant chunk of the founders’ previous careers have been with Coca-Cola) they could spot that the Indian market is disproportionately dominated by carbonated soft drinks. This was in comparison not Just to the developed economies but even countries like China, Brazil, Philippines, and Poland to say nothing of Thailand, the country of Red Bull’s origin. He says, “With that data point, we engaged with multiple consumers across Delhi and Bangor and realized significant player. ” Fair enough.

However, the fact is it’s a small waterhole where any are paddling hard to create ripples. So how does the small guy take on the big one? The men behind Taking are trying a series of tactics that includes its very competitive price, RSI 25 for a mall pack; a price tag that is a full RSI 50 less than the general asking price for even the cheaper brands in the category. A 250 ml can of market leader Red Bull on the other hand, costs RSI 95. It’s the result of what Taking considers genuine product and packaging innovation: a daypack instead of the usual metal can or glass.

Says co-founder James Neutral, “The important point here is that his is not unsustainable. For most consumer goods, packaging is the biggest cost and has a great impact on the retail price. We have been able to disrupt this aspect with our packaging. ” However it does pose a fairly unusual problem for the brand, with potential consumers wondering how an energy drink can be priced so low. Neutral admits, “This is related to the self-image aspect and does constitute a paradoxical marketing challenge -? that of marketing a better product at lower price! ” Blame it also on the lack of a well defined counter culture movement in the country.

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Consumer Behaviour Case Study – Red Bull: Rampaging Through Global Markets

MKTG 2101 Consumer Behaviour Case Study -Red Bull: Rampaging through Global Markets 1. What segmentation base has Red Bull adopted to target customers? How should Red Bull further segment the market in the future? Red Bull have adopted a segmentation base strategy relating to market demographics. In particular the company has targeted young active people aged 16 – 29 years. Red Bull also use geography, identifying mainly university students and urban professionals who needed an ‘energy boost’ throughout their busy schedules and activities.

Mateschitz’ strategy aimed to target opinion leaders, believing that “the authority of one alpha bee can influence the buying habits of hundreds”. The Red Bull segmentation strategy also has an important psychographic component, particularly focussing on young people with attitudes, perceptions and lifestyles that are consistent with risk taking, fast paced and energetic behaviours; highlighted with the company motto “No Red Bull, No Wings”. In order to continue to succeed, I believe that Red Bull must optimise opportunities in the growing economies of India and China.

With greater economic freedoms and increased population growth in the middle class there are millions of young people falling into an attractive demographic for the Red Bull product. These young people will be the opinion leaders of the future in their countries, therefore holding the key for a success. Ways in which the company can expand its current activities to begin the process will lie in the correct marketing strategies; in particular I believe that the continued sponsorship of extreme events in these regions will be the perfect way to introduce young people to the product in an exciting new way. . How does Red Bull arouse the motivations of customers to purchase its energy drinks? Red Bull and Mateschitz explain “we are always looking for a more creative, different point of view” (Dolan 2005) to promote and present the product to the customer. This attitude is consistent with the brand personality and the image of its customers. It is for this reason that the company aligns itself with the young male – fast paced and energetic, interested in extreme sports, risky behaviour and never satisfied with the last thrill.

The company too, is never satisfied, continuing sponsorship of extreme sports, owning Formula 1 racing teams and even developing its own sports such as BMX bike riding, Kite Boarding, Freeskiing, paragliding and more! The company is able to continually satisfy the needs of the market, arousing the customer with exciting new promotions and events which challenge the limits of human belief. For example, the Red Bull sponsored BMX events where the riders are attempting and completing unseen tricks and ‘death defying’ acts on a weekly basis.

The company has also attempted a viral marketing strategy, in order to get the product to the consumer in a cheap and effective way. However, these efforts are also well calculated, for example, the drivers of the Red Bull VW Beetle are generally extremely good looking females aged 19 – 28 years, attractive and corresponding for the targeted young male. 3. Describe the brand personality of Red Bull. Why do you think the concept of brand personality is so important to Red Bull?

Brand personality allows the consumer to develop a meaningful attachment to the product. People do not develop meaningful, long lasting relationships with the thing itself, it is when the consumer is able see the product with a certain persona, with feeling and meaning; it is then that the relationship develops and potentially blossoms. Red Bull and Mateschitz understand this and have created a brand personality that embodies excitement, energy and exhilaration, “Red Bull isn’t a drink, it’s a way of life”.

People are overwhelmed with the image, the amazing aura around the events and the excitement created by the athletes. Young people feel the product, the brand and the colours when they see these competitors doing the amazing things that they aspire to, enshrouded with the simple colours of silver and blue. A clean, refined image burned into their brain, connected to the memories of thrilling moments when their heart was pumping, hands were sweating and adrenalin was frantically pulsating through their bodies.

By creating these experiences for their consumer Red Bull are facilitating the development of important relationships with their product. In my opinion, maintaining brand personality and relationships is imperative for Red Bull. Mateschitz himself states, “We don’t bring the product to the people. We make it available and those who love our style come to us” highlighting his acknowledgement of the importance of people aligning themselves with the brand personality and developing a meaningful and long lasting relationship with the Red Bull product

References * Dolan, K. (2005). The Soda With Buzz. Forbes. com http://www. forbes. com/global/2005/0328/028 print. html * Sciffman, L. , O’Cass, A. , Paladino, A. , D’Alessandro, S. and Bednall, D. 2011. Consumer Behaviour, 5th Edition. Pearson Prentice Hall: Australia * Gschwandtner, G. (2004). The Powerful Sales Strategy Behind Red Bull. Selling Power. September. http://www. sellinpower. com

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Red Bull Case Analysis

Red Bull Case Analysis Purpose: to provide the chain of strategies Red Bull used to develop their brand equity and global market dominance in the energy beverage industry. Target Market: Red Bull does not target to a specific demographic or psychographic. Its strategy is to reach to a relatively broad consumer base. The target is anyone who need energy boost to combat their mental and/or physical fatigue. Red Bull knows their consumer base mostly involves students, drivers, clubbers, business professionals and athletes.

Product: Red Bull offers a premium energy drink supplement that provides essential ingredients to rejuvenate the mind and body. Red Bull consists of energy-enhancing ingredients: caffeine, taurine, and glucuronolactone packed in a 250 millilitre can. Price: Red Bull prices one 250 millilitre can at a premium price between $1. 99 and $3. 00 which makes it significantly more expensive than traditional soft drinks. Their pricing strategy is to charge at least 10 % greater than the most expensive competitor reinforce their position.

Promotion: Red Bull relies on one of the most effective forms of marketing, “word-of-mouth”. Along with the word-of-mouth strategy they also do event sponsorships, sampling programs, point-of-purchase marketing, athletic endorsements, and electronic media buys. Red Bull Mystic: When the product first lunch Red Bull created a buzz by putting empty cans in bars and night club to make the consumers believe that it was a popular product. As a result the consumers started talking about and want to try it out of curiosity.

Event Sponsorships: Event sponsorships greatly increase the recognition of the brand. Red Bull currently has ninety individual events that have been created from the ground up. Most of the events are non-mainstream sports events that are typically extreme sports. Red Bull invests in doing their own events because they control everything and strive to make the event very unique, so they can get into the media. Athlete Endorsements: The athletes Red Bull endorses are carefully select for their individual qualities that fit with the brands personality.

Red Bull would simply make the drink available to the athletes during their competition where they would sample it and then potentially become frequent users. When a particular athlete that fit with the brand would become one of their frequent users, Red Bull would then make a sponsorship deal with that athlete. Sampling: Sampling is the most essential aspect of Red Bull’s marketing efforts. Red Bull offered samples specifically to consumers at music concerts, sport events, highway rest areas, and higher education campuses.

Red Bull assembles a team of college students to go out and encourage other to sample the drink, conduct research on drinking trends, implement on-campus promotions, collect customer feedback and educate the consumers about the product. Point-of-Purchase: Red Bull has its own miniature glass refrigerator with the brand logo on it. Red Bull also made sure that the refrigerator was place in a prominent location in the environment. Unfortunately some places do not allow Red Bull to use their own miniature refrigerator, in this case Red Bull in the existing store refrigerator.

Traditional Advertisement: Red Bull uses television ads, print, and radio advertisements. The television ads are a short animated commercial that clearly communicates the product benefits through intelligent dialogue and scenarios. The message in the commercials is “Red Bull gives you wings” and this message correlates directly to the brands positions. The commercials fitted well with the global market and reached a wide target audience because of the usages of well-known animated characters and simple universal concepts. Place: Red Bull is sold in the global market, but there are a few countries hat prohibit the sale of Red Bull because of specific ingredients and incidence in which Red Bull may have causes health complications. Those countries are France, Norway, and Denmark. In the countries that do allow the sale of Red Bull, it can be found in bars, nightclubs, convenience stores, school campuses, gas stations, and other places where the company believes their target will need an energy boost. Brand Strategy: The brand strives to continue to be the leader in energy drinks and upheld brand position and appeal.

It is ideal to the company to keep the buzz of Red Bull prevalent in the mind of the consumers as well as innovate and retain current users. Brand Position: Red Bull is positioned as a premium energy-boosting beverage that revitalizes the body and mind. Points of Parity: In the saturated market of energy drinks they all claim to boost energy and performance. The ingredients in the majority of the drinks are similar containing b-vitamins and significant amounts of caffeine. Similar brands are: Lucozade, Monster, Rockstar, and Full Throttle

Points of Differences: Red Bull technically exploited the energy boosting drink market. There large focus on word-of-mouth and large network of unique sponsored events keeps their brand fresh in the consumers mind. The are considered a premium drink with premium benefits because of the pricing and packaging appeal. Unlike their closest competitor the can focus exclusively on the Red Bull brand and continue to market towards local target markets instead of marketing to the masses as a whole. Core Brand Associations: Red Bull is associated with their extreme sports and athletic endorsement.

The events are unique and gather big media attention due to the uniqueness and hype. When a spectator is watching a Red Bull event they can expect to see something exciting because of previous Red Bull phenomenon. Red Bull has its own soccer team, Formula One Racing team and NASCAR team. If the sport is not a typical mainstream sport, Red Bull logo will probably be found at the sporting event.

Logo and Slogan: The logo is two red bulls facing toward each other as if they are going to collide in front of a yellow sun. The logo appears to be oriental theme and its significance probably is from the Thai energy drink, “Krating Daeng” that inspired Dietrich Mateschitz. The slogan is “Red Bull give you Wiiings”. Packaging: Red Bull uses a silver and blue 250 millilitre can with the Red Bull logo. Under the logo are the words “Energy Drink” and the phrase “Revitalizes body and mind” both, which effectively communicate the beneficial properties of the drink to the consumer.

The silver and blue pattern on the can is really effective in the brands salience and the cans are mostly sold in singles, but are offered in convenient packs priced the same amount as if each can is sold separately. Brand Mantra: Revitalize body and mind Four Steps of Brand Building Brand Salience: The aluminium and blue can pair with the logo “two red bull and sun” is highly associate with the brand. Brand Performance: Red Bull small premium can is thought of as being very effective and provides an energy boost for anyone who needs revitalization.

Brand Judgement: Viewed a being performance enhancing fuel and cool. This is mainly due to brand association with extreme sports and events. Red Bull is judged one of the strongest because it comes in a one 250-millilitre can Brand Feelings: Extreme, potent, excitement, revitalizing, cool, extravagant, premium Brand Resonance: Red Bull has high brand loyalty in the global market place. Consumers have high attachment and need for the product. The communities of extreme performers and extreme sports athletes, college students, and partiers have high loyalty.

Red Bull has high engagement with consumers, often offering deals and promotions for their events and regularly will visit a college campus or event to handout free Red Bull. It is even a popular alcohol mixer. Distribution: To ensure the quality and consistency of the point of purchase display, Red Bull employs their own delivery drivers to delivery the beverage and restocks the refrigerators. The product can be found at most convenience stores, trendy locations, and nightclubs. Brand Image: Health concerns have been an issue for Red Bull since its inception.

There was one incident in particular with, Ross Cooney, a basketball player from Ireland drunk four cans of Red Bull before playing a game and died of Sudden Arrhythmia Death Syndrome. There was never a firm conclusion that his cause of death was because of the four cans of Red Bull, but recently a consumer did die because of drinking too many Monster energy drinks. Monster is Red Bull’s leading competitor and this incident can negatively affect Red Bull even though it was a competitor’s product that cause.

The all-natural and organic industry is increasing and people are looking for energy products that are natural. There are a few energy beverage companies that are in that market already and Red Bull could enter it with no problem due to their brand equity. With that said, I recommend a few brand extensions. Other companies have different types such as a coffee version or a weaker version. The different brand extensions would satisfy needs in other submarkets that exist Red Bull just has to make sure they do not confuse the consumers and target the products strategically.

Red Bull has already began releasing and testing a small variety of flavours and I believe this is a good idea because I know from reviews and first hand experience that some people do not like the smell or flavour of the original beverage. I believe Red Bull’s advertising does a good job appealing to all the consumers’ lifestyle stages and appeals to the broad target. I believe Red Bull is doing a good job innovating their event marketing upping the ante every time. For example the Red Bull near space jump.

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