Red Bull(“gives you wings”)

Submitted By: YujataSubmitted To: Dr. Sameer Mathur

1. What are red Bull's greatest strengths and risks as more companies (like Coca-Cola, Pepsi, and Monster) enter the energy drink category and gain market share?

2. Should Red Bull do more traditional advertising? Why or why not?

3. Discuss the effectiveness of Red Bull's sponsorship, for example, Bull Stratos. Is this a good use of Red Bull's marketing budget? Where should the company draw the line? 

Key Research Questions

Red Bull is an energy drink sold by Austrian company Red Bull GmbH, created in 1987.

Red Bull is the highest-selling energy drink in the world, with 5.387 billion cans sold in 2013.

Red Bull operates many other businesses aside from energy drinks. The company owns and manages a construction company, football clubs, youth academies and TV broadcasting and recently online clothing (Red Bull label only) sales.

Additional media products include print magazines about football, motor racing, celebrity gossip and lifestyle. The company has even ventured into the mobile phone service business in Austria, Hungary, Switzerland and South Africa.

Introduction

Chaleo Yoovidhya, introduced a drink called Krating Daeg in 1976 Thailand. It means “red gaur” in English. It is inspired by tonic Lipovitan, whose prime ingredient is Taurine.

In 1984, Mateschitz co-founded  Red Bull with Yoovidhya.It was founded by each partner investing US$500,000 of savings and taking a stake in the new company. The product was launched in Austria in 1987.

History

To date, over 30 billion cans of Red Bull have been consumed worldwide, in over 160 countries

Red Bull first expanded to foreign markets in 1989 to Singapore, 1992 to Hungary, 1994 to Germany, 1995 in the UK, and finally 1997 to the USA, starting in California

Growth• 1987: Available in 1 country• 1992: Available in 3 countries• 1995: Available in 15 countries• 1998: Available in 45 countries• 2001: Available in 73 countries• 2004: Available in 124 countries• 2009: Available in 160 countries

Target Market

Analyze the 4PsA Sales and Distribution Approach

Red Bull Products are available in cans of different capacities , varying in their ingregients providing variety in taste.

Inference: Not so diversified in terms of product

Product Diversification

Diversification

Red Bull is available in cans of different capacities and flavors, thus pricing of the product is according to its particulars.

250 ml Rs.99.00

140 mlRs.140.00

1000 mlRs.375

Sugarfree, 250mlRs.99.00

Pricing

Inference: Very high cost, not for low income population

Sampling Program

Word of Mouth

Event Sponsorship

Sampling Program

Point of Purchase

Athlete Endorser

Advertisement

Promotions

Word of Mouth

Point Of Purchase

Event Sponsorship (Currently Red Bull is organizing Grand Pix Of Catalunya which is to be be held on 3 Jun,2016)

Athlete Endorsement

Advertising

Red Bull invests in online platforms that will give them a better marketing

Instead of relying on audience traditional media properties, Red Bull is building their own audiences through business development and inbound marketing.

Such cartoons are really catchy for target market of Red Bull,Hence Advertising through such commericals enhance their popularity among youngsters.

Vast Social Media Presence

Modern Channels

Red Bull is involved in intensive distribution, which aims to saturation coverage of the market by using all available outlets such as: Supermarkets Gyms Coffee Houses In and Out convinence stores

Supply and Distribution

College students as College

ambassadors for promotion and

distribution

No e-tailing platformPromotional Cans are distributed for free at night clubs ,night spots.Sometimes a direct distribution channel is also followed in case of Red-Bull events

• From being seen as a “market-less” product, Red Bull managed to sell more than one million cans in 1997. • By 1998, this number has grown to 300 million cans. The company has reported a sales record of US$1 Billion

(Sauer 2001). By 2004, the number of cans sold has increased to 1.9 billion and the profits reached US$2 Billion (Dolan 2005).

• Because of its marketing strategies, however, the sales force has grown dramatically. The company’s use of guerrilla marketing and direct distribution was so effective that Red Bull was able to create its own market, despite of the earlier research that it virtually did not have a market at the onset (Dolan 2005).

• Its sales force consists of agents and dealers who coordinate with retail outfits. There are also those who distribute the product directly to consumers especially if there are sporting and other events sponsored by Red Bull.

Sales Force

Segmentation Yes, mostly to Sportsmen and teenagers

Promotion

Communication strategy

Brand extensions

Brand ambassadors

Sold for free in Clubs, night spots, sports events.

Tag lines such as “gives you wings” clearly communicates it as an Energy drink

Yes, but not significant. Mostly focuses on health factor-”sugar free”; “zero calorie”

No prominent Brand ambassador. However advertises in race car logos, F-1 Racing

PackagingAluminum cans, cause waste management issues. Available in different

volumes

Marketing Strategies

AdvertisementTelevision, Digital Channels. However frequency is less, mostly focuses

on direct marketing

Personal SellingHire college students to deliver its products and finally, hiring hip locals ‘who

embody the spirit of Red Bull’ in target areas to drive around in a Red Bull logoed car

Social Media Presence Massive (Facebook, Twitter, Google, Pinterest)

Overall SummarizingFollows a Grassroots marketing strategy

Grassroots strategy has been quite successful for Red Bull. However due to increased competition, changing market demands and low product diversification, along with grassroots strategy, lately it can be seen from our analysis that Red Bull has been moving towards traditional advertising.

Red Bull has taken measures to ensure the general public that drinking their product is safe and not harmful for human health. This was evident from the launch of “sugar-free” variant. Thus more traditional advertising is required to promote the health benefits of the dirnk

Outcomes from the above analysis

RQ-2

Financial Analysis

Red Bull reported exceptionally strong net sales growth in South Africa (+52%), Japan (+51%), Saudi Arabia (+38%), France (+21%), the US (+17%) and Germany (+14%). Red Bull cited efficient cost management and ongoing brand investment as underpinning its growing profitability.

In value terms, the company’s performance was stronger in recent years although even in value terms the company’s performance fell below that of the energy drinks market overall.

The energy drinks market has attracted a number of other players including Monster Beverage Co, and The Coca-Cola Co (TCCC)

Top 10 players in soft drinks by value share

Red Bull GmbH however with its relatively premium but small serving size Red Bull brand ranks seventh in 2012. The company’s narrow focus in soft drinks, being almost exclusively based on energy drinks, continues to keep the company out of the top five in soft drinks.

TCCC and PepsiCo capture a stronger share in value than in volume terms chiefly due to their products, particularly carbonates, being priced higher than local brands and private label, benefiting from strong brand equity and extensive distribution networks

SWOT ANALYSIS

STRENGTHWEAKNESSOPPORTUNITIESTHREATS

STRENGTH WEAKNESSSCATEGORY LEADER :Red Bull has established a strong, consistent brand image (an independent, edgy brand) globally. Red Bull is synonymous with energy drinks in many countries. GLOBAL PRESSENCE :Red Bull has a broad geographic presence, which should ensure positive long-term growth even if certain markets reach maturity.MARKETTING

STRATEGY:The promotional activities engaged by Red Bull throughout extreme sports sponsorships have helped the brand to build a strong identity and consumer base

CATEGORY LIMITATIONS :

Red Bull has a limited product portfolio compared to the rising number of rivals with a plethora of flavour variants and categories.PRICING:Red Bull products are above the energy drinks average price,consumers tend to think twice at the time of purchase.CONTROVERSIAL :The relatively high caffeine content of Red Bull makes the brand highly vulnerable to regulatory control

OPPORTUNITIES THREATSEMERGING MARKETS:Emerging markets represent newer geographies for Red Bull’s expansion. Accelerating the marketing and sponsorships in these markets is a wise move.NEW PRODUCTS:Red Bull is building a new production facility in Brazil which is likely to make its retail price more competitive than imported product prices. Building a site in Asia should also be considered. PRODUCT LINE

EXTENSION:Offering new flavours and formats will help Red Bull to improve its market shares.

COMPETITION:Monster represents the biggest threat to Red Bull as it contains natural ingredients, which seem more desirable than Red Bull for some consumers.NEGATIVE

PUBLICITY:Media reports that ,Red Bull is harmful for health,recent reports claim that Red Bull drinks comprises of bull semen,though all this is rumour,but it influence company’s image.

Summary

Red Bull is consider as pioneer of energy drinks throughout world.Red Bull has encountered a lot of trials and tribulations in order to build a brand, for which it is known today.It has followed brilliant strategies which worked for it and helped it to build a brand image.According to current scenario, it is leading among all the competitors in energy drink market,though theres a tough competition but it has maintained its leading position.

DISCLAIMER

http://www.redbull.com/in/enhttps://en.wikipedia.org/wiki/Red_Bullhttp://www.nytimes.com/2003/10/06/nyregion/flights-of-fancy-but-flopsin-reality.html https://images.google.com/ https://www.facebook.com/redbull