Red bull

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Red bull

  1. 1. Marketing PlanRed BullTariq Hameed SiddiquiHafiz Umair PatelHafiz Memon
  2. 2. Marketing PlanContents History ................................................................................................................................................. 2 Background ......................................................................................................................................... 2 Introduction ........................................................................................................................................ 3 Mission ................................................................................................................................................ 3 Vision................................................................................................................................................... 3Marketing
Background .......................................................................................................................... 3 Company
and
Product
Review......................................................................................................... 3 Distribution/Penetration .................................................................................................................... 4 Target
Market
Statement ................................................................................................................. 4 Pricing.................................................................................................................................................. 4Competitive
Analysis.............................................................................................................................. 5Marketing
Plan ....................................................................................................................................... 5 Sales
Objectives ................................................................................................................................. 5 Target
Market .................................................................................................................................... 5 Target Market of Red Bull ................................................................................................................... 6 Market Segementation Strategy ......................................................................................................... 6SWOT Analysis......................................................................................................................................... 6 Strengths ............................................................................................................................................. 6 Market leadership ........................................................................................................................... 6 Marketing efforts ............................................................................................................................ 7 Cadbury Schweppes alliance ........................................................................................................... 7 Weaknesses ........................................................................................................................................ 7 Lack of innovation ........................................................................................................................... 7 Reliant on small product base......................................................................................................... 7 Marketing expense ......................................................................................................................... 8 Opportunities ...................................................................................................................................... 8 Diversification of retail outlets........................................................................................................ 8 Extension of product line ................................................................................................................ 8 Geographical expansion .................................................................................................................. 8 Threats ................................................................................................................................................ 9 Public health concerns .................................................................................................................... 9 Maturing market ............................................................................................................................. 9 Consumer awareness of health and well being .............................................................................. 9 1
  3. 3. Marketing PlanHistoryIn 1982, Dietrich Mateschitz became aware of products called "tonic drinks", which enjoyedwidespread popularity throughout the Far East. His idea to market these functional drinksoutside Asia evolved whilst he sat at a bar at the Mandarin Hotel in Hong Kong.In 1984, Mateschitz founded Red Bull. He fine-tuned the product, developed a uniquemarketing concept and started selling Red Bull Energy Drink on the Austrian market in 1987.This was not only the launch of a completely new product, in fact it was the birth of a totallynew product category. Meanwhile Red Bull is present in over 160 countries.Since 1987, around 30 billion cans of Red Bull have been consumed, more than 4.2 billion in2010. The responsibility for the success of the worlds No. 1 energy drink is shared by thecompanys 7,758 employees around the world (compared to 6.900 in 2009). The Red Bullheadquarters are based in Fuschlam See, not far from Salzburg, Austria.BackgroundRed Bull GmbH produces the worlds leading energy drink. More than a billion cans a yearare sold in nearly 100 countries. Red Bull holds a 70 percent share of the world market forenergy drinks, or functional beverages, a category it was largely responsible for building. Itsdominant position in the fastest-growing segment of the soft drink market in a number ofcountries has drawn a number of imitators. Red Bull has become a case study in successfulguerilla marketing in the United States and United Kingdom. Marketing is aimed at hipyoung people with active lifestyles, though the formula began as a popular tonic for bluecollar workers in Thailand. 2
  4. 4. Marketing PlanIntroductionRed Bull Energy Drink is a functional beverage. Thanks to a unique combination of highquality ingredients Red Bull Energy Drink vitalizes body and mind. Red Bull Energy Drinkhas been developed for people who want to have a clear and focused mind, performphysically, are dynamic and performance-oriented whilst also balancing this with a fun andactive lifestyle.In short, Red Bull gives wings to people who want to be mentally andphysically active and have a zest for life.MissionOur mission is to be the premiere marketer and supplier of RedBull in Asia, Europe and other parts of the world. We will achieve this mission by building long term relationships with the people who can make it a realityVision We create a working environment in which employee are respected and are trained to maximize their skills. We seek to provide reliable products to our customers and will never compromise on cost for quality. We will maintain our leadership position in the energy drink market through this we aim to increase profitability and become a brand which is well known in energy drink market.Marketing
BackgroundCompany
and
Product
ReviewIn
1982,
Dietrich
Mateschitz,
creator
of
Red
Bull
alongside
Chalerm
Yoovidhya,
saw
where
Japan
and
Thailand
were
heading
in
the
energy
drink
market
and
decided
theywanted
a
piece
of
the
pie.
By
1987,
Austria
proved
to
be
a
difficult
market
for
Red
 3
  5. 5. Marketing PlanBull
to
survive
in
and
soon
Mateschitz
expanded
into
Hungry
and
the
rest
of
Germany.
After
expanding
across
Europe
with
a
lot
of
trial
and
error
Red
Bull
was
$12
million
in
the
hole.
Rather
than
scrapping
Red
Bull
as
a
loss,
Mateschitz
fired
all
his
staff
and
hired
a
marketing
firm
to
help
him
target
nightclubs
and
students.
Buzz
marketing
became
the
main
focus
of
Red
Bull’s
marketing
plan,
and
soon
students
were
pounding
campus
pavement
and
driving
around
inMini
Coopers
with
a
big
Red
Bull
canstrapped
ontop
with
free
samples.
His
buzz
marketing
proved
to
be
not
only
cost
effective,
but
the
very
thing
that
gave
Red
Bull
its
appeal.
Although
Red
Bull
was
not
welcomed
with
open
arms
in
all
countries,
such
as
France,
Denmark
and
Norway,
it
was
growing
and
expanding.
Mateschitz
soon
realized
that
an
extreme
sporting
event
was
a
profitable
avenue
to
take
Red
Bull
down.
Red
Bull
started
supporting
approximately
500
extreme
sports
athletes
and
hosting
exclusive
parties
for
these
rock
star
competitors.
By
1997,
Red
Bull’s
buzz
marketing
strategy
proved
successful
in
the
U.S.
as
well.
Events
are
now
hosed
throughout
the
world
ranging
from
B.A.S.E.
jumping
to
surfing.
Their
tagline,
“gives
you
wings”
is
known
worldwide
and
Red
Bull
sponsors
public
and
private
events
such
as
the
X‐games
and
the
Red
Bull
Air
Races.Distribution/PenetrationRed
Bull
is
distributed
in
most
grocery
store,
convenience
store,
and
gas
station allacross
the
U.S.
such
as
HyVee,
SuperSaver,
Safeway,
Trader
Joes,
Conoco,
Quick
Trip.Also
found
in
discount/supercenter
stores
as
Target
and
Wal‐Mart.In
2002, Red
Bullcompleted
its
distribution
share
and
the
product
is
now
available
in
all
50
states.Target
Market
StatementRed
Bull’s
target
market
are
young,
on
the
go
people,
who
enjoy
extreme
sports
andlead
an
active
nightlife,
anywhere
from
18‐35,
who
lead
an
active
lifestyles,
and
are
skeptical
of
traditional
marketing.PricingThe
pricing
of
Red
Bull
varies
from
if
the
consumer
is
buying
an
individual
can,
which
the
price
is
Rs.150,
compared
to
a
case
of
Red
Bull.

The
average
price
of
a
caseof
24
Red
Bull
is
Rs.130,
but
depending
upon
the
distributor,
the
prices
may
vary.Pricing
for
energy
drinks
vary
by
brand,
but
Red
Bull
is
the premium.
 4
  6. 6. Marketing PlanCompetitive
AnalysisRed
Bull
can
be
easily
copied
because
the
ingredients
were
printed
on
the
can,drink
was
not
patented.Even
though
the
taste
of
Red
Bull
did
not
do
well
intaste,it
was
the
marketing
strategy
that
made
Red
Bull
so
successful.In
the
late
80s,
around
the
same
time
Red
Bull
was
spreading
across
Europe,
American’s
were
drinking
Jolt
Cola,
which
was
advertising
as
having
“all
the
sugar
and
twice
the
caffeine
as
Coke”.

It
can
be
said
that
Red
Bull
was
the
first
energy
drink
to
be
in
competition
with
soft
drinks
but
also
created
the
new
energy
drink
category
in
most
markets.

After
Red
Bull
hit
the
market
hard
in
the
late
90‐the
present,
many
other
companies
have
tried
to
hop
on
the
energy
drink
bandwagon
such
as
when
Hansen,
the
natural
soda
company,
created
Monster
Energy.
Red
Bulls
has
approximately
100
major
competitors,
such
as
5
Hour
Energy
Drink
and
Rock
Star
Energy
Drink.
Not
only
do
energy
drink
companies
fall
in
these
100
major
competitors
of
direct
competition
but,
there
is
also
the
sector
of
soft
drinks
that
have
proven
to
be
a
viable
opponent.

Coca‐Cola
(Full
Throttle
&
Monster),
Pepsi
(AMP
Energy
Drink)
and
Gatorade
(Rebranded
as
G
and
G2)
are
three
of
Red
Bulls
major
competitors.
Many
celebrities
have
also
taken
on
the
role
of
putting
their
face
toan
energy
drink
label,
such
as
Ice‐T
creating
an
energy
drink
called
Liquid
Ice,.However,
in
the
end,
no
other
energy
drink
has
been
able
to
claim
Red
Bull’s
70‐90%
of
the
market
share
it
has
in
over
100
countries
worldwide,
despite
these
competitors.Marketing
PlanSales
ObjectivesWe
want
to
maintain
our
position
as
the
leader
in
energy
drinks
and
the
face
of
extreme
sports
worldwide,
while
expanding
our
reach
in
the
U.S.We
want
to
increase
distribution
of
Red
Bull
in
these
states
by
5%
and
increase
brand
awareness
by
85%
inPakistan as well while keeping a national presence.Target
MarketThe
uniqueness
of
Red
Bull
is
that
the
company
does
not
follow
traditional
media
guidelines
and
that
is
why
they
chose
the
untraditional
platform.Their
target
audience
isvery
receptive
to
this.As
stated
above,the
target
audiences
of
Red
Bull
are
people
between
the
ages
of
18‐35,who
lead
an
active
lifestyle
and
what
to
have
a
sense
of
belonging
in
their
community,but
in
an
untraditional
way.
Red
Bull’s
target
audience.
Not
only
do
they
not
trust
traditional
media
they
are
turned.
These
antiestablishment
andadventure
seeking
individuals
that
do
not
follow
the
rulesand
needed
Red
Bull
neededbuzz
marketing/extreme
sports
in
order
to
tap
into
them.




 5
  7. 7. Marketing PlanTarget Market of Red Bull • Teenagers • Youth Adults • Top Athletes • Students of college and universities • Busy professionals • Drivers on long journeyMarket Segementation StrategyRedBull avoided using usual methods of marketing, relying moew on what is called buzzmarketing or the word of mouth.Red Bull advertised directly to Generation Y, the so called millennial peope born after 1091Student Brand Managers who would be used to promote ref bull on university campuses.These students would be encouraged to throw parties at which cases od red bull would bedistributed.Brand Positioning Strategy would be clear, engaging and unique and relevant to the targetaudience. And the ability to incorporate an element of positive emotional attachment that isbetter than just good.SWOT AnalysisStrengthsMarket leadershipWithin the energy drinks market Red Bull is the industry leader throughout the world.It hasannual sales of a billion cans, with a significant presence in Europe and the US.In 2003 itachieved an 80% brand share of the UK energy drinks market. In Europethe companyproduces two-thirds of overall volume in the region. The brand is presentin 13 WestEuropean countries and holds the lead in 12 of these. The rest of the top20 brands take a 6
  8. 8. Marketing Plancombined 17% share. In terms of market trends, fewer new brandsare being launchedcompared with the 1990s, and there has been a clear shakeoutsince 2000. Even the productsoffered by leading drinks manufacturers are failing to make major headway against Red Bull,with products such as Coca-Cola’s Burnabsent from the top five.Marketing effortsThe heavyweight promotion and expansion of the Red Bull brand, which brought theconceptof stimulation drinks to the western market, has driven functional drinksgrowth over theyears. The company employs well targeted marketing campaigns thatappeal to the core 18-25age group. It has promoted its product using its ’Red Bull gives you wings’ slogan andsponsoring Formula 1 driving; free skiing; BMX biking and other dangerous sports. This hassignificantly increased consumer brand awareness of the product, and differentiated it fromits competitors.Cadbury Schweppes allianceRed Bull has established an alliance with Cadbury Schweppes in Australia. The alliance hashelped expand the brand’s marketing distribution, allowing more customers to have access toRed Bull across the nation. Sales, which are already 40% up compared to the same time lastyear, are set to rise dramatically as a result of the pending partnership. Red Bull believesCadbury Schweppes can help it reach new channels such as food courts, vending machines,hospitals, colleges and sports and travel facilities, ensuring an increased customer base. Suchpartnerships allow the company to reduce competitive threats from its rivals and extend itssales opportunities.WeaknessesLack of innovationA number of new energy drinks have been launched in 2004. Raw Energy Fuel Cell is aCanadian vitamin and glucose drink, which is endorsed by World Wrestling Entertainment.This product contains no taurine and has less caffeine than rival offerings. It also comes in330ml PET bottles as opposed to Red Bull’s 250ml cans. Other firms are also makingheadway in the market by introducing sports drink packaging and other initiatives. With littlechange in its product format, Red Bull is being left behind from the majority of itscompetitors. Sting has proven to be a competitor too with a price very low.Reliant on small product baseThe company only markets one branded product, Red Bull Energy Drink (along with asugarfree variety). It is therefore vulnerable to market fluctuations, especially as the energy 7
  9. 9. Marketing Planand sports drink category in which it operates is the smallest sector of the overall soft drinksmarket. With consumer interest turning away from Red Bull’s major strength of carbonatestowards healthier alternatives, the firm is finding itself as less of a giant in the playing field.The company would therefore benefit from introducing drinks into other, more successfuldrinks categories.Marketing expenseExtensive marketing efforts are required for Red Bull to boost product sales. The energydrinks have high association with fashion and youth trends, and the company must projectitself as in line with this in the face of giant rivals such as PepsiCo.Despite the massive costs Red Bull’s marketing campaigns, its rivals also investinghugeamounts, resulting in Red Bull gaining smaller returns from these investments.OpportunitiesDiversification of retail outletsRed Bull has recently detailed an initiative to use vending as a new route to increase sales.Vending is increasingly acting as an important advertising vehicle and the company isexploiting this avenue in order to stimulate growth. The manufacturers of Coca-Cola andPepsi have long used this route, and firms such as GlaxoSmithKline and Outspan have alsoentered the market. Red Bull’s decision to introduce vending illustrates its commitment todiversify its distribution network and keep up with industry trends.Extension of product lineNew entrants into the market are unlikely, as extensive marketing and promotion are requiredto retain market share, needing large financial resources. Datamonitor expects the mostsuccessful new product in the market is likely to be an extension of an existing brand, andwill succeed best in the non-cola carbonates sector of the market. Marketing products asfunctional drinks the company may be able to extend its product line, capitalizing on strongconsumer awareness of its brand.Geographical expansionWith sales derived from 100 countries, Red Bull has an extensive geographical reach. Thecompany is building upon this by making inroads into developing markets such as India.With a distribution deal secured with Mount Shivalik and Narang Hospitality Services, thesefirms will market distribute and manage the logistics of the drink. Red Bull will initially bepromoted in North, East and Central India, with a view of rolling out the product to further 8
  10. 10. Marketing Planregions in the long-term. The Asia Pacific region holds a good opportunity for growth forRed bull as in 2003 it accounted for 50.9% of the global market share of the Functionaldrinks market (40% of which is energy drinks). The market is also predicted to grow atCAGR 5.2% in the next five years reaching a market value of around $16.1 billion by 2008.ThreatsPublic health concernsRed Bull’s energy drink has been banned in France due to concerns over its high caffeinecontent. Experts fear that the drink could be potentially deadly when combined with alcoholor when drunk after strenuous exercise. The move has been backed by the EU’s high court,asserting that the drink is a real risk to public health if consumed in excess. Denmark is theonly other country to ban Red Bull, although authorities in Ireland, Turkey and the US haveexpressed concerns about it. The drink is classified as a medicine in Norway and until recentyears was only available in pharmacies in Japan. These issues are creating significant adversepress for the company.Maturing marketThe energy drinks market has witnessed slowing growth in recent years. In 2003, thePakistani carbonated soft drink industry posted volume growth of only +0.6% overall. Thatgrowth rate represents a slight decrease from the 2002 growth rate of +0.8%. It is farbelowthe industry’s annual 2%-4% growth rate range seen throughout most of the1990s. Thisslowdown in growth may inhibit the company’s revenue expansion potential going forward.Consumer awareness of health and well beingDrinks retailers are becoming increasingly aware of the potential growth in bottled watersales. Per capita consumption of bottled water has now risen to 35 liters, in comparison to oneliter 20 years ago. Consumers are becoming increasingly aware of their health, and bottledwater is associated with health and well being. Although Red Bull has recently launched RedBull Sugarfree, the drink’s high caffeine content may remain a concern for the healthconscious.Strengths - Weaknesses Opportunities - Threats 9
  11. 11. Marketing Plan Market leadership Diversification of retail outlets Marketing efforts Extension of product line Cadbury Schweppes alliance Geographical expansion Lack of innovation Public health concerns Reliant on small product base Maturing market Marketing expense Consumer awareness of health and well being 10

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