Red Bull is proposing to diversify into the energy snack bar market with a new product called "Bull Bites". The marketing plan outlines introducing 3-square mini energy bars in existing Red Bull flavors. It analyzes the growing snack bar industry and Red Bull's strengths as well as opportunities to expand. However, over-reliance on energy drinks is also identified as a weakness. Main competitors like Clif Bars and Kashi are examined in terms of their market share, positioning, pricing, and distribution. The proposal recommends Bull Bites to help secure Red Bull's future growth.
Cola Wars have continues till date. This presentation presents an analysis of the case Cola wars continues in 2006.
Find out what we have to say about the classic case of competition.
MKTG 347- Advertising/Creative Marketing
Assignment: to create a 360 degree campaign for AMP Energy
See documents in SlideShare starting with MKTG 347.
To see the video it must be downloaded.
My Involvement:
In this campaign I played the role of both the account manager and account planner at the same time. I had my hands in every single step of the project, from the research to the creative execution.
After coming up with our campaign slogan, our basic idea, gained from a sudden epiphany, of using the Vitruvian Man, led our campaign in a new and innovative direction.
For the creative work, the actual drawings were done by my teammate Kyndal Teich and all the graphic designs where done by me through the use of Microsoft Office software and Paint.
What is not shown in this document:
1) the debriefing is from a tissue session we had with two local advertisers playing the role of the client
2) the miniature version of our video blog, which will be on a PowerPoint that will also be attached. The PowerPoint will include each of the creative works.
The carbonated soft drink (CSD's) industry was dominated by Coca Cola and Pepsi vying for market share. The CSD organizations gained market share in the U.S. and in global markets extending their brands’ recognition and capturing sales from new markets. The shift in consumer beverage preference and the expansion into global markets proved to uncover new opportunities for growth and profitability. In addition the changes in the organizational structure of business for these companies have allowed them to sustain growth beyond CSD’s.
Cola Wars have continues till date. This presentation presents an analysis of the case Cola wars continues in 2006.
Find out what we have to say about the classic case of competition.
MKTG 347- Advertising/Creative Marketing
Assignment: to create a 360 degree campaign for AMP Energy
See documents in SlideShare starting with MKTG 347.
To see the video it must be downloaded.
My Involvement:
In this campaign I played the role of both the account manager and account planner at the same time. I had my hands in every single step of the project, from the research to the creative execution.
After coming up with our campaign slogan, our basic idea, gained from a sudden epiphany, of using the Vitruvian Man, led our campaign in a new and innovative direction.
For the creative work, the actual drawings were done by my teammate Kyndal Teich and all the graphic designs where done by me through the use of Microsoft Office software and Paint.
What is not shown in this document:
1) the debriefing is from a tissue session we had with two local advertisers playing the role of the client
2) the miniature version of our video blog, which will be on a PowerPoint that will also be attached. The PowerPoint will include each of the creative works.
The carbonated soft drink (CSD's) industry was dominated by Coca Cola and Pepsi vying for market share. The CSD organizations gained market share in the U.S. and in global markets extending their brands’ recognition and capturing sales from new markets. The shift in consumer beverage preference and the expansion into global markets proved to uncover new opportunities for growth and profitability. In addition the changes in the organizational structure of business for these companies have allowed them to sustain growth beyond CSD’s.
Running Head: SWOT Analysis 1
SWOT Analysis 3
SWOT Analysis
Bobby Holman
Columbia Southern University
December 21, 2015
Company of choice: Red Bull
Introduction
Also referred to as SWOT matrix, SWOT analysis is an organized method of planning that is used to analyze and gauge the weaknesses, strengths, threats and opportunities that are involved in a business venture or a project (Quincy, 2013). It is a basic framework that is used to generate strategic alternatives from an analysis of a given situation. This analysis often appears in business marketing plans and is applicable in either business unit levels or in corporate levels (Blake, 2015). It can be done for a product, a person, an industry, or a particular place. The Acronym SWOT stands for Strengths, Weaknesses, Opportunities and Threats. Often deploying this framework helps a firm to become fully aware of its position in the competitive market and also aides in both decision making and strategic planning. As a company, Red Bull has over the recent years encountered various challenges including competitive rivalry which have raised concerns about the overall wellbeing of the company and its stand in the marketplace. This paper will be divided into four sections and will attempt to discuss the strengths, weaknesses, threats and opportunities of the company through the application of the SWOT analysis.
Section One: The Strengths of Red Bull
The strengths of Red Bull include its marketing strategy, its geographical presence, category leadership, market share, and alliances.
Business Marketing Strategy
Red Bull has deployed very tactful and beneficial marketing and promotional activities which have helped the company to build a strong foundation and a name for itself. Activities such as extreme sports sponsorships have helped to increase customer awareness of the product and also grasp and maintain the loyalty of customers to the brand. The brand’s marketing strategy has been magnificently implemented to bring a strong identity to the brand which brings with it unwavering customer loyalty.
Geographical Presence
Red Bull’s broad geographical presence has been so strong and is a major contributing factor to its positive and long-term growth. This is unlike most other companies in the market which often stagnate after reaching their maturity stage. The company’s quick global expansion has worked to earn it an undisputed position among the world’s leading energy drinks, and despite facing growing competition, Red Bull is still aggressive in further expanding its customer base and market share.
Category Leadership
Another one of Red Bull’s astounding strengths has been in its ability to be consistent in establishing a strong brand global image which has mad.
Running head MARKETING PLAN PRODUCT IDENTIFICATION AND SWOT .docxcowinhelen
Running head: MARKETING PLAN: PRODUCT IDENTIFICATION AND SWOT ANALYSIS
1
Product Identification and Swot Analysis: Red bull GmbH
Stephanie Hicks
Ashford University
BUS330: Principles of Marketing
December 11, 2016
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[no notes on this page]
Marketing Plan: Product Identification and Swot Analysis
2
Red Bull GmbH
Red Bull GmbH is an energy drink manufacturing company based in Fuschl am see,
Austria (Bodner, 2011). Red bull’s main product is the Red Bull energy drink. It is a
multinational with branches in over 169 countries in the world. Red Bull as an energy drink was
established in 1987 in Thailand by an Austrian entrepreneur Dietrich Mateschitz and a Thai
business person Chaleo Yoovidhya, (Pahl & Richter, 2007). Although red bull is currently the
market leader in sales of energy drinks, its sales can be significantly boosted by targeting a
different demographic.
Red Bull was founded in the mid-1980 from inspiration by other energy drinks in the Far
East and especially in Thailand. Red Bull energy drink was sold for the time in its home market
of Austria on April 1st 1987 and this has seen it grow to a multinational with millions of euros in
revenue annually. It is estimated that as at 2016, over 60 billion cans of the energy drink have
been sold worldwide (Bodner, 2011). Apart from energy drinks (which is red bulls primary
output), red bull also distributes other products including the drinks ‘simply cola’, the Cape
Diem range of herbal soft drinks and the Sabai wine spritzer line of winery (Rendle, 2011).
Red bull’s main competitor is Monster energy drink made by Monster Beverage
Corporation based in California, USA. According to time magazine, Red Bull enjoys about 43%
of the American soft drink market with its closest competitor Monster commanding about 39%
of the market share. The number 3, but the relatively distant competitor is ‘Rockstar’ which
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[no notes on this page]
Marketing Plan: Product Identification and Swot Analysis
3
commands a 3% market lead. Coke owned NOS and Pepsi-owned Amp are also players in the
energy drink market although commanding a very small portion (Pahl & Richter, 2007).
Red Bull energy drink is an interesting choice of product to conduct a strength, weakness
and threats analysis on given its current market share. Red Bull commands a significantly huge
market space, but there is still much to be improved upon. The market segment it majors on is
small and can be significantly increased to target different areas of the demographics in exchange
to better profit margins.
Strengths
The main strength displayed by Red Bull is its stature in the current energy drink
market. Red Bull has stood for years as the number one energy drink across t ...
Red Bull has the world's best marketing campaigns, this is a humble effort to evolve a creative campaign in India which would reach out to its targeted customers in a way that this event becomes a memorable happening for many. Thus creating our customers, into a fan base.
This is a product strategy I designed with some mates for a Uni Entrepreneurship project. It's a gritty representation of my thinking. I didn't have any hand in the finance side.
Needless to say my ideas and communications thereof, are a bit more polished these days. It's always good to look back and learn.
This category is developing and not fully grown in the market. The main reason for not growing is mainly of its high price, customers feel do they really benefit from drinking energy drink. The main sector who drinks is youth i.e. mainly who play sports frequently
Unit VIII Case Study OpenWeight 9 of course gradeGrading Rub.docxgibbonshay
Unit VIII Case Study Open
Weight: 9% of course grade
Grading Rubric
Instructions
Case studies are an important learning strategy in business classes as they provide an opportunity for you to critically analyze events that have taken place in real-life businesses. This develops your critical thinking and research skills as you research the competition and industry in which your business resides with an end goal of formulating a recommendation for the challenges faced by the company.
Select one of the three case studies listed below, which can be found in your textbook. Evaluate the case of your choice, and respond to each of the questions below using both theory and practical managerial thinking as well as supporting research.
Option 1: Red Bull (pp. 581–582)
1. What are Red Bull’s greatest strengths as more companies (like Coca-Cola, Pepsi, and Monster) enter the energy drink category and gain market share? What are the risks to their brand equity of competing against such powerhouses?
2. Discuss the pros and cons of Red Bull’s nontraditional marketing tactics. Should the company do more traditional advertising? Why, or why not?
3. Discuss the effectiveness of Red Bull’s sponsorships, advertisements, personal selling strategies, promotion, events, and public relations. Where should the company draw the line in terms of risk?
4. Recommend the next steps for Red Bull with respect to their marketing and advertising strategies.
Marketing Excellence Red Bull
Red Bull’s integrated marketing communications mix has been so successful that the company has created an entirely new billion-dollar drink category—energy drinks. In addition, Red Bull has become a multibillion-dollar beverage brand among fierce competition from beverage kings like Coca-Cola, Pepsi, and Anheuser-Busch. To date, the company has sold more than 40 billion cans of energy drinks across 166 countries. How? Red Bull became the energy drink market leader by skillfully connecting with youth around the globe and doing it differently than anyone else.
Dietrich Mateschitz founded Red Bull with a single product in Austria in 1987. By 1997, the slender silver-and-blue can was available in 25 markets globally, including Western and Eastern Europe, New Zealand, and South Africa. Its size and style immediately signaled to consumers that its contents were different from traditional soft drinks. Red Bull’s ingredients—amino acid taurine, B-complex vitamins, caffeine, and carbohydrates—were specifically formulated to make the drink highly caffeinated and energizing. In fact, some users have referred to it as “liquid cocaine” or “speed in a can.” Over the past decade, the company introduced other products and flavors, many of which did not succeed. Today, Red Bull offers the original Red Bull Energy Drink, Red Bull Total Zero, Red Bull Sugar Free, and special editions infused with berry, lime, and cranberry flavors.
As the company continued to expand worldwide, it developed an integrated mar ...
2. 1
Table of Contents
Part One
Executive Summary……………………………...………………………………………………..2
Introduction……………………………………………………………………………….……….3
Industry Analysis………………………………………………………………………….………3
Company Analysis………………………………………………………….……………………..4
Competitive Analysis………………………………………………………………….…………..5
New Product Plan Objectives……………………………………………………………………..8
Segmenting, Targeting, and Positioning…………………………………………………………..8
Part Two-Marketing Mix
Product Decisions………………………………………………………………………………..10
Price Decisions…………………………………………………………………………………...12
Place Decisions…………………………………………………………………………………..13
Promotion Decisions……………………………………………………………………………..14
Attack and Defense Strategy……………………………………………………………………..20
Summary…………………………………………………………………………………………20
Appendices……………………………………………………………………………………….21
References………………………………………………………………………………………..23
3. 2
Part One: Situation Analysis
Executive Summary
The objective of this proposal is to inform Red Bull Corporation of the benefits of
diversifying its current product portfolio to include Bull Bites, a new and exciting energy snack
bar. The company has relied on solely on energy drinks for its revenue up to this point, and now
is looking to expand into new industries.
There is a large market of consumers looking for a solution to being time poor. Red Bull
cannot sell them more time, obviously, but they can sell them a quick snack and a burst of energy
to go with it. Sales of snack bars have doubled from 684 million in 2008 to 1,275 million in
2015, making it a growing and lucrative market (Simon).
The marketing mix would be simple. The product is Bull Bites. The company can stick to
what they know and just develop flavors that mimic the existing flavors of their energy drink
line. For price, we would maintain a competitive pricing strategy. We would stay lower than our
competitors, but high enough to retain a quality image with our consumers. To promote the new
product, we would rely mostly on social media because is the most effective and inexpensive
way to promote within our target age segment if done right. We suggest either building on, or
reconfiguring the existing Red Bull manufacturing plants to allow for the manufacturing and
distributing of the new product. The shape and weight should allow for the same shipping
methods as the energy drinks currently utilize. Red Bull should selectively distribute the new
product at first until we capture a sufficient market share to fund a more intensive distribution
strategy.
We think that adding a new product line in a new product industry will help secure a
profitable future for Red Bull’s as a company.
4. 3
Introduction
The new product we are introducing is called “Bull Bites.” These are Red Bull energy
bars. We are providing a new twist to the traditional snack bar that is on the market now. Many
people in our target market do not have enough time to sit down and eat a meal that could hold
them over for a while. These bars provide the nutritional value of a snack you would need and
the energy pick me up each on the go person needs. Each bar consists of 3 mini squares in one.
The flavors would be congruent of what Red Bull offers in energy drinks. As a consumer, you
will be able to “take the day by its horns.”
Industry Analysis
Currently Red Bull competes in the energy drink industry, with a product line of just
functional beverages (Red Bull), but we are hoping to branch from just functional drinks into
functional foods with “Bull Bites”. According to Business News, there is an increasing demand
for snack bars to fulfill a variety of needs. It seems that the nature of demand in the market is still
primary. Consumers know they want the type of product, but they don’t know exactly which
brand, so there is a lot of trial and switching from product to product. Some consumers are
looking for low calories, some are looking for organic health foods, some are looking for an
energy boost, while others are looking for a mixture of all three (Fit Club).
The product category of energy snack bars is in the growth stage of the market. There is a
lot of competition among brands such as Clif and Powerbar, and they are already established.
However, there are still new competitors being introduced and marketed, such as Kind and Luna
Bars. Retail sales of nutrition and energy bars has doubled from 684 million in 2008 to 1,275
million in 2015, making it a growing and lucrative market (Simon). The top three competitors in
the energy bar market are Clif at 21.1% market share, Kashi at 15.8%, and Powerbar at 12.2%
5. 4
(Energy Bar). With our biggest competitor being Clif, we would play up on the energy factors
that “Bull Bites” would have compared to others.
Company Analysis
The mission statement of Red Bull is “To spread our wings over the world by being the
premier marketer and supplier of Red Bull in Asia, Europe, and other parts of the globe. We will
achieve this mission by building long-term relationships with the people who can make it
become a reality” (Red Bull).
Red Bull as a company has quite a few distinct strengths. It has a very strong brand
identity and its brand logo is almost iconic. Red Bull is the industry leader in energy drinks
worldwide with 12.4 million dollars in sales in 2015. Monster follows in second with a mere 4.7
million dollars in sales (Top Selling). Red Bull has been in the functional beverage industry for
28 years and has a brand loyal customer base that appears to be growing. Additionally, the
company already has a strong global presence in 169 countries (Red Bull).
A large weakness that Red Bull faces is a lack of diversification. The only products they
sell are energy drinks, and while they have branched to four different “types” of Red Bull with
the sugar free, total zero, editions, and the traditional drink, there is not much room left for
growth with the current product being presented (Red Bull). Some could argue that the product
“Red Bull” is in the maturity stage and will soon begin the decline if the company doesn’t soon
start to branch out into other product lines. Another problem Red Bull faces is that its price point
is generally set above the market average, making it less competitive as a brand.
There are opportunities to expand into emerging markets in the far east as well as the
core markets of Western Europe (Red Bull). Red Bull also has opened new production facilities
in Brazil, which could potentially make the retail price of the product more competitive, and
6. 5
possibly eliminate a company weakness. With the expansion of this product line, Red Bull may
be able capture new market share. The social environment lately has been pushing for healthier
foods and lifestyles, Red Bull could expand into this market and come up with a product line that
provides a more healthy form of energy than pure caffeine and taurine that would appeal to a
more health conscious market segment.
There are a number of threats to the company. Some consumers give energy drinks such
as Red Bull an unhealthy connotation which makes potential new users hesitant to try it. Red
Bull, and energy drinks in general, suffer from some negative publicity, with various media
sources reporting them to be harmful for health. The majority of these reports are hyped up for
the media, however, the damage is done (Federal). A threat that could very easily spin off of the
social concern of caffeine abuse is the government getting involved. The government is
researching to determine if it is something that needs to be more closely regulated in teenagers
due to the growing concern about adverse medical effects (Federal). This could become a serious
threat to the company when it directly affects the future target market.
Competition
Red Bull is the leader in the energy drink industry for many years. We are adding a
product extension that would expand Red Bull as a competitor in the snack bar industry. We
would be entering the convenience product category specifically into the introduction of the
product life cycle and focusing on being primary demand. Our top competitors include Clif Bars,
Kashi and Powerbar.
The most direct competitor to “Bull Bites” would be Clif Bars. When you go to the Clif
bar website it is almost identical to the Red Bull site. They are using the slogan “Feed your
Adventure” (Clif Bar). They also focus highly on nutritional health value and how their product
7. 6
line fits into the busy lifestyle. With Clif bars having a 21.1% market share and positioning
themselves for the adrenaline junky who is more likely to have a family they are a key
competitor (Energy Bar Manufacturers). Clif bar differentiates from other companies by using
their drive to use organic and healthy ingredients in their bars. This can be considered a
weakness in that it causes their prices to be less competitive, but it can be a strength in that it
appeals to the specific market that they are aiming for. Clif bar has a product line of nine
different products that are middle range in price depending on if you buy a whole box or an
individual bar. They can be bought at retail stores or even online from amazon marketplace and
has minimal promotions but focuses more on brand loyalty. For a box of 12 bars, the price would
be $12. With this, if a competitor were to attack Clif bar they would use a flanking defense
strategy. They would attack the attacker’s weaknesses to show how strong of a company they
are. With attacking weaknesses, the strengths of Clif bar would show and make it harder for
competitors to counter attack.
Another competitor to “Bull Bites” would be Kashi. With a 15.8% market share, (Energy
Bar Manufacturer) Kashi is the second leading competitor in the snack bar industry. Kashi’s
positions themselves in the organic, all natural market. As a company, they have ten different
product lines, including a snack bar line. They focus on using ingredients that will support your
active lifestyle while being healthy in it (Kashi). Kashi is sold in just about every large retail
store and online on sites such as Amazon. They are a middle range snack bar, having their price
set at $5 for a box of 6 bars. Their extensive product line sets the company up to have a strong
appeal to the organic side of a market. However, our target market tends to be less concerned
with organic ingredients and more concerned with cheaper prices. If Kashi were to be attacked
8. 7
by a competitor they could easily use the mobile defense. With such a broad product line ranging
from snack bars all the way to cereals it would be very easy to defend themselves as a company.
The last competitor that we have identified is Powerbar. Powerbar has been around for 30
years and is known as the leaders of the power bar market (Power Bar). They focus on “knowing
athletes and helping them conquer their challenge.” Due to their market share being 12.2%,
(Energy Bar Manufacturer) it is not identified as a strong industry competitor. However, it would
be a likely product competitor. Powerbar is looked at as more of a recovery protein bar and not
so much as a pure energy bar. The biggest strength that Powerbar has is relating themselves with
athletes which fits directly into our target market. They also have four different product lines and
nine different flavors. Their weakness is that they only really capture athletes and not so much
the people on the go. They have a more expensive type of bar, for a pack of 15 it is around $20.
Because their product is so focused to the athletes they can price a little higher. Due to Powerbar
being a market leader, they would use a preemptive defense strategy. Once they would feel the
threat, they would attack competitors first.
With the new product, we would be entering the snack bar industry. In this industry, there
is room for new competition to happen often. Snack bars can range from organic with fruit all the
way to chewy granola. Each new product will create competition but having a strong strategy
laid out is key to having a successful product launch.
9. 8
Objectives for New Product Plan
● Introduce new product into the market by July 2017
● Expand market share by 2% within two years of being on the market
● Increase brand awareness of new product to double the target market within 5 years of
being on the market
● Expand customer base within 5 years of being to capture more brand switchers
● Create promotions for new product within 5 years to keep brand loyal customers
● Create advertising by July 2017 to kick off new product introduction
● Use pricing strategies to break even by quarter 2 of being on the market
● Increase the first year’s revenue by 10% during the second year
Segmenting, Targeting, Positioning
For today’s busy, on the go consumers, Red Bull’s “Bull Bites” are the answer to their
energy crisis. Bull Bites offers a high quality, lower cost snack bar that provides a quick,
nutritious, boost of energy when there is no time for a meal. With four different fruit flavors,
there is something for everyone. Professionals on the way to work can throw them in their
briefcases, and mom’s taking their kids to school can throw one in their purses. Consumers from
a variety of target segments will see Bull Bites as an affordable solution to a very real need for a
snack that provides a quick and effective burst of nutritious energy. We aim to position ourselves
as a less expensive, more energizing option than Clif and Kashi. We don’t want to be viewed as
the cheapest alternative, because we also want consumers to consider us to be a quality
convenience product. Red Bull is already known as a source of energy with its drinks. Now it
will be known as a source of energy with its snack bars.
10. 9
The target market we have selected is males and females age 18-30 who have on the go
lifestyles. According to GFK University Reporter, consumers in this age range are 13 percent
more likely to purchase energy bars than other segments. The demographics of consumers in this
age range typically consists of high school graduates, college students, young families, and
single workers. Of this age group, we hope to reach the segment of consumers that are employed
in professional occupations post-graduation or in a business occupation. Consumers in this
segment are 42 percent more likely to purchase snack bars than other segments, which is a large
percentage (Snack Bar). Consumers that have graduated college and are considered post graduate
have a 48 percent higher likeliness to purchase snack and energy bars. Whether they are looking
for work, transitioning to a new job, or starting a family, their lifestyles are very hectic and they
tend to be constantly on the go.
Despite an emphasis on postgraduate professionals, we also feel there is a rich market in
current college students that shouldn’t be overlooked. As of fall 2015, “there are 20.2 million
college students in the United States.” (Simon). This market is considered large and, due to
social trends, we believe this segment will only grow. Typically, college students are the first to
skip breakfast and the first ones to run and get some sort of caffeinated drink. By mixing these
two components to make our new product it meets the needs and wants of this large potential
market.
11. 10
Part Two: Marketing Mix
Product Decisions
We are introducing a new product to the snack bar industry. Red Bull already strives in
the energy drink industry, so why not expand into the snack bar industry. We would do this by
adding a new product line called “Bull Bites”. Bull Bites would be a new snack bar that would
satisfy the needs of our target market’s desire for a meal on the go and the want of the energy
boost to get them through the day. We would have a bar for each product line that already exists
in Red Bull Drinks. The original energy drink flavor, total zero, and sugar free editions would all
be similar tasting, and have just a drizzle of icing on top. The tangerine, blueberry, cranberry and
tropical editions would have a layer of real fruit on the bottom to match the line and a drizzle of
icing on the top. Several of our competitors are adding real fruit to their bars, so this is almost a
necessity to stay competitive. Adding “made with real fruit” to the package can help attract more
health conscious consumers.
Each Bull Bites package would include three small bars in one package that would be
laid out horizontally. We would want to stay pretty consistent with the packaging of the energy
drinks to try to capitalize on brand recognition and pull brand loyal customers over to this new
industry. Each package would be similar to the can, however, the front would be see through so
that consumers can see the actual size of each bar. So if a customer were to go buy a Blueberry
Bull Bites, they would see a blue package with Bull Bites written in silver across the top of the
bar, and a clear window allowing them to see the product through the front of the package. The
Red Bull logo would be in the upper right hand corner of the package and nutritional information
appears on the back. Under the seam of the packaging, consumers would see Red Bull’s 100%
satisfaction guarantee. (See Appendix A)
12. 11
We have classified Bull Bites as a convenience product. We want them positioned as
frequently purchased items that require minimal effort and little planning to buy. They will be in
many outlets and the manufacturer will provide the advertising. We will position Bull Bites to be
a high quality, low cost product. We want consumers to look at Bull Bites as being a prestige
product but something that they can afford, which will fit into our target market perfectly.
Our product will move through the life cycle using compatibility. The idea of snack bars
has already been introduced and their value has been accepted by the consumer. Because our
product would be similar to snack bars that are already on the market, the adoption of our
innovation will be more easily accepted. We are adding more features to what is already on the
market to differentiate ourselves from our top competitors. It helps that we are doing a product
extension of Red Bull because they have already established their brand as a top energy provider.
The product strategy that we have chosen is horizontal diversification. We are entering a
new industry that is completely different than Red Bull’s current industry. Our new product is
unrelated to the existing product, but we still hope to attract a portion of Red Bull’s existing
customers. We will do this by making Bull Bites packaging congruent to Red Bull energy drink
cans. The colors will be the same, the lettering will be the same, and the flavors labeled the same.
The most significant differences would be that we would have real fruit added to our edition
bars, we would put “energy bar” on the front of the package instead of saying “energy drink”,
and we would have a 100% guarantee on the back. We chose our packaging to be this way so
that loyal customers of Red Bull will easily be able to identify a package that they are familiar
with but will also know that they are different products. Our product name has the word “bull” in
it, to tie into Red Bull, so that consumers can clearly see that this is a new exciting Red Bull
product line.
13. 12
Our product will be different than competitors’ products because our product focuses on
energy. As such, our recipe will have the traditional red bull ingredients of taurine and caffeine
in it that give it the energetic kick that energy drinks provide. The competitors rely on vitamins
to give consumers energy. While that might be healthier in the long run, it won’t give the quick
boost of energy that consumers in our target market are seeking.
Price Decisions
We are positioning our product to be high quality, low price. With this, our price
breakdown will be consistent with that. For the normal Bull Bites, which include original, total
zero, and sugar free, the price would be $7 for 6 bars, and $15 for 12 bars. For the edition Bull
Bites, the ones with fruit on the bottom, the price would be $8 for 6 bars, and $16 for 12 bars.
These prices are based on product being sold in boxes and not individually. If they are sold
individually the price would be $1 for the normal Bull Bites and $1.25 for the editions Bull
Bites.
The pricing strategy that we would use is life cycle pricing. In the first part of the life
cycle, the new product development stage, we would establish our price objective. Because we
are entering a new product industry, our price objective would be competitive pricing. We did
this when setting the price for Bull Bites. We looked at our top three competitors (Clif, Kashi,
and Powerbar) to see what features and benefits they have and where their prices are set. For the
normal Clif bars, the price is $10 for 6 bars. For the pomegranate fruit Clif bars, the price is $20
for 12 bars (Clif Bar). We compared our prices with Clif the most because they are the market
leader in this industry.
In the second part of the life cycle, the introduction stage, we would utilize a price
skimming strategy. We would do this because it establishes higher value which is how we are
14. 13
trying to position our product. We want Bull Bites to be perceived as high quality for a low cost.
We also chose the price skimming tactic because it is easier to reduce price at a later time than it
is to raise the price.
The third part of the life cycle, the growth stage, is where we would establish market
share by price reductions. This is where we would introduce coupons into the mix. We want to
keep all the loyal customers we have gained but we also want to continue to gain new market
share. With coupons and price reductions this is something that can be accomplished.
The fourth part of the life cycle, the maturity stage, is where we would price defensively.
We would want to keep the product leader, which is currently Clif, from raising their price. If
Cliff were to raise their price we would be perceived as a cheap, lower value, less prestigious
bar. If they did change their price, we would focus on a different feature of our bar and look at
changing our price based on that new feature. We would also consider increasing our position
through increased advertising.
The last part of the life cycle, the decline stage, is where we would increase our price to
loyal markets. We would increase the price to $2 to gain a little more revenue. There is an option
to withdraw from the market but we are confident that if we increased the price, brand loyal
consumers will continue to purchase a little while longer and the company can glean a little more
profit from the product line.
Place Decisions
In order to maintain a cost effective advantage with our new product, we think it would
be best to utilize our existing facilities for production and maintain the existing channels for
distribution. Red Bull drinks travel predominantly by train and ship, and we see no reason to
change that for our bars. The weight and package constraints should be similar to the drinks, so it
15. 14
should be a simple process to adapt the current shipping procedures to the new product. The
company only uses trucks as a last resort when necessary (red bull).
The manufacturer leads the channel for Red Bull products because it is a unique product.
They select which way they want to ship products and where they want to send their products. It
is a legitimate power structure because Red Bull has the right to ship their products however they
want to in congruence with their business model. Red Bull uses a multi-channel approach and we
will continue to do so for our energy bars. We will continue to ship primarily by rail and ship,
only using truck as a last resort in an attempt to reduce carbon emissions.
For distribution during the introduction phase, we will use selective distribution. We have
chosen this because it will help us to gain optimum market coverage and maintain more control
while keeping our costs lower than if we were to use an intensive distribution strategy (Types of
Distribution). Our competition seems to use a similar strategy as it is a relatively common middle
of the road strategy for distribution for both new and existing companies and products. As sales
increase and we penetrate the market, we hope to move to a more intensive distribution strategy,
which would provide better market saturation and would get our product into all available
outlets.
Promotion Decisions
Promotional Strategy
We plan to use a few print ads to push the new product in carefully selected venues. We
also plan to utilize social media by adding Facebook and Instagram promotions on some of the
packaging. This works with our pricing strategy because we are trying to stay low cost.
Advertising on social media isn’t necessarily free, but running multiple print ads and a lot of
commercials is much more expensive to use as a primary form of advertisement. All of our
16. 15
advertisements will work together because they will all promote a common slogan, which is
“Take the Day by Its Horns”. We will ensure that our personnel selling, advertisements, and
direct marketing ventures stay centered on the target market so that there is no confusion as to
what the focus of the campaign is. Communication among all fronts is important so that the front
line salespeople don’t give inaccurate information about promotions or pricing. So
communication and consistency is how our integrated marketing strategy is going to work.
Type of Advertising
The first thing to focus on in advertising for Bull Bites would be what type of advertising
is best. We would use a pull system for this specific product. We have chosen this instead of a
push system because we want our advertising to be geared toward our consumers and have them
pull it through the advertising chain. We think this is ideal because we will use coupons in the
growth stage of our pricing life cycle. With our product being positioned as a convenience
product, we would focus on point of purchase to pull our way through the advertising chain.
Advertising Campaign
First, we would identify our target market. The target market we have selected is males
and females age 18-30 who have on the go lifestyles. The demographics of consumers in this age
range typically consists of high school graduates, college students, young families, and single
workers. Of this age group, we hope to reach the segment of consumers that are employed in
professional occupations post-graduation or in a business occupation. Whether they are looking
for work, transitioning to a new job, or starting a family, their lifestyles are very hectic and they
tend to be constantly on the go. Despite an emphasis on postgraduate professionals, we also feel
there is a rich market in current college students that shouldn’t be overlooked.
17. 16
We would then define our advertising objectives. For advertising specifically, we would
look at both sales and communication objectives. When looking at our sales objectives, we will
know if we achieved our goals or not. Our sales objectives would include expanding market
share by 2% within two years of being on the market and use pricing strategies to break even by
the second quarter on the market. Our communication objectives would look at if we have top of
mind awareness in consumers. Our communication objectives would include increase brand
awareness of our new product to double the target market within 5 years of being on the market,
expand to new customers within 5 years of being on the market to capture more brand switchers,
and create promotions for new product within 5 years to keep brand loyal customers.
Next, we would look at our advertising platform. We would focus on selling points of
Bull Bites. These would include; a delicious edible bar, the energy bar will provide energy,
matching our product line to Red Bull’s product line, and having real fruit in the editions line.
With these selling points, we have focused in on what is important to our consumers that are in
our target market.
After developing our advertising platform, we would then determine our ad
appropriation. We would focus on competitive parity. We would do what everyone else is doing
so that we do not cause any advertising wars. Our biggest competitor is Clif bar. “Clif Bar rarely
advertises in mainstream media, preferring to rely on sports sponsorships, social media and
word-of-mouth to secure its lead in the energy bar segment.” (mediapost.com) Because we are
doing a brand extension of the Red Bull energy drinks we would do similar advertising to them
but we would also do similar advertising like Clif bar does. We would have the small amounts of
commercials like Red Bull currently has but really focus more so on the social media and word
of mouth advertising much like Clif Bar.
18. 17
Part of our advertising campaign would be developing a media plan as discussed above.
However, because this is a new product we would first start our campaign with a 30 second
commercial. Our commercial would be aired on primetime television and late night television to
capture our target audience of 18-30 year olds. The Red Bull commercials focus on real people
doing real things, with a little help from Red Bull. Our commercial would show ordinary people
doing extraordinary things throughout their day. We would capitalize on the energy aspect that
18-30 year olds with on the go lifestyles have. We would focus most on what our target markets’
habits are for the media type. Because of this, we would have advertisements on Pandora, Hulu,
YouTube, Facebook, Twitter, and Instagram. We would want our commercial to reach at least
100,000 people across the United States in the first quarter. We want people to start noticing Bull
Bites and become more brand aware of them. However, because our biggest competitor focuses
on less traditional advertising we would not be as worried about the frequency of which this
commercial is shown, but more focused on the frequency our advertisements were being seen on
social media.
We would then execute the campaign. Our style of the campaign would be image, which
is much like the positioning of the product which is high quality, low price. Red Bull currently
positions its products to be prestigious so we would want this brand image to carry across with
the product line. Our tone for this campaign would be real life. We would not want to add too
much humor and risk the product being looked at as cheap. We definitely would not want to add
fear as a tone. Our campaign would revolve around the new slogan “take the day by its horns.”
Much like Red Bull slogan, “it gives you wings”, we are providing our target market with
motivation to reach above their limit to meet their dreams and we will be here to give them the
extra energy push they need.
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The last step of our campaign would be to evaluate the effectiveness. There are two
portions to this, the pretest and the posttest. Before we even started the campaign we would do a
pretest. We would want to see if our target market would be able to recall Bull Bites without
having any advertising. We would do this with a taste test. We would have a Clif Bar (our
biggest competitor) and a Bull Bites side by side and have the consumer in our target market try
to recall by taste which is ours. We would then launch our advertising campaign. After one
quarter of the advertising campaign running, we would do a posttest. With our posttest we would
see how many consumers in our target market recognize our brand Bull Bites. We would then
show the consumer a picture of our package with our name omitted and see how many can recall
our brand. Lastly, we would measure their attitudes towards the brand itself to see if additional
changes needed to be made for the following quarters.
The Commercial
Our commercial would be approximately 30 seconds long and would encompass the true
essence of our target market, age 18-30, being ordinary people who do extraordinary things.
First, we would have 5 to 7 frames of people. This block of frames would highlight college
students. The first student would be running from their house to class, really emphasizing the
hectic lifestyle. The next student will be running from class to a sports practice. The last student
would be running from the library study session and heading to their part time job. This last
student would be crucial because they would be eating an original Bull Bites while on the go.
We would then have 5 to 7 frames of different people. This block of frames would
highlight single workers. The first worker would be running late to get to work and driving
through crazy traffic. The second worker would be rushing from one meeting to the next in
office. The last worker would be rushing to the gym to get a quick workout in after their long day
20. 19
of work before heading home. Once again this last person would be crucial because they would
be eating an Editions Bull Bites while on the go.
For the last round of 5 to 7 frames we would highlight young families. The first character
would be a young mom who is rushing to get her young child to daycare before heading to work.
The second character would be an older dad who is dropping his child off at soccer practice
before heading to the grocery store. The third and final character would be eating a sugar free
Bull Bites while she was on the way to run her Saturday errands with all four of her children in
the back of the minivan. Our final frame would then pop up with a black background and a
display of our entire product line. Underneath the product line it would read: “Bull Bites: Take
the day by its horns”
The Print Advertisements
The print advertisements will be ran very selectively in specifically chosen venues that
will best reach the target segments. To encompass our target segment we would place our ads in
magazines such as Men’s Health and Shape. This would be geared towards the “health
conscious” part of our target segment. However, much like how the industry is doing, we would
focus the other part of our segment advertising would be based on social media ads, word of
mouth buzz, and coupon flyers. The advertisements will typically feature an image of a over
taxed and overburdened character struggling to get through the day with the Red Bull logo
somewhere on the page and the slogan “Take the day by its horns” printed tastefully in bright
letters. The consumers in all of our target segments feel run down, tired, and overworked at some
point and can relate to the images. The idea that Bull Bites can provide a solution to that feeling
is exactly what we want to communicate to them. (See Appendix B)
21. 20
Attack and Defense Strategy
When competition comes in with a competing product, since we are a new product with a
smaller market share, we would stick to a flanking attack strategy. It is less risky than a frontal
attack. We don’t have a large enough market share, as of right now, to maintain a prolonged
offensive stance against the existing competition in the market so we need to start hacking out a
market share. With our focus being a product that provides a large boost of energy, we are
already different and we need to ensure that is the message that our target market gets. Flanking
will allow us to avoid direct competition, but still allow us to potentially gain new growth in the
market. It is a good way to help us ensure a profitable survival (Marketing).
As a defensive strategy, we will use a preemptive flanking strategy if they are a big
company, or a preemptive frontal strategy if they are a small, new company with a new product.
Waiting to be attacked in today’s market is waiting too long. Being preemptive will prevent us
from losing precious market share.
Summary
In conclusion, Bull Bites could be a lucrative and profitable endeavor for Red Bull as a
company. It would allow them to capture new market share which would present new
possibilities for corporate growth.
24. 23
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