Red bull final


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Marketing Plan project about red bull corporation.

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Red bull final

  1. 1. JAWAD HASSAN MARKETING MANAGMENT CONTENTS1 Introduction 021.1 History 021.2 Mission Statement 031.3 Issues and Criticism 041.4 Competitor analysis 052.0 Methods 063 Analyses 073.1 Critical Review 073.2 Segmentation 093.3 Children (Humpty Dumpty) 103.3.1 4 P’s 103.4 women (Bell) 113.4.1 4 P’s 113.5 Old Ages (Cool River) 123.5.1 4 P’s 123.6 Ansoff’s Model 133.7 SWOT 143.8 STEEPLE 154.0 Findings 164.1 Conclusion 165.0 Reference 17 1 Page
  2. 2. JAWAD HASSAN MARKETING MANAGMENT1 IntroductionRed Bull is the most popular drink in the world. The market share of the Red Bull is 71% ofthe world market of energy drink. Red Bull produces the worlds leading energy drink. Morethan a thousand of the million cans years are sold in nearly 100 countries. Its dominantposition in the fastest-growing segment of the soft drink market in a number of countries hasdrawn a number of imitators. Red Bull has become a case study in successful guerrillamarketing in the United States and United Kingdom. Targeting at hip young people withactive lifestyles, though the formula began as a popular energy drink for blue collar workersin different countries like Thailand. Red Bull claims to Increase performance, Increaseconcentration and reaction speed, Improve vigilance, Improve emotional status, Stimulatemetabolism.1.1 HistoryIt is the adoption of Thai energy drink which translated into Red Bull. The founders of thecompany were Thai national Chaleo and Austrian national Dietrich. Chaleo is holding 51% ofthe share and Dietrich is responsible for the operation of the company. Irrespective of RedBull if facing criticisms that it has possible health risk, it is aggressively advertised throughmarketing and different youth tournaments. The slogan of the Red Bull shows the clearsegmentation of the Red Bull that Red Bull is targeting the young’s. The slogan of the RedBull is It Gives You Wings. Red Bull began a revolution in the market of energy drinks.In 1982 Austrian Dietrich Mateschitz developed an energy drink. After that he visitedThailand and found the local energy drink he mixed that drink with his drink. At that timeboth of partners decided the shares ratio. 49% of shares were given to Chaleo and 2% shareswere given to Chaleo’s son but decided that the company will operated by Dietrich. At thesame time both of partners founded Red Bull Gmb H; each investing $500,000 of savings andtaking a stake in the new company. The combination of both products was launched in 1987.The first foreign market of the Red Bull was hungry in 1992. In UK it was introduced in1994. But before launching in Europe they altered ingredients according to western taste.They added some ingredients in the Red Bull, like vitamin B, caffeine sodium, andglucuronolactone. It was launched in us in1997 and in the Middle East it was launched in 22000. 2002 was a mew year for Red Bull. In 2002 they opened regional headquarter in Dubai. Page
  3. 3. JAWAD HASSAN MARKETING MANAGMENTNow the Red Bull is working in 60 countries and expending its activities more and more. In2003 Red Bull introduced Red Bull sugar free.In 2008, the most famous magazine Forbes declared the founder of the company as a being260 richest person of the world. As Red Bull is a privately owned Austrian company ofDietrich Mateschitz. Since introducing Red Bull in 1987, Mateschitz has invested heavily inbuilding the brand. In some countries, Red Bull is enjoying 80% market share. In the U.S,Red Bull enjoyed a 47% share of the energy drink market, and the sales are growing annuallyat 40%. It is the most popular world in the world that more than hundred of the drinks tried tocopy Red Bull. Marketing of Red Bull and position of Red Bull in the market limited the newentry of new rivals. The in the promotion of Red Bull, slogan of Red Bull was that itincreases the stamina and brain concentration, and it was the basic formula that made the RedBull famous and it got huge appreciation from drivers specially long distance drivers.“In terms of attracting new customers and enhancing consumer loyalty, Red Bull has a moreeffective branding campaign than Coke or Pepsi. Red Bull is building a beverage brandwithout relying on the essential equipment of a mass-marketing campaign. Perhaps theindispensable tools of marketing arent so indispensable after all."- Nancy Koehn, Professor of Business Administration at Harvard Business School, in2001.1.2 Mission statement:"We are dedicated to upholding Red Bull standards, while maintaining the leadershipposition in the energy drinks category when delivering superior customer service in a highlyefficient and profitable manner. We create a culture where employees share best practicesdedicated to coaching and developing our organisation as an employer of choice." 3 Page
  4. 4. JAWAD HASSAN MARKETING MANAGMENTThe mission statement of the Red Bull shows its goals and objectives. From the above it isseen that the basic goal and objective of the Red Bull is to maintain leadership in the marketand increase market share relative to the competitors. While doing all this Red Bull don’tforget the most important dimension of the marketing, the customers. Mission statementshows that customers are most important for Red Bull like other organisations. Red Bulltrying to provided superior services in highly efficient manner and besides this they try toearn profit. It is very important that the company must increase the standard of the productwith the passage of time and Red Bull is doing the same thing because if we see previoushistory of the product we can easily conclude that companies who did not maintain thestandard of the product they were kicked off. The effectiveness and loyalty of the employeesis also a important issue while making the strategy of the company. And professional andskilled employment is important assets for the company. So Red Bull has a keen eye on thetraining and coaching of the employees. Red Bull is trying to create a culture for theemployees so that they can easily work in motivated environment. Red Bull claims toIncrease performance, Increase concentration and reaction speed, Improve vigilance, Improveemotional status.1.3 ISSUES AND CRITISIMS:Health issue:People criticised that the presence of taurine negatively affects human body. Allegedlyreported that there are some adverse affect of caffeine used in the Red Bull. They crititsizedthat caffeine cause insomnia nervousness headache and tachycardia. Study also shows thatthe use of Red Bull sugar free increases the blood coagulation this raise the cause ofcardiovascular risk. Some criticized that the use of Red Bull increases the stress inn thosewho have high blood pressure.Red Bull may have triggered heart condition that killed student reported on the death of a 21year-old woman who died after drinking four cans of Red Bull as well as alcohol at "sociallevels”. It was believed, but had not been proven, that she suffered from a rare heart conditioncalled long QT syndrome she was on medication for epilepsy. A medical examination foundthat there were no illegal drugs in her system. The article quoted a doctor as saying, "The QT 4levels may have grown over a few years, or it may have been artificially pushed over the limit Pageby caffeine". (The Daily Telegraph Feb 3, 2009)
  5. 5. JAWAD HASSAN MARKETING MANAGMENTCocaine controversy: Another controversy was raised in June 2009 that there were a amount of cocaine inthe Red Bull cans, which were imported to Austria. Due to this controversy Germany hadbanned these drinks by 25 May 2009 in 11 states out of 17. Same mater was raised in Taiwanalso but due to legal constraints no action was taken.Caffeine controversy: Another big issue related to Red Bull the presence of the amount of caffeine in the canof Red Bull. Some experts say that the caffeine also adversely affects the human health. Theamount of caffeine in a normal can of Red Bull is equal to the caffeine present in the coffeecup. Due to these controversies Red Bull is banned in Norway France and Denmark. But afterthe ban was lifted in Norway and Denmark. So Red Bull is also facing legal issues.But instead of criticism we also know that Red Bull contains huge amount of vitamin Bwhich is very useful for human body. The purpose of above discussion is not to criticize onthe Red Bull, but according to me Red Bull has different competitors and different rivals. Allthese above issues also contributed in decreasing the sale of Red Bull. All above mattersadversely affect the sale of the Red Bull. So all these issues challenge the position ofRed Bull in the market. So Red Bull must take steps in order to minimize all these remedies.Red Bull must revise its strategy for long term and also to retain its market position. Red Bullmust resolve these issues in order to maximize its market shares.1.4 COMPETITORS ANALYSIS:In many surveys it is said that people use energy drinks for various reasons, athletes useenergy drinks to provide some ‘fuel’ as they practice and compete. On the other side peoplenormally use as a way to become ‘energized.’ That’s about all I know. So be an energetic is abasic point which attracts the customers into the energy drinks.In countries like India and Pakistan, Pepsi and Coca Cola have a hold over other products.They market their products in these countries like war that is way they are market leader inthe countries. Pepsi holds the 70% of market shares in Pakistan and in India also. They hire 5 Pagesuperstars in these countries to promote their product and they have monopoly in distribution
  6. 6. JAWAD HASSAN MARKETING MANAGMENTsectors also. Unlike Red Bull they don’t hire stars for their promotion, Red Bull hire athletesfor their promotion. And the marketing is very week in third world countries as compare tothe rivals. The prices of these products also very low as compared to Red Bull. Another big competitor of Red Bull in Canada is Slow Cow. Slow Cow is targetingthose customers who don’t want to take excitement. It has very small amount of caffeine in it.It helps the people slow down when they stressed up unlike the Red Bull contains the caffeinewhich don’t help in stress. Slow cow contains the amino acid which said to produce feelingof relaxation in the brain, without causing sleepiness. It is also said to increase mentalawareness and concentration. Another big competitor of Red Bull is Cott Corporation. Due to its diversifyingstrategy, Cott Corporation is earring huge profits in the United States, Mexico and Canada.Red Rooster is an energy drink of Cott which was launched to compete with Red Bull. Some other competitors of Red Bull are like Lucozade, Monster, Relentless, DrPepper, Iron bur. All these energy drinks holds different segment of the customers. So RedBull needs to rebuild its strategy and revise its segmentation in order to compete thesemarkets as well. Red Bull must also develop the strategies for the niche markets.2 Methodologies:There are two sources of data. Primary data Secondary dataPrimary data was taken by interviews and personal observation and secondary data was takenfrom different sources like internet, different course books and different articles. Both type ofdata helped a lot in order to make this assignment. 6 Page
  7. 7. JAWAD HASSAN MARKETING MANAGMENT3 Analyses: 3.1Critical ReviewIn order to maintain the position of Red Bull in global market and increase the shares indifferent countries the Red Bull must revise its strategy according to new market andcompetitors. if Red Bull change its strategy like to target the third world countries likePakistan and India Red Bull can get rid of huge criticism and earn profit beyond the limits. Inwest the Red Bull has serious challenge of different issues; Red Bull is facing difficulties inorder to maintain its position due to health issues and prices of products.Another big issue of Red Bull in these countries that Red Bull has very small range of drinksand Red Bull is just targeting young man, and they are ignoring huge market like childrenwomen old ages. So Red Bull going down from the maturity stage. Red Bull must developdifferent products in order to meet the needs and wants of customers and different membersof society. So it is big advantage for Red Bull is it is already a famous brand and no need ofhuge investment is required and just to change its strategy and develop different products.And if we see segmentation of Red Bull, there would be strategy for men women children. Soto gain again its position on the top of the market Red Bull must develop its research anddevelopment or we can say that R & D dept.Another big market which Red Bull is ignoring like India, Pakistan, China and whole Africa.No doubt Red Bull holds 70% of market shares of energy drink in United States, but if we seethe population of America, it is very small as compared to these economies which Imentioned above. Red Bull has no big structure and development in these countries and itseems like Red Bull is just for its presence not for sale so the structure of Red Bull in thirdworld countries also in declining. In these countries the Red Bull is in growth stage but alsoin but if Red Bull continuously ignores the strategy it would be declined stage for Red Bull.In these countries the women children are more than men and it would be a big market forRed Bull if Red Bull satisfied need and wants of customers.The people living in these countries have low income level and their living standard is alsolow. In these countries the competitors are providing low price drinks as compared to RedBull that is way they have hold in these markets. Red Bull must develop the products for low 7income customers or they have to adjust prices of Red Bull according to income level. Page
  8. 8. JAWAD HASSAN MARKETING MANAGMENTSo according to my point of view Red Bull needs huge investment in these countries. RedBull must have separate R&D for these countries and they must produce the productaccording to the culture of these countries.If we have given to make new strategy, we would make new segmentation for Red Bull. Thesegmentation which we made is given below in analysis section. Red Bull is ignoring hugemarket, which defiantly turns its customers to competitor’s products. And in segmentation wealso describe product mix and strategy for new segmentation. So according to my point ofview company must have mission statement like this for long term relationships. Mission ofthe Red Bull is to be the premier marketer and supplier of Red Bull in Asia, Europe, andother parts of the globe. We will also target women children and old age. We will achievethis mission by building long-term relationships with the people who can make it become areality."Product Life Cycle of Red Bull for Western CountriesThe star in the chart below represents the position of Red Bull in the western market. It isslowing beginning to decline due to health issues and Red Bull ignoring viable segments. Maturity 8 Page Growth Decline
  9. 9. JAWAD HASSAN MARKETING MANAGMENTProduct life cycle of Red Bull for Third World Countries The star in the chart below represents the position of Red Bull in the western market.It is slowing beginning to decline due to health issues and Red Bull ignoring viable segments. Maturity Growth Decline3.2 Segmentation (New Strategy):For Red Bull we have different strategies in order to overcome these problems and here wealso discuss how Red Bull can use marketing mix for this segmentation. There are threetypes of segmentation which would be followed by Red Bull. We also discuss under how rebull can promote products for these segments and how they can set prices for each segment.We also discuss which factors Red Bull would keep in mind in order to set prices and thefactors Red Bull can use to promote its products. Following are the segmentation and productmix of Red Bull. 9 Page
  10. 10. JAWAD HASSAN MARKETING MANAGMENTWe basically go to target three different but important segments, which are given below. 1. Children 2. Women 3. Old age3.3 Children: (Red Bull (Humpty Dumpty)) Explanation: We know that children are big part of population. So if we target this segment withlittle change in product we can earn huge profit. In other words this segment of population isa big opportunity and Red Bull can convert this into huge strength. And if we see this strategyin both dimensions for western and as well for third world countries we can easily concludehow big this opportunity is.3.3.1 4p’s:Product: For this segmentation Red Bull caffeine free is very useful because children are so sensitiveagainst caffeine and by introducing Red Bull caffeine free we can target huge market. And accordingto our study name of Red Bull is very name for every .body and same for children they are alsointerested in Red Bull.Price: The price of this product depends on the geographical area. The can of the Red Bull will beonly in one size and the same for every child as well. In UK the price of Red Bull can be 70p and inPakistan and like other countries it would be at minimum level. But the price can be adjustedaccording to situation and income level of the relative region.Place: There is no need to develop special warehouses for this segment and Red Bull humptydumpty will be provided in every shop with normal Red Bull and on every stores. In UK it would bestored on famous stores like ASDA, TESCO, LIDL, MORRISONS, and SAINSBURRY.Promotion: 10 Page
  11. 11. JAWAD HASSAN MARKETING MANAGMENT The promotion of this product would be a big opportunity, because we can promote thisproduct on different levels likes; o Ads on famous children networks o Promotional campaign in schools o It can be promoted by different children shows o In different parks it can be promoted where children usually use to play o On stores on each purchase a can be Red Bull would be given to parents o Attractive hording boards in different parts of city usually famous for children.3.4 Women: (Red Bull (Bella))Explanation:This is most important segment of our strategy because women are major part of populationin the world and Red Bull is just targeting men and only young men. So this is mostimportant strategy for Red Bull. It would be a great chance for Red Bull by targeting thissegment Red Bull can get rid of a lot of competitors and a lot of threats. And by targeting thissegment Red Bull can earn huge profit and shares of Red Bull in market would touch sky.3.4.1 4p’s:Product: Red Bull (Bella) will be our product which would target only ladies and girls. For this productwe don’t need to change anything but just for girls they like chilli, we would add some specialingredients for chilli taste and we sell this product by Red Bull (Bella).Price: We would offer three different sizes of can for this segment like normal Red Bull. The pricesof the this product will be as follows Small can £1.25 Medium can £1.89 Big can £2.25 There would be slight change in prices for this product for girls relative to normal one but thiswould be special prices on initial basis. 11Place: Page
  12. 12. JAWAD HASSAN MARKETING MANAGMENT There is no need to develop special warehouses for this segment and Red Bull (Bella) will beprovided on every shop with normal Red Bull and on every store. In UK it would be stored on famousstores like ASDA, TESCO, LIDL, MORRISONS, and SAINSBURRY. Red Bull (Bella) can also bestored on petrol pumps shops for sale. And special store can also develop for this product near thewomen gathering centres.Promotion: For this product we would use special promotional campaign. We would use these types ofways in order to promote product. o Different fashion shows o Product can be displayed in different shopping malls o Different colourful ads o Colourful hording boards o Advertisement through famous celebrities famous in women.3.5 Old Ages :( Red Bull (Cool River)) Explanation: This is our special product targeting only old age. As we know they are the major partof the population in the Europe and by targeting this Red Bull will be able to get competitiveadvantage over the competitors. If we see everywhere in the market no company is targetingthis segment and if someone do so they are just doing formalities. So it would be a bigopportunity for Red Bull and in future it would help to compete market in long term.3.5.1 4p’s:Product: The product for old age will be same like normal Red Bull and we would make slight changein it. We will reduce the amount of caffeine in the can and present for sale.Price: We would present Red Bull in three sizes and prices of these cans are given below; Small can £1.19 12 Medium can £1.59 Page
  13. 13. JAWAD HASSAN MARKETING MANAGMENT Large can £1.99Place: There is no need to develop special warehouses for this segment and Red Bull (Cool River)will be provided on every shop with normal Red Bull and on every store. In UK it would be stored onfamous stores like ASDA, TESCO, LIDL, MORRISONS, and SAINSBURRY. Red Bull (CoolRiver) can also be stored on petrol pumps shops for sale. And special store can also develop for thisproduct near the old houses.Promotion: We need special promotions for this product because old age is very sensitive for eachproduct which they purchase. We would use special promotions for this product and we will adoptsome different ways to promote this product. Some of them are given below. o Special promotions by talk shows o Ads on Sunday news papers o Door to door campaign3.6 Ansoff’s model: Existing NewExisting Penetration New productNew New market DiversificationDiversification: Red Bull must change its strategy if Red Bull wants to take over the market for longperiod of time and if they want to be market leader for longer. At this stage Red Bull needs todiversify and they must invest in different types of product not only in energy drinks but also 13in other drinks that helps to cool down customers. Red Bull also needs to make otherproducts like Red Bull bread, Red Bull home use machines, Red Bull small cars, Page
  14. 14. JAWAD HASSAN MARKETING MANAGMENTRed Bull garments, Red Bull digital accessories. For diversification they need highinvestment and proper R&D and they must also see the strategy of acquisition. Like they canpurchase lion shares of the company which are not working as well as demand of market andRed Bull can convert them into opportunity for its long term planning. There are a lot ofcompanies would ready to make partnership with Red Bull happily. For example SHEZAN inPakistan.New Product Development: Another strategy can be used in order to get more customers like Red Bull can makedifferent products, in this way Red Bull can target more and more customers. Red Bull mustdevelop drinks in different flavours like Red Bull(lemon) Red Bull (Rubicon) RedBull(apple)Red Bull (mix flavours).in this way Red Bull can target a lot of customers whichRed Bull continuously ignoring. Because no of customers don’t like energy drinks, especiallyif we see children energy drinks are not useful as for young and old age. So Red Bull needs tochange its strategy for this segmentation and in some countries there is major factor of culturethat affects the sale of Red Bull.MonitoringThis strategy will be monitored for a period of 6 months. If the strategy is found useful it willcontinue with same run, and if its not useful for some reason then there will be some changeswhich will be recommended by the share holders and valuable customers, and a new strategywill be launched accordingly.3.7 Swot:Strengths:The brand name of the Red Bull is the biggest strength. Red Bull has largest market sharesshow investor’s trust on Red Bull, so Red Bull has no need to raise finance.Weaknesses:Red Bull is facing different health controversies and issues. Red Bull has very weakmarketing in under developing countries. Red Bull is also ignoring major segment of 14population. Page
  15. 15. JAWAD HASSAN MARKETING MANAGMENTOpportunity:By targeting different segments Red Bull can get competitive advantage over. It would be agreat opportunity for Red Bull, if they are succeed in getting the new customers.Threats:Coca cola and Pepsi are major competitors of Red Bull and they can be threat for Red Bullfor long term strategy.3.8 STEEPLE:SocialCheck out latest trends and moods in energy drink market. It also need to analyse mediahabits and opinion formers in the target group.TechnicalTechnically Red Bull has no big issue because Red Bull is not a diversified company and butit can affect its long term strategies.EconomicGiven the international status of the company and differing economic cycles, the financialobject needs to be reviewed in the light of exchange rates and sector activities.EducationThere must be internal education system in order to develop skills in sale force so that theycan forecast future sale.PoliticalNormally this type of product doesn’t have big and real issue, except it occurs some time inadvertisement. 15 Page
  16. 16. JAWAD HASSAN MARKETING MANAGMENTLegalRed Bull had different legal restrictions in different countries like France, Norway andGermany due to health issues.EnvironmentalRed Bull has no big issue relating to environment because there is a proper system of re_cycling of Red Bull cans and there is a proper check and balance on packaging.4.0 Findings: Following are the findings given below: Different controversies affected the sale of Red Bull Red Bull lost a lot of revenue due to ignoring different segment of population Due To absence of diversification Red Bull got declined4.1 Conclusion: If Red Bull controls the problem which it has been having it could survive and itcould make more than it has been previously. If Red Bull decreases it prices and advertises itin such a way in the third world countries where most of the people can get known about reddull and its exploits. 16 Page
  17. 17. JAWAD HASSAN MARKETING MANAGMENT5.0 References:Slack, F., Rowley, J & Coles, S (2007), ‘Consumer behaviour in multi-channel contexts: thecase of a theatre festival’, International Research, 18(1), pp (46-59)Johnson, K.,, (2006), ‘Multi-channel shopping: channel use among rural customers’,International Journal of Retail and Distribution management, 34(6), pp (453-466)Laukkanen, T.,, (2007), ‘Customer preferred channel attributes in multi-channelelectronic banking’, International Journal of Retail and Distribution Management, 35(5), pp(393-412)Aaronovitch, S. sawyer, M.C.(1975) Big Business (The Machmillan press Ltd).Besanko, D. Dranove, D. Shanley, M Economics of strategy (2nd Edition) John Wily andsons (USA)Bowles, M (1991). Organisational Studies. (New York): EGOSBurack, E.H. 1991. Change the company culture, the role of human resource development,Long Range Planning. 24(1), 88-89.Chell, E (1987), the psychology of the behaviour in organisations. (Macmillan), London.Child, J. management in China during the age of Reform. Cambridge University Press,Greenwich, CT.Colgate Palmolive Annual Reports.Denison, D, 1984. Bringing corporate culture to the bottom line, orgnisationalDynamics, 13(2), 5-22.Edgar Herzfeld & Adan Wilson 1983. Joint ventures, Bristol Jordan Publishing Ltd.Jackson, T 1995. Cross-Culture Management, Printed by clays Ltd. UKJohnson, J. and Scholes, K. Exploring corporate strategy 5th edition, (Prentice Hall)Kotter, J.L. 1992, Corporate Culture and performance. New York. The free press.Kought, B. 1988. Joint Venture, Theoretical and Empirical Perspectives StrategicManagement Journal, 9.319-332.Laurant, A. 1086. The cross culture puzzles of international human resources management,Human Resource Management. 17Sing, R. 1089. Management in Pakistan. Lahore publishers Ltd. Pakistan Page
  18. 18. JAWAD HASSAN MARKETING MANAGMENTSmith, H.D. 1974. Confucius and Confucianism. London. Paladin.Tiosvold, D &Tjosvold, M.M. 1995. Psychology for leaders. New York. John Willy & SonsYoung G. R. & Bradford S. J. 1977. Joint venture. Planning and action. New York.Internet 18 Page