INTRODUCTION
Austrian entrepreneur Dietrich Mateschitz was inspired by an existing energy drink named Krating Daeng, which was first introduced and sold in Thailand by Chaleo Yoovidhya. He took this idea, modified the ingredients to suit the tastes of Westerners,[5] and, in partnership with Chaleo, founded Red Bull GmbH in 1987 in Chakkapong
In Thai, daeng means red, and krating is the large bovine called "gaur" in English. Red Bull is sold in a tall and slim blue-silver can, while Krating Daeng is in a shorter gold can.[6]The two are different products, produced separately.
The Red Bull company slogan was "Red Bull gives you wings
10,997Employees
As of the end of 2015, Red Bull employed 10,997 people in 169 countries - compared to the end of 2014 when we had 10,410 employees in 167 countries.
In 169Countries around the world
In terms of further expansion, Red Bull is targeting the core markets of Western Europe and the USA and growth markets in the Far East, while also focusing on the worldwide roll-out of the Red Bull Editions.
A total of 5.957 billion cans of Red Bull were sold worldwide in 2015, representing an increase of 6.1% against 2014.
Red Bull in India
Red Bull can be called as a pioneer in the energy drink category worldwide. In India too, Red Bull was the brand that created the energy drink category.
The brand came to India in 2003. Although the brand has been keeping a low profile compared to the Cola majors, Red Bull has created a category of energy drinks in the Indian market.
The energy drink market in India was at a nascent stage and was estimated at 20-25 Crores per annum. But since than market for energy drink has grown with India’s GDP growth by 9% hence red bull and other competitors had acquired 100% growth.
Competitors in India.
The pic on the PPT shows the competitors for red bull in the market
I.E Monster , Gatorade & Tzinga
It has 62% of market share across India.
In Competition there are 3 important things.
1. Industry (Segment) Rivalry:
The market in an industry can sometimes be unattractive if the product already has strong substitutes and competitors. This might lead to a large amount of strife between competitors. Such a market experiences a lot of price fluctuations.
Industry Rivalry for red bull is low owing to the following:
1.Red Bull has turned their niche market into a mass market and a regular buy for people around the world.
2.Its brand familiarity has given them a key source of competitive advantage.
3.Differentiation by Tzinga (another popular energy drink that is trying to enter the market) is a strategy being used. They are becoming direct competition adding caffeine into their drink making it a stimulation drink.
4.Red Bull has secured distribution channels that make it hard for competitors to enter the market.
5.Red Bull has a very loyal customer base.
2. Potential Entrants:
A potential entrant refers to local entrants into the business which bring in competition to the product. On one hand, a local brand might find it difficult to establish itself in the market, however being locals; they have a greater understanding of the customer.
The threat of a potential entrant in the market for red bull is medium.A drink like a famous caffeine based soda that is manufactured in the local market and hence has the advantage of cheaper rates and can be competition to red bull.
3. Substitutes:
Substitutes refers to products which might pose a threat to the product because they are almost identical or might even prove to be a better selling product if the company selling it goes for aggressive pricing.
Although Tzinga, a new entrant to the market (priced at almost 1/3rdred bull), might seem a big competition. Threat from substitutes is very low for red bull because Red Bull’s High prices are linked to their high quality, thus identical substitutes at lower prices don’t really affect the Red Bull market
4 P’s of marketing
Product
Red Bull is a sweet, caffeinated drink aimed to give consumers the high energy kick.Available only in rather expensive 250ml cans, 350ml bottles, with 4 packs and only two‘flavours’ (original or sugar-free). It contains caffeine, taurine, glucuronolactone, and Bvitamins. Founded in 1984 by Austrian businessman Dietrich Mateschitz, Red Bull has become the worlds leading energy drink, a staple in many young, and active people’s lives.
Red Bull product portfolio is highly focused and is limited to the following:
1. Red Bull Energy Drink
2. Red Bull Sugar Free
3. Red Bull Zero Calories
4. Red Bull Editions: tropical, blue and orange editions
5. Red Bull Simply Cola
The company also sells brand-related accessories, apparel, media products, headwear and gift ideas from its official website.
Failed Innovation : Red Bull Cola
Place :
Red Bull has successfully managed to sell 5.9 billion cans worldwide in 2015 owing to its vast distribution network worldwide. Red Bull is available at convenient locations like a supermarket, convenience store, retail outlet or even night clubs, bars and casinos. This way it becomes very easy for a customer to buy the product. Also, Red Bull is often stored in Red Bull exclusive refrigerators attracting customers to buy an energy drink when they go grocery shopping or to a bar. Red Bull is also available online either in bulk packs or single making it easier for customers to buy it in bulk. The main motive of selling this drink at night clubs and bars is either people prefer mixing it with an alcoholic beverage to add some extra flavor or sometimes it is just to help them stay up late and party with friends. At supermarkets and convenience stores they are placed alongwith other competitive products giving the customer a choice between which one to buy.
Price :
Red Bull has a number of competitors in the energy drinks industry but yet they are the market leaders. Hence, the marketing mix pricing strategy is that of a market leader but based on competitor pricing. Being on the top they can easily charge a premium for their products and customers will even buy it for their quality. Red Bull was the first in its category so it will always be the number one choice for customers and its demand will never decrease. People prefer buying Red Bull in bulk as its’ cheaper than buying a single can. Yet overall they are the most expensive energy drink compared to competitors like Rockstar, Tzinga, Cloud 9, Gatorade, Monster etc.
Promotion :
Red Bull being an energy drink mostly targets sports people with their tagline “Red Bull gives you wings” so owing to a huge customer base they organize a lot of sports events and even sponsor teams as well as the events. Some of these events include mountain biking, BMX, motocross, windsurfing, surfing, skating, Formula 1, Red Bull Startos, Red Bull Foxhunt, Red Bull Cape Fear, Red Bull BC One, Red Bull Battle Grounds, etc. They also endorse various sports athletes and celebrities. Besides sports they also have a Red Bull House of Art where they encourage artists to display their art in a period of 3 months at their exhibitions. They have Red Bull T.V available on laptops, PCs, mobiles, gaming consoles and tablets airing various music festivals, shows, films, performances and videos. Red Bull also have their own merchandise stores online and magazines for extreme sports persons. Through all these promotional activities they want customers to recall their brand every time they see or hear energy drink thus increasing their customer base. Hence, this covers the marketing mix of Red Bull.
STDP Analysis
Segmentation
Demographic Segmentation:
In demographic segmentation, the market is divided into groups on the basis of variables such as age, gender, income, occupation etc; these demographic variables are so popular with marketers so that they are often associated with the consumer’s needs and wants. Segmentation variables are easily measurable. Here are the demographic variables have been used to segment markets. The companies target audiences primarily are the bachelors, youth and the professionals Red Bull segments its customer base by age as follows
– Age
16 to 30 years – they account for the major share of the customer base
Below 16 – They account for most of the sales of their other line of products of red bull soda.
Middle age and elderly – red bull came out with zero calorie and special edition (cool breeze) for the elderly tastes.
– Gender: They mainly target males, although females are a part of their customer base
– Income: Red bull associated a certain luxury with their brand name and hence caters to a segment that is ‘well off’ in terms of income.
– Occupation: Students, working professionals, sports enthusiasts, athletes
Psychographic Segmentation:
It is the science using psychology to better understand the psychology of the consumers. With the changing marketing, Red Bull continuously tries to cope up with the new trends and come up with new flavors and offers to attract more customers.
Psychographic segmentation buyers are divided on following ways:
· Lifestyle: Business class, working class executives, students
· Personality: ambitious, open to experience.
· Occasions: Regular, special.
· Benefits: Quality,
· User status: regular user
· Usage rate: medium
· Loyalty status: medium Loyal
· Readiness stage: intending to buy
· Attitude toward product: enthusiastic
Geographic Segmentation:
Geographic segmentation is done using the spatial location to segment the market. In geographic segmentation there are different schemes for the different geographical units such as states, regions, cities. Markets are mainly divided into the rural and urban areas. The Geographical variables have been used to segment markets in following ways:
· Area: Red bull limits itself to semi urban and urban India as that is their major consumer base
· City: Class-A and Class-B cities i.e. metro politician cities
· Region: Distribution of redbull is constant across regions in India
Socioeconomic Classification:
The people belong to the high job profile with efficient communication knowledge can use it. The purchase potential of this product is limited up to the B1, B2, A1 and A2.
TARGETING
In geographic segment they target countries with no or negligible market for Red bull. In demographic segment their main target is the teenagers and college students (13 to 21 years), young adults ranging from (21 years to 35 years) or can also called as working professional. In psychographic segmentation they targeted a2, b1 and b2 socio-economic classes. In behavioral segmentation it was found that they were targeting the first time users and also their regular users. They target super markets, movie halls and even bars and restaurants to improve their visibility.
Positioning :
Red Bull is the largest selling brand in the energy drink market across the India with 62% of the market. Red Bull sells approximately 4.6 billion cans per year, and the product is available around the globe in 164 countries. Red Bull’s “it gives you wings” slogan serves as the brand message to target millennials and the brand is associated with extreme sports and other activities and events like music festivals. Red Bull endorses recognized sports figures and artists.
Red Bull uses a progressive marketing strategy as part of the marketing promotion strategy including sponsorship of inspirational and extreme sports and music events with high media coverage. The founder of Red Bull, Dietrich Mateschitz, explains his philosophy as “We don’t bring the product to the consumer, we bring consumers to the product”.
Red Bull’s content marketing strategy is the core of their strategy. Red Bull operates as a marketing company that uses an association of the brand with extreme sports events, music, and valuable content delivered using digital and social media to differentiate the brand. The strategy uses videos and articles related to extreme sports and music with minimal correlation to the Red Bull energy drink.
Areas of interest for Red Bull’s target audience have been excellent sources to create content, and they attract consumers to spend time accessing digital and social media content.
Differention :
• Red Bull is a sweet, caffeinated drink to give customer the high energy
• it was beneficial and efficient product.
• Red Bull is only one product of the world that is not provide only fresh to body and mind but also energy, detoxification, stimulating digestion and increased remembrance.
• Red Bull is maintaining product size, but creating multi packs instead.
• Red Bull TV online channel, The Red Bulleting online magazine and about 150 people employed for content marketing and media strategy
The Red Bull flavouring is still produced in Bangkok and exported into manufacturing plants internationally.
Law Suit
n 2013, an $85 million wrongful death lawsuit was filed on behalf of a 33 year-old man, whose family alleges that his death from a heart attack was caused by his consumption of Red Bull.
In October, 2014, Red Bull agreed to pay $13 million to settle a class action lawsuit that alleged the company made false and misleading advertising claims by saying that consuming the beverage would help increase concentration and reaction speeds. It was found that these claims lacked scientific support, and that Red Bull does not offer any sort of physical benefits or enhancement.
Conclusion :
Red Bull is a highly successful company responsible for 70% of sales in the energy drink market to date. Their product is well known by consumers to ‘vitalize body and mind’ and is generally purchased by most for this purpose.
