red bull final

JAWAD HASSAN MARKETING MANAGMENT

CONTENTS

1 Introduction 02

1.1 History 02

1.2 Mission Statement 03

1.3 Issues and Criticism 04

1.4 Competitor analysis 05

2.0 Methods 06

3 Analyses 07

3.1 Critical Review 07

3.2 Segmentation 09

3.3 Children (Humpty Dumpty) 10

3.3.1 4 P’s 10

3.4 women (Bell) 11

3.4.1 4 P’s 11

3.5 Old Ages (Cool River) 12

3.5.1 4 P’s 12

3.6 Ansoff’s Model 13

3.7 SWOT 14

3.8 STEEPLE 15

4.0 Findings 16

4.1 Conclusion 16

5.0 Reference 17


1 Introduction

Red Bull is the most popular drink in the world. The market share of the Red Bull is 71% of

the world market of energy drink. Red Bull produces the world's leading energy drink. More

than a thousand of the million cans years are sold in nearly 100 countries. Its dominant

position in the fastest-growing segment of the soft drink market in a number of countries has

drawn a number of imitators. Red Bull has become a case study in successful guerrilla

marketing in the United States and United Kingdom. Targeting at hip young people with

active lifestyles, though the formula began as a popular energy drink for blue collar workers

in different countries like Thailand. Red Bull claims to Increase performance, Increase

concentration and reaction speed, Improve vigilance, Improve emotional status, Stimulate

metabolism.

1.1 History

It is the adoption of Thai energy drink which translated into Red Bull. The founders of the

company were Thai national Chaleo and Austrian national Dietrich. Chaleo is holding 51% of

the share and Dietrich is responsible for the operation of the company. Irrespective of Red

Bull if facing criticisms that it has possible health risk, it is aggressively advertised through

marketing and different youth tournaments. The slogan of the Red Bull shows the clear

segmentation of the Red Bull that Red Bull is targeting the young’s. The slogan of the Red

Bull 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 visited

Thailand and found the local energy drink he mixed that drink with his drink. At that time

both of partners decided the shares ratio. 49% of shares were given to Chaleo and 2% shares

were given to Chaleo’s son but decided that the company will operated by Dietrich. At the

same time both of partners founded Red Bull Gmb H; each investing $500,000 of savings and

taking 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 in

1994. 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, and

glucuronolactone. It was launched in us in1997 and in the Middle East it was launched in

2000. 2002 was a mew year for Red Bull. In 2002 they opened regional headquarter in Dubai.


Now the Red Bull is working in 60 countries and expending its activities more and more. In

2003 Red Bull introduced Red Bull sugar free.

In 2008, the most famous magazine Forbes declared the founder of the company as a being

260 richest person of the world. As Red Bull is a privately owned Austrian company of

Dietrich Mateschitz. Since introducing Red Bull in 1987, Mateschitz has invested heavily in

building 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 annually

at 40%. It is the most popular world in the world that more than hundred of the drinks tried to

copy Red Bull. Marketing of Red Bull and position of Red Bull in the market limited the new

entry of new rivals. The in the promotion of Red Bull, slogan of Red Bull was that it

increases the stamina and brain concentration, and it was the basic formula that made the Red

Bull 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 more

effective branding campaign than Coke or Pepsi. Red Bull is building a beverage brand

without relying on the essential equipment of a mass-marketing campaign. Perhaps the

indispensable tools of marketing aren't so indispensable after all."

- Nancy Koehn, Professor of Business Administration at Harvard Business School, in

2001.

1.2 Mission statement:

"We are dedicated to upholding Red Bull standards, while maintaining the leadership

position in the energy drinks category when delivering superior customer service in a highly

efficient and profitable manner. We create a culture where employees share best practices

dedicated to coaching and developing our organisation as an employer of choice."

http://wiki.answers.com/Q/What_is_the_mission_statement_of_Red_Bull


The mission statement of the Red Bull shows its goals and objectives. From the above it is

seen that the basic goal and objective of the Red Bull is to maintain leadership in the market

and increase market share relative to the competitors. While doing all this Red Bull don’t

forget the most important dimension of the marketing, the customers. Mission statement

shows that customers are most important for Red Bull like other organisations. Red Bull

trying to provided superior services in highly efficient manner and besides this they try to

earn profit. It is very important that the company must increase the standard of the product

with the passage of time and Red Bull is doing the same thing because if we see previous

history of the product we can easily conclude that companies who did not maintain the

standard of the product they were kicked off. The effectiveness and loyalty of the employees

is also a important issue while making the strategy of the company. And professional and

skilled employment is important assets for the company. So Red Bull has a keen eye on the

training and coaching of the employees. Red Bull is trying to create a culture for the

employees so that they can easily work in motivated environment. Red Bull claims to

Increase performance, Increase concentration and reaction speed, Improve vigilance, Improve

emotional status.

1.3 ISSUES AND CRITISIMS:

Health issue:

People criticised that the presence of taurine negatively affects human body. Allegedly

reported that there are some adverse affect of caffeine used in the Red Bull. They crititsized

that caffeine cause insomnia nervousness headache and tachycardia. Study also shows that

the use of Red Bull sugar free increases the blood coagulation this raise the cause of

cardiovascular risk. Some criticized that the use of Red Bull increases the stress inn those

who have high blood pressure.

Red Bull may have triggered heart condition that killed student reported on the death of a 21

year-old woman who died after drinking four cans of Red Bull as well as alcohol at "social

levels”. It was believed, but had not been proven, that she suffered from a rare heart condition

called long QT syndrome she was on medication for epilepsy. A medical examination found

that there were no illegal drugs in her system. The article quoted a doctor as saying, "The QT

levels may have grown over a few years, or it may have been artificially pushed over the limit

by caffeine". (The Daily Telegraph Feb 3, 2009)


Cocaine controversy:

Another controversy was raised in June 2009 that there were a amount of cocaine in

the Red Bull cans, which were imported to Austria. Due to this controversy Germany had

banned these drinks by 25 May 2009 in 11 states out of 17. Same mater was raised in Taiwan

also 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 can

of Red Bull. Some experts say that the caffeine also adversely affects the human health. The

amount of caffeine in a normal can of Red Bull is equal to the caffeine present in the coffee

cup. Due to these controversies Red Bull is banned in Norway France and Denmark. But after

the 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 B

which is very useful for human body. The purpose of above discussion is not to criticize on

the Red Bull, but according to me Red Bull has different competitors and different rivals. All

these above issues also contributed in decreasing the sale of Red Bull. All above matters

adversely affect the sale of the Red Bull. So all these issues challenge the position of

Red 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 Bull

must 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 use

energy drinks to provide some ‘fuel’ as they practice and compete. On the other side people

normally use as a way to become ‘energized.’ That’s about all I know. So be an energetic is a

basic 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 in

the countries. Pepsi holds the 70% of market shares in Pakistan and in India also. They hire

superstars in these countries to promote their product and they have monopoly in distribution


sectors also. Unlike Red Bull they don’t hire stars for their promotion, Red Bull hire athletes

for their promotion. And the marketing is very week in third world countries as compare to

the 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 targeting

those 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 caffeine

which don’t help in stress. Slow cow contains the amino acid which said to produce feeling

of relaxation in the brain, without causing sleepiness. It is also said to increase mental

awareness and concentration.

Another big competitor of Red Bull is Cott Corporation. Due to its diversifying

strategy, 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, Dr

Pepper, Iron bur. All these energy drinks holds different segment of the customers. So Red

Bull needs to rebuild its strategy and revise its segmentation in order to compete these

markets as well. Red Bull must also develop the strategies for the niche markets.

2 Methodologies:

There are two sources of data.

Primary data

Secondary data

Primary data was taken by interviews and personal observation and secondary data was taken

from different sources like internet, different course books and different articles. Both type of

data helped a lot in order to make this assignment.


3 Analyses:

3.1Critical Review

In order to maintain the position of Red Bull in global market and increase the shares in

different countries the Red Bull must revise its strategy according to new market and

competitors. if Red Bull change its strategy like to target the third world countries like

Pakistan and India Red Bull can get rid of huge criticism and earn profit beyond the limits. In

west the Red Bull has serious challenge of different issues; Red Bull is facing difficulties in

order 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 drinks

and Red Bull is just targeting young man, and they are ignoring huge market like children

women old ages. So Red Bull going down from the maturity stage. Red Bull must develop

different products in order to meet the needs and wants of customers and different members

of society. So it is big advantage for Red Bull is it is already a famous brand and no need of

huge 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. So

to gain again its position on the top of the market Red Bull must develop its research and

development 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 see

the population of America, it is very small as compared to these economies which I

mentioned above. Red Bull has no big structure and development in these countries and it

seems like Red Bull is just for its presence not for sale so the structure of Red Bull in third

world countries also in declining. In these countries the Red Bull is in growth stage but also

in 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 for

Red 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 also

low. In these countries the competitors are providing low price drinks as compared to Red

Bull that is way they have hold in these markets. Red Bull must develop the products for low

income customers or they have to adjust prices of Red Bull according to income level.


So according to my point of view Red Bull needs huge investment in these countries. Red

Bull must have separate R&D for these countries and they must produce the product

according to the culture of these countries.

If we have given to make new strategy, we would make new segmentation for Red Bull. The

segmentation which we made is given below in analysis section. Red Bull is ignoring huge

market, which defiantly turns its customers to competitor’s products. And in segmentation we

also describe product mix and strategy for new segmentation. So according to my point of

view company must have mission statement like this for long term relationships. Mission of

the Red Bull is to be the premier marketer and supplier of Red Bull in Asia, Europe, and

other parts of the globe. We will also target women children and old age. We will achieve

this mission by building long-term relationships with the people who can make it become a

reality."

Product Life Cycle of Red Bull for Western 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 Decline


Product 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 Decline

3.2 Segmentation (New Strategy):

For Red Bull we have different strategies in order to overcome these problems and here we

also discuss how Red Bull can use marketing mix for this segmentation. There are three

types of segmentation which would be followed by Red Bull. We also discuss under how re

bull 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 the

factors Red Bull can use to promote its products. Following are the segmentation and product

mix of Red Bull.


We basically go to target three different but important segments, which are given below.

1. Children

2. Women

3. Old age

3.3 Children: (Red Bull (Humpty Dumpty))

Explanation:

We know that children are big part of population. So if we target this segment with

little change in product we can earn huge profit. In other words this segment of population is

a big opportunity and Red Bull can convert this into huge strength. And if we see this strategy

in both dimensions for western and as well for third world countries we can easily conclude

how big this opportunity is.

3.3.1 4p’s:

Product:

For this segmentation Red Bull caffeine free is very useful because children are so sensitive

against caffeine and by introducing Red Bull caffeine free we can target huge market. And according

to our study name of Red Bull is very name for every .body and same for children they are also

interested in Red Bull.

Price:

The price of this product depends on the geographical area. The can of the Red Bull will be

only in one size and the same for every child as well. In UK the price of Red Bull can be 70p and in

Pakistan and like other countries it would be at minimum level. But the price can be adjusted

according to situation and income level of the relative region.

Place:

There is no need to develop special warehouses for this segment and Red Bull humpty

dumpty will be provided in every shop with normal Red Bull and on every stores. In UK it would be

stored on famous stores like ASDA, TESCO, LIDL, MORRISONS, and SAINSBURRY.

Promotion:


The promotion of this product would be a big opportunity, because we can promote this

product 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 population

in the world and Red Bull is just targeting men and only young men. So this is most

important strategy for Red Bull. It would be a great chance for Red Bull by targeting this

segment Red Bull can get rid of a lot of competitors and a lot of threats. And by targeting this

segment 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 product

we don’t need to change anything but just for girls they like chilli, we would add some special

ingredients 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 prices

of 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 this

would be special prices on initial basis.

Place:


There is no need to develop special warehouses for this segment and Red Bull (Bella) will be

provided on every shop with normal Red Bull and on every store. In UK it would be stored on famous

stores like ASDA, TESCO, LIDL, MORRISONS, and SAINSBURRY. Red Bull (Bella) can also be

stored on petrol pumps shops for sale. And special store can also develop for this product near the

women gathering centres.

Promotion:

For this product we would use special promotional campaign. We would use these types of

ways 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 part

of the population in the Europe and by targeting this Red Bull will be able to get competitive

advantage over the competitors. If we see everywhere in the market no company is targeting

this segment and if someone do so they are just doing formalities. So it would be a big

opportunity 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 change

in 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

Medium can £1.59


Large can £1.99

Place:

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 on

famous stores like ASDA, TESCO, LIDL, MORRISONS, and SAINSBURRY. Red Bull (Cool

River) can also be stored on petrol pumps shops for sale. And special store can also develop for this

product near the old houses.

Promotion:

We need special promotions for this product because old age is very sensitive for each

product which they purchase. We would use special promotions for this product and we will adopt

some 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 campaign

3.6 Ansoff’s model:

Existing New

Existing

New

Diversification:

Red Bull must change its strategy if Red Bull wants to take over the market for long

period of time and if they want to be market leader for longer. At this stage Red Bull needs to

diversify and they must invest in different types of product not only in energy drinks but also

in other drinks that helps to cool down customers. Red Bull also needs to make other

products like Red Bull bread, Red Bull home use machines, Red Bull small cars,

Penetration New product

New market Diversification


Red Bull garments, Red Bull digital accessories. For diversification they need high

investment and proper R&D and they must also see the strategy of acquisition. Like they can

purchase lion shares of the company which are not working as well as demand of market and

Red Bull can convert them into opportunity for its long term planning. There are a lot of

companies would ready to make partnership with Red Bull happily. For example SHEZAN in

Pakistan.

New Product Development:

Another strategy can be used in order to get more customers like Red Bull can make

different products, in this way Red Bull can target more and more customers. Red Bull must

develop drinks in different flavours like Red Bull(lemon) Red Bull (Rubicon) Red

Bull(apple)Red Bull (mix flavours).in this way Red Bull can target a lot of customers which

Red Bull continuously ignoring. Because no of customers don’t like energy drinks, especially

if we see children energy drinks are not useful as for young and old age. So Red Bull needs to

change its strategy for this segmentation and in some countries there is major factor of culture

that affects the sale of Red Bull.

Monitoring

This strategy will be monitored for a period of 6 months. If the strategy is found useful it will

continue with same run, and if its not useful for some reason then there will be some changes

which will be recommended by the share holders and valuable customers, and a new strategy

will be launched accordingly.

3.7 Swot:

Strengths:

The brand name of the Red Bull is the biggest strength. Red Bull has largest market shares

show 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 weak

marketing in under developing countries. Red Bull is also ignoring major segment of

population.


Opportunity:

By targeting different segments Red Bull can get competitive advantage over. It would be a

great 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 Bull

for long term strategy.

3.8 STEEPLE:

Social

Check out latest trends and moods in energy drink market. It also need to analyse media

habits and opinion formers in the target group.

Technical

Technically Red Bull has no big issue because Red Bull is not a diversified company and but

it can affect its long term strategies.

Economic

Given the international status of the company and differing economic cycles, the financial

object needs to be reviewed in the light of exchange rates and sector activities.

Education

There must be internal education system in order to develop skills in sale force so that they

can forecast future sale.

Political

Normally this type of product doesn’t have big and real issue, except it occurs some time in

advertisement.


Legal

Red Bull had different legal restrictions in different countries like France, Norway and

Germany due to health issues.

Environmental

Red 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 declined

4.1 Conclusion:

If Red Bull controls the problem which it has been having it could survive and it

could make more than it has been previously. If Red Bull decreases it prices and advertises it

in such a way in the third world countries where most of the people can get known about red

dull and its exploits.


5.0 References:

Slack, F., Rowley, J & Coles, S (2007), ‘Consumer behaviour in multi-channel contexts: the case of a theatre festival’, International Research, 18(1), pp (46-59)

Johnson, K., et.al., (2006), ‘Multi-channel shopping: channel use among rural customers’, International Journal of Retail and Distribution management, 34(6), pp (453-466)

Laukkanen, T., et.al., (2007), ‘Customer preferred channel attributes in multi-channel electronic 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 and sons (USA)

Bowles, M (1991). Organisational Studies. (New York): EGOS

Burack, 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, orgnisational

Dynamics, 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. UK

Johnson, 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 Strategic Management Journal, 9.319-332.

Laurant, A. 1086. The cross culture puzzles of international human resources management, Human Resource Management.

Sing, R. 1089. Management in Pakistan. Lahore publishers Ltd. Pakistan

Smith, H.D. 1974. Confucius and Confucianism. London. Paladin.


Tiosvold, D &Tjosvold, M.M. 1995. Psychology for leaders. New York. John Willy & Sons

Young G. R. & Bradford S. J. 1977. Joint venture. Planning and action. New York.

Internet Sources:

www.bplans.co.uk

www.infortrac.london.galegroup.com

www.bellhowell.infoleaening.com/proquest/global.html

www.emerald-library.com

red bull final

Documents