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Red Bull is one of the biggest soft drink successes over the past the years. The slim blue silver can has developed a following among those who claim that it helps them with virtually everything to work better and play better. Yet Red Bull has a 70 to 90 percent market share in over 100 countries worldwide. During the past 15 years, the drink has been copied by more than 100 competitors, but such companies as Coca-Cola and Anheuser-Busch have been unable to take market share away from Red Bull. [Selling Power (September, 2004)]

In 1982, Dietrich Mateschitz, the founder of Red Bull became aware of products called “tonic drinks” which enjoyed wide popularity in Asia. Energy drinks containing taurine, glucuronolactone, caffeine and important vitamins and carbohydrates are claimed to help with physical endurance, improved reaction, speed and concentration and a feeling of well being. We can see that in the present days more than a billion cans of Red Bull are consumed each year around the world. Red Bull was launched in the UK in the mid-1990s of Austrian parentage.

According to a Zenith International 2001 survey that, in 2001, it was the UK’s third biggest soft drink by value, behind Coca-Cola and Pepsi Cola. In the energy and sport drink sector, estimated to be worth £750mn, it had an 86 per cent brand share by 2000, more than double the combined sales of Lucozade’s energy and sports brands. The advertising slogan of the Red Bull is “The Drink That Gives You Wings” and focuses on the stimulant properties of the drink.

The functional sector concentrated on energy drinks, with brands such as Red Bull dominated. Meanwhile, the focus for sports drinks is replenishing carbohydrates and electrolytes quickly, and rehydrating the body after exercise. This subsector is still dominated by Lucozade Sport with £34 mm in sales in 2000, but Coca-Cola intends to prelaunch its Powerade brand to capture a significant share, using “Get Up, Stay Up” as its campaign theme. Lucozade Sport in creating a new sector that is in tune with changes in lifestyles and reflects the development of sport & physical activity. [Hawkes (1997), Johnson (2001), Newnham (2001)]

Analysis of the external and internal environments of an organization influence strategic choices and compare the marketing proposition that, The UK total cold drinks market is large and competitive area in which, many powerful and famous brands with large marketing budgets competing for share.

In the cold drinks market, increases in the soft drinks category have been slowing. However, growth has been driven considerably by the energy drink sector, which was worth an estimated £940 million in 2003 and more than £392 million in 2004 and still has grown 26% since 2003. (ACNielsen) The Energy drink category continues to grow at pace with brand extensions and new entrants to the market emerging every year. This represents both a challenge and an opportunity for the category’s leading brands. [Mintel Energy & Stimulant drinks Market Report August 2006].

The Product

Red Bull improves emotional status and vigilance, increases performance, reaction speed and concentration. Customers drink Red Bull for such benefits as these.  In times of long school hours, stressful work, and very tiring days, customers look to a product that vitalizes body and mind. Red Bull does just that!  Red Bull even supplies a sugar free version for the average health-concerned user.

The Target Audience (Market)

At this point, the concept of market segmentation, targeting and positioning are key to the success of firms marketing efforts. Red Bull targets an active audience, especially those between the ages of 17 and 23, male and female.  Characteristically, 17- to 23-year-olds are either thinking about college, in college, or just recently graduated from college.  It is currently in a consumer’s life that dramatic schedule changes are happening.  High school atmospheres are considerably slower than the pace of college atmospheres. Sports, education, clubs and part-time jobs are far more challenging in a college setting.  Red Bull is targeting customers across the world that it is at the turning point in their lives when energy is a necessary component to successfully make it through any given day.  Red Bull is a perfect solution for 17- to 23-year-olds who live fast-paced, hectic lifestyles while hardly making it through long days and nights of classes and studying.

Segmentation is also important because firms cannot appeal to all customers at once, especially not with the same offering.  Rather, firms need to design products and services that fit with particular groups of individuals. Firms can segment their market in a number of ways, including geographical which is mainly people who are situated in the city, as they are likely to be really busy and tired. Red Bull seems to have a cooler in most bars and clubs in the city as well as in convenient stores.Demographic, mainly concentrate on men and women of all ages but focusing on people aged 16-29. Psychographic for example, the people who are tired or stressed and want to relax and have fun and finally behavioural segmentation especially students and young professionals to boost energy during work long day at work.

The type of marketing strategy that should be employed will vary on the target market. Choosing an appropriate target-marketing strategy will depend on a number of factors. Once a firm has selected the segment within which it wishes to compete, it must then choose a specific position within said segment where it will distinguish itself [Kotler and Keller, 2006; Kotler, 1980, 1985]. The requirement of market positioning refers more broadly to the notion of competitive advantage.

The Proposition

Red Bull is “The Drink That Gives You Wings”. This is Red Bull’s international slogan for its energy drink. Red Bull is a popular drink amongst men in particular, with its largest consumers consisting of athletes, students, and night-clubbers in need of a late night lift.  However, the brand is marketed to ‘opinion leaders and hard-working people with active lifestyles’, as the company’s website claims.

Red Bull succeeds by remaining exactly the same. Consumers can choose with sugar or without. There is no other choice. As founder Dietrich Mateschitz says “We don’t bring the product to the people, we bring people to the product.” Red Bull marketing maintains a sense of product mystique that makes consumers feel special. Customers can relate to the experience they were having when they encountered the drink and they adjust their values to the attributes of the product.

The Competition

Red Bull is competing with major competitor Lucozade in the soft drink market and they are the driving forces in the rapidly increasing energy drink market. A close assessment of their websites reveals that they have a similar focus in their messages, so they seem to be competing for the same customers. However, the message delivery is very different. This would seem to indicate that they are not concentrating their strategic objectives on stealing market share or overall market share growth. Instead they recognize that the whole market share pie is rising. For that reason it seems logical that each company would be concentrating on bringing in a greater number of the consumers new to the energy drink market. Red Bull is also competing with some companies such as show below;

Vault

-Markets product as a hybrid: “Drinks as a Soda, Kicks like an Energy Drink”

“The Taste. The Quench. The Kick.”

-A Coca-Cola product

-Product Variations: Vault Zero (diet version)

-Commercial advertisements display men doing extraordinary things while drinking Vault.

Monster

-Tagline: “Unleash the Beast”

-Green and black themed product and website

-Product variations: Lo-Carb, Assault(soda drink), Khaos(juice drink)

-Khoas slogan: “70% Juice, 100% Monster”

-Promote Supercross racing events

-Promote mixing Monster with alcoholic beverages, website provides mixed drink recipes.

Rock Star

-Edgy tone

-Rock music plays on the website; Rod Stewart, Fernando Vargas and Snoop Dogg are pictured on the homepage of the site, “Party Like A RockStar”

-Product variations:  Diet RockStar, RockStar Energy Cola, Get Juiced

-Get Juiced slogan- “70% Real Juice, 100% Energy”

-Website sells merchandise: t-shirts, hats, wristbands, etc.

-Youthfully imaged founder & CEO

Advertising Objectives

Red Bull campaign strategy is to redirect the advertising from the former extreme sport athlete audience to a demographically larger target audience – college students.

What will Red Bull campaign do for the target?

Red Bull campaign will hit a soft spot and plant their product deep in to the minds of the target audience by using a childhood cartoon character for instance, Popeye the Sailor Man who has recently been missing in action on current television.  Their focus group study revealed that the targeted college student audience often wishes they could turn back the hands of time and relive their childhood when life was easy and they had all the energy in the world to laugh and play.  The goal is to reach their target’s soft spot by using a childhood cartoon character – pleasant childhood memories.