Friday, September 16, 2011

Chap. 2.Strategic Planning for Competitive Advantage

A thorough analysis of energy drink producer Red Bull concludes that the company was set up to market just one product, Red Bull. Eventually it started marketing a variety of slightly modified energy drinks. Now Red Bull is energizing people around the globe, touching down in over a hundred countries worldwide. The ambition of Red Bull is maintaining the
top-brand status in the energy drink market and clearly distinguishing themselves from their competition, who is marketing almost the same product against extremely low prices.
Red Bull uses every means of marketing to reach their target groups. Their marketing is mainly based on the “3 pillars of Red Bull; Sampling, Advertising, Sponsoring”. This means that next to normal advertisements, they drive around in Red Bull –modified cars handing out cans of red bull and sponsor big extreme sports events and competitions. In this way Red Bull is not just promoting their energy drink but is also selling a lifestyle, seemingly people are willing to be a part of this Red Bull extreme sports lifestyle.
The Red Bull consumers can be divided into three segments: athletes, clubbers and workers. Each of these using the Red Bull energy drinks to meet their personal needs. Whether these are obtaining physical edges, mental edges or just consumption for pleasure.

SWOT Analysis
  • Market leadership- Within the energy drinks market Red Bull is the industry leader throughout the world. Marketing Efforts- a lot of promotions and well targeted campaigns and sponsorship e.g. formula 1 helps to expand Red bull brand and increase consumer brand awareness.

  • Strong , fresh & fashionable brand identity.

  • Above-average prices.

  • Lack of innovation- there are a lot of competitors in the market and they have their own USP which leaves Red Bull behind.
  • Reliant on small product base- The company only markets one branded product, Red Bull Energy Drink (along with a sugar free variety).

  • Lack of patent on RB ‘s recipe means anyone can copy it.
  • Extension of product line- this will help to retain market share.

  • Hardcore Advertising and Promotions.
  • Consumer recognition through sponsorship of sports events.
  • New ventures like partnership with Facebook.
  • Health concerns- tougher rules from government on high caffeine content.

  • Consumer awareness of health and well being- people may start to drink other alternatives as it is associated with healthier life style.
  • Drinks might not be accepted in the new markets.

  • Organic energy drinks might steal RB’s market share.

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