Ch.10 Product Concepts

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).  Red Bull being a consumer product can also be classified convenience product in that, Red Bull customers don't normally plan ahead on purchasing the product but often buy it regularly.  Red Bull Consumers view the product as both a homogeneous and heterogeneous shopping product. A homogeneous product becuase like many other soft drinks energy drinks Red Bull delivers the same effect : enhance energy boost, or endurance. But what helps Red Bull Make such a large profit margin is its heterogeneous aspect ( or what the company wants you to think makes Red Bull different).

"There are three basic human needs that Red Bull satisfies, physical, social and individual
needs. ‘Human needs are states of felt deprivation… marketers do not invent these needs; they
are a basic part of human makeup…People in industrial societies might try to find or develop
objects that will satisfy their needs." With the company releasing comments like the one just stated they create a subconscious need in the consumer that they must acquire Red Bull to fulfill a need that's really isn't there to begin with. 

Product-Line-extension
Red Bull has tried a series of product line extension to increase revenue;


- Red Bull Energy Drink:

- Red Bull Sugar Free: 

-Red Bull Energy Shot: 

-Red Bull Cola

Branding

Red Bull has an aggressive international marketing campaign. The numerous sponsored activities range from extreme sports  like mountain biking, BMX, motocross, windsurfing, snowboarding, skateboarding, kayaking, wakeboarding, cliff-diving, surfing, skating, freestyle motocross, rally, Formula 1 racing, and breakdancing to art shows, music, and video games. In keeping with their target market of young males, Red Bull has also enlisted help from celebrities, such as Eminem that would appeal to this group (sponsoring the Red Bull "EmSee Battle Rap championships"). It also hosts events like the "Red Bull Flugtag" (German for "flight day" or "flying day") and other such contests. Red Bull also sponsors association football teams, with clubs in Austria, Germany, the United States and Brazil featuring the Red Bull trademark in their names. By associating the drink's image with these activities, the company seeks to promote a "cool" public image and raise brand power. In addition, the slender container is used to suggest a "sexier" image than some other cola counterparts. Hence, this one energy drink has helped create a market for over 150 related types of merchandise, like Red Rooster and Blue Lightning

Team ownerships

• Red Bull Brasil - a football team currently playing in the Brazilian Campeonato Paulista Série A2.
• RB Leipzig - a football team currently playing in the German Regionalliga Nord
• Red Bull New York – a soccer franchise competing in the United States' Major League Soccer
• Red Bull Racing - a Formula One team based in Milton Keynes, England, World Constructor's Championship winner of 2010 and 2011, and produced the car for the 2010 and 2011 F1 World Champion Sebastian Vettel.
• Scuderia Toro Rosso (Italian translation of Team Red Bull) - Another Formula One team based in Faenza, Italy.
• Team Red Bull, a racing team competing in the US based stock car racing competition NASCAR.
• FC Red Bull Salzburg, an Austrian football club based in Salzburg and competing in the Austrian Bundesliga
• EC Red Bull Salzburg, a member of the Austrian Hockey League based in Salzburg, Austria

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Ch. 18 - Sales Promotion and Personal Selling

Sales promotion- Marketing communication  activitties, in which a short-term incentive motivates consumers or members of the distribution channel to purchase a good or service.immediately, either by lowering the price or by adding value. Unlike advertisement which offers the consumer a reason to buy; sales promotion offers an in incentive(any factor financial or non-financial that enables or motivates a particular course of action, or counts as a reason for preferring one choice to the alternatives. It is an expectation that encourages people to behave in a certain way) to buy.  Immediate purchase is the goal of sales promotion.

Marketing managers must decide which consumer sales promotion device to use in specific campaign. Red Bull uses several sales promotion techniques to boost sales. One of which are Contest and sweepstakes; stated in a previous blog ( Ch.3 Ethics and Social Responsibilty) Red Bull created a nationwide competition that was eco-friendly and helped not only interest and publicity but also helped generate long-term sales.

                                                Red Bull Art of Can: Inspired Recycling

The Red Bull Art of Can is a nationwide hunt for creativity and is open to everyone, from full-time artists to anyone with a creative flair. Build, sculpt, weld, glue, hammer, bend, fold, print, tape and paint, whatever you like!

The Red Bull Art of Can offers a platform for anyone, regardless of age, who wants to explore his or her creative talent. Artists, students, grandparents and all those in between are invited to submit their works of art. The Red Bull Art of Can is a true expression of one's imagination, with little or no restrictions placed on the budding artist.
The project will culminate in a premium art exhibition, where the selected pieces will be displayed and the top three pieces awarded prizes. The judges will select the winners which will be announced on the opening night of the exhibition.

Another sales promotion method that Red Bull has implemented was, attract customers through erotic imagery or ''sex sells''. A feature of sex in advertising is that the imagery used, such as that of a pretty woman, typically has no connection to the product being advertised. The purpose of the imagery is to attract the attention of the potential customer or user which Red Bull has taken into consideration when implementing a Sales Rep. team called "Red Bull Girls''. The "Red Bull Girls" are a team of selected women who tour the country and attend social events ex. such as parties, clubs, beach luau's and perfessional sporting events ex. Nascar, or beach volleyball in order to creat extra publicity for the product.

Red Bull Girls Boost the Sales of Red Bull Energy Drink

Red Bull Girls have the potential to give guys more than wings. Red Bull energy drink would not be where they are if they did not have the red bull wiiings team spreading love and energy to every consumer they come in contact with.These attractive girls are more than just a pretty face, they understand what it takes to deliver a great product and message to their consumers.

You have to Watch This Red Bull Girl Video if you really want to see what it means to really have a cool job that allows you to be yourself..look how much fun the Red Bull Girls are having.. press the play button!

Poinht of Purcchase ( P-O-P)

A P-O-P includes any promotional display set up at the retailer's location to build traffic, advertise the product or induce impulse buying. Becuase Red Bull doesn't have its own retail line or specialty store the company emphasizes on P-O-P.

"Sometimes just selling Red Bull products just isn't enough! Show off the fact that you are a proud seller of Red Bull by displaying your product prominently in one of our Red Bull branded coolers or point of sale displays."- This qoute coming from a advertisment directed towards retailers to get Red Bull merchandise into thier stores.

 Red Bull set aside $800,000  for design, creation, and distribution of sales promo materials and co-operative advertising costs.

Ch. 17 - Advertising and Public Relations

 Little known outside of his native Austria, Dietrich Mateschitz is one of the most successful entrepreneurs of our age, a man who single-handedly changed the landscape of the beverage industry by creating not just a new brand but a whole new category: the energy drink. As the visionary who brought the world Red Bull, affectionately known as "speed in a can" or even "liquid cocaine," Mateschitz, has been a patron saint for more than two decades to late-night partiers, exam-week undergrads, long-haul truckers, and, above all, extreme-sports athletes everywhere.

Now he's set his sights on media. On May 15, subscribers to the Los Angeles Times, Chicago Tribune, Miami Herald, Houston Chronicle, and New York Daily News found a magazine called Red Bulletin inserted in their Sunday papers. The 98-page glossy features a cover story on San Francisco Giants ace Tim Lincecum, as well as pieces on Bob Dylan, graffiti art, and Russian BASE jumper Valery Rozov. Billed as "an almost independent monthly," the magazine is a product of Red Bull Media House, a subsidiary media company launched in Austria in 2007 that expanded with a Los Angeles outpost this January.

Red Bull knows what it's getting into. Over the years, it has produced TV programs (No Limits on ESPN), films (That's It, That's All), magazines, a website, and a steady diet of Web videos featuring snowboarders, rally cars, surfers, cliff divers, and concerts. Even so, its current ambitions reflect a serious ramping up, as well as the realization of a business plan that eschews conventional advertising in favor of marketing through its own events, shows, and publications. The company shipped more than 1.2 million copies of the first Red Bulletin in the U.S. (equal to Sports Illustrated's paid circulation). This fall its first feature-length documentary, a look at snowboarding called The Art of Flight, will be released in U.S. theaters. Earlier this year, the company announced a partnership with Bunim/Murray Productions, best known for creating the Real World reality-show franchise on MTV. The two are working on reality TV concepts for Red Bull athletes.

 Mateschitz calls the multimedia assault "our most important line extension so far. As a major content provider, it is our goal to communicate and distribute the 'World of Red Bull' in all major media segments, from TV to print to new media to our music record label." He hopes Red Bull Media House will turn a profit, but, as with his sports teams, he's willing to wait. "In literal financial terms, our sports teams are not yet profitable, but in value terms, they are," he says. "The total editorial media value plus the media assets created around the teams are superior to pure advertising expenditures.

 As for Public Relations,Red Bull has employees in 161 countries.At the end of 2004, Mateschitz had just 2,605 employees; in 2010, Red Bull employed 7,758 people—which works out to more than $667,000 in revenue per person.

CH.15 Retailing

  Red Bull has a great image and is the market leader. Therefore we have two objectives:

• Maintaining the lead
• Trying to extend it by creating further consumer needs for Red Bull

·        Product
The product is fine as it is, over 60% of the under 30 year old Germans recognise the brand unassisted. People are happy with the product. Only the image can be strengthened.
·        Price
Also the price should stay the same, a high price is inadmissible to keep the image of a high quality product. Only place and promotion can add further value to the image.
·        Place
In 1998 only 20% of Red Bull’s sales were distributed through retail. As Red Bull is an utility drink, consumers only buy it occasionally. Therefore they do not necessarily buy the drink in supermarkets, but rather at petrol stations or off-licence retailers. As Red Bull has already reached market dominance in the rest of Europe with drastically rising sales figures, the company will have a significant influence on the wholesalers product displaying policy ( PDP). In the near future Red Bull will become a more established and demanded brand.
·        Promotion
Because of the high correlation between marketing expenditure and the sales of Red Bull in the past, the marketing budget should be significant. Red Bull has already increased the budget immensely; the goal is up to 50% of revenues. A high percentage of the budget is spent on sponsoring. In the future we should extend the promotion and ad-activities in order to maintain the leader position; there shall be more Red Bull stands at ski huts giving a way Red Bull mix drinks (RB-Champagne)etc.

 
White Bull
·        Product
White Bull is a soft high quality mix drink (long drink), containing Vodka and Red Bull. The name “white”, because Vodka is crystal clear. There will be a light Bull and a White Bull light with a lesser extent of alcohol. The drink will be presented in a luxury 300ml bottle. The idea of the product is that all the people who use Red Bull as an Energizer at daytime shall have a drink for the night. The motto is:
Cool       goes     hot
Light       goes     night
Red        goes     white.
The image shall be that white bull helps you to fly even longer, so you can survive the night in a club; and you can enjoy it even more intensive.
·        Price
White Bull shall have a luxury image, but the target group is everybody. Whether it is a business woman in the Country Club, who only wants to have one drink and does not want to buy a whole bottle of Vodka, or whether it is a teenager, who just wants two Vodka Red Bull for the night in front of the TV. The price shall be around twice as high as a beer, a little bit higher than a Hooch, but still cheaper than a self-mixed Vodka Red Bull. That means that it shall cost round about $3.50 in the supermarket.

·        Place
“White Bull” will be distributed literally at the same places as “Red Bull”. We are firstly talking about Bars, Pubs and night-clubs, petrol stations ( not in the UK , more likely in Germany i.e.) and small off-licence retailers. Once Red Bull is fully established in supermarkets, White Bull will fill the shelves in the supermarkets as well.
·        Promotion
White Bull will be promoted in a similar kind as Red Bull, through events organised together with Vodka-producers, VIP-Parties, etc.. Also, as by-product to Red Bull on Ski huts.  Definitely at evening events rather than sports events at day time. Advertising will be on TV and fashionable magazines (Time Out; Cosmopolitan). White Bull will be promoted with the slogan: “White Bull gives you horns”. This may cause some controversy, but gives  a lot of extra publicity, as well as it differentiates the product from Red Bull.

 Sports-Clothing
 The company thought about introducing a small selection of very extraordinary sports clothes. Red Bull is sponsoring a lot sports events. Almost always sports who are rare, and only a minority is doing them. First aim is to make some extra money, second is to get extra attention through people wearing the clothes.
·        Product
Products of the Clothing Selection shall be very limited. There shall be a jacket for skiing and snowboarding for instance, a hat for spare time, Shorts for biking, bath suits, etc. The product shall be of high quality where the Red Bull logo is a cult, and shall be bought in addition to the cult objects (e.g. Burton Snowboard pants)
·        Price
Clothing shall be a lot more expensive than no-name clothes, but a bit cheaper than Burton , Tommy Hilfiger, etc. The strategy shall be similar to Kookai.
·        Place
The “Sport Clothing” sector will be distributed very selectively. Therefore they will be sold in only a few, selected stores that target young, sportive and active people who desire functional and durable clothing. They also will be sold in places such as skiing resorts. The comany will try to establish specific “Red Bull” rooms or corners in famous stores.
·        Promotion
The Clothing will mainly be advertised in sports magazines and promoted through sports sponsoring (Formula One, Snowboarding, etc.).

The “Red Bull Energy Bar"
·        Product A City-Bar for business people to take a light lunch and to meet. In the style of an Airport VIP-Lounge, customers have the possibility to plug in their computers (Internet, Email), send and receive faxes and to be financially informed over a large screen showing stock exchange quotes.
Products will be salads, healthy sandwiches and juices, and of course Red Bull
·        Price
The price will be as high as in any other City-Bar and in addition phone line charges. The Bar should reflect a high standard, but it should be affordable very regularly.
·        Place
The “Red Bull Energy Bar” will firstly be established at a few, very selective places. Our primary target market-professionals \ managers-will be perfectly reached in the City. All offices and banks are situated in the city, where professionals take a lunch break to energise. “Red Bull Energy Bar” will firstly be established in selected major European capitals, i.e. London , Paris , Berlin . Once this business is established Red Bull is going to expand it.
·        Promotion
The Red Bull Energy Bar does not need a lot of media advertising, because it will be placed in an area where people pass by very frequently. This gives a great word of mouth attention (ex. Häagen Dazs). There will be opening events attracting the press. Nevertheless, infrequent advertising in specific magazines (Business Week, Time Out Eating & Drinking Guide, etc.) will take place.

Ch.6 Consumer Decision Making

Consumer Behavior- "process a consumer uses to make purchase decisions , as well as to use and dispose of purchased goods or services; also includes factors that influence purchase decisions and product use".Understanding how consumers make purchase decisions can help marketing managers make decisions to create a proper marketing mix and compete in its market.When making a decision of whether to buy,or not to buy, and what to buy the consumer generally follows the consumer decision-making process; which is a five step process used by consumers when buying goods or services. (1)need recognition,(2)information research, (3)evaluation of alternatives, (4) purchase, (5) postpurchase behavior.

The first step is need recognition, occurs when cosumers are faced with an imbalance between actual and desired states that arouses and activates the consumer decision-making process. A want is the new that a consumer goes about addressing a need.Need recognition is triggered when a consumer is when exposed to either an internal or an external stimulus.Internal stimuli are occurrences you experience such as hunger or thrist. for example when you may hear your stomach grow or have a dry throat and realize you are hungry or thristy. External stimuli are influences from an outside source such as someone's recommandationof a particular brand or advertisment on television or the radio, in case of Red Bull in places such as clubs, educational universities and billboards. Red Bull is something that consumers want and not necessarily need, A marketing manager's objective is to get consumers to recognize an imbalance between their present status and thier preferred status. Red Bull began a research project which helped the Red Bull brand create wants on the part of the consumer.

Red Bull's Logo Alone Can Affect Your Behavior

Even if you don't drink a drop, Red Bull’s logo alone can "give you wings" says a new study published in the Journal of Consumer Psychology by two Boston College professors. They found that consumers exposed to the brand displayed characteristics associated with it.

Here's how it worked: Researchers had volunteers play a car racing video game with nearly identical race cars. The only difference was each car was decorated with a different brand logo and color scheme.

The other cars represented Guinness, Tropicana, and Coca Cola.

Players controlling the Red Bull car displayed characteristics often attributed to the brand – speed, power, and risk-taking – and the results were both positive and negative. In some cases, the drivers sped around the course faster than other cars. In others, their recklessness caused them to crash and lose valuable time.

This behavior is known as “non-conscious brand priming,” according to professors S. Adam Brasel and James Gips, which means the personality of a brand can unconsciously “push” or “nudge” a consumer to act in ways consistent with that personality when exposed to brand imagery.

Red Bull has built its brand identity around sponsored promotions such as cliff diving, street luge contests, car racing, and a full-contact ice-skating obstacle course known as “Crashed Ice.”

The researchers also point to search results on the website brandtags.net, where users enter words or phrases they associate with brands. 9 of the 40 most commonly occurring terms for Red Bull deal with speed and power and four pertain to risk-taking and recklessness. In comparison, the 14 other most popular drink brands at brandtags.net average less than one speed or power associated word per brand and almost zero risk-taking or recklessness associated words per brand.

After recognizing a need or want consumers will search for information about the product.There are many ways a consumer may search for information. The information search can be external, internal, or both. Internal info search is the process of recalling past informtion stored in the memmory. External info search is the proceess of seeking info in the outside environment. Red Bull consumers can be provided with info about the product externally. Thier are two basic types of externa info sou rces; non-marketing controlled and marketing-controlled. In non-markeitng source there is no association with marketers promoting a product.These info sources include personal expericences,and acquantances who may recommand a product or service. Red Bull uses it's innovative 'viral markting techniques' to send out 'normal citizens' who happen to leave a red bull can hear or there in places where consumers are bound to need a drink; or at a area where the product is sold and have empolyees indulge premeditated public conversation about how red bull is a great and a must have product. A marketing-controlled info source is biased toward a specific product becuase it originates with marketers promoting that product. This includes mass media advertising( radio, newspaper, television, and magazones), sales promotion (contest, displays,and premiums), salespeople,product labels and packaging and the internet. Nowadays Red Bull is found every where in today's society due to the fact that it is the top energy drink producer in the market; if you didnt know what the Red Bull logo was you wouldnt have a hard time to find out, the brands logo is on billboards internationally, thier are sport franchises with Red Bull as a sponser, and Red Bulll even has it's own
magazine with everything Red Bull from product improvent to coustomer evaluation.

After getting info and the consumer is ready to make a decision. A consumer will use the info stored in memory and obtained from outside sources to develop a set of criteria which brings s to the next step in process evaluation of alternatives and purchase. The environment,internal and external info help consumers evaluate and compare alternatives. In order for Red Bulll to differ from other products it states many of its positive affects through advertisment and studies.

Positive effects of Red Bull® Energy Drink on driving performance during prolonged driving

Abstract

BACKGROUND:

The purpose of this study was to examine if Red Bull Energy Drink can counteract sleepiness and driving impairment during prolonged driving.

METHODS:

Twenty-four healthy volunteers participated in this double-blind placebo-controlled crossover study. After 2 h of highway driving in the STISIM driving simulator, subjects had a 15-min break and consumed Red Bull® Energy Drink (250 ml) or placebo (Red Bull® Energy Drink without the functional ingredients: caffeine, taurine, glucuronolactone, B vitamins (niacin, pantothenic acid, B6, B12), and inositol) before driving for two additional hours. A third condition comprised 4 h of uninterrupted driving. Primary parameter was the standard deviation of lateral position (SDLP), i.e., the weaving of the car. Secondary parameters included SD speed, subjective driving quality, sleepiness, and mental effort to perform the test.

RESULTS:

No significant differences were observed during the first 2 h of driving. Red Bull® Energy Drink significantly improved driving relative to placebo: SDLP was significantly reduced during the 3rd (p < 0.046) and 4th hour of driving (p < 0.011). Red Bull Energy Drink significantly reduced the standard deviation of speed (p < 0.004), improved subjective driving quality (p < 0.0001), and reduced mental effort to perform the test (p < 0.024) during the 3rd hour of driving. Subjective sleepiness was significantly decreased during both the 3rd and 4th hour of driving after Red Bull Energy Drink (p < 0.001 and p < 0.009, respectively). Relative to uninterrupted driving, Red Bull Energy Drink significantly improved each parameter.

CONCLUSION:

Red Bull Energy Drink significantly improves driving performance and reduces driver sleepiness during prolonged highway driving.

 Red Bull is not just an energy drink it is primarily a utility drink to be taken against mental or physical weariness or exhaustion. It’s use helps to increase endurance and heighten alertness as well as reactions and generally spoken the use of Red Bull helps to cope with the challenges of every day life, which includes work, leisure and sports. As previously stated in my previous blog (CH.4) marketing environment.


Finally comes the purchase and postpurchase behavior steps. Ultimately a consumer has to decide whether to buy the product or not to buy;And if thier expectations where met with the purchased product. I believe Red Bull's numbers speak fort themselves in this particular area;
A total of 4,204 billion cans of Red Bull were sold worldwide in 2010, representing an increase of 7.6% against 2009. Owing to currency and price factors, however, company turnover increased by 15.8% from EUR 3.268 billion to EUR 3.785 billion.
Sales, revenues, productivity and operating profit not only matched 2007 levels, they significantly exceeded them to such an extent that the figures recorded were the best in the company's history so far.The main reasons for such positive figures include outstanding sales in the Red Bull markets in Turkey (+86%), Japan (+80%), Brazil (+32%), Germany (+13%) and the USA (+11%), combined with efficient cost management and ongoing brand investment even in the challenging economic climate of recent years