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

Ch. 5 - Developing a Global Vision

"You don't have to twirl a red cape in front of this bull to get a charge out of it! Red Bull markets its eponymous energy drink around the globe".
In 2010, more than 4.204 billion cans were sold in over 161 countries. 7,758 employees generated 3.78 billion euros in turnover.Red Bull holds a 70 percent share of the world market for energy drinks, or functional beverages, a category it was largely responsible for building.

 

Red Bull's distribution expanded into neighboring countries Hungary and Slovenia in 1992. Red Bull was introduced in Germany in March 1994. By June, it was claiming a quarter of the sports drink market there, reported the Associated Press, putting it ahead of Gatorade. Red Bull was introduced in the United Kingdom in 1994 and marketed there as Red Bull Stimulation after 1996. Red Bull entered the United States in 1997, focusing at first on four western states: California, Oregon, Texas, and Colorado. It was marketed to Americans as a non-corporate alternative to Coke and Pepsi, and both packaging and pricing helped set it apart. The drink was sold in unique, narrow 8.3-ounce cans for $2 a pop.
Worldwide sales were logged at 300 million cans in 1998 by Beverage World. By the end of 1999, Red Bull was sold in more than 50 countries, and sales estimates varied between 600 million and one billion cans worldwide. Red Bull led the energy drink category in the United States and the United Kingdom, where it displaced the venerable Lucozade brand owned by pharmaceutical company SmithKline Beecham (later GlaxoSmithKline).

 

 Recently Red Bull has begun to market towards India. Being a country with huge economical potential, due to the fact that India has one of the two largest geographical areas,greater linguistic and sociocultural diversity than any other country in the world but among the highest levels of income disparity in the world. Red Bull marketed towards India in 2003, the brand can be viewed as a pioneer in India becuase it was the brand that created the energy drink category. According to the Economic Times the Indina energy drink market is estimated to be about 100 crores(a unit in the Indian/Pakistani number system equal to ten million).Red Bull is talking about a volume of 15,000 cans a month in 2007 according to 'Rediif India Aboard'' a internet website for Indian news in New Delhi.

 

In order to get thier product into so many countries and sell at large quantitities Red Bull uses intensive distribution-A marketing strategy under which a company sells through as many outlets as possible, so that the consumers encounter the product virtually everywhere they go. If one were to be looking to purchase Red Bull he/she could find it in any one of the listed places below-

 

*Super markets

 

*Gyms

 

*Coffe Houses

 

*Subway

 

*Convience Stores

 

*Pizza outlets and ext.

 

 

 

 

 

 

 

 

Ch.4 The Marketing Enviroment

Red Bull, who is originally from Austria where it is still produced, distributed their energy drink in over twenty countries. Countries like USA , New Zealand , South Africa , Eastern and Western Europe . So it would be not very useful to restrict the target market to the geographic areas as well as the psychographic segmentation for the targeted consumer that’s because for a product like Red Bull it would be far to narrow as it cuts across lifestyles, demographics and socio-economic boundaries. So the best solution would be to set the target market as a behavioural segmentation. The reason for that decision is because in a behavioural segmentation the individual’s relationship with the product and the use and benefit sought from the product. 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.

Red Bull Target Market

The Athlete
It is usually a person who takes his sport very serious, what means he wants to get the best out of his body. Therefore you can say that Red Bull is part of his diet and sport life. So in this case Red Bull is for him a very good and easy way to improve his endurance or speed.

 The Worker          
This could be anyone who has to work hard such as a manager or a street worker. Anyone who wants to get pushed up and would rather like to have a Red Bull than a coffee.

 The Clubber
This category is fairly new, in recent years the people found out that Red Bull can be used as a very good mixer with alcohol. Red Bull sells now 34% of its units on premise. It is almost impossible to find the right target group, the reason for that is because of the various applications of Red Bull. Hence a clear cut categorization in age groups and socio-economics groupings is not feasible. But what we can be sure of is that the typical Red Bull drinker is dynamic and active, the gender does not play any role at all. But it is more likely that more less younger people who really like to go out fall for Red Bull. Research (PHT, 11/97 Smith Kline Beecham Energy & Sports Drinks Report) has shown that 53% of the people who drink energy/ sports drinks are within the age between 14-34 years. Moreover they found out that the main reason for purchasing energy/sports drinks were to quench thirst (37%) and give boost.


Some observers say that Red Bull's branding is evolutionary, calling it an 'anti-brand' strategy. The company faced additional problems in Pakistan where there were already many established drinks available.

The firm avoided usual methods of marketing , relying more on what is called 'buzz marketing' or word-of-mouth. A brand image was created and cultivated which associated the drink with youth culture and extreme and adventure-related sports, such as motor-sports, mountain biking, snowboarding and dance music parties. In other countries Red Bull's target consumer segment began to adopt nicknames for the product such as 'liquid cocaine' or 'speed in a can', thus spreading its 'left-field' appeal.
Red Bull then worked to ensure that their brand was visible on the street:

• Using pick-up trucks as mobile displays, painted blue and silver with a giant can of the drink mounted on top of the vehicle.
• Designed to be eye-catching, these devices were aimed at promoting the red bull brand as youthful and slightly 'off-the-wall'.
• Cans of the drink were also given out free to people on the street who had been identified as being in need of energy
• Red Bull was given to club DJs, empty cans would also be left on tables in hot spots such as trendy bars, clubs and pubs.

The company also set about promoting the Red Bull brand directly to Generation Y, the so-called 'millennial': people born after 1981 who were believed to be cynical of traditional marketing strategies . Part of this idea involved recruiting 'student brand managers' who would be used to promote Red Bull on university campuses. These students would be encouraged to throw parties (as if encouragement was needed!) at which cases of Red Bull would be distributed. The brand managers would then report back to the company, giving the firm a low cost form of market research data.

 

Ch.3 Ethics and Social Responsibilty

Red Bull, which distributes its product in aluminium cans sells more than 4 billion cans a year! That means a lot of aluminium cans are used to deliver the product in top quality to places all over the globe. Naturally, Red Bull’s production and distribution has an environmental impact. Red Bull is very aware of its environmental responsibility, and is constantly striving for improvement in this area, with the aim to keep environmental impact at an absolute minimum.


*Less energy and fewer raw materials-
Wall-to-wall production is just one of the ways in which Red Bull reduces its environmental impact. This kind of production dramatically shortens transport distances, resulting in lower CO2 emissions, in addition to other benefits. Increasing the can recycling rate not only cuts down on Red Bull’s usage of precious virgin raw materials, but saves on the energy needed to process these. Reduction of the can’s weight has also made a difference: the less aluminium goes into cans in the first place, the smaller the carbon footprint.

Red Bull environmental sustainability - can lifecycle
According to the company, Red Bull cans are the world's most recycled drink packaging.
Red Bull believes that part of its success lies in its efficient and highly modern production system. Taking an old can and using it again takes 95 percent less energy compared to using new aluminium and significantly reduces Red Bull's carbon footprint.

Using aluminium was a conscious decision from Red Bull for various reasons. Aluminium cans are oxygen-proof and neutral in taste, so the drinks retain their flavour for a long time. As aluminium cans are 100 percent recyclable, they can be melted down and reused an infinite number of times, saving a huge amount of cost and energy.

-With all the spare cans that the world has from the product, the company created a innovative nationwide movement which helps in thier recycling cause.

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 inbetween 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.
Your primary material must be a silver and blue Red Bull can (Sugarfree and Cola are also an option), but you will need to add plenty of imagination and creativity. Make a sculpture, a picture, a 3D model, a mobile, or a piece of modern art, but make it beautiful, colourful, clever, amusing or outrageous.

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

Strengths

• 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.

Weaknesses

• 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.

Opportunities

• 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.

Threats

• 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.

Misson Statement

'To Spread Our Wings Over The World'

Red Bull GmbH 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 efficent and profitable manner. We create a culture where empolyees share best practices, dedicated to coaching and developing our organization as an employer of choice.

Our mission is to be the premier marketer and supplier of Red Bull in Asia,Europe, and other parts of the globe. We will acheive this mission by building long-term relationships with the people who can make it become a reality.