How Red Bull Business Has to Operate - Case Study Example

Executive summary The marketing plan for the Red Bull company is important this is because it helps the learner and the business men to know how to go about ensuring that the business is productive and therefore this implies that in running a business one will know the products that lead to more sale and those that do not have to be supplied in large quantities so that one will know how to make implementations that are required so as to make the business productive. The plan provides a summary of how that business has to operate so that it can bring more sales to the user and at the same time provide products that are required so as the consumers to be satisfied with the supply in the market and have the demand been equal to supply that will ensure that both the seller and the buyer balance and the production and consumption cycle is compete. Table of contents Executive summary…………………………………………………..1 Introduction……………………………………………………………2 Mission statement………………………………………………………4 Situation analysis……………………………………………………….5 1) Internal environment……………………………………………5 a) Products…………………………………………………5 b) Financial and non- financial situation…………………..5 c) Channels………………………………………………..6 2) External environment……………………………………………6 a) Markets………………………………………………….6 b) Competitive environment……………………………….7 c) Economic environment……………………………………7 d) Demographic environment…………………………………8 e) Social and cultural environment…………………………….8 f) Political and legal environment……………………………...9 g) Technological environment…………………………………..9 3) SWOT analysis……………………………………………………….9 4) Critical issues………………………………………………………..10 Marketing objectives………………………………………………………….10 Marketing strategies……………………………………………………………11 a) Target market………………………………………………………………11 b) Product strategies…………………………………………………………..11 c) Pricing strategies……………………………………………………………11 d) Promotion strategies…………………………………………………………11 e) Distribution strategies………………………………………………………..12 Recommendations for change……………………………………………………..12 Implementation plan………………………………………………………………12 Conclusion…………………………………………………………………………12 References…………………………………………………………………………14 Appendices…………………………………………………………………………15 Introduction The Red Bull Company began in 1933 as a club in Australia. After some time it changed its name to be the company for energy soft drinks, which spread from to other countries. The Red Bull Company deals with the sale of drinks that help people to do their work without problems and also it associates itself with sports that are extreme meaning that it can bring the expected results to the people all the levels. The Red Bull is the biggest exporter in Australia where by it has created and dominated the energy drink category in the way the players of board game risk would defeat the opponents. (Mollie, 2000) A caffeinated beverage was created in 1987 where by after some time this drink spread to other countries like the Germany. Today this company has invaded most parts of US were it makes high sales in wholesale and other building energy drinks followed making high sales. The share for this company in the market has stood at about 65% a in the cool, and 1 billion in worldwide sales. This means that compared with the beverages of the Red Bull is highly sold all over the world as after its invasion in several countries it has been able to spread very fast to the other friendly countries. The plan of this company has been able to open up markets by securing unusual distribution where by the distributors deliver a number of brands where by for example the Pepsi house will sale the Pepsi. Due to the advertising, promotional, accounts and sampling costs this company faced that problem then it had to narrow down its approach. A sales representative will approach a distributor and insists that they must sale only this Red Bull product it sets up a warehouse and hires people like the kids to load the vehicles and deliver the products. The start up distributors can be bale to focus their energies on getting Red Bull be fully stocked in stores with shelf placement and it is able to make more sales within the next months meaning that the profits will be high. These small distributors buy direct from the company and therefore they have enough volume to make it work. The sales team visits the key on – premise accounts like the hot clubs and trendy bars and thus when the owners begin to buy the sellers know that the product can be sold to him or her then they receive a Red Bull branded cooler and other POP items and through this they are able to do their business officially. This on- premise accounts ensures that the product gets a lot of visibility and attention and therefore it goes faster to deal with individual accounts, not big chains and the authorization process. It also ensures that it provides fertile ground for new drink trends. This Red Bull gives people a feeling of been refreshed from the week’s activities and therefore if one takes this product then it works. The sales team opens the off- premise accounts at convenience stores like near colleges, health food stores and supermarkets this ensures that the product is highly sold as in these places then it means that if they need this product it is very near to them and thus the buyers will not have to go and find where to get it. This reduces so costs like the transport cost where by the company is supposed to make the product available to consumers and therefore due to their nearness to them then the product will be easily sold. This company has divided the US into eight decentralized sales units where by each unit is handled on a city-to-city basis and each unit is responsible for creating distribution, making sales and developing the targeted market plan. (Katty, 2000) Mission statement The main aim of this company it to ensure that the targeted population that is the people are able to get the product near them and also they take the product to the expected places like the clubs and at the right events. This is to ensure that they sale the product to all who are willing so as to make high profits that will enable the company operation to continue supplying the product and also spread to other countries. The company has to ensure the people between 18- 39 years receive the drink, as they are involved in activities that lead to loss of energy. Situation analysis 1) Internal environment a) Products This company is concerned with production of the drinks that are required by specific people and it has to ensure that it covers that population so that it makes high sales that are required so that the company does not have to face financial problems. The company is situated in convenient places where these people can be able to reach the product without delays and at the appropriate time. This is to ensure that they capture most of the people who are willing to make use of this product. The main products that are supplied by this company are the Red Bull original and Red Bull sugar free. The drinks provide the lost energy that is lost through the physical or mental exercise and thus they are able to stimulate the concentration, vigilance and also they enhance the reaction speed for the people who require a boost. They are affected by competition for example with high competition in the market then the product will not be sold as expected and thus the company faces problems of poor performance. It can be affected by the tastes and preferences of the people where by if one has a negative attitude towards that product then it means that the marketing of this product will be affected. (William, 2001) b) Financial and non-financial situation This company is able to make a lot of money from the buyers that is the students in colleges, the supermarkets are also buyers of this product and therefore it means that this product is highly sold, meaning that it does not experience problems of lack of cash to make its production expansion therefore the company is financially stable compared to other companies that compete with it. The company has made a sale of 1.6 billion worldwide from the drinks that were sold to athletes and other people who were in need of this drink. c) Channels The company has got many commercial partners whom they trade with and they include: the notter kanaldicht which the leading company in Switzerland that is responsible for the maintenance and renovation of pipes and has also technological development; there is the fortis aviation group which is the leading company for marketing and the management of corporate and commercial air craft; there is the car glass which is the leading company offering repair and placement of wind screens and other glasses for cars; there is the capol which is a company the deals with the production of professional software solutions; there is the associate partners that is the intercoat which is a specialist manufacturer of quality surface coatings of wood, metal and plastics. (David, 1998) 2) External environment a) Markets This company is able to market its products in several areas where it has its branches. It has many links and therefore it has many markets where it can be able to sale its products. This is because in all the countries where this company is available then it has made establishments in these countries and thus it is easy to market the product because they have the methods that they can use to make the product known to the buyers and therefore this enables it to sale the product in all the markets as the competition with other related products are not very high and thus its presence in the market makes the buyers have the know how that the product is already in the market. The company has got the product been branded attractively and this captures many buyers in the market. In the market the product is affected by substitutes, which is an element this leads to high competition in the products of Red Bull. (Carol, 1988) b) Competitive environment The company faces competition from both the direct and the indirect competitors like the V coke, lift plus Pepsi, PowerAde coffee/ tea and other drinks that may be provided in the market. The determinants of competition includes the price, the brand managers are able to explain the full benefit of the Red Bull and eliminate the perceived risks and therefore the product is able to compete in the market effectively this is because the people are aware of the state of the product meaning that it will have many buyers than these other products because it is proved to be risk free. It has more than 100 competitors for example the coca cola and the Anheuser- Busch, which were not able to take the market share of the Red Bull. c) Economic environment Economically this product is sold to many people this means that it is able to capture a large population due to the benefits that are received from the product therefore the product been risk free is able to be accepted by many people. When it is compared with other products then it proves to be more beneficial to the people’s body than the other products that are supplied in the market therefore it becomes possible for people to make use of this product due to the benefits that are related with the drinks. The products for Red Bull that is the Red Bull sugar free is used by many runners this is because it regains their lost energy. d) Demographic environment The drink covers the population of people who are aged 16- 29 years old this is because these are the people who losses a lot of enough on the activities that they undertake. Therefore these people are taught on the usage and the benefits that it brings to the user and thus most of the people who need to regain their lost energy make use of this product as it has proved to be risk free and providing energy that has been lost due to the activity that one has been taking like in running one losses a lot of energy and thus he or she can recover it through this drink. The population that used this product was increasing and differed in several countries. Through a research that was done in several countries then it had the indication that males used the energy drinks more than females this is because the males undertake very hard tasks like for example in a cement company men are concerned in lifting the cement packages. This implies that men loss a lot of energy compared to women. In basis of income the rich this is because the poor are no able to afford even the prices that are offered for this product mainly consume the products of Red Bull Company. In family cycle the young are seen to be losing a lot of energy than the adults and therefore they make use of these products in high quantities. (Bonnie, 2001) e) Social and cultural environment This drink is accepted in the society and also by the people who take heavy activities this means that these people are willing and ready to have the drink as it does not have side effects to the user and therefore it is not rejected in the society. This means that the drink can be taken without fear of one having rejected the culture that is required to guide them in the society. The culture environment of a product is the fact that a product that is produced does not affect the user in any way meaning that people will use the product if it does not affect them in terms of their culture. The Red Bull Company has ensured that the values of the people have been put in consideration and therefore more of their products are sold. The products of this company are made in a way that they meet the basic needs of the people in that particular place. f) Political and legal environment The company follows the health regulations that are required so that a product can be proved to be risk free this means that the sale of the product in the market is legally accepted as there are things that a company has to follow so that it can be allowed to market a product and the company has to make the necessary changes that are required so that the product does not have to affect the user. Countries like French and Denmark rejected the use of the product but after the investigations that were done then they accepted their people to make use of the Red Bull company products. (Daniel, 1998) g) Technological environment This company makes use of the most affordable technology that will not cost the company much so that they provide fair prices to the people who are willing to make use of this product. This ensures that the product is not produced at a very high cost that will not benefit the company economically and therefore the product proves affordable to all in the market. 3) SWOT analysis It has a detailed analysis which examines the company’s performance on the soft drinks that it offers to the people, it also shows the company’s shares by regions and the sector, there is the brand portfolio and the new product developments, the market and the distribution strategies, the challenges from the competition and the future prospects and therefore through this analysis one is able to know the opportunities and the threats that the company faces and the factors that can be used so that the company can be successful. Thus through this analysis then one is able to know the performance of the business and therefore know the amendments that are to be taken so that the company can be able to face the competitive market. This is because in the Company there are things that have to be changed so that the business can be productive. The strengths of this analysis are that it enables the firm to know the changes that have to be done so that the proper functioning can be achieved. The weakness of this analysis is that it does not provide the accurate information that can be used in the firm to know its operations. 4) Critical issues The company should ensure that the issues like in the reaction the drinks can have on the user have to be checked so that the company will know the changes that it will have to make so that the product does not have negative effects to the users therefore concerning the health issues then the company has to have the right information so that the product do not have to affect the people. Marketing objectives The company has to ensure that it reaches the standards that are set by the market this will make the product to be accepted in the market if it reaches the goals in the market like ensuring that it offers the product at the right time and at affordable prices meaning that if the prices are high then the buyers will not like the product and may end up switching to use a substitute product but if it is of the accepted standard then it will be used by many and the company will make high sales. (Winnie, 2000) Marketing strategies a) Target markets For a company to make the product be sold in the market then it has to ensure that in the market the buyers that are targeted are available in that market this is through the company having the innovative marketing efforts where by the company has to employ an effective buzz marketing in the new markets this will lead to the company selling more of this product therefore the company has to ensure that the targeted audience are available in that market. (Jose, 1998) b) Product strategies The product should be appealing to the users and should be free from risks that can make the users have negative impression towards that use of such product. Therefore the product should be well branded and be differentiated from other products in the market. c) Pricing strategies The prices that are offered in the make for that product should be affordable to all. Therefore the company should know the audience that uses that product and through this it should fix prices that are not high. d) Promotion strategies These are the methods that the company can use so that the product can be made known in the market this can be through advertisement and the method that is used should not affect the user’s attitudes towards that product. e) Distribution strategies These are the means in which the products are supplied in the market to reach the consumers. The company ensures that the product reaches the consumers in the market at the right time. The distribution of this product has to be made in such a way that the consumers do not lack them at the right time. Recommendation for change Incase the company does not provide the required supply in the market then the company has to make changes on the technology that is used so that the productivity is raised. Implementation plan The company has to have the plan on the things that have to be changed so that the company can raise the sales. This can be a thing like having information on the views that the consumers have towards this product and through this the company will make the required changes. In implementation then one has to have in the records that will assist him or her in knowing the weak places in the company so that it can be able to make the required changes to these areas this will make the company improve in its productivity and ensure that it supplies the best products to the market and this can only be achieved through making an implementation plan that acts as a guide to the business man of the company. (Alfred, 1999) Conclusion Marketing plan is very important to any company that is willing to raise its production and make high sales leading to high profits therefore the company has got to have the plan so that it ensures that the product is highly competitive in the market and through this more sales will be achieved. Companies make high sales through ensuring that many buyers accept the product in the market and this is through ensuring that the market strategies are followed. Reference: Alfred, K (1999). Reaching the masses in the market. University reserves, pp 78-90 Bonnie, D (2001). The accepted steps for an effective market plan. University reserves, pp 90-100 Carol, J (1988). Marketing instructional services that are applied to make the business productive. Pierian press. Pp65-70 Daniel, N (1998). The important strategies to follow in marketing plan. Research strategies, v, 45, pp 67 -70 David, N (1998). Marketing plan as a guide to success. Research strategies, v. 20, pp 34-49 Jose, P (1999). Red Bull marketing plan improvement. University press. Pp 89-90 Katty, M (2000). Instructions for marketing plan to the businessman. Pierian press. Pp 78-80 Mollie, N (2000). Tips to make the product known to many. Michigan University. William, S (2001). Marketing plan importance in the business. International journal, pp56-70 Winnie, M (2000). Proper performance of a business. Political economic journal, pp 78-80 Financial state of Red Bull in 1999 Type of drink males females unknown total Red Bull original 60 40 11 111 Red Bull sugar free 70 20 10 100 Demographic chart of Red Bull in 1999 State Males Females unknown sex total Alabama 45 50 4 99 Louisiana 50 30 6 86 Read More