The Success of the Marketing Plan and Product Introduction - Essay Example

? Table of Contents Red Bull for Women Marketing Plan Table of Contents 2 Introduction to the company 4 Strategic position & situation analysis 5Marketing Objectives 11 Marketing Mix 13 Implementation and Control 16 Practical Considerations 17 References 17 Introduction to the company Red Bull was founded in 1984 in Germany by Dietrich Mateschitz. The idea of ‘tonic drinks’ struck him during his stay in Asia where he was exposed to similar beverages and realized that there is tremendous opportunity for such drinks outside Asia. One similar tonic based drink came from Thailand that caught the attention of Mateschitz. Thailand workers used the drink for staying awake during their shifts. The drink was known as Krating Daeng translated to ‘Red Bull.’ He contacted the manufacturers of the drink and bought the foreign licensing rights in exchange of 51% share in his company. When Mateschitz launched the drink in Austria, he did not target factory workers; his target market was young professionals as he would be able to promote a premium and trendy marketing campaign. Product Portfolio Initially, only the regular version of Red Bull energy drink was launched. However, several other variants with different specific features were launched with time: Red Bull Energy Drink – The drink is available in 3 size variations, with 16oz, 12oz, and 8oz. It has been designed for those people who have clear and focused mind and want to perform physically well. Red Bull Sugar free – This drink is a variant of the Red Bull energy drink but it is without sugar and hence, contains only 3 calories per 100ml. It has the same features as the Red Bull energy drink. Red Bull Cola – This is a relatively new addition to the Red Bull product line. It is claimed to 100% without chemicals consisting of only natural products with all natural taste. Red Bull Energy Shot – A very recent addition to the product portfolio, Red Bull energy shots is concentrated Red Bull Energy drink without carbonation and no requirement of chilling. It comes in small size of 60ml and consists of 27 calories. However, the concentrated 60ml have the ability of providing the same energy as a regular Red Bull can. (Red Bull Energy Drink, n.d.) Strategic position & situation analysis Market Performance & Positioning As mentioned earlier, Red Bull was first introduced in Austria in 1987. It later ventured into foreign markets with the first venture being in Hungary in 1992. The drink is now available in 120 countries with more than 2 billion sales annually acquiring the position of world’s number one energy drink. The brand has acquired the top position among 15 other brands of energy drinks that are subsidiaries of different beverage or other companies (BevNet.com staff, 2009). The brand was promoted with a unique and creative style of advertising. The slogan was ‘Red Bull gives you wings’ that not only creates an image in the consumer minds but also suggests physical properties and benefits. Red Bull has been supported with a unique and creative style of advertising. The slogan “Red Bull gives you wings” strongly suggests the brand’s physical properties and benefits. Red Bull is sold as an energy drink and is designed to combat mental and physical fatigue. It is the combination of ingredients interacting with each other that provides the energy-building benefit. Red Bull operates within the energy drinks sector of the soft drinks market. The product is an example of a 'functional' drink. Functional foods respond to consumer interest in well-being and performance. The major multinational soft drinks companies are investing in the area of functional drinks, developing their own brands and buying up existing ones. This is seen as being important, given that their traditional soft drinks markets are at the maturity stage in many countries. For these multinationals, new functional drinks offer opportunities for renewed business growth. Positioning The reason why Red Bull was able to accomplish such a huge market share in such little time was due to its ability to bring out niche markets with the help of unusual distribution. For example, when it came to Santa Monica, California, it grabbed established distributors to have a reliable distribution network (Hein, 2001). The positioning of Red Bull in the consumer mind is on the basis of behaviors. Red Bull relies heavily on its features and attributes and it provides benefits to the people looking for them. The position of Red Bull in the consumer mind could not be on the basis of geographic and psychographic segmentation. The reason behind this is that targeting a market on the basis of geographic or psychographic behavior would result in a very small consumer base as we would be cutting customers out on the basis of lifestyles, demographics, and socio-economic boundaries. Therefore, the best possible segment that Red Bull could target was on behavioral aspects. In a behavioral segmentation, the relationship that the individual and the brand enjoy is of needs and their fulfillment. The company did not want categorize it just as an energy drink, in fact it should be characterized as a utility drink that consumers consumer during mental and physical tiredness. The use of the drink helps in increasing the stamina and alertness as well as overall response and it helps in coping with the challenges of everyday life involving work, leisure, and sports. Target Market The main target market of Red Bull is men aged between 18-50 years. The reason behind this is due to difference in preference level of male and female consumers. Female and children usually like drinks with high sugar levels whereas strong taste and flavor; characteristic of the product are preferred by the male beverage consumers. Moreover, studies have also found that 65% of the consumers of energy drinks are males. Customer Profile As mentioned earlier, the main target segment is the male consumers within the age of 15-35 years. They can be further divided based on their attributes, living styles and similar requirements: The Athlete – This is the target segment that is very crazy about sports and is actively involved in sports activities. They want their bodies to perform their best and this is where he needs Red Bull to increase his stamina, responsiveness, and speed. The Workers – This is also a broad segment as a worker could be any person working in the office at managerial positions or a street worker. They would be consuming Red Bull instead of coffee to keep them alert and fresh on their jobs. The Clubbers – Red Bull targets this segment to target Gen Y, and to stay connected with the younger lot who are not involved in sports and are not working. The clubbers is again a very broad segment as workers, athletes, students, etc. all come in this segment. Moreover, with time it was found that it turns out be a great drink when mixed with alcohol. Now, 34% share of sales come from on premise sales (Red Bull, 2010) . External Audit PEST Analysis Political Analysis – Red Bull was introduced in the market as a non-alcoholic energy drink, which was a completely new concept. Initially, health organizations had concerns regarding its ingredients and that it might consist of drugs and could be hazardous to health. Due to high caffeine content, it might face problems in some countries. Economic Analysis – The product is lesser prone to the impact of economic cycles as it is not targeted on the mass market and serves only niches who are attached to the drink and do not like to switch. Socio-Cultural Aspects – The market of energy drink has tremendously developed over the years and today people from all cultures and societies are welcoming it. Moreover, the drink has a trendy cool images attached with itself making it acceptable in clubs, bars, and all social gatherings. Technological Analysis – Red Bull is produced in Austria and it is exported from there to other countries. This helps in maintaining consistency as well as ensuring the authenticity and security of the recipe of the product. SWOT Analysis Strengths Market Leaders in the energy drinks market throughout the world Creative and innovative marketing techniques providing first movers advantage in many geographic locations Strong perception of energy and strength associated with the brand Strong Brand identity and image of premium brand giving premium quality and taste Connect with the target consumers Weaknesses High prices Lack of diversification, i.e. the company is relying completely on one product, which is the Red Bull energy drink. Small consumer base – Red Bull is essentially targeted towards the male population cutting it out from the 50% or more of the female consumer base Opportunities Extension of product line to retain market share A highly profitable young female segment Diversification into other similar beverages and flavors Threats Government regulation in various countries due to high caffeine content Consumer reluctance to drink the product due to health issues Organic energy drinks might gain more market share being natural and less harmful to health Other low price competitors gaining on the market with similar product Market Growth and Limitations The energy drinks market had a value of ?941m in 2008, which was a 10% increase from 2007 whereas forecasts for 2009 suggest that the value would break the ?1bn that is equivalent to 525m liters. Another interesting aspect of the industry is the fact that the perception of the consumers is not that of a luxury product, but that of getting value for money unlike other beverages and products in the same category. In spite of the growth of the company and the overall market, one limitation that severely hampers growth is a limited consumer base of men aged between 15-34, who are involved in physical and mental activities and are the biggest consumer segment of the product. Therefore, in light of the previous analysis, for the growth of the product as well as the market itself, it is necessary to explore new consumer segments such as women aged between 25-54 year olds (Heller, 2009). Red Bull needs to come up with a strategy as well as a product that can satisfy the value proposition of women and attract them towards the product. Marketing Objectives Gap Analysis Gap Analysis is a comparison of the actual and potential performance of a company (Marketingteacher.com, 2011). The growth of the company in terms of its geographic expansion as well as market share has been phenomenal. It is the number 1 brand in the energy drink market. Therefore, we can say that the actual and potential performances match, there is not much competitive gap. However, in terms of product gap the company needs to improve. The product gap is the part of the market that is excluded from the firm’s consumer portfolio. The exclusion might be deliberate, but once a company has achieved considerable market share, it should look to expand. As discussed, the women segment of the energy drink market seems like a viable and attractive segment. Ansoff Matrix Currently, Red Bull is in the 1st quadrant where it has an existing product and an existing market of energy drinks. Red Bull wants to move in the fourth quadrant and go into the diversification phase where it needs to come up with an energy drink that can cater to the women segment of energy drinks as well as develop the market. Competitive Environment Although, a number of competitors have entered in the market tempted by the success of Red Bull, still Red Bull enjoys the position of the market leader due to its taste and association with the consumers. Following is the list of small and large competitors that have evolved with time: Drink Market share 2007 Drink Market Share 2006 Red Bull 42.6 Red Bull 35.2 Monster 14.4 Monster 27.3 Rockstar 11.4 Rockstar 11.1 Full Throttle 6.9 Full Throttle 6.6 Sobe No Fear 5.4 Amp 5.1 Amp 3.6 No Fear 2.7 Sobe Adrenaline Rush 2.9 NOS 2.1 Tab Energy 2.3 Adrenaline 2.1 Monster XXL 0.9 Sobe 0.6 Private Label 0.9 BOOKOO 0.6 Rip It 0.8 Arizona 0.5 Sobe Lean 0.7 Lost 0.5 BooKoo 0.5 Rip It 0.5 Sobe Superman 0.4 Vitamin Energy 0.5 Von Dutch 0.4 Jeff Gordon 24 0.5 (Energyfiend, 2007) Moreover, as mentioned earlier energy drinks had focused on boys and males involved in rigorous physical and mental activity. As Red Bull would be the first of the few energy drink providers to target women and come up with a product catering to their needs, they would have an edge over their competitors. Marketing Mix Product Red Bull Pink would be the name of the product. Research has shown that women unlike their male counterparts like sweetened taste more as well as very strong amount of caffeine does not appeal to most of them either. Therefore, the product would have lesser amount of caffeine than a can of regular Red Bull that has 9.64mg/oz, approximately around 2.9-3 mg/oz. However, it would have the regular ingredients such as: ginseng and taurine (Steve, 2009). The taste would come in two variations, strawberry and lemon to cater to the sweet and sour taste buds of women. One major concern that women commonly have regarding energy drinks is the amount of calorie intake so a strict check would be kept to keep the calories low while maintaining taste (Carefair.com, 2009). Pricing Research has shown that women prefer the Red Bull size 8.4 oz can than the 12-14 oz cans (Steve, 2009). Hence, the product would keep similar packaging of the Red Bull cans to gain in on the credibility and brand equity that Red Bull has acquired over the years. Pricing would also be the same what a regular Red Bull can charges. However, one important think on the can would the name, as well as the colors. Red Bull pink would be mentioned to connect with the target customers as well as the blue and silver colors of the can would be replaced by blue and pink. Place The product would be initially introduced only in limited cities of USA to gauge response and acceptability. It would also help in building awareness. Promotion As Red Bull has always done, it would start it road campaign and viral marketing efforts long before it would actually get into advertising and conventional form of promotion. Campaign – A campaign that would be aimed at women would begin months before the official introduction of the product into the market. Free samples would be distributed at places like salons, gyms, and malls. The target would be to make maximum number of women try the new product so that they are aware and interested in the product once it enters the market. Product introduction phase would also involve into women related causes such as: breast cancer, fitness, weight loss, etc. Advertising – The car with the giant can on top would still be used, however, it would be made more prettier and appealing for women. It would also have a softer image to connect with the intended audience. Advertising should focus on specific attributes such as regaining glow, strength, energy, vigor, while not gaining weight. The advertisements and campaign information would appear in the most popular women magazines of USA. Sales – The product would be kept on outlets specifically women favorites such as malls, salons, gyms, etc. Moreover, sales promotion campaign would also be run in colleges and universities where contests would be held involving women. Implementation and Control Critical Success Factor Following would be the critical success factors for the plan: Clear definition of a desired outcome, i.e. to target the women consumer base of the energy drinks market and convert women who don’t consume to women who consume. Determining the macro-environment and planning accordingly, examples would be health regulations, legislations, etc. A segmented specific target market, which in case of Red Bull Pink would be women Lastly, the most important success factor would be a change of common perception that energy drinks only target boys. To make women believe that Red Bull Pink is actually specifically catering to women is the most difficult and critical task as well as creating awareness and acceptance. Measurement Techniques Achievement of the critical success factors would help in measuring the success of the marketing plan as well as the overall product introduction. In this regard, the sort of response, sales, share of mind, share of wallet would be the factors that would help in understanding the mistakes and the advantages of the plan. Practical Considerations We must realize that even though we are suggesting women as a target market, they cannot be a full fledge market. Energy drinks would be sought after only for those women who have extreme physical and mental requirements whereas the rest would take it as just some drink. Another factor very important is that women are more conscious about their calories and weights than men. Therefore, it would be important for the product to change the perception in the minds and make them believe that the product would not increase their weight. As we have suggested that Red Bull Pink would only be launched in limited cities of USA to gauge response. There is always a possibility that the response is not positive in those cities. However, the company should still in such a case again introduce Red Bull Pink in those cities where it is a favorite. References BevNet.com Staff, (2009). 2009 Energy Drink Guide. Retrieved on March 10, 2011 from Hein, Kenneth (2001). A Bull's Market - the marketing of Red Bull energy drink. Retrieved on March 10, 2011 from Drawert, Sebastian C., (2006). Red Bull. Retrieved on March 10, 2011 from Heller, Lorraine (2009). Target women with energy drinks, says Mintel. Retrieved on March 10, 2011 from Marketingteacher.com, (2011). Gap Analysis. Retrieved on March 11, 2011 from Energy fiend, (2007). The Top 15 Energy Drink Brands. Retrieved on March 11, 2011 from Carefair.com (2009). How women energy drink works? Retrieved on March 11, 2011 from Steve (2009). Review Her Energy. BevReview.com. Retrieved on March 11, 2011 from Red Bull Energy Drink, (n.d.). Company website. Retrieved on March 16, 2011 from Read More