Red Bull GmBH - Case Study Example

 Preamble Truly a global brand, Red Bull GmBH is consumers’ envy when one holds a can. It is truly a distinctive product that makes it unique amidst numerous brands across markets. The reason being, its strong marketing and advertising skills of the company that forces other brands to stay aloof. Incorporated in 1984, Red Bull GmBH had achieved enormous appreciation for its distinctive ingredients in the field of soft drinks. (Red Bull GmBH, n.d). It is better referred to as energy drink. Sport stars have embraced the product whole-heartedly as the company assures the product to maintain its standards in quality. With more than 4 billion cans sold almost in 146 countries worldwide, Red Bull had set its foot tight on the ground in the beverages market. (Red Bull GmBH Company Profile, 2009) The company earned a revenue of USD 4.6 billion (€3.3 billion) from its 2008 sales. (Red Bull GmBH Company Profile, 2009) Demographic segment is used by red bull to segmentize the market. U.K. market already flooded by big market players like that of Coca-Cola and Pepsi Cola has created a tougher competition for the Austrian based company to make a market of its own and further generate business. The company has been among the top selling companies but it makes no mark in the quantity of the products sold. It can be understood as the companies sought to benefit the socials for individual well-being and much better lifestyles. Certainly demographic impacts have been seen by the company in segmenting the market. They have been targeting the youth, middle aged and elderly people of the society and subsequently these people are attracted to products that rejuvenate and regenerates. The market is said to be functional with variety of products in the food and beverages segments are launched each day. Each company had its own unique way of attracting the customer base. Red Bull also thought out a process of marketing and advertising its most valuable product. It introduced ‘buzz marketing’ or it can be said as word-of-mouth. It was a strategical concept introduced by the company to attract UK customers. To make marketing of the product much more different from the traditional concepts, Red Bull resorted to campaigns in the sports arena. It got itself associated with various youth drinks especially in the extreme sports zone like motor racing, mountain biking, snow boarding and dance music. Gradually Red Bull started to get results for their hard work. With growing demand for the product Red Bull became clear market winner in energy drinks consumption in the U.K. (Red Bull begins 2009 marketing campaign, Jan 2009) Red Bull takes strategical position to launch its new cola product. There has been number of strategical issues that Red Bull had been concentrating on to grab better market share with the launch of its new cola. With number of authentic market leaders already shaving their way by cultivating new innovative ideas and strategies, gives Red Bull fewer options open to their new launch. Moreover, the market has seen gradual and continuous entry of newcomers that pose a threat to the already developed companies. But however some of the visible strategical tools that the company used in order to make a significant move are – a) trucks used as pick-up vehicles that had a huge can painted in silver and blue kept on top of the truck, b) cans were available which were given out to people for free and moreover it was distributed to those people who were in need of energy and c) it was randomly distributed among various DJ clubs. To catch the sight of the teenagers’ empty cans were placed on tables in various hot-spots like trendy bars, clubs and pubs. The company has been promoting its brand directly meant for the Generation-Y section of people. Generation-Y targets those people who were born after 1981 and are nick-named as ‘millennials’. (A look at a key feature of Red Bull’s Business, 2009) The Red Bull Cola introduced in 2008 marked a new entry in the field of colas. It was a definite attempt by the company in a process where the market already dominated by two big names – Coca Cola and Pepsi Cola. In its new launching strategy the Austrian based company ensures the product to be 100% natural with blend of real cola nut and coca leaf. It defeats the idea of using artificial colors and flavors, preservatives, phosphoric acid and additives. It goes to the mass with the assurance that the product contains plant extracts, that of galangal, vanilla, mustard seed, lime, kola nut, cacao, cinnamon, lemon, ginger, corn mint, pine, cardamom, mace, clove, caffeine from coffee beans and lemon juice concentrates. (Case study, n.d.) ‘Red Bull Gives you Wings’ concept brought unique experiences for its consumers with refreshed excitement and inspiration. (Red Bull begins 2009 marketing campaign, Jan 2009). Their efforts continued to bring more consumers to a brand that assures to give more energy than just pleasure. This strategy of Red Bull is also referred to as ‘viral marketing’ as because the company did not sought to traditional style of marketing rather opting for the youth generation to popularize the brand. (A look at a key feature of Red Bull’s Business, 2009) In one of the interviews, former CEO Harry once stressed upon certain core issues of Red Bull’s marketing strategy. Firstly, identifying the market segment audiences, secondly, prescribe the right route to get to the audiences. Thirdly, he states that delivery of products should be done as and when required by the people. Red Bull performed this by the method of experimental marketing. Lastly, he emphasizes those products that were delivered maintained standards as promised. (Former Red Bull UK CEO reveals four point marketing strategy, 2009). These simple but unique strategies worked for the company. Red Bull is different from other cola brands in the market. Red Bull differs greatly from its competitors. Its branding and brand positioning is different from its competitors and also vary irrespective of different markets across countries. At the beginning it was quite a difficult task for the management to install an Asian brand in Europe. Markets vary accordingly. The management had to shift towards concentrating on local market needs. To adapt itself in a different environment altogether the management had to restructure its management style. Though originally being a Thai brand, Red Bull had to make the market of its own in spite of class and taste differences. Initially it was introduced in Thailand to get rid of mental and physical fatigue, increase metabolic activities, level of concentration, energy, and others. It was popular among blue-collared workers. Taxi drivers, construction workers, farmers enjoyed the drink. But unfortunately the brand did not do as much expected of it. It was basically due to its association with the blue collared class of people and fear of health hazards caused by excessive beverage consumption. However in 1987, Dietrich Mateschiz an Austrian entrepreneur, re-branded the Thai product specially suited for the European countries. (The Internationalization of Red Bull, 2008) The products produced by Red Bull are identical from other brands in the market. Products are non-alcoholic in nature prepared from various plant products. Though it is treated as a soft drink but has enough to provide stimulating experience. Soft drinks can be categorized into three types, namely – glucose energy drinks, sport drinks and high energy stimulation drinks. Glucose drinks are a mixture of sugars or glucose. They do not contain mixtures of additives or other artificial colors. Sports drinks, on the other hand, is a substitute for body fluids that tend to get lost away during training periods and sports activities. It re-energizes and subsequently re-hydrates the body organs providing refreshing experience. It can be taken at the time of exercise or at the beginning or after exercises. It tends to be low of carbonate products. High-energy Stimulation drinks contain certain amount of caffeine and taurin that helps to increase concentration level along with endurance and reactions. It also helps to provide alertness. This type of drink is not only suggested for sportsmen but for everyone whoever wants to get energized. (Introduction, n.d.) The original market for the Red Bull is almost to saturation point due to tough competition from other renowned brands. Red Bull Cola and Red Bull Energy drink share the same market and position. Both the products are produced under the sole company of Red Bull. So for products those are meant to access varied lifestyles across multiple socio-economic boundaries and demographics it would not be just to restrict the products on the basis of psychographic segmentation. Observers are of the view that the products enjoy a behavioral segmentation. The reasons that were put forward, attraction towards a product generally depends upon one’s own individual preference and it is due to the quality of the product that they stick to. They stick to the same product also because they generate benefit out of the product. The new product launched can be cited as not only an energy drink but in many ways a drink that is of higher utility for the people to get rid of both mental and physical weariness. In simple words Red Bull promises to manage or cope up with everyday life challenges. For an athlete who wants speed with power, Red Bull promises to improve his endurance or his speed. A worker who might be a labor or an office staff or manager wants some kind of refreshing drink to get energized. In that case Red Bull Cola promises to give energy with food value. Clubber is a new type developed in the recent years. People found out that Red Bull becomes a good drink when mixed with alcohol. Hence it is difficult to assign a definite target group for Red Bull products. Products are taken and accepted by almost all section of the people. (Introduction, n.d) Regarding its brand positioning Red Bull has brought about a new era in the soft drinks market. Price wise the products produced are highly competitive simply because other products do not have the necessary ingredients to compete with. It remains unparallel. It remains to be providing a drink unique in its own. The policy followed by the company in terms of positioning itself in the target markets are namely – premium product, premium price and premium profitability. (The Brand Positioning, n.d). Moreover brands like Coca Cola and Red Bull had been taking big strides forward in terms of their pricing strategies only because they developed into a very strong brand and dependable reliability from its huge customer base. Although for Red Bull new entries had already posed a threat to its pricing strategies. For example, during 2008 in Australia, Pure Energy had tried to ouster out Red Bull from the market by its exclusive price rates. (Red Bull Positioning, 2008) However, much of these strategies depend fully on the physical placement of the product where Red Bull has a better edge. Red Bull with the launch of its new cola had tried to focus as being a drink that enhances performance for the people. Nicknamed as ‘Boom!’ the new product comes with a new look with modified designs for the cans. They promise to provide cans that would be easier to hold and open. Surprisingly, this time for the new product Red Bull opines that it is not like the traditional energy drink that it is used to. (Energy drink giant Red Bull is preparing to launch a natural cola brand in seven countries, 2008). The tagline for the product remains to be ‘Strong and Natural’. (Coming Soon: Red Bull Simply Cola, 2008) Competitors like Monster and Rockstar previously had rolled out cola products in spite of their energy drinks into the market and had succeeded. (Coming Soon: Red Bull Simply Cola, 2008) There is no doubt about the fact that the new cola product launched would surely succeed in trapping the cola market with its all-new natural taste of vanilla, cinnamon, lemon and lime. (Red Bull confirms energy drink is cocaine free, 2009) and (Does the New drink contain Cocaine?, 2009) Red Bull is likely to succeed in UK waters. Giving a macro view of the present market condition and the present market status of the Austrian company, it is more likely that the company is going to succeed with its new launch. In view of the political and legal aspects, at the beginning health organizations were quite suspicious that the company might be selling products that could be in case drugs. (Red Bull Cola Available Nationwide Strong and Natural Wins Space on US Shelves, 2009). It was due to the reason that these products were steroidal in nature. This form of misconception in the minds of people was removed when Red Bull put evidences regarding its existence in the Asian markets and in Australia without any kind of complaints. Moreover the new launched product contains stimulating product like caffeine which researches have already declared it to be having low addiction possibilities. Still in this respect several countries are yet to provide approvals for Red Bull’s selling of the products. (Does the New drink contain Cocaine?, 2009). Initially in UK too Red Bull was only allowed to sell its product after its harmlessness was proven. But year 2008 saw a rise of 15% growth in the energy drink market. (Red Bull drink lifts stroke risk: Australian study, 2008). Economically Red Bull has a better position. Recent crisis do have a little impact on its overall drinks market. As their targets remain the working section of the people, sportsman and sportswomen both alike, hence they are able to get positioned in a better market. Regarding the socio-cultural aspects in the field of soft drinks, people now-a-days is more open to such new ideas and products. They are in the mood to accept products that tend to influence their lifestyles. Things have turned around since 1980s. People now want to try out products that promise to set high standards in their health conditions both physically and mentally. Also people are very much trendy in their approach. Red Bull is often blended with Vodka in bars, pubs and clubs. The product has been designed in the form of 25cl and 35.5cl cans and is quite well-known in clubs, bars, restaurants and stores. Moreover, the product is environment friendly. The can is made up of recyclable aluminium. (The Macro environment, n.d) In spite of the above cited features that might be the cause for its better marketing of the product, but there are few problems that needs rethink process. Firstly, attention towards the group of people at the age of 16, secondly, high intake of caffeine had caused severe health hazards in the recent times. Several countries have opted out to provide Red Bull the lead. Finally, the market has gradually matured. It has attracted several players to take an active part by having a competitive advantage over its market leaders. (A look at a key feature of Red Bull’s Business, 2009) References 1. A look at a key feature of Red Bull’s Business, 2009. Red Bull Case Study. 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