Macro and Competitive Environment of the Non-Alcoholic Redbull Cola in the UK Market - Case Study Example

Consultancy Report Reference The report is prepared for the Chief Executive Officer of ‘non alcoholic Redbull Cola’ so as to study and evaluate the macro and competitive environment of the product in the UK market. Procedures In the fast changing environment of highly competitive global business, taking cognizance of fast changing preferences of people have become major imperatives of the market strategy along with emerging new paradigms of macro environment which significantly impact business performance. As a Marketing Consultant, the study of macro environment has become crucial to the success of Redbull Cola drink. The study was, therefore, primarily focused on the following factors: The benefits of using Redbull Cola drinks. The impact of major macro factors vis-à-vis economic; demographic; socio-cultural; new environmental compulsion and nature; and technology on the market strategy of Redbull Cola drink. Identify major competitors. Identify segment that would help create market position for the UK market. Most effective means of creating awareness of the soft drink in new market and popularizing it amongst the people. Findings Red Bull cola faces stiff competition from the already established brands like Pepsi and Cola Cola. Since Red Bull has already a dominant market position in the energy drinks, launching of its Cola version would become easier within this particular market segment as it has many differentiating elements in its cola product which can be easily promoted within this group. In the recessive economy, the competitively priced Redbull Cola could become highly popular amongst the youngster as the latest energy or health drink. Advertisements significantly impact the popularity and awareness of the drinks. People have become sensitive to environmental paradigms and are increasingly favoring ‘natural drinks’. Conclusions The 100% natural ingredients of the drink have provided the Redbull Cola with huge market scope and it has greatly facilitated a beneficial market position. Mixed marketing would be highly suitable format of creating and popularizing the drink. Recommendations The economic factor is very important because the market is driven by the demand and supply that is mainly dependent on the buying capacity of the consumers. In the current environment of recession, the market conditions have become more stringent and customers have become more cautious. Thus, in the present scenario of increasing unemployment and higher healthcare delivery, Redbull Cola offers more innovative and cost effective healthy drink, which can become infinitely more attractive. The demographic changes vis-à-vis population size, age distribution, gender ratio, income group etc. have massive influence on the changing consumer preferences and thereby on the economy. Kotler et al(2007) emphasize that in the fast changing global business, demographic compulsions have significant impact on market position and therefore, they need to become intrinsic part of the market strategy of the industry. Psycho-demographic is chosen as the focus area primarily because of the fact that the competition within the industry demands a creation of a niche market for Red Bull cola to become a success. Psychographic or lifestyle pattern categorises the market according to which people exhibit a well defined way of living, maintaining a set of standard and displaying a typical purchasing behaviour. The younger generation is more inclined towards cola drinks and this particular segment could be persuaded to change their behavioural pattern through market techniques of differentiation that would add value to the Red Bull cola. In the contemporary time, the parents as well as the schools are putting more emphasis on healthy living and introduction of Red Bull Cola has great potential to create a niche market in the lifestyle segment, targeting youth and the young professional initially. As the advertisement says ‘only cola brand to contain real Kola nut and coca leaf’, the Red Cola drink has potential that could be successfully exploited through creative marketing (redbull). Demographic segmentation would further split the market and Provide better tool to develop strategies and make significant inroad into the UK market for non alcoholic Red Bull Cola. Of the various demographic characteristics, the most useful would be the income and age-wise identification of the group that could be targeted through intense media blitz and other market techniques to attract them and make them a committed user and purchaser. The mixed segmentation is hugely popular in the contemporary times and gives a big leverage to the companies to plan its market strategy in a more flexible manner and successfully introduce their products in a new market. In the contemporary environment of globalization, the world is increasingly moving towards multi-cultural society with persons from different culture, race, color and nationality. In the recent years, UK too has undergone tremendous change. The increasing immigration from south east Asian countries like India, China, Singapore etc. have not only brought in their own culture but it has also brought in the ‘zing’ in the market opportunities for other industries that were hitherto being adversely impacted by the recessive economic trend. Thus, the emerging new socio-cultural dynamics have considerably increased the scope for the new Redbull Cola in UK market. It is important to note that the fast food and non alcoholic aerated drinks, which are popular with the children, have now been declared by the dieticians and social scientists as unhealthy and potentially hazardous for the growing children. According to Ebbeling et al. major cause of obesity and lifestyle diseases is fast food includes ‘ingredients that are ‘saturated and trans fats, high glycemic index, high energy density, and increasingly, large portion size’ (2002). Therefore, at such a time, Red Bull Cola could be the answer for them as it has nothing artificial in its drinks and at the same time, has the tag of Cola attached to it that may swing the interest of the children to it! The deteriorating environmental conditions have resulted in rapid climate change and natural disasters like global warming, tsunami, hurricanes like Katrina etc. The present lifestyle is not conducive to sustainable development and there is urgent need to promote environment conservation and preservation as a means to safeguard our natural resources. The changing social values and the imperatives of the times have necessitated the social scientists and medical experts to declare the need for people to move towards nature. The concept of nurturing the nature through changing consumption habits and promoting goods that are ‘green’, which is increasingly becoming popular amongst the people, may prove to be highly beneficial for the company when it introduces Red Bull Cola as 100% natural. The important feature of the Red Bull Cola is its claim of being 100% natural ingredients that are ‘Strong and Natural’. This might prove to be the key to the success of the drink in UK market which is presently undergoing a deluge of artificial aerated drinks that are creating huge health related problems for the younger generation. The target market of Red Bull Cola is therefore critical for its market strategy and long term aims and objectives of making significant presence in the UK market. The market strategy for Red Bull Cola needs to change the consumer behaviour and motivate them to cultivate consumption habits towards drinks that have more natural ingredients. Red Bull Cola should be designed to convert the committed Cola drinkers (read Pepsi and Coca Cola) to Red Bull Cola. The Red Bull Cola displays all the ingredients that are used to produce the drink and its claims of not even using artificial flavour or colouring is a significant factor in its favour. All the non alcoholic drinks, including Pepsi and Coca Cola have artificial flavour and colouring, which would give Red Bull, a big advantage to cash on its slogan of ‘strong and natural’. This is a huge differentiating factor that would certainly provide a beneficial leverage to Red Bull Cola for the niche market that it is targeting at the present. Montgomery has asserted that strategy needs to be dynamic to encompass the changing paradigms of the times (Montgomery, 2008). Indeed, it is not only relevant but essential in the contemporary environment of competitive business. The Red Bull Cola has great potential to emerge as a ‘100% natural drink’ that would not only satiate the palette but would also promote healthy living and drinking! The technological advancements have brought forth an explosion of information that is easily accessible to public through the internet and other media like television, radio, mobile phones etc. Shultz say that it is the end-users who now control the markets rather than the marketers (Shultz, 2001). Redbull Cola needs to understand the compulsions of the contemporary times and adopt innovative and mix market strategy for its soft drinks to meet the challenges from its rival companies in the global market. Since advertisement is the most prolific example of segmented marketing where the contents of advertisements are decided by the target group, Redbull should use the various tech formats for advertising it. The company must also use the promotion technique of viral marketing. Viral marketing can be broadly classified as the unorthodox techniques of emerging new marketing strategies that are low cost and have potential to reach to a larger audience. It has great potential of exponential growth through diversity of new approaches and initiatives in its market strategies. Using posters, balloons, pamphlets, sponsorship, use various distribution channels tickets, carry-bags to advertise its products, blogs, internet messaging and various other gizmos for its promotion. In the recessive trends, this type of marketing becomes highly relevant for Redbull Cola in UK. (1588) Reference Ebbeling, Cara B., Dorota B. Pawlak, and David S. Ludwig. (2002). ‘Childhood obesity: Public-health crisis, common sense cure’ The Lancet, Vol. 360, No. 9331, August 10, pp. 473-482. Kotler, Brown, Adam, Burton & Armstrong (2007). The Global Marketing Environment. Prentice hall. Montgomery, Cynthia A. (2008). Putting Leadership Back into Strategy. Harvard Business Review, January. Shultz, Don E. (2001). Bid Farewell Strategy based on old 4Ps. Marketing news; Feb 12, 2001; 35,4; ABI/INFORM Global. Red Bull. Key Features of Red Bull. 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