Red Bull Market Expansion - Business Plan Example

Red Bull Marketing Plan Table of Contents Question Marketing Audit 4 PEST Analysis (External Audit) 4 SWOT Analysis (Internal Audit) 5 Question 2:Marketing Orientation 6 Segmentation 6 Targeting 7 Positioning 7 Question 3: Stakeholder Mapping (Power/Interest Matrix) 8 Question 4: Explanation of Required Marketing Strategies 9 Creation of customer value 9 Recommendations to enhance customer value proposition 10 Recommendations to drive competitive advantage 10 Question 5: Marketing Mix 11 Product 11 Price 11 Place (Distribution) 12 Promotion 13 References 14 Question 1: Marketing Audit Red Bull is the leading organization within the global energy drink industry. This part of the report will conduct both external and internal environmental marketing audit for Red Bull. PEST analysis will be implemented in order to conduct external environmental marketing audit. On the other hand, SWOT analysis will be implemented in order to conduct internal environmental marketing audit. PEST Analysis (External Audit) PEST analysis is an important strategic marketing tool that will help to determine the impact of several important external environmental factors on the business performance of Red Bull. Political UK is politically stable. The government of UK is supporting the business activities of energy drink organizations as these are playing major role in the economic growth of UK. However, the government has developed strict policies regarding the selling and consumption of energy drinks. High import or export charges can be considered as major political threats for Red Bull. Economical Recent financial crisis and economic recession affected the disposable income and purchasing power of people. Therefore, the consumers are less preferring energy drinks as these are not necessary products. Therefore, it can be stated that the economical environment is not favourable for Red Bull. Social Demand for energy drinks is significantly increasing among the people of young generation. In addition to this, demand for these energy drinks is also increasing among sports persons. Therefore, it can be stated that social environment is favourable for Red Bull. Technological UK is technological developed. Organizations within energy drink organization can use advanced technological communication channels or applications to promote their products. In addition to this, high technological resources can help Red Bull to produce drinks in large quantity. Therefore, it can be stated that the technological environment is favourable for Red Bull. SWOT Analysis (Internal Audit) SWOT analysis is an important strategic marketing tool that can help Red Bull to determine its internal strengths, weaknesses and external opportunities, threats. Strengths Most popular and leading energy drink in world. Strong distribution channel and effective promotional activities. High brand image and brand equity. Weaknesses Lack of patent and economic pricing. Small product base. Opportunities Promoting through social media networking sites. Business expansion in emerging regions in UK. Developing strong relationship with target audiences. Adoption and implementation of both product differentiation and cost leadership strategy. Threats Intense market competition and strict legal policies. Health risks are associated with excessive consumption. Question 2: Marketing Orientation This part of the report will determine Red Bull’s market segmentation, targeting and positioning strategy in order to identify the organization’s marketing orientation. Segmentation The management of Red Bull has considered two types of market segmentation in its marketing orientation, such as demographic segmentation and behavioural segmentation. The organization has targeted people of aged between 15 and 30 under the demographic segmentation. On the other hand, in terms of behavioural segmentation the management of the organization has targeted people who love to consume energy drinks. Targeting The organization generally targets people of young generation who are aged between 15 and 30. Moreover, the management of the organization generally targets athletes, energetic people and other sports people. Kids, college goers and young adults are the major target audiences of Red Bull. Positioning Positioning of a product is an important aspect for an organization. It is highly important for an organization to position its product according to the nature of the product and target market (Lamb, Hair and McDanniel, 2011). Following perceptual map will help to determine the market positioning of Red Bull. It is clear from the above perceptual that customer perceives Red Bull as an energy drink of high price and high quality. However, it is clear from above STP analysis that the organization is targeting young and energetic individuals for its products. In addition to this, the organization has positioned its products as high priced and high quality products. Determination of this marketing orientation is highly important for Red Bull as it will help the management of the organization to develop effective and accurate marketing plan according to the current market demand (Pride and Ferrell, 2008, p.13). Question 3: Stakeholder Mapping (Power/Interest Matrix) Suppliers, Employees, government, communities, future generation and customers are the major stakeholders of Red Bull. Suppliers and employees can be placed in the meet their needs quadrant. Customers and communities can be places in the key player quadrant. Future generation can be placed in the least important quadrant of the following stakeholder map. Lastly, the government should be placed in the show consideration quadrant. Suppliers can be considered as important stakeholder and can be placed in the meet their needs quadrant. Effective integrity and efficiency of supply chain network highly depends upon the hard work of suppliers (Freeman, 2010, p.54). Therefore, efficiency of supply chain network helps the management of Red Bull to meet the market demand and needs of target customers. Customers can be considered as key players in the stakeholder map of Red Bull. The management of the organization should try to develop meet each and every need of target customers in order to sustain in the competitive market place as the customers are the key business growth drivers. Future generation can be considered as least important part in the stakeholder map of Red Bull, it is highly important for the organization to develop strategies according to the current market demand and needs of present target customers. Strong focus on future generation can affect recent business performance of the organization. Government can be placed in show consideration quadrant as the organization seriously has to consider the developed policies and legislations but the government. It will help the management of Red Bull to continue conflict free business practices. Question 4: Explanation of Required Marketing Strategies This part of the report will try to recommend Red Bull how to enhance value proposition and potential competitive advantages. Creation of customer value In general organizations can create significant customer value by raising benefits, reducing costs or prices of products or services, raising benefits while reducing costs, reducing benefits by reducing more costs and increasing benefits be increase in cost. Following part will try to discuss about how the management of Red Bull can enhance CVP and potential competitive advantages. Recommendations to enhance customer value proposition It is important for the management of Red Bull to adopt and implement both product differentiation and cost leadership strategy in order to enhance CVP or customer value proposition. The production department should try to consider cost reduction strategy during the manufacturing of products. In addition to this, it is the responsibility of the research and development team of Red Bull to maintain effective quality of energy drinks in low cost. The management should cut down each and every unnecessary cost in order to offer quality products in competitive pricing. It will help the organization to back the reduced purchasing power of people. On the other hand, high quality in low price aspect will surely increase customer value. Last but not the least; unique and effective social media promotional strategy is required in order to show the quality and improved attributes of the products to the target customers. Recommendations to drive competitive advantage The management of Red Bull should try to consider the price and quality of product in order to gain potential competitive advantages. It is true that recent economic downturn affected the purchasing power of people. Therefore, it is highly important for the organization to adopt cost leadership business level strategy. It will help Red Bull to achieve potential competitive edge. Most importantly, this aspect will help the organization to increase customer preferences about the energy drink products of Red Bull. Last but not the least; it is highly essential for the organization to ensure aggressive promotional strategy. It will help Red Bull to drive potential competitive advantages. Question 5: Marketing Mix Marketing mix can be considered as an important strategic marketing tool that will help Red Bull to develop effective product, pricing, distribution and promotional strategy based on its current marketing orientation practices. Product It is true that the management of Red Bull always tries to offer products of high quality in order to maintain the satisfaction level of the target customers. Red Bull Regular, Red Bull Sugar Free, Red Bull Zero calorie, Red Bull Cola and Red Blue Silver Edition are the major products of Red Bull brand (Red Bull, 2014, p.1). But, several issue related to product development process is affecting the brand image of Red Bull. Firstly, too many inadequate and artificial ingredients can affect the health of human beings. On the other hand, lack of product differentiation strategy is forcing the target customers to switch over other organizations. Therefore, it can be recommended that the organization should try to adopt and implement product differentiation strategy. It will help the organization to meet the current market demand and needs of target customers. Quality of product is becoming one of the major issues for Red Bull. Therefore, it is the responsibility of the research and development team of the organization to maintain high quality of these products to maintain its market competitiveness. It will help the organization to maintain ethics and sustainability in the business operation process. Price It has been discussed earlier that the price of the energy drink products of Red Bull are of above average. The management of the organization has implemented cost based pricing strategy. It is true that recent financial crisis and global economic recession have affected the purchasing power of people. In addition to this, low disposable income of people is the other negative consequence of this economic slowdown. Therefore, people are trying to consume goods at economic price level. In addition to this, the consumers are avoiding to buy unnecessary goods. It is true that Red Bull energy drink cannot be considered as a necessary product. Therefore, it is highly important for the management of Red Bull to importance of economic pricing strategy. Therefore, it is the responsibility of the organization to adopt and implement cost leadership strategy in the business operation process so that the organization can offer high quality products in competitive price level. Place (Distribution) In this case, place stands for distribution channel. The organization has a strong presence across UK. Majorly the organization used to market its products in the urban and sub-urban areas. Red Bull distributes its products in kiosks, gas stations, grocery stores, convenient stores, college campus, drug stores, sports’ accessories stores, super markets and hyper markets (Richter, 2012, p.31). Therefore, it can be stated that the organization has a strong presence around the country. But, the management of the organization faces difficulties in the distribution management process due to inadequate turn-around timing in supply chain network. The distribution and supply chain department of the organization follows centralized distribution method. It increases supply chain lead time and causes high inventory turnover. Therefore, in several time the organization fails to meet the given deadline of distribution of products. Therefore, it can be recommended that the organization should try to adopt and implement decentralization in the supply chain management and distribution process to increase the efficiency in the distribution networking activities. Most importantly, it will help the organization to maintain a strong relationship with its suppliers and end customers. Promotion Promotion can be considered as one of the important marketing tools that can help an organization to promote and market its products quite effectively. Management of Red Bull considers all the traditional marketing communication tools to promote the products. The organization invests significant amount of its business profit in the promotional activities in order to create significant brand awareness of its products among the target customers. However, it is true that limited presence in social media websites is becoming huge challenge for Red Bull; where as several potential competitors of Red Bull is considering several leading and popular social media platforms as marketing communication tool to promote the products (Oudan, 2007, p.21). Therefore, it can be recommended that the management of Reed Bull should try to consider online and social media promotional strategies in the marketing plan to create significant awareness of its products among the potential target customers. References Freeman, E., 2010. Strategic Management: A Stakeholder Approach. London: Cambridge University Press. Lamb, C., hair, J., and McDanniel, C., 2011. Essentials of Marketing. Stamford: Cengage Learning. Oudan, R., 2007. Market Orientation. Berlin: VDM Verlag. Pride, W., and Ferrell, O. C., 2008. Marketing. Stamford: Cengage Learning. Red Bull., 2014. Products. [Online]. Available at: http://energydrink.redbull.com/. [Accessed on April 21, 2014]. Richter, T., 2012. International Marketing Mix Management. Berlin: Logos Verlag. Read More