In the early sass, Dietrich Mathematics, today’s managing partner of Red Bull Ltd. Got to know a so called energy drink in Asia, which Asian managers drank before meetings in order to be able to stay awake and concentrated. He brought this effective product to Austria , developed a marketing strategy and named the drink ‘Red Bull In 1987 the product was introduced in Austria . After that it has been established in 20 countries- in Europe, Asia and the USA . Red Bull has been established world-wide successfully and has reached a market leader position.
This port shall work out, how this relatively new product has been established so fast, and how Red Bull manages to stay in the position of the market leader. Analyzing the target market, the marketing strategy and the positioning, this report as well shall have a look into potential future opportunities for the company. 1 . Market Segmentation 1. 1 Introduction Red Bull is a non-alcoholic energy drink and therefore falls under the category of soft drinks. Soft drinks can be divided into sub-segments and one of these segments is energy and sports drinks. These can be divided again into three different categories:
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Glucose energy drinks Sport drinks High energy stimulation drinks Since 1996 the market of soft drinks has grown by 5% and by 1997 it reached a total amount of EH. Bonn, which is an equivalent of bin liters. Moreover we can say that the segment of energy and sports drinks represents 2. 6% or El mom of the overall soft drink market. Since 1992 an increase of 64% in volume sales can be found within this very young market of energy and sports drinks. The main differences of the three above mentioned sub-segments of soft drinks are as followed: 1. 2 Glucose Energy Drinks
These drinks provide physical energy through glucose or a mixture of sugars. Originated trot the Located brand . These ring d KS do not contain any other substantial ingredients such as Located Energy, Located NOR or Red Card. In 1927 they were originally positioned as a convalescence drink. 1. 3 Sports drinks Also known as isotonic drinks, replaces body fluids after sport activities or exercises. Sport drinks help to re-energize and re-hydrate the body and can be taken before, during or after exercises. That’s because you should drink it in great amounts and fairly quickly, they are usually still or low carbonated.
Examples for this kind of drinks are Storage, Costar and Dexter. 1. 4 High-energy Stimulation Drinks These drinks have ingredients such as caffeine and Turin, which help to increase concentration, endurance, alertness and reactions. This kind of drink is not only designed for sports men, it can be used nearly from everyone who wants to get stimulate and energize mind and body. Red Bull, Flying Horse and Virgin Hi Energy belong to the category of high-energy stimulation drinks. 2. The Target Market 2. 1 Introduction Red Bull, who is originally from Austria where it is still produced, distributed their energy drink in over twenty countries.
Countries like USA , New Zealand , South Africa , Eastern and Western Europe . So it would be not very useful to restrict the target market to the geographic areas as well as the cryptographic segmentation for the targeted consumer that’s because for a product like Red Bull it would be far to narrow as it cuts across lifestyles, demographics and socio-economic boundaries. So the best solution would be to set the target market as a behavioral segmentation. The reason for that decision is because in a behavioral segmentation the individual’s relationship with the product and the use and benefit sought from the product.
Red Bull is not Just an energy drink it is primarily a utility drink to be taken against mental or physical weariness or exhaustion. It’s use helps to increase endurance and heighten alertness as well as reactions and generally spoken the use of Red Bull helps to cope with the challenges of every day life, which includes work, leisure and sports. Three main stereotyped uses can be identified. 2. 2 The Athlete It is usually a person who takes his sport very serious, what means he wants to get the best out of his body. Therefore you can say that Red Bull is part of his diet and sport life.
So in this case Red Bull is for him a very good and easy way to improve his endurance or speed. 2. 3 The Worker This could be anyone who has to work hard such as a manager or a street worker. Anyone who wants to get pushed up and would rather like to have a Red Bull than a coffee. 2. 4 The Clubber This category is fairly new, in recent years the people found out that Red Bull can be used as a very good mixer with alcohol. Red Bull sells now 34% of its units on premise. It is almost impossible to find the right target group, the reason for that is cause of the various applications of Red Bull.
Hence a clear cut categorization in age groups and socio-economics groupings is not feasible. But what we can be shore of is that the typical Red Bull drinker is dynamic and active, the gender does not play any role at all. But it is more likely that more less younger people who really like to go out fall for Red Bull. Research (PATH, 11/97 Smith Kline Became Energy & Sports KS Report) NAS shown that 5 % to the people who drink energy/ spot arts drinks are within the age between 14-34 years. Moreover they found out that the main reason or purchasing energy/sports drinks were to quench thirst (37%) and give boost. . The Micromanagement 3. 1 Political and Legal Aspects Red Bull was introduced into the market as a new non-alcoholic drink with a new concept, namely energy drink. At first the Health Organization was suspicious that Red Bull could be a starter drug. Their skepticism even increased after rumors that Red Bull contains ingredients like bull’s galls. However, the fact that Red Bull has been used in Australia for 9 years and in Asia even for 30 years without any complaints led to increased confidence.
Furthermore a study carried out by an independent institute (ISMS) in 1998 proved that Red Bull has stimulating effects like caffeine, but does not lead to addiction. Nevertheless Red Bull still needs to be approved by each country where it shall be sold, which is a very time consuming and therefore expensive. 3. 2 Economical Aspects Red Bull faces little exposure to economic cycles as it is a special drink, serving a niche market. Their target market are sportsmen/women as well as hard working people, who need a “push up”. There are few substitutes and through their well positioned advertisements their sales are increasing. 3 Socio-cultural Aspects Unlike the sass’s, where nobody wanted to try it, people are now much more open for new experiences, as their lifestyles are changing and getting more and more influenced by ethnically groups. Furthermore they are confident to try it, because any health concerns were cleared by organizations like the ISMS. The consumers are male and females regardless of age, who are very sporty or work very hard. At the moment Red Bull has a very trendy image and gets sold in a lot of bars and clubs, where it is often mixed with Vodka. 3. 4 Technological Aspects
Red Bull gets exclusively produced in Austria from where it is exported to 28 countries. There are two reasons why it does not get produced in any other country. First it guaranties consistency in taste. The Fan sold in Breastplates for examples slightly different from the one sold in Europe , in order to meet domestic preferences. Red Bull wants to ensure that it tastes the same all over the world. Secondly in that way the recipe will be kept safely in one place. Red Bull is normally produced in mall cans, but glass bottles are an alternative in the case that they run out of cans – which has happened before. The Competitors All of them contain the same ingredients: Guarani (extracted from a rare Brazilian plant; an energy spender), Ginseng (known to relieve stress), Terrine (an aid in increasing muscle mass, energy and speed up the combustion of fat) Vitamins and Caffeine (serves as accelerator to increase the effects of Turin). And most of them are sold in mall bottles or cans. All of them are marketed as energy spending and as very suitable mixer with alcohol. Anyway;ay, in the I-J there has only been a very moderate development in the energy drink market.
Although, all of the above are repaper to penetrate the market very soon, there are only very few serious competitors of Red Bull in the UK . So far the serious direct competitors of Red Bull in the I-J are the following: The can is made to recyclable aluminum and therefore environmentally trendy. Glass bottles can also be recycled and therefore do not harm the environment either. This might give the company a competitive advantage when regulations become stricter and more equal throughout Europe as well as in the rest of the world. 5. The Brand Positioning Red Bull represents a new category of drinks, the energy drinks.
In this new market sector Red Bull is perceived as a premiumhigh margin brand product. Precise Red Bull is in position in which it can command a premium price because there simply nothing to compare it with. It is a unique functional drink, promising and delivering benefits that no other drink can offer. In the I-J the average price of a Red Bull can is 1. 05 which is clearly above its competitors average price of 1. 03. The price expresses superiority of Red Bull and furtherer it proves that there is no substitute. The positioning policy of the company is : premium product, premium price and premium profitability.