Red bull without uncertainty has been changed to multinational company by the merchandise which invigorates individuals body and mind. Red bull is multinational is company offering only two products invigorating peoples mind and body. Its international success has become subject of interest for many researchers in field of international marketing. The existing report addresses international marketing strategies of the Redbull company as major international player in energy drink and drink industry. Customer loyalty and relative creation cost are main benefits of the company. But company is threatened by major players of international market in its penetrated territories. Still company is enjoying expansion in its international energy drink market segments.
Internal research of Red bull strategies has reviled use of normal and unconventional markets to extend its international market segments. The superior HR strategies of the Redbull is another propellers of the company in international marketplaces. Redbull follows concentrate differentiation strategy in drink industry. So Red bull has become selected selection of massive young inhabitants, which sales 1 million can of energy drink every year.
SWOT evaluation of the company depicted some strengths and weaknesses. The analysis confirmed proper adoption of general marketing strategy, right international segmentation, right targeting, right setting and good sales record. The online marketing strategy of red bull can be easily put on different cultures throughout the world that have sizeable youth society.
History
Being dressed up in special way is not enough to be good seller in beverage industry. Within an industry which its products are located every where like hypermarket, supermarket, grocery and even in clubs selling is challenging.
Red bull was first presented by Dietrich Mateschitz Austrian business man who teamed up with Thai person to bring creation of traditional Thai drink to international level. The merchandise was canned in metallic shiny can and named Red Bull because it showed head to head bull battle. ("Red Bull Creator Rides Influx of Success")
In 1987, the product was then taken up to Austria where it got its first groundbreaking success in no time. In started heading international in 1992, when they got into Hungary. Red Bull is currently active in over 100 countries, energizing the population and creating competition as they go along. One source pointed out that there are over 150 "energy drink" brands, however, all inferior to the mighty Red Bull ("A REFRESHED CREW IS AN EFFECTIVE CREW"). With over 1 billion cans sold every year, Red Bull regulates 70% of the world's market share of energy drinks.
Background
Red Bull became strong when they created a superior quality drink that is only made in Austria. Furthermore, all of its materials are synthetically manufactured in pharmaceutical companies to grantee high quality and security. Moreover, due to the ingredients of the product, it is said that Red bull ("Red Bull FAQ"):
Improves performance
Improves concentration and response speed
Improves vigilance
Improves psychological status
Stimulates metabolism
However, the key reason for the success of Red Bull is at its advertising style. Red Bull tends to spend very little on normal or traditional marketing tools, like Television set and Print advertisings. Their marketing strategy is usually from the container and creative. Red Bull is commonly more active in sponsoring extreme locations and offering examples in local occasions. Due to the fact that Mateschitz has been involved with Formula One rushing for more than a decade, he used the incidents to draw attention to his brand. In addition, he sponsored the globe Stunt Accolades, an gross annual fund-raiser to help wounded stunt staff ("Red Bull Creator Rides Influx of Success"). In addition, some observers say that Red Bull uses the 'anti-branding' approach to advertising, where they broke the usual approach to marketing and branding. Actually what they do was use the "buzz marketing" strategy or better known as person to person. With this plan, they associated their brand with the junior culture and extreme and adventure-related athletics, such as motor unit sports, pile biking, snowboarding and boogie music. Thus they targeted their brand right to people from Generation Y, the so-called 'millennials': people created after 1981 who have been thought to be cynical of traditional marketing strategies ("A Look at an integral Feature of Red Bull's Business").
The Buzz over Red Bull among the youth and their underground frame of mind has created Red Bull's reputation as 'the drink' within that community. That's the reason Red Bull continues to use 'Viral' marketing internationally, where in fact the company would prefer to restrict the supply of Red Bull and not advertise it, expecting that growing amounts of target consumers to 'capture the bug' and its own reputation would spreads. Through this plan, Red Bull has successfully captured 70% of the 1. 6 billion market ("A glance at a Key Feature of Red Bull's Business").
External Analysis
Porter Five Drive Analysis
External analysis is very important, the analyst taking this step should become aware of how competitive strategy needs to be produced. The analyst must bring all relevant public and economic factors in both micro and macro environment to awareness.
The people responsible for formulating competitive strategy of the firms should know all strategic options available to the company. They should know all forces inside and outside industry affecting the company. Michael porter has unique construction for industry examination and formulation of the strategy.
Rivalry among existing competition, potential buyers, suppliers, potential entrants into the business and Risk of replacement products are those five makes which can have positive or negative effects on industry framework by causing the industry more or less competitive.
Potential Entrants
Redbull can produce bubble less energy beverages among other soft drink producers. In case the barriers of access are high, it is problematic for potential competition to enter the marketplace. Three main sources of barriers to new entry: brand devotion of red bull customers, complete cost advantages in Redbull 's creation range, and economies of level liked b RedBull.
Brand loyalty
Customers of RedBull have grown to be faithful to the brand. The show up at special occurrences sponsored by the Redbull, react to professional advertisement put by the business and name is well known because of its quality among its customers. Brand loyalty is a barrier for just about any new entrant to get into the power drink industry.
Cost advantage
According to the Michael Porter, normally cost downside is a huge hurdle for companies to enter in an industry as new entrants because it can be cost advantages for existing companies for the reason that industry. Also, companies with the help of cost advantages can compete and overcome their competitors quickly because usually it is problematic for new entrants to complement their companies with the lower cost composition.
Therefore, Red Bull because of Red Bull's superior development and operation processes, and their experience in the power drink industry, and control of its inputs regarding to their experience in producing red bull beverages, benefit the cost advantages with keeping its quality in the higher level. Although there a wide range of energy drinks existing on the market with the lower price somewhat than Red Bull, as quality aspect they have got not cost advantages both in quality and price, so Red Bull is steps in advance from its opponents in this case.
Customer moving over cost
In food and beverage industry there is no turning cost for costumers with taking into consideration the quality level, therefore it can be viewed as as hazard for existing companies in this industry. In cases like this, Red Bull is not exceptional, so they need to keep their quality at the same level to not loosing their market talk about by arriving new entrants because it is real threat for them.
Government regulations
One of big issues and always concerns for companies which like to go internationally is government regulation, also, in cases like this some Europe countries have problem with selling Red Bull and have attempted to ban it. They declare that Red Bull was the cause of death of people in those countries. France, Belgium, and Sweden ban using the mixture of Red Bull and alcoholic beverages. So, it's rather a threat on their behalf in taking the marketplace share and using a bad image for their brand. . ("French Ban on Red Bull (drink) Upheld By Western Court")
Intensity of Rivalry
Rivalry in some industries is seen as a such phrases as "warlike, " "bitter, " or "cutthroat, " whereas in other sectors it is termed "polite" or "gentlemanly. " Energy drink industry comes with an intense rivalry due to a variety of interacting structural factors:
Industry competitive structure
Due to the competition in the energy drink market, Red Bull focuses on non-price competitive weapon like offering exhilarating happenings, high quality products and sponsorship. On the other hand with other competition Red Bull appeal to more costumers to its company by growing in 45%marketshare. Consequently Red Bull has a major effect on its competitor's performance on the market because Red Bull is one of the pioneers in energy drink industry and many companies try to obey and consider Red Bull as benchmark.
Industry demand
In the vitality drink industry, as a result of various proper adverts to encourage visitors to use and drink energy drinks (providing the image that people can soar) the demand for refreshments is increasing. Thus, this is an excellent point for the company because there are several opportunities for each and every company to load the existing demand and rivalry tend to reduce in the industry, also there is space for everybody to hop in enter the industry (growing stage), and the profit of the company is going to increase which is a goal that every company is seeking it.
Buyers
Having strong and secure costumers are suppliers and suppliers concerns, producers like to have costumers with variety level of purchasing and secure financial status quite simply in energy drink industry especially Red Bull costumers (purchasers) are wholesalers and big sellers. These buyers buy the energy beverages through the company or its staff, and resell these to supermarket, pubs, restaurants and end users. Red Bull encounters buyers with advanced of bargaining electric power, which is real risk for Red Bull. Main reasons for this high bargaining vitality of buyers in cases like this are; the transitioning costs in the energy drink industry are incredibly low. So, Red Bull potential buyers can change from Red Bull to other energy drink companies which produce it with lower prices without the difficulty. Also, in most cases energy drink clients (vendors and wholesalers) purchase products in large quantities, which is obvious that the more buying in quantity, the more bargaining power the buyer has. To allow them to use their power to reduce the price of energy beverages.
Suppliers
The bargaining ability of suppliers is the same story like bargaining electric power of customers but from other side. Red Bull company has both kind of suppliers as bargaining ability, some quite strong and others fragile, to allow them to balance between them. For instance, the distributor of Glucuronolactone is Glaxo Smithkline Company. Red Bull energy drink will buy their Glucurnopolacton inputs out of this company. So the bargaining power of this supplier is very high on Red Bull. However the other ingredients are built from several small suppliers, and Red Bull has the bargaining power in it. Also, Red Bull has many channels and substitutes suppliers because of its normal recycleables, to allow them to move from any provider to cheaper and much more flexible one.
Substitutes
All companies always carry the matter of substitute products for his or her products and always researching to protect and survive themselves from this occurrence. Energy drink industry isn't an exclusion, so players in this industry always try to keep quality level high, convenience price and other thing which may make costumers more satisfy. Coffee industry can be a threat for energy drinks because of the existing caffeine in coffee and it's rather a powerful potential product substitute for energy drink. Therefore, Red bull must manage its costing strategy and product quality to keep its costumers and meet them more day by day which they were successful credited to records not only Red Bull could protect its products against other substitutes but also, they have got increased in their market share in US market by 45%.
Industry Examination and Peer Review
Industry Characteristics
Beverage industry is divided into many categories such as alcoholic vs. non alcoholic, (hard vs. soft drinks) and within soft drinks still there is other segmentation such as carbonated soft drink (CSD) and non carbonated soft drink. "Carbonated Energy Drinks account for less than half of the total volume. This physique is closely skewed however by the attractiveness of still brands in Asia "(Canadean News release)
According to Drink Process, "in 2004 the U. S. non-alcoholic refreshment market totaled 14 billion conditions (192-oz). Carbonated soft drinks composed 73. 1% of the total with non-carbonated products composed of 13. 7% and packaged water in bottles accounting for 13. 2%. People in the usa spent around $92. 9 billion each year on refreshment beverages".
Energy drink is a comparatively new product introduced in 80's and has been growing noticeably "with the market more than doubling in proportions since 1998" (Canadean Press release). The following chart is proof this inevitable expansion and the appeal of this expansion for drink manufacturer. The industry has been experiencing a substantial growth and still growing at the speed that draws the top players in gentle like Coca Cola drink to go into to this high margin business.
Food and beverage market are critical enough that out of 100 new product development 90 NPD fails. The failure results from a poor interpretation of consumer's style and translation of those to opportunities. Austrian company, Red Bull, as a pioneer trend settler has made its lot of money from their unique strategies in advertising, marketing and other product's characteristics such as Packaging, Flavor, color and Product promise.
Global consumption
According to Drink digest report, Asia is the major leading market in intake of energy drinks followed by Western Europe and THE UNITED STATES as the second and third market segments.
Asia has been loosing some of 20% of its market show is past 6 years. However, this drop has been offset by the second and third market mainly due to the steady development in market of carbonated E. D in THE UNITED STATES. "North American market is now almost 40 times greater than it is at 1998"
Peer Review
In THE UNITED STATES today more than 200 energy drinks been around in US. Corresponding to bevNET. com, after having a strenuous marketing research the best energy drinks are "AMP by Pepsi Cola, KMX Red by Coca-Cola Company Red Bull by Red Bull North America".
"Red Bull's market dominance seems reassured. No other rivals have either the circulation channels or, moreover, the good posture of rebellious infamy to be considered real threats".
Year 2001, in UK energy beverages market "21 new drinks" have been launched that could have force the red bull into a competition. However, red bull can still enjoy being truly a market leader.
In the following stand there are representations of top 14 non- alcoholic market segments where a few of them are in the specific market of the energy beverages.
Coca-Cola(Juice, Soft Drinks, Normal water) ($21bn)
Suntory(Water, Soft Drinks) ($4. 4bn)
Nestle(Coffee, CARBONATED DRINKS, Normal water) ($19bn)
Starbucks(Espresso) ($4. 0bn)
PepsiCo(Juice, CARBONATED DRINKS, Normal water) ($10bn)
Sara Lee(Coffee) ($2. 7bn)
Kraft Foods(Coffee, Powdered Refreshments) ($4. 6bn)
Tchibo(Espresso) ($2. 7bn)
Unilever(Tea ) ($4. 5bn)
Red Bull(Energy Drinks) ($1. 6bn)
Cadbury Schweppes(Soft Drinks) ($4. 5bn)
Cott Corp(Juice, Soft Drinks) ($1. 4bn)
Danone(CARBONATED DRINKS, Normal water) ($4. 5bn)
Ocean Spray
Source: http://www. mind-advertising. com/sectors/sector_softdrinks. htm
Industry Life Cycle
Energy refreshments were at first pioneered by Asian companies, but they became popular in European countries the overdue 80's with the appearance of Red Bull. There are more than 200 energy drinks been around in US market only and this figure is increasing because of the high margin of this business.
In 2004, carbonated soft drinks posted the development of 1% which is unlike its usual trend, case of growing 2% to 4%. Noticeably, this inescapable growth was driven by Diet and Energy beverages. While other carbonated drinks posted quantity change of 1 Digit, brands like Red Bull and Hansen Natural reported the 45% and 56% of positive size change in 2004.
The market, now predicted to be worthwhile $10 million, has been predicted to expand to $300 million or even as much as $2 billion within the next few years. Two times digit growth on the market is the primary factor adding to Energy drinks life pattern in its embryonic period (expansion).
Since the marketplace is not old enough, the number of players are increasing and even the Coca Cola and Pepsi will be the new entrant which enhance the well-built assumption of embryonic phase.
Brand loyalty and high anticipations are still questionable in this stage and it's really because the consumers are still revealing to services and new boasts. Thus, players are fighting for product feature expansion such as low-carbs and sugar free plus new product's cases such as "improve concentration, reaction time and strength. "
After launch of Red Bull in overdue 80's, industry visited an introduction period. By 1998, the size of the industry doubled and still growing with an easy pace pursuing highlighted area in the graph can be an approximate level of the life span cycle at this time.
Internal Analysis
Value Chain
Logistical issues at Red Bull in of high importance. Due to the fact that all ingredients in the Red Bull drink is synthetically created by pharmaceutical companies, they ensure that their products are carefully managed to maintain the product quality and avoid pointless costs. Red Bull always makes sure they align with prime logistics provider to accomplish their proper goals. Red Bull aims to have web-based awareness on their resource string, thus they bottom their logistical activities or selection on:
Flexible warehouse network
Transportation management capabilities
Strong it offering
With 1, 600 employees working for Red Bull worldwide ("Gulf Media, Red Bull packages to set up Dubai plant"), Red Bull required those expectations as they are experiencing year-after-year of high growth, which make the inventory forecasting and management challenging. That's the reason logistical issues have become increasingly important, and that's the reason they choose to outsource the logistics to companies that can adhere to their network of multi-client warehouses needs ("Red Bull & OH Logistics"). Interestingly, Red Bull uses small distributors in small local marketplaces, if those small distributors don't perform up to Red Bulls expectations they establish a warehouse and force teenagers to cream their vans with Red Bull's product and send out it all over the place. This way, the small distributors generally break even within three months and are profitable within six ("A Bull's Market - The marketing of Red Bull Energy Drink").
Primary Activity: Operations
There is little information about the businesses procedure for Red Bull. However we will enlighten you with the articles and simple information about the packaging company that Red Bull deals with.
The great product which is provided by Red Bull one of its main elements of success. Known for improving performance, improving focus and reaction swiftness, improving vigilance, improving emotional position and stimulating metabolism, Red Bull's solution is its substances. The substances in each Red Bull drink (250ml) consist of:
Taurine (1000mg)
Glucuronolacton (600mg)
Caffeine (80mg)
Niacin (20mg)
Vitamin B6 (5mg)
Pantothenic Acid (5mg)
Vitamin B12 (0. 005mg)
According to Red Bull, It really is a combination of all the ingredients together, which bring about Red Bull's benefits ("Red Bull, Ingredients"). .
The packaging process of Red Bull is completely done in Austria. Along with the dealer of Red Bull's cans is Rexam, and they're regarded as the world's greatest provider of beverage cans. Rexam produces different types of cans for different market sectors, however almost half of their revenues result from Coca-Cola and Pepsi Cola. In addition, industry quotes present that Rexam gained about $22 million from the sales of Red Bull cans ("SO HOW EXACTLY DOES Red Bull Package deal Its Product?").
Primary Activity: Marketing and Sales:
With the control of 70% of the 1. 6 billion market (about 1. 12 billion), Red Bull has achieved all this through rigorous unconventional marketing strategies. Concentrating on young people, mainly the Y-generation, Red Bull has utilized eccentric marketing tools that has extremely effective on the target market. The strategy of sponsoring local activities like the Red Bull music academy in america, parachuting in South Africa, Go-Karts in Kuwait, and many more in several countries has achieved its aim for of bringing in its marketplace which gets thrilled when browsing such sports. A number of the strategies used for marketing Red Bull include:
Using pick-up vehicles as mobile displays, coated blue and sterling silver with a giant can of the drink mounted on top of the vehicle.
Designed to be eye-catching, these devices were aimed at promoting the red bull brand as fresh and just a bit 'off-the-wall'.
Cans of the drink were also given out free to people on the road who was simply identified to be in need of energy.
Red Bull was presented with to membership DJs, clear cans would also be still left on furniture in hot locations such as trendy pubs, clubs and pubs.
Secondary Activity: Technology
The information about the technology that Red Bull uses was quite scares. However we could safely and securely say that Red Bull little activity done on the R&D part because Red Bull does enjoy any sort of economies of scale. Red Bull has only one main product, which is the Red Bull energy drink and recently they created the new Red Bull energy drink 'sugar-free'. Hence, the primary difference between your original Red Bull drink and the sugar-free drink is the fact that it has 0g of sucrose and 0g of blood sugar, where the original product has 21. 5g of sucrose and 5. 25g of blood sugar. Furthermore, each 'sugar-free' drink has only 8 calories (European union)/ 10 calories from fat (USA), yet it generally does not loose some of its energetic results ("Red Bull, Ingredients").
Secondary Activity: Individual Recourse
Red Bull is famous for exercising what they preach, especially when it comes to recruitment. Due to the fact that Red Bull stimulates their product as a Hip and young product, they make sure to recruit staffs that are young, in touch with youth culture, active and innovative. For instance, they make that happen by recruiting university or college students as 'scholar brand managers' to market its product among young college student groups ("What Sort of People IMPROVE Red Bull?"). However their recruiting will not happen by Red Bull themselves, nevertheless they makes certain that it is executed by all the outsourced activities. However, it is known that the majority of Red Bull's 1, 600 employees are marketing experts and are the real movers of the Red Bull drink ("Marketing Eyeball, Red Bull Car").
Group Customers and Market Segmentation
As it is known any successful company should have a certain customer group. The clients that were targeted by Red Bull were those that were looking for excitement, alertness, and amount depending on the age, status, and lifestyle. Four consumer categories were Red Bull's target under age 16-30: students, club people, sport people, and employees.
College students were the primary target of Red Bull. Since college students look for something that would enhance their concentration on doing their assignments and assignments, and staying instantaneously for learning for exams then Red Bull is the best solution for them. It would improve their concentration in their learning Furthermore; Red Bull has used this group to enhance their promotion. According to Biz/ed, toss people those students were emboldened to market the merchandise in the campuses of the colleges as what they call them "student brand managers". Those students gather the info and make a report of a market data research to the company. Based on that strategy and the youngsters generation (high school and schools students), Red Bull could multiply the reputation and the attractiveness of the drink and focusing on supplying the product rather than applying the original marketing ways of promotion ("A glance at an integral Feature of Red Bull's Business").
The second category of Red Bull customers are the night team people, because the drink has some chemicals that would improve the person's emotional status. Moreover, Red Bull emerges in the nightclubs with respect to the cultural background. For instance, nightclubs in Dubai offer Red Bull for folks who do not consume alcohol like the Muslims, which made it a major swap for alcohol to that group. However, Red Bull is still individually blended with alcohol to generate both the Red Bull highness and the liquor feeling. Furthermore, Red Bull has also made music occasions for those groups of customers like the "Red Bull Music Academy in 2005" in Seattle, Washington in the United States. ("Red Bull Music Academy 2005")
For the physical exertion that the drink offers, Red Bull in addition has promoted the merchandise for the activity people. Among those people, there will be the athletes, the race individuals, the airborne-sport people, water-sport people, the bikers, the skateboarders, and the skiers. Red Bull highly endorsed this group numerous sport festivals, and one of the famous one of those is the "Red Bull Dolomite Man" that occurred in Austria in 2005. ("Red Bull Dolomite Man")
Red Bull's trivial groups are the white-collar and the blue-collar individuals. Red Bull can support white-collar employees to concentrate more on the job to boost their performance, and it could also help them stay instantaneously if he or she needed. The drink would also permit the blue-collar staff to work extra hours with out the sensation of exhaustions for the exercise that the drink provides. However, Red Bull did not concentrate on this group, so there have been no special efforts aimed towards them.
Within the four communities, there a great deal of customers who look for diet product. For the category, Red Bull produced the sugar-free Red Bull to combine the dietary plan customers with rest of the customers that are within the four organizations.
Business Level and Generic Strategy
In the common strategy Red Bull there are two views, there is a generic strategy from energy drink market point of view, and there's a common strategy from soft drink market perspective. In the energy drink market point of view, since Red Bull has few economies of scope, the strategy followed by Red Bull to follow is differentiation. The price tag on the drink is approximately 5Dhs in the UAE, which ultimately shows the clear differentiation of the product, especially in a market where every body is competing on the same customer segment. According to Biz/ed, Red Bull could create a strong brand image through: using Red Bull automobiles that got big cans to them, offering free cans to the people, and providing Red Bull cans to team DJs ("A Look at a Key Feature of Red Bull's Business"). This strategy made Red Bull to be the market innovator of 70% market in the vitality drink market.
From the soft drink market industry extensive point of view Red Bull applies the Focused-differentiation universal strategy. Red Bull has a very good brand image in conditions of carbonated drinks industry. The drink can only maintain this image through focus-differentiating the merchandise by separating their customers in line with the demography (era, lifestyle, culture) and the geography, because the industry has many aggressive competitors with a robust brand image like Coca Cola and Pepsi.
SWOT
Strengths
Industry leadership
Throughout the entire world, Red bull is the first choice in the energy drinks market with gross annual sales of billion us dollars. According to the statistics, in time 2003 red bull achieved 80% brand show of the energy drinks market in the united kingdom. Also in the European countries, they produce two-thirds of overall amount in the region. In addition, Red bull is rivalling in 13 Western European countries and is the main innovator in 12 of these and other top 20 brands are having only 17% of share. Since time 2000 (compare to 1990s), it's been a clear shakeout, and fewer new brands are launching new products to the marketplace. Furthermore many products made available from leading drink manufacturers could not contend with Red bull in the market, such as Coca-Cola's Burn up. ("Red Bull SWOT Analysis")
Marketing capabilities
The successful marketing strategies and consumer knowing of Red bull created stimulation refreshments to the american market and has resulted practical drinks development throughout these years. Red bull is increasing its consumer brand recognition by using targeted marketing campaigns that targets 18-25 age ranges. Also the company has been differentiating its product by sponsoring dangerous sports activities such as Method 1 traveling; free winter sports; BMX biking etc. Furthermore, Red bull highly promotes itself by using its slogan: "Red bull offers you wings". ("Red Bull SWOT Analysis")
Alliance with major distributors
Red bull has widened its brand's marketing syndication by establishing a link with Cadbury Schweppes in Australia. This connection allows consumers to get access to Red bull across the nation. As a result of this relationship, sales of Red bull are 40% higher compared to last year and looking to grow significantly year-by-year. Furthermore, this relationship can reduce competitive dangers from Red bull's rivals and broaden its sales opportunities due to the fact that Cadbury Schweppes can help it to reach channels such as vending machines, food courts, universities, sports activities a travel facilities, hospitals etc. Another relationship that Red Bull North America does was with Ozburn-Hessey Logistics, where Red Bull found its supply chain get boosted this past year. OH Logistics, Red Bull's solo national provider, managed more than 16, 000 shipments of the drink during 2004 and exposed five locations in five areas in the first 3 months of operation. ("Red Bull & OH Logistics") ("Red Bull SWOT Analysis")
Weaknesses
Lack of innovation
In season 2004 some new energy beverages have been joined in to the market. One of these is called Fresh Energy Petrol Cell, which is Canadian vitamin supplements and sugar drink and is also qualified by World Wrestling Entertainment. The product has silent the same effects that Red bull has except that it generally does not contain Taurine and has less caffeine containing drinks compared to other energy beverages. Furthermore it will come in 330ml PET containers, which makes it look different compared to Red bull (250ml cans) and other rivals. However Red bull only made little changes to its product format throughout these years and is being left behind in comparison to other competitors. ("Red Bull SWOT Analysis")
Reliant on small product base
Red Bull Company only offers energy drinks plus a sugars free variety, which is tranquil at risk because of the market fluctuations. Why is it riskier is that energy and sports activities drink is the smallest sector of the overall soft drinks market. These days, consumers' hobbies are changing toward better alternatives such as no carbonated, decaffeinated, fresher refreshments. Therefore Red bull will definitely benefits from launching more healthy and more lucrative drinks in to the market. ("Red Bull SWOT Analysis")
Marketing expense
In order for the Red bull to boost sales, it requires to spend a whole lot money on advertising. The Energy beverages have strongly linked to fashion and young ones trends, therefore the company must plan itself as in line with this when confronted with huge competitors such as PepsiCo. The competition is so strong that even though Red bull is spending huge amounts on promotional initiatives, other opponents are also investing so much money for promoting their products. Therefore results in an inferior go back for Red bull. ("Red Bull SWOT Analysis")
Opportunities
Diversification of retail outlets
In order to increase sales, Red bull lately is using trade as a fresh path to increase sales. Vending machines work advertising tool and sales tools, as a result of constant publicity that can create. Companies such as Coca-Cola and Pepsi have been using this way for such a long time and companies such as Glaxo Smithkline and out period have also inserted the marketplace. Red bull is also launching vending machines, which shows that it's focused on diversification of its syndication network and encountered industry trends. ("Red Bull SWOT Analysis")
Extension of product line
Because of considerable marketing and campaign costs that are needed to introduce a fresh product from a new entrant to the marketplace, the probability of new competition entry into the market is very low. It's more likely that a new product as an expansion of a preexisting brand will do well best in the non-cola carbonates sector of the marketplace. By introducing a fresh product, Red bull may use its strong brand recognition in promoting its new product or in the other words, it can capitalize on its strong consumer knowing of its brand. ("Red Bull SWOT Analysis")
Geographical expansion
Red bull has a broad geographical reach, which is because of its sales to more than 100 countries. Red bull is currently entering the developing markets such as India. In addition, it has a solid distribution package with Mount Shivalik and Narang Hospitality Services to be able to control and distribute its logistics of the drink. Now Red bull has began with North, East and Central India, but in the long-term they need to broaden into other countries. ("Red Bull SWOT Analysis")
Threats
Public health concerns
Red bull is known as a harmful drink in a few countries. For example, France prohibited Red bull because of its high levels of caffeine content and some experts think it might be deadly in some situations. Also EU's high court declared that excess use of Red bull is a real risk to general population health. Denmark also banned its utilization. Furthermore, Turkey, Ireland and U. S are worried about its use. In Norway Red bull has been used as a medication and in Japan it used to be sold in pharmacies. These issues can spoil the reputation and image of Red bull. ("Red Bull SWOT Analysis")
Maturing market
The marketplace that Red Bull greatly depends keeps growing and becoming older, hence there is a belief that the prospective market is proclaiming physically, emotionally and psychologically to change. Red Bull's target, generation Y, is becoming older, and perhaps their change my make Red Bull's marketing efforts ineffective. ("Red Bull SWOT Analysis")
Consumer knowing of health and well being
The increasing development of water in bottles sales is a sign that people have become health conscious. Twenty years ago the per capita utilization of water in bottles was 1 liter, whereas now they have increased to 35 liters. Even though Red bull has launched its sugar free version but still the high amount of caffeine is a concern for consumers. ("Red Bull SWOT Analysis")
Recommendation
After looking at the actions and functions of Red Bull, and found out they have so far achieved success in their segment of the industry. However, some loopholes have been learned that needs to be considered by Red Bull. The primary threat that is clinging over Red Bull is the lack of diversity. Red Bull centers mainly using one product, which creates a kind of risk that other major companies like Coca-Cola and Pepsi-Cola could come along with an improved product and stronger advertisement. Even though Red Bull diversified by having a sugar-free energy drink, it is known as to be insufficient to prevent stronger companies come and eat out with their energy drink market talk about. Thus, we highly guide Red Bull to focus on horizontal and unrelated diversification to expand their product portfolio and reduce their risk. Another suggestion is to grow their target market to increasing the market size, hence adopt a forwards diversification form. The current target market is getting old and changing, which will be the student, runners, and clubbers from technology Y. This change will make the current marketing initiatives less-effective, hence ether the marketing styles must change, or they must expand their target market.
Conclusion
Through our review in Red Bull's company we concluded that Red Bull mainly implements that same strategy worldwide. The marketing strategy, for example, targets the same marketplace, like the students and players. In addition they sponsor local events in almost all of the countries that they are active in. Quite simply, Red Bull's strategies have successfully proven themselves to be universal, where they could be cloned in various countries. Hence, their activities have become pretty much general. However, their strong position must not keep them from the fact someday a solid competitor comes into play and drive them from the market. Thus, they need to reconsider their diversification to keep or even grow their current position.
