Red Bull Marketing Plan Essay Example
In the business world, any company that wishes to become successful in selling their products must remain competitive and capable of taking care of building and maintaining their own image. Formation of image is a laborious and lengthy process. Since the beginning of previous century business and economics can not develop effectively without the proper focus on marketing and attraction of customers. Companies orient marketing strategy to different groups of people and social layers, paying special attention to the customers’ desires.
Red Bull is an Austrian company, manufacturer of energy drinks. The most famous of them is the eponymous soft drink Red Bull. In 1970, Thai pharmaceutical company TC Pharmaceuticals, has created an energy drink Krathing Daeng Red Bull, whose name is translated into English as Red Bull. The drink has become very popular.
In 1984, Mateschitz founded Red Bull Company located in the Austrian town of Fuschl am See. According to the new formula, the main ingredients of the beverage were caffeine and taurine, but it had less sugar and more gas. With the development of a marketing program, in 1987, the product appeared on the market. Today Red Bull is available in more than 100 countries and holds a market share of these countries among manufacturers of energy drinks about 70 % (as of 2003 ) and is at the same time one of the most successful new brand-name products in recent years (Porter 1990).
However, the first marketing promotion was not successful. Despite misfortune, competent and aggressive marketing brought company to success. Red Bull wisely chose audience for their product – Red Bull started to spread and advertised in night clubs and universities.
Sly promotion of Red Bull as an ideal drink for sports has begun. Red Bull does not only participate in the sports and extreme events, but also organizes them, e.g. Red Bull Flugtag, which was first held in 1991. The idea of flying machine performance, borrowed from the UK, represented perfect combination of personal style and youth’s interest, making Red Bull rather a culture than just a brand. Red Bull clearly understands the value of entertainment content and profitably uses a variety of online tools to help spread the event (Kotler 2006).
A single word should be said about the advertising strategy. Red Bull Company usually represents the drink in cartoons. Their simple and humorous stories are easy to remember, bringing to consciousness of consumers the slogan “Red Bull gives wings” (Hawkes 2006).
Another important strategic element is the concept of freedom. Applying to youth, Red Bull is represented as a battery that liberates personal ambitions and gives chance to do whatever a person wants. Sharp-witted and funny characters in advertising perfectly fit young people’s lifestyle and worldview.
Creators of Red Bull search for unusual people to create urban atmosphere. In Sao Paulo, for example, they used the Academy as an exhibition space for several young aggressive artists installers. Besides, there is musical laboratory Red Bull Music Labs, where people who want to become musicians learn the art of recording and record their own songs in a five-day marathon in different cities (Listorious, 2014).
However, by strengthening associations of Red Bull with alcohol and partying, it gained a reputation as a legal liquid drug. Although these associations lead to increased sales, they also attract the attention of those who set out to vilify such mind-altering substances. Officials in Ireland and the United States banned the energy drinks, including Red Bull, after several accidents caused by them. However, the more Red Bull is associated with danger, the more its popularity is growing (Red Bull, 2014).
According to the Interest matrix, stakeholders with high power and low interest are State authorities and suppliers. This category of people should be satisfied in order to avoid struggles in business. High interest and low power would refer to young students, who are not allowed to drink energetic drinks, but still are interested in them and are considered as future customers, and students with low budget who cannot afford to buy products. Red Bull Company’s Chief Managers should be interested in consumers that buy dozens of products each month and form the income rates. That would be clubbers, taxi drivers and other people who prefer stimulating their brain activity. In addition, partners could also consider high interest and high power stakeholders since they influence all business and external affairs of a company, including brand’s image (Mintzberg 2004).
The effectiveness of stake holding can be viewed from three different positions. From the perspective of the effectiveness of specific actions and projects evaluation is performed intuitively. Before discussing these views, you need to find out exactly what we mean by efficiency sponsorship and charitable activities. One should distinguish between types of efficiency, the ratio of costs to the results obtained and the degree of use of funds and resources. Effectiveness ratio results in haunt goals degree of realization of goals (Red Bull, 2014).
Expediency, the objectives to the real problems and the degree of rationality put forward goals. Among the main parameters that must be considered when analyzing the effectiveness, sponsorship and charitable activities the main indicators of the effectiveness of PR in general may be considered: establishment of mutual understanding between the firm and its social environment; public awareness can promote new products and services ; creating a positive perception of the brand ; promoting social position of the firm ; development of staff motivation, strengthening of cohesion; expansion into new markets , opening new prospects for the development and growth of the firm; overcoming isolationism and being closed in management; ensuring progress towards the company, its development , diversification and growth (Mintzberg 2013).
From 2005, when the company bought the team Jaguar, till 2009m, the Austrians spent 690 million euros on Formula 1. Experts still believe that such investments are in any case more profitable than simple sponsoring of one of the teams. Still, after that Red Bull Racing became the winner of the Constructors’ Championship twice in a row – in 2010 and 2011. According to estimates of Sport + Markt, in the 2011 Red Bull would have to pay 148, 7 million euros to get the same media coverage that they have achieved through the participation of their teams in Formula 1. According to the Sada, one can conclude that the Red Bull sponsorship is effective as team sponsorship is almost comparable to commercial advertising payment for the year (Hawkes 2006).
The main country consumer of energy drinks is the USA, whereas one of the main consumer groups there are drivers and students. The target audience for this drink are people who are active at night or need extra energy for their lifestyle and regime. Studying preferences and motives of purchase decisions of the representatives of final consumer segment is the most succinct and meaningful analysis stage of the operational environment (SocialMention, 2014)
Results of the analysis of the primary sources of information obtained by means of observation and survey, allows understanding who the target consumer is. The following features characterize the target consumer of energy drinks: age 15 – 31 years and older, average income, person with any occupation. The dynamics of structural share of this group of consumers of energy drinks is generally not dependent on any specific group decisions.
As part of the special characteristics of the market, the need for priority stimulating effect on the user, provided the prevalence of intermediary organizations as part of a marketing network company should be defined.
With regard to the European market of energy drinks, sales of refreshing drinks in 2013 in the UK accounted for $ 1 billion. Production technology of Red Bull is not very different from the technology of production of other carbonated beverages or alcoholic cocktails that are just made from the ingredients mix (Porter 1990) In most countries, Red Bull’s market average price for a jar is approximately 1,5 EU – on average three times higher than that of Coca-Cola. In the U.S., for the first nine months of 2005, the small shops selling essential goods at a higher price sold Red Bull for $ 282 million. Diet Coke was sold at $ 260 million, and Diet Pepsi – at $ 220 million. Sales mark of Red Bull is noticeably inferior to Diet Coke and Diet Pepsi, but the price of drinks is at least two times higher than Coke. According to the newsletter on the market of beverages Beverage Digest, the value of energy drinks producers increases as demand falls on the traditional soda. During the first eight months of 2005, sales of energy drinks in the United States grew by 75 %, while sales of conventional carbonated beverages declined slightly.
Consumers are buying more Red Bull and other brands that contain caffeine, glucose and other stimulants to increase energy and banish fatigue. Europe assessed the merits of Red Bull first, but the Americans quickly tightened . The company’s sales in the U.S. in the first eight months of 2005 increased by 38 %. However , the share of the U.S. market now stands at 26.5% down. Red Bull is now sold in 120 countries. In 2004, sales of the drink reached $ 1.935 billion, occupying 70 % of the world market in this segment. That, in fact, allows the company to make such expensive purchases advertising, such as the one of the teams of Formula 1.
Strong competitive advantage, which is able to create a unique corporate culture and unique management model, means a strong team of professional staff. People can unite and give fantastic results compared to other players in the industry. The only problem is that few leaders and business owners are able to give such a strong emotional orientation actions to their employees (Porter 1990)
It should be noted that the unique competitive advantage in the context of the concept is a fusion of the most powerful factors or different ways to create a competitive advantage. You need to consistently make just a few steps, analyze what the possible competitive advantages for the company are. It is important to appreciate the uniqueness of the company available for competitive advantage, and how long they can be unique, estimate the time and resources necessary to create value, choose the ones that would be the most successful for Red Bull’s strategy.
Marketing research of consumer needs as a basic component of a collective evaluation of customer values allows to identify unmet needs, find vacant niche markets and build a common understanding of the properties of the goods at the pre- stage of its development. The task of research information component evaluation is to determine the laws of formation of an image in the minds of buyers of goods based on information received from the Red Bull. In view of the results, the choice of communication channels, specifics of the content and form of information presentation are decided.
During the analysis of Red Bull marketing, customer value sets out the basic requirements of buyers to the properties of the material and immaterial parts of commodity supply, adjusted to the composition and content of the marketing mix elements such as product promotion and distribution. Key importance is given to the definition of monetary valuation, integrating indicator, expressed in the form of the maximum price the buyer is willing to pay for this product.
Establishing the market price at the price the buyer offers is the opportunity to maximize the manufacturer’s profit from the sale of each item, to optimize the structure of the marketing mix, taking into account the cost of resources and the desired rate of profit for the manufacturer.
Interdependence of the various components of non-additively of commodity supply leads to the necessity of its definition as a whole system of interrelated elements, which together makes up a particular value for the consumer of Red Bull. In this context, special importance is paid to the research questions of causality between consumer needs and opportunities. The producer explores ways of their harmonization and alignment. Therefore, the specification of the functions and values of the marketing mix should be linked not only with the analysis of the specificity and content of its individual elements. It should also refer to the understanding of the laws of formation of value product offerings for customers. Ways to transfer verbal evaluation criteria in the elements of the marketing mix with specified cost rating should be identified (Listorious 2014).
Feedback is an important part of any project. The more manufacturer talks with the client, the more he learns. Constant contact will give you valuable insight into what the customer thinks. Feedback is an important way to assess the degree of implementation of customer satisfaction or service quality of the goods. When given feedback, you respond by taking appropriate measures, clients feel cared about them. This helps the emergence of mutual trust.
Confidence building and the introduction of feedback mechanisms can give more ideas on how to go beyond the minimum and how to meet real business needs in the best way. Customers do not just want suppliers but rather reliable partners. If the customer is satisfied, he is unlikely to return to the market to find someone else (Klous 2014). Developers need to strengthen the campaign and even strengthen the understanding of the very concept of energy drink. Red Bull Company should continue uniting consumers by single concept of interrelation with the core values of the brand: personality, humor, innovation, nonconformity. Initial positioning of the brand “Red Bull stimulates the body and mind” was later translated into more memorable and fun slogan “Red Bull inspires.” However, energetic companies only position their brands as useful for a person (Red Bull, 2014). In fact, majority of professionals argues that it is not true. Nowadays, healthy lifestyle reaches its highest popularity. Therefore, Red Bull Company should work on the effect on the health and spreading awareness about it in commercials.
Twenty-three of the thirty countries in which there was Red Bull’s campaign, had a budget for advertising above-the-line. In all of them, it was decided to use their customized concept “Red Bull inspires.” As part of this concept, marketing managers should use extensive sampling. It is also important to intensify sponsorship of some sports events (extreme, amateur sports coach), create a photographic archive for journalists, including a website with high-quality pictures for printing, videos about sports telecasts, etc. Red Bull should improve media strategy to display the dynamic transfer rollers selected in order to achieve such a specific audience, as young employees.
With the advent of the digital revolution brands come to the understanding that their information and entertainment products can and should go away from the traditional fee model based on distraction , that is, from advertising. Several brands have begun to move towards the production of their own content: blockbusters like Burger King Games, and the long-running platforms such as «Open Forum» from American Express. Many loudly stated the importance of media in the development of the brand. However, it was hard to imagine that there is a company that will take it so literally. The creation of Red Bull Media House Company is now taking its first steps in the transformation of the brand in the media company.
Therefore, the company should create a global media network covering segments such as print, TV, mobile, music and new media. This network will be responsible for the creation and distribution of all content of the Red Bull. Media House’s first task is to create and distribute high-quality original content, which can be organized both for customers and for partners.
Relatively few companies (and almost none of the “traditional” advertisers) have a comprehensive vision of the brand , in which every aspect of it- the product itself , the corporate culture , communication – subordinate to a unified approach . For such companies, marketing is not just a subdivision, it is an organic component of the brand itself . Sequence of Red Bull made its world-famous brands of titanium drinks, and now the company decided on a very unexpected move . Producing a lot of sports and youth- oriented content (internet , social networking , movies , portable devices , printed matter , music and television) , the brand that gives wings, became what all brands nowadays want to become- a full-fledged media company.
Why not to check your price right now?
Get a price quote