JAWAD HASSAN

MARKETING MANAGMENT

CONTENTS

1 Introduction 1.1 History 1.2 Mission Statement 1.3 Issues and Criticism 1.4 Competitor analysis 2.0 Methods 3 Analyses 3.1 Critical Review 3.2 Segmentation 3.3 Children (Humpty Dumpty) 3.3.1 4 Ps 3.4 women (Bell) 3.4.1 4 Ps 3.5 Old Ages (Cool River) 3.5.1 4 Ps 3.6 Ansoffs Model 3.7 SWOT 3.8 STEEPLE 4.0 Findings 4.1 Conclusion 5.0 Reference

02 02 03 04 05 06 07 07 09 10 10 11 11 12 12 13 14 15 16 16 17

Page

JAWAD HASSAN

MARKETING MANAGMENT

1 Introduction Red Bull is the most popular drink in the world. The market share of the Red Bull is 71% of the world market of energy drink. Red Bull produces the world's leading energy drink. More than a thousand of the million cans years are sold in nearly 100 countries. Its dominant position in the fastest-growing segment of the soft drink market in a number of countries has drawn a number of imitators. Red Bull has become a case study in successful guerrilla marketing in the United States and United Kingdom. Targeting at hip young people with active lifestyles, though the formula began as a popular energy drink for blue collar workers in different countries like Thailand. Red Bull claims to Increase performance, Increase concentration and reaction speed, Improve vigilance, Improve emotional status, Stimulate metabolism. 1.1 History It is the adoption of Thai energy drink which translated into Red Bull. The founders of the company were Thai national Chaleo and Austrian national Dietrich. Chaleo is holding 51% of the share and Dietrich is responsible for the operation of the company. Irrespective of Red Bull if facing criticisms that it has possible health risk, it is aggressively advertised through marketing and different youth tournaments. The slogan of the Red Bull shows the clear segmentation of the Red Bull that Red Bull is targeting the youngs. The slogan of the Red Bull is It Gives You Wings. Red Bull began a revolution in the market of energy drinks. In 1982 Austrian Dietrich Mateschitz developed an energy drink. After that he visited Thailand and found the local energy drink he mixed that drink with his drink. At that time both of partners decided the shares ratio. 49% of shares were given to Chaleo and 2% shares were given to Chaleos son but decided that the company will operated by Dietrich. At the same time both of partners founded Red Bull Gmb H; each investing $500,000 of savings and taking a stake in the new company. The combination of both products was launched in 1987. The first foreign market of the Red Bull was hungry in 1992. In UK it was introduced in 1994. But before launching in Europe they altered ingredients according to western taste. They added some ingredients in the Red Bull, like vitamin B, caffeine sodium, and glucuronolactone. It was launched in us in1997 and in the Middle East it was launched in
Page

2000. 2002 was a mew year for Red Bull. In 2002 they opened regional headquarter in Dubai.

JAWAD HASSAN

MARKETING MANAGMENT

Now the Red Bull is working in 60 countries and expending its activities more and more. In 2003 Red Bull introduced Red Bull sugar free. In 2008, the most famous magazine Forbes declared the founder of the company as a being 260 richest person of the world. As Red Bull is a privately owned Austrian company of Dietrich Mateschitz. Since introducing Red Bull in 1987, Mateschitz has invested heavily in building the brand. In some countries, Red Bull is enjoying 80% market share. In the U.S, Red Bull enjoyed a 47% share of the energy drink market, and the sales are growing annually at 40%. It is the most popular world in the world that more than hundred of the drinks tried to copy Red Bull. Marketing of Red Bull and position of Red Bull in the market limited the new entry of new rivals. The in the promotion of Red Bull, slogan of Red Bull was that it increases the stamina and brain concentration, and it was the basic formula that made the Red Bull famous and it got huge appreciation from drivers specially long distance drivers.

In terms of attracting new customers and enhancing consumer loyalty, Red Bull has a more effective branding campaign than Coke or Pepsi. Red Bull is building a beverage brand without relying on the essential equipment of a mass-marketing campaign. Perhaps the indispensable tools of marketing aren't so indispensable after all." - Nancy Koehn, Professor of Business Administration at Harvard Business School, in 2001. 1.2 Mission statement: "We are dedicated to upholding Red Bull standards, while maintaining the leadership position in the energy drinks category when delivering superior customer service in a highly efficient and profitable manner. We create a culture where employees share best practices dedicated to coaching and developing our organisation as an employer of choice." http://wiki.answers.com/Q/What_is_the_mission_statement_of_Red_Bull

Page

JAWAD HASSAN

MARKETING MANAGMENT

The mission statement of the Red Bull shows its goals and objectives. From the above it is seen that the basic goal and objective of the Red Bull is to maintain leadership in the market and increase market share relative to the competitors. While doing all this Red Bull dont forget the most important dimension of the marketing, the customers. Mission statement shows that customers are most important for Red Bull like other organisations. Red Bull trying to provided superior services in highly efficient manner and besides this they try to earn profit. It is very important that the company must increase the standard of the product with the passage of time and Red Bull is doing the same thing because if we see previous history of the product we can easily conclude that companies who did not maintain the standard of the product they were kicked off. The effectiveness and loyalty of the employees is also a important issue while making the strategy of the company. And professional and skilled employment is important assets for the company. So Red Bull has a keen eye on the training and coaching of the employees. Red Bull is trying to create a culture for the employees so that they can easily work in motivated environment. Red Bull claims to Increase performance, Increase concentration and reaction speed, Improve vigilance, Improve emotional status. 1.3 ISSUES AND CRITISIMS: Health issue: People criticised that the presence of taurine negatively affects human body. Allegedly reported that there are some adverse affect of caffeine used in the Red Bull. They crititsized that caffeine cause insomnia nervousness headache and tachycardia. Study also shows that the use of Red Bull sugar free increases the blood coagulation this raise the cause of cardiovascular risk. Some criticized that the use of Red Bull increases the stress inn those who have high blood pressure. Red Bull may have triggered heart condition that killed student reported on the death of a 21 year-old woman who died after drinking four cans of Red Bull as well as alcohol at "social levels. It was believed, but had not been proven, that she suffered from a rare heart condition called long QT syndrome she was on medication for epilepsy. A medical examination found that there were no illegal drugs in her system. The article quoted a doctor as saying, "The QT
Page

levels may have grown over a few years, or it may have been artificially pushed over the limit by caffeine". (The Daily Telegraph Feb 3, 2009)

JAWAD HASSAN

MARKETING MANAGMENT

Cocaine controversy: Another controversy was raised in June 2009 that there were a amount of cocaine in the Red Bull cans, which were imported to Austria. Due to this controversy Germany had banned these drinks by 25 May 2009 in 11 states out of 17. Same mater was raised in Taiwan also but due to legal constraints no action was taken. Caffeine controversy: Another big issue related to Red Bull the presence of the amount of caffeine in the can of Red Bull. Some experts say that the caffeine also adversely affects the human health. The amount of caffeine in a normal can of Red Bull is equal to the caffeine present in the coffee cup. Due to these controversies Red Bull is banned in Norway France and Denmark. But after the ban was lifted in Norway and Denmark. So Red Bull is also facing legal issues. But instead of criticism we also know that Red Bull contains huge amount of vitamin B which is very useful for human body. The purpose of above discussion is not to criticize on the Red Bull, but according to me Red Bull has different competitors and different rivals. All these above issues also contributed in decreasing the sale of Red Bull. All above matters adversely affect the sale of the Red Bull. So all these issues challenge the position of Red Bull in the market. So Red Bull must take steps in order to minimize all these remedies. Red Bull must revise its strategy for long term and also to retain its market position. Red Bull must resolve these issues in order to maximize its market shares. 1.4 COMPETITORS ANALYSIS: In many surveys it is said that people use energy drinks for various reasons, athletes use energy drinks to provide some fuel as they practice and compete. On the other side people normally use as a way to become energized. Thats about all I know. So be an energetic is a basic point which attracts the customers into the energy drinks. In countries like India and Pakistan, Pepsi and Coca Cola have a hold over other products. They market their products in these countries like war that is way they are market leader in
Page

superstars in these countries to promote their product and they have monopoly in distribution

the countries. Pepsi holds the 70% of market shares in Pakistan and in India also. They hire

JAWAD HASSAN

MARKETING MANAGMENT

sectors also. Unlike Red Bull they dont hire stars for their promotion, Red Bull hire athletes for their promotion. And the marketing is very week in third world countries as compare to the rivals. The prices of these products also very low as compared to Red Bull. Another big competitor of Red Bull in Canada is Slow Cow. Slow Cow is targeting those customers who dont want to take excitement. It has very small amount of caffeine in it. It helps the people slow down when they stressed up unlike the Red Bull contains the caffeine which dont help in stress. Slow cow contains the amino acid which said to produce feeling of relaxation in the brain, without causing sleepiness. It is also said to increase mental awareness and concentration. Another big competitor of Red Bull is Cott Corporation. Due to its diversifying strategy, Cott Corporation is earring huge profits in the United States, Mexico and Canada. Red Rooster is an energy drink of Cott which was launched to compete with Red Bull. Some other competitors of Red Bull are like Lucozade, Monster, Relentless, Dr Pepper, Iron bur. All these energy drinks holds different segment of the customers. So Red Bull needs to rebuild its strategy and revise its segmentation in order to compete these markets as well. Red Bull must also develop the strategies for the niche markets. 2 Methodologies: There are two sources of data. Primary data Secondary data Primary data was taken by interviews and personal observation and secondary data was taken from different sources like internet, different course books and different articles. Both type of data helped a lot in order to make this assignment.

Page

JAWAD HASSAN

MARKETING MANAGMENT

3 Analyses: 3.1Critical Review In order to maintain the position of Red Bull in global market and increase the shares in different countries the Red Bull must revise its strategy according to new market and competitors. if Red Bull change its strategy like to target the third world countries like Pakistan and India Red Bull can get rid of huge criticism and earn profit beyond the limits. In west the Red Bull has serious challenge of different issues; Red Bull is facing difficulties in order to maintain its position due to health issues and prices of products. Another big issue of Red Bull in these countries that Red Bull has very small range of drinks and Red Bull is just targeting young man, and they are ignoring huge market like children women old ages. So Red Bull going down from the maturity stage. Red Bull must develop different products in order to meet the needs and wants of customers and different members of society. So it is big advantage for Red Bull is it is already a famous brand and no need of huge investment is required and just to change its strategy and develop different products. And if we see segmentation of Red Bull, there would be strategy for men women children. So to gain again its position on the top of the market Red Bull must develop its research and development or we can say that R & D dept. Another big market which Red Bull is ignoring like India, Pakistan, China and whole Africa. No doubt Red Bull holds 70% of market shares of energy drink in United States, but if we see the population of America, it is very small as compared to these economies which I mentioned above. Red Bull has no big structure and development in these countries and it seems like Red Bull is just for its presence not for sale so the structure of Red Bull in third world countries also in declining. In these countries the Red Bull is in growth stage but also in but if Red Bull continuously ignores the strategy it would be declined stage for Red Bull. In these countries the women children are more than men and it would be a big market for Red Bull if Red Bull satisfied need and wants of customers. The people living in these countries have low income level and their living standard is also low. In these countries the competitors are providing low price drinks as compared to Red Bull that is way they have hold in these markets. Red Bull must develop the products for low
Page

income customers or they have to adjust prices of Red Bull according to income level.

JAWAD HASSAN

MARKETING MANAGMENT

So according to my point of view Red Bull needs huge investment in these countries. Red Bull must have separate R&D for these countries and they must produce the product according to the culture of these countries. If we have given to make new strategy, we would make new segmentation for Red Bull. The segmentation which we made is given below in analysis section. Red Bull is ignoring huge market, which defiantly turns its customers to competitors products. And in segmentation we also describe product mix and strategy for new segmentation. So according to my point of view company must have mission statement like this for long term relationships. Mission of the Red Bull is to be the premier marketer and supplier of Red Bull in Asia, Europe, and other parts of the globe. We will also target women children and old age. We will achieve this mission by building long-term relationships with the people who can make it become a reality." Product Life Cycle of Red Bull for Western Countries The star in the chart below represents the position of Red Bull in the western market. It is slowing beginning to decline due to health issues and Red Bull ignoring viable segments. Maturity

Growth

Decline

Page

JAWAD HASSAN

MARKETING MANAGMENT

Product life cycle of Red Bull for Third World Countries The star in the chart below represents the position of Red Bull in the western market. It is slowing beginning to decline due to health issues and Red Bull ignoring viable segments.

Maturity

Growth

Decline

3.2 Segmentation (New Strategy): For Red Bull we have different strategies in order to overcome these problems and here we also discuss how Red Bull can use marketing mix for this segmentation. There are three

types of segmentation which would be followed by Red Bull. We also discuss under how re bull can promote products for these segments and how they can set prices for each segment. We also discuss which factors Red Bull would keep in mind in order to set prices and the factors Red Bull can use to promote its products. Following are the segmentation and product
Page

mix of Red Bull.

JAWAD HASSAN

MARKETING MANAGMENT

We basically go to target three different but important segments, which are given below.

1. Children 2. Women 3. Old age

3.3 Children: (Red Bull (Humpty Dumpty)) Explanation: We know that children are big part of population. So if we target this segment with little change in product we can earn huge profit. In other words this segment of population is a big opportunity and Red Bull can convert this into huge strength. And if we see this strategy in both dimensions for western and as well for third world countries we can easily conclude how big this opportunity is. 3.3.1 4ps:
Product: For this segmentation Red Bull caffeine free is very useful because children are so sensitive against caffeine and by introducing Red Bull caffeine free we can target huge market. And according to our study name of Red Bull is very name for every .body and same for children they are also interested in Red Bull. Price: The price of this product depends on the geographical area. The can of the Red Bull will be only in one size and the same for every child as well. In UK the price of Red Bull can be 70p and in Pakistan and like other countries it would be at minimum level. But the price can be adjusted according to situation and income level of the relative region. Place: There is no need to develop special warehouses for this segment and Red Bull humpty dumpty will be provided in every shop with normal Red Bull and on every stores. In UK it would be stored on famous stores like ASDA, TESCO, LIDL, MORRISONS, and SAINSBURRY.

Page

10

Promotion:

JAWAD HASSAN

MARKETING MANAGMENT

The promotion of this product would be a big opportunity, because we can promote this product on different levels likes; o o o o o o Ads on famous children networks Promotional campaign in schools It can be promoted by different children shows In different parks it can be promoted where children usually use to play On stores on each purchase a can be Red Bull would be given to parents Attractive hording boards in different parts of city usually famous for children.

3.4 Women: (Red Bull (Bella)) Explanation: This is most important segment of our strategy because women are major part of population in the world and Red Bull is just targeting men and only young men. So this is most important strategy for Red Bull. It would be a great chance for Red Bull by targeting this segment Red Bull can get rid of a lot of competitors and a lot of threats. And by targeting this segment Red Bull can earn huge profit and shares of Red Bull in market would touch sky. 3.4.1 4ps:
Product: Red Bull (Bella) will be our product which would target only ladies and girls. For this product we dont need to change anything but just for girls they like chilli, we would add some special

ingredients for chilli taste and we sell this product by Red Bull (Bella).
Price: We would offer three different sizes of can for this segment like normal Red Bull. The prices of the this product will be as follows Small can Medium can Big can 1.25 1.89 2.25

There would be slight change in prices for this product for girls relative to normal one but this would be special prices on initial basis. Place:

Page

11

JAWAD HASSAN

MARKETING MANAGMENT

There is no need to develop special warehouses for this segment and Red Bull (Bella) will be provided on every shop with normal Red Bull and on every store. In UK it would be stored on famous stores like ASDA, TESCO, LIDL, MORRISONS, and SAINSBURRY. Red Bull (Bella) can also be stored on petrol pumps shops for sale. And special store can also develop for this product near the women gathering centres. Promotion: For this product we would use special promotional campaign. We would use these types of ways in order to promote product.

o Different fashion shows o Product can be displayed in different shopping malls o Different colourful ads o Colourful hording boards o Advertisement through famous celebrities famous in women. 3.5 Old Ages :( Red Bull (Cool River)) Explanation: This is our special product targeting only old age. As we know they are the major part of the population in the Europe and by targeting this Red Bull will be able to get competitive advantage over the competitors. If we see everywhere in the market no company is targeting this segment and if someone do so they are just doing formalities. So it would be a big opportunity for Red Bull and in future it would help to compete market in long term. 3.5.1 4ps:
Product: The product for old age will be same like normal Red Bull and we would make slight change in it. We will reduce the amount of caffeine in the can and present for sale.

Price: We would present Red Bull in three sizes and prices of these cans are given below; Small can Medium can 1.19 Page 1.59

12

JAWAD HASSAN Large can 1.99

MARKETING MANAGMENT

Place: There is no need to develop special warehouses for this segment and Red Bull (Cool River) will be provided on every shop with normal Red Bull and on every store. In UK it would be stored on famous stores like ASDA, TESCO, LIDL, MORRISONS, and SAINSBURRY. Red Bull (Cool River) can also be stored on petrol pumps shops for sale. And special store can also develop for this product near the old houses. Promotion: We need special promotions for this product because old age is very sensitive for each product which they purchase. We would use special promotions for this product and we will adopt some different ways to promote this product. Some of them are given below.

o Special promotions by talk shows o Ads on Sunday news papers o Door to door campaign 3.6 Ansoffs model: Existing Existing Penetration New New market Diversification New product New

Diversification: Red Bull must change its strategy if Red Bull wants to take over the market for long period of time and if they want to be market leader for longer. At this stage Red Bull needs to diversify and they must invest in different types of product not only in energy drinks but also in other drinks that helps to cool down customers. Red Bull also needs to make other products like Red Bull bread, Red Bull home use machines, Red Bull small cars,

Page

13

JAWAD HASSAN

MARKETING MANAGMENT

Red Bull garments, Red Bull digital accessories. For diversification they need high investment and proper R&D and they must also see the strategy of acquisition. Like they can purchase lion shares of the company which are not working as well as demand of market and Red Bull can convert them into opportunity for its long term planning. There are a lot of companies would ready to make partnership with Red Bull happily. For example SHEZAN in Pakistan. New Product Development: Another strategy can be used in order to get more customers like Red Bull can make different products, in this way Red Bull can target more and more customers. Red Bull must develop drinks in different flavours like Red Bull(lemon) Red Bull (Rubicon) Red Bull(apple)Red Bull (mix flavours).in this way Red Bull can target a lot of customers which Red Bull continuously ignoring. Because no of customers dont like energy drinks, especially if we see children energy drinks are not useful as for young and old age. So Red Bull needs to change its strategy for this segmentation and in some countries there is major factor of culture that affects the sale of Red Bull. Monitoring This strategy will be monitored for a period of 6 months. If the strategy is found useful it will continue with same run, and if its not useful for some reason then there will be some changes which will be recommended by the share holders and valuable customers, and a new strategy will be launched accordingly.

3.7 Swot:
Strengths: The brand name of the Red Bull is the biggest strength. Red Bull has largest market shares show investors trust on Red Bull, so Red Bull has no need to raise finance. Weaknesses: Red Bull is facing different health controversies and issues. Red Bull has very weak

population.

Page

14

marketing in under developing countries.

Red Bull is also ignoring major segment of

JAWAD HASSAN

MARKETING MANAGMENT

Opportunity: By targeting different segments Red Bull can get competitive advantage over. It would be a great opportunity for Red Bull, if they are succeed in getting the new customers. Threats: Coca cola and Pepsi are major competitors of Red Bull and they can be threat for Red Bull for long term strategy.

3.8 STEEPLE:
Social Check out latest trends and moods in energy drink market. It also need to analyse media habits and opinion formers in the target group. Technical Technically Red Bull has no big issue because Red Bull is not a diversified company and but it can affect its long term strategies. Economic Given the international status of the company and differing economic cycles, the financial object needs to be reviewed in the light of exchange rates and sector activities. Education There must be internal education system in order to develop skills in sale force so that they can forecast future sale. Political Normally this type of product doesnt have big and real issue, except it occurs some time in

Page

15

advertisement.

JAWAD HASSAN

MARKETING MANAGMENT

Legal Red Bull had different legal restrictions in different countries like France, Norway and Germany due to health issues. Environmental Red Bull has no big issue relating to environment because there is a proper system of re_ cycling of Red Bull cans and there is a proper check and balance on packaging.

4.0 Findings:
Following are the findings given below: Different controversies affected the sale of Red Bull Red Bull lost a lot of revenue due to ignoring different segment of population Due To absence of diversification Red Bull got declined

4.1 Conclusion:
If Red Bull controls the problem which it has been having it could survive and it could make more than it has been previously. If Red Bull decreases it prices and advertises it in such a way in the third world countries where most of the people can get known about red dull and its exploits.

Page

16

JAWAD HASSAN

MARKETING MANAGMENT

5.0 References: Slack, F., Rowley, J & Coles, S (2007), Consumer behaviour in multi-channel contexts: the case of a theatre festival, International Research, 18(1), pp (46-59) Johnson, K., et.al., (2006), Multi-channel shopping: channel use among rural customers, International Journal of Retail and Distribution management, 34(6), pp (453-466) Laukkanen, T., et.al., (2007), Customer preferred channel attributes in multi-channel electronic banking, International Journal of Retail and Distribution Management, 35(5), pp (393-412) Aaronovitch, S. sawyer, M.C.(1975) Big Business (The Machmillan press Ltd). Besanko, D. Dranove, D. Shanley, M Economics of strategy (2nd Edition) John Wily and sons (USA) Bowles, M (1991). Organisational Studies. (New York): EGOS Burack, E.H. 1991. Change the company culture, the role of human resource development, Long Range Planning. 24(1), 88-89. Chell, E (1987), the psychology of the behaviour in organisations. (Macmillan), London. Child, J. management in China during the age of Reform. Cambridge University Press, Greenwich, CT. Colgate Palmolive Annual Reports. Denison, D, 1984. Bringing corporate culture to the bottom line, orgnisational Dynamics, 13(2), 5-22. Edgar Herzfeld & Adan Wilson 1983. Joint ventures, Bristol Jordan Publishing Ltd. Jackson, T 1995. Cross-Culture Management, Printed by clays Ltd. UK Johnson, J. and Scholes, K. Exploring corporate strategy 5th edition, (Prentice Hall) Kotter, J.L. 1992, Corporate Culture and performance. New York. The free press. Kought, B. 1988. Joint Venture, Theoretical and Empirical Perspectives Strategic Management Journal, 9.319-332. Laurant, A. 1086. The cross culture puzzles of international human resources management, Human Resource Management. Sing, R. 1089. Management in Pakistan. Lahore publishers Ltd. Pakistan

Page

17

JAWAD HASSAN

MARKETING MANAGMENT

Smith, H.D. 1974. Confucius and Confucianism. London. Paladin. Tiosvold, D &Tjosvold, M.M. 1995. Psychology for leaders. New York. John Willy & Sons Young G. R. & Bradford S. J. 1977. Joint venture. Planning and action. New York. Internet Sources: www.bplans.co.uk www.infortrac.london.galegroup.com www.bellhowell.infoleaening.com/proquest/global.html www.emerald-library.com

Page

18