Introduction
The soft drink industry is one of the fastest growing business sectors in the world today. Different firms compete over the best products that attract customer attention by meeting their dietary, monetary, and refreshment needs. Much of these companies have embarked into the production of energy drinks. Red Bull GmbH is one of the globally recognized companies for its energy drink the Red Bull. The product finds a market in all parts of the world because of its uniqueness in content, flavor, originality, and the ability to supplement customer's energy. The paper discusses marketing analysis of Red Bull energy drink by focusing on the market analysis, overview, customer and competitors' analysis, and marketing assumptions and objectives.
Discussion
Background of Red Bull GmbH Company
Dietrich Mateschitz founded Red Bull GmbH in 1984 in Australia. Mateschitz developed the first Red Bull marketing formula in 1987 where he sold more than one million cans. The demand for the Red Bull energy drink kept increasing since its first marketing launch. As the company continued producing more cans, nutrient and dietary experts came up with new ingredients such as carbonation to increase the energy strength of the content. The Red Bull energy drink components include Vitamins B, Sodium, caffeine, and glucuronolactone.
Mission and corporate objectives
The mission of the company “To spread our wings over the world” drives the company’s ability to achieve its goal to upholding highest industry standards while maintaining the top leadership position by delivering excellent customer services in an efficient and profitable manner.
Market external analysis
Organizations face a lot of pressure externally from competitors and rivals that have a significant impact on their productivity, profitability, and growth. The external market analysis plays a significant role in establishing potential external forces capable of influencing a business depending on the type of industry it operates. The analysis of Red Bull’s external market using the PESTLE analysis model helps in realizing potential strengths and weaknesses of the company in the global market.
PESTLE analysis helps organizations identify external factors in the business environment that influence their operations. The analysis considers Political, Economical, Social, Technological, Legal, and Environmental factors (Team FME 2013).
Political
Red Bull distributes its products in different countries that have varying political backgrounds. The government must conduct a thorough investigation of the product to ensure it contains acceptable ingredients. However, competitors affect the distribution of the product by creating a bad reputation for making consumers use substitute products. For example, during the first launch of the product, the Health Organization politicized the company saying it was producing appetizer medicine in the form of an energy drink. However, the company had to overcome such allegations and managed to sell its products. Currently, Red Bull operates under health certifications to ensure compliance with political demands of different regions.
Economic
Red Bull operates in more than 169 countries across the world today that has different economic demands. The high rate of taxes charged by some countries discourages the growth of the product in the region. Red Bull has recognized brand equity and customers expect to get the product at a reasonable price. The increase in sales taxes influences the profitability of the company. On the other hand, the high rates of unemployment in some countries influence the company’s growth. Lack of qualified employees to market the product because of inadequate skills forces the company to recruit new employees whenever it launches its products in a new market, especially in developing countries. Moreover, frequent recessions affect the company's profitability and sales outcome. The 2007-2009 economic recessions led to a sharp decline in the Red Bull sales volume. The decline affected the company’s growth and profitability that took long to overcome (Gates 2015).
Social/Culture
The social and cultural lifestyle of consumers determines the acceptability of the product. Religious cultures avoid taking the Red Bull drink because they associate it with alcohol and other illicit drugs. The drink has high caffeine levels that limit many consumers from using it. On the other hand, many societies avoided using the product during first few years of introduction. Moreover, high-profile deaths experienced today, especially those related to heart diseases and diabetes, are linked to energy drinks consumption. Some European countries such as France, Denmark, and Norway have banned the consumption of Red Bull (Bradley 2012). Even though the court overturned the ban citing no health risks; it created huge social implications on Red Bull consumers in the region and many other places worldwide.
Technology
Technology acts as one of the drivers towards global business sustainability. The modern market environment calls for products and services that demonstrate high levels of technology advancements and innovative productions to create a unique value. The increasing knowledge in technology makes firms steal designs and production strategies from competing firms. Technology leads to improved manufacturing, distribution, and marketing processes and techniques that lower the cost of production. Additionally, technology innovations bring new products to the market capable of outdoing Red Bull energy drinks regarding flavor, taste, and affection. Red Bull helps avoid such challenges by keeping its production formula secured in one region. Additionally, the company adopts unique and highly controversial modern marketing techniques. The internet acts as the primary tool for propagating online marketing techniques. The company has to take extra precaution about the marketing information they post on the internet.
Legal
Nations across the world have embarked into taking strict measures to get rid of all unhealthy food products. Soft drinks producers have been highly targeted, especially when it comes to advertising and the content in the product. Additionally, nutritionists link excessive consumption of soft drinks to the high prevalence of obesity among children and adults (Ibrahim & Iftikhar 2014). For example, George Osborne introduced the sugar tax targeting soft drink companies. The tax aims at increasing the price of drinks whose sugar content goes above 5g per 100ml. Products expected to face a high rate of taxes are Coca-Cola products, Red Bull products, Lucozade Energy drink, and Irn-Bru (Butler 2016). Every energy drink must have recommended amount of contents such as sugar for it to get to the market. Such measures influence Red Bull’s distribution because the product must undergo tests to pass legal requirements in the target country.
Environmental
The soft drink marketing environment creates many challenges that affect the marketability of Red Bull products to target customers. Microenvironmental factors such as competitors, customers, suppliers, and substitute products affect Red Bull's marketing and distribution channel. Red Bull responds by maintaining high-quality brands throughout and using price and customer relations strategies to overcome threats from the environment. On the other hand, different nations have different environmental sustainability policies that help them maintain a clean and safe environment. Manufacturing companies must comply with such rules to get an approval into the target market. Red Bull cans are eco-friendly because they are made of recyclable aluminum. The use of environmentally friendly products gives the company a competitive advantage over competitors especially in regions that follow stick environmental rules.
Market Overview
Market size
The market for energy drinks has experienced rapid growth in the recent years because of the increase in the rate of energy consumption. The rate of consumption increased since the launch of the product. Red Bull recorded 1.5 billion cans in sales in 2011 in the United States alone (Ibrahim & Iftikhar 2014). The size of the market in the current business environment determines the ability of the firm to make profits and compete in the global market. Red Bull Company has managed to maintain a high lead in the soft drink industry despite the introduction of many competitors selling similar products. Red Bull continues to expand its operations to different countries in the world with the aim of ensuring people at all parts of the world feel the good taste of the Red Bull energy drink. The energy drink industry recognizes Red Bull based on the high global market share of more than 40 percent and distribution of the product in more than 169 countries. On the other hand, Red Bull Company’s market share in the United States has increased from 0.3% to 1.3% between 2004 and 2014 (The Statistics Portal 2015). The high market share and brand recognition make Red Bull face many external market challenges (Red Bull 2016).
Growth
The new and emerging economies across the world create more opportunities for the Red Bull Company growth. Since its launch, Red Bull has sold more than 60 billion cans in more than 60 billion cans in more than 169 countries. In 2015 alone, Red Bull Company sold 5.96 billion cans of Red Bull energy globally, which represented a 6.1 percent increase from the 2014 sales. By the end of the same year, the company had employed about 11,000 employees in all 169 countries (Red Bull 2016).
Trends
Red Bull energy drink expects to experience increasing sales in the coming future because of the growing trends of the present and upcoming generations. The increasing number of dance parties and the growth of the sports industries across the world call for an increased demand for the supply of energy drinks. Additionally, Red Bull has sponsored parties and sports activities across the globe increasing its awareness.
Customer and competitor analysis
Customer
Red Bull Company manages to maintain a high customer profile by continuously producing quality products whose taste never change since the launch of the first market in 1987. Customers from different parts of the world recognize the brand and use it to whenever they need an energy drink to fulfill their body energy requirements. Additionally, the company embarks on producing products that meet different consumer needs regarding culture, age, energy requirement, and socioeconomic status. It also uses a unique branding strategy that involves "consumer educators." The company implements the strategy through a team of marketers traveling with small off-road cars with giant cans of Red Bull fixed on the back with the aim of finding consumers along the way in need of energy boosters and give out a free Red Bull product. The strategy helps create brand awareness and attract more people into purchasing the product.
Competitors
Red Bull faces stiff competition from existing and emerging new companies trying to develop energy drinks that overcome Red Bull’s market. One of Red Bull close competitors, Monster, creates the biggest threat to the marketing and distribution of Red Bull products. However, Red Bull overcomes the competition because it contains natural ingredients that improve its taste and flavor making it more desirable than the Monster. The Monster brand records high volume of sales in the U.S. energy drinks market, but Red Bull overcomes it regarding value (Euromonitor International 2013). Other competing brands available in the market are Rockstar, NOS, AMP, and Full Throttle.
The product audit
Red Bull Company deals with more than one product lines. The company produces products in both the food and beverages categories. The products are healthier and made from organic ingredients. Modern consumers look for healthier consumable products. Moreover, products come in different flavors that meet needs of different customers in the consumer demographics. Moreover, the company adopts a price reduction strategy. The company believes increased sales when consumers pay less. Additionally, the strategy helps the company win the competitive advantage.
Marketing assumptions and objectives
Red Bull focuses on achieving its objectives of becoming the global leader by delivering quality products to customers. It needs an effective marketing strategy to achieve the following goal.
Objectives
Increase sales by 50 percent each year
Maintain a high growth rate of about 15 percent each year
Assumptions
First, Red Bull assumes its products are the best and most desired in the market. The assumption gives the company more morale to increase productivity and focus on quality and taste. Second, the company assumes competitors are always devising new strategies to win the market. Red Bull strives to win the competition and with the idea that competitors have the same goal, it must put more efforts to ensure the marketing and distribution strategy adopted overcomes that of the competitor. Finally, Red Bull assumes it conducts business in a perfect market structure. The mode of distribution and price may change anytime. Hence, the company's marketing strategy must address risks associated with immediate changes in market prices.
Conclusion
Marketing in the current contemporary business environment requires the application of unique strategies. Business must establish the industry forces that influence the flow of the product and conduct an extensive research about competitors' marketing strategies. According to Keillor, global organizations should establish and maintain customer channels while creating a connection between the firm, products, and customers to achieve marketing goals (2013). Red Bull has great potentials to continue leading the soft drink industry in the production, distribution, and sales of soft drinks because the company uses unique strategies and features that assist it to achieve a high global competitiveness.
References List
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