Marketing Strategy
Red Bull organization is regarded as main energy drink provider that is distributing its products throughout the world. Red Bull is an international organization that is trying to market Red Bull Energy Drink. The mission of red Bull here is to enter into market of Hong Kong. Hong Kong is selected because it is located and China and China has successfully entered into the global market, and has provided several opportunities to international organizations to conduct their business in China. Further, China has also opened several platforms for businesses in order to facilitate them to enter into the Chinese market. In this paper, marketing strategy comprising of product strategy, pricing strategy, and place strategy for Red Bull in Hong Kong is discussed in detail.
Marketing Objective
The marketing objective of Red Bull in China is to enter into Chinese market and to achieve dominating position in the market. In this regard, the company may face several issues such as threat from competitors, trade barriers, distribution plan, and marketing plans, which are meant for new markets. Further, in China, the target market will comprise of primary market and secondary market. Primary market for Red Bull in China will be middle class males and working males of ages 25-50 years. Secondary market will comprise of male and female students of ages 16-25 years.
Product Strategy
A product strategy helps in considering target audience and attributes of consumers (Kaser , 2012). It is a plan for marketing a product by analyzing the nature of market. Red Bull Energy Drink with antioxidants and herbal ingredients will be offered to consumers in Hong Kong market. This is because Chinese are very health conscious. Many companies failed to conduct business in China because they did not considered preferences of Chinese consumers. Health is a major factor for Chinese consumer (Reuters, 2015). So, Red Bull Energy drink will be provided by keeping health of Chinese consumers into consideration.
Consumers in Hong Kong, who are concerned about their health, will be attracted when they come to know about the ingredients present in the energy drink. They will like to purchase the product in order to take benefits for their health. Furthermore, recent movement in China for quality and healthier lifestyle has compelled companies and producers towards creation of healthier products. Hence, Red Bull Company is also keen to facilitate customers of Hong Kong with healthy and quality product in order to provide maximum benefits. However, it is also a fact that buying habits of Chinese consumers vary, but majority of consumers demand those products that are safe for their health.
Further, logo and brand name of the product will remain same as the United States Red Bull Brand. This is because Red Bull is a famous brand, and many people all over the world are well aware of this brand. The brand name and logo will create an appeal and attraction to the customers, as more and more consumers prefer to purchase brand because of quality. They want to get quality product in order to remain healthy. Logos are very important aspect for marketing and introducing a product, and it is also a most significant part of overall marketing strategy of an organization. They are representation of brand identity and helps in promoting recognition (Masterson & Pickton, 2014), that is why the logo of product will not be changed. Additionally, when consumers become aware of the product, they develop trust and liking for brand, and respond in a constructive manner for the brand, which ultimately paves the way to increase in sales of company, and also to increased market share (Lautenslager , 2014).
It is also said that brands are effective enough to tell about DNA of business to consumers. Keeping this fact into consideration, the brand name will also remain same. However, for China, the design of Red Bull will be same as in the U.S., but color will be changed as red will be dominating color, and text on can will be in blue color, and silver accent will also be used. Individual packaging will be preferred instead of bulk as bulk products are not liked by Chinese consumers. This is to say that overall product will remain same, but flavor and packaging will be changed. The packaging and flavor is changed in order to make the product in accordance with preference of customers of Hong Kong, and also to attract them.
Pricing Strategy
A pricing strategy helps the company in considering input costs, actions of competitors, margins of trade, capability of paying, and various segments of market. Like in other countries, the company will adopt premium pricing strategy in Hong Kong. In premium pricing strategy, the price of product is placed above the price of competitors’ products (Asiedu, 2016). However, consumers will become willing to pay a high price because of the quality of product that the company is offering, and also because of the benefits that are associated with the product. Further, it is expected that consumers will pay high price because of product’s taste, as the taste of Red Bull will be much better than taste of other soft drinks that are available in Hong Kong market.
As a matter of fact, Red Bull with antioxidants and herbal ingredients will be unique, and will be a new category in drinks that are made for the purpose of providing energy. Red Bull cans will, however, be priced on individual basis at 8.50 Chinese Yuan. Retail price will be about 12.15 Chinese Yuan. Red Bull will, however, offer a unique effect that creates value to customers via energy increasing effect. It is expected that sales will be slow in the beginning, but after a period of 12 months, sales will increase, and contribute to profitability of the company.
Red Bull is an expensive drink in energy market, and it is about 3%-6% more expensive as compared to soft drinks such as coke. High price is advantageous for Red Bull in a sense that consumers link high price with best or high quality. Moreover, the company is already enjoying increased market share in other countries, so it will be able to charge high price for Red Bull energy drink in Hong Kong without losing its customers. Further, it is expected that Red Bull energy drink will face high price elasticity of demand in China because of availability of large number of substitutes, and also because of low requirement of the product as the product is considered as a luxury product.
Distribution Strategy
In China, distribution of Red Bull will be ensured via distributors and small retailers. Further, shipment of product from West Coast to China will be ensured. The company will also try to find its distribution partners in order to make the product available in the market. Excess supply of product will be ensured, and it will be stored in the warehouses. Further, brand recognition will be established with the help of product samples, and relationship with Chinese retailers will be ensured. Building associations with retailers is effective because they also play a significant role in making consumers aware about the product. The product will be shipped in 30 dry containers, and it will be shipped from Michigan to Los Angeles, and then from Los Angeles to Beijing via ship. From Beijing, the product will be transferred to Hong Kong by bus or by train. In this shipment process, the company will have to bear loading and unloading charges, pier charges, import charges, customs duty, and insurance of product. In order to ensure timely and quick distribution in Hong Kong, warehouse will be formed in Hong Kong, so that product can be stored and shipped when required by customers.
Moreover, the product will also be distributed in convenience stores on small scale. It will also be delivered in Grocery stores, but at small scale in the beginning, and more will be provided on increase in demand. However, in order to maintain quality of the product, the company will package and manufacture the product itself so that customers can be attracted, and they can be satisfied. Further, the company will not franchise or license its name. it is because of ensuring quality control. The company will maintain good relations with suppliers in order to ensure timely and quick delivery of product, and to minimize cost. The company will select suppliers in China by keeping quality, cost, and delivery into consideration. The company will also try to achieve efficiency and effectiveness at the lowest possible cost, and will also focus on eliminating waste.
Further, in order to attain efficiency at lower cost, the company will use different distributors at regional or national level. Regional distributors help in distributing the product in the areas of high demand. It will also collaborate with famous beverage corporations so that partnership can be established. However, the company will also try to increase space in warehouse in order to place products properly in warehouse, and also try to increase points of sales. It will try to maintain constant control on supply of product, and also try to pay attention to reduction of cost. The company will reward retailers on the basis of amount of Red Bull that they sold.
Promotion Strategy
Promotional strategy indicates the selection of target market, and formulating an adequate promotion mix in order to exert its impact on it (Warshaw, Kinnear, . Reece, 2000). Awareness regarding Red Bull energy drink will be created among 30% of young adults having ages of 18 to 40 years, who live in Hong Kong.
Advertising
The company will adopt the method of aggressive advertising campaign on its entry in Hong Kong. Campaigns will be carried out on airports, via advertisements on radio, and on public transportation. After 12 months, the company will plan to scale down its advertising program. However, television advertisements will not be considered during starting 12 months because of cost and censorship of government of China. Further, sponsors, particularly athletes will be considered for advertising the product. Social media will also be considered. This is because of the fact that now almost everyone is using social media to communicate with friends, and to get awareness about the product. The company will also advertise the product on social media so that majority of people in Hong Kong can be informed about the product. It will also play a useful role in attracting customers for using the product. Further, word of mouth is essential as the company wants to create a positive image. The word of mouth in this regard, is to create buzz for generating amusement among customers. In creation of word of mouth, external factors have played their role. Red Bull will, however, use pull marketing in which consumers get excited about the product, and then this excitement is transferred to friends and family.
Sale Promotion
In Hong Kong, the company will focus on creating new target market with the help of buzz marketing. It will promote the product in campuses so that students will become aware, and for this purpose it will designate brand managers for students. Further, it will also distribute free samples to students who are studying in educational institutions of Hong Kong so that they can taste the product, and become more aware of the product. This will also help in building confidence in students regarding product, and help in satisfying customers.
Event Sponsorship
The objective of company in this regard is to sponsor high energy events. The company will focus on sponsoring sports such as basketball, baseball, and football. Further, in order to win hearts of older generations that company will also consider sponsoring traditional sports. It will also help the company to exploit new opportunities. By sponsoring events, the company can pay attention to the brand image, visibility, and credibility of its product.
Public Relation
Red Bull will also ensure public relations in Hong Kong. The objective of maintaining public relations is to grab attention of consumers directly towards the attributes of products. In this regard, appeal can be created with the help of social media, press release, and public events. All these methods are effective for attracting attention of customers, and making them aware of the products that are offered by the company. The company will use social and digital media in order to communicate with customers. Social media such as Twitter, and Facebook etc, and the online blogs have made it easy for people to get information and to exchange information in a rapid manner. for interacting with customers, Red Bull will create a Facebook page of the company, especially for Hong Kong customers so that customers can get required information from that page.
Direct Marketing
Red Bull will also ensure direct marketing in order to communicate directly with customers. The Company will communicate via email and text messages so that required information can be gathered, and also needed information can be provided.
Personal Selling
The company will also ensure personal selling of product, and in order to sell the product it will build personal relationship with customers. Brand managers for students will promote the product in campus. Vehicles containing logo of Red Bull will be driven in order to make people aware, to create an eye catching effect, and to promote the product in an effective manner.
References
Asiedu, E. (2016). How to create and sustain a strategic marketing plan through the 4p’s of Innovation: With reference to Red Bull energy drink company. International Journal of Commerce and Management Research, 2(1), 40-52
Kaser , K. (2012). Advertising and Sales Promotion. Nelson Education Limited, Canada
Lautenslager , A. (2014). Market Like You Mean It: Engage Customers, Create Brand Believers, and Gain Fans for Everything You Sell. Entrepreneur Press, New York
Masterson, R., & Pickton, D. (2014). Marketing: An Introduction. Sage Publications, Washington
Reuters (2015). Health-conscious Chinese challenge Western food firms. Retrieved from:
http://uk.reuters.com/article/consumergoods-china-nestle-idUKL1N0VT10A20150225
Warshaw, M.R., Kinnear, T.C., Reece, B.B. (2000). Promotional Strategy: An Integrated Marketing Communication Approach. Pinnaflex Educational Resources, New York
