Sales management

 

Sales management involves how well you penetrate into the market and increase the sales of your product. Red Bull excels in managing its sales. In 2013 it sold more than 5.3 BILLION cans.

A total of 5.387 billion cans of Red Bull were sold worldwide in 2013, representing an increase of 3.1% against an already very successful 2012. Company turnover exceeded the five billion euro mark for the first time, increasing from EUR 4.930 billion to EUR 5.040 billion. In terms of sales, revenues, productivity and operating profit, the figures were up once again and represent the best in the company's history so far. Such positive figures can be attributed to outstanding sales in the Red Bull markets in India (+55%), Japan (+32%), Turkey (+18%), Scandinavia (+16%), Russia (+13%) and Brazil (+12%), efficient cost management and ongoing brand investment.

 



holistic and sustainable marketing

HOLISTIC ANG SUSTAINABLE MARKETING

 



Red Bull is very aware of its environmental responsibility and is constantly striving for improvement.

Red Bull is going to great lengths to ensure its carbon footprint stays as small as possible across the entire lifecycle of the can.

The Red Bull Cans are light in weight and 100% recyclable:

 

Red Bull has made a conscious decision to use aluminium cans. Today Red Bull cans weigh 60% less than a decade ago, which saves precious raw material. Once they are collected they are fully recyclable over and over again without any loss in quality.

All cans are 100% recyclable: once they've been collected and reached the recycling facilities, not the tiniest bit of aluminium is lost. They can be melted down and reused an infinite number of times with absolutely no loss in quality. Using reclaimed aluminium comprises a 95% saving in energy compared to using new aluminium. 

Today, Red Bull cans weigh 60% less than only a decade ago. The reduction of the can's weight also makes a difference: the less aluminium goes into cans in the first place, the smaller the carbon footprint. 

Aluminium cans are oxygen-proof and neutral in taste, so the drink stays in fresh, top quality for a long time. This means it tastes as good at the source as at its destination. 

The beverage can is the world's most recycled drink packaging. Of course, this is only possible if the cans are collected and (re-)introduced into the recycling loop. If a can is left carelessly littering the landscape, naturally it can't fulfill its recycling potential. Unfortunately, littering is still a problem in some regions. Making sure that the can ends up in a waste or recycling bin helps keep the landscapes pristine, increases recycling rates and reduces energy consumption as well as the drain on natural resources.

 

Red Bull Saves resources through short distances :More than 7,000,000km of truck travel are saved each year thanks to Wall-to-Wall Production.

Apart from using 80% of our energy from renewable sources, Red Bull implemented what's called 'Wall-to-Wall' production at the production site. This means their cans are manufactured and filled on the same site - helping them save many miles of transport. Since they don't have to transport empty cans to the fill up plant, this reduces the footprint significantly.

Wall-to-Wall production saves more than 5,313 tons of CO₂ emissions each year.

 

 

Approximately two billion cans annually need no further transport until they're ready to leave the facilities for their final destination. This saves the equivalent emissions of more than 10,000 truck journeys of 700 kilometres each or more than 7 million kilometres per year. 

More than 5,313 tons of CO2 emissions are saved each year, thanks to Wall-to-Wall production. 

 

Red Bull's manufacturing base in central Europe has a lot of advantages:

Red Bull guarantees that the same premium product quality is enjoyed around the world, thanks to its state-of-the-art production process and the use of high quality ingredients, such as locally-sourced alpine water. 

New efficiency-enhancing technologies - which, in turn, help preserve natural resources - can be implemented immediately. 

The energy used for production comes from the region; around 80% is sourced from renewable energies - and Red Bull's working to improve this figure however possible. 

 

Six Can Coolers use only as much energy as a single 100 watt light bulb:

Red Bull Energy Drink tastes best when ice cold. That's why they developed  environmentally friendly Red Bull ECO-Coolers which use up to 45% less energy than conventional refrigerators.

Red Bull has installed 313,000 ECO Coolers instead of conventional coolers already. 

Thanks to their natural refrigerant, ECO-Coolers are considerably more environmentally friendly than conventional refrigerators and use up to 45% less energy. The use of ECO-Coolers and refrigerants is an effective way to avoid greenhouse gases, that's why Red Bull has made a commitment to distributing ECO-Coolers in the future, whenever local infrastructure allows.

As of 2012, there were 313,000 ECO-Coolers in use worldwide, representing 35% of Red Bull’s entire fleet of cooling equipment.

Analysing business markets

ANALYSING BUSINESS MARKETS

compared to customer markets, business markets generally have fewer and larger buyers, a closer customer supplier relation and more geographically concentrated buyers. Demand in the business market is derived from demand in the customer market and fluctuates with business cycle. Business marketers need to be aware of the role of the professional purchasers and their influencers, the need for multiple sales calls and the importance of direct purchasing.

 

Like the buying process for the customer, B2B also has its own buying decision making process.

It consists of eight stages as follows :

1. problem recognition
2. general need description
3. product specification
4. supplier search
5. proposal solicitation
6. supplier selection
7. order routine specification
8. performance review

 

Red Bull caters to both customer and business market.

 

Business to business (B2B) : Red bull supplies to food chains, Restaurants, hotels, clubs, bars, and juice shops. It is used mostly as a mixer, so one can always find it in the clubs and bars.

 

 

 





analysing consumer markets

ANALYSING BUSINESS MARKETS

 

 

Consumer behaviour is influenced by three factors: cultural(culture, sub-culture, and social class), social(reference groups, family, and social roles and statuses) and personal (age, stage in the life cycle, occupation, economic circumstances, lifecycle, occupation, economic circumstances, lifestyle, personality, and self-concept).  Research into these factors can provide clues to reach and serve consumers more effectively.

 

To understand how consumers actually make buying decisions, marketers must identify who makes and has input into buying decision, people can be initiators, influencers, dealers, buyers, or users. Different marketing campaign might targeted to each type of person.

 

 Consumer Purchase Decision Model for Red Bull Energy Drink

A. Problem Recognition

 Red Bull is mainly marketed to people who feel the need for an extra energy boost in their lives, e.g. athletes, but also stressed-out business people, students, etc.

B. Information Search

Since Red Bull is a relatively low involvement product, value is accessed primarily through an internal search.

C. Alternative Evaluation

 Evaluative criteria for Red Bull Energy Drink include:

o   Red Bull has the image of being a premium product , and will thus best satisfy the consumer’s need for additional energy when compared to the competition.

o   Recent controversy over the possible negative side effects of Red Bull may also impact the evaluation process .

o   The traits associated with the brand personality of Red Bull – speed, power, and recklessness - may also factor favourably into the evaluation process, given that they are similar to the traits of the potential consumer.

 

 

 



FELIX BAUMGARTNER

"Sometimes you have to go up really high to see how small you are."( Red Bull Stratos)

PROMOTIONS:-

 

Red bull has always been on top when it comes to promotions. It promotes heavily through sport events and competitions. Red Bull's integrated marketing communications mix has been so successful that the company has created an entirely new energy drink category and has become multimillion dollar brand among competition from beverage kings like Coca-Cola and Pepsi. In less than 20 year, Red Bull has become the energy drink market leader by skilfully connecting with the global youth.

 

Since its beginning Red Bull has used traditional advertising and no print ads, billboards, banner ads, or super bowl spots. while the company runs the minimal television commercials, the animated spots and tagline " Red Bull gives you wiings" are meant to amuse its young audience.

 

Red Bull marketing efforts strive to build its brand image of authenticity, originality and community in several ways. First, Red Bull targets opinion leaders by sampling its products, a lot. Free Red Bull energy drinks are available at sports competitions, in limos awards shows and exclusive after parties Free samples are passed out to college campuses and city streets, given to those who like they need a lift.

 

Red Bull aligns itself with wide variety of extreme sports, athletes, teams, events, and artists. From motor sports to mountain biking, snowboarding to surfing, dancing to extreme sailing, there is no limit to the craziness of red bull event or sponsorship. A few have become notorious originality and extreme sporting to the limit including annual Fulgtag . At Fulgtag contestants build homemade flying machine that must weigh less than 450 pounds, including pilot. Another annual event the red bull air race tests the limits of sanity.

Red Bull web site provides consumers with the information about how to find red bull events, videos, of  and interview with red bull sponsored athletes and clips of amazing feats that will be tested next.

 

 

 

Some of the major events that red bull sponsors are :-

 

 

 RED BULL THRE3STYLE WORLD FINLALS, 2014

 

 

 

 

 

 RED BULL DISTRICT RIDE

 

 

 

 

 

RED BULL KING OF THE ROCK

 

 

 

 

 

RED AIR RACE : FORT WORTH

 

 

 

 

 

UCI MTB WORLD CHAMPIONSHIPS 2014

 

 

 

 

BRITISH GRAND PRIX, 2014

 

 

 

 

 

 

 

 

 

 

 

 These are just a sand grain in the whole island of promotions done through various sport events .

This association with sport and athlete creates an image of exhilaration, energy and adrenal rush whenever they see a red bull can.

 

 

TV Commercials also makes an important part of the promotional mix:-

 

 

red bull print ads:

 

 

 

BUYING DECISION PROCESS

What a customer buys ultimately depends on the various factors. As there are number of substitutes available, deciding which brand to choose becomes a question that every marketer aims to answer.

Kotler gives five stages through which a customer reaches his final decision.

 

NEED RECOGNITION:

The buying process starts when the buyer recognizes a problem or need triggered by internal or external stimuli. marketers need to identify the circumstances that trigger a particular need by gathering information from a number of consumers. they can develop marketing strategies that spark consumer interest.

 

INFORMATION SEARCH :

After the need is recognised, customer starts to search information about the product which will have the potential to satisfy his/her need and has the potential of giving maximum value. He/She will start looking for reading material, talking to friends, searching online and visiting stores to learn about the products.

 

EVALUATION OF ALTERNATIVES :

Once he gathers all information about the product, he will list down the alternatives and evaluate them on the basis of maximum value proposition.

 

PURCHASE DECISION :

After evaluating the alternatives, he will select the one with the potential to satisfy all he needs better that the others. 

 

POST PURCHASE :

Buying process does not get over on purchasing the product. Marketers are always interested to know whether the product is giving value to the customer or not. If the customer is dissatisfied, then the chances of him never buying the same product again is very high, and this exactly what brands want to avoid. On the other hand if the customer likes the product, he will become the evangelist and tell others about the same.

 

RED BULL buying decision :

1. A need for energising body and surviving sleep will give rise to urge for a product satisfying these needs. The customer know why he wants an energy drink, but he still does not know which brand to buy.
2. He will begin his search by asking around and through various online sites.
3. He will list down names of the brand which promise he potential to provide value. Red Bull, Monster, Burn, Tzinga, Glucose-D, Chilly Willy, Cloud-9, Tang etc. from these he will start to narrow down the one alternative.
4. After thorough evaluation, he will decide to buy Red Bull because of the high perceived value attached with it.
5. If Red Bull satisfies him completely, he will buy it again and will also tell others about it.

 



BRANDING

 

The intense promotion of Red Bull has not only established the brand but also driven the growth of the market of energy drinks as a whole. Within its target group the brand awareness is significant. 
The brand equity has developed during a number of years and is very hard to copy. They have managed to build an authentic, credible and qualitative brand which consumers have been willing to pay a premium for. Their advertisement through extreme sport events and similar opportunities has through its unexpected and outstanding approach established the Red Bull brand awareness.  

 

A pioneer in energy drinks three decades ago, Red Bull is now the world sales leader.

Red Bull’s unique approach to brand building:

• Red Bull’s brand building is largely based on associating its brand with an amazingly wide range of people, teams and events.

• Red Bull believes in owning teams and events rather than being one of several sponsors.

• Because of this ownership model, they can and have turned this buzz machine into a profit centre.

• Their on-brand activities reflect two very different personalities that live side by side.



DISTRIBUTION

 

Most producers do not sell their goods directly to the final users: between them stands a set of intermediaries performing a variety of functions. These intermediaries constitute a marketing channel, which is also called distribution channel.

Some intermediaries such as wholesalers and retailers buy, take title to, and resell the merchandise, they are called merchants. Others, such s brokers, manufacturers' representatives, sales agents search for customer and may negotiate on the producer's behalf but do not take title to the good, they are called agents. Still others, such as transportation companies, independent houses, negotiate purchase and sales; they are called facilitators.

 

 

Channel Levels:

 

Level-1: It is the direct distribution channel, where in the producer/manufacturer sells the product directly to the end user without involving any intermediaries. A local pani-puri wala uses direct channel.

 

Level-2 : In this level, the producer reaches his customers through  retailers. So he will first deliver the goods to the retailer who will then sell it to the customer. 

 

Level-3 : There is an addition of one more intermediary, the wholesaler. Now the producer will reach his final consumers through wholesalers and retailers. Wholesaler takes order from the retailer and communicates the same to the producer. The dispatch of goods is then supplied to the retailer by the wholesaler, which then exchange hands with the final consumer. This enables wider reach for the producer.

 

Level-4 : The fourth channel has one more addition , the agent. In this channel wholesaler sell to small-scale wholesalers also called agents or jobbers, who in return sell to small retailers.

 

 

 

Red Bull follows a direct channel where they reach their customers ( end user as well as the restaurants, clubs, liquor store etc.) through the network of independent wholesalers.

Red Bull started by selling its products in small distribution outlets like bars and health clubs and concentrated their limited cash to promote its products in these outlets. After enough time had passed and a pull force from the consumers was generated, Red Bull had the power to persuade the retail distribution channel to put its products on the shelf. Red Bull thus used a pull method to get its products on the shelves whereas the industry was used to using a push method in order to achieve the same goal. This enabled Red Bull to catch the incumbents by surprise and gain market share in a market considered impossible to penetrate.

 

The retail channel is the contact-point of the product and the end-consumers. For energy drinks, retail outlets include bars and nigh clubs, supermarkets, convenience stores, health clubs, etc. Red Bull is available in all of these channels, and is considered the number one energy drink brand in all of them.

 

 Smart Transport: Red Bull Energy Drinks travel to their destination predominantly by train and ship. They only use trucks when it's absolutely necessary. Since their cans are compact in shape and light in weight, they are a more efficient transport packaging than PET or Glass Bottles.

 

Transportation to more than 165 countries around the world:-

As soon as the Red Bull cans have been filled, they're transported from Austria and Switzerland to more than 165 countries worldwide. The cans travel long distances, whenever possible by ship and rail. Transportation by truck is the last resort when there's no other means of delivery - it remains Red Bull's priority to allocate ever more transport to rail and shipping. 

Following is a newspaper article on the change in the channel by RED BULL.

"We know that trust forms the basis of any successful business relationship. We would never carelessly risk the trust you have shown us over the last few years, and it is therefore important for us to respond to the rumours which have been going round: Yes, we are changing our distribution model in Australia.

From 1st January 2009 Red Bull will handle its own distribution by selling direct and through a network of independent wholesalers. As part of this change we will also update the ordering process.

We will inform you about all details of this change during the coming weeks. We will be doing all we can to prevent supply bottlenecks and to make the changeover as smooth as possible for you, because this is the only way to ensure that Red Bull will remain one of Australia’s most popular energy drinks."

 

 

Product : RED BULL

PRODUCT MIX :- Product mix includes a product variety, quantity, design, features, brand name, packaging, sizes, services, warranties and returns.

Red Bull is characterized by two elements in its formula—caffeine and energy- enhancing ingredients—which the company claims to make it the perfect drink to energize the body before strenuous activities such as extreme sports and all-night clubbing. Red Bull contains 80 mg of caffeine, which is almost twice that of a can of Coca Cola or Pepsi, or an equivalent to a cup of filtered coffee. Energy-enhancing ingredients include Taurine (amino acid), Glucuronolactone (carbohydrate), and several other sugars and vitamins. The drink is available only in a 250mL can. In 2003, another product line “Red Bull Sugar Free”, was added to the portfolio5

 

RED BULLS'S PRODUCT MIX

a) Variety :: Red Bull's portfolio consists of 4 different products - Energy Drink, Sugar Free, Cola and Energy Shot. In the Singapore market, Red Bull currently only provides the Energy Drink and Sugar Free product.Apart from its red and royal blue can, it also has red, blue and silver edition.

Building on their momentum of the Red Bull Editions, the energy drink manufacturer will launch a new flavor exclusive to 7-Eleven locations in Canada and the U.S.  Aptly named the “Summer Edition”, the drink’s packaging is a sunny-yellow colored 12oz (355ml) can.  The tropical fruit-flavored drink adds to the Red Bull Editions line-up of the Red (cranberry), Blue (blueberry), and Silver (lime) flavor offerings.

Red Bull has launched a range of products, including Red Bull Cola in 2008 and Red Bull Energy Shots in 2009.

b) Design : Red Bull's design is very simple. It is a cylindrical shaped can, light in weight and very sturdy. A can is easy to transport because of its form and low weight. Thus, it can be said that the can is an ideal transport packaging, especially when compared to other forms of packaging: it saves about 40% in truck loads compared to glass bottles and about 30% compared to PET bottles

 

Since the cans are compact in shape and light in weight, they are a more efficient transport packaging than PET or Glass Bottles.

Glass Bottles: need 40% more space

PET Bottles: need 30% more space

Our Can: light and compact

 

 

c) Ingredients :

Taurine: – amino acid that supports the heart, brain, and nervous system. Reduce stress levels and improve althetic performances.

Inositol: have similar vitmain properties to treat various health issues such as diabetic nerve pain, high cholesterol, insomnia, cancer, depression,Alzheimer’s disease, and more…

Caffeine: About 76mg of caffine is in a can of Red Bull. Caffine can definitely increase your metabolism and attentiveness.

Guarana: A study in the journal Appetite showed that people showed less sign of fatigue and faster reaction time with this ingredient.

 

d) features: Red bull has a unique taste. it one whole can makes a person highly energetic and revitalises the body.

 

e) brand name : It is the top most brand in the energy drink category. the brand loyalty is very high seeing the no. of cans sold each year.

 

 

f) packaging :Packaging the finished mix is packaged into cans, bundled into cartons, and sent to distribution. This is a highly capital intensive operation that requires specialized high-speed lines. Red Bull is packaged at its Austrian Plant.  It has the red and blue packaging with its famous logo in centre. Red Bull has come up with various variant which differ in their packaging.

 

 



 

 



 

MARKETING MIX

Marketing Management is the process of planning and executing the conception, pricing, promotions and distribution of idea, goods and services to create exchanges that satisfy individual and organisational goal.

marketing mix consists of four elements : PRODUCT, PRICE, PLACE and PROMOTIONS.

 

 

 

 

 

 

 

 

 

Pricing

Pricing acts as a critical determinant in a consumer buying decision. To gain maximum market share a brand selects the best possible alternative.

RED BULL uses premium pricing . It is priced at INR 95. compared to other energy drinks and substitutes, it is priced the highest.

 

 

Red Bull and Monster are both priced 95/-. Other brands such as Burn, Tzinga, ChillyWilly are prices at 80/-, 40/- and 70/- respectively.

plc

Product Life cycle

 

 

Every product category passes through different stages of its market life. These stages are :-

• Introduction stage : It is that stage in a product's life where it is first introduced in a market. This stage requires a lot of promotion and awareness about its unique selling point to its target segment. At this stage, a company has to spend a lot on promotions and distribution. Also since the product is new in the market, the revenue generation is low.

When Red Bull was launched in the market, it was a new to world kind. To build up the brand loyalty and status it has now, it had to go through a lot of promotional activities.

Growth stage : At this stage, the product gets accepted by the customers and the revenue starts coming in. Competitors enter the market with full force seeing the potential in the product category. To outperform the competition, aggressive marketing strategies are drawn. Since sales start to rise, the cost comes down. Also new variants of the same product category are launched as an expansion strategy.

Red Bull's aggressive marketing through sports and competitions spread more brand awareness and build strong image for itself. the most popular marketing and promotional activities include Felix Baumgartner's fall from the space. Over 8 million people watched the jump live as he took the leap. They get directly involved and organize events themselves. The annual Flugtag, Cliff diving, Wakeboarding, Breakdancing, Music Academies and Studios, DJ events etc are some of them.

Maturity stage : This is where the product has experienced the growth and is at its peak. The market is stable with its loyalists. There is a stable flow of revenue and sales. The main focus here is to grip new customers. This stage lasts the longest.

Red bull is on its maturity stage, but the it still sees the steady rise in sales and attract more customer. They sold 5,200,000,000 cans in 2012 alone.  They continue to associate with 500 athletes all over the world and sponsor major sport events along with organising some mind-boggling competitions of its own. During these events red bull sells for a major discounts or gives them for free. people who haven't tried Red Bull yet, get to try their hands on it . This will not only increase the customer base but also maintain its brand association with energy and adrenalin rush .

In Mumbai, last year Red Bull had organised Soapbox race. They were selling cans for only Rs 40. My friend and her sister who hadn't tried Red Bull till then, gulped down four cans each. Yes they could not sleep the whole night, but Red Bull gained new customers.

Decline stage : When product starts struggling for sales or have no scope for growth at all, it deems to have entered the last stage of its life. This happens due to better substitutes in the market, customers' preference shifting to competitor's product, outdated technology etc. the best way to deal with the product in this stage is to either remove it from the market and come up with a total new product having completely new features which can tackle the customer problems in a better way than its competitors or to find buyers for its revitalization.

 

ILC- Industry life cycle : summation of all the product life cycles of the same category gives industry life cycle . It follows the same stages of life cycle.

 

 BLC- Brand life cycle : In case brands jumps across categories.

Competition is the presence of substitutes in the market . It brings in an interesting element in the marketing strategies for any product. Competitors can be any one :- be it the product with same features but different brand, enjoying more or less the similar brand loyalty as yours, or a product which is not a close substitute. For example for coke , apart from Pepsi and other cold beverage brands, even drinks like nimboo pani and sugar cane juice from a small outlet are its competition.

 

Red Bull being the first mover in the energy drinks category had an advantage of creating a strong brand for itself without any competitors around. Like any other new to the world product category, the success of Red Bull made other brands to come up and compete with the brand. To compete with these brands, Red Bull came up with many successful and defensive marketing strategies.

Energy Drinks have become very famous in the last decade. During the last ten years, there were established hundreds of them around the world. The energy drink market continues to grow even in light of the tough economy and increased health scrutiny. Soda sales have been declining steadily over the same period, while energy drink sales have been booming.

 

Red Bull's COMPETITORS :-

 

Red Bull continues to dominate “The Top Brands” chart with over 40% of the market share.

 

Since the main purpose of Red bull is to give energy, any product solving the same problem will be its competitor. In India, products such as Glucose-D, Blue, Rio, Tzinga are its direct competitors where as tea and coffee will be its indirect competitors.

 

 

 

Ohmae's 3C model :-

 

The 3c model provides competitive advantage over others.
Its three main elements include customer, competition and company/corporation.
 
a. Customer
For the long term success, customers are the main focus for any firm. The choice they make regarding the purchase directly affects the firm's marketing strategies. To retain the present customers and attract new ones, company makes a lot of efforts. Hence, customer is the centre of all the marketing strategies a company makes. Red Bull has a very strong customer/consumer base. It has managed to maintain its loyalists through some aggressive guerrilla marketing.
 
b. Competition
To stay above the competition, company has to differentiate its offering from that of its competitors operating in same market. Red Bull has come up with different variant in energy drink. Some of these variants didn't fare well due to the taste factor and some are doing well.

Presence of competitors gives customers a lot of choices. To make your product their first choice is what every company looks for.
 
c. Company
A company needs to carefully evaluate both the short term and long term strategies to beat competition and have a sustainable competitive advantage.
Apart from television and print & radio advertising Red Bull has a distinctive approach to marketing. It uses a progressive marketing strategy where in it aims to constantly evolve and develop the brand. This approach allows Red Bull to engage with consumers using new and exciting channels of communication. It also uses buzz-marketing strategy where it engages customers through sports events. It supports 500 world class athletes that compete in record breaking events across the globe. 
 
 
 

 

 

 

 

 

 

 

segmenting, targeting, and positioning

Segmenting, targeting and positioning

 

Segmentation involves dividing the whole market into small segments of  targets groups having similar traits and features.

Through clever market segmentation, where they focused on extreme sport and clubbing, they made it possible to price a premium for the product. Traditionally the soft drink market had not competed on price; a can of Coke was sold at the same price as a lesser known brand. Red bull managed to avoid this price boundary when defining the new energy drink market within the soft drink market. A newly defined niche market made it possible for price discrimination to capture the higher willingness to pay.

 

TARGETING

Targeting means the market that company aims to cater to.

Who does Red Bull target ?

The core target group includes males of 18-37 of age.

Aims to capture people who really need to keep awake. Now this can include college students, drivers and working group.

people who just drink it for fun. This will include party goers, people who love red bull with their drinks or for those who just drink it like that, on impulse. Yes, that includes me too.

 

Positioning

Red Bull has positioned itself as a premium product which is associated with sports and energy more than anything.  

what problems does it solve ?

Well it really does keep you awake when you can't afford to fall asleep. 

 

 

value to customers

Value has a total different connotation when it comes to marketing. The benefits that a consumer expects out of a product or a service, something which will satisfy the needs and wants, is called value. Since a customer never knows for the first time if the product will actually satisfy his/her needs, s/he always perceives them.

Red Bull in this case, through its advertisements and famous tagline, makes a customer perceive that it gives such a boost of energy that your body starts functioning with a double of what it was doing before. So because of these perceptions s/he will buy Red Bull over other energy drinks.

What a consumer gets out of the product, and what s/he pays to get it, is the total value s/he gets out of that product. Hence, the value a customer gets out of the Red Bull is the boost of energy against the payment of Rs 95 (that's how much a can of Red Bull costs).

customer perceived value is thus the difference between the benefits the customer gets and costs s/he incurs to get those benefits.

 

following is the chart representing determinants of the customer-perceived value.

 If the total customer benefits increases, value goes up and if the total customer cost increases, value goes down.

 

total customer benefits:-

1. product benefit : What makes a customer choose Red Bull over others is its distinguished taste, attractive and sleek packaging.
2. services benefit : A good service builds strong customer loyalty and base. Services include home delivery , solving customer complaints , maintenance services etc. Red Bull doesn't provide these kind of services to its customer. It has a strong and smart customer distribution network. The ease of availability makes for a positive customer experience.
3. personnel benefit :  Their is no direct personnel interaction with the consumer in case of Red Bull. So the question of getting benefit in terms of responsive and trained staff does not arise.
4. image benefit : Red Bull is a very strong brand. It has mastered the customer experience by becoming the face of extreme sports and associating its properties with "adventure" and pushing the limits. Red Bull is not so much an energy beverage as it is an aspirational brand. . The association factor is so strong that people buy it despite its premium price.

 

total customer cost :-

1. monetary cost : Red Bull is a premium brand . One can of Red Bull is priced at Rs 95. This does make it a non frequent purchase, at least where Indian customer is concerned. I, for example love it. But the last time I drank was a year back. Being a student doesn't give me this luxury.
2. time cost : The distribution network is the strongest. you will find it in every restaurant, club. bar, college canteens etc. This availability and presence reduces the cost.
3. energy cost : Again the easy availability saves customer's search efforts and energy.
4. psychological cost : Red Bull and all other major energy drinks brands are satisfactorily available in the cities. But someone living In a small town will have to really make an effort to get it. The search for the outlet, accessing that spot and ultimately getting it will really make him worked up. Now if he/she hasn't tried it before, taking all these efforts has a risk attached to it. What if you travel all the way to get one can of red bull and end up disliking it? There is psychological cost or risk attached to every product esp. the absolutely new one.