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.