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Red Bull's Marketing Mix

Red Bull's Marketing Mix

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Published by: meged12 on Sep 07, 2009
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Red Bull1. The Product/ Competitors/Industry1.1 ProductRed Bull is a sweet, caffeinated drink aimed to give consumers the high energy kick.Available only in rather expensive 250ml cans, 350ml bottles, with 4 packs and only two‘flavours’ (original or sugar-free). It contains caffeine, taurine, glucuronolactone, and Bvitamins. Founded in 1984 by Austrian businessman Dietrich Mateschitz, Red Bull has become the worlds leading energy drink, a staple in many young, and active people’s lives.1.2CompetitorsBig global companies such as Coca Cola and Pepsi have introduced their own energy drink versions to their product base. Mother (by Coca Cola), Amp (Pepsi), V, Battery, 180, RedEyeand Bennu being just some in the ever-growing energy drink market.Competition also presents itself in original sports drinks, such as Gatorade (Pepsi) andPowerade(Coca Cola). Furthermore, premixed alcoholic drinks like the Smirnoff range form part of the competition.1.3IndustryRed Bull has becoming hugely successful and operates within the global soft drink marketplace. Within the soft drink industry its niche is the ‘energy drink’ market, of whichMateschitz was largely responsible for creating. Red Bull currently is the leading energy drink across the entire globe. It holds 70% of the market worldwide (Gschwandtner, 2004). Oncethe drink was passed by health ministries, Red Bull entered the Austrian market, soonthereafter then moved into Germany, United Kingdom and the USA by 1997.2.Needs, Wants and Demands satisfied by Red Bull2.1NeedsThere are three basic human needs that Red Bull satisfies, physical, social and individualneeds. ‘Human needs are states of felt deprivation… marketers do not invent these needs; theyare a basic part of human makeup…People in industrial societies might try to find or developobjects that will satisfy their needs.’ (Kotler et al. 2006)
 
Firstly, a physical need is when tired drivers are feeling the need to fall asleep due to fatigue;and this can compromise their safety. A driver needs to stay awake and alert when driving toavert danger and this need is satisfied by Red Bull. In fact it has become a ‘hot item amongsttired drivers stopping at gas stations.’ (Gscwandtner 2004).A social need for example is where ‘humans have a social need for belonging’ (Kotler. 2004)and this need is satisfied by belonging to a group. A group could be people with the sameinterests eg extreme sports. Red Bull associates itself with energy, danger and youth culture,and markets its product through its sponsorship of youth culture and extreme sports events.Consumers who drink Red Bull are ‘automatically’ introduced to the Red Bull culture, andtheir social need is then satisfied.The final need is individual. An individual may have a need for concentration or self-expression and this could be inhibited by fatigue or weariness. Red Bull realised that it couldsatisfy this need by ‘energising and stimulating the mind’ (Red Bull 2008). For example, if they are fatigued, a university student may experience an inability to retain knowledge andtherefore show an inability to express themselves.2.2WantsA want can be defined as ‘the form taken by human needs as they are shaped by culture andindividual personality’ (Kotler et al. 2006)Extreme athletes want to accelerate their performance and to revive themselves quickly after each event and this want is satisfied by Red Bull. Red Bull promotes its consumption ‘toincrease physical endurance, improve concentration and reaction speed, improve vigilanceand stimulate metabolism.’ (Red Bull, 2008).2.3Demands‘Demands are human wants backed up by buying power and given their resources, peopledemand products with benefits that add up to the most satisfaction.’ (Kotler et al. 2006).Another way of putting it is that ‘demand for a product…is both a willingness and an abilityto pay for the product that will satisfy a particular want’. (McColl et al. 1998)Red Bull is arguably one of the most expensive soft drinks on the market, a can of Cokegenerally costs around $2.50 for 375ml whereas a smaller 250ml can of Red Bull is sold at$3.75. Consumers are willing to pay the higher price for Red Bull because it satisfies their 
 
needs and wants, it also delivers on its promise to ‘Vitalize Body and Mind. So regardless of size of the can or price, consumers are willing to pay for Red Bull’s product.3.The Marketing Management PhilosophyIn our opinion, Red Bull fits into three of the marketing management philosophies.When it first entered the market it could be viewed in the selling concept phase. Founder Dietrich Mateschitz even stated. “If we don’t create the market, it doesn’t exist.”(Gschwandtner 2004). Mateschitz used buzz marketing to promote the product by givingconsumers free samples.Once Red Bull established itself it then moved into the product concept philosophy. Itseems that many consumers buy the Red Bull product wholly based on what benefits it cangive them, i.e. increased wellbeing and energy. Red Bull cans are branded with the tagline‘Vitalises body and mind’ and it is well known by consumers that drinking Red Bull canalleviate tiredness.The final philosophy the product fits into is the marketing concept. ‘This is where anorganisation delivers target market satisfactions more effectively and efficiently thancompetitors.’ (Kotler et al. 2006). This can be done by researching its target audience and thecompany has shown this by the fact that ‘Red Bull has a 70 to 90 percent market share in over 100 countries worldwide’. (Gschwandtner 2004). This clearly indicates that Red Bull’scurrent marketing strategy is working well and they are ahead of their competitors in themarket place.4. The Marketing Challenges4.1CompetitionThis is probably one of the biggest threats to Red Bull to date. Major competitors suchas Coca Cola and Pepsi are continually seeking to regain market share off Red Bull. CocaCola and Pepsi have launched their own energy drink versions to compete directly with RedBull’s product, yet with no real impact on the market, examples of this are Think ‘V’ EnergyDrink and Coke’s version ‘Mother’.4.2Negative PublicityVarious media worldwide have reported that Red Bull is harmful for one’s health. TheFrench Health Authority has gone one step further by not approving the Red Bull product for 

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