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Executive Summary

• Red Bull can be called as a pioneer in the energy drink category


worldwide. In Egypt too, Red Bull was the brand that created the energy drink
category.
• The brand came into existence in 1984.
• Red Bull Energy Drink is a functional beverage. Thanks to a unique combination
of high quality ingredients Red Bull Energy Drink vitalizes body and mind.
• Red Bull Energy Drink has been developed for people who want to have a clear
and focused mind, perform physically, are dynamic and performance-oriented
whilst also balancing this with a fun and active lifestyle.
• In short, Red Bull gives wings to people who want to be mentally and physically
active and have a zest for life

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History

• Originated in Thailand in the 1970’s it was first called “Krating Daeng”.

• The recipe was recreated by Dietrich Mateschitz in 1987 to better suite Austrian
tastes.

• Red Bull was launched in Germany in 1994 after meeting with huge success it
was launched globally in 1997.

• In 2003 the sugar-free Red Bull was introduced into the market.

• Red Bull was released in Egypt in 2006.

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Problem Statement

• Red Bull has recently faced Decrease in perceived value of the product due the
fact that Red Bull has recently faced much controversy in regards to the health
concerns associated with it. Due to the high levels of taurine and caffeine it has
been banned in countries such as; Denmark, Norway, France, Uruguay and
Iceland. Red bull loses out on women, teen agers and seniors as these groups
won’t pay for a drink that doesn’t include the ingredients they needs nor branded
for their life style .Perceived to be Above-average prices with lack of innovation-
Reliant on small product base- as the company only markets one branded
product. In addition RB core benefits don’t fit into new trends , there are new
trends to focus more on being natural, healthy ,new trends not only towards
boosting body and brain but also memory ,intelligence ,lowers stress and
depression accordingly RB seems not to be appealing to the next generation

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Situational Analysis

SWOT Analysis

Strengths

• Market leadership- Within the energy drinks market Red Bull is the
industry leader throughout the world. Marketing Efforts- a lot of promotions and
well targeted campaigns and sponsorship e.g. formula 1 helps to expand Red
bull brand and increase consumer brand awareness.
• Strong, fresh & fashionable brand identity.

Weaknesses

• Above-average prices.
• Lack of innovation-Reliant on small product base- The company only
markets one branded product
• Lack of patent on RB‘s recipe means anyone can copy it.
• Red bull loses out on women ,teen agers and seniors as these groups won’t pay
for a drink that doesn’t include the ingredients they needs nor branded for their
life style

• Decrease in perceived value of the product due the fact that Red Bull has
recently faced much controversy in regards to the health concerns associated
with it.
• RB core benefits don’t fit into new trends , there are new trends to focus more on
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being natural, healthy ,new trends not only towards boosting body and brain but
also memory ,intelligence ,lowers stress and depression accordingly RB seems
not to be appealing to the next generation

Opportunities

• Increase in the percentage of the target market within the Egyptian population
due to the high birth rates and the low death rates

• Marketing researches shows that Middle East and Africa shows the largest
growth of energy drinks consumption 255% 2007 – 2011 ,mainly by young
customers who may choose not to drink alcohols due to social and religious
reasons in café’s and music venues

• The new cultural shift towards weight loosing and having in shape bodies would
be an opportunity if RB RB introduced a low calorie product /Sugar free product

• The new cultural shift especially of guys towards body building and going to the
gyms

• The Egyptian consumers are price sensitive ,introducing a high quality product
compared to competitors with slightly lower prices would be very effective

• The Egyptian consumers are size sensitive ,introducing a larger pack relative to
competitors with lower prices would be a very effective

• Experiences create word of mouth which to a great extent positively affect my


acquaintances (relatives –friends –colleagues) buyer decisions
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• The increasing demand of the Egyptian customers to soft drinks, juices, etc…
Threats

• Health concerns- expected tougher rules from government on high


caffeine content.
• Consumer awareness of health and well being- people may start to
drink other alternatives as it is associated with healthier life style.
• Organic energy drinks might steal RB’s market share.
• Numerous substitutes
• Low capital requirements to enter the industry
• High level of intensive competition with energy drinks and other carbonated soft
drinks producers as well as juices Pepsi, Coke, Schweppes, Johanna juices
• Increasing health and hygiene awareness among Egyptians has greatly
increased sales of fruit juice products for health watchers as well as bottled water
and sparkling water
• Experiences create word of mouth which to a great extent negatively affect my
acquaintances (relatives –friends –colleagues) buyer decisions in case of initial
bad experiences using the products

• Easy entrance to the market due to easy access to distribution channels

• Low switching costs by buyers

Consumer behavior and Market analysis

Controversies

• Seen as addictive, drug-infused beverages with negative health implications .Red


Bull has recently faced much controversy in regards to the health concerns
associated with it. Due to the high levels of taurine and caffeine it has been
banned in countries such as; Denmark, Norway, France, Uruguay and Iceland. It
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has been proven that caffeine can be deadly when consumed in massive doses,
but the amount estimated to prove fatal is 10 grams, which would require 125
cans of the drink .A study conducted in 2007 by American researchers found that
although consumption of Red Bull could increase both blood pressure and heart
rates it was only dangerous for those people with heart disease. Most claims
about the dangers of Red Bull and other energy drinks have been proven to be
nothing more than urban myths.

Current customers are :

1. Young people are especially open to determined exhaustion and insufficient


energy.
2. More specifically male teenagers & people in their 20s, are also most likely to
believe in the authenticity of the energy drinks’.

• As a result, the majority of energy drinks are developed for and


advertised to this younger generation. Appeal to very specialized groups, such
as gamers, extreme sports enthusiasts, and the hip-hop crowd.
• The power of consumers is decreasing due to :

1. Low loyalty to RB
2. Low switching costs
3. Health issues
4. Low value perceived
5. Many substitutes
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6. Over average price


7. More price sensitivity due to economic situations

Competitive analysis

• Market Share of Red Bull in compared to AMP by PepsiCo, Burn by Coca cola
and Power Horse be Heineken is as follows :Red Bull controlled approximately
60% of the market in 2009 with Red Bull has managed to maintain their strong
market share through advertising and heavy event sponsorship.

• RB is facing High level of intensive competition with energy drinks and other
carbonated soft drinks producers as well as juices Pepsi, Coke, Schweppes,
Johanna juices .Coca Cola is thinking of adding energy to its regular
drinks .Numerous substitutes as coffee ,energy bars ,energy gums and even fruits
are available
Current Product analysis
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•In Egypt there only exists one size 250 ml can ,with no flavors
•Ingredients Include :
1. Caffeine

Caffeine is known for its stimulating effects on mental and physical functions such as
endurance, performance, reaction speed, alertness and concentration.

2. Taurine

Taurine is an amino acid, naturally occurring in the human body and contained in the
daily diet that has several physiological functions in the human body, inter alia is acting
as a detoxifying agent and has various neurological functions.

Glucuronolactone

Glucuronolactone is a body constituent and is also contained in the daily diet; it is a


derivative of sugar which for instance is present in various foodstuffs such as grain.

3. B-group vitamins

B-group vitamins are important for the energy metabolism and neurological functions;
they have a positive impact on mental and physical performance.

Sucrose & Glucose


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Sucrose and Glucose are different types of sugars that provide energy to body and
mind.
Alpine Spring Water

Naturally, water is a key ingredient of Red Bull. The water used for Red Bull is fresh
alpine water of best quality which comes from springs nearby the production sites in
Austria and Switzerland. This region, the Alps, is known as one of the world’s biggest
water reservoirs, where water as a resource is available in abundance and constantly
replenished. Hence, to ensure consistency of the upmost premium quality around the
world, Red Bull is produced in the Austrian and Swiss Alps

Target Audience

• New target groups should be targeted and approached with new values and
accordingly product versions

1. Young ambitious nerdy students who need brain energy ,they don’t have
purchasing power yet ,accordingly their mothers are targeted through personal
selling sampling ,the personal selling should illustrate the difference between
regular RB and Red Bull Brainergy ,distribution channels include the regular
ones in addition to school cafeterias ,design should be in different color for
differentiation
2. Young generation who always need differentiation with a slim making coffee
energy drink (Black color ) called Kryptonite(Buzz marketing –vending
machines –college cafeterias )
3. Career driven fashionable females looking for other benefits as vitamins ,slim
making and longer period energy ,the traditional RB has a male image
,accordingly a anew package with a softer image or a name flower with a new
berry flavor
4. Health watchers through launching sugar free RB and focusing on other
ingredients in the original RB as vitamins Page27
Accordingly our segments and targeted segments will be as follows:

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TYPE Targeted Segment

Geographical country Urban, suburban

Demographic Age 15-19,20-34,35-49

Gender Male , Female

Income Middle /High

Education Educated

Psychographic Social class Middle and High Class

Behavioral Occasions Regular occasion

Benefits Convenience ,Health, slim making ,brain energy

User Status Non-user, first time user

Usage rate medium user , heavy user

Loyalty status medium , strong

Readiness stage Un aware , aware ,interested , intended to buy

Attitude towards Positive, enthusiastic


product

Positioning Strategy
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We are seeking to be:


• Clear ,engaging ,unique and relevant to the target audience

• Delivering a positive emotion to the audience rather than just good through
providing the benefits needed by every single target audience

• Delivering high perceived value as the customer is ready to pay for the drink
which meet his changing needs through changes in our products

Positioning Statement

“A high perceived value products offering all benefits you need, health energy,
multiflavored, slim making ,brain energy bundle of products ,we clear ,engaging and
unique seeking more than sales ,we are seeking loyalty through convenience “

Objectives

A-Marketing objectives

Short-Term Objectives

• Aggressive Marketing Strategy can take advantage of the positive press on the
health benefits of new product versions and the existing vitamins of the original
RB to boost the sales of the product line. The company can use recent studies
on the new health and brain benefits as the basis of its press releases and
advertising campaigns.

• Introduce the new available product versions as Kryptonite, Brainergy ,Sugar


Free and She to the
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• Focusing on the wrong health claims that has been facing original RB
Long-Term Objectives:

• Customer Loyalty perceiving RB as a major choice at thirst ,with health


benefits ,differentiated flavors, reasonable prices

• RB must continue its innovative research and development strategy to come up


with new flavors and products using its extensive research facilities on product
improvement. The company , can use its resources and professional expertise to
come up with new flavors that will suit the continuous demand

B- IMC Objectives

• Delivering a new message to customers “We provide tasty ,healthy


,reasonably priced ,multi flavored drink with all required benefits ,energetic
,health ,brain energy and slim making “

• Delivering new Products’ Image

1. Healthy

2. Brain energy

3. Multi flavors(Regular /Berry/Coffee )

4. Slim making (Sugar Free)

5. Average priced

6. High Quality

7. Natural Ingredients
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C-Media Objectives

• To initiate strong awareness about the launch of new product versions To win
market shares over our top functional drinks competitors

• The promotional activities will convey the clear message that “We provide
tasty ,healthy ,reasonably priced ,multi flavored drink with all required benefits
,energetic ,health ,brain energy and slim making product not only to young males

• BR is a market leader with an European origin
Marketing Mix Strategies

The marketing mix strategy is made up of the 4ps

• Product

• Price

• Place

• Promotion

First Product Portfolio

1. Brainergy

• Young ambitious nerdy students who need brain energy ,they don’t have
purchasing power yet ,accordingly their mothers are targeted through personal
selling sampling ,the personal selling should illustrate the difference between
regular RB and Red Bull Brainergy ,distribution channels include the regular ones
in addition to school cafeterias ,design should be in different color for
differentiation

2. Kryptonite
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• Young generation who always need differentiation with a slim making coffee
energy drink (Black color ) called Kryptonite(Buzz marketing –vending machines
–college cafeterias )

3. RB Female

• Career driven fashionable females looking for other benefits as vitamins ,slim
making and longer period energy ,the traditional RB has a male image
,accordingly a anew package with a softer image or a name flower with a new
berry flavor

4. RB Sugar Free

• Health watchers through launching sugar free RB and focusing on other


ingredients in the original RB as vitamins

5. Regular RB

Product Info On package

• Flavor
• logo
• Slogan “ Charge up on Red Bull”
• Ingredients
• European origin product
• 250 ml Can
• Nutritional Details(High lighting vitamins ingredients)
• Sweetened or Diet
Second Pricing

Pricing
• In the second ‘P’ pricing we have observed that RB is continuously increasing its
prices as compared to its competitors mostly in other products which a number of
customers use rarely so some times he feel uncomfortable when he compares
the prices which were sometime before The different cost are used in managerial
analysis in managerial analysis like AVC, ATC, FC, VC, MC are all the prices
which are involved in production process of a product. S o we wi ll
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c o n cen tra te on the se fa cto rs ve ry mu ch .


• Th e re a re tw o ma in type s o f p ri ce se tti n g : P en e tra ti o n an d
s k i mmin g

• Penetration is used
It’s an approach in which we set firstly low and then as demand
increases we increase the price .We are following this strategy for
competition based pricing to achieve high customer loyalty after
encouraging customers use the original and new products

3rd Placement (Distribution)

Distribution Strategy

• Intensive distribution aims to provide saturation coverage of the market by


using all available outlets such as:

1. Super markets,
2. Gyms
3. Coffee Houses as Costa Coffee
4. Hyper markets
5. School and college cafeterias
6. Pharmacies

4th Promotion (Marketing )

• Promise & Support: All benefits you need from Body health to brain health
• Slogan: “Charge Up on Red Bull ”
• Theme: Red Bull For every One Core Benefit:- Fulfillment
• Functional Benefit:- Makes Energy
• Push VS Pull: push strategy is applied as benefits and values are announced
expecting demand in response
• Value Preposition: Best value for money.
• Marketing Strategy Used:- Penetration strategy supported by product
differentiation
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Media Strategy
• It’s a 1 year national campaign focusing on urban areas.
• We are launching in the fall as demand for soft and cold drinks decreases at fall
and it is the back to school season and then continues at a high intensity through
the busy holiday season.
• To maximize total impressions and utilize a broad range of channels, a pulse
approach will be used in scheduling media Pulse scheduling (promotional
presence year-round, but emphasized and intensified before and during
summer).
• . Reach is key – moderate frequency to avoid annoying overplay.
• Transit, outdoor, print, television media are used A profile match strategy will be
implemented.
• Approaching females through Women’s magazines such as and TV Female
oriented channels and the message should support independence
• We will also use Event marketing/sponsorship

• Reach/Frequency/Continuity

1. Reach :Brand awareness and image are necessary to succeed


2. Campaign must connect with the target to encourage trial purchase
and eventually brand loyalty
3. Frequency to ensure the consumer recognizes the product’s new image

• Market Coverage

1. Trendsetting areas - major urban markets


2. Reaching the trendsetting female is the main concern of the
campaign and the extent of coverage will rely entirely on the substantial budget

• Timing

1. Energy drink sales decline in the fall


2. campaign will focus heavily on promoting Red Bull from
September 1st to December 31st
3. prime time television ads will be prominent as well as the already
existing pulse flight of outdoor, transit and magazine advertising

Media Selection Rationales


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TV:
• Still a corner stone in any major media campaign and is the most viewed
channel for now a day’s concerning out target customers

• TV communicates with sight, sound and motion, which is needed for RB. It is
the only media that can reach 99% of the homes at once.

• RB has the budget to cover the high costs of this media.

• Television allows a demonstration of the advantages of Red Bull Good reach


and proven impact

• Female oriented TV programs and channels are approached

Radio:

• FM 100 in Cairo/Giza ,FM 97.6 IN Alexandria are mostly listened by target


groups considered music stations

Magazines:

• We should take advantage of the fact that magazines have become a very
specialized medium. There are many consumers' magazines in Egypt.

• Good color production is also an advantage that creates strong images which is
the purpose of RB

• EEN Magazine addresses young customers of both genders, Arabeati mainly


targets males. Flash and Origami addresses well educated relatively high income
customers

• Provides critical brand awareness as well as clear and precise demographic


selectivity

• Provides geographic flexibility across many urban markets


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Internet:
• Online advertising is similar to print advertising in that it offers a visual message.
It also has additional advantages; it can also use the audio and video
capabilities. As we are targeting our ads to young outgoing people, sound and
movement may attract more attention from viewers and has the unique feature of
being interactive. Interactive media would RB the opportunity to reach younger
of both genders ,to reach consumers who have developed a preference for
online communication. Initiating a campaign on face book is very important to
create buzz marketing and reach brand awareness we are targeting

Outdoor:

• On buses which is an efficient carrier reaching mass audience

• Billboards in specific geographical area would allow us get a good reach and
frequency. It is a low cost and flexible alternative. (Campus, malls and metro
stations)

Sales Promotional Mix

• Must encourage the first purchase of the product in store and make the new
target market aware of the product and its benefits
• Large displays integrated into the cooler shelves that hold the product
• Freestanding units at the point of purchase
• Bull hoof-print stickers placed on the floor leading from the door to the
freestanding rack or coolers Bull sound when you step on the last footprint

• Contests:
“Win another RB”, “Uncover a secret code underneath the bottle cap and win
sporting goods and electronics by logging on the website”, “Win a trip Paris
increasing consumer purchases and encourage consumer involvement with the
product
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• Samples:
Distributed in supermarkets, school/universities. Samples are a way to avoid product
resistance as It will encourage new product purchases and it represents low risk for
consumers since they get it for free. They have nothing to lose by trying it. Sales
people will try to explain the new benefits of new product versions

• Point-of-purchase:
In supermarkets to reach the parents of nerdy teen ager students seeking brain
energy, increasing product trial and provide a good product visibility.

• Allowances and discounts:

Case allowance as the goods approach will be used so it can encourage retailers to buy
more of the product to get a certain amount free .Example selling a pack of 5 cans with
an additional can free

• Cooperative advertising:
To encourage retailers to buy our product and to maintain our high level of
advertisement that consumers expect

Public Relations (Getting Involved)

• Effectively build the Red Bull brand in association with female culture
• Target market is among the world’s most intelligent and critical consumer
segments
• Red Bull brand must make substantial, visible contributions to causes
affecting the modern woman
• Red Bull will announce a donation of
L.E 1million to the Egyptian Breast Cancer Foundation the most publicized issue
affecting women worldwide
• Funds have been earmarked as part of the marketing budget
• We will focus the public announcement of the donation in our media tools
• Red Bull becomes a key national organizer and sponsor of the women’s breast
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marathon Run and will have a presence at the main event on September 30,
2007 where individuals dressed in Red Bull apparel will be handing out free
product samples as well as Red Bull branded merchandise

Personal Selling

• As previously stated new target customers include Young ambitious nerdy


students who need brain energy ,they don’t have purchasing power yet
,accordingly their mothers are targeted through personal selling sampling ,the
personal selling should illustrate the difference between regular RB and Red Bull
Brainergy ,distribution channels include the regular ones in addition to school
cafeterias ,design should be in different color for differentiation

Creative Plan

• To communicate that Red Bull can restore mental awareness and


energize a busy, independent person, provides brain energy

• Communicate that Red Bull is an effective, good tasting substitute for


other caffeinated beverages (coffee, tea, pop);Diet drinks (sugar free version ) and
it contains all natural ingredient

• As a mature brand RB is targeting new segments as females accordingly


ads should Show attractive women consuming Red Bull as a substitute for
coffee and other energy supplements Show attractive women consuming Red
Bull as a substitute for coffee and other energy supplements .There must be a
clear contrast between the average, dull woman and the successful, vibrant
Red Bull drinker .The target market will see how effectively Red Bull fits into
their busy lifestyle, highlighting the small can and the well-known Red Bull label
will also create brand awareness in association with the female market

• Humor will be used to stress the advantages of Red Bull over other
energy supplements and competitive brands

• The positive aspects of Red Bull will be presented in contrast to the


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negative aspects of the alternatives ,demonstrated visually as well as implied


• A new Slogan is used instead of The previous slogan “Red Bull gives
you wings” and will be replaced by: “Charge up on Red Bull” in order to
effectively presents Red Bull as a slightly different brand than in the past

Media Action Plan

Period of
Step Output Arguments
time

Personal 1st month to To make retailers aware of RB so they can order it in


1
selling 2nd month time

2nd month to
Radio is the most listened media by students and
2 Radio spots mid of 3rd
peoples on the go
month

Mid of 3rd The target market will then match an image with the
Magazines
3 month to 4th name of the product more easily. The recognition of RB
ads
month will be faster.

Mid of 3rd
Television To send a wide message over Egypt that RB is now
4 month to 4th
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spots available.
month
Making a special section for the RB in Grocery store
Point of 5th month to
5 will help the new potential buyers to find our product
purchase 6th month
faster and more easily.

Mid of 3rd
Putting adds in specific places where Generation Y
6 Outdoors month to 4th
hangs out will create an increased awareness of RB
month

We will use special events (sports and others) to


Public 6th month to promote RB and to get in touch with our potential
7
Relations 7th month market. It will allow RB to interact with our Generation
Y Consumers.

7th month to We will use contest to give a second "push" to the


8 Contest
8th month sales of the RB.

Use of TV ads and news to make the public aware of


9 Publicity All the time
the existence of RB.

Tactics

Marketing Department Chart

• Tactics to implement the previously discussed IMC Program is done through the
marketing department chart :

1. Market Research Manager: Collects data about customer needs, benefits


expected from the market products, current status of loyalty to competitors, Level
of satisfaction, the relationship between customers and the brand .

2. The brand Manager reviews all aspects of the IMC program including: targeting,
segmenting, positioning, pricing, promotion, packaging
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3. The distribution manager works with retailers ,ensures transportation on time
considering lead time ,ensures favourable shelf spaces

4. The advertising Manager reviews and implements the media selection and the
action plan part of the IMC program, including advertising schedules ,contests
,promotions in areas where demand is low

5. The sales Manager works with retailers, large communities as clubs, colleges,
schools, negotiate quantity discounts, price reductions .

6. The Marketing director receive reports from all the previous managers ,puts the
broad strategies ,evaluates the implementation and the success of the overall
IMC program ,make strategic pricing ,promotion, product strategies

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MARKETING DEPARTMENT

DIRECTOR MARKETING

SALES MANAGER

ADVERTISING MANAGER

DISTRIBUTION MANAGER

BRAND MANAGER

MARKET RESEARCH MANAGER

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Budget

• The estimated cost that will incurred while marketing of RB new Products
relaunched ranges around 14.2 Millions as estimated as follows :

The details are as follows:

Media Explanation of estimated cost that will incurred for 1 year

T.V Adds on TV with different celebrities for one year will cost
approx. 7 Millions

NEWS PAPER Add in leading news papers will cost approx. 2 million

RADIO For 30 second ad for 2 months will cost approx. 400,000

MAGAZINE For 1 month advertising will cost approx. 200,000

BILL BOARDS For bill boards on main locations acquiring will cost approx. 1.5
million

FREE SAMPLING Free sampling to main retailers will cost approx. 300,000
TO RETAILORS

CONTESTS After 6 month of operation if there will be a need to give a 2nd


push to our sales and a contest has to be arranged that will
approx. cost about 5million
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Evaluation

• In the first month of operation Management will over view that whether the
Marketing goals and objectives are going in right direction or not if not than what
went wrong and what are differences between actual and expected performance.
This may require changing the action programs or even changing the goals.

• Involves checking ongoing performance against the annual plan and taking
corrective action when necessary. It will ensure us that the com-any achieves the
sales, profits and other goals set out in annual plan. It also involves determining
the profitability of product.

• It involves looking at whether the company's basic strategies are well matched to
its opportunities. Marketing strategies and programs can quickly become out-
dated and there will be need of periodically reassess its overall approach to the
market-place. A major tool is marketing audit.

Marketing Audit

• There will be a need of monthly marketing audit regarding current activities and
sales volume. It will cover all the marketing areas of business. It will include audit
of:

1. Marketing Environment
2. Marketing Strategy
3. Marketing Organization
4. Marketing Systems
5. Marketing Mix
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6. Marketing productivity
7. Profitability
8. Measuring and Managing return on Marketing Investments

9. After six months of operation, we have to measure that whether our


investment is being spent well or not. Are we getting targeted Return on
Investment or not

10. The net return from a marketing investment divided by the costs of the
marketing investment. It measures the profits generated by investments in
marketing activities.

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