A Marketing Plan

Submitted by:

Maria Khan, Hareem Sattar, Ozair Asif, Muhammad Ammar,

Hamza Saud, Ameena Rahman

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Acknowlegment:

First of all thanks to Al-mighty Allah for enabling us to complete this project. We owe a bigger
debt of gratitude than we can ever express to our Professor, Ms Rabeel Khan, who has provided
us with extensive personal and professional guidance. Thank you for your constant support and
encouragement.

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Table of Contents

Executive Summary 3

Project Part 1: Company/Product Description 4 -5

Project Part 1: Situation Analysis 6- 7

Project Part 1: Consumer Behavior Research 8-11

Project Part 1: Critical Issues 12

Project Part 1: Marketing Goals and objectives 13

Project Part 2: Marketing Strategies 14-21

Project Part 2: Marketing Mix for Value Creation 22-29

Project Part 2: Implementation Schedule and financials 30-32

Project Part 2: Controls and Contingency Plans 33-34

Conclusion 34-35

References 35

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List of Appendices:

Appendix 1-Survey Results

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Executive Summary:

The objective of this paper is to research Red Bull, analyze the entire company and identify the
major problems the organization is facing. Red Bull is one of the market leaders in the energy
drink industry which continues to expand its product line, sponsorships, and events to gain
sustainable competitive advantage over Sting. Our research began with analyzing the industry
and then diving deeper into how Red Bull has positioned itself in the market relative to its
competitors. A survey comprising of 70 participants was conducted in order to get views from
the customers as to how they perceive Red Bull, factors that urge customers to make purchases
and those which inhibit them to do so. From the insights shared by these individuals during
interviews, surveys and random observations, we came to know that customers perceive Red
Bull to be priced really high as compared to its competitors, which is a major area of concern.
Individuals agreed that although Red Bull is more effective than other energy drinks but because
the price is so high, (almost thrice that of Sting) they prefer Sting over Red Bull. However, they
were also of the view that if the price is reduced they are willing to purchase it more.

In the light of survey results, we suggested to target individuals falling in the age group 18-35
belonging to Middle Class because the size of this segment is large enough to be profitable. The
problem which we identified for Red Bull was very high prices. Whichever country, whatever its
income levels, Red Bull has always followed a premium pricing strategy all around. It’s
understandable that in a country where people spend money economically, customers would shy
away from its high price, as was confirmed through our survey result. People opted for Sting not
for its better quality or taste but for its much lower price levels.

We do not believe that lowering the price of the drink is the best way to go, although it may
appear as the most obvious solution because lowering the prices might indicate desperate
measures or falling quality, neither of which is good for the brand image. An alternative way to
go about this problem is to offer another can size for Red Bull. It will offer a 175ml can named
‘Red Bull Shot’ priced at Rs.150; which is likely to attract more customers, as it’s still assuring
that energy boost through a top quality brand, but at a much affordable price.

Advertising campaigns featuring Samina Baig and Muhammad Amir will run on TVs. Both are a
great match for Red Bull’s positioning. Red Bull can take “Gives you wings” to the next level by
sponsoring adventurous initiatives like Rock climbing with Samina Baig, etc. Since Red bull’s
majority target audience is colleges & university students plus employees; who are available and
free to try out new things in winter and summer breaks from institutions. Hence major
promotions should be focused in the vacation season with minor re-iterations throughout the
year. When analyzed this plan from a financial view point, calculations were made and thus we
can that even after reducing the price, Red Bull will still earn a huge profit. The plan will be
monitored throughout the implementation phase and even after the implementation to mitigate
risks.

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Project Part 1
I. Company/Product/Service Description

Red Bull is a leading brand for Energy drink category, established in 1982 by an Austrian named
Dietrich Mateschitz under Red Bull Gmbh. Red Bull produces the world’s most selling energy
drink with more than a billion cans being sold every year in nearly 100 countries. Red Bull is
sold in a tall and slim blue-silver can. The Red Bull company slogan is "Red Bull gives you
wings”. Rather than following a traditional approach to mass marketing, Red Bull has generated
awareness and created a 'brand myth' through proprietary extreme sport event series such as Red
Bull Cliff Diving World Series, Red Bull Air Race, Red Bull Crashed Ice and stand-out stunts
such as the Stratus space diving project.

With huge success around the globe, Red Bull was launched in Pakistan in 2001.Red Bull
currently operates in Karachi, Lahore and Islamabad with Asian head office located in United
Arab Emirates. Though the idea of consuming energy drinks has not been adopted completely,
Red Bull enjoys a huge market share and resultantly good profits. With our culture that so loves
its tea and its intense dependence on it to get through the day, still there is some room for
something different. Although, the love for chai still remains strong, trends are changing as
newer generations opt lesser for the traditional hot beverage, and more for coffee and soft drinks.
Red Bull offers an alternative, with its refreshing bubblegum flavor, and its physical revitalizaion
properties. It’s aimed at students cramming for exams, drivers on long routes and active
sportsmen, promising mental and physical boosts. The need for energy boosters already exists in
the Pakistani culture, so a market need for energy drinks like Red Bull can be established.

Presently, Red Bull in Pakistan faces its biggest competition from Pepsi’s Sting. Monster and
Speed are also market players but have a very limited number of customers. Since the market for
energy drinks in Pakistan is still in its growth phase, there is a considerable chance that other
international brands might use this opportunity and launch themselves here. If Red Bull and
Sting are analyzed in comparison, both are backed by a very powerful international image, Red
Bull through its own brand recognition for the world’s most popular energy drink, and Sting
through being produced by the renowned name of Pepsi. Despite Red Bull entering the energy
drink market in Pakistan first and securing a substantial market share, it still comes second to
Sting for a majority of the market and price might be the single most contributing factor for this
competition.

Energy drinks in general are sometimes viewed negatively. They are thought of as an unnatural
and unhealthy way to get energy and some views go as far as to claim they do serious damage to
the human body. Red Bull has always dealt with such claims with scientific facts and complete
transparency regarding the ingredients that are used. For its Pakistani audience, where people
stick to their beliefs and seldom research on the facts, Red Bull must force the information onto
them. Through the endorsement of famous fitness trainers and health nutritionists, Red Bull can

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pass on reassurance to its audience about the safety of consuming the energy drink, and can solve
at least one of the major problems it faces in Pakistan.

Target Market :

Red bull’s current target market comprises of young people who are sporty, funky, and
adventurous and travelers. The individuals belonging to this segment are professionals, students,
athletes and employed individuals. Red Bull targets both males and females falling in age groups
18-26 and 26-40, enjoying a higher income. Red Bull target three main cities of Pakistan namely
Islamabad, Karachi and Lahore.

Product:

Red bull is aims to provide energy in times of increased mental and physical strain. The need for
energy revitalization is always there in Pakistan and which is popularly being fulfilled with tea or
coffee. Red bull is perceived as a strongest brand when it comes to revitalizing energy. The
Brand itself claims that this is because of the unique ingredients it uses.

Price:

Whichever country, whatever its income levels, Red Bull has always followed a premium pricing
strategy all around. It’ll be most likely to be the highest priced energy drink on any shelf. It’s sort
of part of Red Bull’s identity, and it’s not come to existence out of the blue. Massive brand
awareness, unquestionable quality and it’s creative, widely acclaimed marketing campaigns, all
come together to justify the high price Red Bull charges for its products.

Place:

Red Bull uses dual distribution channels. Dual distribution refers to a combination of direct and
indirect distribution both. The product is directly distributed at Red Bull stalls setup at various
sports, adventure and food festivals. Here the customer directly purchases the product from
company representatives present at the stall. At the same time Red Bull is indirectly distributed
with the help of intermediaries. The types of intermediaries Red Bull works with include
wholesalers, distributors and retailers.

Promotion:

Red bull has opted below the line marketing strategy when it comes to promotion. Red Bull has
generated awareness and created a 'brand myth' through proprietary extreme sport event series
such as Red Bull Cliff Diving World Series, Red Bull Air Race, Red Bull Crashed Ice and stand-
out stunts such as the Stratus space diving project.

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II. Situation Analysis

SWOT Analysis:

Strength Weaknesses

Energy drink pioneers in Pakistan. Focused only on single market.

Strong brand image and brand equity. High price compared to the competitors

Effective marketing strategies Weak distribution network

Strong financial position Non diversified product portfolio

Fashion brand Ignored ATL marketing strategies

Opportunities Threats

Focus females Growing health concerns

Diversification of product portfolio Competitors including Sting and Monster

Official sponsor for sports Laws and regulations

Open manufacturing facilities in developing Prefer substitutes for energy.

countries (Out sourcing)

Competitor Analysis:

Although Red maintains a dominant position in the market, it is no longer the only player. Red
Bull has been challenged by Sting and Monster. Sting is the major competitor of Red Bull. Sting
has always followed Red Bull in every step. It has a strong distribution network which is why it
is readily available almost anywhere and everywhere. Price of Sting is a also very much lower
than that of Red Bull thus customers get attracted to its lower pricing strategy.
While Red Bull is available in aluminum cans, sting is offered in plastic bottles. Sting is also
available in different quantities and in different sizes.

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PESTEL Analysis:

1. Political and Legal:

Because companies exist in an environment, they are affected by any changes in their
external environment. Red bull has been banned to sell within schools, colleges and
universities. Because majority of its target market goes to university, this restriction has
directly affected the sales of Red Bull. Secondly, Red Bull also needs to get approval
from each country to be sold. Quantity of caffeine used in Red Bull is checked to ensure
that it is used in right proportion. Because Red Bull is manufactured in Austria, it has to
pay import tariffs thus contributing to higher prices of Red Bull.

2. Economic Analysis:
Because Red Bull is targeting individuals in high income bracket, these individuals are
not very much affected by the economic periods since the company is practicing Niche
Marketing. The tax rates on Red Bull are also very high. It has to pay a huge amount of
its profits in taxes.

3. Social Analysis:
Red Bull has a very stylish image since it has been targeted towards individuals with high
income level. The existing customer segment comprises of health conscious individuals
who are very much concerned about their health. Energy drinks in general are sometimes
viewed negatively. They are thought of as an unnatural and unhealthy way to get energy
and some views go as far as to claim they do serious damage to the human body. Red
Bull has always dealt with such claims with scientific facts and complete transparency
regarding the ingredients that are used.

4. Technological Analysis:
The technology, Red Bull has been using is barely changed. The packaging of Red Bull
has not even changed a bit. Same goes for its manufacturing processes. But Red Bull has
reformulated to counteract claims regarding the ingredients used in the energy drink.

5. Environmental Analysis:
Keeping in view environmental changes and abiding by the law, Red Bull has introduced
slimmer aluminum cans which can be easily disposed off as compared to the plastic
bottles. Red Bull is also practicing Corporate Social Responsibility by giving back to
community. Recently Red Bull has donated a huge chunk of its profits to go green
initiative.

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Porters Five Forces Analysis :
Porters’s five forces framework is a tool for analyzing competition of s business. It determines
the competitive intensity and the attractiveness of an industry in terms of profitability.

1. Threats of new Entrants:

Threat of new entrants is low because the Cost of setting up plant for an Energy drink is
huge. Secondly complying with governmental rules and regulations is very much
difficult. Different standards must be met in order to get the approval. Building a brand
image is not an easy task and it takes years to create a powerful brand image.

2. Bargaining power of suppliers:

Because the energy drink does not require any specific raw materials, which may be
available with specific suppliers or there is nothing as shortage of materials so the
bargaining power of suppliers is low. Suppliers are known because of Red Bull and not
the other way around.

3. Bargaining Power of buyers:

Customers have a lot of options to choose from and because the market is highly
competitive, the bargaining power of buyers is high. Increasingly there are health
concerns surrounding the product. Energy drinks are being negatively viewed as having
side effects. Negative publicity of product further strengthens the bargaining power of
buyers.

4. Competitive Rivalry:
As of now, the number of rivals is very less. Currently there are two main rivals of Red
Bull i.e Sting and Monster. There are not many options in energy drink market..So for the
being time, competitive rivalry is low. If businesses see Red bull, Sting etc flourishing,
they will enter the market and competitive rivalry will shift from low to high.

5. Threat of Substitutes:
Tea, coffee and other healthy drinks are potential substitutes of energy drinks. Cheap and
less harmful products are available. Though there is not actual replacement or perfect
substitutes for Red Bull therefore the threat of substitutes is medium.

III. Consumer Behavior Research

Sample:

The sample size is 70. The sample is chosen on using stratified sampling. Individuals belonging
to age groups 18-35 were the participants.

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1. Individual Interviews& Focus groups:
These individuals also belonged to age groups 18-35 some of them were students while
others were job holders/employed. We included job holders to determine if the opinions
of employed individuals differ from the students or not. We also wanted to determine if
employed individual being mature enough as compared to students, take into account the
health concerns or not? Results of survey indicated that employed or unemployed people
are more concerned about prices then health.

2. Data Collection:
Primary data is collected to know the perceptions of customers regarding Red Bull,
critical issues faced, effect on market share, customer satisfaction & competition, to
define Marketing goals and SMART objectives for Red Bull.

1. Method of Data Collection

A questionnaire consisting of 20 questions was used to collect data. The questions were
closed ended so that the person can easily tick the response of their choice. Interviews
were conducted from 10 individuals and 2 focus groups in order to get in depth insights.
Apart from the interviews 5 observations were done in order to understand customer
psychology.

2. 10 in depth interviews:
Transcription of Individuals interviews and survey resulted are available under
Appendix 1.

3. Focus Groups:
Focus Group Interview 1: This group included young 20-35 who are students .Focus
group 1 believed that Red Bull is not really working on promotion and that it should work
on it. Focus group 1 was of the opinion that launching lower priced energy drink would
increase their sales. Extending the product line horizontally would help in increasing the
variety in their product lines to keep customers loyal to the brand and prevent switching
to competitors. By actively managing their product lines in addition to other marketing-
mix instruments such as price and promotions, Red Bull would be able to face
competitive pressures. For example, by offering broader product lines, Red Bull can
increase their market share and profitability as well as soften price competition and
achieve higher margins. This is what we deduced after conducting interview from group
1.

Focus Group Interview 2:

This group includes young adults who are employed. The perceptions and views of
participants regarding red bull and sting were very much similar. Group 2 believed that

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 the Sting is performing better than Red Bull. Price matters a lot when it comes to making
choice between Sting and Red Bull. There are also health concerns. Focus group 2 also
believed that Red Bull is not really working on promotion and that it should work on it.
Both focus group agreed that launching lower priced energy drink would increase their
sales.

4. Observations:
a. We observed at the retail stores that the Juices and Pepsi/Coke were purchased more as
compared to energy drinks. The ratio of energy drinks consumption was less and when
they had to purchase they would choose the lower price drink.

b. Coffee/Chai is consumed during increased overload hours for employed individuals

who do not consume energy drinks.

c. Students consumed energy drinks towards the end of the day.

d. If individuals were to participate in sports competition they consume energy drinks

before the match starts.

e. Individuals preferred drinking Coffee when they had to stay late night.

Product:
Red bull is perceived as the strongest brand when it comes to revitalizing energy. The
Brand itself claims that this is because of the unique ingredients it uses. As per our survey
results and interviews when it comes to taste, Red Bull lags behind other energy drinks
such as Sting. Customers believe taste of Sting is better than Red Bull and that they have
a variety of flavors to choose from. In contrast, Red Bull is just offering Sugar Free Red
Bull.
During focus group interviews, participants were also encouraged to discuss their views
regarding packaging. Participants pointed out that packaging of Sting is better than Red
Bull because it offers the drink in different quantities. They also pointed out that Sting is
easier to open. Commenting on the attractive packaging one of the participants said “The
packaging of Red Bull is not very appealing and its very dull.”
As there is an unmet demand for flavors and because different customers have different
tastes and preferences, Red bull should introduce some flavors just the way Sting did.
Since the packaging is also not very attractive, the design team should focus its attention
towards its packaging. Demand for a better packaging by customers is legitimate because
Red Bull has not made even minor changes in its packaging over last several years.

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: Price:

Price plays a major role in purchase of almost everything. Since the majority of Pakistani
market is price sensitive, it directly affects the purchase decision of customers. Majority
of the customers including the employed individuals were of the view that the price of
Red Bull is very high as compared to its competitors. Participants agreed that though Red
Bull boosts energy but they were also of the view that:” Why should we purchase Red
Bull, if we can purchase almost 3 Stings in its price? “From the responses of participants,
we felt that customers are not very much concerned about the health issues and negativity
publicity of Energy drinks rather they are more concerned about the prices. This means
majority of customers will switch the brand based on price.
Because Red Bull’s strategy is niche marketing, targeting youth who are capable of
paying high prices, it does not want to reduce the price since it is earning profits from
smaller but profitable segment. We believe Red Bull should launch an energy drink with
lower price so that it can easily compete with Sting whose market is increasing.
Respondents were also of the view that Red Bull should introduce lower priced energy
drink since they said that the only factor that inhibits their purchase of Red Bull is Price.

Place:
Red bull is distributed in almost all big retail stores, cafes, gyms and restaurants. Red
Bull assigns sales person the responsibility for distribution in their respective area. If we
compare the placement of Red Bull with that of Sting, the later outperformed it.
Participants were of the view that Sting is more easily available as compared to Red Bull.
In order to enjoy profits, we suggest Red Bull should launch a lowered price drink which
is readily available, in this way Red Bull increase their market share and profitability as
well as soften price competition and achieve higher margins.

Promotion:
Unlike its competitors Red Bull has not done much promotion through TV, radio,
billboards, banner ads and hoardings. Instead Red Bull has adapted the practice of
marketing through Brand Ambassadors and organizing events at universities since the
target market of Red Bull is youth who can be easily spotted at University events, Sports
events etc. Sting is also following Red Bull but it is also focusing on traditional sources
of promotion. After conducting a focus group interview we realized that people from
rural areas haven’t even heard of Red Bull but they were aware of what sting is. One of
the individuals in our focus group belongs to Dargai, a small village located in KPK
Pakistan. He said clearly, “I haven’t even heard of Red Bull may be because I belong to a
rural area while my fellow colleagues are well aware of it.” Though Red Bull is targeting
the people belonging/living in cities but because the product is in market, people should
be aware of what the product is, no matter if they purchase it or not.

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 Red Bull should focus on its promotional strategies to attract the potential customers.
Majority of the respondents felt that Red Bull is not putting much effort in advertising as
it is not bringing news TVCs or any innovation/change at its events.

General Marketing Strategy:

We believe Red Bull should launch an energy drink with lower price so that it can easily
compete with Sting whose market is increasing. Respondents were also of the view that
Red Bull should introduce lower priced energy drink since they said that the major factor
that inhibits their purchase of Red Bull is Price. Launching lower priced energy drink
would increase the market share and profitability as well as soften price competition and
achieve higher margins. This new product should be readily available and promoted
using the traditional promotional strategies.

IV. Critical Issues

Health Concerns:

There is a general view surrounding energy drinks, where not only are they considered an
unnatural method to get energy boosts, but are also thought of doing serious damage to the in
serious harm to bones, muscles and the brain. It is also thought that consuming too much of such
energy drinks can cause your body to become too dependent on them for energy.

Too Pricey:

Our survey results suggested that the biggest factor contributing to low sales for Red Bull in
Pakistan was its high price as compared to its competitors. When Red Bull first entered the
market in Pakistan, it was priced at Rs.70, however due to ever increasing taxes and import
duties, the price went up to Rs.220 for one 250 ml can of Red Bull. Its major target audience,
which is students, manage their finances economically and for them this high a price was just not
worth it, when for a much lower price of Rs. 65, they could purchase a 500ml bottle of Sting.

Non-diversified Product Line:

Another factor causing Red Bull to not be a more popular choice was its lack of flavors.
Presently, it is only available in the original flavor, which is bubblegum. However survey results
showed that many people did not prefer this flavor, and would be more willing to purchase Red
Bull if it were available in more flavors.

Government Ban:

Earlier in 2018, a ban was placed on the sale of energy drinks in education institutions by the
Federal directorate of Education. Taking forward the health concerns mentioned earlier, the

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government believes that energy drinks have a damaging effect and not be something so easily
available to students. One of the target markets Red Bull explicitly targets is students, as the
description on the can clearly reads “Red Bull’s effects are appreciated throughout the world by
top athletes, busy professionals, active students and drivers on long journeys”.

Marketing Style:

Red bull is well-known for its unconventional marketing methods. It is highly dependent of
below the-line promotional activities, and such campaigns have always worked out in favor of
Red Bull all around the world. Most of the campaign themes surround music, extreme sports and
loud, upbeat parties. However, in Pakistan, this concept of crazy music and extreme sports is not
something people can easily relate to. Also, Red Bull sticking to its BTL promotions in Pakistan
may not be working out too well as the Pakistani audience has been shown to respond better to
above the line campaigns.

Marketing Goals and Objectives

Red Bull uses the acronym SMART to set objectives for their future strategies. The smart
objectives are: Specific, Measurable, Achievable, Realistic, Time-based.

Red Bull aims to increase awareness about the product amongst its target customers by 2020, to
an extent that Red Bull is perceived to be a no-side effects energy drink and customers prefer
Red Bull over all other energy drink brands. Hence adding at least 20% more customers
compared to their customers currently. It will monitor the data based on behaviors and actions
recorded through surveys and evaluate the customer responses. This will be done quarterly to
evaluate the progress towards the set goal and boost marketing campaign accordingly.
It also aims to ensure 10% more sales of Red Bull by 2020, compared to its sales right now.
They plan to do this by bringing differentiation to the product for instance introducing a new can
size of Red Bull. They will monitor its impact on sales and revenue generation of red bull
monthly to make the decision of continuation or discontinuation of the new differentiated
product.

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Project Part 2
VI. Marketing Strategies

6.1.Segmentation Strategies:

Market segmentation is defined as dividing the market into different groups/segments of buyers
with similar needs in each segment. Each segment requires a separate marketing mix because
trying to provide a single marketing mix for a large, un-segmented market is expensive and
somewhat “hit and miss”. Thus we divide the market into different segments so that the business
is able to satisfy the needs of customers profitably. Segmentation is done on the basis of four
variables namely Demographic, Geographic, Psychographic and Behavioral.

Red Bull currently operates with a single segment in Pakistan. Individuals in this segment are
fascinated by extreme sports, active in their personal and professional lives, willing to pay a
premium price (high income) and trend followers. Results from the different research methods
(surveys, interviews, focus groups and observations) strongly supported the existence of a
potential segment which has been constantly ignored by Red Bull. This segment included
customers who belong to upper middle class, interested in sports like cricket, football, travelers
and risk takers. The details of the above mentioned segments based on the segmentation
variables have been illustrated in the table below:

Segmentation Segmentation Recommended

Variables Criteria Existing Segment Existing Segment Segment

Provinces Punjab & Sindh Punjab & Sindh Punjab,KPK& Sindh

Geographic
Density Urban Urban Urban

Age 16 – 26 26-40 18-35

Gender Males & Females Males & Females Males & Females

Bachelor Newly Married Bachelors, Newly

Stage young, single Couples young, no Married, Married and
people not living at children have kids
Life-cycle stage home

Income High High Medium

Demographic Occupation Students, Professionals Students,

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 employees, Employees professionals
professionals,atheletes employees

Boost energy, Boost energy,

Boost energy,
Enhances Enhances
performance performance Enhances performance
Benefits sought

Regular users Regular users

Non-users Non-users
User status Regular users

Middle class & Upper

Psychographic Social class Upper class Upper class class

Adventurous, Sports(Football,cricket)
Life Travelers Adventurous
Behavioral style/Personality Into Extreme Sports Travelers,Adventurous Hard working

Characteristics of the segment:

As outlined in the table above, there are three segments of Red Bull. Though there are some
differences among these segments yet they all share some common characteristics. For example
Red Bull targets younger working(students as well) adults between the ages of 18-26.Red Bull
also directs its efforts towards individuals falling in age group 26-40 with its Sugar free/Zero
Calories energy version. These individuals are health conscious and they don’t want to consume
more calories. Characteristics of these segments of Red Bull are as follow:

1. Demographic Variables

Gender: Red Bull targets both Males and Females since they both require energy to perform
different tasks in their daily routine whether its office, university or in ground.

Age: Red bull has directed its efforts towards the youth. They target people falling in age groups
18-35 and 26-45.Because individuals falling in the mentioned age group are always willing to try
something new and take risks, Red Bull has chosen these segments. As individuals grow older,
they prefer what they have already tested and they simply don’t want to take the risk.

Income: Red Bull currently is targeting people with high income. Because it’s a premium
product.

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Occupation: Students, employees, sporty individuals and for professionals and almost everyone
and anyone who need to boost energy are targeted by Red bull.

2. Geographic Variables

Geographically Red Bull targets main cities of Pakistan including Islamabad, Lahore, Karachi.
Since the lifestyle of people living in Urban areas, very much resonates with what Red Bull has
to offer-Instant Energy. Though people in rural areas also require energy but for them source of
energy is pure and natural food i.e milk, butter etc.

3. Psychographic Variables

Social Class: The social class being targeted by Red Bull is Upper class due to its strong brand
equity. As per our research Middle Class is also a potential segment to be considered since it
large enough to be profitable and Red Bull has enough resources to cater to the needs of
customers in this segment.

Lifestyle: Red bull targets people who are travelers, sporty, adventurous and risk takers(try
something new).

4. Behavioral:

Usage Rate: Usage rate for Red bull is high among the individuals with high income level while
its medium for people belonging to Middle Class.

Benefits: Red Bull boosts energy and keeps you up.

6.2.Target Marketing:

Evaluation of Red Bull’s segments:

Red Bull has been a major success worldwide since the day it started its operations. Red Bull is
an international brand serving customers from all parts of the world. Customers in different
countries have different needs and demands. Thus there is a huge difference between Red Bull’s
customers in Pakistan and those residing outside the country and hence those extreme sports
events, club partying does not relate entirely to Pakistan. There exists a very small segment
which is actually into extreme sports like F1 racing etc. Secondly, the percentage of people who
high income is low in Pakistan while those in middle class is high. People in this segment are
very much interested to purchase red bull given the prices are reduced.

In order to consider a segment worthwhile, it should satisfy five criteria:

Substantiality: The targeted segment should be of sufficient size and profitable enough to make
its pursuit worthwhile. Currently Red Bull is targeting Upper Class in Pakistan which is

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profitable enough but in order to remain competitive it has to consider other potential segments.
According to a survey conducted in 2015, Pakistan has 18th largest middle class in the world.
Research also provides strong evidence that Middle Class spends and consumes more than 50%
of total consumption each year in Pakistan. Thus, recommended segment is large enough to be
targeted. In addition to this, the age group 18-40 comprises almost 60% of the entire population
(Exhibit 1).The individuals in this segment are willing to purchase Red Bull given that the prices
are reduced.

Actionability: Red Bull has enough resources to design effective programs for attracting and
serving this segment. It doesn’t have to launch a new product for this new segment (Middle
Class) It only has to put in some efforts in its promotional and pricing strategies. Red Bull has
focused more on below the line activities whereas in Pakistan Above the line activities work
well. Since it is already earning huge amounts of profits in different countries, Red Bull can
spend, without any hesitation, on these activities.

Measurability: Sufficient information can be obtained cost effectively for this new segment
since majority of the products are been targeted towards this segment.

Responsiveness: Individuals in these segments tend to respond differently to different marketing

mix programs. Middle Class particularly lower middle class tends to be price sensitive. While for
individuals in Upper Class price doesn’t matter as long as they are satisfied with the quality of
the product being purchased.

Accessibility: Red Bull can easily reach segment 3(recommended segment) through its
normal/usual distribution channels (i.e retails stores etc) because it is already offering its
products through these channels to its existing target market. Secondly Red Bull can
communicate with the recommended segment via social media, TV, e-mails, print media, bill
boards etc since youth spends most of their time on social media, watching TV etc.
In the light of above discussion we can conclude that the recommended segment is worthy of
investment.

6.3.Customer Profile

Consumer profile is a way of describing a consumer categorically so that they can be grouped for
marketing and advertising purposes. By defining the ideal customer, it becomes easier for
businesses to notice patterns that may prove useful in target advertising. Common categories
used for defining the customers include demographics, socio-economic status, psychographics
etc.

Customer Profile-Students

This profile specially designed for Students both males and a females included in it from the age
of 18 to 35 years with feature of low income, geographically operated in main cities of Pakistan

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(Lahore, Islamabad, Karachi, Faisalabad, and Multan), behaviorally targeted energy seeker
students during their exams and project week.

Customer Profile-Professional

This profile is specially designed for Professionals interested in sports. Both males and females
falling in the age group 26-35 years with medium income, residing in main cities of Pakistan
(Lahore, Islamabad, Karachi, Faisalabad, and Multan) who love to travel.

Customer Profile-Students

Demographics
Gender:
Males and females
Age:
18-25
Income:
Medium
Occupation:
Students

Psychographics Geographic Behavioral

Social Class: Country: Usage rate:
Middle
Class Pakistan High
Lifestyle: Provinces Benefits:
Punjab,KPK &
Hard workers Sindh Energy
Activities: Cities;
Study, Karachi, Lahore, Islamabad and other
Sports major cities

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Customer Profile-Professionals

Demographics Geographic Psychographics Behavioral

Gender: Country: Social class: Benefits:
Males and females Pakistan Middle Class Energy
Age: Provinces: Lifestyle: Usage rate:
Punjab,KPK and
26-35 Sindh Explorer Medium
Income: Cities: Activities:
Islamabad, Karachi, Lahore
Medium and other main cities Sports, Games
Occupation: Density:
Professionals,Employed Urban

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Customer Lifetime value:

Customer lifetime value is a measure that represents the total net profit, a company makes from a
given customer.CLV is basically a projection to estimate a customer’s monetary worth to a
business after factoring in the value of the relationship with a customer over time.

Total Cost = Cost incurred for all customers*expected relationship

Total Cost = 4,105,677,859*9 = 36,951,100,731

If the number of customers acquired = 60,036,226

Cost per customer acquired for one year = 36,951,100,731/60,036,226 = Rs 615

Cost per customer acquired for 9 years (average) = 615*9 = 5535

Cost per customer acquired for 17 years (maximum) = 615*17 = 10544

Revenue = Price*frequency*Usage per year*expected average relationship life

= 150*4*12*9 = 64,800

Revenue = Price*frequency*Usage per year*expected relationship life

= 150*4*12*17 =122,400

CLV (average relationship 9 years) = 64800 – 5535 = 59,265

CLV (average relationship 17 years) = 122,400-10544 = 111,856

From the above calculation, we can conclude whether average relationship life with customer is
9 years or 17years,we are still earning profit.

Positioning strategy:

As we have decided to enter Segment 3(recommended segment), we must decide what position
the product should occupy within this segment. A product’s position is the place the product
occupies in the minds of consumers relative to its competitors’ products. The strategy for
positioning a product can be based on product attributes, price and quality, product class,
application, product user and against competitors.

22 | P a g e
Since we are offering a value added product to our price sensitive customers, we chose “high
quality at a reasonable price” positioning. Because the product we are offering is already
perceived by customers to be a premium/high quality product thus we won’t have to put in much
effort in this area but we have to convince customers that we are providing premium product at
reasonable/reduced price which is a challenging task.

Brand
awareness

Red Bull

Effectivness
Speed Boost

Sting

Positioning Statement:

“Red Bull aims to unleash the energy in our hard working, adventurous, sporty, and joyful youth
at affordable prices”.

Because we want to position Red Bull as an energy drink that it is of superior quality at
affordable price, targeting individuals who fall in age group 18-35 belonging to middle class.
The above positioning statement includes all of these characteristics of our target segment. As far
as the term youth is concerned, a study reveals that youth ends at 35.Thus the term youth
includes all individuals between the ages of 18-35.

Product Strategy:

Product Analysis

Before diving deep into what benefits Red Bull offers, let’s answer a very simple question. Is
Pakistani market really looking for something like an energy drink to give them that kick of
energy they need? With our culture that so loves its tea and its intense dependence on it to get

23 | P a g e
through the day, is there any room for something different. The answer is yes. Although, the love
for chai still remains strong, trends are changing as newer generations opt lesser for the
traditional hot beverage, and more for coffee and soft drinks.

Red Bull offers an alternative, with its refreshing bubblegum flavor, and its physical revitalizaion
properties. It’s aimed at students cramming for exams, drivers on long routes and active
sportsmen, promising mental and physical boosts. The need for energy boosters already exists in
the Pakistani culture, so a market need for energy drinks like Red Bull can be established.

Competing Products

Presently, Red Bull in Pakistan faces its biggest competition from Pepsi’s Sting. Monster and
Speed are also market players but have a very limited number of customers. Since the market for
energy drinks in Pakistan is still in its growth phase, there is a considerable chance that other
international brands might use this opportunity and launch themselves here. If Red Bull and
Sting are analyzed in comparison, both are backed by a very powerful international image, Red
Bull through its own brand recognition for the world’s most popular energy drink, and Sting
through being produced by the renowned name of Pepsi.

Despite Red Bull entering the energy drink market in Pakistan first and securing a substantial
market share, it still comes second to Sting for a majority of the market and price might be the
single most contributing factor for this competition. As confirmed by survey and secondary
research, consumers opted for Sting less for the taste and brand image, but more for getting the
effects of the energy drink in less than half the price being offered by a stronger brand name.

Branding Front:

1. Addressing health concerns

Energy drinks in general are sometimes viewed negatively. They are thought of as an unnatural
and unhealthy way to get energy and some views go as far as to claim they do serious damage to
the human body. Red Bull has always dealt with such claims with scientific facts and complete
transparency regarding the ingredients that are used.

For its Pakistani audience, where people stick to their beliefs and seldom research on the facts,
Red Bull must force the information onto them. Through the endorsement of famous fitness
trainers and health nutritionists, Red Bull can pass on reassurance to its audience about the safety
of consuming the energy drink, and can solve at least one of the major problems it faces in
Pakistan.

24 | P a g e
 2. A Diversified Product Line

One conclusion we arrived to concerning why Red Bull wasn’t gaining more consumers in
Pakistan was the limited options of flavors being offered. Women especially did not seem to like
the original bubblegum flavor, and most of the people we surveyed agreed on one thing; they
were willing to purchase Red Bull, had it more flavors.

Red Bull actually offers a wide range of fun flavors internationally, including Cranberry,
Coconut, Tropical Fruits, Blueberry and Kiwi. It’s understandable to wonder if offering all these
flavors in Pakistan is really worth the risk.

We think it is, and we propose a way to do it. It is similar to how Lay’s introduced various
international flavors in Pakistan, through offering them only for a limited addition, and then
selecting the most liked for its permanent product line.

Red Bull can offer these different flavors during a nationwide favorite sports season like
cricket’s T20 and push an aggressive marketing campaign for it, getting people to try all the
flavors. The idea would be for the consumers to send in an SMS, voting for their favorite flavor,
and the flavor with the most votes will become a permanent product being offered in Pakistan.

3. Expanding the Product Range

Despite its major success all around the world, it’s surprising that Red Bull never moved forward
in developing its product range. Many of its global competitors like Coca Cola and Pepsi provide
many different products like water and potato chips. It’s arguable that offering just one type of
product can be a powerful strategy, where all efforts are emphasized on one that one product,
making it perfect, focusing on improving its quality and thus being successful in offering a
differentiated product. However, this also means that once that product stops bringing in that
market share the company is dependent upon, there’ll be no safety net to fall on to, no backup
product to rely on.

We suggest a product range expansion, where Red Bull can include some other products that fall
under the energy boosting category. For example, energy bars is an unexplored market in
Pakistan. Apart from a few relatively unpopular local brand names, most of the international
brands like Nature’s Valley, Quest Bar and Kellogg’s K-Protein, although obtainable in Pakistan,
are not readily available in most big stores. And that’s not because there isn’t any market
demand for it. Fitness and working out is slowly, but steadily, spreading out in the country, and
energy bars provide a quick and healthy energy burst. If Red Bull starts offering a well-marketed
energy bar, there is little doubt it will be a successful undertaking.

Secondly, Red Bull can also launch electrolyte-infused water. Staying within its energy
providing range, Red Bull can take this opportunity to venture into another unexplored market in
Pakistan. Electrolytes like potassium and sodium infused into water help in fighting dehydration

25 | P a g e
and are especially helpful during periods of intense exertion. Directed again at athletic
community, this product may have great potential if introduced into the market.

Pricing Strategy:

There are two types of factors affecting the pricing decisions, internal and external. Because Red
Bull wants to increase its market share it may penetrate the market with reduced prices. We do
not believe that lowering the price of the drink is the best way to go, although it may appear as
the most obvious solution. An alternative way to go about this problem is to offer another can
size for Red Bull. The detailed analysis of Red Bull’s existing pricing strategy and what we
suggest is explained as under:

1. Premium Pricing: Whichever country, whatever its income levels, Red Bull has always
followed a premium pricing strategy all around. It’ll be most likely to be the highest
priced energy drink on any shelf. It’s sort of part of Red Bull’s identity, and it’s not come
to existence out of the blue. Massive brand awareness, unquestionable quality and it’s
creative, widely acclaimed marketing campaigns, all come together to justify the high
price Red Bull charges for its products.
But then again, it’s understandable that in a country where people spend money
economically, customers would shy away from its high price, as was confirmed through our
survey results. People opted for Sting not for its better quality or taste but for its much lower
price levels.

So what could be the most efficient way to deal with this dilemma which is turning away
many potential consumers for Red Bull?

2. Suggested Strategy
We do not believe that lowering the price of the drink is the best way to go, although it may
appear as the most obvious solution. Like mentioned before, the premium price Red Bull
charges is part of its identity, and lowering prices might indicate desperate measures or
falling quality, neither of which is good for the brand image.

An alternative way to go about this problem is to offer another can size for Red Bull. Similar
to how Coke offers Coke Mini’s, Red Bull can introduce a new, smaller sized can, which due
to its reduced quantity, will be offered at a lower price. Presently, Red Bull offers a can size
name ‘Red Bull Shot’, internationally but it’s only 60ml and is mainly aimed at being used in
alcoholic mixers.

Red Bull charges Rs. 220 for a 250 ml can, inclusive of taxes. A simple calculation indicates

220/250 = 0.88/ml

26 | P a g e
 Thus the price for each ml offered is Rs. 0.88. The new proposed size of the can is 175 ml,
which means that according to Red Bull’s pricing,

175*0.88 = Rs 156

We should be charging Rs. 156. This number can be rounded off to a more attractive price of Rs.
150. A 175 ml can of Red Bull priced at Rs.150, is likely to attract more customers, as it’s still
assuring that energy boost through a top quality brand, but at a much affordable price.

Placement Strategy:

Placement or distribution strategy is the process used to bring product to the customers. This
process can be carried out with the help of a combination of intermediaries such as distributors,
wholesalers and retailers. Along with the traditional distribution methods another method has
been added: internet; which is a marketplace in itself.

In order to align the distribution strategy with our marketing objective, increasing the market
share. We will be employing a combination of direct and indirect distribution strategies. The
product will be directly distributed at Red Bull stalls setup at various sports, adventure and food
festivals. Here the customer will directly purchase the product from company representatives
present at the stalls. At the same time Red Bull will also indirectly distribute with the help of
intermediaries such as wholesalers, distributors and retailers.

Red Bull will be opting intensive distribution strategy. Red Bull will be available at convenient
locations like a supermarket, convenience stores, retail outlets, canteens and also at “sheesha”
spots. Red Bull will also be available online either in bulk packs or single packs. The main
motive of selling this drink at educational institutes and “sheesha” spots will be to help students
stay energetic during the day or stay up late and party with friends. At supermarkets and stores
they will be placed along with other competitive products giving the customer a choice between
which one to buy. Red Bull will be often stored in Red Bull very catchy looking refrigerators to
attract the customers.

Indirect Distribution:

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Direct Distribution:

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Promotion Strategy

Integrated Marketing Communication is a concept under which a company carefully integrates

and coordinates its many communication channels to deliver a clear, consistent and compelling
message about the organization and its products. Red Bull basically will follow pull strategy it
will offers free samples on different events or it can surprise its customers/target markets by
reaching malls and other public places at random and offer free samples just the same way Coke
did it in India. The ultimate marketing communication objective is to increase consumer
awareness and sales of the product.

Advertising on TV,Billboards and hoardings:

Red Bull’s marketing is completely based on below the line activities. BTL marketing is not very
common in Pakistan and where above the line promotions usually work well. Because Red Bull
is an international brand, it has a huge customer base in different parts of the world. Resultantly,
there is much difference between Red Bull customers outside Pakistan and those residing in
Pakistan. Hence the extreme sports, club partying do not entirely relate to them. Individuals in
our target market are more into sports like cricket, football, squash, table tennis etc. In order to
increase awareness of Red Bull’s energy drink among customers we would reaching out to
customers through TVCs, billboards, hoardings, streamers etc. Services of Medior,a Pakistan
based marketing organization will be taken.

Red Bull always intend to market its products with great enthusiasm, even though it is
considered one of the most popular brands, and doesn’t need that much recognition. According
to Medialogic – which conducts media research analysis, our target age group of 18 – 35
constitutes a huge portion of TV viewers as shown in the diagram below:

29 | P a g e
Similarly, the top five most viewed channels overall as well as for cable and satellite include:

We intend to create a 40-sec TV ad and because the above mentioned channels have the most
viewership, we have chosen to place our TVC during primetime to gain the maximum exposure.

Though females are part of Red Bull’s target market but this has not been getting much attention,
thus the number of female customers is not very high as confirmed from our primary and
secondary research. Since almost every other brand has a ambassador to endorse the product, we
will hire a brand ambassador who will be a great complement to the product. Usually in their
desire to have star power, businesses end up hiring overly priced celebrities who simply strike a
pose. Samina Baig & Muhammad Amir both are a great match for Red Bull’s positioning-
Energy and adventure in affordable prices.“Samina Baig” will be brand ambassador for the
female segment while “Muhammad Amir” for the male segment. These two celebrities will
complement the brand. Red Bull can take “Gives you wings” to the next level by sponsoring
adventurous initiatives like Rock climbing with Samina Baig, etc

30 | P a g e
Recommended Timing and frequency:

The recommended timing and frequency of the communication plan is majorly dependent upon
the lifestyle of target audience. Initially after launching the “Red Bull Shot”, TVC will run for 40
seconds 12 times a day during the peak times. The billboards and hoardings will remain in
display for about two months. Since Redbull’s majority target audience is colleges & university
students plus employees; who are available and free to try out new things in winter and summer
breaks from institutions. Hence major promotions should be focused in the vacation season with
minor re-iterations throughout the year. For instance sponsor real-time events during vacations
so target audience can actively participate and promote on media platforms rest of the year to
keep the brand image alive in their minds.

The major chunk of budget will be spent on sponsoring events for promotion at various events.
The remaining portion of the budget is spent on promotional expenditures like billboards, TV/
radio and print advertisement.

Cost of running ads on different channels:

Channel Name Time Slot Rate / Min in Rupees

PTV Home 7:40 - 9:00 pm 236,568.75

ATV 5:00 - 9:59 pm 232,406.25
ARY Digital 8:00 - 9:00 pm 398,324.89
GEO Entertainment 8:00 - 8:59 pm 365,131.72
HUM TV 8:00 - 9:00 pm 663,875.74
GEO News 9:00 - 9:59 pm 292,068.75
Disney Channel 6:00 am - 7:00 pm 29,262.77

Amount Spent on Marketing in one month

Cost of Hiring Muhammad Amir: PKR 2-3 million

Cost of Hiring Samina Baig: PKR 500,000

Cost of running 30 sec ad on Hum,ARY,PTV,GEO and ATV = 1,896,307.35*6= 11377844.1*30

Amount spent on advertising on TVC for one month = 341335323

Amount spent on Billboards and streamers for one month = 328000

ADVERTISEMENT THROUGH SOCIAL MEDIA

Major and the most popular social media platforms are Facebook, Twitter, Instagram and
YouTube. Every Platform has different rates for advertisement, with the most popular has the

31 | P a g e
highest and the least popular has the lowest. Now we are going to analyze the cost of each
platform separately and predict it for the REDBULL.

Twitter: Cost on this platform depends on the type of advertisement and the level of budget.
Types include promoted tweets, it has a cost of $1.35 per engagement. For promoted accounts,
cost is based on each confirmed follower, which is $2.50-$4.00. And for promoted trends we will
pay $200,000 per day because it guaranteed us to get in front on twitter.

Facebook: Main factors that affect Ad cost are the type of your industry, audience, bidding
amount, quality and objective. Average CPC for Facebook is $0.27 and average CPM is $7.19.
However, if we look industry wise which is more appropriate then the following Exhibit will
precisely help us in cost measurement related to our industry

Instagram: It cost more than Facebook Ads, but it also has a far greater interaction than
Facebook. Cost is somewhere close to 20 cents and $2 per click (CPC) and cost per mile (CPM)
is around $5. Cost is determined on the preference of a method from the above-mentioned
methods.

YouTube: A normal video advertisement keeps running somewhere in the range of $.10 and $.30
per see, relevant to video quality, target market, and general objective. A group of people that is
inadequately focused on will drive costs up, hence it is extremely important that you pick the
exact targeting audience which will the desired outcome you need.

Red Bull officially exist on every platform, but it doesn’t contain any official page for Red Bull
Pakistan. Depending on the local audience market team should opt for Facebook first, then
Instagram and then YouTube considering their cost effectiveness

32 | P a g e
VIII. Implementation Schedule and Financials

8.1.Metrics:

Return on Marketing Investment

Being a privately owned company, Red Bull is super confidential in declaring its financial
matters, like no exact figure is known for production cost, packaging, distribution and marketing.
Thus we are providing the total costs spent on the execution of the plan.

Our best guess is following the Austrian industry standard practice to know the cost of
production.

COST OF PRODUCTION ON TOTAL PRICE OF A CAN

Manufacturing 5–8%
Packaging 8%
Distribution 10 %
Marketing 20 – 25 %

Which means almost 50 % of the price of can goes into production. If the price of can of Red
Bull is Rs. 150 then it will take about Rs. 75 to produce one unit of Red Bull Energy drink.

Cost of Marketing

Amount spent on advertising on TVC in one month = 341335323

Because we will be reducing the number frequency of ad shown per day to 8,the cost will reduce
accordingly.

Amount spent on advertising on TVC in 1 year = 1,896,307.35*4 = 7585229.4*30 =

227556882*12= 2730682584

Amount spent on billboards, hoardings = 328000*12= 3,936,000

Total Costs for first 12 months = 2,730,682,584+3,936,000+2,000,000+500,000+1368559275 =

4,105,677,859

8.2.Action Plan:

33 | P a g e
Regional heads of different zones (Northern Punjab, Federal Capital, Urban areas of Sindh and
Urban areas of KPK) will be responsible for the various aspects of the implementation.
Marketing, Finance, logistics and human resource managers will report directly to their
respective Regional heads regarding the progress and update them every month. The purpose of
making regional heads responsible for the implementation is to enhance coordination among
different functional departments and to increase competition among different regional zones.
Regional heads and their subordinates will put in more efforts to perform better than the rest of
regional zones.

Because Red Bull is an established brand and is operating successfully all over the world, there
are enough funds to implement this plan.Red Bull will have to chose a creative marketing team
so that Red Bull is able to hit its target-A bull’s eye

8.3.Sales projection:

First 12 months: Because will be investing huge amounts of funds on promotional campaigns
and advertising, we are expecting only to recover funds invested that is break even for first 12
months.

Total Costs for first 12 months = 4,105,677,859

Number of sales to be made in 12 months = 4105677859/150 = 27,371,186 cans

Number of sales to be made every month = 27,371,186 /12 = 2,280,932 cans

Supporting material:

According to a survey, total population of Pakistan in July 2017 was 204,924,861 and number of
individuals falling in age group 18-45 was 120,072,452.If we assume that 50% of people in this
bracket belong to our target market (middle class), the figure becomes:

120,072,452*50% = 60,036,226

Further, assuming that 50% of our target market actually makes a single purchase in one month
then the number of units purchased equals:

60,036,226*5% = 3,001,811.3

34 | P a g e
Thus we can conclude that we can easily meet our target because even if 5% of our target market
actually purchases even a single unit a month we will achieve our monthly sales target. But we
are expecting around 35% of our target market will purchase atleast one can a month,

Three years sales projection

Since the product would have created its place in the minds as well as the hearts of our target
customers in three years through the value it is offering, advertising and promotional campaigns,
we are projecting that 64% of our target market will actually purchase Red Bull.

8.4.Total Marketing expense:

Cost of Hiring Muhammad Amir: PKR 2-3 million

Cost of Hiring Samina Baig: PKR 500,000

Cost of running 30 sec ad on Hum, ARY, PTV, GEO and ATV = 1,896,307.35*6=
11,377,844.1*30

Amount spent on advertising on TVC for one month = 341,335,323

Amount spent on Billboards and streamers for one month = 328,000

Amount spent on billboards, hoardings in 1 year = 328000*12= 3,936,000

Amount spent on advertising on TVC in 1 year = 1,896,307.35*4 = 7,585,229.4*30 =

227,556,882*12= 2,730,682,584

Total marketing costs in one year = 2730682584+3,936,000+500,000+2,000,000 =

2,737,118,584

IX. Controls and Contingency Plans

9.1. Monitoring and Control:

Measuring success is critical to the overall success of a plan or a project. A plan, a project or an
initiative is more likely to be successful when the executives/sponsors are visible or active.
These mean managers should always plan-do-check-act.

i.Financial Statements

Financial statements will be studied to see how much money the target segment has generated.
Profit is the most important thing in any business. Without earning profit, a company cannot
survive longer. The growth of business is dependent on profit. Key Performance Indicators (KPI)

35 | P a g e
will be set since the very beginning. This will help in identifying which goals were accomplished
and which were not.

ii.Customer Satisfaction

Yet another measure to measure the success of the plan is Customer Satisfaction. If customers
will be not satisfied, the wont purchase again and may switch to competitor. We will be
measuring customer satisfaction periodically through surveys or reviews. Feedback from the
customers will be analyzed since customers help us improve the product by sharing their
experiences and views. Appropriate steps will be taken to improve customer satisfaction so that
we are able to retain our customers.

iii.Number of new customers

Knowing how many new customers the businesses has acquired, is a great way to measure the
success of a business and predict growth. If Red Bull remains stagnant with the same number of
customers, then we will need to review our marketing strategies. By averaging new customers
often, we can measure how successful Red Bull is at drawing in new people.

9.2. Contingency Plan:

In case monitoring and control measures indicate a problem, we will try to analyse the reason
behind the problem. If the plan turns out to be effective and the problem resides with its
implementation then Regional Head will be held accountable for its profitability. But if it
happens to be other way around then we will review our marketing strategy and pivot. We will
pivot as soon as possible and pick new goals that align with our mission of becoming market
leader. We will expand the product range.

Despite its major success all around the world, it’s surprising that Red Bull never moved forward
in developing its product range. Many of its global competitors like Coca Cola and Pepsi provide
many different products like water and potato chips. It’s arguable that offering just one type of
product can be a powerful strategy, where all efforts are emphasized on one that one product,
making it perfect, focusing on improving its quality and thus being successful in offering a
differentiated product. However, this also means that once that product stops bringing in that
market share the company is dependent upon, there’ll be no safety net to fall on to, no backup
product to rely on.

We suggest a product range expansion, where Red Bull can include some other products that fall
under the energy boosting category. For example, energy bars is an unexplored market in
Pakistan. Apart from a few relatively unpopular local brand names, most of the international
brands like Nature’s Valley, Quest Bar and Kellogg’s K-Protein, although obtainable in Pakistan,
are not readily available in most big stores. And that’s not because there isn’t any market
demand for it. Fitness and working out is slowly, but steadily, spreading out in the country, and

36 | P a g e
energy bars provide a quick and healthy energy burst. If Red Bull starts offering a well-marketed
energy bar, there is little doubt it will be a successful undertaking.

Secondly, Red Bull can also launch electrolyte-infused water. Staying within its energy
providing range, Red Bull can take this opportunity to venture into another unexplored market in
Pakistan. Electrolytes like potassium and sodium infused into water help in fighting dehydration
and are especially helpful during periods of intense exertion. Directed again at athletic
community, this product may have great potential if introduced into the market.

9.3. Anticipated competitor response:

If our strategy works the way we are expecting and proves to be successful, than our competitors
will focus their efforts towards reducing the prices further in an effort to give us a tough time and
penetrate the market.

There are also chances that the competitors maintain their prices believing they would lose too
much profit if they reduce the prices, it would not lose much market share and could regain its
market share when necessary. According an HBR review article, competitor might not feel
threatened and accordingly will not think that mounting a will not think that mounting a response
is worth the expense and distraction. If Sting asses its performance strictly against their annual
budgets and if the financial goals in the budget can still be met despite our planned action,
management will see the company as “on plan” and will feel safe.

9.4. Risk analysis:

If Sting reduces its price, in response to Red Bull’s strategy than it will initiate a price war. As
mentioned earlier that the customers in our target market are price sensitive, they might switch to
Sting again because it will be providing the energy drink to the customers at even lesser prices.
Price war will neither benefit Red Bull nor Sting because their profit margins with shrink as they
continue to reduce their prices.

Conclusion:

Red Bull is a leading brand for Energy drink category. Currently it is facing tough competition
from its competitors specially Sting because of its lower prices. We confirmed through our
primary and secondary research that customers purchase Sting solely because for its lower price.
Red Bull is perceived to a high quality energy drink. Customers are willing to purchase Red Bull
provided that it lowers its price. In the light of survey results, we suggested to target individuals
falling in the age group 18-35 belonging to Middle Class because the size of this segment is large
enough to be profitable. A survey conducted by Credit Suisse said that Pakistan has 18th largest
middle class in the world. Another survey that 58% of Pakistan’s population falls in age group
15-45.

37 | P a g e
The problem which we identified for Red Bull was very high prices. Whichever country,
whatever its income levels, Red Bull has always followed a premium pricing strategy all around.
It’ll be most likely to be the highest priced energy drink on any shelf. It’s sort of part of Red
Bull’s identity, and it’s not come to existence out of the blue. But then again, it’s understandable
that in a country where people spend money economically, customers would shy away from its
high price, as was confirmed through our survey results. People opted for Sting not for its better
quality or taste but for its much lower price levels.

So what could be the most efficient way to deal with this dilemma which is turning away many
potential consumers for Red Bull?

We do not believe that lowering the price of the drink is the best way to go, although it may
appear as the most obvious solution. Like mentioned before, the premium price Red Bull charges
is part of its identity, and lowering prices might indicate desperate measures or falling quality,
neither of which is good for the brand image. An alternative way to go about this problem is to
offer another can size for Red Bull. Red Bull will offer a 175ml can named ‘Red Bull Shot’. We
‘Red Bull Shot’ will be priced at Rs.150; it is likely to attract more customers, as it’s still
assuring that energy boost through a top quality brand, but at a much affordable price.

Advertising campaigns featuring Samina Baig and Muhammad Amir will run on TVs.Both are a
great match for Red Bull’s positioning. Red Bull can take “Gives you wings” to the next level by
sponsoring adventurous initiatives like Rock climbing with Samina Baig, etc.Initially after
launching the “Red Bull Shot”, TVC will run for 40 seconds 12 times a day during the peak
times. The billboards and hoardings will remain in display for about two months. Since
Redbull’s majority target audience is colleges & university students plus employees; who are
available and free to try out new things in winter and summer breaks from institutions. Hence
major promotions should be focused in the vacation season with minor re-iterations throughout
the year. For instance sponsor real-time events during vacations so target audience can actively
participate and promote on media platforms rest of the year to keep the brand image alive in their
minds.

When analyzed this plan from a financial view point, calculations were made and thus we can
that even after reducing the price, Red Bull will still earn a huge profit. The plan will be
monitored throughout the implementation phase and even after the implementation to mitigate
risks.

References:

https://tribune.com.pk/story/973649/pakistan-has-18th-largest-middle-class-in-the-world-report/

https://www.indexmundi.com/pakistan/demographics_profile.html

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Appendix 1: Survey Results:

Q1.What is your gender?

When conducted an online survey, about 58 people responded. According to the results 50% of
the people were males and 50% were females.

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Q2. Which age group do you fall?

When asked about their age we found put that 20-25 age group constitute 51.7%, 25-30 age
group constitute 43.1% and 30-35 age group falls in 5.2% range.

Q3. Are you currently employed?

When asked if they were students 81% responded positively.

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Q5. Do you consume energy drinks?

When asked if they consumed energy drinks 51.7% responded in yes, 27.6% said that they
consume sometimes, while 15.5% said that they drink rarely.

Q6.When you think about energy drinks, which brand comes first to your mind?According to the
respondents Red Bull is the most popular brand with 67.2% of people think of it first when they
think about energy drinks.

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Q7.Do you think energy drinks can help you gain more energy?

Similarly 86.2% agree that energy drinks helps them in gaining more energy.

Q8.For what act would you use energy drinks?

When inquired that when do they use energy drinks 37.9% responded that they use it for exercise
or sports, 32.8% use during studying and 24.1% consumed for leisure.

Q9. Is brand an important factor in your purchase decision making?

86.2% people think that brand name is important in their purchasing decision.

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Q10. Compared to other competitors (Sting,Monster etc),Red bull is

46.6% think Red Bull is good as compared to other brands like Sting or Monster, 12.1% said that
it was best, while 39.7% were neutral.

Q11.Flavor/Taste of Red Bull when compared with its competitors is?

41.4% agreed that Red Bull’s taste was good as compare to its competitors, 12.1% said it was
best, while 43.1% were neutral.

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Q12.What inhibits you from purchasing Red Bull?

58.6% were of the opinion that high price is the reason for not buying Red Bull, 24.1% think it is
bad for health and 12.1% does not have a favorable view of the taste.

Q13.Packaging of which of the following energy drinks do you feel is better?

41.4% think that Red Bull’s packaging is better than Sting or Monster.

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Q15. Introducing a lower priced energy drink (by Red Bull) would be a good move?

96.5% thought introducing a lower price can would be a good move by Red Bull.

Q16. What is the recommended price for Red Bull if it launches a lower priced drink?

When asked about the recommended price, 65.5% were of the opinion that 55-65 would be a
good range, 31% said 65-75, while the remaining said 75-85 would be good.

Q17.Do you feel Red Bull is not targeting females as compared to males?

86.2% think that there is gender discrimination involve as Red Bull is targeting less females
compared to males.

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Q18.Among the following which energy drink’s advertising campaign is more effective?

43.1% thought Red Bull’s marketing campaign is more effective, 29.3% thinks Monster’s
campaign is better, while according to 27.6% Sting is better.

Q19.I will purchase more often if Red Bull?

When asked about price 58.6% said that they will purchase more Red Bull more often if they
reduce their price, 22.4% said they will buy if they introduce lower price can with more flavors,
and to 19% variety matters more than price.

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Q20.Who do you think is a strong competitor of Red Bull?

According to 44.8% Monster is the biggest competitor of Red Bull whereas 41.4% think that
Sting is bigger.

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