Introduction

Red Bull is the highest selling energy drink in the world sold by an Austrian Company, Red Bull GmBh.
Red Bull was founded in 1980 by Dietrich Mateschitz. There was a Thai energy drink named Krating
Daeng and Dietrich Mateschitz was greatly inspired by this drink. So he took the ingredients of this drink
and did some modifications according to the Western taste and preferences. Then he officially came up
with a new energy drink in 1987, Red Bull. It was greatly appreciated in the European Countries since its
inception.

In the 27 years of its business operations, Red Bull has become the World`s largest selling and most
popular energy drink. According to Red Bull Official Website (http://energydrink.redbull.com/company),
they are selling Red Bull in 167 countries and their sales figures are increasing significantly year by year.
For Example, their sales in 2013 were 5.387 Billion Cans and in 2014 this figure escalated to 5.612 Billion
Cans in 2014, with a net increase of 4.12%. According to them, they have been able to sell around 50
Billion Cans in the world till today. They have 10410 employees working all over the world. Company is
planning to grab more market share in the existing countries and expand its business in the Far East
Countries. Red Bull has been alleged of having ingredients that are bad for the human health but
according to European Food Safety Authority (EFSA), Ingredients used by Red Bull are completely safe to
consume.

Talking about the products, Red Bull has following products and variations:

 Red Bull Original

 Sugar free Red Bull
 Zero Calories Red Bull
 Total Zero Red Bull
 Orange Zero Edition Red Bull
 Cherry Zero Edition Red Bull
 Red Bull Shot (Concentrated)
 Red Edition (Cranberry)
 Blue Edition (Blueberry)
 Lime Edition (Lime)
 Yellow Edition (Tropical fruit)

Need For Internationalization

Internationalization is the process of taking the products of accompany from its home country to
different other countries or to sell in other countries as well. Red Bull was primarily launched in its home
country as well in the beginning i.e. Austria. In order to grow the business and to earn more revenues
and profits, company needed to expand its area served. Moreover they needed to turn the company
into a global brand and serving more international markets was the only method of doing that. Being a
global brand, Red Bull not only would be able to sell in more countries but it would certainly help them
in selling more units in the existing countries because of the bigger Brand Name. That is why it decided
to launch Red Bull in many countries (Mühlbacher H., Dahringer L. and Leihs H., 1999). Till Date, Red Bull
has successfully established its operations and selling in 167 countries all over the globe. When Red Bull
started to expand its business in Europe, many new competitors arrived in the European Market as well.
When, Red Bull was started selling in Germany, company felt the shortage of Aluminum to produce
cans, and that point, company experienced in the sales but later on, it was back on track. Its journey in
England was much more challenging as they could not use the label “Energy Drink”, as it was used by
another pharmaceutical company. They, however, used the name ‘simulation’ for the marketing
purpose, but they experienced many difficulties in selling more cans. Therefore, Red Bull came up with a
new strategy called Buzz Marketing. They target mainly the night clubs and the students. Red Bull hired
students that used to drive cars covered with the Red Bull Brand and they were providing free red bull
samples in the students` parties. It helped Red Bull in escalating sales in England.

Mode of Entry

At first in 1987, Red Bull was serving only Austrian Market so they were not able to sell more units
because of the fact of Austria being a small country by the means of population. They had to enter new
markets and by 1992, they covered North America, Africa, Western Europe and Middle East. When
companies enter new markets, the biggest decision to make is to either export the product in the new
countries or to manufacture in the new markets. Many companies prefer manufacturing in the host
countries but Red Bull has not established any manufacturing plant in any other country and they are
only exporting the product in the international markets.

Red Bull uses both indirect and direct export in international markets. It has undergone a strategic
alliance with an Australian Firm, Cadbury Schweppes which distributes the products for Red Bull not
only by the traditional channels but also through digital channels such as vending machines. Red Bull
uses world of mouth marketing in many countries. In this strategy, Red bull pays the portion of the sales
revenue to those, who are recommending its products in the new markets. According to Gschwandtner
(2004), Red Bull has appointed many students as their brand executives those market their products in
some of the most crowded target areas for Red bull.

Marketing Mix Strategy adopted by Red Bull

Product

Red Bull GmbH`s products are energy drinks that are most popular in many countries because of the
western touch In its taste. It contains caffeine, taurine, Glucuronolactone, B-group vitamins, sucrose,
and Glucose. As of 2014, Red Bull is not using Glucuronolactone as an ingredient in the energy drink. It is
not only the energy drink which is being sold in a high volume all over the world, but company`s
association with some most enjoyable adventurous sports, “Extreme sports” has given it a great brand
name associated with thrills and challenges. Due to the rich taste and association with adventurous
sports, Red Bull is most popular in the age group of 18-35.

Price

Red Bull Pricing is generally higher than the other energy drinks. They use premium pricing strategy and
it helps them in targeting premium or high income customers. According to Red Bull, There most
revenue comes from this segment only and that is why their pricing has to reflect the segment. But, with
increase in the number of substitutes and lower price of these drinks can be a threat to Red Bull in the
Future.

Place

Red Bull sells its products where it is easier to reach to the target segment. They use supermarket and
Grocery stores and in the addition Red bull is made available in the Night Clubs, Colleges, and
Universities where students can buy it easily. It is a right strategy for Red Bull as they are targeting the
Youth more.

Promotion

Red Bull uses an interesting and unique promotion strategy. They use a slogan “Red Bull Gives You
Wings” that speaks for itself. It means that the boost in the Red Bull will take the consumers to a
different state of energy. Moreover, Red Bulls` Extreme Sports is associated with many thrilling sports
such as mountain bikes, BMX, windsurfing, Snow-Boarding, Skate-Boarding, cliff-diving, skating, surfing
and F1 racing etc. Red Bull organizes many sporting events each year for the promotion. Furthermore,
there magazine, Extreme Sporters is also a great way of promoting the products to the target audience.

Positioning and Advertising Strategy of Red Bull

Positioning is the image of a brand in the mind of the consumers. Humans see and hear a lot of things
everyday but they are capable of remembering only the few. Therefore, they ignore some brands, for
some brands, they store a little information and there are some brands which they love and influenced
by that. Now it is up to the companies to be remembered in the minds of their target audience and most
importantly, the message perceived with the brand matters the most. Red Bull positions itself as a
premium energy drink associated with thrill and adventure. Their main target is the younger segment of
the market. To position its brand to the segment, they use extreme sports promotional strategy and
strike as a high value energy drink that is richer in taste as well. Moreover their packaging also helps
them positioning the product to the premium target segment. The 250 ml cans of Red Bull gives it a
premium look.

According to Mateschitz, “We don’t bring the product to the consumer, we bring consumers to the
product.” For the advertising purpose, Red Bull organizes many sports event in different countries
according to the popularity of the products. They have also been successful in using the Word of Mouth
Marketing strategy. They pay some portion of the sales to the hired brand promoters those market their
products in the new markets. Red Bull GmbH states that with the help of extreme sports, we have been
able to get more loyal customers. Moreover, Red Bull has successfully been using Buzz Marketing and
Viral Marketing to advertise its products.

Red Bull`s competitor Analysis in the United States of America

It is beyond doubt that Red Bull has created a dominant place for itself in the Energy Drinks industry, but
it is no longer the only big player. For instance, in the United States, there are three main and direct
competitors to Red Bull; Monster, Full Throttle and Rockstar.
Monster is known as the biggest competition threat to Red Bull. Monster has been made an almost
identical product to Red Bull and is ready to gain the advantage of the lower price. Although the cost for
both the cans of Red bull and Monster is same in the U.S, yet the quantity offered by Monster is almost
double to the quantity offered by Red Bull.

Rockstar, with a slogan “Party like a Rockstar”, is also targeting the younger segment of the market like
Red Bull. It is made for the youngsters those like to gain energy by consuming the energy drink. It comes
in different flavors such as Juice and cola. Its cola version is preferred for a better taste whereas juiced
version claims to be containing 70% real fruit juice. It also comes in a larger can size as Monster.

Full Throttle was launched in 2005 in the United States. It comes under the product hood of Coca Cola. It
contains a larger amount of caffeine and is rich in energy. Due to the brand name of coca cola that is a
much larger player in the Beverage industry when compared with other energy drinks brands, can
possess some serious threats to Red Bull.

There is also a threat of indirect competition to Red Bull and the whole Energy Drink Industry. Energy
Drinks are found to be bad for health by many researchers and due to this fact a lot of consumers are
switching to healthier drinks such as Packaged Fruit juice, Flavored Milk, Flavored Water with Minerals
and Soya Drinks. As people in the United States and other parts of the world are becoming more health
conscious, these drinks possess some serious threats to the whole Energy Drinks Industry.

Impact of Social and Cultural Factors

Social and Cultural factors, jointly called as socio-cultural factors have a significant impact on the success
or failure of an organization in different new markets. Each person`s buying behavior is related with the
society and the culture he/she lives in. It is influenced by the reference groups they are part of, family
and workplaces etc. When a company decides to enter new market, it has to consider socio-cultural
factors very seriously. They must know which type of product is acceptable in different market and
which ingredients are non-acceptable. Social and Cultural Factors decides that whether people of a
country would welcome their products or not. For example, in India, there are more vegetarian people
than any other country. Therefore companies like McDonalds when entered in India, they had a larger
range of vegetarian products.

As far as Red Bull is concerned, its products are highly appreciated in the new markets. It is due to the
significant change in the lifestyle of the consumers. Nowadays, even eastern countries have developed a
modern lifestyle. They like Red Bull because it reflects their personality. Instead of consuming a water
bottle, now consumers like to buy an energy drink as it will give them energy and satisfy their need.

Although there are some health concerns associated with the Red Bull and other Energy Drinks, yet its
popularity is increasing day by day. In the 1980s, this scenario was different. Sales of the energy drinks
were less because people used to be afraid of the ingredients. But with time, there has been some
significant developments in the products as well. Companies are no longer using ingredients that
possesses serious health concerns. Moreover, people those are aged more than 35 are more concerned
about the health rather than the young population. That`s why older segment likes to consume healthy
drinks in place of energy drinks. But, as we all know that most of the energy drinks companies including
Red Bull are primarily targeting the age group of 18-35, health concern don`t seriously matter to the
companies.

Factors to consider while deciding about international distribution channels

Deciding about the distribution channel is an important decision to make and there are endless number
of factors that influences the decision or must be considered before making a decision. However, some
of these are mentioned below.

Value: First factor to consider is no doubt the value of the product. If the cost of product is high, then
companies use a selective distribution network or if the product is cheap, firms will have to concentrate
on mass selling and thus, they use extensive distribution making the product available at maximum
possible locations.

Convenience: While entering new markets, companies understand their target audience and their
lifestyle in that particular country. According to that, product is placed at the places where consumers
can easily buy the product.

Competition study: Companies must study their competition in the new markets, if any. Companies
must consider the distribution channels used by the competitors so that they can go head to head with
the competition or making the product available at the places where competitors are already selling
their products.

Brand Reputation: There is always some sort of reputation associated with each brand. Brands should
consider that and continue with that brand image only, even in the new markets. For Example, Red Bull
is a premium energy drink brand and its price is higher than its competitors. So it does not sell at
ordinary locations as it does not reflect their brand reputation.

Buying Behavior of consumers: Buying behavior is a vast topic to study, but companies must understand
the basic things about the buying behaviors of the consumers in the new markets. Things like, where
they shop, how they pay, social influence and cultural influence etc. can be beneficial to know about the
new target market.

Conclusion and Findings

In this report, we were able to understand many important things about Red Bull and Beverage Industry.
Also we had a quick look at some of the marketing concepts. In a nutshell, we may conclude that Red
Bull is doing great internationally or in the different markets. It has the largest global market share in the
energy drinks industry. Its rich looking small packaging can gives it a premium look. Its taste is matched
with the western taste and for this reason it is not only popular in the Western countries but also it
helps Red Bull in selling more quantities in other parts of the world as Western culture is being followed
everywhere. Moreover, its unique advertising and marketing campaigns and association with the
extreme sports reflect its Brand image.
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