Introduction
In the international market, Red Bull is one of the leading brands in energy drinks. It is also associated with individuals who participate in activities involving intense physical sports (Red Bull, n.d.). As one of its strategic marketing plans, Red Bull ensures that it sponsors most sporting events that have a lot of following around the globe. Although it is a brand that has established its presence internationally, Red Bull’s headquarters and manufacturing base is located in Austria.
A Thai energy drink, the Krating Daeng influenced Dietrich Mateschitz, the maker of Red Bull. Under the guidance of the founder of Krating Daeng, he would later embrace and launch his energy drink brand (Red Bull, n.d.). Today Red Bull has grown to become a household name in the international market. It has overcome all challenges and stays at the top of the market, regardless of the rivalry experienced in the beverage industry by the organization’s competitors (Red Bull, n.d.). It adopted a comprehensive strategic plan which handles its volume sales. In 2019 alone in the US, Red Bull earned itself 24.9% of the energy drink market share, while it managed to sell over 7.5 billion cans around the globe the same year (Pafitis, 2020). Currently, the organization holds the largest market share in the nonalcoholic energy drinks industry (Statista, n.d.). For it to be where it is, it had to place a strong fight against established companies in the non-alcoholic market, such as Coca-Cola. This research paper outlines the marketing strategy of Red Bull GmbH.
Product Range
For an organization to operate a business and compete with others producing similar goods, it has to develop a product in line with its operating category. The next big thing after finding a void in the market is to draw up a supply strategy and determine the offer price, considering the existing competition. In the 1980s, Red Bull GmbH joined the beverage market and has remained an integral part of the sector until today (Kunz et al., 2016). The organization is popularly known for the production of Red Bull energy drink, however, it has diversified its range of products by introducing other products which are, Sabai Wine Spritzer and Carpe Diem
This marketing research investigates the marketing position of the organization by evaluating the performance of its primary product which is the Red Bull energy drink. However, it is important to note that with time the organization has expanded its product portfolio to accelerate its success Other flavorings consisting of kiwi, blueberry, cranberry, tropical fruits, and coconut are currently available in Red Bull energy drinks (Red Bull, n.d.). The company has also reacted to an increased focus on safe feeding practices and continued concerns about the high sugar content in Red Bull. It has, therefore. reacted by launching a variety of Red Bull Sugar-Free drinks.
Target Market
Red bull product targets young people, especially those participating in strenuous engagements and those between the ages of 18 and 35 leading active lifestyles, who are cynical of traditional marketing. Besides, shoppers can easily locate the in most convenience stores, grocery, and filling stations across the United States (Red Bull, n.d.). They are also found in supercenters and discount stockers, for instance, Target and Wal-Mart.
Red Bull SWOT Analysis
Strengths
Various strengths have immensely made Red Bull the success story it is today. The organization has enjoyed a massive market reach following its robust efforts of seeking endorsement from influential sports personalities around the world. Besides, the brand enjoys a significant market share following its futuristic marketing strategies which attract a large number of consumers to its products. Its continued sports sponsorship and endorsements from sports personalities play a significant role in creating its brand awareness among the followers of the sponsored entities and brand endorsers. Further, Red Bull’s sponsorship of several lifestyles and sports magazines that are popular with its target market places the brand in the limelight.
Finally, Red Bull’s foreign presence in GmbH is immense. In particular, it enjoys a large sales volume, especially in America, where the demand for energy drinks is quite high. Following its futuristic marketing approach, the company has earned an enormous share in the market. The organization’s marketing strategies have managed to traverse its competitors’ efforts (Comeforo, 2017). Red Bull has adopted a strategic branding blueprint that ensures it remains on top of energy drinks production. The organization is vocal in funding important sporting events, therefore, placing itself in a broad target market pool. It is an unfeasible way of supporting energy drinks in particular. Sports personalities are likely to be searching for a beverage that replenishes their energy reserves due to the intense workouts they partake in.
It has also been involved in advanced technology communications for marketing purposes. Red Bull has been immersed in digital marketing as technology continues to drive all industry facets virtually. It also has a social media page to market its brand further and foster more success beyond just sport. Therefore, while it is primarily prevalent among athletes, other customers build up a strong consumer network.
Weaknesses
While Red Bull enjoys several strengths that hold it at the top of the industry, the organization also faces several market limitations. This follows strong competition in the beverage industry from well-established brands. Established beverage companies such as Pepsi and Coca-Cola tend to present a challenge to Red Bull in its fight to win a considerable market share in the beverage industry (Venkatesan et al., 2015). Despite its robust and highly sponsored product marketing strategies, its market share has not increased. Ideally, in the international realm, its rivals have strong distribution networks. From 2009 to date, Red Bull’s market share has not been impressive due to competition from other beverage brands in the market (Venkatesan et al., 2015). The organization’s volume sales remain stable; however, it has not risen for a while now.
With stiff competition, lack of FDA approval, and concern over high-calorie goods, the company has faced a serious challenge in raising its market share. This stems from threats from established brands that continue to control the industry by producing other goods and services that are easily embraced in the market. By offering a range of flavors for consumers to choose from, one of its major rivals called Monster gave Red Bull energy drink a run for its energy drink. Red Bull GmbH, on the other hand, does not have many energy drink flavors. Besides, it does not diversify its product range.
Limiting its production activities in Austria is one of the main drawbacks of Red Bull’s energy drink. Therefore, its production volume remains comparatively low compared to other companies, which have granted production rights to other corporations in other countries around the world. This has become something of a limitation, even as it attempts to secure its development rights (Comeforo, 2017). Following its long and extensive distribution channels, the cost of the product is quite high compared to others in the market.
Opportunities
Despite its limitations, the organization will tap into a host of possibilities to revolutionize its fortunes. The organization’s decision to tap into the Asia Pacific region provides the organization with a myriad of opportunities to grow its market share. The brand has a massive following, and customers show unprecedented loyalty to the energy drink from Red Bull. In particular, Asia Pacific countries such as China have undergone steady economic development, which has resulted in improved financial conditions for consumers (Red Bull, n.d.). Therefore, the buying power of consumers has risen dramatically.
In the Asian Pacific regions, creating a strong brand would transform the organization’s revenue turnover. It is important to remember that some Asia Pacific countries, such as China, have a high population of middle-class workers, which presents a potential market for Red Bull (Comeforo, 2017) The business is in the early stages of tapping the beverage consumer market in China. The company has started by launching a special edition of Red Bull golden and blue cans in the region. It has also developed an office in the Shanghai area of China. With the creation of a relatively reputable brand in the consumer market, Red Bull GmbH can launch and benefit greatly from other brands in its product range.
Threats
There are several challenges to its survival, even though it has a reasonably secure position in the consumer market. The lack of FDA approval of the products threatens its market share in countries, which consider consumer goods. Consumers have been more and more concerned with calorie-laden food products in the recent past. Therefore, some customers prefer drinks that have comparatively lower sugar levels or sugar-free ones (Swart & Ntloko 2008). Concerns regarding the high concentration of ingredients, including sugar and caffeine, have also been raised (Bremser et al., 2018). The organization should respond quickly to the numerous concerns, which have emerged over poor feeding patterns and their relation to chronic healthcare lifestyle conditions. Consumers are more concerned about unhealthy food products in the market is attributed to the increasing healthcare conditions such as obesity and an overweight lifestyle (Heart of Codes, 2018). Red Bull contains a large amount of sugar as an energy drink, which has healthcare issues, especially among health-conscious customers.
Marketing Mix
Red Bull employed several marketing strategies to gain its current market share over time. The organization’s international influence and recognition are derived from its extensive public relations campaigns (Comeforo, 2017). In addition to offering goods favored by consumers, the organization has embarked on extensive marketing campaigns to sensitize consumers about its products and convince them to buy them regardless of the several alternatives in the market. This futuristic marketing blend has immensely contributed to making the organization one of the leading brands in the beverage market for years.
Product
Red Bull energy drink is the primary product, which initiated the organization to the beverage market and drove it to be one of the leading brands in the world. Despite stiff competition from other brands, the company has managed to launch flavors following the evolving customer tastes and preferences (Comeforo, 2017). Another variation has also been launched to keep up with changing customer needs and tastes, popularly known as the Red Bull sugar-free variety. The organization ensures that its product taste remains unique compared to other ranges of soft drinks in the market. Product branding is another strategy that the organization uses to connect with its target market. Through its brand slogan, “Red Bull Gives You Wings” the company has been able to connect with its consumers effectively.
Pricing
The organization’s products are relatively high compared to the other drinks on the consumer market (Business Case Studies, 2019)). This follows the fact that the company uses a premium pricing strategy to set the cost of its products. This means that the price of the product is set at a price above its competitor. The main reason why the organization uses this strategy is its strong belief in the quality and the health benefits the product offers to consumers. The success of this pricing strategy is reflected in the act that Red Bull is a leading energy drink in the world. Having been launched in 1987, the product is currently at the maturity stage. However, the company has intensified its positioning to make it remain relevant in the market.
Place
In the international arena, the Red Bull energy drink has a presence. The organization uses a restrictive distribution model, which ensures that the product is readily available to consumers in the market (Business Case Studies, 2019). It also enhances market stores such as bars and restaurants, nightclubs, and supermarkets by providing them with merchandising and branding materials. The company supplies its vendors with exclusive refrigerators, which are used to display the products and keep them cool (Bremser et al., 2018). This initiative is the recent marketing strategy that Red Bull launched to increase its presence in the market. Through using its goods in the online world, the firm has also supported e-commerce.
Promotion
An investment in futuristic marketing campaigns complete with a well-laid consumer niche is one of the strategies behind the popularity of the Red Bull energy drink. The organization spends a fortune sponsoring its promotions for product marketing (Bremser et al., 2018). The slogan dubbed “Red Bull Gives You Wings,” which is quite catchy, is one of its marketing bases (Business Case Studies, 2019). As a result, Red Bull is associated with the young generation. In sports sponsorship, it has also become quite outspoken, a move that has earned it relatively huge visibility. Furthermore, the company’s products have been featured in mainstream media, something that has been made.
Conclusion
Through proper planning and strategic marketing, any product or service survives in the market. Marketing is one of the organizational pillars to be looked out for as it allows entrepreneurs to create a niche for the market and meet the target parties. Despite the presence of other alternatives in the industry, it is not only about attracting huge advertisements but also convincing the target buyers to use the products. Red Bull GmbH knows that its client is the main asset behind its existence in the market. The organization’s energy drink is one of the most popular beverages in the world today because of its strategic product marketing strategies.
No discussion of the presence of energy drinks on the market can be complete without considering the Red Bull energy drink. It relies on other types of advertisement, in addition to using conventional media, to contend for an advantageous well with other industry rivals. It has a large presence in sports events, which forms part of its public relations campaigns through sponsorship. The organization targets its products to consumers who do not want alcoholic drinks in nightclubs and bars. It is part of its vulnerability that the Red Bull energy drink remains unpatented. This means any independent manufacturer can imitate the product and sell it in the market freely.
Further, the ingredients used to make Red Bull can be copied and used to make a similar beverage. While it has its strongholds in the consumer sector, the containment of non-FDA-approved ingredients has been defective on many occasions. Besides, given the harmful regime, they pose to customers, the ingredients, sugar, and caffeine have come into the limelight. Despite this, by addressing customer concerns and obtaining sufficient approval from bodies such as the FDA, the red bull energy drink will retain its marketplace. In addition to setting specific marketing targets, it is time for Redd Bull GmbH to think about the health-conscious consumer’s demands.
Recommendations
Owing to increased cases of lifestyles, health care problems such as obesity and overweight, carbonated and sugary drinks have come to the fore in the recent past. Many of these derive from poor feeding patterns, such as the intake of foods filled with sugar. Many customers have shown interest in safe therapies, such as low sugar beverages and those without preservatives. They think that less succulent beverages are better with reduced caffeine. Notably, this is an ability that can be used successfully by Red Bull GmbH to stay in the competitive market. Other companies, such as Coca-Cola Group, have also followed a similar pattern to launch low-calorie drinks that have been received by consumers. Red Bull should also consider its consumer preferences in terms of healthy eating habits and introduce more products under its portfolio, which have health benefits to them. The approach will attract more clients to its consumer base.
Red Bull had just one brand originally; however, it has added other flavors in the recent past, although that is not enough. For customers to select according to their tastes and preferences, it can also introduce a wide variety of other beverages. As an organization with an outstanding reputation among customers, the launch and marketing of new goods as opposed to new entrants to the market is likely to be simpler.
It is high time that the organization should seek FDA approval for it to have a competitive advantage in the market. This follows the continued health concerns regarding high-calorie beverages in the market. Besides, the organization should consider reviewing its product formula to reduce the sugar contents. Currently, Yiwu is one of the largest markets for China in mainland China. In the recent past, the nation has undergone steady economic growth. Therefore, venturing into the thing market for Red Bull GmbH would be close to a sure bet. With the correct marketing approach, it can be ensured that the goods can achieve tremendous consumerism.
References
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Pafitis, E. (2020). Red Bull’s Marketing Strategy: A Case Study | SB. Startingbusiness.com.
Red Bull. (n.d). Red Bull Energy Drink – Official Website: Energy Drink: Red Bull UK. Redbull.com.
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Venkatesan, R., Farris, P., Guissoni, L., & Neves, M. (2015). Consumer Brand Marketing through Full- and Self-Service Channels in an Emerging Economy. Journal Of Retailing, 91(4), 644-659.