Red Bull
Red Bull Energy Drinks
Date Submitted April, 4, 2016
Prepared By
Valerie Guzzo Makenna Orlando Isabelle Cosgriff Kaeli Hinton
BUS 360 SECTION 001
Rev 1/2015 BUS 360 Team Project Red Bull Energy Drink
Table of Contents
COMPANY OFFERING PRODUCT/SERVICE ...... 1 Company Description 1 Company Location(s) 1 Other Products/Services Offered 1 Market Areas Sells To 1 PRODUCT/SERVICE BEING MARKETED ...... 2 Description of Product 2 Description of Services 2 Features and Capabilities 2 Product/Service Life Cycle 3 MARKET OF PRODUCT/SERVICE ...... 4 Customers for Product/Service 4 Why Product/Service Needed 4 How Product/Service Used 4 When Product/Service Bought 4 PRODUCT/SERVICE POSITION ...... 5 Competitors Offering Products/Services 5 Competing Products/Services Features/Capabilities 5 How Competing Products/Services Different 5 Competing Products/Services Evaluations 5 All Products/Services Market Share 6 Current trends in this marketing environment (identify minimum of 3-5) 6 Current Product/Service Marketing Channels 7 Competitor(s) Marketing Channels 7 Advantages/Disadvantages of Current Channels 7 Possible Alternative Channels 8 PRODUCT/SERVICE MARKETING PROGRAM ...... 9 Overall Marketing Program 9 Program Changes Made 9 Product/Service Demand Generation Programs (including Social Media) 9 Product/Service Branding Elements 10 Product/Service Marketing Success 10 Samples of Marketing Communications 10 Recommendations 11 APPENDIX (SUPPORTING DOCUMENTATION) ...... 12 INFORMATION SOURCES ...... 13
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Company Offering Product/Service
Company Description
Red Bull is a privately-owned company that provides various functional benefits to its users through its variety of carbonated energy drink products and exciting services. In the mid 1980’s, Dietrich Mateschiz created the original Red Bull energy formula which was sold for the first time in Austria on April 1, 1987. Since it was first sold, 50 billion cans have been consumed by an array of users such as athletes, business professionals, college students, and travelers as a way to “vitalize the body and mind”.
Company Location(s)
The company’s headquarters are located in Fuschl am See, Austria. Red Bull is a worldwide company located in numerous cities within its 167 country locations.
Other Products/Services Offered
In regards to energy drinks, Red Bull offers Red Bull Energy Drink, Red Bull Sugarfree, and the Red Bull Editions. Besides its energy drinks, Red Bull also provides merchandise and gear products as well as services to its customers such as Red Bull Media House, Red Bull signature series, Red Bull Racing, Red Bull TV, Red Bull Records, and The Red Bulletin.
Market Areas Sells To
As Red Bull is a well established global company, it is still trying to expand its brand further. To accomplish this task, Red Bull is beginning to target the core markets of The United States and Western Europe as well as growth markets in the Far East. Some successful Red Bull markets include Turkey, South Africa, Saudi Arabia, India, Poland, and Germany.
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Product/Service Being Marketed
Description of Product
• Red Bull Energy Drink • Red Bull Sugarfree • Red Bull Yellow Edition • Red Bull Blue Edition • Red Bull Red Edition • Red Bull Orange Edition
Red Bull offers a multitude of products in order to suit a variety of people in different situations. The sugar free option is provided for people with dietary concerns. Red Bull edition includes cranberry, blueberry, tropical, and tangerine flavors for those with specific taste preferences. These energy drinks contain caffeine, taurine, B-Group vitamins, and alpine spring water, as well as sucrose and glucose and flavoring depending on the product.
Description of Services
• Red Bull Media House • Red Bull TV • Red Bull Signature Series • The Red Bulletin • Red Bull Records • Red Bull Events
Red Bull Media House contains all services Red Bull provides such as Red Bull TV, Red Bull Signature Series, The Red Bulletin, Red Bull Records, Red Bull Racing and Red Bull Events. Red Bull TV provides all of the company’s signature series based on extreme sports alongside their magazine The Red Bulletin. Red Bull Records is a recording company that has produced many artists like Awolnation. Red Bull also provides many events ranging from video games to extreme sports. Some events offered are Red Bull Soap Box Racing and Red Bull Crashed Ice.
Features and Capabilities
• Boost of energy for a variety of activities • Different flavors and dietary options • Different sizes • Entertainment
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Red Bull’s effects have been recognized worldwide by top athletes, busy professionals, college students, and travelers on long journeys in various moments of need, for being alert, focused, and concentrated. To accomplish this goal for its consumers, Red Bull provides a variety of flavors and dietary options with the option of 8.4, 12, 16 and 20 fl oz cans. Red Bull services offer a number of entertainment options for all of its consumers.
Product/Service Life Cycle
Red Bull products are at the beginning of the maturity stage. The company has already differentiated itself from energy drink competitors like Monster through their “premium” quality with higher pricing and a wider array of events and services. They have introduced new services like Red Bull TV this year to try to rejuvenate their products by adding new features to the company.
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Market of Product/Service
Customers for Product/Service
The targeted consumer group for Red Bull is anyone searching for a product to fulfill their needs of energy, particularly male and females between the ages of 18 and 50 and those with extreme and exerting lifestyles. Although they have a particular target consumer profile, Red Bull does not limit its products to just this age group only. Anyone willing to buy Red Bull for its beneficial attributes can be a Red Bull consumer.
Why Product/Service Needed
Many people find it hard to keep their energy levels high during their daily activities and are searching for a product that will give them the physical and mental exertion to get through the day. Red Bull is designed to do just that for consumers. An energy drink can help a consumer in a range of challenging daily activities.
How Product/Service Used
Red Bull is marketed to drink as an everyday pick-me-up. Any Red Bull product variation can be consumed at any part of the day to receive significant levels of caffeine and taurine which is the source of the drink’s energy. Some consumers even substitute their daily cup of coffee for an 8.4 fl oz can of Red Bull due to the fact that Red Bull contains 80mg of caffeine, which is similar to a small cup of coffee.
When Product/Service Bought
Red Bull should be consumed whenever one requires an altered state of body and mind or a boost to his or her concentration. Red Bull believes that there are primary “times of need” where extra energy is required for consumers.
Red Bull recommends consumption during these “times of need” situations: • On the road • During lectures and study sessions • At work • While performing sports • While playing video games • While going out day and night
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Competitors Offering Products/Services
Although Red Bull dominates the energy drink industry, it still has a strong list of competitors.
Top 5 Competitors within the United States (2015 & 2014): • Monster • Rockstar • Nos • Amp • Full Throttle
Top 5 Competitors Worldwide: • Monster • Rockstar • Lucozade • NOS • Burn
Besides these competitors, Red Bull also has to keep a close eye on coffee chains, energy shot brands, and energy drink mixes. Overall, Monster continues to be Red Bull’s main competitor.
Competing Products/Services Features/Capabilities
Like Red Bull, its competitors deliver a wide array of energy drink products and flavors with the sole purpose of providing people that have busy and active lifestyles with functional benefits to get through the day. These competitors also offer numerous services such as events and promotions to keep consumers involved in the brand and products.
How Competing Products/Services Different
The main difference that sets Red Bull apart from its competitors are the different products offered with each brand. For example, Red Bull’s main competitor Monster offers even a greater variety of products. Besides its generic flavor, Monster offers 13 flavors and low calorie options. Monster also provides Java Monster which includes coffee-like products, Muscle Monster which contains a high dose of protein and is consumed during workouts, and other drinks such as Extra Strength, Rehab, Punch, and Juice Monster for certain preferences and situations.
Competing Products/Services Evaluations
When consumers look to purchase a drink that will provide them with an extra boost in their day, they evaluate the amount of energy (caffeine and taurine levels), flavor, and price. Surprisingly,
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Red Bull is less powerful energy-wise and is more expensive than its competitors. Monster contains higher levels of caffeine and is cheaper than Red Bull. However, is still a leader in the energy drink industry.
All Products/Services Market Share
Red Bull dominates the energy drink market with 43% market share. Monster is a close second at 39%. Other competing market shares include Rockstar at 10%, Amp at 3%, NOS at 3%, Full Throttle at 1%, and Xyience Xenergy at 1%. To demonstrate their dominance in the market, Red Bull sold $2,883,000 worth of product in 2014 whereas Monster sold $2,476,000 and Rockstar sold $647,000,000. An illustration of this market share can be seen in the appendix.
Current trends in this marketing environment (identify minimum of 3-5)
Accommodating Consumer Health Concerns– Red Bull reaches a wider consumer base with its health accommodations. Among its many benefits, Red Bull is gluten free, vegan, wheat free, lactose free, and dairy free. Red Bull is also pasteurized and contains no preservatives. Using organic and natural ingredients is now a huge notoriety in energy drink formulas for many companies.
Sugar-Free and Diet Products – Today, more than a third of all soft-drink products consumed world-wide are a variation of a sugar-free or diet product. Red Bull was the first global energy drink brand to meet this need for consumers, and other energy drinks are following this trend. In fact, energy drinks sales are increasing while soda sales are declining as energy drinks are thought to be the healthier alternative. These low-calorie and sugar-free drinks are an especially attractive aspect to female consumers.
Environmentally Friendly Products – Many U.S. businesses are becoming extremely conscientious of creating a more environmentally friendly environment. Red Bull’s cans are 100% recyclable and weigh less to save raw material and reduce the carbon footprint.
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Product/Service Marketing Channels
Current Product/Service Marketing Channels
Wall-to-Wall Production – Cans are manufactured and filled on the same site to reduce the amount of transportation needed. By filling the cans on site, Red Bull not only saves time and money, but they also save more than 6,641 tons of CO2 from being emitted via truck transportation each year. Using this method of production, Red Bull has the advantage of being able to guarantee that the quality of their product is the same around the world.
Transportation – Red Bull cans are transported directly from their warehouse to more than 167 countries. Though ship and rail are the preferred method of transportation, Red Bull also transports cans via truck if there is no other way to deliver. They have their own distribution company: Red Bull Distribution Company.
Continuous lifecycle – Over the years, Red Bull has significantly reduced the amount of aluminum required to produce each can and increased its efforts in becoming an environmentally responsible company. Today, all of Red Bull’s cans are 100% recyclable, and after being melted down, can be used over and over again to reproduce new cans at the same level of quality. Their cans have a seemingly continuous lifecycle through its production channels.
Imperial is a logistics partner that has worked to integrate technology into Red Bull’s distribution and warehousing processes, and improve its management systems. They plan, control, and manage transport operations and have implemented a transport management system that gives Red Bull expected time of arrivals and timely proof deliveries. These technologies have allowed Red Bull to make better decisions about their distribution and transportation operations.
Competitor(s) Marketing Channels
Outsourcing – While the company does pack some of their products in certain locations to ensure that the beverages are produced closer to the market for which they are intended, Monster outsources the manufacture and distribution of the majority of their products. By relying on third-party bottlers and contract packers, they are able to reduce costs associated with freight and transportation.
Partnerships – Coca-Cola negotiated a deal that gave Monster access to Coca-Cola’s strong global distribution network and will allow Monster to expand its international reach and gain shelf space.
Advantages/Disadvantages of Current Channels
Advantages:
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• Control over operations • Technological advancement • Ability to determine how eco-friendly they want to be • Can identify, fix, and change things faster • Owning their own distribution company helps create a “premium” brand image
Disadvantages: • More expensive and timely than outsourcing • Long-term investment with insourcing
Possible Alternative Channels
While outsourcing it one of those channels, it would not be beneficial given all the technology and advancements they have made to improve the quality and efficiency of their current processes. Red Bull is currently partnered with the logistics company Imperial, but given the previously mentioned advancements that were made, it is possible that Red Bull does not need this partner anymore. As an alternative, they may consider hiring logistics experts of their own.
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Product/Service Marketing Program
Overall Marketing Program
• Field-Marketing Managers • Field-Marketing Specialists • Wings Team • Student Brand Managers
In each chosen market, their is a Field-Marketing Specialist who is in charge of The Wings Team marketing team. The Field-Marketing Manager supervises and works with the Field-Marketing Specialists in his/her market to help plan events and target new consumers. The Wings Team is the marketing team that works under the Field-Marketing Specialist to help plan local events and target new consumers, especially at the colleges they attend. The Student Brand Managers create events at the big universities that they attend. The Wings Team and Student Brand Managers surprise consumers by giving a free can to those who need a boost of energy. The purpose is to create a memorable experience in hopes that the consumer will remember Red Bull and buy a can next time they need an energy boost.
Program Changes Made
• Discontinued products • Red Bull Media House
Red Bull has discontinued some unprofitable products such as Red Bull Silver Edition, Red Bull Total Zero Editions and Red Bull Cola after seeing the reactions and data the Wings Team gathered from consumers. Red Bull Media House was created to show the support for extreme sports and related activities. It has also launched Red Bull TV this year to show documentaries and events that it has helped produce.
Product/Service Demand Generation Programs (including Social Media)
• Social media • The Wings Team • Sponsors athletes
Red Bull has created an Instagram and Twitter account for the company as a whole, as well as having individual Instagram handles for each market to support the local communities like @redbullnc and @redbullbos for Red Bull in the North Carolina and Boston markets. The company also sponsors athletes like Blake Griffin and Ryan Sheckler to help market to a variety of consumers.
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Product/Service Branding Elements
• “Premium” branding • Logo • “Red Bull gives you wings” • Red Bull vehicles • Red Bull Distribution Company
The company lives by their standard of being “premium” and reiterating that term to all of their employees. Red Bull brands everything with their logo of two red bulls, a yellow sun and blue background and their tagline “Red Bull gives you wings”. They aim to create an exclusivity with the logo by only allowing Wings Team Members and Red Bull athletes to wear the logo. Red Bull has many vehicles branded with the logo such as the Wings Team Red Bull mini cooper topped with a giant can, Red Bull “Dixie” which is a mobile DJ booth and many other specialized vehicles. Red Bull also owns their own distribution company which is labeled with the logo.
Product/Service Marketing Success
• Number one energy drink • Widest range of involvement in sports/production
Red Bull is the number one energy drink in the world and prides themselves in being the most involved in extreme sports events and sponsoring world projects like “The Art of Flight” documentary about extreme snowboarding.
Samples of Marketing Communications
• Few advertisements
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Recommendations
• Create new Wings Teams • Broaden Student Brand Managers
It could be beneficial to create more Wings Teams in states and cities that do not have one to help gain new consumers who have not been reached yet. It would also be helpful to hire more Student Brand Managers at other big schools like Appalachian State, especially when there are so many great mountain sport opportunities to take advantage of.
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Market Share & Sales Totals
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Information Sources
Individuals
Spencer Smud Field-Marketing Manager Red Bull North America 2700 Perimeter Park Drive Morrisville, NC 27560 [email protected] (919)-462-0870
Web Sites
Caffeine Informer http://www.caffeineinformer.com/the-15-top-energy-drink-brands Market share and the different competitors
Monster Energy https://www.monsterenergy.com/us/en/products/ The different drinks that Monster offers
Transparency Market Research http://www.transparencymarketresearch.com/energy-drinks-market.html Different trends in the energy drink market
Imperial Logistics http://www.imperiallogistics.co.za/case-study/715/imperial-giving-red-bull-wings Logistics processes information
Market Realist http://marketrealist.com/2015/01/monster-beverages-extensive-line-energy-drinks/ Partnerships Monster Energy Drink made with Coca Cola, channel information
TIME http://time.com/3854658/these-are-the-top-5-energy-drinks/ Market share and competitor information
Passport http://www.euromonitor.com/medialibrary/PDF/RedBull-Company-Profile-SWOT-Analysis.pdf Company overview
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Red Bull http://www.redbull.com/us/en?medium=tsa&gclid=CI6UyYC59ssCFRMlgQodiMsN2w&gclsrc =aw.ds A majority of our information came from this site; company overview, product descriptions, product use, manufacturing and distribution channels uses
Other Sources
Red Bull Twitter
Red Bull Instagram
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