Report analysis of Red Bull PDF

Preview

Summary

Download Report analysis of Red Bull PDF

Description

PRINCIPLES OF MARKETING

GROUP REPORT

1

Red Bull marketing analysis

1.Abstract In recent years, the trend of energy drink consumption among young people has been developing for many reasons, and Red Bull is the typical example of this new wave. This project's primary aim is to get complete information on Red Bull and what their goals are to gain customer loyalty and maintain their market leadership. This is the premise to concentrate on STPD and SWOT analysis, providing 4Ps marketing strategy to differentiate Red Bull from its rivals, especially in the Vietnam field.

2.Introduction 2.1 Company description Red Bull is an Austrian company, which was created on April 1, 1987. by Dietrich Mateschitz.The first time, it was called Krating Daeng because it was initially based on a Thai drink. Then, Mateschitz collaborated to reformulate the drink to Western palettes. Today, Red Bull became a famous energy drink worldwide. In 1987, it began launching a completely new product category in the international market. From the first product sold until now, Red Bull has now been present in 167 countries and officially entered Vietnam in 1999. 2.2 Product description Red Bull Vietnam, headquartered in Di An, Binh Duong, operates an enterprise with 100% foreign-owned capital, with the product sold at a reasonable price. Red Bull products are a significant beverage category in Vietnam, and it has higher sales than mineral water and cola carbonate. These energy drink ingredients meet health safety standards entirely and have passed strict censorship on the Vietnamese market. It has been certified by the Department of Food Hygiene and Safety under the Ministry of Health(2012).

3.External environment Microenvironment Customer Red Bull is one the most popular energy drinks in the Vietnam market because of its customer behavior. According to the research, Red Bull's targeted customers are mainly from the age of 18 to 35, and it is very well known that the energy drink market is generally young people under and of the working class. Competitors Red Bull is a popular choice with many athletes because it has sponsored various football matches. In Vietnam, the company's most notable competitors are Coca-cola, Tan Hiep Phat, and Sting. Coca-cola, The brand was born under the Coca-Cola company in 1886 in the USA. Coca-cola takes every customer as a target, and its world's segmentation is mainly based on "age, family size, and income." The perfect segmentation was the main factor for Coca-Cola's success. Tan Hiep Phat, which was established in 1994, Tan Hiep Phat Beverage Group (THP) is Vietnam's largest FMCG (FMCG). THP mainly develops, manufactures, and sells beverage products to 63 provinces in Vietnam and 16 countries worldwide. Products include herbal teas, green tea, squash tea, exercise drinks, energy drinks, soy milk, and purified water.

2

Red Bull marketing analysis

4. SWOT Analysis Strengths

Weakness

 Lack of variety  Strong brand - Red Bull is almost entirely dependent on - A powerful slogan, “Give You Wings,” and unique, color-based branding sugar-rich energy drinks and sugar-free  Effective supply chain energy drinks -The company has developed a highly  Patent enforcement difficulty efficient supply chain that includes - As the company did not develop the dependable manufacturers and devoted ingredients, Red Bull's recipe is difficult to distributors. protect.  Intensive market - Any business can produce a closely -Red Bull's marketing campaign is highly similar product to Red Bull. aggressive, using social media and athletics Opportunities

Threat

 Product  Increase in Imitations - develop new flavors and formats to - Consumers enjoy energy drinks that taste maintain market share. and pack very much like Red Bull, thinking  Health option they are legally consuming Red Bull. - Adding health-conscious options like  Growing Health-Consciousness protein drinks, vitamin drinks, and electrolyte -Red Bull comprises unhealthy ingredients, drinks. such as caffeine, artificial flavor, color, taurine, etc., - Reworking their existing products to use fewer toxic ingredients and rebranding  High marketing cost - Because of the matured and developed themselves appropriately market today, promotion is more complicated than ever.

3

Red Bull marketing analysis

5. STDP 5.1 Segmentation

Segment

Demographics

Red Bull • Age: 16-30 Energy Drink • Gender: Males and Females • Income: Medium • Occupation: Students, Employees, Professionals

Psychographics

Behavioral

Geographics

• Personality: Ambitious • Lifestyles: Daring, Explorer, Working professionals

• Degree of loyalty: ‘Hardcore..’ • Benefit sought: Enhanced performance, sense of belonging • User Status: Regular users, nonusers

• Region: Domestic & international • Density: Urban/rural

Red Bull Sugarfree

• Age: 26-45 • Gender: Males and Females • Income: Medium • Occupation: Employees, Professionals

• Personality: Ambitious • Lifestyles: Daring, Explorer, Working professionals

• Degree of loyalty: ‘Hardcore.’ • Benefit sought: Enhanced performance, sense of belonging • User Status: Regular users, nonusers

• Region: Domestic & international • Density: Urban/rural

Red Bull Editions: cranberry, lime, blueberry, tropical fruits

• Age: 18-36 • Gender: Males and Females • Income: High • Occupation: Students, Employees, Professionals

• Personality: Determined • Lifestyles: Daring, Explorer, Working professionals

• Degree of loyalty: ‘Soft-core.’ • Benefit sought: Enhanced performance, sense of belonging • User Status: Firsttime users

• Region: Domestic & international • Density: Urban/rural

Red Bull Simply Cola

• Age: 16-40 • Gender: Males and Females • Income: High • Occupation: Students, Employees, Professionals

• Personality: Easygoing • Lifestyles: Daring, Explorer, Working professionals

• Degree of loyalty: ‘Switchers.’ • Benefit sought: Sense of belonging • User Status: Firsttime users

• Region: Domestic & international • Density: Urban/rural

4

Red Bull marketing analysis

5.2 Targeting Strategy 5.2.1 Analysis of customer insights. The organization focuses mainly on target audiences that it believes will prosper from a "boost." Athletes, action sports athletes, working professionals, and young people who enjoy their weekends having fun are all candidates for Red Bull.. According to DanSo, the Vietnam population is 98 million people, and the average age is 32.6 years old. Therefore, with a large and diverse market scale: customers with demand are all classes, all generations, all ages, businesses must know how to meet those customers’ needs ingeniously, and the Red Bull did a great job of this. Red Bull continuously improving their product base on the ten wants of customer: • Want to improve quality of life • Want to enhance performance • Pursue something interesting, novel, exciting or strange • Want to be confident

• Want to renew their life • Want a comfortable life • Want an opportunity to express affection • Want the best • Want to improve social status • Want to win over yourself 5.2.2 Reason this segment targeted by the company

The company launched various Red Bull Energy drinks, including sugar-free products, flavors stereotypes Red Bull, and organic products such as Red Bull Simply Cola. Hence, these types of traditional Red Bull Energy Drink is still holding the largest market share for an energy drink in Vietnam (42%) and globally (43%) reported by T4. According to new research (Alsunni, 2015, p. 461), energy drinks usually have sugar levels ranging from 21 g to 34 g per oz. As a consequence, excessive consumption of energy drinks can increase the risk of obesity and type 2 diabetes. Moreover, the number of customers that Red Bull strives for is around 16-45. In research from Chacko (2003), replacing sugar-based soft drinks with sugarfree alternatives could slow the progress of the obesity epidemic. Hence, the sugar-free "diet" versions of these drinks could be a valuable aid for weight maintenance, which helps retain the 'hard-core loyal' customer of Red Bull. On the other hand, Red Bull uses a mono-segment type of positioning. Accordingly, the company appeals to a single customer segment’s wants and needs, leading to Red Bull stereotypes editions (cranberry, lime, blueberry, tropical fruits) and Red Bull Simply Cola.

5.2.3 Targeted strategy To reach the target audience, Redbull focuses on promoting to a small number of target customers. Those events provide the springboard for talented athletes to express their skills and dreams. Red Bull's marketing strategy can be divided into three main groups.  Compelling content: Videos, images, articles, etc., posted by Red Bull's marketing department signify the same quality as any other advertising campaign in the market.

5

Red Bull marketing analysis

 The "crazy" adventure: Red Bull has continuously become the center for organizing events that give the audience insane moments.  To demonstrate its responsibility to consumers: Red Bull has continuously become the main sponsor of significant events for young people passionate about adventure and energy future players’ efforts. In conclusion, the targeting marketing strategy used by Red Bull is the Niche marketing strategy.

5.3 Differentiation 5.3.1 Competitive advantage Red Bull ignored the big-budget mass-media advertisement standard in the beverage business at the time. Alternatively, it relied on grassroots, high-octane sports and event marketing. It sponsored super sports events, and professionals who big beverage competitors overlooked were nailing in popularity with Red Bull’s target customers. Today, the brand holds hundreds of events per year in dozens of sports around the globe. Each event highlights off-the-grid experiences intended to bring the high-octane world of Red Bull to its small but vibrant community of enthusiasts.

5.3.2 Marketing channels Red Bull’s Vietnam Facebook Fan Page has 195 thousand followers, but when looking at the amount of interaction in the Facebook marketing channel. Even though Sting and Number 1 have more followers on this platform than Red Bull, the number of individuals who interacted per post at Sting was around 20-100 likes, and Number 1 was 4-20 likes on average while each post of Red Bull provided 5000 - 15000 interaction per post. The company also launched its campaign through the Youtube platform, gaining over 20000 followers.

6

Red Bull marketing analysis

5.4 Positioning 5.4.1 Positioning map

As one of the Vietnamese market’s earliest names, Red Bull is the most popular product group globally, along with Number 1, Lipovitan or Rhino. But until 20 years of presence, sales of this brand new milestone reached a trillion (VND). Specifically, in 2019, Red Bull Vietnam's revenue reached 1,013 billion VND, increasing more than 2% compared to 2018 (Tri Thuc Tre, 2020). Hence, Red Bull still holds the largest market share for an energy drink in Vietnam (43%).

5.4.2 Positioning statement For nearly 20 years, "providing energy" for Vietnamese users. With international quality products, Red Bull constantly inspires young Vietnamese to discover their potential, overcome all challenges to achieve their goals, with the spirit of “bản lĩnh chinh phục mục tiêu.”.

6. Marketing mix 6.1 Product Red Bull Energy drinks are non-alcoholic products containing stimulants for the body and mind, such as caffeine, taurine, and glucuronolactone, which help customers improve concentration, improve physical performance, and restore energy after training.

7

Red Bull marketing analysis

Red Bull is currently experiencing the maturity stage in its product life cycle. Besides, Red Bull brand awareness is vital, so sales continue to grow but at a declining rate compared to the past. Besides, there are more competitors with the same products. So, companies defend their market share. At this stage, usually, loyal customers make purchases. 6.2 Price In the Vietnam market, Red Bull is sold at a retail price of 10,000 VND per can of energy drink, comparable to or lower than other rival brands such as Monster and Bang energy drink. Red Bull used rebate methodologies, such as trade limits for dealers and wholesalers. Red Bull also used mental estimating. This estimating strategy is based on the belief that particular costs or odd numbers are actually below the round to make the goods more attractive to consumers than others. However, promotion pricing tactics may pose concerns about product consistency. When products are sold daily, customers who are familiar with Red Bull will continue to wonder, "Why are the prices of the products already constant before price changes?". When using a psychological pricing approach, Red Bull would have long-term pricing assumptions. Psychological pricing will boost sales, and consumers will often expect to purchase goods at the lowest price. One day, if they see an unreasonable offer, they will switch to a competitor's offering, such as Coca-Cola, Bang, or Monster. 6.3 Place/Distribution Red Bull are currently bringing their products to end-users through distribution intermediaries. This helps companies save costs but does not affect the expansion of scale. Like the international market, Red Bull reaches Vietnamese consumers through such intermediaries. Red Bull refrained from selling to wholesalers and used to sell the product to retailers at a single price before. They relied heavily on store executions to get the necessary retail push, but until 2009, Red Bull had begun to apply the selling to wholesalers strategy. Red Bull is available at convenient locations like a supermarket, convenience store, retail outlet, or even nightclubs, bars, and casinos. The energy drink is often stored in exclusive refrigerators, and Red Bull attracts customers to buy it when they go grocery shopping. It is also sold on online and e-commerce sales websites to purchase anytime, anywhere easily. Despite being a giant in the energy drink industry with strong financial potential, Red Bull does not directly bring its products to consumers, instead of building an extensive distribution network to help its energy drinks penetrate deep into the market.

6.4 Promotion Red Bull's marketing strategy is unique and rare. "We do not bring the product to the customer, we bring the customer to the product.” (Farris et al., 2017). To implement that, Mateschitz organizes "marketing events,” more specifically, a strategy for "Non-Personal Communication,” which means using brand names to organize major cultural and sporting events. Especially extreme sporting events, windsurfing, cliff diving, rock climbing, racing. Red Bull constructed a new area at the airport and formed a radio and television business as part of the marketing division's "Merging Advertisement and Entertainment" plan.

8

Red Bull marketing analysis

This way, it can create advertising and branding content to reach consumers with such engaging messages that people want to see them. In Vietnam, choosing the golden hour to advertise is paramount because the audience is the largest at that particular time. Even so, Red Bull can still do well with its "Breaking Through the Clutter" strategy, and it takes risks in its attempt to step out of the comfort zone and be unique without obnoxiousness. As a result, marketing moves are progressive moves that people cannot emulate as successful as Red Bull.

7. Conclusion Red Bull is doing well in its mission in the Vietnamese market. However, there are allegations that the chemical composition of energy drinks can be addictive, including severely affecting behavior because caffeine is a stimulant that increases heart rate, blood pressure and increases hormone levels, harmful stress in the blood(Salih Abdul-Sadanand Abdulrahman, 2018). This can lead to consumers will opt for a healthy soft drink with less caffeine than energy drinks. Furthermore, the covid-19 epidemic has caused a significant decrease in sales in the energy drink market in general and Red Bull, particularly in 2020 in Vietnam (National Report, 2019). Hence, Redbull needs to seize the opportunity to enter new markets by boosting healthy products and launching a new product line with new flavors and less sugar-sweetened beverages. The environmental problem is a big challenge for Red Bull energy drinks. Red Bull does not provide any information about whether recycled material is used in Red Bull cans, or it appears that all Red Bull cans are made of pure aluminum (Netwerk, 2019). Thus, water cans that can recycle need to be produced to help protect the environment and ensure revenue.

9

Red Bull marketing analysis

8. Reference

A. (2018, July 16). Dân số Việt Nam mới nhất (2021) - cập nhật hằng ngày. Retrieved from https://danso.org/viet-nam/

Alsunni, A. A. (2015). Energy Drink Consumption : Beneficial and Adverse Health Effects. International Journal of Health Sciences, 9(4), 459–465. https://doi.org/10.12816/0031237

Chacko, E. (2003, October 24). Replacing sugar-based soft drinks with sugar-free alternatives could slow the progress of the obesity epidemic: have your Coke and drink it too. Retrieved from https://pubmed.ncbi.nlm.nih.gov/14583807/

Chỉ bán nước tăng lực nhưng Redbull thu lời hiệu quả hơn hẳn Coca-Cola hay Pepsi. (2020, September 22). Retrieved from https://doanhnhan.vn/chi-ban-nuoc-tang-luc-nhung-redbull-thu-loi-hieu-quahon-han-coca-cola-hay-pepsi-33449.html

Di Rocco, J. R., During, A., Morelli, P. J., Heyden, M., & Biancaniello, T. A. (2011). Atrial fibrillation in healthy adolescents after highly caffeinated beverage consumption: two case reports. Journal of Medical Case Reports, 5(1), 11–13. https://doi.org/10.1186/1752-1947-5-18

Energy Drink Market Share | T4. (2021, January 23). Retrieved from https://www.t4.ai/industry/energydrink-market-share#:%7E:text=Red%20Bull%20market%20share%20was,energy%20drink%20in %20the%20world

Energy Drinks in Vietnam | Market Research Report | Euromonitor. (2020). Retrieved from https://www.euromonitor.com/energy-drinks-in-vietnam/report

Farris, P. W., Shames, E. R., Johnson, R. R., & Mitchell, J. (2017). Red Bull (Abridged). Darden Business Publishing Cases, 1–8. https://doi.org/10.1108/case.darden.2016.000256

Red Bull marketing analysis

10

N. (2020, September 21). Red Bull Việt Nam thu 2 đồng lãi 1 đồng, tỷ suất lợi nhuận vượt Vinamilk, Sabeco, Heineken. Retrieved from https://ndh.vn/chuyen-thuong-truong/red-bull-viet-nam-thu-2dong-lai-1-dong-ty-suat-loi-nhuan-vuot-vinamilk-sabeco-heineken-1276465.html

Pantaleon, K. (2019, April 28). Red Bull Vietnam Uses Cans To Create Renewable Energy for ‘Giving Life to the Night’ Campaign. Retrieved from https://www.brandinginasia.com/red-bull-uses-cansto-create-renewable-energy-for-giving-life-to-the-night-campaign/

Plastic Soup Foundation. (2020, March 2). Questions for Red Bull. Retrieved from https://www.plasticsoupfoundation.org/en/2015/06/questions-for-red-bull/#:%7E:text=Red %20Bull%20is%20proud%20of,bottles%20because%20of%20their%20shape

Recycling Netwerk. (2020, October 21). 3 European environmental NGOs join forces to address the Red Bull can pollution. Retrieved from https://recyclingnetwerk.org/2020/10/21/3-europeanenvironmental-ngos-join-forces-to-address-the-red-bull-can-pollution/

Roos, G. (2010, December 14). Red Bull Pays Record U.K. Fine for Failing to Recycle Packaging Waste. Retrieved from https://www.environmentalleader.c...