The Red Bull, Essay Example

Consumer brand extension for entry into an Emerging Market

Part 1: Problem definition

Preliminary marketing mix

Product definition

The brand in discussion is Red bull. Red bull is an energy drink that came into existence in 1984, but came into India in 2003. In the Indian market, Red Bull has created various categories of energy drinks although the brand has been keeping a low profile as compared to coca cola, and related brands. Of the two outstanding energy drink manufacturers, (Red Bull and Power Horse), Red bull has an estimated market share of 29% globally in the market of energy Drinks. It has a market share of approximately 47% of the energy drink market in the U.S, and a 50% share in Germany. The emerging market we need to the extent is India.  With the fact that it has only been in the Indian market for eight years, its popularity is encouraging.

Red bull is a healthy energy drink majoring in replacing lost energy and at the same time providing pleasure to the consumer. It targets the youth group, such as students, white collar and black tea lovers.  Red bull has widely known advertisements more especially to fulfill the electronic markets needs. They go a step ahead in fulfilling the EM consumer needs by offering a variety of new products.  With the competitiveness in entering into an emerging market, the Red bull remains outstanding through its uniqueness in quality. Competitiveness makes consumers enjoy great services at reduced prices. The competitiveness in the energy drinks industry also has benefited the consumers greatly. Consumers have a greater variety of brands to choose from, where the best brand in terms of quality, quantity, packaging and friendly prices gain customers. Customers benefit from escaping the harassment of monopolists in the market.

Preliminary Pricing/Promotion/Distribution decisions

Majority of the consumers perceive the Red bull as one of the best energy drinks. So far, a SWOT Analysis shows that amongst the energy drinks, Red Bull leads in the industry globally. Efforts put in marketing promotions and campaigns. With the aim of producing a strong, fashionable, and fresh brand into the market, its contents are more likely to be costly. This is in addition to all other expenses in advertising and marketing. The selling price is a little bit higher than those of other energy drink competitors are. This will be an advantage, and will work towards capturing those consumers who tend to believe that expensive is quality.

In working towards retaining the market share, we hope to work on opportunities extension of the product line. This achieved through advertising and promotions. We will work towards consumer recognition through the sponsorship of sports events, and venturing into new partnerships with social sites as face book. Through this, the Red bull will gain fame, more especially with the local community who has little or no time to access information from the television or internet. Further, advertisements aired in India by radio, TV and the internet, especially on TV. Young people in their 20s need energy renovation after every activity.  As a result, advertisements developed and aired in a manner to capture the younger generation. Another strategy is the one that employs student brand managers to promote Red Bull on university campuses. These students throw parties in colleges, where Red Bull distributed.

The packaging will consist of unique, attractive cans that will come in different sizes. The product supplied and distributed from supermarkets as Wal-Mart, COSTCO, and Publix. Red bull also distributed in clubs, small stores, gyms, cinemas and restaurants, all being joints of our target market group.

Secondary research

Competition analysis

It is a traditional in India, or rather most parts of the world to take black tea for relaxation, more especially after a days’ tough schedule. For this reason, companies have identified a loop into the business, thus manufacturing different forms of beverages, all named tea. Different brands, with different flavors, colors, tastes, and different colors, all going to different costs have emerged into the Indian market. Red bull has faced a number of competitors who are old enough in the beverage market. Cola companies as the Pepsi & Coca Cola for example, have their own USP; thus leaving the red bull behind. The other factor that beats the Red bull company is the fact that it relies on one branded product, which is the Red bull. The cola company has several branded products that rule the market. If consumers dislike the taste of one cola product, they will always have another choice from those companies. This is unlike the Red bull, where, if one dislikes the company’s product, then there is no alternative.

As much as the Red Bull black tea company tries to spend millions of dollars on advertisement to convince young people that it is the energy drink to go for, it still faces strong competition. Red Bull black tea also faces competition from other brands as the Tata Tea and the plebeian tea. Green tea is too a threat to the Red bull’s emergence into the market. The competition placed in a manner that competitors have popular products that came into the market early enough and already have royal customers.

The issue of prices holds a lot of weight in the purchase of a product. Red bull is a little bit more expensive than similar brands. It is probably for this reason that consumers go everywhere discouraging people from consuming Bull black tea. They go ahead saying that it is not good for the health. This has been a threat especially to the company as capturing newer customers who have already listened to the gospel of those despising the Red Bull is difficult.  Competitor companies offer their products at reduced the prices to gain favor from customers.

Rumors have it that the red bull, just as other energy giving products consist of the same ingredients, and that they see no reason for Bull black tea to be highly priced. However, consumers forget that Red bull has flavor, is carbonated and canned, compared to the other products.

Companies like Tata Tea are the oldest makers of traditional black tea, are seeing off a different churn in the tealeaves. They work towards capturing the changed global beverage market. They have tried this by getting the Indian concoction, and mixing it with the Chinese one. By tradition, this mixture known to tweak the best brews ever. The Tata Tea wants to use ingredients rich in antioxidants as polyphenols to make more healthy tea products. R K Krishna Kumar, who is the vice- chairperson of Tata Tea, says it loud that they are looking at value-added products. Through all this, company is able to stand out in the competitive beverage market. All this efforts aim at bringing down the Red bull.

The target market for all beverage manufacturers is the students and the sport persons, among others. This is because the students are always in the search for a new choice, and in the process, they could become loyal to one of the products. The sports persons targeted, as they tend to lose a lot of energy during their activities. Companies have tried all strategies including unique and attractive packaging, considerably lower prices, and advertisements. Other competitor companies have employed promotional strategies as the “buy two and get one free”. With this, a consumer is most likely to do impulse buying, just to obtain the extra free sample.

Segmentation

The gamers, hip-hop crowd, and sports persons present the primary target group that comprises of a segment of persons bound to fatigue. The Red bull Target Market consists of persons bound to losing a lot of energy during their daily activities and this majorly comprise of persons in the age bracket 15-60. This is the best crowd that brings in new customers to the products. While the loyal consumers take the Red bull brand, new customers who would like to taste the new brand will come up. In the process, some will like it and become loyal customers to buying the Red bull, and this forms the secondary target group

The gamers, sports persons and generally the male consumers form a most attractive market segment in terms of future growth potential, ease of entry, competition, and purchasing power.  However, the overall risk associated is that of competition, where competitors in the market are having their own USP that leaves Red Bull behind. The fact that the company only markets one branded product, which is the Red Bull Energy Drink, is newer to the market compared to the cola group brings in risk. The most risky part of it is the lack of patent on Red bull’s recipe meaning anyone can copy it.

Yet another segment comprises of children, breastfeeding women, and very active women, who are more popular with high sugar levels energy drinks. Male consumers prefer Red bull brands with a stronger taste. In fact, research indicates that 65% of the energy drinks market comprises of male consumers.

Customer analysis

In the Customer Analysis, young people who are especially open to determined exhaustion and insufficient energy present a good percentage of the Red bull customers. To be more specific, there are the male teenagers who are more likely to consume the product. Teenagers and young adults either in their early or late twenties is more likely to consume energy drinks, and in this case, we work toward making the Red bull to being their choice of drink. In making up to meeting the demands of the youngsters, the main target group, adverts developed in a manner to suite their requirements.

Social activities including events like games are more likely to affect sales. During a match for example, there is a tendency of the players, participants, and the spectators thirsting for energy drinks. Such events mark a boost in the anticipated number of sales. Other social events as clubbing are also likely to contributing in boosting the sales per day. A hip-hop crowd could play a strategic way of not only making great sales, but also creating new customers for the Red bull as a product. This works in a funny manner: while someone takes the Red bull, a friend who is new to it could have the desire to taste it. It is during this process of tasting that one could end up liking it and becomes a royal customer.

Environmental changes are more likely to cause a rise or fall of sales. Take for example a very cold weather. The tendency of taking or rather requiring an energy drink lowered as compared to a hot weather. Sales are more likely to higher during a hot weather, or rather in a hot environment as compared to a cold one.

Economic factors contribute a lot in determining the sales per day. Tough economic conditions will obviously lead people into concentrating in the purchase of basic needs. In such a case, the Red bull considered a luxury, and only customers with extra cash at their disposal would purchase them. During such periods, the general number of sale per day reduces.

To buy any energy drink, and in this case the Red bull, several factors considered. The pricing is the major factor that the majority of the consumers consider. Secondly, people would mind the taste and general quality of the product. There are other consumers who are either loyal or they prefer a certain brand. Other factors that could influence one’s decision to purchase a product include Public Valuation and the Competitors’ Market Shares. Advertising is yet another item that plays a consistent role in the consumers’ decision to purchasing a product. A regularly advertised product will obviously capture the eyes of a customer in a shopping mall as compared to a product not advertised. An attractive package would go a step ahead in attracting the eyes of the consumer.

Several persons are involved in making decisions regarding purchasing. This majorly depends on the consumer of the products. In a social network, for example, women’s community club, buying club, and religious group could be involved in the purchasing decision. In the case of a general consumption, the relatives, friends, leaders, and colleagues contribute much in making the purchase decision.

The buyer determines the frequency of purchasing the energy drink. Take for example the homemakers; they would prefer shopping and thus buying the Red bull on weekends or at regular intervals. Persons who are more exposed to fatigue as office workers more likely to do the buying in the morning during the workdays. The Physical exercisers would do the buying after exercise, while the students would buy before studying. The Black tea lovers will not have a definite time to do the purchasing, thus they would buy frequently as long as they love the taste.

The common place of purchase is the supermarkets. At the supermarkets, the Red bull placed on shelves alongside similar products. Supermarkets as Wal-Mart, COSTCO, and Publix among others will have the Red bull and other energy drinks. Other outlet joints will include the restaurants, which offer various drinks. They will yet the study institutions that will have the Red bull in the small stores adjacent to the library, classroom buildings, gym, and cinema.

The quantity of purchase would vary from one consumer to the other. Homemakers, for example, and tea lovers may buy bundles of the product every other time. The Students, office workers, travelers, moviegoers, and physical exercisers may buy one or more every time need arises.

Like any other product, buyer’s preferences and needs for edible products category are more or less the same. First, it must be healthy, not harmful for people. Healthy eating and living is the order of the day, due to the rising number of lifestyle diseases. Every other consumer would always like it if he or she were on the safe side in consuming a given good. The whole product made from natural ingredients with no chemical content.  The effect of the Red bull black tea should be stronger than the other brands. This way, one would find it economically worthy to spend on purchasing the Red bull. Above it all, the Red bull should have a base of the traditional black tea, and should have some special taste.

Problem definition

To redefine the problem definition, we would consider giving the definition of the following terms:

Target segment –This comprises of persons falling under age group 15-60. Amongst these persons, there are children, women, and men, all with different tastes of the Red bull as discussed.

Brand name: the brand name is Red bull. This is an energy drink packaged in a cylindrical can similar to that of a cola drink. There are proposed proximal and distant brand extensions yet to emerge.

The problem definition thus redefined as; to determine the energy losers’ consumer preferences and purchase intentions for Red Bull energy drink in India.