Healthy Trend To Overcome The Current Issues Commerce Essay

Having good health is very important for everyone, so today almost everyone has increasingly health concerns and even the media is providing knowledge about health to people; for instance, how to be healthy and how being unhealthy may cause many diseases.

There are many causes that may lead people to be unhealthy such as not enough sleep, bad pollution, lack of exercise, and perhaps the most important is eating habits. If you want to have good health, one’s main concern should be selecting food to eat because unhealthy food is a main cause of health problems such as cancer, heart disease, hypertension, diabetes, and obesity.

We can see that today many supermarkets such as Vons and Ralphs provide organic product for their consumers. Even though the organic prices are more expensive than non organic products, stores still make a profit from selling it. I think this is a good example to show that healthier trends are becoming more popular today. Therefore, a giant corporation like Red Bull GmbH which is doing well in the energy drink market should seize an advantage from this healthy trend. They could do this by launching a new product that supports healthy trends in order to meet consumers’ current demand, expand their market, maintain loyal customers, and help company to create good image. However, in this research paper, I will focus on how Red Bull GmbH uses company’s opportunity according to SWOT analysis “current trend (healthy trend)” to overcome the current issues which many studies have revealed that Red Bull products cause adverse side effects. I will use three strategies, including product strategy, package strategy, and price strategy as tools for helping Red Bull to launch their new product.

Company Overview

Red Bull GmbH was founded in Austria in 1987 and launched products in the USA about 10 years later. Red bull products are in the category of energy drinks and have many benefits such as: increased performance, concentration, reaction speed, and stimulated metabolism. Almost 15 years since Red Bull was presented to the United States, Red Bull built a very strong brand name and has become the number one energy drink in the USA and around the world. Today, Red Bull is present in 164 countries. As of the end of 2011, Red Bull had sold approximately 4.6 billion cans worldwide and employed 8,294 people. The headquarters of Red Bull is located at Fuschl am See in Austria.

Highlight history

In 1982, Mr. Dietrich Mateschitz, the Austrian business man visited Thailand for his business. He felt sick because he had taken a plane for many hours, but after he tried Kratingdaeng energy drink that would later inspire him. He was getting better and claimed that it could help him recover from jetlag. Therefore, he went to contact with Mr. Chaleo Yuwitthaya that he was interested in entering the energy drink business. [1] 

In 1984, Mr. Dietrich Mateschitz and Mr. Chaleo Yuwitthaya established “Red Bull GmbH” in Austria. Both of them held 49% of stock equity share and the rest 2% belonged to Mr. Chaleo’s son. [2] 

In 1987, they began to sell Red Bull energy in Austria. It became the most popular energy drink in Austria within the first year. However, before launching Red bull energy drink in western market, Red Bull changed many ingredients from its original prototype such as, added carbonation, B vitamins, glucuronolactone, sodium, and caffeine in its new product in order to respond the demands of western consumers. Not only the taste, but the package was also changed, from glass-bottle to can. However, after Red bull improved their product, they claimed that the new product can increased stamina and mental concentration, so their target customers were changed from low class people to middle class people, such as athletes and students. [3] 

In 1997, Red Bull was presented to the USA and they focused on four western states which were California, Colorado, Oregon, and Texas. However, Red Bull used marketing strategy in presenting their brand by supporting extreme sports that are very popular in USA. For example, Red Bull sponsored snowboarding, skiing contests, and motorcycle racing. Moreover, Red Bull attracted people who like nightlife by introducing a drink that mixed Red Bull energy drink with vodka. Today, Red Bull GmbH is the most highly valued company in Austria, worth about $11 billion. [4] 

1982

1984

1987

1997

Figure 1: Red bull GmbH timeline

Vision

According to Red Bull ” Red Bull Energy Drink has been developed for people who want to have a clear and focused mind, perform physically, are dynamic and performance-oriented whilst also balancing this with a fun and active lifestyle. In short, Red Bull “gives wings” to people who want to be mentally and physically active and have a zest for life.” [5] 

Goal

According to Red Bull ” In spite of the still very difficult and uncertain financial and global economic climate, Red bull plans for growth and investment in 2012 remain just as ambitious and we envisage a continued upward trend.” [6] 

Objectives

1. Increase in sales.

2. Expand to new market, and develop the new product.

Healthy Trend 2012

A growing cause of death in world populations is chronic diseases. The chronic diseases are caused by the degeneration of the body. Examples of these diseases include: cancer, heart disease, hypertension, diabetes, and obesity. These chronic diseases cannot be overcome by modern medicine, but maintaining good health is simple solution to prevent such diseases. Therefore, keeping healthy by following healthy trends is a good way to make your life better. For example, sleep should be sufficient and a good bedtime is 10 pm. because the human body will begin to repair itself approximately every day at about 10 pm. However, if we do not sleep, the brain will not secrete substances it uses to repair the body and will lead to deteriorating health. Concerning the environment and air quality, these are also important because if lungs are receiving toxic polluted air, our lungs will suffer. The result of extreme pollution causes the growth of harmful cells which may lead to lung cancer. Another issue that must be mentioned is maintaining emotional wellbeing, which is important as well. When we are upset or angry, our body will be agitated too because we will secrete bad hormones that destroy our cells. Therefore, we should reduce our stress by calming down. We should also not neglect exercise. A healthy lifestyle involves 3 day a week for 30 minutes per day to maintain health. The last thing that we should consider carefully is eating. We should eat healthy nutritious food because good eating helps us to have a good health. However, if we eat unhealthy food, our body will be feeble and less able to fight off diseases. In addition, we should not forget to eat breakfast because when we sleep, we use a lot of energy to repair our body, so in the morning our body needs food to convert to energy for using in daily life. Everything are the basics of healthy lifestyle.

However, top 5 health trends for 2012 consist with natural energy drinks, getting enough sleep, flexitarians, digital motivation, and DIY health apps. However, in this paper, I will primarily focus on natural energy drinks only because it better pertains to my research. Over the last few years energy drinks such as Red Bull, Monster, and 5- Hour Energy have become increasingly popular. However, if these drinks want to continue to be popular in the future , they should concerned about consumers’ health , so they should contain 100% natural such as vitamins, whole grains, tea extract, bananas, and dates. [7] 

The particular issue “Side Effects of Red Bull Energy Drink”

Red Bull products are these include: Red Bull Energy Drink, Red Bull Sugarfree, Red Bull Energy Shot, Red Bull Cola, Red Bull Total Zero, and The Red Bull Editions. The company claims that Red Bull energy drink revitalize the body and mind, increase performance, concentration and reaction speed, improve vigilance, stimulate metabolism, and make you feel more energetic and thus improve your overall well-being. [8] 

The ingredients of Red Bull are caffeine, taurine, glucuronolactone, B vitamins, and sugar. However, some of Red Bull ingredients are causing the adverse side effects. For example, excess amounts caffeine can cause heart arrhythmia, insomnia, anxiety; A can of Red Bull energy drink has 27g sugar and 110 calories, so in excess it could attribute to weight gain, diabetes, and tooth decay. [9] In many countries, energy drinks are main causes of death. In Australia a 28 year- old- man died of a heart attack after he drank seven cans of energy drink and then joined in a motorcycle competition. In Britain, found a 21- year- old died at nightclub after drinking four cans of an energy drink mixed with alcohol. Another case is a student in Ireland that died after drinking four cans of Red Bull energy drink with friends. Due to negative side effects of these energy drinks, some countries have banned its sales in their country. [10] However, the worst side effects usually occur if consumed energy drink in excess. Sheryl Lozicki shows many studies of energy drink’ side effects in the following:

Australian medical researchers completed a study in 2008 on 30 young adults one hour before and one hour after drinking an energy drink. They concluded that one hour following, the blood viscosity became thicker, a condition similar in nature to individuals with cardiovascular problems such as stroke. Scott Willoughby, the lead researcher, stated that the effects of energy drinks when combined with high stress or high blood pressure could negatively impact the proper function of blood vessels, increasing the risk of clotting. Wayne State University researchers completed a study in 2007 on healthy adults who consumed two cans of a popular energy drink daily. They concluded that individuals with hypertension and heart disease should avoid consuming these types of beverages. The study showed that healthy adults experienced increases in blood pressure and heart rate following consumption. The participants were at rest, sitting in chairs or watching a movie. While the increase was not significant for healthy people, it could pose health risks for those with heart-related concerns. [11] 

Even if Red Bull also provided energy drinks without sugar, such as Red Bull Sugarfree, its sugar was replaced by aspartame and sucralose sweeteners. However, two main ingredients of Red Bull Sugar Free are taurine and caffeine, that two ingredients can lead you to suffer such negative side effects. Red Bull Sugar Free could increase heart rate if you are particularly sensitive to caffeine. Australian study by the Cardiovascular Research Centre at the Royal Adelaide Hospital in 2008 explains that stickiness of blood level may increase, only drink a can of Red Bull energy drink. Not only that, but Red Bull energy drink also causes blood clotting that is the primary of cardiac arrest and stroke. In addition, drinking Red Bull Sugarfree mix with alcohol can lead the drinker to deadly consequences. According to Steve Clarke, “combining the stimulant ingredients in Red Bull with the depressant effects of alcohol can cause cardiac problems.” [12] 

As the result, we can see that Red Bull products have been linked to many side effects. Therefore, Red Bull Company should concern about their customers’ health because products’ side effects can affect its sales. However, Red Bull should try to revise products to be healthier to retain existing customers and attract more customers. According to Red Bull Energy Drink SWOT analysis, one opportunity for Red Bull is launching a new product that aligns with the current healthy trend like it never has before. I think this is a good opportunity for Red Bull to take advantage of this healthy trend in order to maintain customers in the future.

How Red Bull can use the opportunity (Healthy Trend) to overcome the current issues.

The solution that can help the company to deal with the current issues is launching a new healthy conscious product that supports healthy trend by using three strategies: product strategy, package strategy, and price strategy in order to increase in sales, expand to new market, and develop the new product.

Product strategy

To serve a changing consumer basis in 2012, energy drinks should contain more natural ingredients, so the new product of Red bull should be a natural energy drink that contains ingredients from 100% natural sources. They should also add minerals and multivitamins that promote good health. Under the concept “Red Bull for Your Health.”

1. The new product is a drink in the category of energy drinks, under the name “Red Bull Natural Drink”. It is a drink that helps people to recover from physical exhaustion more quickly after work, sports, studying and also help for repairing the parts of the body that were damaged in order to stay healthy. This product will use a mixture of natural ingredients only and some minerals and multivitamins will be added in the product for additional health benefits. Moreover, the new product will have zero calories, zero carbs, and zero sugar which is good for the people who diet and people who want to have good health.

2. The water color is light green with 100% natural ingredients, higher mineral and multivitamin level than other brands in the same category. The light green represents nature that matches with the product concept involves nature. Therefore, I assume the light green is the best fit for Natural Drink.

3. At first, I will produce only one flavor that is the same original taste of Red Bull energy drink because this taste is very unique and difficult to copy and I want to keep with company identity. Moreover, Red Bull’s customers are told that they chose Red Bull because of this unique taste.

4. The drink will be contained in a can that, like the old product package, can help the company to save costs that will be lost in creating new package.

5. At the beginning, I will provide only one size of product that contains 355ml. It will be middle size that it not too much, but it is enough to give people what they need. I provide only one size because I want to know initial feedback of the new product and adjust my strategy accordingly. However, if the new product is popular, I think it will not be too late to produce another size.

6. Red Bull’s researcher team will work hard to study customers ‘demand and feedback that is a valuable information source to help company to develop new products in order to have a better range of products.

Package strategy

Logo: I will use the same logo picture and same color like the former product because when the customers see the new product, they will know quickly that it is a product of Red Bull and I think this will make it easier to advertise.

Package: I will choose a can package as the current product package, but color on the can will be changed by using a bright blue and green color to represent nature and a graphic that will be added on the can. It will be the graphic such as tree, plants, and flowers that reflect the nature of the new product in order to persuade consumer to consume the new product.

Label: The words on the label will be a green color and the label background will be a light blue color in order to match with the can of the new product.

Price Strategy

From the psychological strategy, I will set the price above the market price because high pricing can take advantage of a segment of consumers who believe high quality comes at a high price. It also helps the company to build positive consumer awareness. Another reason is using 100 % natural ingredients will increase production costs which is why I have to set the price above the market price and I want to sway consumers’ attitude about the new product that its high quality and better for your health than another product that set at the lower price.

In the next price strategy, the Red Bull Healthy Drink selects the psychological strategy by setting odd pricing. I will set the price at $3.25 per a can. This strategy is very popular in many items in the big stores and this strategy works many times for persuading consumers to purchase a product.

In the last price strategy, I will use product bundling strategy because this strategy will help the company to sell a larger amount of product in a shorter amount of time and also offer more value to the consumers. For consumers who are interested in purchasing the product, they may decide to buy if they can get more products in a bundle package. The Red Bull Healthy Drink will have 3 kinds of bundles. For a pack of 6 cans will be $17.75, a pack of 12cans will be $35.50, and a pack of 24 cans will be $71.00.

Conclusion

Due to many issues that Red Bull is currently facing, launching a new product that support healthy trends would be a good solution that would help the company to maintain consumers and also open new marker. I think using the current trends to run business would be a smart strategy that the company should follow because the customers want something new and that thing has to be the best for them. Therefore, if people want to succeed in business, they should know what current demands of consumers are and how to fulfill those demands. For instance, in my research, I have known nowadays that healthy trends are very popular because people have more concern about their health and eating habits as one aspect that creates health problems, so I think Red Bull should use this information to think about what the new product should be. I think launching the new product that support health trends would be the best answer for Red Bull Company. After knowing an answer, the next step is making new product to be real by using many tools. However, in my research I use only three strategies, product strategy, package strategy, and price strategy that I think would be enough to serve as a guideline about launching a new product for Red Bull.

Recommendation

Although launching new product may help Red Bull to overcome the current issues that they have faced, creating a natural energy drink that contains ingredients from 100% natural sources would cost a lot of money to company. Since there are many steps before launching the new product such as research and experiments about what should be ingredients for the new product, and also marketing. However, launching a new product is not easy, so the company has to consider carefully that the product is valuable enough to launch or not in order to ensure a successful business.