Questions on analysing red bulls marketing strategies

Red Bull is a highly successful branding story. The brand came to India in 2003. Although the brand has been keeping a low profile compared to the Cola majors , Red Bull has created a category of energy drinks in the Indian market. According to Economic Times ( 30.05.08) the energy drink market in India is estimated to be around 100 crore. The market now has two main players Red Bull and Power Horse.

Energy Drinks are not much popular in India or it can be said that this product is used mostly by sport persons hence a niche. So far the use of these kind of drinks has not percolated to the mass market..

The energy drink broadly comes under the category of functional drinks which is a bigger market estimated to be around Rs 543 crores.

Q1. Argue for the most relevant segment criteria to be used in the international market selection process?

Red bull has consistently worked on growing international sales. Red bull has a well developed network of local subsidiaries set up in key markets to oversee distribution in any given region. Instead of targeting largest distributors with greatest reach, red bull targets small distributors who often become exclusively red bull distributors. Small independent venues are also the first targets.

Red Bull does not use traditional market the local subsidiaries are responsible for local marketing content such as oral marketing, bill boards and radio.

Q2.Which changes would you suggest for red bull’s future global marketing mix in order to make future challenges?

Have an ability to gain new customers and retain current customer loyalty:

With Red Bull’s target market currently aimed at the Generation Y’s (15 – 30 year

olds) there is the question of whether this generation will continue to drink Red Bull as they

grow older. And will the next upcoming generation accept this product as their own. They should segment the market in two difeernt ways, one relating to the youth. Second to the older generation

Have Health and Social Implications:

Due to growing pressure on organisations in society, Red Bull now promotes their

product with current societal and health issues in mind. Childhood obesity and type 2-onset

diabetes has become a major issue across western developed nations. By introducing ‘sugar

free’ Red Bull will open up a new opportunity to the ‘health conscious’ and diabetics.

Managing this issue will be a constant process and Red Bull must be seen to be adjusting their

product to suit society.

By not having only one product:

One particular issue Red Bull has to consider is their limited product range. Unlike

their major competitors such as Coca Cola and Pepsi, who have various different products in

different beverage classes (water, soft drinks, electrolytes) Red Bull does not. Only having

one product can be a positive however, for example Red Bull can concentrate 100% effort on

their product while not being distracted by other influences, however the downside is that

should the market share of that product decrease in the future, Red Bull has no back up

product to cover the loss.

Q3.How will you categorize red bull’s oral global marketing strategy?

Red Bull globally is known for buzz marketing. It is a brand which has built its equity through careful below the line marketing. During the initial launch time, Red Bull used to invest heavily in buzz marketing .

Some of the famous marketing strategy adopted by Red Bull is given below :

Student Brand Managers : The brand tried to reach the trend setters and opinion leaders by appointing ( informal agreement ) student brand managers across campuses. These members were given free Red Bull cans and was encouraged to organize parties for other youngsters.

Identify Hot Spots : The brand identified hot spots where the majority of consumers /opinion leaders gather. This could be a bar or a party area. Once these hotspots are identified, the brand campaigns in that spot.

Red Bull has the famous slogan ” Red Bull gives you wiings “. The ads are revolving round this theme of the brand giving a high. One fact is that Red Bull need not do much of a product advertisements because the brand was confident that once the customer tries the product, he will start understanding the benefits of this product.

Q4.Red bull’s is available in large cities in India across supermarkets, restaurants and bars. Evaluate for opportunities for market expansion in India?

In India which is a market which is characterized by heavy duty advertisements, high profile celebrity endorsements and mouth watering sales promotions, Red Bull has managed to take the different route.

Since the launch the brand has managed to dominate the Indian market with more than 60 % market share . The popularity of Red Bull has prompted many cola majors to launch their energy drinks brand in India. There are news reports of Coca Cola and Pepsi bringing their global brands in this category into the Indian market.

Despite the success of Red Bull and Power Horse, there are stumbling blocks in the development of this category . The main issue is regarding the perception of consumers towards this category.

Energy drinks are usually viewed this type of drinks with suspicion. Frankly speaking they have an attached perception that this energy drinks are associated with alcohol ( it was a perception). I was surprised to find that these products are targeted towards youth.And these products are more found in pubs and bars which further reinforced the perception that these drinks have parity with products like beer.India, the culture is different. The consumption of these beverages are not considered a part of social living. There are restrictions in consumption and availability of these beverages.

Red Bull is marketed heavily through pubs and bars across the western markets. But in India , Red Bull should keep away from associating itself with these kind of beverages. Because such an association will repel many customers especially ladies.

Having said that, this category also offers excellent growth potential also provided the brand rationalizes the price. The price of energy drinks vary between Rs70-95 per can which can restrict the frequency of purchase of this product.