Red Bull International Marketing Plan Business Essay

rosy-cheeked diddlyshit International selling Plan headache Essay blood-red ink prick with no doubt has been transformed to transnational follow by the increase which invigorates races mind and body . reddened grunter is supranational is lodge offering only two harvest-feasts invigorating peoples mind and body. Its international victor has become subject of inte stick around for galore(postnominal) researchers in compass of international marting. The current report addresses international merchandise strategies of the red ink squat connection as major international player in talent make merry and boozing fabrication. Customer homage and relative overlapion apostrophize atomic number 18 primary(prenominal) advantages of the society. But company is threatened by major players of international food marketplace in its penetrated territories. Still company is have it offing get under ones skin in its international elan vital befuddle markets.Internal a nalysis of deprivation slovenly person strategies has reviled practice of courtly and unorthodox markets to expand its international markets. The sophisticated HR strategies of the red ink slovenly person is an opposite propellers of the company in international markets. ruddy wangle follows focus dissimilariation scheme in drunkenness lather. So bolshy bull has become selected choice of massive spring chicken population, which gross revenue 1 jillion preempt of billet present both course of instruction.SWOT analysis of the company depicted or so(a) strengths and weaknesses. The analysis showed congruous adoption of generic merchandising strategy, redress international segmentation, right targeting, right positioning and groovy sales record. The marketing strategy of red bull go off be easily applied to different cultures around the arna that be in possession of sizeable y extincth population.History basisHistory beingness dressed in extra way is not enough to be good seller in beverage industry. In an industry which its products argon found each where worry hypermarket, supermarket, grocery and even in order of magnitudes selling is not easy. rubor bull was first introduced by Dietrich Mateschitz Austrian origin man who teamed up with Thai person to bring production of tralatitious Thai revel to international take. The product was canisterned in ash gray shiny can and named vehement diddly because it showed head to head bull fight. ( bolshy fudge Founder Rides Wave of Success)In 1987, the product was then taken to Austria where it had its first groundbreaking success in no time. In started red international in 1992, when they paintinged Hungary. inflamed tinkers dam is currently active in over 100 countries, energizing the population and creating competition as they go along. unmatched source menti unmatchabled that on that point be over 150 expertness plight cracks, however, all inferior to the mighty passing diddley (A retrieve CREW IS AN EFFICIENT CREW). With over 1 million cans s gray severally year, departure dogshit delays 70% of the humans market part of thrust sucks.Background going tomentum became strong when they created a high character reference suck up that is only do in Austria. Further much, all of its ingredients are synthetically do in pharmaceutic companies to grantee high timberland and safety. Moreover, due to the ingredients of the product, it is state that reddened bull ( passing falsify FAQ)Improves performanceImproves preoccupancy and reaction vivifyImproves vigilanceImproves emotional attitudeStimulates metabolismHowever, the briny reason for the success of bolshie strapper is in its advertising style. passing squat tends to buy the farm very footling on conventional or traditional marketing tools, like TV and Print ads. Their marketing strategy is usually out of the box and creative. Red manipulate tends to be more than ac tive in sponsoring extreme spots and giving away samples in local anaesthetic events. repayable to the fact that Mateschitz has been involved in traffic pattern One racing for more than a decade, he used the events to d innovative attention to his check. In addition, he sponsored the World Stunt Awards, an annual fund-raiser to help injured stunt workers (Red dogshit Founder Rides Wave of Success). Moreover, roughly observers say that Red cocksucker uses the anti-branding order of advertising, where they broke the usual method of marketing and branding. Actually what they did was use the seethe marketing strategy or better seen as volume of mouth. With this strategy, they associated their brand with the youth culture and extreme and adventure-related sports, such(prenominal) as force sports, mountain biking, snowboarding and dance music. Thus they targeted their brand directly to people from extension Y, the so-called millennials people born after 1981 who were believe d to be cynical of traditional marketing strategies (A Look at a Key Feature of Red fakes Business).The Buzz over Red Bull among the youth and their underground military perplex has created Red Bulls reputation as the take in within that community. That is wherefore Red Bull continues to use Viral marketing internationally, where the company would sort of modify the supply of Red Bull and not advertise it, expecting that growing numbers of target consumers to catch the bug and its reputation would spreads. Through this strategy, Red Bull has winningly captured 70% of the 1.6 one million million million market (A Look at a Key Feature of Red Bulls Business).External AnalysisPorter tailfin Force AnalysisExternal analysis is very important, the psychoanalyst winning this step should be aware of how warlike strategy has to be formulated. The analyst must bring all relevant social and economic factors in both micro and macro environment to digation.The people in incriminat e of formulating competitive strategy of the companies should know all strategic options available to the company. They should know all forces inside and outside industry affecting the company. Michael porter has rum framework for industry analysis and formulation of the strategy. competition among existing competitors, buyers, providers, potency entrants into the business and Threat of substitute products are those 5 forces which can maintain positive or negative effects on industry complex body part by making the industry more or less competitive. potentiality EntrantsRedbull can produce bubble less energy fuddles among some opposite comfortable swallow producers. If the barriers of entry are high, it is difficult for potential competitors to enter the market. triplet main sources of barriers to bare-ass entry brand loyalty of red bull nodes, absolute follow advantages in Redbull s production line, and economies of scale get laided b RedBull.Brand loyaltyCustomers of RedBull have become loyal to the brand. The attend special events sponsored by the Redbull, respond to professional advertisement put by the company and name is cognize for its quality among its customers. Brand loyalty is a barrier for any new entrant to enter the energy drink industry. constitute advantageAccording to the Michael Porter, normally cost disadvantage is a grown barrier for companies to enter an industry as new entrants because it can be cost advantage for existing companies in that industry. as well as, companies with the help of cost advantages can compete and beat their competitors very easily because usually it is difficult for new entrants to match their companies with the lower cost structure.Therefore, Red Bull because of Red Bulls winner production and operation processes, and their experience in the energy drink industry, and control of its inputs according to their experience in producing red bull drinks, benefit the cost advantages with obtaining it s quality in the high direct. Although thither are legion(predicate) energy drinks existing in the industry with the lower harm rather than Red Bull, as quality aspect they have not cost advantages both in quality and price, so Red Bull is go ahead from its competitors in this case.Customer switching costIn nutrient and beverage industry there is no switching cost for costumers with considering the level of quality, therefore it can be considered as threat for existing companies in this industry. In this case, Red Bull is not exceptional, so they need to keep their quality at the equivalent level to not loosing their market share by coming new entrants because it is real threat for them.Government regulationsOne of liberal issues and al shipway concerns for companies which like to go internationally is government regulation, also, in this case some Europe countries have problem with selling Red Bull and have tried to ban it. They claim that Red Bull was the cause of death of people in those countries. France, Belgium, and Sweden ban using the confection of Red Bull and alcohol. So, it can be a threat for them in taking the market share and having a bad image for their brand. . (French censor on Red Bull (drink) Upheld By European Court)Intensity of RivalryRivalry in some industries is characterized by such phrases as warlike, bitter, or cutthroat, whereas in opposite industries it is termed polite or gentlemanly. Energy drink industry has an intense rivalry because of a number of interacting structural factorsIndustry competitive structure due(p) to the competition in the energy drink market, Red Bull focuses on non-price competitive weapon like offering pick up events, high quality products and sponsorship. In contrast with other competitors Red Bull attract more costumers to its company by growing in 45%marketshare. Accordingly Red Bull has a major influence on its competitors performance in the industry because Red Bull is one of the pioneers in energy drink industry and galore(postnominal) companies try to obey and consider Red Bull as benchmark.Industry demandIn the energy drink industry, because of the various proper advertisements to encourage people to use and drink energy drinks (giving the image that people can fly) the demand for drinks is change magnitude. Thus, this is a good point for the company because there are lots of opportunities for every company to fill the current demand and rivalry tend to reduce in the industry, also there is space for everyone to jump in enter the industry (growing format), and the profit of the company is going to increase which is a goal that every company is seeking it.BuyersHaving strong and stable costumers are suppliers and producers concerns, producers like to have costumers with large quantity level of ordering and stable financial status basically in energy drink industry especially Red Bull costumers (buyers) are wholesalers and big retailers. These buyers buy the energy drinks through the company or its representatives, and resell them to supermarket, bars, restaurants and end users. Red Bull faces buyers with high level of negociate berth, and it is real risk for Red Bull. Main reasons for this high bargaining power of buyers in this case are the switching costs in the energy drink industry are very low. So, Red Bull buyers can switch from Red Bull to other energy drink companies which produce it with lower prices without any difficulty. Also, in most cases energy drink buyers (retailers and wholesalers) purchase products in large quantities, and it is obvious that the more buying in quantity, the more bargaining power the buyer has. So they can use their power to reduce the cost of energy drinks.SuppliersThe bargaining power of suppliers is the same story like bargaining power of buyers but from other side. Red Bull company has both kind of suppliers as bargaining power, some very strong and others weak, so they can balance between them. For i nstance, the supplier of Glucuronolactone is Glaxo Smithkline Company. Red Bull energy drink buys their Glucurnopolacton inputs from this company. So the bargaining power of this supplier is very high on Red Bull. But the other ingredients are assembled from several infinitesimal suppliers, and Red Bull has the bargaining power on them. Also, Red Bull has many channels and substitutes suppliers for its normal raw materials, so they can switch from any supplier to cheaper and more tensile one.SubstitutesAll producers always carry the concern of substitute products for their products and always looking at for ways to protect and survive themselves from this phenomenon. Energy drink industry isnt an exception, so players in this industry always try to keep level of quality high, convenience price and other thing which may make costumers more satisfy. Coffee industry can be a threat for energy drinks because of the existing caffeine in coffee and it can be a powerful potential produc t substitute for energy drink. Therefore, Red bull must take care of its pricing strategy and product quality to keep its costumers and satisfy them more day by day which they were successful due to reports not only Red Bull could protect its products against other substitutes but also, they have increased in their market share in US market by 45% .Industry Analysis and confederate ReviewIndustry CharacteristicsBeverage industry is divided into many categories such as alcoholic vs. non alcoholic, (hard vs. soft drinks) and within soft drinks shut away there is other segmentation such as carbonate soft drink (CSD) and non carbonated soft drink. Carbonated Energy Drinks account for less than fractional of the total volume. This figure is heavily skewed however by the popularity of still brands in Asia (Canadean Press release)According to Beverage Digest, in 2004 the U.S. non-alcoholic refreshment market totaled 14 one million million cases (192-oz). Carbonated soft drinks made up 73.1% of the total with non-carbonated products comprising 13.7% and packaged bottled water accounting for 13.2%. the Statesns spent roughly $92.9 billion annually on refreshment beverages.Energy drink is a comparatively new product introduced in 80s and has been growing noticeably with the market more than doubling in size since 1998 (Canadean Press release). The following chart is demo of this inevitable ingathering and the attraction of this growth for drink manufacturer. The industry has been experiencing a significant growth and still growing at the speed that draws the big players in soft like coca plant Cola drink to enter to this high valuation reserve business.Food and beverage market are unfavorable enough that out of 100 new product development 90 NPD fails. The failure results from a poor interpretation of consumers trend and translation of those to opportunities. Austrian company, Red Bull, as a pioneer trend settler has made its fortune from their unique strategies in advertising, marketing and other products characteristics such as Packaging, Flavor, color and crossroad claim.Global consumptionAccording to Beverage focus report, Asia is the largest leading market in consumption of energy drinks followed by westerly sandwich Europe and conjugation America as the second and third markets.Asia has been loosing some of 20% of its market share is past 6 years. However, this decline has been trigger off by the second and third market mainly due to the potent growth in market of carbonated E.D in North America. North American market is now nigh 40 times greater than it was in 1998Peer ReviewIn North America now more than 200 energy drinks existed in US. According to bevNET.com, after a rigorous marketing research the trump out energy drinks are angstrom by Pepsi Cola, KMX Red by Coca-Cola Company Red Bull by Red Bull North America.Red Bulls market dominance seems assured. No other competitors have either the distribution channels or, more importantly, the posture of rebellious infamy to be considered real threats.Year 2001, in UK energy drinks market 21 new drinks have been introduced that would have force the red bull into a competition. However, red bull can still enjoy being a market leader.In the following table there are representations of top 14 non- alcoholic markets where some of them are in the specific market of the energy drinks.Coca-Cola(Juice, emollient Drinks, Water) ($21bn)Suntory(Water, Soft Drinks) ($4.4bn)Nestle(Coffee, Soft Drinks, Water) ($19bn)Starbucks(Coffee) ($4.0bn)PepsiCo(Juice, Soft Drinks, Water) ($10bn)Sara Lee(Coffee) ($2.7bn)Kraft Foods(Coffee, Powdered Drinks) ($4.6bn)Tchibo(Coffee) ($2.7bn)Unilever(Tea ) ($4.5bn)Red Bull(Energy Drinks) ($1.6bn)Cadbury Schweppes(Soft Drinks) ($4.5bn)Cott Corp(Juice, Soft Drinks) ($1.4bn)Danone(Soft Drinks, Water) ($4.5bn)Ocean Spray offset http//www.mind-advertising.com/sectors/sector_softdrinks.htmIndustry Life CycleEnergy drinks were airplane pilo tly pioneered by Asiatic companies, but they became popular in Europe the late 80s with the arrival of Red Bull. There are more than 200 energy drinks existed in US market only and this figure is increasing due to the high margin of this business.In 2004, carbonated soft drinks posted the growth of 1% which is unalike its usual trend, case of growing 2% to 4%. Noticeably, this inevitable growth was driven by Diet and Energy drinks. While other carbonated drinks posted volume convert of one Digit, brands like Red Bull and Hansen Natural reported the 45% and 56% of positive volume change in 2004.The market, now estimated to be worth $10 million, has been predicted to grow to $ccc million or even as much as $2 billion in the next hardly a(prenominal) years. Double digit growth in the market is the main factor contributing to Energy drinks demeanor cycle in its embryonic phase (growth).Since the market is not old enough, the number of players are increasing and even the Coca Cola an d Pepsi are the new entrant which add to the well-built assumption of embryonic phase.Brand loyalty and high expectations are still questionable in this stage and its because the consumers are still exposing to new products and new claims. Thus, players are fighting for product character extension such as low-carbs and sugar free plus new products claims such as reform parsimony, reaction time and endurance.After invention of Red Bull in late 80s, industry went to an introduction phase. By 1998, the size of the industry doubled and still growing with a refrain pace following highlighted area in the graph is an approximate stage of the life cycle at the moment.Internal AnalysisValue trainPrimary exercise Inbound outbound logisticsLogistical issues at Red Bull in of high importance. Due to the fact that all ingredients in the Red Bull drink is synthetically made by pharmaceutical companies, they make sure that their products are carefully handled to maintain the quality and k eep off unnecessary costs. Red Bull always makes sure that they align with gift logistics provider to achieve their strategic goals. Red Bull aims to have web-based visibleness on their supply chain, thus they base their logistical activities or choice onFlexible warehouse networkTransportation management capabilities buckram discipline technology offeringWith 1,600 employees working for Red Bull world wide (Gulf News, Red Bull plans to set up Dubai plant), Red Bull required those standards as they are experiencing year-after-year of high growth, which make the inventory forecasting and management challenging. That is why logistical issues have become increasingly important, and that is why they choose to outsource the logistics to companies that can comply with their network of multi-client warehouses needs (Red Bull OH Logistics). Interestingly, Red Bull uses small distributors in small regional markets, if those small distributors dont perform up to Red Bulls standards they establish a warehouse and impel young people to stuff their vans with Red Bulls product and distribute it every where. This way, the small distributors generally break even within three months and are profitable within six (A Bulls Market The marketing of Red Bull Energy Drink).Primary Activity OperationsThere is little information about the operations process of Red Bull. However we will realize you with the contents and brief information about the packaging company that Red Bull deals with.The great product which is provided by Red Bull one of its main elements of success. Known for ameliorate performance, improving concentration and reaction speed, improving vigilance, improving emotional status and stimulating metabolism, Red Bulls secret is in its ingredients. The ingredients in each Red Bull drink (250ml) consist oftaurine (1000mg)Glucuronolacton (600mg)Caffeine (80mg)Niacin (20mg)Vitamin B6 (5mg)Pantothenic Acid (5mg)Vitamin B12 (0.005mg)According to Red Bull, It is a c abal of all the ingredients together, which result in Red Bulls benefits (Red Bull, Ingredients)..The packaging process of Red Bull is fully done in Austria. And the supplier of Red Bulls cans is Rexam, and they are considered to be the worlds largest provider of beverage cans. Rexam manufactures different types of cans for different industries, however almost half of their revenues come from Coca-Cola and Pepsi Cola. Moreover, industry estimates present that Rexam gained about $22 million from the sales of Red Bull cans (How Does Red Bull Package Its Product?).Primary Activity Marketing and SalesWith the control of 70% of the 1.6 billion market (about 1.12 billion), Red Bull has achieved all of this through intensive unconventional marketing strategies. Targeting young people, mainly the Y- propagation, Red Bull has utilized erratic marketing tools that has extremely effective on the target market. The strategy of sponsoring local activities like the Red Bull music academy in the USA, jumping in South Africa, Go-Karts in Kuwait, and many more in different countries has achieved its target of attracting its target market which gets excited when viewing such sports. some(a) of the strategies used for marketing Red Bull includeUsing pick-up trucks as mobile displays, painted blue and silver with a giant can of the drink mounted on top of the vehicle.Designed to be eye-catching, these devices were aimed at promoting the red bull brand as youthful and slightly off-the-wall.Cans of the drink were also given out free to people on the highway who had been identified as being in need of energy.Red Bull was given to orderliness DJs, empty cans would also be left on tables in hot spots such as trendy bars, rescripts and pubs. unoriginal Activity TechnologyThe information about the technology that Red Bull uses was quite scares. However we could safely say that Red Bull little activity done on their RD side because Red Bull does enjoy any sort of economies of scale. Red Bull has only one main product, which is the Red Bull energy drink and recently they introduced the new Red Bull energy drink sugar-free. Hence, the main difference between the original Red Bull drink and the sugar-free drink is that it has 0g of sucrose and 0g of glucose, where the original product has 21.5g of sucrose and 5.25g of glucose. Moreover, each sugar-free drink has only 8 calories (EU)/ 10 calories (USA), insofar it does not loose any of its energetic effects (Red Bull, Ingredients).Secondary Activity Human RecourseRed Bull is famous for practicing what they p gain ground, especially when it comes to recruitment. Due to the fact that Red Bull promotes their product as a hip to(predicate) and young product, they make sure to recruit staffs that are young, in stir with youth culture, dynamic and innovative. For example, they achieve that by recruiting university assimilators as student brand managers to promote its product among young student groups (What Sort of People puddle For Red Bull?). However their recruiting does not happen by Red Bull themselves, but they makes sure that it is implemented by all of the outsourced activities. However, it is known that most of Red Bulls 1,600 employees are marketing experts and are the real movers of the Red Bull drink (Marketing Eye, Red Bull Car).Group Customers and Market varianceAs it is known any successful company should have a certain customer group. The customers that were targeted by Red Bull were the ones that were looking for excitement, alertness, and concentration depending on the age, status, and lifestyle. Four consumer categories were Red Bulls target under the age of 16-30 students, club people, sport people, and employees.College students were the main target of Red Bull. Since college students look for something that would enhance their concentration on doing their assignments and projects, and staying overnight for studying for exams then Red Bull is the best solution for them. It would improve their concentration in their studying Moreover Red Bull has used this group to enhance their promotion. According to Biz/ed, put down parties those students were emboldened to market the product in the campuses of the universities as what they call them student brand managers. Those students collect the information and make a report of a market data research to the company. Depending on that strategy and the youth generation (high school and colleges students), Red Bull was able to spread the reputation and the popularity of the drink and concentrating on supplying the product rather than applying the traditional marketing ways of promotion (A Look at a Key Feature of Red Bulls Business).The second category of Red Bull customers are the night club people, since the drink has some substances that would increase the persons emotional status. Moreover, Red Bull is offered in the nightclubs depending on the cultural background. For example, nightclubs in Dubai offer Re d Bull for the people who do not drink alcohol like the Muslims, which made it a major substitute for alcohol to that group. However, Red Bull is still one after another mixed with alcohol to create both the Red Bull stateliness and the alcohol sensation. what is more, Red Bull has also made music events for those groups of customers like the Red Bull Music Academy in 2005 in Seattle, working capital in the United States. (Red Bull Music Academy 2005)For the physical exertion that the drink offers, Red Bull has also promoted the product for the sport people. Among those people, there are the athletes, the racing drivers, the airborne-sport people, water-sport people, the bikers, the skateboarders, and the skiers. Red Bull highly endorsed this group with many sport festivals, and one of the famous one among those is the Red Bull bitter spar Man that took place in Austria in 2005. (Red Bull Dolomite Man)Red Bulls minor groups are the white-collar and the blue-collar workers. Red B ull can support white-collar workers to deoxidize more on the job to improve their performance, and it would also help them stay overnight if he or she needed. The drink would also allow the blue-collar workers to work extra hours with out the sapidity of exhaustions for the physical exertion that the drink provides. However, Red Bull did not concentrate on this group, so there were no special efforts directed towards them. inwardly the four groups, there a considerable amount of customers who look for nourishment product. For that category, Red Bull produced the sugar-free Red Bull to combine the diet customers with rest of the customers that are within the four groups.Business Level and Generic strategyIn the generic strategy Red Bull there are two views, there is a generic strategy from energy drink market perspective, and there is a generic strategy from soft drink market perspective. From the energy drink market perspective, since Red Bull has few economies of scope, the st rategy adopted by Red Bull to follow is differentiation. The price of the drink is about 5Dhs in the UAE, which shows the clear differentiation of the product, especially in a market where every body is competing on the same customer segment. According to Biz/ed, Red Bull was able to build a strong brand image through using Red Bull cars that had big cans on them, giving free cans to people, and providing Red Bull cans to club DJs (A Look at a Key Feature of Red Bulls Business). This strategy made Red Bull to be the market leader of 70% market in the energy drink market.From the soft drink market industry wide perspective Red Bull applies the Focused-differentiation generic strategy. Red Bull has a very good brand image in terms of soft drinks industry. The drink can only maintain this image through focus-differentiating the product by separating their customers according to the demography (age, lifestyle, culture) and the geography, since the industry has many aggressive competitor s with a powerful brand image like Coca Cola and Pepsi.SWOTStrengthsIndustry leadershipThroughout the world, Red bull is the leader in the energy drinks market with annual sales of billion dollars. According to the statistics, in year 2003 red bull achieved 80% brand share of the energy drinks market in the UK. Also in the Europe, they produce two-thirds of overall volume in the region. Moreover, Red bull is competing in 13 West European countries and is the main leader in 12 of these and other top 20 brands are having only 17% of share. Since year 2000 (compare to 1990s), it has been a clear shakeout, and fewer new brands are launching new products to the market. furthermore many products offered by leading drink manufacturers could not compete with Red bull in the market, such as Coca-Colas Burn. (Red Bull SWOT Analysis)Marketing capabilitiesThe successful marketing strategies and consumer awareness of Red bull introduced stimulation drinks to the western market and has resulted functional drinks growth throughout these years. Red bull is increasing its consumer brand awareness by employing targeted marketing campaigns that focuses on 18-25 age groups. Also the company has been differentiating its product by sponsoring dangerous sports such as Formula 1 driving free skiing BMX biking etc. Furthermore, Red bull strongly promotes itself by using its slogan Red bull gives you wings. (Red Bull SWOT Analysis)Alliance with major distributorsRed bull has expanded its brands marketing distribution by establishing an association with Cadbury Schweppes in Australia. This association allows consumers to have gateway to Red bull across the nation. As a result of this partnership, sales of Red bull are 40% higher compared to give-up the ghost year and expecting to rise significantly year-by-year. Furthermore, this partnership can reduce competitive threats from Red bulls rivals and broaden its sales opportunities due to the fact that Cadbury Schweppes can help it to r each channels such as vending machines, food courts, colleges, sports a give way facilities, hospitals etc. Another partnership that Red Bull North America did was with Ozburn-Hessey Logistics, where Red Bull saw its supply chain get boosted last year. OH Logistics, Red Bulls single national provider, handled more than 16,000 shipments of the drink during 2004 and opened five locations in five states in the first 90 days of operation. (Red Bull OH Logistics) (Red Bull SWOT Analysis)WeaknessesLack of innovationIn year 2004 some new energy drinks have been entered into the market. One of them is called Raw Energy displace Cell, which is Canadian vitamin and glucose drink and is certified by World Wrestling Entertainment. This product has quiet the same effects that Red bull has except that it does not contain Taurine and has less caffeine compared to other energy drinks. Furthermore it comes in 330ml PET bottles, which makes it look different compared to Red bull (250ml cans) and o ther competitors. However Red bull only made little changes to its product format throughout th