Red Bull Marketing Strategy - Get a Sample Solution

Question: Discuss about theRed Bull Marketing Strategy. Answer: Introduction Red Bull is no doubt a transformed multinational company because of its products that invigorate customers body and mind. The multinational company offers two primary products, and its international success remains a subject of interest for nearly every researcher (Gates 2015). The article opts to address the international marketing strategies the company has used to remain a major global player in the industry of beverage and energy drinks. Interestingly, it is evident that Red Bulls advantage has come from its relative production costs and customer loyalty (Porter 1985). Nevertheless, the company is facing a fierce threat from the major players in the market, in particular, in its penetrated territories. Conversely, the company still enjoys a growth in the international energy drinks industry (Thompson, Rindfleisch Arsel 2006). Therefore, the article examines the role of marketing strategy at all business and corporate levels regarding Red Bull. Expansion of Red Bulls Target Market Since the inception of Red Bull, its target market has remained the generation Y (18-34 years), particularly the male segment market as explained by Ackerman (2013). In fact, the company has strived and invested heavily on various guerrilla tactics to reach this target market including the extreme sports associations, Cliff Driving, and the Red Bull Air Race. Undeniably, this strategy has ostensibly worked for the company. However, the target market is becoming saturated because all the leading brands target the same market using a similar approach (Cnossen, Li, Sampath, Taylor-Maisano Tsonev 2016). To this effect, it would be prudent for Red Bull to broaden its appeal using different strategies. In most cases, the young generation has become more health conscious and have expressed concern about the health effects regarding the energy drinks compared to other generations (Thompson et al. 2006). Similarly, the consumption rate of energy drinks remains low among the women because the y are more responsive to health than men. In response to this saturated market segment, the company needs to introduce zero-calorie and sugar-free editions that would tap into a rapidly growing market share. Montague-Jones (2011) also acknowledges that continued efforts to endorse celebrities and role models in getting around legislations to reach other market shares including the minors before they set their spending habits. However, Red Bulls has disputed these allegations as they levy criticisms. The company must intensify its efforts to attract more women to its products. In fact, it has used high-profile sportspeople including professional golfers including Skier Lindsey Vonn and Alexis Thompson (Bhasin 2012). Red Bull has incessantly operated profitably in a niche segment, especially the soft drink market. The big companies never participated in this market segment, but have invaded the market and are building and protecting market share. The presence of the PepsiCo and Coca-Cola brands and related marketing clouts, they will cause the niche expansion in the next few years (Cnossen et al. 2016). For example, Coca-Cola has stated its position and objective to introduce a one-two punch brand in the growing and profitable energy drink industry. The presence of these companies and anticipated new entrants will expand thus appeal to a broader market share. Red Bull will have to respond to protect its market position and build sales beyond the reproach. Indeed, the new entrants offering the similar drinks at pocket-friendly prices would threaten Red Bull (Red Bull 2013). Similarly, the Coca-Colas established distribution networks will be disastrous to Red Bull because of the credibility and ins tant shelf-space for the Coca-Cola brands in the market (Gates 2015). To this effect, Red Bull must adjust the market strategy so as to survive the competitors onslaught and broaden its target market. Red Bulls Marketing Mix The elements of marketing mix must change because nothing can benefit the firm without adjustments based on the market dynamism. The product is the most important marketing mix that the business should consider changing to improve its competitiveness in the market (Porter 1985). Product The current product line that Red Bull offers seem limited if compared to the competitors. Red Bull faces fierce competition from Rockstar Inc. and Monster Energy that have established a broad range of flavours that have blended well with the targeted market. Rockstar and Monster Energys line of drinks have surpassed the current six flavours that the company has offered to the public (Montague 2013). Undeniably, the three of the Red Bulls flavours have the same flavour. Unfortunately, the product lacks the full flavour, and the other has sugar-free, while the last product has a zero-calorie flavour (Bhasin 2012). The future of the companys product will depend on its efforts to adjust on its flavours. For example, it should introduce a coffee blend because a Java infused energy drink would be relevant in creating an all-natural product (Gates 2015). Coffee is a healthy source, and the company will benefit by offering coffee mixture to help it expand its target market. With this blend, the Austrian company will attract younger generations living off of barista style coffee drinks. Indeed, the strategy will also attract the interests of the older crowds that have always embraced black coffee. Red Bull has failed to tap into new markets, particularly the tea and juice energy drink fusions. By introducing tea union or juice with an energy drink, the company will add a non-carbonated drink to customers. Besides, the strategy will open up the minds of various clients in the market because a juice or tea mix will satisfy the healthy conscious shoppers who rarely consume carbonated drinks (Forseth 2012). Red Bull should offer energy drinks with various caffeine levels so that it can outclass its rivals. Importantly, most of its rivals have offered an extra strength versions with more energy packed drinks compared to its traditional energy drinks. In fact, packing the product in cans is attractive to shoppers because they will believe that the Red Bull Xtra has more values that the original drinks (Gates 2015). Therefore, the company must change its products as a marketing mix by expanding its product line to encompass tea, juice, and coffee flavoured energy drinks. Red Bulls Global Marketing Strategy The company has ostensibly invested in different marketing strategies to meet the expectations of its targeted market. In fact, the gorilla marketing tactics have formed the foundation of Red Bulls marketing strategy (Gebhardt, Carpenter Sherry 2006). Apparently, the conglomerates use different marketing strategies such as event sponsorship, word-of-mouth, sampling programs, advertisement, and point-of-purchase. Red Bull remains the most popular energy drink in the modern world based on its market share. Smith and Atroch (2010) argue that the company is the pioneer in this industry of energy drink. By 2008, the companys market share was 29 percent of the global market. Indeed, in the United States, it occupied 47 percent of the US energy drink market share (Cnossen et al. 2016). For several years, the company has supported athletes because of its athlete drinks. It is evident that the firm uses an innovative marketing strategy that encompasses passive marketing elements including print and television advertisements as managed by the companys House that have incessantly issued the monthly Bulletin magazine. Similarly, the organization has invested in advertising using the modern or active marketing techniques including team ownership, ambush marketing, event organization, and digital marketing like social media, viral advertisements, and blogs (Gates 2015). Red Bull remains a primary example of the ambush marketing because it involves the investment in creativity, knowledge, energy, and time beyond money to realize its objectives. In most cases, Red Bulls ambush marketing has justified its fantastic success thus create a brand buzz, in particularly on the club scene (Red Bull 2013). The company made the local DJs as exhibited in its products thus making the product popular among the clubbers. Roy-Bornstein (2011) views the ambush marketing as seeding. Red Bull has further engaged in active social media marketing efforts to maximize its potential. News Reputation (2012) found that Red Bull was 49.3 percent active on Twitter as many users mentioned it in their tweets. Red Bull has excelled in the event organization and team ownership marketing efforts. However, many critics have questioned why the company has used these techniques instead of sponsorship (Lewis 2013). The company has incessantly failed to offer a full sponsorship. For example, the traditional sponsors of events pay for their logo regarding the team thus derive the marketing value through association. For instance, the Adidas sponsoring the Olympics appeared undermined by the ambush marketing campaigns. For Red Bull, the company has integrated the events and team into its operations and has linked them to its values and branding to overcome any efforts of the competitors ambush marketing strategy. The Red Bull Racing F1 is an event completely sponsored by the company thus compels the cars in the event to have its logo and colours (Cnossen et al. 2016). To this effect, any company intending to associate with the event would find it nearly impossible due to the branding. Red Bull has also established teams such as the New York Red Bull football club, EC Red Bull Salzburg among others (Gebhardt et al. 2006). The rivals can rarely find an opportunity to ambush it in the stadium because the stadium is renamed the companys brand. The Red Bull Arena bares the companys colours and logo thus making the organization make the best investment because it runs these teams as turnover a profit and business. A similar situation is also evident in the in the Red Bull events where its themes with Cliff Diving and Red Bull Flugtag are inevitable (Red Bull Energy Drink n.d). The events remain intrinsically linked preventing ambushing thus allows the company to gain an annual brand interaction with the targeted and potential clients. Recommendations Based on the analysis of the companys operations and activities, it is indisputable that Red Bull has achieved significant success in their market segments. Conversely, some shortfalls have affected its operations, and the company needs to redress them. The worst threat is that of lacking diversity because it only focuses on the on the product, thus exposes it to other major companies including Pepsi-Cola and Coca-Cola that can introduce a better product using a stronger advertisement (Gates 2015). Despite the companys efforts to diversify by adding a sugar-free energy beverage, the effort is insignificance in preventing more influential companies from eating into its energy drink market share. To this effect, the organization needs to focus on unrelated and horizontal diversification strategy so as to expand its product portfolio thus reduces risks. Red Bull should also consider expanding its target market so that it can increase the market size by adopting a progressive diversification approach. Lewis (2013) maintained that the companys current target market seems to be changing and getting older, which are the clubbers, athletes, and students, mainly drawn from generation Y. The proposed change can make its current marketing strategies less effective, hence the need for expanding the target markets or changing the marketing styles. Conclusion The energy drink industry seems to be a productive sector that continues to attract new entrants. The Red Bulls success has attracted many companies, which have made significant efforts to enter and dislodge Red Bull. However, Red Bull appears to be prepared to retain and expand its market share. The competition level remains fierce thus increasing the risk, even for the established firms to lose their market share because of the high rate of substitutability of the energy drinks. The industry and market frequently becoming segmented regained the flavour, low-carbon options, and various sugar-free options. Companies such as Red Bull are finding it hectic to establish an individual image to make them unique and distinctive in the market. The industry is changing as companies are opting for an effective positioning by targeting a particular market share such as women, whose consumption rates remain low compared to men. For the company to overcome stiff competition, it must expand its m arket target and adopt the recommendations as mentioned earlier. Bibliography Ackerman, J, 2013, Jan 26, Ice-cross blends hockey gear and high speed at Red Bull crashed ice world championship, The New York Times, Available at https://www.nytimes.com/2013/01/26/sports/ice-cross-blends-hockey-gear-and-high-speed-at-red-bull-crashed-ice-world-championship.html. [Accessed October 21, 2016]. Bhasin, K, 2012, Feb 6, The marketing strategy this energy drink used to take on Red Bull and become a billion dollar brand, Business Insider, Available at https://www.businessinsider.com/the-marketing-strategy-this-energy-drink-used-to-take-on-red-bull-and-become-a-billion-dollar-brand-2012-2. [Accessed October 23, 2016]. 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