Red Bull International Marketing Plan Business Essay

florid motherfucker International Marketing Plan Business Essay red ink squealer with no doubtfulness has been transformed to multinational company by the product which invigorates peoples drumhead and body . deprivation bull is multinational is company religious offering more(prenominal)over two products invigorating peoples mind and body. Its world(prenominal) success has become subject of interest for many researchers in field of international grocery storeing. The current report addresses international marketing strategies of the scarletbull company as major international player in muscle confuse and beverage industry. Customer liegety and relative production address ar main advantages of the company. entirely company is threatened by major players of international market in its penetrated territories. Still company is enjoying growth in its international zip fastener toasting markets. ingrained analysis of rosy bull strategies has reviled use of conventional and unconventional markets to expand its international markets. The sophisticated HR strategies of the personnel casualtybull is another propellers of the company in international markets. fiercebull follows emphasis differentiation strategy in beverage industry. So Red bull has become selected choice of massive teen population, which gross revenue 1 jillion cornerstone of vitality beverage every year.SWOT analysis of the company depicted most strengths and weaknesses. The analysis showed proper adoption of generic marketing strategy, right international segmentation, right targeting, right positioning and good sales record. The marketing strategy of red bull can be easily applied to different cultures well-nigh the world that have sizeable youth population.History BackgroundHistoryBeing dressed in special way is not enough to be good seller in beverage industry. In an industry which its products argon found every where resembling hypermarket, supermarket, grocery and ev en in clubs selling is not easy.Red bull was first introduced by Dietrich Mateschitz Austrian business man who teamed up with Thai person to bring production of traditional Thai intoxication to international take aim. The product was canned in silver shiny can and named Red shite because it showed head to head bull fight. (Red hoot Founder Rides roll up of Success)In 1987, the product was then taken to Austria where it had its first groundbreaking success in no time. In started going international in 1992, when they entered Hungary. Red talk through ones hat is currently active in everywhere 100 countries, energizing the population and creating competition as they go along. One source mentioned that in that respect are everywhere 150 energy drunkenness dishonors, however, all inferior to the mighty Red cocksucker (A REFRESHED CREW IS AN EFFICIENT CREW). With over 1 jillion cans sell each year, Red hog controls 70% of the worlds market get by of energy drinks.Backgroun dRed bastard became strong when they created a high quality drink that is only made in Austria. what is more, all of its ingredients are syntheti call backy made in pharmaceutical companies to grantee high quality and safety. Moreover, cod to the ingredients of the product, it is said that Red bull (Red pig FAQ)Improves performanceImproves concentration and reaction speedImproves vigilanceImproves emotional statusStimulates metabolismHowever, the main reason for the success of Red motherfucker is in its advertising style. Red shucks tends to spend very little on conventional or traditional marketing tools, like TV and chump ads. Their marketing strategy is usually out of the box and creative. Red cocksucker tends to be more active in sponsoring extreme spots and giving away(predicate) samples in local events. Due to the fact that Mateschitz has been involved in Formula One racing for more than a decade, he used the events to d blunt perplexity to his fault. In addition, h e sponsored the World Stunt Awards, an annual fund-raiser to help injured stunt workers (Red hog Founder Rides Wave of Success). Moreover, some observers say that Red bastard uses the anti-branding method of advertising, where they broke the usual method of marketing and branding. Actually what they did was use the buzz marketing strategy or better known as account book of mouth. With this strategy, they associated their brand with the youth culture and extreme and adventure-related features, such as motor sports, mountain biking, snowboarding and dance music. Thus they targeted their brand directly to people from Generation Y, the alleged(prenominal) millennials people born after 1981 who were believed to be cynical of traditional marketing strategies (A Look at a Key Feature of Red Bulls Business).The Buzz over Red Bull among the youth and their underground attitude has created Red Bulls study as the drink within that community. That is why Red Bull continues to use viral mar keting internationally, where the company would rather restrict 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 successfully captured 70% of the 1.6 billion market (A Look at a Key Feature of Red Bulls Business).External abbreviationPorter Five Force outlineExternal analysis is very important, the analyst taking this step should be aware of how competitive strategy has to be formulated. The analyst must bring all relevant social and economic factors in two micro and macro environment to consideration.The people in ill 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 unique manikin for industry analysis and formulation of the strategy.Rivalry among live competitors, buyers, suppliers, p otential entrants into the business and Threat of substitute products are those five forces which can have positive or negative set up on industry structure by making the industry more or less competitive.Potential EntrantsRedbull can produce babble less energy drinks among other soft drink producers. If the barriers of entry are high, it is difficult for potential competitors to enter the market. Three main sources of barriers to new entry brand loyalty of red bull customers, absolute cost advantages in Redbull s production line, and economies of scale enjoyed 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 known for its quality among its customers. Brand loyalty is a barrier for any new entrant to enter the energy drink industry.Cost advantage fit in to the Michael Porter, normally cost disadvantage is a throw overboardhand barri er for companies to enter an industry as new entrants because it can be cost advantage for existing companies in that industry. Also, companies with the help of cost advantages can postulate and beat their competitors very easily because usually it is difficult for new entrants to match their companies with the humiliate cost structure.Therefore, Red Bull because of Red Bulls superior production and act wait ones, 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 keeping its quality in the high level. Although in that location are many energy drinks existing in the industry with the lower harm rather than Red Bull, as quality construction they have not cost advantages both in quality and harm, so Red Bull is steps ahead from its competitors in this consequence.Customer switching costIn food and beverage industry in that location is no switching cost for c ostumers 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 same level to not loosing their market lot by coming new entrants because it is real threat for them.Government regulationsOne of big issues and al ways concerns for companies which like to go internationally is government regulation, also, in this case some europium countries have problem with selling Red Bull and have tried to ban it. They claim that Red Bull was the cause of demolition of people in those countries. France, Belgium, and Sweden ban using the mixture 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 Ban 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 other industries it is termed polite or gentlemanly. Energy drink industry has an intense rivalry because of a number of interacting morphological factorsIndustry competitive structureDue to the competition in the energy drink market, Red Bull focuses on non-price competitive weapon like offering exhilarating events, high quality products and sponsorship. In contrast with other competitors Red Bull attract more costumers to its company by growing in 45%marketshare. harmonisely 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 many companies try to obey and consider Red Bull as benchmark.Industry demandIn the energy drink industry, because of the versatile proper advertisements to encourage people to use and drink energy drinks (giving the image that people can fly) the demand for drinks is increase. Thus, this is a good point for the company because there are lots of opportunities fo r every company to fill the current demand and rivalry tend to reduce in the industry, also there is space for everyone to burst forth in enter the industry (growing branch), 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 particularly 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 bargaining forcefulness, and it is real risk for Red Bull. Main reasons for this high bargaining occasion 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 sleep between them. For instance, 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. just now the other ingredients are assembled from several nice suppliers, and Red Bull has the bargaining power on them. Also, Red Bull has many channels and substitutes supplie rs for its normal raw materials, so they can switch from any supplier to cheaper and more flexible one.SubstitutesAll producers always carry the concern of substitute products for their products and always looking 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 product substitute for energy drink. Therefore, Red bull must take care of its determine 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 Peer ReviewIndustry Char acteristicsBeverage industry is divided into many categories such as alcoholic vs. non alcoholic, (hard vs. soft drinks) and within soft drinks still there is other segmentation such as carbonated soft drink (CSD) and non carbonated soft drink. Carbonated Energy Drinks account for less than half of the perfect volume. This figure is heavily skewed however by the popularity of still brands in Asia (Canadean loo release)According to Beverage Digest, in 2004 the U.S. non-alcoholic refreshment market totaled 14 billion 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%. Americans spent roughly $92.9 billion annually on refreshment beverages.Energy drink is a relatively 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 evidence of this requisite growth and the att raction 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 Cola drink to enter to this high margin business.Food and beverage market are critical 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, modify and Product claim.Global consumptionAccording to Beverage digest report, Asia is the largest direct market in consumption of energy drinks followed by Western Europe and sexual union America as the second and troika markets.Asia has been loosing some of 20% of its market share is past 6 years. However, this decline has been offset by the second and third market mainly due to the steady growth in market of carbonated E.D in North America. North American market is now around 40 times greater than it was in 1998Peer ReviewIn North America today more than 200 energy drinks existed in US. According to bevNET.com, after a rigorous marketing research the best energy drinks are AMP by Pepsi Cola, KMX Red by Coca-Cola Company Red Bull by Red Bull North America.Red Bulls market dominance seems as genuined. No other competitors have either the distribution channels or, more importantly, the side 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 earn 14 non- alcoholic markets where some of them are in the specific market of the energy drinks.Coca-Cola(Juice, Soft Drinks, Water) ($21bn)Suntory(Water, Soft Drin ks) ($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 SpraySource http//www.mind-advertising.com/sectors/sector_softdrinks.htmIndustry Life CycleEnergy drinks were originally pioneered by Asian 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 unlike 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 change of one D igit, 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 $300 million or even as much as $2 billion in the next few years. Double digit growth in the market is the main factor contributing to Energy drinks life cycle in its embryonic phase (growth).Since the market is not old enough, the number of players are increasing and even the Coca Cola and Pepsi are the new entrant which add to the well-built assumption of embryonic phase.Brand loyalty and high expectations are still doubtful in this stage and its because the consumers are still exposing to new products and new claims. Thus, players are fighting for product feature extension such as low-carbs and sugar free plus new products claims such as improve concentration, reaction time and endurance.After base 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 fast pace following highlighted area in the graph is an approximate stage of the life cycle at the moment.Internal AnalysisValue Chain essential bodily function 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 avoid unnecessary costs. Red Bull always makes sure that they align with premium logistics provider to achieve their strategic goals. Red Bull aims to have web-based visibility on their supply chain, thus they base their logistical activities or selection onFlexible warehouse lucreTransportation management capabilitiesStrong breeding 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-a fter-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 menial distributors in small regional markets, if those small distributors dont perform up to Red Bulls standards they establish a warehouse and push 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). old Activity OperationsThere is little indata formattingion about the operations process of Red Bull. However we will enlighten 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 change 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 combination of all the ingredients together, which result in Red Bulls benefits (Red Bull, Ingredients)..The packaging process of Red Bull is fully make 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 intimately 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 B ull 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- multiplication, Red Bull has utilized eccentric 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, parachuting in South Africa, Go-Karts in Kuwait, and many more in different countries has achieved its target of attracting its target market which gets elicit when viewing such sports. Some 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 passably off-the-wall.Cans of the dr ink were also given out free to people on the street who had been identified as being in need of energy.Red Bull was given to club DJs, empty cans would also be left on tables in hot spots such as trendy bars, clubs and pubs.Secondary 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), yet it does not loose any of its energetic effects (Red Bull, Ingredients).Secondary Activity Human Reco urseRed Bull is famous for practicing what they preach, especially when it comes to recruitment. Due to the fact that Red Bull promotes their product as a Hip and young product, they make sure to recruit staffs that are young, in touch with youth culture, dynamic and innovative. For example, they achieve that by recruiting university students as student brand managers to promote its product among young student groups (What Sort of People Work 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 SegmentationAs 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 concentr ation 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 examine 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 procession. According to Biz/ed, throw 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 c oncentrating 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 Red 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 individually mixed with alcohol to create both the Red Bull highness and the alcohol sensation. Furthermore, Red Bull has also made music events for those groups of customers like the Red Bull Music Academy in 2005 in Seattle, Washington 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 p eople, 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 Bull can brave white-collar workers to concentrate 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 consent to the blue-collar workers to work extra hours with out the feeling 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.Within the four groups, there a considerable amount of customers who look for diet product. For that category, Red Bull produced the sugar-free Red B ull 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 strategy 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 competitors 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 be en 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. T his association allows consumers to have access to Red bull across the nation. As a result of this fusion, sales of Red bull are 40% higher compared to last 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 reach channels such as vending machines, food courts, colleges, sports a travel 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 Fuel 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 other competitors. However Red bull only made little changes to its product format throughout th