Red Bull: Energy Drink's Innovative Success in US Market - Essay Sample

Introduction

Since the introduction of the soft drink segment in the United States, there has been an immense growth in the industry. Research of the market plays a vital role in the development of a marketing plan through the identification of the external and internal factors that can affect the business performance of the company. The main product of Red Bull is its energy drink, which constitutes an innovative mixture of strong and distinct ingredients, which include taurine, caffeine, sucrose, glucose, and gluconolactone (Dhanasarnsombati, 2011). The product increases mental and physical performance, increases reaction speed, stimulates metabolism and enhances an individual's emotional status. The most significant consumers of Red Bull are professional athletes, stressed managers, drivers, and students who like to party. In the global scene, the most popular drink is a mixture of Red Bull and Vodka. To enhance its sales, the Red Bull company needs a well-crafted marketing plan (Dhanasarnsombati, 2011). The primary purpose of this essay is to present a marketing plan for Red Bull, by identifying its target customers, assess the competitive nature of soft drink companies and coming up with strategies for the company to maintain their brand image in the market successfully. This marketing plan provides the platform that can be utilized by red bull marketers to successfully generate revenue through a sale of their product, and includes the risk factors of launching the product in a new market. The outcome of this marketing plan will ensure that marketers formulate tactics to enable them to attain a competitive edge over their rivals.

Is your time best spent reading someone else’s essay? Get a 100% original essay FROM A CERTIFIED WRITER!

Save 25%

Goal Setting in Red Bull

Red bull can set the following goals to be achieved in the next few years; to recommend strategies that will ensure a competitive edge in the concerned segment, to ensure that their product is sustainable through a positive growth of profitability and customer base, to ensure that they become the market leaders of the UAE market in the energy drink segment and to ensure identification of risks for launching energy drink products in the new market.

Analyze an Organization’s Current and Future External and Internal Environment

Internal Environment

In 2003, a red bull created a new sugar-free product containing acesulfame K and aspartame, instead of glucose (Dhanasarnsombati, 2011). The red bull sugar-free has allowed the company to acquire a new customer base of health-conscious customers who are concerned about their sugar intake. The company attains its objectives by recognizing that not all customers enjoy the taste of red bull, and it focuses on utilizing the same amount of ingredients in a smaller quantity of beverage. By the use of Porter's value chain, the activities and relationships that give red bull its competitive advantages include; primary, including outbound and inbound logistics, operation, marketing and sales, and secondary and services activities which include the company's infrastructure, human resources management, technological development, and procurement. Red bull needs to strengthen its primary source of competitive advantage that is sales and marketing, and is responsible for its marketing mix, price, promotion, and distribution of the product (Asiedu, 2016).

The current objectives of Red bull stand at staying in the same position as leaders, being the brand icons of extreme sports, and expanding their existing market. To achieve these objectives, red bull has utilized some strategies, including the extension of its product line and sponsoring extreme activities. The main strength of Red bull as it stands is its healthy content. Unlike other products, the drink is sweeter, and its techniques in being environmentally friendly will enhance its image in the market. The company is founded based on strong values of hard work, respect, integrity, partnership and loyalty, factors which will ensure that the product obtains a secure connection with its market (Asiedu, 2016).

The weaknesses of identifying a product again, based on the occurrence of a bad image, is that the competitors could use this to their advantage. The company has a unique product line, but it lacks the distinguished human resource team to ensure proper implementation of its marketing plans. The company will require an enhanced distribution network to establish its resources and put them back in place.

External Environment

Red Bull has managed to exploit the sector that constitutes carbonated soft drinks. Even though Red Bull has not presented a product innovation in the soft drinks market, it has fulfilled distinct functions that are different from the frequent use of carbonated beverages; this has ensured that the company has created a new business (Gorse, Chadwick and Burton, 2010). Through technology and innovation, the company has managed to develop a segmented group of consumers with a distinct lifestyle. Due to the increase in competition, companies have strived to distinguish themselves through universal shared principles to retain their customers. The hegemony drink of Red Bull company reflects its adherence to a multifaceted strategic marketing plan, which considers the imperativeness of the external environment.

In the future, Red Bull can ensure a practical trend analysis and consumer behavior analysis by projecting and predicting the behavior patterns of its target audience. Through practicing consumer behavior, the business will be placed in a position where their products and services will be strategic. Prediction of spending patterns and consumer behavior will require an analysis of the psychographics, demographics, geographic, and behavioral segmentation. Since the market of Red Bull consists of young adults between the ages of 18 to 35 years old, the company can utilize variables that pertain to the preferences, spending habits, lifestyle, social class, and level of education (Gafoor and Monica, 2018). The success of the company has been attributed to its psychographic variables, which include the analysis is certain variables that pertain to the target audience of the organization. The company can use these variables to ensure success by ensuring the fulfillment of the customer's behavioral needs customer's consumption patterns and their attitudes. To best analyze the usefulness of the techniques by Red Bull, a PESTEL analysis is essential, which comprises of the economic, political, technological, and social factors.

Political

Recently, the government has restricted the use of caffeine, taurine, and guarana components, and the issues are under discussions and regulations around the world. Restrictions on the number of energy drinks to be consumed will affect the amount of the bottles bought and will introduce import and export charges on drinks. The company can ensure that they keep the business smooth by each department carrying out their procedures legally.

Environmental

They can be used by red bull is made of recycled aluminum and is environmentally friendly (Harris, Schwartz, Brownell, Javadizadeh and Weinberg, 2011). The ethics in business and environmental issues have become important topics, especially n the European standards, giving the company a significant competitive advantage. However, Pollution is a major environmental factor that can affect the future of Red bull. Red bull should ensure maintenance retention of a proper recycling system.

Economic

Inflation might be encountered by red bull, in case of a high supply of money in the economy. Red bull will have to increase its pricing in case of inflation, to sustain their business, and might also want to increase the cost of raw materials. This will enable the company to cater to the interest rates that will get worse if red bull needs a loan from the bank.

Social

When red bull was first introduced, the society was reluctant to try new things. The current shift in the societal mindsets and changes in lifestyles have ensured that people experiment in new and intriguing products (McCarthy, 2017). Red bull is a fashionable product whose image has extended in bars and nightclubs and has become popular as a vodka mixer. The drink has experienced questioning in America, especially after the death of a basketball player. The drink has been identified with having a lot of caffeine, that should not be consumed, as critics have suggested. The social implications of this include a terrible name for the company, on the essence that the public will want it to produce the drink without the given recipe (McCarthy, 2017). To ensure that they reach out to a broader market, red bull will have to provide a sugar-free version of their energy drink, to appeal to the people that are specific on their health issues.

Technological

Red Bull ensures the integrity of its brand and ensures that its flavor is recognized globally by producing entirely in Austria and then exposing it to all other markets (Luther, 2001). Red bull faces danger on their marketing techniques being considered to be unique, and they keep paying vast sums of money to advertisers to avoid the risks which they face. They also rely heavily on the internet to promote their products. To support their products and reach a broader market, the company will have to increase its activities in platforms such as twitter and facebook to help their adverts is becoming more recognized.

Legal

Red bull needs to ensure that their product is sold in stores. This requires that the drink is safe for consumption and will meet all the legal requirements. The drink has to be safe to the extent that it does not cause side effects such as vomiting. A reaction from the consumers might lead to the filing of lawsuits that will generate bad press for the company.

Recommending and Informing Strategic Decision Making Using the Marketing Mix

Marketing Mix Strategies

Product

The drink has a unique branding and stylish bottling which captures the eyes of the consumer. The contents of the drink are also healthy, with limited long-term effects (Luther, 2001). By ensuring that the energy drink is packed with lots of enjoyable and robust content, consumers whose values and mages are similar to the brand will be attracted. The ingredients will appeal to the users who consider themselves to be healthy, active, and full of life, and those who are careful about their lifestyle and health.

Pricing Strategy

Introduction of sugar-free red bull product in the market will require market skimming, to enable the company to recover its investments. With similar health-related drinks flooding the market, there has been a high competition in the energy drink industry (Brasel and Gips, 2011). Reinforcing Red bull as a unique and healthy product will require that a price is set that is realistic to ensure that the brand delivers value to its customers and that the price is set a bit higher than that of its competitors. The company can utilize unique pricing tactics to stimulate purchase, including; offering discounts for bulk purchases, using discrimination tactics where college students will have lower pricing as compared to places like sport centers, bars, hospitals, and restaurants.

Positioning Strategies

To make the image of the brand reliable and to maximize the position of the brand as a premium product, Red bull company can pursue an exclusive distribution strategy by selecting retailers who will be allowed to distribute the brand. The most significant distribution channels can be supermarkets because of most consumers today shop there. The product will also be distributed drugstores, pharmacies, selected sort venues, and bars (Chionne and Scozzese, 2014). The intensification of geographical areas will ensure that the company is efficient in supplying its products. Well, known...