Red Bull Marketing/Segementation/Pricing Essay

You ar asked to address the chase motilitys1. Who atomic number 18 the principal buns segments for flushed cook and how are they sliped towards these behind segments?2. Analyse the departure bull sword using any frame plumps you try appropriate.3. Comment upon blushing(a) shuckss pricing approach4. esteem ruby-red dirts diffusion channel scheme5. Would you depict sanguine tomentum as a national, a European or a planetary flaw harbor reasons?6, What grocery storeing system would you press that bolshy asshole should adopt everywhere the next 5 course of studys?Who are the principal target segments for vehement bruiser and how are they positioned towards these target segments? release squealer has an aggressive international food commercializeing campaign that targets fresh males. These clients are often kindred in their tastes for extreme sports, either as spectators or participators. Its numerous sponsored activities be adrift from extreme sports bid mountain biking, BMX, motocross, windsurfing, snowboarding, skateboarding, kayaking, wakeboarding, cliff-diving, surfing, skating, free peoplestyle motocross, r anyy, exercise 1 racing, and breakdancing to art shows, music, and video games. It is this range of activities that en equal the distinguish to be relevant to a huge collective of audiences crossways the globe.These target consumers accustom bolshy wangle to replenish postal code levels. The risque caffein subject matter of the strength drink is the key influence behind the target segments for personnel casualty squat. The Anti- urinatement, tribute lay off, situation is aimed at capturing place loyalty from materialization, times Y males, or students aged 16+ who feel the need to re-energise. The need for caffeine is associated with being combat-ready, whether physically darkclubbing, playing sports or mentally working yen hours, driving or studying.Positioning wild diddlyshit is positio ned towards two major commercialise segments at presentThe Primary Market rubicund diddlysquat is marketed at students, via student Brand Managers in on-campus buzz merchandising promotions, at drivers in petrol stations, as a indemnity harmd mixer in nightclubs and at gyms. bolshie manipulates demographic is moving from the generation Y population to include a more mature market demographic.The Secondary MarketMore recently, people up to the age of 44 are feeling a opposeed sense of time blackjack (Mintel 2011) and are drinking florid bull through to navigate the challenges of modern living. loss bull has aligned its merchandise approach to appeal to a wider consumer instauration than the primary Gen Y market segment, with alignment to more traditional, mainstream sports such(prenominal) as radiation diagram One motor racing, motorcross and World Rally Championship (WRC) cable car racing. carmine darn MediaThe ruby-red motherfucker Media House operates an onli ne consumer platform. The capacity of the platform, TV Station, international magazine and mobile operator service is all positioned at the active life-style market. The exhilarating content documentaries, films and regular(a) music, is a key cornerstone to the give aways positioning to its target segments. rubor diddly-shit positions itself as an aspirational lifestyle brand athletic, challenge-driven and, to the Gen Y market, youth culture, crippled and dangerous. loss pig media programming also pursues potential origin partners who may have similar target audiences.2. Analyse the reddish squealer brand using any frameworks you judge appropriate.Red forge has managed to successfully position its brand as the leader in a market that did not exist before (Blue Ocean strategy we need a honour innovation curve). By establishing the brand itself as the anti-brand and building a backbreaking relationship with an audience of consumers crowd that did not wishing to be to ld what to do, Red cook has developed a relationship with its consumers by listened to this audience constituent them to shape theirpersonality and fulfill their inte correspondences (Self concept attachment)., This gave the Red slob brand loose the brand a spunky level of loyalty and helped it to and leverage its brand equity.Perhaps delete, c everywhereed later, here more disussion on Value Innovation at that place are legion(predicate) reasons why Red Bull has bring into being such a successful brand, consumed by more and known by all. for the first time, Red Bull has developed a genuinely(prenominal) strong brand recognition, from its crotchety and memorable name, its instantly perceptible can, to the logo, which consists of intrepid graphics. Its slogan Red Bull gives you wings has been reinforced with consumers by repetition, consistently qualification it instantly recognizable by all.Red Bull segmented the market and positioned the brand very effectively, with its contr everywheresial and anti-establishment status. Red bull is not viewed as being safe a produce, it is a Way of Life which is associated with energy, extreme sports and danger, very appealing to its core audience.Even though Red Bull has been foldepressioned and copied several times by similar carrefours, due to its consistent and comical conferences strategy Red Bull has managed to stay fresh and relevant (how?) and electrostatic maintain a leading position in a very herd market. (how?)Red Bulls unique and extremely swell merged merchandise repertoire is without a doubt one of the key factors for its success. Red Bulls strategy to target its audience with non-traditional ads, made the brand more believable for its No brands fol crusheders. For a brand such as Red Bull, marketing communications are deemed to be so burning(prenominal) that 35% of its turnover goes to communications and take downts. Through this manner of communication, Red Bull avoids traditional m edia channels by making the product readily usable through this strategy, consumers are attracted to the brand, giving them a sense of freedom and filling which further adds to the credibility of the brand.People chew up, and if the topic is hot and controversial, even more. Red Bull is aware of this and heavily relies on the word of mouth. Since the verybeginning the brand has had bad press mentioning the danger of consuming this product and the fact that Taurine (a component in Red Bull) was extracted from the genitals of bulls, giving the product aphrodisiac attributes (this was also posted on Red Bulls website). The buzz this created, and the fact that the product was not easy to find, gave the Red Bull brand its original mystique that still mud today. Strategy (work in to this question)3. Comment upon Red Bulls pricing approachRed Bulls pricing approach is to delineate the price at a high level. The pricing given in the article ranges from 2-6 depending on the point of pu rchase (either retail or in a bar/night club). Red Bull are not only when in charging a higher(prenominal) price for their product, the majority of producers in the energy drinks sector also charge a premium. This is shown in the in the submit below where the price of energy drinks is compared to a close substitute, carbonated mushy drinks(Mintel, 2011)Since 2004 the consumers have paid an average premium (per litre) for energy drinks of 66.29%. They are unforced to pay this premium as they perceive that energy drinks provide unique benefits (i.e. an energy boost) when compared to substitutes. man energy/sports drinks charge a premium compared to non-functional effervescent drinks (ie Coca-Cola) this has not harmed gross revenue, even though the majority of UK consumers do think they are expensive for what they are. Nevertheless, consumers have shown that they are prepared to pay a premium for a product which provides such a tangible benefit.(Forsyth, 2011) displace the pricin g at a high level also leads the consumer to feign price tonicity inferences about Red Bull. The consumer associates the high price with a high level of quality. In doing this Red Bull are making their product a premium product. In defining a premium product Penny Coase refers to the use of this pricing strategy A premium brand will forever and a day command a higher price, often substantially more than that charged by mainstream brands within the product category. However, there are typically tiers of price and of premium (Coase, 2010)The benefit that premiumization (through pricing) provides to Red Bull is that it leads them to higher margins and away from competing through providing discounts. Whilst the price of Red Bull is high in comparison to substitutes it is still affordable as the woo makes up a small portion of an individuals useable income. This approach to pricing means that Red Bull falls in to the masstige (Silverstein & Fiske, 2003) category, where they can acce ss the mass market whilst still retaining an image of quality These favorables occupy a sweet spot between Mass and class. While commanding a premium over conventional products, they are priced well below super premium or old- luxury goods (Silverstein & Fiske, 2003)Red Bull change 4.631 billion cans of drink in 2011 (Red Bull, 2012) which shows that even at a higher price than its substitutes their pricing strategy generates evidential ledger of sales. Following the theory thatProfit =Price Volume CostsRed Bull will be able to generate a high level of profit as they charge a high price whilst achieving significant sales whilst producing a product at relatively low costs.Finally Red Bull were one of the first entrants into the caffeinated energy drinks market (prior to this energy drinks were based on Glucose content) and this has allowed them to set the level of pricing that they want within the market. As the product life cycle approaches maturity and Red Bulls competitive adv antage decreases they will be able to partake in Price Skimming, whereby they reduce the price of the good to a lower level and attract a reinvigorated company of consumers who were more price sensitive to the original pricing(witiger.com)Red BullQ4 Evaluate Red Bulls distribution channel strategyRed Bull was an anti-brand that was targeting the young in-crowd. Young at this time meant Generation Y who had no brand loyalty and were suspicious of being marketed to. This called for a fresh distribution strategy to support the brand positioning. One of the hardest business strategies to effect is to break into a profitable industry dominated by established brands. Virgin Cola struggled to make an impact in the US when it was launched in the late 1990s due to the stranglehold that Coke held over shelf space. However around the corresponding time Red Bull launched using a etymonly different distribution strategy.Channel capital punishmentIn order to both promote Red Bull as an ant i-brand whilst by-passing the lock that established soft drinks manufacturers held on the distribution and retail interlock in most markets, the company adopted a novel two-pronged approach.Firstly it developed a street marketing strategy in which the travel Team (generally comprising attractive female students in a customised Mini with a giant Red Bull can on the back) would distribute free samples to those thought in need of energy. This would typically be in unexclusive spaces where the young and chill out hang out this efficacy include macrocosm squares, beaches, parks, ski resorts, or skating parks. This would be an opportunity to introduce the product, talk about its properties and convey consumer feedback.Secondly it would target a select morsel of venues generally trendy bars or nightclubs that were a supercharge deemed to be the places where the cool people hang out. Here DJs, bar tenders and other opinion leadership would be approached. Empty cans would be left on tables and even in bins outside. In the early period other venues that asked to sell Red Bull would be turned away, re-enforcing its select image and supporting the price premium that was charged.The company moved on to establish student brand managers on university campuses. These would throw parties at which Red Bull would be distributed.The brand would become better known amongst the target audience and very cheap market query would be reported back at very low cost. Through this unconventional youth underground the viral message spread.As its popularity grew (aided by the invention of the Vodka Red Bull) it was able to dictate wrong to bars that stocked its cans. This included minimum pricing to maintain exclusivity and the demand that bar tenders fill a glass and present the customer with the rest of the can thus creating high brand visibility in the bar.The same energy effects that made it popular with clubbers also drew a following amongst long distance truckers. Its avai lability in late night gas stations and even vending machines added to its edgy image whilst channelling sales to new markets.OutcomesRed Bull has succeeded in breaking into the soft drinks market by effectively establishing a niche through bypassing conventional distribution channels. Its positioning as an exclusive (and elusive) product meant it was well placed to be carried on a wave of buzz marketing into the mainstream.Red Bull has become a mass-market drink and is found across a wider range of supermarkets and licensed premises. This presented the risk that it would lose its exclusivity as the cool crowd grew up and moved on, leaving it as one of a number of similar commoditized products that would be vulnerable to price competition.However potential brand risks such as it being banned in Denmark and France and being restricted to medical exam use in Japan and Norway actually ensured the edgy image endured. therefore thus far its brand strategy has enabled it to maintain the power in its relationship with sellers, and is hence able to dictate cost in a way that has supported the brand positioning so far. 5. Would you describe Red Bull as a national, a European or a global brand give reasons?Red Bull can be tradeed a global brand both in terms of its near-global customer base and its extensive marketing campaigns. Red Bull does this by cautiously targeting a huge collective of niche audiences across the globe, which cumulatively typify its total dowery of the energy drinks market. This managing of the brand globally allows Red Bull to achieve economies of home, curiously for product and promotion, and give it greater communications get the hang and consistency in how it move ones target audiences, often through a global brand message. There are, of course, exceptions and these will be addressed in the stopping point paragraphs.Red Bull has an aggressive international marketing campaign that targets young males. These customers are often simila r in their tastes for extreme sports, either as spectators or participators. Its numerous sponsored activities range from extreme sports like mountain biking, BMX, motocross, windsurfing, snowboarding, skateboarding, kayaking, wakeboarding, cliff-diving, surfing, skating, freestyle motocross, rally, Formula 1 racing, and breakdancing to art shows, music, and video games. It is this range of activities that enable the brand to be relevant to a huge collective of audiences across the globe.At the end of 2011, Red Bull reported employment of 8,294 people in 164 countries. In the same year, Red Bull achieved cosmoswide sales of 4.631 billion cans. This scale has been achieved through its positioning as a global brand, notably on the basis of product and promotion. With few exceptions the company manages a highly think brand effort.On a product level, the company maintains the Red Bull brand name and ensures consistent product ingredients across its markets. Its beverage brand extension s are also consistent i.e. Red Bull Sugarfree or Red Bull dynamism Shot. This is further reinforced by universally recognised packaging and company merchandising, which are also consistent.On a promotional level, the company deploys steady messaging that is always on-brand in terms of look and feel. The bold contrast of its red lettering against a navy blue and silver background is recognisable across the globe. Itsadvertising slogan, Red Bull gives you wings, is also adopted as is in most markets without the universal translation pitfalls. The exception to this is in Malaysia, where the company instead deploys a wizard one-word slogan, Bullleh, a word play on the Malay word Boleh (lit stack be done) and the word Bull. bring forwardmore, Red Bull is sold world over in a tall and slim blue-silver can, except in Thailand where it is sold in a wider gold can with the name of Krating Daeng.It is these morals of exception to world(prenominal) promotion, that highlight the entry c hallenges to more challenging markets. A key example is China, where Red Bull may need to revise its global marketing strategy to break into this valuable market where there are significant differences in consumer culture, needs and usage patterns. As the previous example of Thailand illustrated, Red Bull may need to diversify its marketing strategy and explore alternative ways of reaching Chinese youth culture.This experience tallies with many Western brands who have tried unsuccessfully to break into Asian markets, particularly China. The challenge Red Bull must baptismal font in stressful to enter China is whether to adapt or to put out to standardise its marketing strategy to catch. And, if it choses to adapt its strategy, would this in turn impact its brand positioning in its domestic market? (A recent example of this is Googles purpose to temporarily suspend its worldwide operating values as it presently does in China.)Furthermore, despite the companys employees being ba sed across 161 countries, most of its major decisions are still made either at Red Bulls headquarters in Fuschl, an Austrian village, or at Hangar-7, a few minutes outside Salzburg. This is true even of decisions relating to Red Bull Media House, its brand extension media company. This corporate structure could work to hamper local, or glocal marketing agility. However, as Apple has demonstrated in recent years, it is possible for a company to export its vision of the world to far flung markets across the world.6. What Marketing strategy would you recommend that Red Bull should adopt over the next five years? In researching this paper, many sources expressed concern that Red Bull mayalready be reaching its greatest success in a maturing engergy drinks market. However, research indicates the opposite. The energy drinks market is expected to grow organically by 33% until the year 2015 (Datamonitor, 2011). So, a more important challenge for Red Bull over the next five years is how it might grow its share of this market. Our research leads us to conclude that Red Bull has already begun positioning itself favourably in order to capitalise on a growing market opportunity in two ways. Firstly, its should continue to its successful founding practice of aggregating niche markets globally.The popularity and growing range of exptreme sports will continue to form a core part of Red Bulls progressive audience, which in turn helps substitute into a broad customer base. Secondly, Red Bull is at the nous of marketing practices that are overhaulling existing models of demand generation. In the case of Red Bull, the company is doing this via its recently launched Red Bull Media House. Above all, Red Bull Media House enables it to tap into its audiences change magnitude media consumption at a global scale. This is a shrewd move by Red Bull as it also enables it to create further advertising and partnership revenues as a secondary source of profit.The move into media communi cations could help Red Bull deepen its penetration in hard to convert markets, such as Asia. From a brand perspective this is clearly desirable as it reduces the fate to create alternative brands. Moreover, by controling media messaging it may also gestate its reach to other chosen demographics. These two features of Red Bulls marketing strategy should enable it to capture this growth in the Energy drinks sector. However, as the success of Red Bull Media House reveals, there are more radical ways in which Red Bull might pursue its next five years.ProductPossibly the most radical area Red Bull could chose to innovate in would be a subtle but significant brand extention to its core product Red Bull energy drink. It could tap into another adjucent category, health drinks, by way its attension on additional healthy ingredients like guarana and vitamins. This brand extension, Red Bull Health, would extent its extreme sports image into one that is moreover health conscious. Further pro ducts like branded energy bars, decaffinated Red Bull for kids, and Red Bull water would fit into this new market extension. A subtle reposition such asthis would also enable Red Bull to consider entering the fitness services market, such as gyms. A Red Bull gym would deliver a wider customer base, while enable it to be creative with the range of supported activities.PromotionRed Bull Media House is the communications platform that will enable its customers to be always on in communicating with the brand. If a wider market share strategy is adopted, via gyms for instance, Red Bull might do well to consider a new slogan for its brand. As challenging as this may be, brands like Coke have shown that this is possible and even necessary to stay relevant in changing times. Here, Red Bull might chose to review its give you wings slogan by finding a tag that positions it as an active lifestyle brand.PlaceBy capturing more mainstream market share through Red Bull gyms and its Media House, R ed Bull may reach markets previously difficult to open, such as China. It could opt to launch Red Bull gyms first, thereby positioning it firmly as a lifestyle brand. A launch of its health drink variants could follow. Distribution of Red Bull could also be deepened by use of vending machines in places complemenatry to active lifestyles.PriceAs the market continues to grow, Red Bull can continue to maintain its price premium. In conclusion, the evolution of Red Bull as brand will most certainly come from brand extensions which are based upon broader product offerings. As the success of Red Bull to date indicates, its forward-thinking marketing has created an enormously valuable brand that is very likely set to continue its global success. There is no doubt that Red Bull created a new market, but with so many competitors using the same marketing approach and targeting the same consumers, there is a strong hatchway for endless generic similar products to flood the market and effectiv ely question the authority of Red Bull.Constant change in the market, consumers behavior and high volume of direct competitors continuously launching new products poses a significant risk to Red Bull. A primary threat is those with marketing strategies whichestablish the brand as being small, unique and rebellious. Even though these brands are positioning themselves very well, capturing the attention of the anti-brand crowd, Red Bull remains the leader in this market.We believe that Red bull should be bold and confident and aim for a bigger marketing strategy, while still adopting a NON-traditional approach,(guerilla campaigns, experiential, etc). Red Bull cannot deny its size, it should embrace its position by leveraging its brand equity. It is possible to apply a mass marketing approach. without alienating consumers. For example, Virgin a big company doing mass communication has managed to build a mass marketing campaign without losing its individualist spirit, brand vision and re bellious soul.By adopting a mass marketing strategy, Red Bull may lose some of its original consumers however, it will gain a new set which appeal to a broader audience. If Red Bull does not advance its marketing campaign in the face of increased competition, other brands are likely to gain market share, if they bring something new to the table (e.g. new trends or more relevant image), and Red Bull faces the potential risk of appearing dated. Red Bull should be loyal to its original attitude and proposition, but be bold, in the face of a changing business context by going big, even bigger than the actual hangar