Red Bull Marketing Report s3n68

[Marketing Report] Red bull

CONTENT 1.

Induction......................................................................................................4

2.

Body............................................................................................................5 2.1

Part A Influence factors of macro environment...............................................5

2.1.1

Demographic.......................................................................................5

2.1.2

Economic............................................................................................5

2.1.3

Natural...............................................................................................6

2.1.4

Technological.......................................................................................7

2.1.5

Political..............................................................................................8

2.1.6

Cultural..............................................................................................9

2.1.7

Reference list of Part A.........................................................................10

2.2

PART B Segmentation of Red bull..............................................................11

2.2.1

Australian market................................................................................11

2.2.2

How big and how fast it growing.............................................................12

2.2.3

Relevant trends...................................................................................12

2.2.4

Market segmentation............................................................................13

2.2.5

Market targeting.................................................................................14

2.2.6

References list of Part B........................................................................16

2.3

Part C Competitors of Red bull & all companies’ competitive position..............18

2.3.1

Goals, strategies, strengths and weaknesses of Red bull’s competitors...............18

2.3.2

Competitive position of energy drinks in Australia.......................................19 Page 1

[Marketing Report] Red bull 2.3.3 2.4

Reference list of Part C.........................................................................22

Part D Red bull’s competitive advantage & perception of itself and customers....23

2.4.1

Differentiation competitive advantages.....................................................23

2.4.2

How Red Bull to be perceived by its target market.......................................24

2.4.3

Positioning statement...........................................................................25

2.4.4

How Red bull to be perceived by customers (by a face- to –face questionnaire). . .25

2.4.5

Possible Value Proposition.....................................................................26

2.4.6

Reference list of Part D.........................................................................27

Conclusion...................................................................................... 28 Appendices.....................................................................................29 Questionnaire of Energy Drink in Australia..................................................31

Page 2

[Marketing Report] Red bull

Executive Summary This report is for research and analysis of performance of Red Bull Operation Company in Australian market. The Part A is about how six macro environmental forces impacting the company’s environment in industry, company, product and brand areas. Red Bull has succeeded to develop marketing approaches for the Australian market and consider different macro environmental factors with demographic, economic, natural, technological, political and cultural. Part B is Red Bull to defined Australian market by customers, competitor and Demography. Then analysis the how’s situation of development of Australian market, and digital age and sustainable development could influence the growth of the market. There are three market segmentation could help for Red Bull more effective in the market, which are Demographic, Behaviour and Geographic. The target market of Red Bull is male with age between 18 and 35 years old. These customers live in cities and they may be students, athletes, professionals and drivers. Part C is analysis Red Bull’s advantage and disadvantage compared competitors, and it is also predict their marketing strategy by different type of market groups, such leader, challenger, follower and nicher. Red Bull as challenger of the market has to learn more from the leader. Part D is about search differentiation of Red Bull by product and image of brand and how it can be competitive advantages. Red Bull develop “stress marketing” strategy, the “Wings team’s” has the role to get relationship with customers by talking with them about product and convey information from them. Red Bull would like to maintain prices relative similar and high compared the rest of the Energy Drinks industry.Red Bull positioning statement is provided most valuable energy drink for customers with highset price. For flavors and packages, providing more flavors can bring more attractive

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[Marketing Report] Red bull packages and stimulate consumer confidence which is beneficial for the development of a company. The Red Bull value positiona is providing the best product with higher price, also the cost is expensive.

1. Induction In recent years, more and more people would like to have energy drinks to replenish necessary power to catch the quick pace of life and work. Based on the demand, there are a large number of energy drinks in the market, particularly in Australian market. This report focuses on a world famous brand, Red bull, to analyze its current marketing situation. The purpose of this research was first to carry out how the marc environmental factors influenced Red bull. The second aim was to look at the segmentation of the company. On top of that, the next aim was to get out the Red bull’s competitors’ goals, strategies, strengths and weaknesses and discuss the competitive position in the whole market in Australia. All in all, the final purpose is find Red bull’s value proposition by using positioning map and perceptual map. According to the results of this paper, some related recommendation will be given in the end.

Page 4

[Marketing Report] Red bull

2. Body 2.1 Part A Influence factors of macro environment 2.1.1

Demographic

In Australia market, the youth people being the major consumers and also bring a peaked of the consumption of Energy Drink in recent years. The age from 16 to 45 all enjoy Energy Drinks which can improve their effective of the work, study and sports. The operation of the Red Bull in Australia was located in Sydney, which city is the most population and economic city in Australia, and the most population of Australian was distributed on the Australia East Coast. The location of company could benefit for marketing research and better to understand the feature of demand. For different level of age structure and consumers, Red Bull published different types of products. Red Bull sugar free and Red Bull zero for older clients and Red Bull Edition of younger clients. (Red Bull site, Products) In Australia, obesity and overweight always one problem for local people, and Australian realized health food in life.(National Health and Medical Research Council) The Red Bull sugar free and Red Bull zero are the keys to open the potential consumer market. Red Bull Edition has three taste drinks which are Cranberry, Lime & Blue Berry, and these different tastes of drink satisfy younger people for seeking different taste of drink.

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[Marketing Report] Red bull Red Bull as the first energy drink in Australia, it has “first mover” advantage in the market. The older people still choose Red Bull even after V, Mother and Rockstar entry the market. Other hand Red Bull’s loyal consumers not only include older age’s consumer, but also people who love sports or activities which Red Bull sponsored. 2.1.2

Economic

The economic environment won’t have much impact on the Energy Drinks industry. Australian average weekly expenditure on the food and non-alcoholic beverages are about $204. The price of Energy Drink in Australia still between the range of $2 to $5 and belong to special drink and niche market, just few substitutions such as coffee and normal drinks. (Australian Bureau of Statistics, 2011) Compare coffee or other normal drinks, Energy Drinks could provide most energy for people who need the power, and that its unique feature which cannot substitute. In Australia, company invest different kind of sports and events, for example, the Racing Australia, Formula One World Championship 2013 and other exciting sports. All these sports and activities are attracting attention of people all over the world. The price of Red Bull price still more than at least 10% of other Energy Drinks. Food and nonalcoholic beverages is the second expenditure on the goods and services, that means there are enough potential consumers in Australia, and Red Bull want provide price and show they are the best in the Energy Drinks, not only their price, but also product’s quality. Red Bull has more effective branding campaign than its competitors. Red Bull investing huge capital on grass-roots campaign, which can help them attracting new consumers and maintaining the loyal the old customer. (Mullins, J.W., Walker, O.C.)Like Racing Australia could be provided honour and raise awareness for Australia, that could help more consumers accept Red Bull in psychological aspect. 2.1.3

Natural

Energy Drink is one type of drink would help people stimulant drugs, and it may be contains carbonated and usually have huge of caffeine and other stimulants, sugar or other sweeteners. (Energy Page 6

[Marketing Report] Red bull Drinks, Australian Beverages) Planting materials, manufacturing pollution and product recycle could influence the natural environment. Red Bull Australia crossing managed transportation, logistics and channels to saving cost and energy waste. Firstly is WALL-TO-WALL Production. Red Bull’s manufacturing base in central Europe, not Australia, and also provide lots of benefit, such as explicit local high quality ingredients, protect local resources immediately and 80% is sourced from renewable energies in the Europe. (Can Lifecycle, Red Bull site)Next is ideal transport packaging. Red Bull can is effective transport packaging because of its form and low weight, and it can saved at least 30% compared with glass bottles and PET bottles. (Can Lifecycle, Red Bull site)The last is Efficient Cooling. Red bull promotes the uses of ECO-Coolers, which could avoid greenhouse gases. (Can Lifecycle, Red Bull site) Red Bull always be careful the recycling of the product, they has chosen the use of aluminium cans. The use of aluminium has several benefits, could be recycled many times without damage of quality, saving more energy by using reclaimed aluminium, lower weight than before, smaller carbon and keep drink fresh for long time. Red Bull implements sustainability development strategy for built the ethical and environmental brand, which can help them to receive competitive advantage when Australian more focus on social responsible as well as the rest of the world. In Australia ‘Green’ brand is more easily accepted by the customers, and it is also the key to get the advantage of brand reputation. 2.1.4

Technological

Energy Drink as an emerging industry can be traced decades ago. The first ‘energy’ drink - Coke was published in 1886 and it contained caffeine and stimulant which can provide people extra energy. (Samantha Lile, 2013) After decades years, Energy Drink keeping improved and innovation. In 1929, published of Luzocade which contains 46% milligrams of caffeine and 37% of sugar. (Samantha Lile, 2013)In 1949, Dr.Enuf developed a soft drink which named as ‘energy booster’ and it is not only contains caffeine and sugar, but also mixed with B vitamins. (Samantha Lile, 2013)Then Japan published popular energy drink of Lapvitan in 1962, and Thailand developed “Thai Red Bull” was popular in East Asia which is now Red Bull. (Samantha Lile, 2013)As the technological innovation, Page 7

[Marketing Report] Red bull Energy Drink not only brings more energy for consumers, also trending to be health drink. Therefore technological improvement brings unlimited possibilities for Energy Drink. Technological could reduce the cost of Red Bull, especially on the transportation, logistics and channels, such as WALL-TO-WALL Production and ideal transporting packaging. Red Bull was manufacturing product in Austria and export products to other countries. It not only can promise the same taste of the product, but also a safe way to keep secret of the recipe. For product, Red Bull invested search and development on the taste, shape and materials of can. For taste, Red Bull published RED BULL EDITIONS with three specific flavours: Cranberry, Lime and Blueberry. Red Bull designed the shape of can, which is better to transport. The use of aluminium on the material of the Red Bull product can, the kind of material easier to recycle for reduces the cost of the new can. In other hand the design of 250ml can is for quickly to drink and effect. With developing of technology, people buy Red Bull products are no longer limited to convenience stores and supermarkets, online shopping or phone shopping also became a trend. Customers only need to shop in front of computer or phone at home. Logo of Red Bull combined two red bulls which face each other and one gold sun. Two red bulls and golden sun are representing the power, speed, energy and aggression. Two red bulls build a pair of wings which is Red Bull’s official slogan – “Red Bull gives you wings”, everyone has right and power to fly. 2.1.5

Political

In Australia, there’s no enforcement law to limit for consumption of caffeine, but Food Standards Australia New Zealand (FSANZ) recommend 201 mg caffeine per day per adult. In Energy Drink 250ml contain 80mg of caffeine, so the maximum amount of daily of Energy Drink should be two can of 250 ml. (FindLaw Team, Find Law Australia) The Standard 2.6.4 published by Australia New Zealand Food Standards Code which is formulated caffeinated beverage must not be mixed with nonalcoholic soft drink to produce product. (FindLaw Team, Find Law Australia)The standards Code also limited the maximum amount of caffeine of Energy Drink is 320mg per litre. (FindLaw Team, Find Page 8

[Marketing Report] Red bull Law Australia)Therefore, excessive intake of Energy Drinks that possible to damage the health of consumers. Red Bull Company claims their drink is safe, and the level of caffeine and taurine is safe as a cup of coffee. Some people still dead after too much Red Bull or mixed with wine, and some people dead had used Red Bull as a mixer with alcohol. Some countries limit and ban Red Bull, for example, , Denmark and Norway just allow Red to be sold in Pharmacies. (Dan Harris, ABC NEWS) Red Bull has warning consumers on the product package, such as contains caffeine, not recommended for children, pregnant or lactating women or caffeine sensitive persons and it is also statement the maximum can or bottles daily. For the brand, Red Bull always focuses on social responsible, make sure the brand reputation over the world. Red Bull not only concerned about environmental protection and sustainable development, but also aims to organize charity event. Red Bull through publicity activities to promotion and raising charitable fund. Red Bull use charitable funds to invest in the development of disease and poor countries. (2012, Red Bull charity campaign raises €1 million) 2.1.6

Cultural

Australia as a nation of immigration, it is easier to accept different culture or new experience. Energy Drink as new type of drink, Australian would like to taste it. Major cities in Australia, such as Sydney, Melbourne, as the pace of people’s life is speeding up, they need Energy Drink provide them extra energy. Red Bull Company has positioning customers on top athletes, busy professionals, active students and drivers on long journeys. In Australia, company promotion crossing local activities and promotion, for example, Racing Australia, Surfing Match, and free Red Bull in university. Red Bull has produced different types of product to satisfy different subculture groups. For example, Red Bull Edition has three different kind of taste corresponding to different favourite tastes groups, and Red Bull sugar free and Red Bull Zero aim to group of customers who do not want sugar and caffeine. The research statement there are more than 50% of men and women and at least 20% of children are Page 9

[Marketing Report] Red bull overweight or obese. (Wellbeing Centre, Chemmart) These statistics Red Bull sugar free and Red Bull Zero have enough potential market in Australia. The core of Red Bull brand is “Red Bull gives you wings”. In Australia, people are said to value equality and a ‘fair go’ for others. Therefore, the meaning of “Red Bull gives you wings” is that creates same opportunity as positivity and confidence in the consumer, because all consumers have the energy and the ability to do whatever they want. They are not constrained or restricted, if they have been given wings to set off and complete their tasks ahead.

2.1.7

Reference list of Part A

Australian Bureau of Statistics, Household Expenditure Survey, Australia: Summary of Results, 200910, Cat. No. 6530.0 September 2011. Can Lifecycle, Red Bull site, http://energydrink-au.redbull.com/can-lifecycle-0#video/2108117381001 Dan Harris, ‘Red Bull Drink Raises Red Flag’, ABC NEWS, http://abcnews.go.com/WNT/story? id=130751&page=1 Energy Drinks, Australian Beverages, http://australianbeverages.org/products/energy-drinks-2/ FindLaw

Team,

‘Energy

Drinks

and

the

Law

in

Australia’,

Find

http://www.findlaw.com.au/articles/4298/energy-drinks-and-the-law-in-australia-.aspx Red Bull site, Product, http://energydrink-au.redbull.com/red-bull-energy-drink Page 10

Law

Australia,

[Marketing Report] Red bull Mullins, J.W., Walker, O.C., ‘Targeting Market Segments’, Marketing strategy, McGraw Hill Education Answers, http://answers.mheducation.com/business/marketing/marketing-strategy/targetingmarket-segments Obesity and Overweight, National Health and Medical Research Council, Australian Government, http://www.nhmrc.gov.au/your-health/obesity-and-overweight Samantha Lile, 2013, ‘The History of Energy Drinks: A Look Back’, WALL STREET INSANITY, http://wallstreetinsanity.com/the-history-of-energy-drinks-a-look-back/ ‘When

excess

body

fat

becomes

a

problem’,

Wellbeing

Centre,

Chemmart,

http://www.chemmart.com.au/when-excess-body-fat-becomes-a-problem/w2/i1011586/ 2012, RED BULL CHARITY CAMPAIGN RAISES €1 MILLION, James Allen on F1 Ja.F1 The official Website, http://www.jamesallenonf1.com/2012/06/red-bull-charity-campaign-raises-e1-million/

2.2 PART B Segmentation of Red bull 2.2.1

Australian market

Australia is an important market of Red Bull. This is because the advantage about customers, competitors and demography. a. Customer Red Bull defines Australian market because of Australian customer behavior. Australia is a developed country with sporting culture. According to Department of Foreign Affairs and Trade Australia, Australian lifestyle under sporting culture is mentioned that: there are more than 11 billion Australians of 15 and over years old play sport at least once a week (DFAT 2012). This is one of main factors for Red Bull to choose Australian market.Energy drink product will be the most chosen by young people, Page 11

[Marketing Report] Red bull who need more energy in the process of playing sport. Therefore, Australian market is really appropriate for Red Bull to develop its product. b. Competitor Australia may be a good market because there are not many competitors. Australia has its own energy drink products, such as: V, monkey. Moreover, there are oversea brands with Rockstar and Mother of Coca-Cola. However, According to Weston, Australia has to import energy drink with more than 100 liters per year (Weston 2013). It can be seen that locally produce is not enough supply for demand of Australian people. Therefore, Red Bull with advantage of the leader in energy drinks market; it will have many opportunities to develop on the Australian market, where there is high demand of the market but not too many competitors. c. Demography The trend of growing population is one of the most important factors of Red Bull to define Australian market. Australian Bureau of statistic shown the growth trends of Australian population that: there are 2.6 million customers of aged 10 to 19 and it is increasing from the early 1990s (2007 cited in Kotler at al. 2013, p.123). Youths and students are the main customers of Red Bull. Hence, with the increase of this group, Red Bull can increase its market and get more sales. Because of this reason, Australian market is one of the appropriate markets for Red Bull which was chosen to expand company. 2.2.2

How big and how fast it growing

Australia is one of the biggest markets of Red Bull in the world. In 2011, Red Bull got 32% market share of energy drink Australia market, just follows V with 37% (Eurominitor 2012). According to drinkstrade, the profit of Red Bull in Australian market is shown that “By the end of 2000, Red Bull had secured 7,685,928 unit sales through the on-premise channel and in seven years, it now represents 21,560,640 million units (year end 2007).” ( drinkstrade 2009). It can be seen that, Australia is a successful market of Red Bull. Only in 7 years but Red Bull can quickly grow and earn lots of profit from this market. 2.2.3

Relevant trends Page 12

[Marketing Report] Red bull There are two relevant trends that affect this market. The first one is the digital age and the other is sustainable marketing. a. The digital age Nowadays, technology significantly develops that leads to the digital age. People depend more on the development of technology, particularly internet. It is an important trend that affects directly to Red Bulls’ market. This is because its main customers are young teens, who pay lots of time on social network and internet. Zoaustralia maintained that: there are 94% Australians access to internet and 69% aged group of 25-34 have shopped online ( Zoaustralia 2012). According to Abramovich, the author mentioned the digital strategy of Red Bull that: company has successful digital strategy with its music showcases, blogs and video contents (Abramovich 2012). Capturing this trend, Red Bull may take more communication and advertising to its customers. Moreover, it can build a better relationship and get more customer needs. Thus, this trend can be one of the most relevant trends affects Red Bulls’ market. b. Sustainable marketing Secondly, today companies are expected to deliver value to customer in environmental responsible way (Kotler at al. 2013, p.18) because customers are paying more attention to protect environment. Hence, customers will pay more satisfaction and loyal to companies which have responsibility to environment. Red Bulls have its own strategy to protect environmentbyu to 80% renewable resources, smart transport by train and ship to reduce CO 2 emissions and supply 313.000 ECO-cooler over the world to reduce greenhouse gases (Red Bull 2012). It can be seen that Red Bull captured the trend of its customers. They more want to associate with companies that are friendly with environment. Therefore, Red Bull with its environmental responsible will get more loyal customers. 2.2.4

Market segmentation

Red Bull is one of the first energy drink products for adults who need more energy. Thus, it is important for Red Bull to indicate market segmentation. It was indicated base on different variables, include: demographic, behavior and geographic. Page 13

[Marketing Report] Red bull a. Demographic Customers have difference needs, wants and usage rates that closely to variables of demographic ( Kotler at al. 2013, p. 249). Therefore, it is an important aspect for Red Bull to define its market, particularly depend on age, gender and occupation segmentation. ①Age and gender In 2012, Australia has 42.2% people from 25-54 years old, with 4,713,552 males, and the second group is 13,5% of 15-24 years old, with 1,524,835 males (Indexmundi 2013) . This age group has the most dynamic daily activities that need to get more energy. According to O’brien, Red Bull focus on male between 18 and 35 years old ( O’brien 2012). Hence, with this energy drink, this group is the most appropriate with its product. Moreover, when choose this segmentation, Red Bull is successful to promote to its customer by sponsoring for game contexts, music concepts and social media. This can help Red Bull bring it product directly to its customer. ②Occupation Red Bull gives more energy for its customers. Thus, its customers are mentioned that: they are active students, athletes, busy professionals and long distance drivers ( FnBnews 2006). These people always suffer mental and physical stress. They need a special drink that can help them increase their capacity and concentration. Hence, red bull with features characteristic of its products can satisfy these customers. b. Behavior The variable in this segmentation that was indicated is Usage rate. There are three types of usage rate, there are light , medium and heavy ( Kotler at al. 2013, 247). According to Jessie, the most customer of Red Bull focus on is heavy and these s bring the most profit for Red Bull, with nearly $2 billion in 2012 ( Jessie 2011). Red Bulls’ customers are mainly men in 18 and 35 years old. This aged group is the heavy that Red Bull focuses on since they have the most demand on energy drink products. Page 14

[Marketing Report] Red bull c. Geographic Red Bull bases on the density of geographic to define Red Bull market. According to Indexmundi, in Australia, 89% of total of Australian population is urban population (Indexmundi 2013). They have a more active and busy living so they willbe potential customers of energy drinks. Moreover, in cities there are more bars, night clubs and pubs, where Red Bull is one of the most popular and favorite drinks. This is place where Red Bull has the most customers and gets the most profit of sale. Therefore, Rural will be the main market targeting of Red Bull. 2.2.5

Market targeting

The target market of Red Bull is male with age between 18 and 35 years old. These customers live in cities and they may be students, athletes, professionals and drivers. Therefore, they want to choose an energy drink to become more concentrate and capacity. Moreover, its customers are also the people who like going bars, night clubs and pubs, where Red Bull is a popular product. With an appropriate market targeting, Red Bull can make lots of sale to increase its profit over years. According to energyfiend, the profit of Red Bull is shown that:

Year

Profit ( $ Million)

2013

3,433

2012

2,950

2011

2,300

(Energyfiend 2013)

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[Marketing Report] Red bull It can be seen that, while being the leader of energy drink, the profit of Red Bull is increasing from 2011 with 2,300 to 3,433 in 2013. This is because Red Bull successfullyindicates its own market targeting. This market is really relevant with its product and this is one of the main reasons for the success of Red Bull.

2.2.6

References list of Part B

Department of Foreign Affairs and Trade 2012, People, Culture and Lifestyle, DFAT, viewed 07 October 2013, http://public01.library.uow.edu.au/refcite/style-guides/html/

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[Marketing Report] Red bull Weston, S 2013, Homegrown energy drinks fuel the market in Australia and New Zealand, Foodbev, viewed

06

October

2013,

http://www.foodbev.com/news/homegrown-energy-drinks-fuel-the-

market#.UllyTFBmiSo Kotler, P, Burton, S, Deans, K, Brown, L & Armstrong, G 2013, Marketing, 9thedn, Pearson, Australia. Abramovich, G 2012, Inside Red Bull Canada’s digital strategy, Digiday, viewed 06 October 2013, http://digiday.com/brands/inside-red-bull-canadas-digital-strategy/ RedBull 2012, Can lifecycle, Red Bull, viewed 07 October 2013, http://energydrink.redbull.com/canlifecycle O’rbien, J 2012, How Red Bull Takes content Marketing to the Extreme, Mashable, viewed 06 October 2013, http://mashable.com/2012/12/19/red-bull-content-marketing/ FnBnews 2006, Energy drink Red Bull to start a rage in satellite cities, FnBnews, viewed 07 October 2013, http://www.fnbnews.com/article/detnews.asp?articleid=17183&sectionid=32 Louver, C 2011, Red Bull: A Brand Built on Marketing, Business Development Strategy, viewed 05 October 2013, http://wearedevelopment.net/2011/12/28/red-bull-a-brand-built-on-marketing/ Energyfiend 2013, The Top 15 Energy Brands, Energyfiend, viewed 05 October 2013, http://www.energyfiend.com/the-15-top-energy-drink-brands Drinkstrade

2009,

Flight

of

The

Bull,Drinkstrade,

viewed

06

October

2013,

http://www.drinkstrade.com.au/ContentFiles/Documents/Drinks %20Trade/Public/Library/insights/other%20categories/Issue%2007%20Oct-Nov%2008%20Red %20Bull%20Australia%20Janelle%20Neath-%20Head%20of%20Communications%20insights.pdf Zoaustralia 2012, Growth Continues in Australia E-Commerce, Zoaustralia, viewed 06 October 2013, http://zo-au.com/2012/10/24/growth-continues-in-australian-e-commerce/ Indexmundi 2013, Australia Demographic profile 2013, Indexmundi, viewed 06 October 2013, http://www.indexmundi.com/australia/demographics_profile.html Page 17

[Marketing Report] Red bull Euromonitor 2012, Sports and energy drink in Australia, Euromonitor, viewed 06 October 2013, http://www.euromonitor.com/sports-and-energy-drinks-in-australia/report

2.3 Part C Competitors of Red bull & all companies’ competitive position 2.3.1

Goals, strategies, strengths and weaknesses of Red bull’s competitors Page 18

[Marketing Report] Red bull a.Frucor Beverages Ltd A famous drink company in the world, Frucor Beverages Ltd from New Zealand, has three products of energy drinks including V, Rockstar and Protein Revival. With regards to V, it has developed so well and became one of the most popular energy drinks in Australia since 1999. Firstly, its objects are meeting clients’ demands by selling various energy drinks. In order to catch the different customers’ tastes, it provides many kinds of flavours such as coffee and persimmon (V-energy 2013). Secondly, for increasing the products which can be supplied to the customer, V implemented sponsorships being its strategy. In 2007, for increasing young customers, V held an activity called VRAW which helped young people to find their ideal jobs (mediahunter 2009). In addition, V has high brand awareness in Australia. According to a report of Sports and Energy Drinks in Australia (2012), it shows that it has occupied more than 37% of market in Australia. Finally, there are some weaknesses in V as well. It did not use a competitive price in Australia. In Woolworths, a famous supermarket of Australia, the price of 500ml V ($6.04) is higher than the same size of Mother ($5.00) (Woolworths 2013). b. Coca-Cola In of Mother, an American product, which comes from Coca-Cola, it is another energy drink brand in Australia. With the local customers’ high expectation, Mother, which is a natural energy drink from America, was launched in 2007 (Coca-Cola 2013). From then on, because of the good quality and suitable market strategy, it quickly covered a large number of target customers. To begin with, increasing 20% of the market share year should be the goals of Coca-Cola in Australia (Coca-Cola 2013). To achieve this purpose, there are two related strategies following. One is focusing on products: taste is the first thing which needs to be considered by producers. Hence Coca-Cola attached more importance on the customers’ taste experience. In 2012, Mother launched Mother Frosty Berry, which added a strong and refreshing sweet option for Aussies (Campaignbrief 2012). The other is focusing on promotion: Mother knew how to built good relation to public that can stimulate their purchase desire. In 2010, it became the official energy drink of the V8 Supercars which is made a deep impression by the public. What is more, there are also some advantages of Mother. It belongs to CocaPage 19

[Marketing Report] Red bull Cola, which is the largest beverage company in the world so it can develop itself quite well by using the parent company’ capital . However, the shortcomings of Mother should not be neglected as well: it has low brand awareness and low brand value. It could be because that it just established in 2007 so it is much younger than other brands in Australia. c. Buzz Monkey In of Buzz Monkey energy drink, it originates from Australia in 2005. First of all, its market goal is catching the eyes of more local clients (Buzz Monkey 2013). Due to the objective, it prefers new distribution channel to increase the number of customers such as using online stores instead of entity shops. For instance, it is convenient to buy the products on Alibaba.com (Alibaba 2013). Besides that, coming from Australia may be its advantage: the culture of brand can easily attract more local people in Australia. However, the disadvantage of Buzz Monkey is manifest as well: the size of company is so small that there is little financial of it. For example, it cannot spend much money on advertisings, which means it could be lose some potential customers. 2.3.2

Competitive position of energy drinks in Australia

In energy drink markets of Australia, there are four brands playing different roles in 2011. Firstly, Frucor Beverages Ltd, with 37% market share, is the leader in Australia, by V brand. And then, Red Bull reached 32% share being a challenger. Besides that, Coca-Cola got 21% share through it Mother brand being a follower. Finally, the rest of the marker share in Australia belongs to Buzz Monkey, the local company (Euromonitor 2012). a. Market leader (Frucor Beverages Ltd) Generally speaking, a leader usually has the greatest market share (40%) and always leads other companies in price change, promotion spending and distribution coverage. What is more, for keeping the status, it chooses to expanding total demand, protect market share and expand market share (Kotleret al.2013, p.100). Frucor Beverages Ltd with the brand V is nearly 40% should be the market leader. During the past 15 years, it has made totally effects on remain No.1 in Australian energy drink market. To start with, Page 20

[Marketing Report] Red bull increasing new customers of its products is a fabulous way to expand the total demand. According to a report, busy mothers who have to take care of their babies need more energy than the young students who study at school (Alternet 2013). Because of that, V made young mothers their new target customers (V-energy 2013). In addition, an effective market leader will focus on leading the industry in customer service, promotion and cost cutting to protect market share. With regards to promotion, in 2013, it used V-media to hold a sale programme in Sydney. Some workers assigned the free drinks to young people who were 13-25 years old in some shopping malls such as Westfield in Bondi Junction (V-energy 2013). Finally, expanding market share is also vital for market leader. Frucor Beverages Ltd used various products including V, Rockstar and Protein Revival to keep its whole market share in Australia. b. Market challenger (Red bull) Companies which are very large with 30% market share but stay second or third status in an industry called market challenger and they have capacity to challenge the market leader (Kotler et al. 2013, p.101). Red bull occupies roughly 30% in the market of Australia, it could be the market challenger. In general, it chooses the direct way to attack the market leader on the business battle. Speaking of the advertising strategies, Frucor Beverages Ltd, it just holds some entertainment activities to catch more young customers. In 2012, it held a live music performance in Australia, and then 15% sales increased in V Energy Drink (V-energy 2013). However, as to Red bull, it usually sponsors big and professional sports events to enhance the brand reputation. On 2rd Feb 2013, Red Bull Cliff Diving World Series 2013 Qualifier was held in Australia (Red bull 2013). After that, the brand awareness will be higher than before in the athletes circle. What is more, fans of some famous athletes may become new customers of Red bull. c. Market follower (Coca-Cola) Some firms with 20% market and they just chose to learn from the leader’s experiences instead of challenging them are called market follower. It may be because copying the successful behaviorsfrom Page 21

[Marketing Report] Red bull leaders can bring them more profit but save the research and development costs (Kotler et al. 2013, p.102). Mother from Coca-Cola just made up about 20% could be the follower in Australian market. It did some activities to copy or improve the market leader, V from Frucor Beverages Ltd. This product includes many flavors: V green with original flavor, V sugar free, V black with coffee flavor, V Not Orange with persimmon flavor and V blue (V-energy 2013). With the abundant types of products, Frucor Beverages Ltd attracted a throng of shoppers. Similarly, Coca-Cola prefers the same strategy to develop its product, Mother. Up to now, it has consisted of Mother original, Mother sugar free, Mother green storm, Mother frosty berry, Mother surge and Mother lemon bite (Coca-Cola 2013). Above all, Coca-Cola should be an adaptor: it copied the idea from Frucor Beverages Ltd but added one new flavor for getting more customers. d. Market nicher (Buzz Monkey) Companies which have small size with limited resources and mini market share are called nichers in the market. The truth is that using suitable niching strategy, these firms also can be great successful and profitable (Kotler et al. 2013, p.105). Buzz Monkey definitely is the market nicher because it gets the rest market share (10%). Firstly, it tries to promote the low-end market. Since 2005, it has kept pricing policy to catch low-income groups. Nonetheless, other companies usually ignore these clients. In addition, it implements on-line selling strategy which not only can get more on-line customers, but also can avoid the serious competition in the physical stores.

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[Marketing Report] Red bull 2.3.3

Reference list of Part C

Alibaba

2013,

Buzz

Monkey

Energy

Drink,

Buzz

Monkey,

viewed

28th

September

2013,. Alternet 2013, Young Mothers Are Some of the Biggest Consumers of Energy Drinks,Alternet, viewed 28th September 2013,. Buzz Monkey 2013, It’s all about the buzz, Buzz Monkey, viewed 28th September 2013,. Campaignbrief 2012, Mother adds 'Frosty Berry' to range of drinks in new print campaign via McCann-Erickson Sydney,Campaignbrief, viewed 28th September 2013, . Coca-Cola 2013, V8 Supercars And Coca-Cola Amatil Extend To 2015, Coca-Cola, viewed 28th September 2013, . Euromonitor 2012, Sports and Energy Drinks in Australia,Euromonitor, viewed 28th September 2013, . Kotler, P., Burton, S., Deans, K., Brown, L. & Armstrong, G. 2013, Marketing, 9th edition, Pearson Australia, Frenchs Forest, pp.100-105. Mediahunter 2009, V Energy drinks engage audience online with RAW, Mediahunter, viewed 28th September 2013, . Red

Bull

2013,

Cliff

Diving

on

the

Hawkesbury,Red

Bull,

viewed

28th

September

2013, . V-energy 2013,In the beginning, V-energy, viewed 28th September 2013, . Woolworths 2013,V Energy Can Drink 500ml, Woolworths, viewed 28th September 2013, . Page 23

[Marketing Report] Red bull 2.4 Part D Red bull’s competitive advantage & perception of itself and customers 2.4.1

Differentiation competitive advantages

There are two differentiations that create the advantage competitive for Red Bull. They are product differentiation and image differentiation. a. Product differentiation Nowadays, there are more competitors on the market. Thus, developing product to make it different that will attract and get more customer satisfaction. Because of this reason, Red Bull is expanding its product with more flavors: cranberry, blue berry and crimebut they sale it in the limited time (Aaker 2012). Red Bulls’ customers now can get more choices with their favoriteflavor. Moreover, it changes its design and packing with 8 tiny cans (Aaker 2012). Thatwillgivecustomersmore vary choices. Therefore, Red Bull can gain more customer satisfaction. b. Image differentiation Nowadays, there are many competitors on energy drink market. By establish the image differentiation, company will be more perceived by its customers (Kotler 2013, p. 265). Beside creative advertisings, Red Bull develops its image by sponsoring for many sports and racing game in many countries like Red Bull Air Race, New York Red Bull or Skateboarding in Colorado (Aaker 2012). By sponsoring for these events, Red Bull may communicate and build strong image to the customers. Hence, it will gain advantage competition because of the widely known from its customers. c. Differences to promote Red Bull promote on two difference factors to position themselves. They are communicable and important factor. d. Communicable It is important to choose an appropriate strategy to well communicate with customers. Targeting customers of Red Bull are most of young people. Therefore, Red Bull develop “stress marketing” Page 24

[Marketing Report] Red bull strategy, the “Wings team’s” has the role to get relationship with customers by talking with them about product and convey information from them (Louver 2011). This strategy will directly communicate to its customers. Hence, customers will have a better image about product and company can get more positive impact from its customer. e. Important The importance is to deliver higher value to target customers(Kotler 2013, p. 266). Red Bull is energy drink that brings more energy for customers. However, with a high rate of caffeine, it is considered that it is not good for the health of s. Thus, Red Bull is proposing to develop its product by using natural resources and nutrition supplement that not only provides energy but also increases memory and others healthy benefits- according to redbull-brand (Redbull-brand 2011). With these new products, Red Bull will be energy drink but good for the health. Thus, it can get more advantage strategy by delivering more value from product to customers. 2.4.2

How Red Bull to be perceived by its target market

As the positioning map shows, Red Bull has highest price with highest brand image respect to competition. Red Bull has founded at least 25 years with kept shaping their own brand image – Red Bull gives you wings. Red Bull events as a unique and trying to guide drinkers to Red Bull events, it will attract consumers and improve consumption in target marketing. The events could help people be part of exclusive the Red Bull family. Red Bull gives you wings Red Bull will continue to use the tagline on product and just make the tagline more evident on product, such as on the give-a-ways that the college Reps will be giving out. These students would be encouraged to make activities on university campuses. Red Bull would like to maintain prices relative similar and high compared the rest of the Energy Drinks industry. This is for keeping the image of a and high quality product. Red Bull price could even sell more than 400%. (Health & Beauty Close – Up, 2009) In Australia, the normal energy drinks price are between 2$-4$, but Red Bull price between 3$-5$. Therefore compared other competitors, Red Bull could provide consumers most energy they need with highest price, and also Page 25

[Marketing Report] Red bull they want present Red Bull worth the high price. Red Bull brand positioning is the product, price and profitability. 2.4.3

Positioning statement

Red Bull positioning statement is provided most valuable energy drink for customers with highset price, and also they are the best in energy drinks. In target market, consumers need energy for working, studying and sporting, and Red Bull can provide most energy compared other energy drinks. 2.4.4

How Red bull to be perceived by customers (by a face- to –face questionnaire)

a. Method First of all, the sample size was 10, these respondents were selected from different genders and occupations. Besides that, the data collection was got out through the use of a questionnaire with a face-to-face interview. b. Findings 1

Finding regarding the relationship between ments and brand awareness

The number of energy drink ments may have a relationship with these products’ brand awareness. According to the data of Figure 1 and Figure 3, when it comes to V, Red bull and Mother, it shows that there is a bigger amount of ments linking to a higher awareness in customers’ mind. However, as to in of Buzz Monkey, its situation is different from these products which are mentioned before. It just made very fewer which reached average mark 3 ments to the public, as a result, it is related a quite lower brand awareness which average score is 3. All in all, there is a positive correlation between the number of ments and the brand perception of customers. It could be because that advertising is an easy way to create awareness of new products and brand in order to influence customers’ buying behaivor. ②Finding regaring the correlations between flavours and packages

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[Marketing Report] Red bull There are correlations between the energy drinks’ flavours and packages. Figure 2 illustrates how customers’ percept about the energy drinks’ flavours and packages. With regards to V and Mother, they both have attractive packages and various flavours. However, as to Red bull and Monkey, they are in the opposite situation. It may lead to the loss of clients for the two companies in the future. By the total data from Figure 3, it is clear to find that, if there are more flavors for an energy drink product, the packages will be more, and vice versa. It could be explained by that, the more flavors of products can derive the demand of more packages. c. Recommentation According to the two findings above, there should be some recommendations following. As to ments and brand awareness, energy drink companies should focus on advertising strategy to develop their products, it will enhance their brand awareness and enlarge the market share in the future. In addition, for flavors and packages, providing more flavors can bring more attractive packages and stimulate consumer confidence which is beneficial for the development of a company. 2.4.5

Possible Value Proposition

For Red Bull, the Possible Value Proposition should be ‘more-for-more’ which is providing the best productwith higher price, also the cost is expensive. In this value proposition, Red Bull could give prestige to the buyer with high valuable. ‘Red Bull gives you wings’ represent status and a loftier lifestyle, Red Bull events brings challenge, enthusiasm, and vitality for people life, it is also belong to self-concept for psychological. For example, Successful mission to the Edge of Space shows Felix Baumgartner (AUT) fly supersonic after a jump from one of the biggest helium balloons ever from 128000 ft. People can watch the video from YouTube and also find Red Bull icon on the Space suit. (Red Bull site, 2012) That is other challenge self-concept, also present ‘Red Bull gives you wings’.

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[Marketing Report] Red bull

2.4.6

Reference list of Part D

Aaker, D 2012, How Red Bull Creates Brand Buzz, HBR Blog Network, viewed 07 October 2013, . Kotler, P, Burton, S, Deans, K, Brown, L & Armstrong, G 2013, Marketing, 9thedn, Pearson, Australia. Louver, C 2011, Red Bull: A Brand Built on Marketing, Business Development Strategy, viewed 05 October 2013, . Redbull-brand 2011, Red Bull Brand Strategy: Product Line Extension, Redbull-brand, viewed 06 Octorber

2013,


line.html>. 2009, “Research and Markets Adds Report: Energy Shots: Birth of a New -Priced, Highgrowth

Category”,

Health

&Beauty

Close

–

Up,


url=http://search.proquest.com.ezproxy.uow.edu.au/docview/818848191?id=15112>. 2012, Red Bull site, .

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[Marketing Report] Red bull

Conclusion

In summary, firstly, company’s environment is impacted by macro environment, such as: economic, political, technological, cultural, demographic and natural. Secondly, Australia market is defined base on customers, competitors and demographics. This is a big market and develops over the years. In addition, Red Bull indicate its segmentation and target market by analyse demographic, behaviour and geographic of the country. Thirdly, this report presents objectives, strategies, strengths and weakness of Red Bulls’ competitors, such as: Frucor Beverages Ltd, Coca-Cola and Buzz Monkey. Moreover, it also shows the competitive condition of Australian energy drink, with market leader: Frucor Beverages, market challenger: Red Bull, market follower: Coca-Cola and market nicher: Buzz Monkey. Finally, Red Bull develops the differentiating competitive advantages by product differentiation, and image differentiation. Red Bull also focuses on two different factors: communicatable and important to position themselves. In addition, Red Bull wants to keep a image of price and high quality. Therefore, it can be seen that Red Bull is really successful with its marketing program.

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[Marketing Report] Red bull

Appendices

Positioning Map

High brand image

Low price

High price

Low brand image

Perceptual Map Product

ment

Brand

Flavour Page 30

Package

[Marketing Report] Red bull awareness V 8 8 7 8 Red Bull 8 7 5 5 Mother 7 6 6 7 Buzz Monkey 3 3 3 3 Figure 3: customers perception on ment, Brand awareness, Flavors and Packages (1= lowest score, 4 = average score, 7 = highest score)

Attractive packages

Fewerflavours

More flavours

Boringpackages Figure 2: Perceptual map1 (flavours VS packages) awareness)

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[Marketing Report] Red bull More ments

Low brand Awareness

High Brand Awareness

Fewer ments Figure 1: Perceptual map2 (ads VS brand awareness)

Questionnaire of Energy Drink in Australia

General Questions: 1 What is your name? 2 Gender: A: Male; B: Female. 3 Which country are you come from? 4 Do you work or study now? A: Work; B: Study Specific Questions: 1 What is the most important factor to influence you buying an energy drink? A: Brand; B: Quality; C: Flavor; D: Package; E: ment F: Other 2 How do you like these products? Page 32

[Marketing Report] Red bull Products

Scores( 1-very satisfied,4average,7unsatisfied)

V Red bull Mother Buzz Monkey

3 What is your feeling about the number of these products’ ments? Products

Scores(1-very few, 4-average,7-too many)

V Red bull Mother Buzz Monkey

4 What do you think about the options of these products’ flavor? Products

Scores(1-very

few,

4-average,7-too

many) V Red bull Mother Buzz Monkey

5 What do you think about the flavors of these products? Products

Scores(1-very attractive, 4-average,7-too boring)

V Red bull Mother Buzz Monkey

6 What is level of the duration time after drinking these products? Page 33

[Marketing Report] Red bull Products

Scores (1-very short,4-average,7-very long)

V Red bull Mother Buzz Monkey

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