Marketing Plan

I. Executive Summary

I. Situation Analysis

A. Market Summary

1. Market Demographic

2. Market Needs

3. Market Trends

4. Market Growth

5. SWOT Analysis

6. Competition

7. Product Offering

8. Keys to Success

9. Critical Issues

II. Marketing Summary

A. Mission

B. Marketing Objectives

C. Financial Objectives

D. Target Markets

E. Positioning

F. Strategies

G. Marketing Mix
 H. Marketing Research

III. Financials

A. Break-even Analysis

B. Sales Forecast

C. Expense Forecast

IV. Controls

A. Implementation

B. Marketing Organization

C. Contingency Planning
II. Situation Analysis

A. Market Summary

1. Market Demographic

a. Predominantly male.

b. Aged 18-24 and 25-34

c. All races with a slight advantage to Asian and Hispanic.

d. Predominantly childless.

e. Earning <$40,000

f. Mostly no college degree or bachelor’s degree

2. Geographic

a. Australia and United States (C.B., 2013).

3. Behavior Factors

a. Purchased mostly in gas stations/convenience stores.

b. Mostly purchased in the afternoon

. c. Slight spike in purchasing on the weekends (Consumer

Insights and Demographics, n.d.).

d. More than 50% of college students drink at least one

energy drink per month (Heckman, Sherry, & Gonzalez, 2010).

e. Athletic and adventurous background.

f. Thrillseekers
 4. Market Entry

Any new company has to determine how they intend to enter

a new market. This will be predicated by a number of factors such as the
available resources, the sales objectives, product offered and existing
competition. In the case of Red Bull, the launch of the new product established a
new category of product; that of energy drinks. Derived from a concept found by
Dietrich Mateschitz in the Far East, the formula developed included large
amounts of caffeine, sugars (glucose and sucrose) and taurine. Taurine is a
‘conditional amino acid’, which means it cannot be created by the body but needs
to be provided in the diet. It is found in meat and fish . It is used medically in the
treatment of congestive heart failure, high blood pressure, high cholesterol and
diabetes, among other conditions, and it is present in infant formulas. Taken
together with the other ingredients, Red Bull claims that it provides an energy
boost .

Since no similar type of product existed on the market, there

was no direct competitor. As an innovator, the company had to educate its target
audience on the product’s benefits. If a mass market entry approach is used, this
can be extremely expensive (Hill and Jones, 2012), since customers have to be
convinced that the new product is safe, has unique benefits and is socially
acceptable. Rather than attempting to do this on a large scale, Red Bull adopted
a novel method based on introducing the product at a grass roots level. It is
promoted as a trendy drink at events where its main target audience gathers;
nightclubs, extreme sports events and even parties. In the latter, it encourages
students to set up Red Bull parties and provides them with free cans to distribute
to their friends. The company also uses cars in the corporate colour scheme –
together with a gigantic can – which give out promotional samples (Onkvisit and
Shaw, 2009). Initially, distribution is set up using small distributors. In some
cases, the company has hired warehouses and set up young people to
aggressively sell the product. As far as can be determined from the available
literature, this approach is likely to continue to be used in addressing new
markets in future.

5. Marketing Communications

However impressive a brand is, it has no value unless it can

communicate its unique characteristics to the consumer. On this basis, Red Bull
has a highly effective marketing communications approach, it is currently
recognised as the 74th most valuable brand in the world, with a value of $7.5
billion USD. From grass roots marketing, these days the brand is more
recognised through its sponsorship initiatives. This is backed up with a strong
online presence that strongly reflects the brand image and provides a form of
Integrated Marketing Communications (IMC). The company sees modern
communications media as being critical to their success.

The reason Red Bull has achieved such success has been
that it has successfully aligned its brand identity with that of its target audience in
a way not achieved by its competitors (Urbany and Davis, 2010). Even when it
uses traditional marketing media such as TV, it does so in a quirky ways that
does not take itself too seriously. In doing so it maintains the image that appeals
to its customers. It is this consistancy of message that is so important to IMC.

Whatever channel is used to get the message across, it

must be the same as those used on alternative channels.

Digital media provides an increasingly important method of

communicating with consumers, and Red Bull has identified this. As well as
having a strong website that focuses on the sponsorship activities it is involved
with, it also provides links to social media websites such as Facebook, Twitter,
Google+ and You Tube. These sites provide consumers with a means of
communicating with the company and with like-minded individuals across the
world. This fosters a club-like experience that enhances the company’s alignment
with its customers. The use of social media to build on relationship marketing is
now well recognised, and Red Bull has been in the forefront of exploiting this.
The company has also been active in the field of mobile marketing, launching its
own app to allow subscribers to keep in touch with the company when on the
move.

Overall, Red Bull is one of the most effective marketing

communications companies in the world, and it does so by offering interesting
content to its customers. The actual advertising of the products forms a small
part of this. However, the brand is intimately linked with its products and thus the
message gets across clearly. The continually changing content prompts users to
visit its sites frequently, and in doing so keeps the brand close to the user’s
attention. Few companies have been so successful in doing so.

6. SWOT Analysis

a. Strengths

Red Bull has numerous strengths. The company was

founded in 1984 and by 1987 it launched its first product in a completely new
category of drinks. Today Red Bull is sold in 164 countries around the world.
Since its debut 25 years ago, Red Bull has sold 30 billion cans, with more than
4.5 billion last year. Due to their success both domestically and internationally,
the company has expanded to over 8,000 employees worldwide (redbull.com).

Their leadership within the energy drinks market is

sub-none. They are by far the most popular company. Top-seller Red Bull posted
$2.3 billion in sales, which is a 14.3 percent increase, according to Symphony IRI
data (bevindustry.com).

According to Red Bull, “Numerous scientific studies

on the product and the individual ingredients prove that Red Bull Energy Drink:
increases performance, increases concentration and reaction speed, improves
vigilance, stimulates metabolism, and makes you feel more energetic and thus
improves you overall well-being” (redbull.com).

b. Weaknesses

Despite having numerous strengths and worldwide

popularity, Red Bull still has a few weaknesses. To begin with, Red Bull is in the
above average price range of the energy drink market. Secondly, there is a
substantial lack of innovation. Red Bull only offers a few products where as some
of their competitors offer more. Third, Red Bull’s recipe is not patented. This
could potentially lead to another company producing a very similar or exact
product with just a different name. Fourth, Red Bull is not yet a large corporation
as they still have less than 10,000 employees (Tyagi).

c. Threats

The biggest threat to Red Bull is Red Bull itself. The

ingredient mix that their products contain is not FDA approved. On top that,
government and scientists are finding that high amounts of caffeine, sugar, and
taurine are extremely unhealthy and potential fatal. France and Denmark have
gone to such measures as to ban Red Bull as a “cocktail of death.” High amounts
of sugar have been found to cause serious health problems. A small amount of
taurine, which is still a vastly unknown ingredient, is thought to be beneficial, but
scientists are beginning to find health risks it causes. Red Bull energy drinks also
contain a highly dangerous chemical called Glucuronolactone. The US
Department of Defense developed this product during the Vietnam War as a
hallucinogenic drug to stimulate troops’ morale. According to reports, “their
effects in the organism were so devastating, that is was discontinued of the high
index of cases of migraines, cerebral tumors, and liver diseases that occurred in
the soldiers who consumed it” (Helmi). Red Bull must carefully watch its larger
competitors, Pepsi and Coca-Cola, who would like nothing more than to obtain
 Red Bull’s consumers. Also, healthy organic energy
drinks are starting to enter and become competitive in the market (Tyagi).

d. Opportunities

Red Bull’s greatest potential lies in its opportunities.

Sales of energy drinks have taken on the energy of its products compared to a
year ago. The energy drinks category increased 15.7 percent for $6.9 billion in
sales, according to Symphony IRI Group, Chicago, for the 52 weeks ending May
15 in U.S. supermarkets, drug stores, gas and convenience stores and mass
merchandise outlets, excluding Wal-Mart (bevindustry.com).To begin with, since
they only have a few products, Red Bull has the opportunity to create new
products. Second, they have an unlimited ability to advertise and promote their
brand. Currently, Red Bull is the major player in the action and outdoor sports
advertising. However, if they were to continue doing that, but also enter into
another market such as UFC, boxing, or even mainstream sports such as football
or baseball, this would create a potentially exponential consumer base. Third, if
Red Bull could partner with a popular company such as Facebook or Apple, this
would create more everyday exposure via social media (Tyagi).

7. Competition

In many surveys it is said that people use energy drinks for

various reasons, athletes use energy drinks to provide some ‘fuel’ as they
practice and compete. On the other side people normally use as a way to
become ‘energized.’ That’s about all I know. So be an energetic is a basic point
which attracts the customers into the energy drinks.

In countries like India and Pakistan, Pepsi and Coca Cola

have a hold over other products. They market their products in these countries
like war that is way they are market leader in the countries. Pepsi holds the 70%
of market shares in Pakistan and in India also. They hire superstars in these
countries to promote their product and they have monopoly in distribution sectors
also. Unlike Red Bull they don’t hire stars for their promotion, Red Bull hire
athletes for their promotion. And the marketing is very week in third world
countries as compare to the rivals. The prices of these products also very low as
compared to Red Bull.

Another big competitor of Red Bull in Canada is Slow Cow.

Slow Cow is targeting those customers who don’t want to take excitement. It has
very small amount of caffeine in it. It helps the people slow down when they
stressed up unlike the Red Bull contains the caffeine which don’t help in stress.
Slow cow contains the amino acid which said to produce feeling of relaxation in
the brain, without causing sleepiness. It is also said to increase mental
awareness and concentration.

Another big competitor of Red Bull is Cott Corporation. Due

to its diversifying strategy, Cott Corporation is earring huge profits in the United
States, Mexico and Canada. Red Rooster is an energy drink of Cott which was
launched to compete with Red Bull.

Some other competitors of Red Bull are like Lucozade,

Monster, Relentless, Dr Pepper, Iron bur. All these energy drinks holds different
segment of the customers. So Red Bull needs to rebuild its strategy and revise
its segmentation in order to compete these markets as well. Red Bull must also
develop the strategies for the niche markets.

8. Product Offering

OUR RED BULL ENERGY DRINKS FAMILY

a. Blue Edition

The Red Bull Editions products are a lineup of lightly

carbonated beverages that offer the same “wings” and ingredients as Red Bull
Energy Drink and Red Bull Total Zero – but explore different flavor profiles.
 b. Red Bull Energy Drink

The original Red Bull product, the energy benefits of

Red Bull Energy Drink derive from a unique blend of caffeine, taurine, B-group
vitamins, sucrose, glucose and Alpine spring water. Today, Red Bull is available
in more than 167 countries with over 45 billion cans consumed so far.

c. Orange Edition

The Red Bull Editions products are a lineup of lightly

carbonated beverages that offer the same “wings” and ingredients as Red Bull
Energy Drink and Red Bull Total Zero – but explore different flavor profiles.

d. Red Edition

The Red Bull Editions products are a lineup of lightly

carbonated beverages that offer the same “wings” and ingredients as Red Bull
Energy Drink and Red Bull Total Zero – but explore different flavor profiles.

e. Red Bull Sugar Free

“Wings without the sugar,” Red Bull Sugarfree offers
the same flavor and benefits of Red Bull Energy Drink without the sugar –
coming in at only 5 calories per 8.4 fl oz. can. Like the original Red Bull product,
the energy benefits derive from a unique blend of caffeine, taurine, B-group
vitamins, sucrose, glucose and Alpine spring water.

f. Red Bull Total Zero

For those who want absolutely no sugar or calories –

with the benefits of Red Bull Energy Drink – Red Bull Total Zero gives you
“nothing but wings.” Caffeine, taurine, B-group vitamins, sugar substitutes and
Alpine spring water come together to make this possible in the lightly carbonated
beverage.
 g. Yellow Edition

The Red Bull Editions products are a lineup of lightly

carbonated beverages that offer the same “wings” and ingredients as Red Bull
Energy Drink and Red Bull Total Zero – but explore different flavor profiles.

9. Keys to Success

Red Bull’s strategy works because of three different things:

a. The first is their ability to tell a story that entices their

audience. Their focus on everything from extreme sports to music festivals gives
them a wide playing field, but it’s not just that.

b. Red Bull puts its product second, and the content and
value they can give their audience first. The attention to detail that their
marketing team gives is evident. These are people who care about the topics
their writing, recording or creating content around.

c. Finally, it’s their commitment to the values and

aesthetic that the brand created when they first got their start that makes
their marketing work. Everything they create relates back to the idea of giving
people and ideas wings to fly.

10. Critical Issues

In order to maintain the position of Red Bull in global market

and increase the shares in different countries the Red Bull must revise its
strategy according to new market and competitors. If Red Bull change its strategy
like to target the third world countries like Pakistan and India Red Bull can get rid
of huge criticism and earn profit beyond the limits. In west the Red Bull has
serious challenge of different issues; Red Bull is facing difficulties in order to
maintain its position due to health issues and prices of products.
 Another big issue of Red Bull in these countries that Red
Bull has very small range of drinks and Red Bull is just targeting young man, and
they are ignoring huge market like children women old ages. So Red Bull going
down from the maturity stage. Red Bull must develop different products in order
to meet the needs and wants of customers and different members of society. So
it is big advantage for Red Bull is it is already a famous brand and no need of
huge investment is required and just to change its strategy and develop different
products. And if we see segmentation of Red Bull, there would be strategy for
men women children. So to gain again its position on the top of the market Red
Bull must develop its research and development or we can say that R & D dept.

Another big market which Red Bull is ignoring like India,

Pakistan, China and whole Africa. No doubt Red Bull holds 70% of market
shares of energy drink in United States, but if we see the population of America,
it is very small as compared to these economies which I mentioned above. Red
Bull has no big structure and development in these countries and it seems like
Red Bull is just for its presence not for sale so the structure of Red Bull in third
world countries also in declining. In these countries the Red Bull is in growth
stage but also in but if Red Bull continuously ignores the strategy it would be
declined stage for Red Bull. In these countries the women children are more than
men and it would be a big market for Red Bull if Red Bull satisfied need and
wants of customers.

The people living in these countries have low income level

and their living standard is also low. In these countries the competitors are
providing low price drinks as compared to Red Bull that is way they have hold in
these markets. Red Bull must develop the products for low income customers or
they have to adjust prices of Red Bull according to income level.
III. MARKETING STRATEGY

A. Mission

According to Red Bull, “[Their] mission is to be the premier

marketer and supplier of Red Bull in Asia, Europe, and other parts of the globe.
[They] will achieve this mission by building long-term relationships with the
people who can make it become a reality” (redbull.com). The company also has
a vision statement that focuses on 5 aspects of their company values: People,
Portfolio, Partners, Profit, and Productivity. Red Bull wants to be “a great place to
work; where people are inspired to be the best they can be.” They want to “bring
to the world a portfolio of quality beverages that anticipate and satisfy people’s
desires and needs.” Red Bull wants to “nurture a winning network of customers
and suppliers; together we create value.” They want to “maximize a long-term
return to shareowners while being mindful of [their] overall responsibilities.” Red
Bull also wants to “be a highly effective, lean, and fast-moving organization”
(redbull.com).

B. Marketing/Financial Objectives

A marketing objective is a statement of what is to be accomplished

through marketing activities. The goal of Red Bull is obviously increasing sales
more than last year. Red Bull leads an energy drink industry so far; however,
Monster has been catching up greatly in the past a few years. Therefore, they
need to have a good marketing objective to keep the position of number one
seller in an energy drink industry and increasing their sales. In order to
accomplish their marketing plan, they need to cover several criteria of marketing
objective such as realistic, measurable, time-specific, and compared to a
benchmark (redbull.com).

Red Bull refused to publish their earnings, profits and specific

marketing goal; however, increasing their profit than past years is clear and
accurate their goal of every year. They also compute their annual profit end of a
year every year. In 2011, Red Bull sold 4.631 billion cans worldwide. It
represents an increase of 11.4% against 2010. Company turnover increased by
12.4%, from 3.785 billion Euros to 4.253 billion Euros. Therefore, their key areas
such as revenues, sales, productivity, operating profit, and the figures recorded
were the best in the history of the company so far. According to industry
marketing reports, “The main reason for such progressive figures include
exceptional sales, especially in key markets such as the USA (+11%) and
Germany (+10%) and also in other markets such as Turkey (+86%), Japan
(62%), France (+35%), and Scandinavia (+34%) combined with efficient cost
management and ongoing brand investment.” The result of these figures indicate
Red Bull continue increasing sales and accomplishing the goal. Red Bull is
successfully growth because of their marketing plan that increasing their profit
than past years and computing their annual profit end of a year are realistic, and
time-specific (redbull.com).

In order to increase a profit of the company, advertisement is one of

very important elements. Red Bull builds up unique marketing campaigns and
many different kind of activities such as mountain biking, snowboarding surfing,
skateboarding, freestyle motocross, and Formula 1 racing. They just succeeded
in the marketing campaign “Red Bull Stratos.” Felix Baumgartner jumped at
128,000 feet above the Earth that reached a high speed of 833.9 miles per hour.
People cannot get a picture of Felix without the Red Bull logo and that is their
marketing strategy. Red Bull considers that marketing is not just department
(Chun).

Their extreme sports activities contents represent the symbol of

their brand; therefore, they launched Red Bull Media House service. Red Bull
Media House is a multi-platform media company with a focus on sports, culture
and lifestyle. They provide and distribute the videos, which are precious, cool,
and adventurous; therefore, people are able to get thrills from the movies. The
marketing plan of Red Bull Media House is making profit from its services. They
also expect the service serve a function as an advertisement and help to
increase sales of Red Bull. According to Red Bull founder and CEO Dietrich
Mateschitz, he states, “In long term, we expect that Red Bull Media House to be
profitable.” Therefore, their marketing objective of Red Bull media House is not
clear. There is a realistic to achieve their goal when they consider long term to
get profits from its Red bull media house services because especially the
attentions from young people to extreme sports are increasing. Red Bull Media
House also needs to become more popular to be profitable. Their goal is not
measurable and time-specific because Dietrich just mentions Red Bull Media
House will be profitable in the future. Their plan is too vague and they do not
determine the date of their achievement such as December 31, 2015. However,
at the same, they also consider Red Bull Media House is part of marketing
content and desire that the services and the video of Red Bull Media House
assist sales of Red Bull. Therefore, we can see the logotype of Red Bull on the
players’ helmets, caps, and shirts in the movies from Red Bull Media House.
They are excited to launch Red Bull Media House and provide the services; even
though, they might not be able to make profits the first a few years because they
tend to consider the loss of profits as expenditure of marketing (Iezzi).

C. Strategies

Its chosen strategy has led to strong word-of-mouth sales in new

markets, and this provides a springboard for further success in those markets. As
it grows, it invests further in creating events such as the Flugtag, in which
competitors attempt to fly from a pier using homemade, unpowered aircraft –
most of which are incapable of flight, and soapbox racing (Red Bull, 2014a). This
draws both competitors and audiences. Most of the events the company
sponsors are more professional in nature and cover an increasing range of
activities, from spectacular air racing using stunt planes, to cliff diving, wingsuit
racing, motorsports and adventures. The company has even moved into
computer gaming and e-sports. The features that are common to all of
these activities are their attraction to their target audience and their physical and
mental requirements. Having identified this approach, the company appears to
be keen to continue to exploit it.

When considering the market positioning of the Red Bull energy

drink, it almost appears that it has arisen organically from the properties of the
product; it supports physical and mental exertion and therefore the market
position supports this. However, this belies is underpinned by clever physical and
psychological positioning. The physical positioning refers to the product’s unique
characteristics (it provides energy from its unique formula) and the psychological
positioning derives from its brand image as being youthful and energetic, and
socially desirable to its twenty-something core audience (Lantos, 2011).

From its original product offering (one product), the company has
added a little to its portfolio through the introduction of Red Bull sugar-free, Red
Bull zero-calories, Red Bull editions (in flavours of cranberry, lime and blueberry)
and Red Bull cola. The cola is promoted as being the only cola drink made from
100% natural ingredients and makes the case that, unlike other brands that might
be mentioned, it has no secret formula. The company follows the same basic
branding approach for these additional products, presumably on the grounds that
they will appeal to subsets of their existing target audience.

Red Bull’s ability to stay true to its branding and values is what
makes them successful.

a. . Maximizing The Idea Behind Their Tagline

Red Bull's messaging strategy revolves around their tagline,

“Red Bull gives you wings.” It focuses on the idea that their product gives people
the “wings” or energy they need to do whatever they want when they want.
 This tagline fuels their content because they produce and record
some of the most action-packed, high flying sports and activities the world has
ever seen.

Need a little help jumping out of a plane in a flying suit? Let Red
Bull give you the extra push you need.

b. Keeping Consistent Visual Branding

The visual branding that Red Bull has created is a key contributor
to the brand’s success.

That edge of your seat, shock-inducing mentality is what Red Bull’s

branding is all about. In turn, they’re able to say, we gave people the energy (and
courage) they needed to attempt something this crazy.

c. Letting Values Be Their Guide

Their values play a role in their content as well. They center around
one core phrase “giving wings to people and ideas.” Everything that the Red Bull
team communicates revolves around that tagline and their values.

It’s the ability to keep that communication consistent over the past
30 years that has lead to their success.

d. Building a Strong Content Core

RedBull’s content core can be summed up by saying:

 “Red Bull’s content core revolves around the intersection between
their audience’s interest for extreme sports, festivals, and a fast-paced lifestyle
with their product’s ability to keep people awake and give them energy during
those events.”

They focus on topics like extreme sports, music, art, dance,

nightlife and a whole lot more. Because of that broad spectrum, their content can
appeal to the right audience.

There is one thing that Red Bull does with its content core that
pushes them ahead of the pack.

Every piece of content that they create matches the quality of other
publications their target audience might read like Buzzfeed, Vice, ESPN, and
more. That level of quality makes it seem like it’s coming from a powerhouse
dedicated to creating consumable media, not an energy drink brand.

6. Creating Content Around What Their Audience Loves

What does every topic that they cover (and there’s a lot of them)
have in common?

They focus on activities that their audience would participate in

while consuming their products. They also publish that content everywhere their
audience is likely to hang out.

They publish a massive amount of material on their website, which,

surprisingly, has no mention of their product whatsoever:
 They produce a magazine, The Red Bulletin, which circulates over
2.2 million copies a month:

They also create awesome, awe-inspiring videos:

In summary, if their target audience is consuming content on a

given channel, you can count on Red Bull being there.

f. Revamping the Way They Use Traditional Media

It’s not just content marketing that Red Bull dominates. The brand
invests a substantial amount in traditional mass media channels as well.

Red Bull’s TV content operates in two formats: videos they create

for their online channels (YouTube, social media, etc.) and ads that they partner
with traditional TV channel content:

Their TV content resides on their online hub called Red Bull TV.
Their videos and shows are segmented into formats like Events and Films as
well as channel topics like Cliff Diving and Culture:

They’ve moved into the music realm too. In addition to covering or

sponsoring massive musical festivals, Red Bull also boasts it’s own record label,
recording studio, music academy, publishing group, and online radio station.
 f. By Being Loud and Proud With Social Media Strategy

Social media is another channel that Red Bull dominates with

authority.

Their Facebook page, for example, is full of artistic videos that

blend together visually appealing images, music created by their own record
label that pumps up viewers, and the sports and events their audience loves.

Their message is short and sweet while the first 3 seconds leave
you wondering what is happening.

Their Twitter and Instagram channels on the other hand focus on

“wow” worthy images to promote shares and interaction with their fans.

Their ability to create dynamic social media posts that are so

engaging it stops fans from scrolling past it is what makes them a social media
success. Each media piece looks like their subject is in motion, which reflects the
brand’s high energy aesthetic.

h. Bringing The Product To The Audience With Sponsorships and

Events

Finally, Red Bull’s sponsorship and events are the last part of their
marketing strategy that seals the domination of their brand. Let’s break their
efforts into three categories:

-Publicity stunts.

-Events they’ve created.

 -Sponsorships.

Their publicity stunts are so crazy it forces the world to stop and
watch. Of course, there’s their Stratos Jump, but there’s more.

Take the Red Bull Air Force team for example. This group is
dedicated to pulling off some of the craziest aerial acrobatics ever seen:
Then there are their events, like Red Bull Crashed Ice or Red Bull Queen of the
Bay that focus on specific sports like ice cross or surfing respectfully. These
events focus on fans of the sport and raise awareness of the Red Bull brand.
Finally, there are sponsorships. From the Electric Daisy Carnival in Las Vegas to
Coachella, Red Bull is involved with it all. It’s a genius move on the company’s
part because who attends all of those events? Their target audience.

Not only that, but those sponsorships allow Red Bull to expose the
brand to new audiences due to the sheer number of people who attend.

D. Marketing mix

Product

Red Bull is arguably one of the most publicized and well-known

organizations in the action sports community, which is phenomenal considering
they essentially only have one product. This one product was the first energy
drink of its kind, and has basically remained the same ever since. They have
added a few variations of the original, Sugar Free and Total Zero, along with Red
Bull Editions that give a slight variety of flavor. Red Bull was developed
specifically to increase mental and physical exertion, increase performance and
concentration during times of stress, and improve reaction speed, which is where
their slogan “Gives You Wings” started (redbull.com).
 Place/Distribution

Red Bull distributes their product through a few different distribution

channels. The first is the Direct Channel where the producer interacts with the
consumer. They set up booths or have the “Wings Team” drive their Red Bull
cars to events and hand out their product to consumers first hand. The other
distribution channel is the wholesaler channel in which Red Bull sells their
product to a wholesaler, who then sells it to a retailer such as gas stations and
convenience stores, who then sell it to the consumer. Red Bull is also involved in
the bar scene and has strict rules about mixing “the right drink” and a bar. The
barmen are instructed to give what remains in the can to the consumer to further
Red Bull’s visibility of the product (Louvet).

Promotion

Red Bull’s promotion strategy began with the “Wings Team,” who
were attractive female students, whose role was to establish a relationship with
the consumers, to have them discover the product, and see what consumer
opinion was. Red Bull’s first target was college campuses, because this is where
they felt they could make the biggest impact, on students who were seeking an
extra boost of energy. Red Bull would consult with the Student Brand Manager at
school to ensure that Red Bull was present at every strategic moment on the
social calendar such as sporting events and big parties. “The strength of Red Bull
is an ability to instill a genuine passion for the brand in the Wings Team and the
Student Brand Managers. Thus, these committed people are more likely to
promote a good image of the brand and to have a greater positive impact on
targeted consumers” (Louvet). Since this, Red Bull has expanded drastically and
changed their promotion strategy.

Red Bull explicitly states that they do not involve themselves in print
advertising such as newspapers and magazines; instead, they rely on television,
social media, and outdoor media to advertise. Since 1992, Red Bull has created
cheap cartoons with simple but recognizable drawings, telling funny and simple
stories. These were a huge benefit for them because they were easily adaptable
to markets all across the globe. Red Bull also displays outdoor media at every
even possible with huge tents and exhibits, inflatable cans and arches; as well as
custom painted helmets, racecars, helicopters, and airplanes for all of their
athletes. Social media has become Red Bull’s best way of advertising. It is an
easy way to get one simple picture, video, or message around the globe in less
than a few seconds. They are famous for their viral videos, which are spread
entirely by fans and followers. Red Bull currently has 34.5 million likes on
Facebook, 480 thousand followers on Instagram, 843 thousand followers on
Twitter. With all the advances in Internet and social media Red Bull has found a
perfect niche market where the consumer spreads the word faster than the
producer (redbull.com).

Price

Red Bull sees themselves as a high quality company that offers a

high quality product, which is why they have a strict pricing policy. Their product
is the most expensive amongst competitors because they are prestigious and
have customer loyalty (redbull.com).

E. Marketing Research

Red Bull has managed to revolutionize the world of energy drinks. It

has permeated globally and hopes to expand into even more countries. Their
success can be traced to a well-established marketing plan. Since their inception
into the market, Red Bull has relied on their research to follow a successful path.
According to Lamb, “marketing research can help managers in several ways, it
improves the quality of decision making and helps managers trace problems”
(pg. 292). By having a well-established marketing strategy a company can be
very profitable. Red Bull has chosen to reposition themselves by targeting a
specific market. They opt for targeting younger individuals involved in action
sports and with a very active lifestyle. Red Bull has a very unorthodox way of
marketing; they rely heavily on “buzz marketing” or word of mouth. It is amazing
that a world renowned company reached such success simply with an effective
marketing strategy and by word of mouth advertising. Another concept entailed in
marketing research is, the ability to understand the ever changing marketplace.
This is another factor that has contributed to their success because they are
aware of the changing trends, especially amongst the younger population or in
other words, generation Y (redbull.com).

IV. Financials

A. Financial Projections

Red Bull has made a few projections regarding its finances and
advertising strategies. One of their strategies was to become more aggressive in
their strategies, some were introduced at the end of the 2011 fiscal year.
According to their website, “In 2011, 4.631 billion cans were sold worldwide. That
is an increase of 11.4% since 2010. In all key areas such as sales, revenues,
productivity and operating profit, the figures recorded were the best in the
company’s history so far” (redbull.com). In other words, as of the end of 2011,
Red Bull employed 8,294 people in 164 countries. The company’s marketing plan
for 2012 stated that, ” Market Share Red Bull anticipates through the following
year to be able to increase its market share by 10%, raising it to 58% of the
market share. Through various media channel , Red Bull has set a goal to set
itself further ahead from all competitors and build an undeniable brand loyalty
among a different demographic” (redbull.com).

B. Company Sales and Diversification

Apart from its energy drinks, the company has diversified into other
businesses that have synergy with its brand image. These include football clubs,
youth academies, online clothing sales and even a construction company. It has
moved into media ownership, with print magazines and the mobile phone service
industry. Red Bull is privately owned and therefore does not need to report its
performance publicly. However, it reported net sales of 4.9 billion Euros in 2012,
with 5.2 billion cans of its primary product sold. This represented considerable
growth on the previous year (15.9% on sales; 12.8% on number of cans). The
company showed very strong net sales growth in South Africa (52%), Japan
(51%), Saudi Arabia (38%) and strong continued growth in France (21%), the US
(17%) and Germany (14%) (Euromonitor, 2012). The company attributed this to
ongoing brand investment and efficient cost management (Euromonitor,2012).

V. Controls

A. Implementation Timetable

In this section, the company implements the marketing strategy and

establishes company goals. As explained previously, Red Bull hopes to generate
more sales resulting from their new marketing plan. The company plans to
advertise, on the web, trial, sponsorship, promotion, viral and on television.
However, for the years to come they hope to shift their target market from young
individuals to 35-65 year olds. The company also stated some goals for this year.
They want to increase revenue by, “the following year, Red Bull has set a goal to
increase revenue by 20% $6.22 billion . By gaining customers in a new
demographic, as well as releasing a revamped campaign, Red Bull believes this
is possible” (redbull.com). This is to say that, the company has established goals
that can be attained if their marketing plan is successful. It is very likely that it can
accomplish those goals, simply because even after many years, it remains the
top name in energy drinks.

B. Marketing organization

Red Bull organizational structure is divisional and the business is

divided into two large businesses – Red Bull soft drinks and other businesses. It
can be mentioned that divisional organizational structure “groups together
those employees who are responsible for a particular product
type or market service according to workflow”[1] As it is illustrated in Figure 1
below, other businesses division comprise motor racing, media, MVNO and
fashion online retailing, whereas Red Bull soft drinks division is further divided
into two sub-divisions: Red Bull energy drinks and Red Bull Simply Cola and
Carpe Diem.
The choice of divisional organizational structure by Red Bull
provides the business with a set of advantages that include achieving a great
focus upon a single product or service. Additionally, divisional structure allows
building “a common culture and esprit de corps that contributes both to higher
morale and a better knowledge of the division’s portfolio”[2]. Red Bull founder
and CEO Dietrich Mateschitz subjects Red Bull organizational structure to certain
changes in a systematic manner in order to reflect changes in the external
environment.
It is important to clarify that Red Bull organizational structure is not
a typical divisional structure in a way that it also integrates certain elements of
hierarchical structure in specific programs. For example, as it is illustrated in
Figure 2 below, Red Bull wings program that involves distribution of free samples
of products contains 6 layers of management from the team member to the
program leader.

C. Organizational Structure and Plan

According to Lamb, “many of the historic sources of competitive

advantage-technology, innovation, economies of scale-allowed companies to
focus their efforts internally and prosper” (pg. 7). In other words, Red Bull has
been able to become successful because it has followed through the many
factors that instill competitive advantage amongst other brands in the market
share. Red Bull really takes into consideration the three factors that allow for a
proficient organizational focus. These are customer value, customer satisfaction,
and building relationships. Firstly, customer satisfaction is “customer’s evaluation
of a good or service in terms of weather it has met their needs and expectations”
(Lamb, pg 9). Customers that purchase Red Bull already have an opinion and
know what to expect from the product. Secondly, building relationships, which is
attracting new customers or maintain its current customers. “Companies can
expand market share in three ways: attracting new customers, increasing
business with existing customers, and retaining current customers” (Lamb, pg.
9). Thirdly, relationship marketing, as a strategy that focuses on keeping and
improving relationships with current customers. All these components contribute
to customer relationship management. In which, the company designs a
business model to reduce costs and increase profitability by strengthening
customer satisfaction and loyalty. Red Bull does a great job of implementing all of
the three components in maintaining a good relationship with its customers. For
example, a young person who is interested in extreme sports has loyalty to the
product, because Red Bull is associated with the sport and it probably sponsors
the popular athletes (redbull.com).