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STRATEGIC MARKETING PLAN FOR RED BULL

BY
ELVIS ASIEDU
Elvis Asiedu is a management lecturer at Institute of Business Studies, KumasiGhana. He received his Bachelor of Education in Social Science from the University
of Education, Winneba-Ghana, his MSc management from the BPP University,
London-UK and his CMI level 7 certificate in strategic management and leadership
from the Chartered Management Institute, London-UK. Prior to his MSc studies, he
was employed for 2 years in corporate planning and control areas. His current
research interests include the impact of organizational culture on the Employee Job
Satisfaction; and the effect of remuneration strategies on employee performance .

A Marketing Plan submitted to BPP University;


As part of assessment for the Module-Marketing Management

Business Department, August 20, 2013.

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SSRN DECLARATION
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I consent to reference of this work to a plagiarism detection service at the discretion
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I certify that the number of words in this assessed work including footnotes is mine.

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TABLE OF CONTENT

PAGE NUMBER

Title Page

SSRN Declaration

Table of Content

Introduction

Research Methodology

MARKETING AUDIT

6-12

Internal Analysis
External Analysis
PESTLE Analysis & the Macro-Environment
SWOT Analysis
MISSION AND VISION & OBJECTIVES (SMART)

13-14

Mission statement
Vision statement
Strategic objectives
KEY ISSUES & FINDINGS FACING RED BULL

15-16

Strategies for Market growth

17-18

Strategic Recommendation

19-20

SEGMENTATION, TARGETING AND POSITIONING

21-23

Segmentation
Targeting
Positioning
Evaluation of Success

23

Ethical Issues

24

References

25-27

Appendices

28-30

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INTRODUCTION
For a successful business, a marketing plan plays a major role. It is a part of the
bigger business plan. The marketing plan helps the business to focus on the goals
and objectives. It varies depending on the type of business and the objective on
which it focuses. Before designing the marketing plan the marketing manager needs
to accumulate enough information about the competitors and the customers so that
they can target the right market segment with appropriate strategy (Nijssen and
Frambach, 2001). See fig 1.0 for more details of Red Bull.
TYPE

Energy Drink Company

MANUFACTURER

The Red Bull Company

COUNTRY OF ORIGIN

Austria

FOUNDER

Dietrich Mateschitz

YEAR INTRODUCED

1987

AREA SERVED

Over 166+ Countries

PRODUCT IMAGE & NAME

Whats Inside
Caffeine + Taurine + B-Group Vitamins +

COLOUR

Red-Ashe-Blue

Sucrose & Glucose + Alpine Spring Water


When to Drink

FLAVOURS

Blueberry, Cranberry and


Lime

On the road, at lectures & study session, and at


work.
How it works

EMPLOYEES

8,294

REVENUE

4.25 billion euros

Red Bull energy drink is a functional beverage


providing wings whenever you need them.
Exclusive Products List

HEADQUARTERS

FuschlamSee, Austria

Original Red Bull energy drink


Red Bull Sugar Free, Zero calories,
The Red Bull Edition (Cranberry), Silver Edition
(Lime), Blue Edition (Blueberry)

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RESEARCH METHODOLOGY
Research methodology is defined as the overall approach that the research process
will take (Collis &Hussey, 2003). There are three approaches which can be followed
by a researcher while conducting a research work. These three approaches include
qualitative, quantitative and a mix of both. It is argue that, research aim decides what
needs to be achieved with the conduct of a study and therefore keeping in view
objectives to be achieved; the researcher adopts quantitative research approach
(Bhattacharya, 2006 cited in Asiedu, 2013).

Quantitative research work involves testing quantifiable information which is


gathered either through primary or secondary sources of information. To realise the
objectives of this research, the researcher decided to rely on secondary source of
information.

In using the secondary sources, the researcher consulted variety of books, journals,
and articles. Besides, national and international data searches at Oxford City-Centre
Library-Oxford, BPP Library-London, Oxford University Library-Oxford, Oxford
Brookes Library and relevant abstracts and indexes were consulted.

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MARKETING AUDIT
This phase provides analysis on current position and opportunities of Red Bull using
3Cs analysis, PESTLE, and SWOT analysis (see appendix 2). Authoritative writers
like Kotler (1977), define marketing audit as an instrument to judge an organisations
overall commitment to a market orientation. Marketing audit helps in increasing the
profitability of the company (Kotler, 1999).
INTERNAL ANALYSIS
i. The Company
The company analysis under the 3Cs deals with the evaluation of the companys
objectives, strategy, and capabilities (Wikipedia, 2013). This helps the company to
indicate the strength of its business model, whether there are areas for improvement
and how well the company fits the external environment.
The Red Bull company has always portray a simple but strong brand image with its
well-known slogan; Red Bull gives you Wing & Ideas. The product is appreciated
worldwide

by top

athletes,

students

and

highly demanding

professionals

(redbull.com, 2013). Red Bull relies on both traditional and non-traditional ways like
sponsoring well-known athletes outside the extreme sports industry and host
exclusive parties for rock-stars to build their brand image and equity (Bodner, 2011).
In order to save many miles of transport and resources, Red Bull has instituted what
they termed as wall-to-wall production. This strategy helps them to manufacture and
fill cans wherever their branch is. According to their own figures, more than
7,000,000km of truck travel is saved every year. These cans are built with aluminium

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and now the cans are weighed 60% less than a decade ago and it is 100%
recyclable (redbull.com, 2014).
Red Bull has sold +5.3 billion cans as of 2013 worldwide, representing an increase of
(+3.1%) against that of 2012 and has exceeded 5 billion euro mark turnover for the
first time. Red Bulls turnover has increased from EUR 4.930 billion to EUR 5.040
billion (energydrink.redbull.com, 2014). The company has won both the constructors
and drivers formula 1 championship for four successive years. It has 9,694
employees in 166 countries as of 2013 as compared to the end of 2012 when they
had 8,966 employees in 165 countries.
It has seen a 60% rise in volume sales over 2007-2012 in parallel with a 64% rise in
volume sales during the same period (Price, 2012). The combined value of sports
and red bull sales in 2012 was around 1.2 billion and red bull accounted for over
80% of this figure at around 1.0 billion (Price, 2012). Red bull has outstanding
performance as of 2013 in terms of sales, revenues, productivity and operating
profits. These positive results can be attributed to the outstanding sales in the red
bull market shown on the tab 2.0 below. These outstanding sales happened as a
result of efficient cost management and the on-going brand investment;
Red Bull Market (Countries)

Sales in percentage (%)

India

+55%

Japan

+32%

Turkey

+18%

Scandinavia

+16%

Russia

+13%

Brazil

+12%

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Besides, Red Bull uses buzz marketing strategy as its main marketing strategy. Its
market share sales and demand increases every year and sales are expected to
keep rising in the upcoming year. Most of Red Bulls sales come from distributing
countries like Middle East, Far East, Europe and USA. Although the demand for Red
Bull has increased, the companys market share in USA for example has gone down
from 75% in 1998 to 47% today (Robin, 2010). Due to that, Red Bulls quest for
expansion is targeting the core markets of Western Europe and the USA. The
company has also decided to intensify their markets growth in the Far East as well
as focusing on the on-going worldwide roll-out of Red Bull Editions. Although there is
uncertainty in terms of finance and global economic climate, Red Bull plans for
growth and investment for 2014 still remains ambitious. Red Bull has still maintained
its 70% of the market share in over 166 countries across the world. Table 1 in
(appendix 2) shows that red bull has significantly outperformed than other
categories.
EXTERNAL ANALYSIS
ii. Competitor Analysis
In marketing, competitor analysis is an assessment of the strengths and weakness of
current and potential competitors (Frout and Rivkin, 1996). To them, the analysis
provide both defensive and offensive strategic context to identify threat and
opportunities.

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Red Bull has shown strong performance in the recent years but in terms of value the
company has been seen to perform far below the other players in the energy drink
market due to issues of high caffeine and growing competition from emerging
products.
Currently, Red Bull has over 100 major competitors like Rockstar, Burn, Gatorade,
Monster Beverage Co., Coca-Cola Co (TCCC), and PepsiCo (Bodner, 2011). Many
celebrities have also been promoting energy drinks labels like liquid ice, Nellys Pimp
Juice etc. Table 3.0 below demonstrate the major competitor of Red Bull.
Table 3.0
Main

Products/

Business

Competitor

Markets

Direction

Strengths
and

Current
Objectives

Weakness

Competitiv
e
Position

and

Strategies

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For all kinds


of people

Coca cola

marketers

Monster
Full-

Throne

Diet coke

To be the best

Popularity

Well-known

in

lot

Word

of

mouth

of

Lack

1st
of

the world

finance

popularity

To lead as a

Customer

of

model citizen

loyalty

coca cola

To

serve

customers

brands

Health
issues

broad
selection

many

of

soft drinks.

The major competitor is Coca cola, for instance has spread its wings to over 200
countries as compared to Red Bull (BBC News, 2001a).
Table 3.1 below shows Coca colas marketing principles and techniques that have
helped them to achieve their higher share of market worldwide.

Table 3.1
1. Coca cola uses marketing techniques like guerrilla marketing (low
cost/no cost method), carpet-bombing method (flyers), referral
networks, the internet and many more.
2. They always increase their customer perceived value (CPV)
and maintain their supply chain management.
3. Focuses on brand image and customer retention schemes like
lucky draw, meeting your favourite celebrity etc

4.Mass marketing and adding social and ethical benefits to every


bottle they sell.

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3.3. PSETLE ANALYSIS & THE MACRO-ENVIRONMENT


PESTLE analysis is another useful way of evaluating and managing more precisely
the external factors that affect the organisation and describes the environment of a
specific market by defining the influence factors at political, economic, social,
technical, legal and environmental levels. This tool helps to get greater
understanding of the external environment and the market place. The microenvironment is done through PESTLE analysis. The fig 2.3 shows the level of
PESTLE analysis carried-out on Red Bull and tab 2.3 defines the PESTLE analysis
of Red Bull in details.
Fig 3.3 shows the level of PESTLE Analysis on Red Bull.

Political &
Legal
environment:
High Impact

Ecological
environment:
High Impact

Tchnological
Environment:
Low Impact

RED
BULL
MARKET

econnomical
environment:
Moderate
Impact

Social
Environme
nt: High
Impact

Tab. 3.3 discuss in detail the PESTLE Analysis of Red bull

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Political and Legal Factors

Government
countries

restrictions
and

Socio-cultural Aspects
from

implementation

EU
of

restrictive laws.

Pressure on caffeine & taurine rate

Health risk of consumers

Red Bull energy drink was introduced into the


market as a safe drink. But the issue of health
risk associated with the drink has tarnished the
brand image. More and more governments
have concerns about Red Bull energy drink
industry and the impact of the products on
consumer health.
A study carried-out by ISME in 1998 has
confirmed that Red Bull energy drink has
stimulating

effect

but

does

not

lead

to

addiction. Although, it has been confirmed but


many countries like Hungary, Norway has
forbidden the selling of Red Bull energy drinks

Negative
health
concern
of
consumers.
Global warning
Unemployment rate
Most people have doubt about the health
dimension of Red Bull energy drink.
It is belief that people consume energy
drink when they are at the workplace.
Another most important thing that was
noted is the ageing population in Europe
and the fashionable dimension of energy
drinks in the system. These factors can
question the future of Red Bull energy
drink market.
However, unlike the 1980s where people
did not want to try the product due to its
health issues, people are now opened
with much experiences as their lifestyle
are changing and getting influenced by
ethical
issues.
People
are
now
confidence because the health issue has
been cleared by organisations like ISME.

on legal basis. Initially, it was even a problem


in UK. Red Bull needs to meet certain legal
criteria.

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Economic Aspects
Recession, Loss of buying power
High price of Red Bull as compared to
other energy drinks.
Market maturity and increasing demand
for alternative energy drink.

The company has been facing little exposure


to economic cycle. Red bull energy drink is the
premium products with a relative high price.
This market is very sensitive to the economic
conditions which impact purchasing power of
consumers. The risk here is that many people
are now shifting from Red Bull energy drink to
other energy drinks that are less expensive.
Another issue is that the company serves only
special drinks for a special niche market. Red
Bulls target market are sports women and men
and hard-working people who need a push
up. Although there are substitutes, Red Bull is
still increasing in sales due to their wellpositioned advertisement.

Technological factor

Development
of
e-commerce
(Internet and social media era)
Technological development can
impact
the
production
and
distribution of Red Bull energy
drink.
Thus,
improved
manufacturing
techniques & process could lead to lower
prices and innovation within the market
and new products could be a big blow to
the industry.
However, the current technological
innovations are not important enough to
negatively impact on red bull energy drink
industry. Moreover, the industry requires
that the brand has a real presence in
social media due to the young-ness of its
consumers.

Ecological Factor

Increase in the need of natural


ingredients.

Many people want to take natural food


instead of adulterated ones. This factor
can affect the red bull market by
threatening the image of the products.

SWOT Analysis (See appendix for details)


The SWOT analysis is the useful way of directing and managing the internal and
external factors that affect the organisation. It talks about what the company is at
good at, what needs to be improved, and the other things happening outside the

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company. It stands for Strength (S), Weaknesses (W), Opportunities (O) & Threats
(T). See fig. 2.4.
Fig. 2.4 shows the summary of SWOT analysis done on Red Bull.

opportunities

Strength

1.Newer geographies
2. manufacturing unit in asia
3.Product line extension
4. Red Bull can partner up with other
major beverage companies.
4. Can sponsor other sporting activties
like professional gulf tounament.

1. Market leadership
2. Brand name
3. successful in promoting its
products.
4. The 250ml can is very small &
fashionable

Threats
1. Competition from emerging products
2. High Cost of marketing
3. Health Concern
4. Coccaine found in Red Bull Germany.

Weaknessess
1. Expensive as compared to other energy
drinks.
2. Offers only three different drinks.
3. No patent on its recipe

HOW TO FIX SWOT ISSUES


For the strengths/opportunities, Red Bull can use word of mouth campaign to
promote their products. In the case of the weakness/opportunites, the company can
come out with cheaper version of their products as well as coming out with new
flavours.
In order to deal with the threat issues, Red Bull can promote positive marketing
campaign against the health concerns and make sure competitors dont take over.

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MISSION, VISION AND STRATEGIC OBJECTIVES


The Mission statement
The mission statement in this study defines the industrys business, its objectives
and its approach to reach those objectives. The mission statement of Red Bull is to;

Be the premier marketer and supplier of Red Bull in Asia, Europe, and other parts
of the globe by building long-term relationships with the people who can make it
become a reality.

The Vision statement


The vision statement of Red Bull describes the desire future position of the company.
Red Bull is globally recognised as one of the worlds leading providers of energy
drink and soft drinks. The company is noted for its high quality drinks and their vision
is to;

Uphold Red Bull standards, whiles maintaining the leadership position in the
energy dinks industry.

Delivering superior customer service in a high profitable and efficient manner.

Strategic Objectives (SMART)

To increase the market share by 6% in three years (2016) through penetration


pricing and loss leader pricing strategy. This objective goes straight with Red
Bulls mission statement to remain as the market leader and continue to focus on
global expansion.

To increase superior customer satisfaction in a highly profitable and efficient


manner by 10% in 2016 through the use of customer services and IT department.

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To provide non-caffeine drinks for the kids between 8 to 17 years and other
people who do not drink for energy purpose by 2014.

To design an expansion plan by 2015 through which the company can operate in
other geographical areas like Asia and Western part of Africa. This is achievable
since the company has decided to go for expansion and has also opened new
manufacturing units.

To implement some cost reduction techniques using guerrilla marketing (low


cost/no cost method), carpet-bombing method (flyers), referral networks, the
internet and many more so that the price of the products can be reduced by 10%
in 2015.

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KEY ISSUES & FINDINGS FACING RED BULL


The following issues were noted from the strategic marketing audit;

Growing Competition and competition from emerging products

Competition from existing and emerging energy drinks is a challenge. The emerging
products like Monster, Full-Throne, Burn, etc are the products that are growing at a
faster rate in the energy drink industry. Figure 5.0 shows the red bull as market
leaders and the emerging products.

ENERGY DRINK
INDUSTRY / MARKET
Full-Throne,
Burn,

Emerging
products
Red Bull as a
premier marketer &
leadership position in
the energy drink
industry

Monster,
Blue Jeans,
Diet coke,
Pepsi. Co
Rockstar
Etc.

Figure 5.0: Researchers own diagram showing red bull and its competitors.
They are investing in marketing campaigns and addressing policy issues (Bodner,
2011). For example, Full-Throne recently has published marketing strategy to deal
with the marketing campaigns, health issues and issues of image (Costly, 2013).
However, the major challenge here is how to create a competitive, world-class and
non-caffeine drink which would match both the quality and the best of Red Bull
business and innovative policies to create value and enhance competitiveness.

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New Trends in Product Demands

The International energy drink industry is moving to a level where consumers are
demanding in new, natural and varying products which would engage them always.
There has been increase in the need of natural ingredients. That is, many people
want to take natural food instead of adulterated ones. This factor can affect the red
bull market by threatening the image of the products. Figure 5.1 shows the changing
demands of customers across the globe.

Changing
Demands in
International
Energy Drink
Industry

Natural and noncaffeine drinks

Consumers
across the
globe are
demanding for

Figure 5.1: Researchers own diagram demonstrating the new trends in product demand .

Consumers are demanding for a non-caffeine product with different flavours (Bodner,
2011). Therefore, to attract the attention of customers, Red Bull should turn their
attention on producing non-caffeine drinks for kids between 8-17 years and those
who do not drink for energy purpose.

Alleged Adverse Health issues

Red Bull is vulnerable to regulatory control because of its high caffeine content
(Euromonitor International, 2013). This has made the company to loose most of their
customers. This same issue has resulted the products banned in certain countries
like Norway, and Hungary (Bodner, 2011).
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STRATEGIES FOR MARKET GROWTH


This section provides the route to achievement for the aforementioned objectives
and describes how the stated objectives will be reached (McDonalds, 2007) using
the mix of Ansoff Matrix Strategy and the 4Ps of innovation.

Pursuing local and business markets through process innovation


Red Bull should change the ways they create and deliver their product to focus
on the local market in Austria. Although, Red Bull has been creating and
delivering more energy drink through young people and teenagers worldwide.
The company can however, be more innovative by creating non-caffeine drinks
for kids between 8-17 years and other people who do not drink for energy
purpose. These new products can be sold for the first time in its home market as
it did in its establishment. This wouldnt only be the launch of a completely new
product but also to transform an ordinary product into a powerful brand.
The industry can use advertisement, motivation and rewards to encourage the
indigenes of Austria to purchase their new products (Costly, 2013). They can also
use order-qualifiers like low-pricing and order-winners to win orders in the
local business market. This will make the product smell good for those outsiders
to develop interest again in Red Bull products.

Strategic Product alliance through position innovation


For Red Bull to remain market leaders, it needs to change the context in which
the products are produced and it premium pricing strategy to defend its value,
volume and market share of the areas they have lost share as a result of health
issues (Tidd, 2005). The company can establish a strategic partnership with one

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of the emerging competitors and reposition the perception of their established


product in a specific context.

Originally, Red Bulls products are believed to have more caffeine, but they can
rebrand it as safe to drink with low caffeine for everyone (Tidd, 2005). They can
use promotion activities like buy-one, get-one-free to build up price expectation
to engage new and old customers (Bodner, 2011). The product context will show
its products values in details to explain what people will get and how much it is
worth. This will help Red Bull to build up the image of their product as safe to
drink in customers minds.

Boosting mass-marketing campaign to

develop new market through

paradigm innovation
Also, Red bull can sustain its market share by boosting mass marketing to embed
the image of their product as safe to drink in customers minds. The company
can do this by repackaging their existing product and introduce it into a new face
of people (Ansoff, 1957) as well as making the products low cost. They can target
different geographical markets either at home or abroad, precisely Western part
of Africa and Asia to reposition the drink as premium designer products (Tidd,
2005).
The company can do this by using tools like bill-boards, posters and banner ads
at the public places to maximize contact with customers (Bodner, 2011). This will
make customers see the brand image regularly which in turn, will make Red Bull
the first choice in the minds of the customers.

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The justification here is that the more customers see the brand image, the more
they develop love and attention to the product which will help to erase the
unnecessary fear from the mind of customers. However, market development is
very risky; therefore Red Bull must be very careful.

Market Penetration, Expansion and Diversification of products through


product innovation
Market penetration involves with entering a new market with an existing products
(Ansoff, 1957). Red Bull can make changes in the products they offer by
introducing different flavours and non-caffeine drinks to penetrate the new
market. This diversification of products will show their innovative skills to their
customers. The company should improve their existing product and use market
research, product adaptation analysis, and legal review to seek expansion for the
existing products (McDonald, 2007).
Although it could be risky to enter a new market with an existing stuff but, the
industry can use market researchers to collect information from customers by
studying customer buying patterns and using tools like customer survey and
focus groups (Bodner, 2011). They can also use reverse engineering by
disassembling their major competitors product to analyze its design features by
using their R & D department to develop their product.

To justify this point, the company has already launched its existing energy
product in different flavours (McDonalds, 2007). Red Bull can also introduce new
kinds of drink such as non-caffeine product with more vitamins plus and more
flavours. But they have to make sure that these new products will not only be
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energy drink. In effect, it will help to freshen the brand image as well as creating
entry barriers against other competitors (McDonalds, 2007). This strategy will
eventually lead to the increase in market share and customer base.
In a nutshell, the diagram below summarizes the strategy that Red Bull can adopt
through the use of Porters five forces.
Table 1: Researchers own diagram showing the strategy red bull can use & the level
of the threat of new entry.

Threat of
new
entry
Growth

Supplier Power
Consumers
are looking
for low
prices

Competitive Rivalry
Red Bull can form
Alliances
Innovation

Buyer Power
Differentiation

Threat of
Substitute
Form alliances

Increasing Advertising on the internet


Red Bull should also intensify their power turbines on advertisement. They can
sponsor various activities that are taking place in the major countries where their
product image and name has gone down like Norway and France. Besides, the
social networking site has become popular recently and more people especially,
the young men who are the target market spend much of their time surfing the
internet. Red Bull should capitalize on that to popularize their brand image by
creating online game. They should also advertise on appropriate sites like

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Facebook, and Twitter which are quite familiar with young people, students, and
business men in diverse countries.
Red Bull has already sponsored many publicity stunts and those have gained
huge unparalleled publicity (Costly, 2013). These publicity stunts therefore, have
created a separate brand image for the organization. The videos of these stunts
can be circulated through YouTube so that a wider consumer base can be
covered to redeem its brand image and position. This will help the company to
make people convince that Red Bulls drink are safe to drink and erase the
unnecessary fear from the mind of the consumers.

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SEGMENTATION, TARGETING AND POSITIONING


SEGMENTATION
Riley (2012) defines market segmentation as dividing a broad target market into
smaller segments to make marketing easier and avoid the waste of products. Its
very important because it respond consistently to a given market stimulus. Red Bull
has been targeting both men and women who are engage in strenuous activities
from 18 to 40 years (Bodner, 2011).

However, in this marketing plan, Red Bulls market will be segregated into two
segments- the people who are engaged in high physical activities like athletes,
working people, footballers etc. and other people who are engaged in low or
absolutely no physical activities like the kids from 8-17 years and common people
who are not engaged in any type of workout.
Red Bull will always show activities where youth get together to enjoy their game
with their brand. Research has disclosed that youngsters love to do strenuous
activities like playing football, dancing and others (Costly, 2013). These youngsters
consume Red Bull when they are enjoying their game. Socializing with friends and
family is therefore core behaviour in the lives of the youth and Red Bull brand
personality is therefore, all about giving them wing.
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TARGETING
Red Bull was targeting the people who are engaged in heavy physical activities from
18-40 years (Bodner, 2011). However for the non-caffeine drinks, Red Bull can be
targeting to other segment of consumers like the kids from 8-17 years and other
people who do not drink for energy purpose.
Red Bulls Target Market

(Bodner, 2011).

POSITIONING
Positioning, in marketing is the process by which marketers try to create an image or
identity in the minds of the target market for its products, brand and organisation
(McDonalds, 2007). To maintain their market share, Red Bull can re-position their
caffeine drinks by changing the product, relatively to the identity of competing
products like the Monstar Energy drink (McDonald, 2007).

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More so, Red Bull can also position the new non-caffeine product for the kids and
others who do not drink for energy. It will be placed to remove the fear of caffeine
content, which is considered to be harmful. This product will not only provide an
opportunity of increasing the customer base but also expanding the product line of
Red Bull (Kotler, 1999). The promotion of this product will be done through the social
networking sites and public relation activities.
EVALUATION OF SUCCESS
There are various dimensions of success like productivity, profitability and growth.
Growth can be measured in terms of market share of the company. If there is growth
in the market share of the company, this indicates the company is growing as
compared to the competitors. A firm only gaining market share does not indicates
that the company is doing well until and unless they are productive and profitable.
The productivity of a firm is measured in terms of sales per employees and sales
per dollar of assets (Baldwin and Gellatly, 2003). Profitability can be measured as
ratio of profit to sales or ratio of profit to equity or ratio of profit to assets.
In this case Red Bull should evaluate their performance every year with the
forecasted outcome and objective that they want to achieve. Behind the marketing
plan the company has to do significant amount of investment. Thus the company has
to measure the return on this investment in order to see whether the investment is
generating expected income. At the same time the company should also measure
whether their market share is increasing as compared to the market share of the
competitors. The company should evaluate their performance at regular interval and
change their strategies if the expected result is not achieved.

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Ethical Issues
After the death of three Swedish people, who were claimed to have consumed Red
Bull energy drink, the ingredients used in manufacturing the drink is under
investigation. These three deaths were followed by deaths in America and Europe.
Owning to these incidents the energy drink of Red Bull has been banned in France,
available only at pharmacies in Japan and categorised as medicines in Norway. The
energy drink of Red Bull is created from a mixture of taurine, carbohydrates, vitamin
and caffeine. It contains amino acid that kick starts the metabolism soon after the
consumption (BBC News, 2001a).
On this issue the company claimed the product to be safe. They said that the level of
taurine and caffeine involved in producing the amino acid makes the drink as safe as
having a cup of coffee. The general manager of Red Bull, Norbert Kraihmer argued
that it is safe and it has been selling in more than 50 countries for so many years and
was never claimed to have any adverse effect on the health of a person. No
complaints have been received by the Food and Drug Administration of US but
nutritionist have raised warning against mixing of Red Bull with alcoholic drinks since
it caused dehydration, kidney and heart problems. They have alerted people of
drinking in larger volumes (Abc News, 2013).

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REFERENCE

Abc News, n.d (2013). Red Bull Drink Raises Red Flag
(Online):http://abcnews.go.com/WNT/story?id=130751&page=1#.Uc1q5jtHLfJ>
[Accessed 28 June 2013].

Ansoff, I. (1957): Strategies for Diversification: Harvard Business Review,

Avasarikar, D.P. and Chordiya, S.B., (2007).


Marketing research. Pune: Nirali Prakashan.

Baldwin, J.R. and Gellatly, G., (2003).


Innovation Strategies and Performance in Small Firms: Massachusetts: Edward
Elgar Publishing.

BBC News, (2001a). Red Bull: Raging Success


(Online): http://news.bbc.co.uk/2/hi/uk_news/1437154.stm> [Accessed 28 June
2013].

BBC News, 2001b. Energy Drink Claims Rejected


(Online): http://news.bbc.co.uk/2/hi/health/1133348.stm> [Accessed 28 June
2013].

Bodner, B., (2011). Company analysis of Red Bull. Munich: GRIN Verlag.

Costley, M. et al (2013) Red Bulls Company Synopsis

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(Online): http://www.sfu.ca/~sheppard/478/syn/Group_4.pdf> [Accessed 28 June


2013].

Euromonitor International, (2007). Red Bull Plans Asian Expansion: Prospects


and Problems [online] < http://blog.euromonitor.com/2007/04/red-bull-plansasian-expansion-prospects-and-problems.html> [Accessed 28 June 2013].

Euromonitor International, (2013) Passport: Red Bull GMBH in Soft Drinks [pdf]
(Online):http://www.euromonitor.com//medialibrary/PDF/RedBull-CompanyProfile-SWOT-Analysis.pdf> [Accessed 28 June 2013].

Kotler, P., 1999. Marketing: How to create, win, and dominate markets. New
York: Simon and Schuster.

McKinlay, M. et al., (2007). FCS marketing L2: Cape Town: Pearson South
Africa.

McDonald, M. (2007: 6th Ed.): Marketing Plans: How to Prepare; How to Use
Them. Elsevier Ltd.

Moth, D., (2013). How Red Bull uses Facebook, Twitter, Pinterest and Google+
[online] Available at <http://econsultancy.com/in/blog/62178-how-red-bull-usesfacebook-twitter-pinterest-and-google> [Accessed 28 June 2013].

Nijssen, E.J. and Frambach, R.T., (2001). Creating customer value through
strategic marketing planning: A management approach. Berlin: Springer.

Rawstorne, T., 2008. Cynically marketed, toxic and disturbing: Why Red Bull is
Britain's real drink problem. (Online): http://www.dailymail.co.uk/femail/article-

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1027304/Cynically-marketed-toxic-disturbing-Why-Red-Bull-Britains-real-drinkproblem.html [Accessed 28 June 2013].

www.redbull.com (2014).

Red Bull GmbH, n.d. The Company Behind the Can


[online] < http://energydrink.redbull.com/company> [Accessed 28 June 2013].

Tidd, J. et al; (2005: 3rd Ed): Managing Innovation: Integrating Technological,


Market and Organizational Change. John Wiley &Sons, Ltd.

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APPENDIX 1
SWOT Analysis is a structured planning technique used to evaluate and identify
firms internal and external factors that might be favourable or unfavourable to
achieve their objectives. However, using SWOT analysis can also be dangerous
especially when a company makes a decision whether conscious or not and only rely
on the analysis for planning (McDonald, 2007).
Internal analysis
Strength

Market leadership: In the year 2012 the company has sold total of 5.226 billion
cans all over the world. This figure represented a 12.8% increase in the sales as
compared to the figures of 2011. The company is the global leader in energy
drinks. The company has a market share of 70% in the world. Even the other
drinks offered by other companies are also facing competition in front of Red Bull.

Millward Brown (2010, cited by Bodner, 2011) stated that Red Bull is positioned
at 79th position amongst all the global brands worth 8,154 billion dollar. It is
positioned at fourth rank amongst all the popular brands in soft drinks like before
Sprite and Fanta but behind Coke (Zero, Lights and Diets), Coca Cola and Pepsi.
Coke and Coca Cola are the third largest brands all over the world.

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Weakness

Products: The main weakness of the company is that it deals in only five products
like Red Bull energy Drink, Red Bull Sugar free, Red Bull Zero calories, Red Bull
Editions and Red Bull Cola (Bodner, 2011). Red Bull Editions is available in three
tastes Blueberry, Cranberry and Lime. Though the company has created
variation since their products but the company is vulnerable to market fluctuations
(McDonald, 2007). This is because of the fact that the sports or energy drink
category in which the company operates is smallest part of the overall soft drink
market.

Cost: Red Bull manufactures its product from its only factory located at Austria.
As it supplies the energy drink to the other parts from this factory only, it is
susceptible to laws and regulation, high tax and high costs of distribution as
compared to the competitors.

Ingredients: Red Bull is vulnerable to regulatory control because of its high


caffeine content (Euromonitor International, 2013).

External Analysis
Opportunities

Newer geographies for the expansion of the company have opened owning to the
emerging market.

Red Bull in order to reduce the distribution cost has decided to open new
manufacturing unit in Brazil and Asia. This has opened new ways to provide
competitive retail price rather than imported product prices.

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Threat

Competition: Monster sets the biggest challenge and threat for Red Bull as it is
made up of natural ingredients and looks more desirable to the consumers than
the Red Bull.

High Cost of marketing: Creating a matured market in the developed countries


makes the marketing process much complex and harder than the past. High
marketing cost is involved in establishing communication with the customers.

Appendix 2
COMPETITION
Red Bull has over 100 major competitors. It ranges from large international
competitors like Rockstar, Burn, and Gatorade, Monster Beverage Co., Coca-Cola
Co (TCCC), and Pepsi.Co. However, the main competitor is coca cola. Coca cola is
a world leader in beverages and convenience foods with revenue of about 27
million and over 143 000 employees. Coca cola brands are in over 200 countries.
Appendix 3 Growth Rate 2012-2013
2012 vs 2013

3 Year Annual Net Operations Operating


Growth

Revenue

Income

Africa

10%

6%

16%

6%

Asia

16%

13%

24%

38%

USA

47%

35%

24%

22%

EU

9%

6%

14%

16%

Pacific

7%

4%

7%

15%

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Can

64%

N/A

53%

750%

10%

15%

25%

10%

Investment
Worldwide

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