Assignment & Case

Marketing Week 1

Max van Neerven: 1664172

Mounir Trabelsi: 1705839
Renaldas Zlatkus: 1701775

Class: IB05

Assignment 1: Red Bull

1) Select an industry
The company we have chosen is Red Bull GmbH, it finds itself in the soft-drink
industry. The 6 relevant developments in the macro-environment are:

Political:
At first, when Red Bull started their business, health organizations were
suspicious that Red Bull could be a starter drug. This suspicion increased after
rumors started that Red Bull contained ingredients like the galls of bulls.
However, the fact that Red Bull has been consumed around the world for
approximately 30 years without complaints has proven otherwise to these health
organizations which made this soft drink more acceptable. In 1998, studies
carried out by an independent institute called ISME proved that the drink causes
caffeine-like, stimulating effects, but does not lead to addiction. Despite this,
some countries still have their doubts about this drink, for example Hungary,
where Red Bull is forbidden. Besides this, Red Bull still must be approved by each
country they want to sell their soft drink in. This issue can be very expensive and
time consuming.
Economic:
Red Bull is hardly affected by the economy because this is a particular drink,
serving a niche market. Red Bulls main consumers are athletes, night clubbers,
and shift workers. Since they are a market leader and there is a lack of
substitutes, people will keep buying this product, even if the economy is
decreasing.
Social Cultural:
When Red Bull was first introduced, people were very skeptical about the product
and most people did not want to try it. But over the years, after the health
concerns were cleared and Red Bull created a stylish image for themselves
(Which they do by advertising and commercials), people started to see Red Bull
differently. Also, a very important development is the change in peoples
lifestyles. Nowadays, people are dealing with longer working hours, more
workload and more stressful factors, such as traffic.
Technological:
Because Red Bull is a product that doesn't change, it's very important to have
clear presence in the media, to keep promoting and advertising their product.
Manufacturing is done only in a few countries, from there they export to other
countries that are near that division. They do this order to keep the same
formula and taste in every can.
Ecological:
Red Bull cans are made out of recyclable aluminium and the glass bottles are
recyclable as well. Red Bull tries to be as efficient as possible with the transport

of their products. They designed a new machine that packs the cans as
efficiently as possible, thus allowing more cans to be shipped in one go. This
lowers the total number of shipments and therefore, any side effects thereof,
such as pollution.

Demographic:
Red Bull is sold in 169 of the 195 countries around the world. So, Red Bull is
selling their product in almost all the countries of this planet. Since the
population of the world keeps increasing and globalizing, the demand for Red
Bull keeps growing.
The majority people who buy Red Bull are young people around 16 trough 30
years old. Most of these will be students so their income isn't that high.

2) Select a company
The company we have chosen is Red Bull GmbH and the relevant developments
in its micro-environment are:

Company:
In 1987, Red Bull was the first company to start developing and selling the
concept of an energy drink. With this early bird approach, Red Bull has become
synonymous with energy drink. This gives the brand a strong name recognition
and status in the customers consciousness.
Suppliers:
The basic ingredients and raw materials are easily obtainable, making Red Bull
virtually non reliant on any of its suppliers. Each geographical division has its
own suppliers for the ingredients and produces the drink themselves.
Marketing Intermediaries:
Red Bull uses all three types of marketing channels. One being B2C and the other
being B2B split up into two paths, one via a retailer directly, and another via a
wholesaler and then, retailer. This cuts down the dependence on any particular
channel.
Customers:
Red Bulls main marketing strategy is aimed at the end consumer. Through
association with extreme sports and positive experiences, the drink becomes
much more than just a drink. The wholesalers and retailers (B2B) are now forced
to provide this brand at any retail outlet, as the demand has grown so large.
Competitors:
Red Bull market share hovers around 43%. Its main competitors are Monster,
whose market share is 39%, and Rockstar, 10%. The remaining market share is
split between the smaller competitors, like Nos and Amp. From these companies,

Monster is the biggest competitor, especially with the recent strategic alliance
with Coca Cola, who has extensive and far reaching distribution channels. This
threatens Red Bulls leading position in the market.

Publics:
The major publics that Red Bull focuses on are the media publics, citizen-action
publics and the general public.
Red Bull has always had the focus of the media public. They sponsor TV shows
and regularly appear in magazines. They are building their brand and need to
reach the public through the media.
The citizen-action publics is the most important public for Red Bull. Red Bull is
known for their brave, tough style and they like to use extreme athletes who
inherit those traits to represent their brand. Through social media, these
ambassadors generate content under the name of Red Bull to strengthen the
image of themselves and Red Bull.
The general public is the final major group. They want to be sold everywhere and
for that everybody needs to know them. Therefore, Red Bull has a soccer and a
Formula 1 team. They want to be seen by everyone to achieve total market
dominance.
Value Chain:
Red Bull uses a wall-to-wall production method. This means that the can is
produced in one side of the factory, while the drink mixture is produce in the
other side. These are then combined at the same factory. This wall-to-wall
production method increases Red Bulls value chain, because everything is done
in house.

3) The positive and negative impacts on Red Bull and its developments
People are more aware of what they eat and drink. That trend has hurt Red Bull
significantly because there is a high percentage of sugar and caffeine in Red Bull.
That is why countries have strict regulations for letting Red Bull sell their
beverages in their country. This isn't that bad because they sell Red Bull in
almost every country around the world.
Red Bull is more than just a product it is a brand and a very powerful as well.
They own their own extreme sports teams, formula 1 team and until recently
they own their own football team. All these developments have a positive effect
on the brand Red Bull because everybody knows Red Bull by pure scale.
So there is an overall positive effect on Red Bull trough the developments in the
macro and micro environment.

4) Red Bulls organizational chart

Red bull has a divisional structure. On a website hosted by red bull we found
these pictures that explain their structure.
In the first picture is show how the divisions are divided and were their project
are on the hierarchy.

In the second picture one of the divisions is being show. Every division has their
own structure but they are very similar to this one.

Case Week 1: Pegasus Airlines

Question 1: Give examples of the needs, wants and demands that Pegasus
customers demonstrate, differentiating these 3 concepts. What are the
implications of each for Pegasus practices?

Needs are the basic requirements for survival. For instance water, food, safety,
social belong and self-expression. Pegasus customers demonstrate a reaction to
this need. Which, by now has become a demand. The reaction too this is then
buying the airline ticket, food and beverages provided by the airline. The wants
are the free choices. The passenger or customer does not need to buy a ticket,
food or refreshments from Pegasus to stay alive.
The implications for Pegasus for each of these phases is then to meet the
customer
expectations:
Needs have to be meet by providing the opportunity to buy these basic
requirements and to have a secure environment by maintaining the airplanes.
Wants could be meet by providing extra features to choose from. May it be food
related, destination or plane layout.
Demand can be created by experimenting with different prizes and offers to see
what the customer is willing to pay/buy.
Question 2: Describe in detail all the facets of Pegasus product. What is being
exchanged in a
Pegasus transaction?
Pegasus is a very low-cost airline. They offer customers a credit card to reduce
insurance rates and keep their customers up to date with their deals. Also they
work with a refund strategy which meets their customers in a positive way in
case of flight delays.
Question 3: Which of the 5 marketing management concepts best applies to
Pegasus? (5 points)
The marketing concept that suits Pegasus the best is the marketing concept.
They are really focused on the needs and wants of the market and only will
achieve their goals until their customers are satisfied.
We can clearly see that they make their profits through customers satisfaction.
Some indicators of this are the award system, the loyalty card and the Pegasus
listens onto you.
Question 4: What value does Pegasus create for its customers?
Pegasus creates the value of trust and consistency. The most important part of
this is that the costumers keep returning and consistently make use of the
services of Pegasus.
Question 5: Is Pegasus likely to continue being successful in building customer
relationships? Why or why not?
Pegasus has put a high standard in the cheap airline industry. With a lot of
emphasis on service and customers satisfaction. For now it has proven that this

is a successful formula in maintaining a strong customer relationship. However

this is no indication on future success rate when measuring the customer
relationships. Customers preferences could change in a instance due to a
different cheaper provider breaking up the hard earned relationship that Pegasus
was going for.