Red Bull case study

Key points: Market: New soft drink category: energy drinks Market dominator / leader By 2007, Red Bull has sold 3.5 billion of cans in 143 countries with a total sales turnover of US $ 4.2 Billion. Sweden the drink is classified as a drug and is only sold in pharmaceutical stores.

Consumers: Target group 1 (Primary characteristics)

Red Bulls primary consumers fit into the age bracket of 16-29 years. Red Bull consumer is not price-sensitive. Red Bull consumers need energy Red Bull consumers perceive the product as fashionable Red Bull consumers perceive the product as a mean of socialization (young socialites and students in college) Target group 2 ( Extreme sports athletes)

Extreme sports athletes fit into the age bracket of 16-29 years. Their consumption relates to the actual need for energy during high-endurance exercise and activity. Extreme athlete who is willing to take risks Extreme sports Target group 3

DJs and raver dancers fit into the age bracket of 16-29 years. Young music fans (dance all night long in discos and clubs)

Distribution Before 1997: they had relied upon established distributors such as Coca-Cola and Pepsi for their distribution channels. After 1997: Red Bull differentiated global strategy utilises a SALES FORCE that caters specifically to each target market in each area. Today, Red Bull has small distributors who work solely with their product.

Distribution Tactics

In 1997: When Red Bull was launched in the USA in 1997 it did not use previous channels. They divided the whole country in to 8 decentralized sales-units and expanded on city-by-city basis. Red Bull differentiated global strategy utilizes a sales force that caters specifically to each target market in each area. Red Bull hires hip locals who drive around in Red Bull logoed cars offering free samples and promoting the product in popular venues. The dedicated sales force finds the trendy hot spots in each particular market and through high-end promotions can put their product into the hands of their target market. When Red Bull enters a new market: The plan of expansion into new markets was unique to Red Bull. They scout out accounts at popular venues frequented by the target market. Red Bull then picks only five venues to introduce their product. At this point, Red Bull develops consumer education teams. On college campuses, employs student brand managers who are responsible for getting the product into the hands of their peers. Red Bulls ambassadors; Red Bull finds small distributors who will DEDICATE themselves to the product and deliver it in Red Bull-branded vans. Red Bull REQUIRES distributors who carry other products to employ a separate sales force to handle their drink. Red Bulls hard work in establishing distribution channels INDEPENDENT of large brands, for example Coke and Pepsi, is rewarded in the loyalty achieved from the distributors who represent their product exclusively.

Red Bull

Distributors (who carry other products but independent of large brands CC/Pepsi)

Dedicated Small Distributor

Sales Force

RB - Sales Force

RB - Sales Force

Red Bull as a company is truly self-sufficient. It is one product, with one united driven sales force (Control). Represented by distributors who only handle their account (Red Bull dictates the distribution tactics and only expect information of sales performance). Power/Control

AND ENGAGE IN PURELY SECRETIVE MARKETING STRATEGIES. (Sign of trust between

Red Bull and the distributors). (Strategic alliance between RB and SMBs distributors)

Savvy
If you describe someone as having savvy, you think that they have a good understanding and practical knowledge of something. Analysis of Red Bulls distribution strategy and tactics. Do you agree with this view (Savvy?) 1. 2. 3. 4. 5. 6. Introduction (market) -200 (Lidia) Distribution strategy before analysis (Intermediation) - 500 (Trang) The current distribution strategy analysis (Disintermediation) 700 (Martin) Consumers analysis + how RB promotes to them - 500 (Lidia) Ethical issues 600 (Shima) Conclusion/Recommendation - 600 (all)

Ethical issues: International distribution lecture How country regulation/legislation can affect the distribution of RB, because of the ethical issues. (Japan and Sweden, Austria, Australia) look throughout the case! In relation to the alcohol topic, why would RB be stupid to go agains CC and Pepsi? RB Cola! Sugar free RB diet segment? Negative publicity, but no consumers concerns, and they do not request further information about the potential harmful effects of RB. Mass consumption effects? Drug sold as food.