MARKETING MANAGEMENT

AN INTERIM REPORT ON RED BULL

SUBMITTED TO: DR. H GAYATHRI

SUBMITTED BY,
GROUP NO- 8
SECTION B
KOUSHIK P N (17065)
SAURABH SINGH (17084)
SUMITESH PATTNAIK (17089)
VISHAL V MAMMEN (17094)
SHOBITHA S M (17099)
CONTENTS

Contents
ENERGY DRINK MARKET OVERVIEW ............................................................................................... 2
REDBULL (HISTORY & COMPANY PROFILE ) .................................................................................... 4
RED BULL – INDIA ........................................................................................................................ 5
THE BUSINESS CONCEPT.............................................................................................................. 5
PRODUCT EDITIONS ..................................................................................................................... 5
RED BULL COMPANY ACTIVITIES ................................................................................................. 7
MARGET SEGMENTATION ............................................................................................................... 8
GEOGRAPHIC SEGMENTATION.................................................................................................... 8
DEMOGRAPHIC SEGMENTATION ................................................................................................ 8
PSYCHOGRAPHIC SEGMENTATION.............................................................................................. 9
BEHAVIORAL SEGMENTATION .................................................................................................... 9
BRAND POSITIONING................................................................................................................. 10
SWOT ANALYSIS............................................................................................................................. 11
Marketing mix strategies ............................................................................................................... 12
COMPETITORS ............................................................................................................................... 17
CONCLUSION ................................................................................................................................. 20

PAGE 1
ENERGY DRINK MARKET OVERVIEW
An energy drink is a type of non-alcoholic beverage containing stimulant
drugs, usually including caffeine, which is marketed as providing mental and
physical stimulation (marketed as "energy", but distinct from food energy).
They may or may not be carbonated and many also contain sugar or other
sweeteners, herbal extracts, taurine, and amino acids.
Energy drinks contain stimulants like caffeine which varies between 19mg to
36mg per 100grams, herbal extracts like Ginseng, Gingko Biloba, Guarana, B
vitamins, High level of taurine, sugar &sugar substitutes.
The global energy drinks market worth was USD 43 billion in 2016.On the
global platform the market is growing at a rate of CAGR 11.
In India the Energy Drink Market is still niche as compared to the Global
market. The energy drink market in India is USD 3663.7 million growing at a
CAGR4.5% in India. The growing health consciousness, rise in income
among the youth has increased the demand for energy drinks. People normally
take Energy drinks after intense Workouts in the gym so it boosts their stamina
& energy level. The consumption of Energy drink in urban area is high as
compared to Tier 2 & 3 cities. These Energy Drinks are intended to give quick
energy along with mental and physical stimulation. This industry is expected
to witness a high growth on account of growing consumer’s health
consciousness and hectic lifestyle.
The Energy drinks consumption has turned into a status symbol especially for
youth. Such consumer behaviour will further drive the demand. In countries
like UK, Australia, USA, Spain alcoholic energy drinks have become popular
which contains an average of 2% to 5% of alcohol. The increase in Pubs, bars,
clubs & lounges(PBCL)sector is one of the factors for the growth of Energy
drinks. Energy drinks are offered in bars & pubs. Consumption of these drinks
mixed with Alcohol is becoming popular these days.
There are many players in the Energy Drink Market. Red bull dominates the
Global as well as Indian market. Monster, Rockstar, NOS energy drinks are
some of the other players in global market giving competetion to Red Bull.
In India Monster, Cloud 9, Tzinga, are some of the other players serving in
this market. Paper boat energy drink marketed by Hector Beverages, XXX
energy drink are some of new entries in the market. Herbal brand like

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Vedantika herbals has Panchamrita Energy Drink. Dabur Glucose D is one of
the key player in India.
In India the Energy Drink is growing faster in the beverage Industry. About
60% of the consumers are Male & age group between 15 to 35 consumes
around 65% of the energy drink.
There are many substitutes products like soft drinks, malted health drinks,
packaged fruit juice which has an impact on the energy drink market. These
drinks are low in cost as compared to the energy drink. These drinks don’t
contain caffeine whereas energy drink contains caffeine which has many side
effects if consumed more. Some of the side effects are frequent Urination,
abnormal heart rhythms, sleeplessness.
The alcoholic segment was valued USD 22.34 billion in 2016 & market
researchers found that the market will grow at CAGR of 6% from 2016 to
2025.Lack of knowledge about the choice of drinks drives the market of
alcoholic energy drinks. The non-alcoholic segment will overtake the
alcoholic sector in the next few years because of the benefits it provides than
the alcoholic segment.
The organic segment is emerging as well. Some of the consumers tending
towards the organic food & beverages in their daily habits has increased the
demand of this segment. In countries like India, China, UK, the organic energy
drinks market is increasing. Scheckter launched an organic energy drink
which contains extracts of organic Brazilian guarana, organic raw Brazilian
coffee seed, organic pomegranate juice, organic ginseng, organic elderberry,
and organic lemon juice in it.

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REDBULL (HISTORY & COMPANY PROFILE )
Red Bull is the top selling energy drink today, it was once a bizarre energy
drink sold in Thailand gasoline stations and it became famous among the night
drivers. Red Bull was once a working class drink for Thailand workers.
Invented by Chaleo Yoovidhya in 1970s seeking to offer a low priced energy
formula for Thai working class. Later the product became famous among
them and then he started to sponsor for local boxing matches and other sports
events. It wasn’t until the late 1980s that the Red Bull exposed to the rest of
the world in its current form.

Red Bull the company was started by Dietrich Mateschitz in the mid 1980's.
He is the one who developed the formula of Red Bull energy drink and
developed the marketing concept of Red Bull. In 1987 the red bull energy
drink was sold for the very first time in its home market Austria. This was not
only the launch of a completely new product, in fact it was the birth of a new
product category called Energy Drink.

Today red bull is available in 171 countries and more than 62 billion cans of
Red Bull have been consumed so far. As of the end of 2016, Red Bull
employed 11,865 people in 171 countries.
In terms of further expansion, Red Bull is targeting the core markets of
Western Europe and the USA and growth markets in the Far East, while also
focusing on the worldwide roll-out of the Red Bull Editions.
A total of 6.062 billion cans of Red Bull were sold worldwide in 2016,
representing an increase of 1.8% against an already very successful 2015.
Company turnover exceeded the six billion euro mark for the first time,
increasing from EUR 5.903 billion to EUR 6.029 billion. The main reasons
for such positive figures include outstanding sales in the markets in Chile
(+28%), Scandinavia (+13%), Poland (+13%), the Netherlands (+12%) and
South Africa (+10%), combined with efficient cost management and ongoing
brand investment.

PAGE 4
RED BULL – INDIA

Red Bull India Private Limited is a Private incorporated on 03 April 2007. It

is classified as Subsidiary of Foreign Company and is registered at Registrar
of Companies, Mumbai. Its authorized share capital is Rs.45,000,000 and its
paid up capital is Rs.27,300,000. It is involved in Other wholesale includes
specialized wholesale not covered in any one of the previous categories and
wholesale in a variety of goods without any particular specialization.

THE BUSINESS CONCEPT

The concept of the company is to create an entirely new functional beverage

category and associated market, this being ‘Focus Drinks’. This is a new take
on the Red Bull energy drink however, this new product will contain less
caffeine and have the added major active ingredient of Nootropics (Chemicals
that enhance cognitive ability). These drinks will be consumed by an
individual and within a matter of minutes, that individual will experience
improved cognition, ability to focus, improved memory and enhanced overall
performance, both intellectual and physical in nature.

RED BULL PRODUCTS

“Red Bull energy drink is a functional beverage which provides wings

whenever you need them’’ this is the statement given by the company about
the energy drink.

PRODUCT EDITIONS

Red bull - red edition: The Red Bull Red Edition contains the same high
quality ingredients as Red Bull Energy Drink and has a sweet cranberry taste.

Red bull - silver edition: The Red Bull Silver Edition contains the same high
quality ingredients as Red Bull Energy Drink and has a distinctive lime taste.

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Red bull - blue edition: The Red Bull Blue Edition contains the same high
quality ingredients as Red Bull Energy Drink and has a fruity blueberry taste.

Red Bull Energy Drink: A functional beverage vitalizes body and mind

Red Bull Sugar free : A beverage without sugar, with only 3 calories per 100
ml

Red Bull Energy Shot: Fits easily in a pocket, handbag, jacket or glove box

Red Bull Cola : Its just not an energy drink and also a very special cola, the
only cola that contains both coca leaf extract and kola nut.

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RED BULL COMPANY ACTIVITIES

RED BULL AIR RACE RED BULL TV RED

BULL CLIFF DIVING

RED BULL RACING RED BULL RADIO RED

BULL BC ONE

RED BULL MUSIC ACADEMY RED BULL AMPICO

PAGE 7
MARGET SEGMENTATION

GEOGRAPHIC SEGMENTATION
Geographic segmentation is done using the spatial location to segment the
market. In geographic segmentation there are different schemes for the
different geographical units such as states, regions, cities. Markets are
mainly divided into the rural and urban areas. The Geographical variables
have been used to segment markets in following ways:

AREA : Urban, Suburban/ Semi urban

CITY : Metro politician cities
REGION : Domestic and International

DEMOGRAPHIC SEGMENTATION
In demographic segmentation, the market is divided into groups on the basis
of variables such as age, gender, income, occupation etc; these demographic
variables are so popular with marketers so that they are often associated with
the consumer’s needs and wants. Segmentation variables are easily
measurable. Here are the demographic variables have been used to segment
markets. The companies target audiences primarily are the bachelors, youth
and the professionals Red Bull segments its customer base by age as follows

AGE : 16-45 Years – account for the major share

Middle age and Elderly – red bull came out with zero calorie, special edition
cool breeze with elderly taste.
GENDER : They mainly target males, although females are part of their
customer base.
INCOME : Redbull is mainly associated with high income people with their
brand name.
OCCUPATION : Students, professionals, sports enthusiasts, athletes.
LIFE CYCLE STAGE : Redbull energy drink- Bachelor stage young people.

PAGE 8
 Redbull simply cola – Newly married young couples.

PSYCHOGRAPHIC SEGMENTATION
It is the science using psychology to better understand the psychology of the
consumers. With the changing marketing, Red Bull continuously tries to
cope up with the new trends and come up with new flavors and offers to
attract more customers.

LIFESTYLE : Business class, students, sports oriented.

PERSONALITY: ambitious, open minded

BEHAVIORAL SEGMENTATION

BENEFITS AND NEEDS – Providing a sense of belonging, Enhanced

performance
LOYALTY STATUS – Hard-core loyal (consumers who buy only one brand
all the time)
ATTITUDE TOWARDS PRODUCT – Enthusiastic
BUYER-READINESS STAGE – People intend to buy

PAGE 9
BRAND POSITIONING
Despite the opposition, Red bull looks like another kind of beverages called
the caffeinated drinks. In this market sector Red bull has a brand image of a
top quality product. These brand image of Red bull and its quality is used for
its brand positioning. The tag line of Red bull is “ Red bull vitalizes Body and
Mind” this positioning idea has helped Red bull to create a brand image in the
market.
The key features for positioning are the following:-
1. Sarcastic
2. Fearless
3. Intelligent
4. Creative
5. Amusing, charming
6. Incautious

It can be assumed that the positioning idea of Red Bull has created the best
energy drink status among the target market. It is also clear that customers
appear to be attracted to the general appearance and brand of Red Bull.
(Heckman, 2010)
The positioning strategy of Red Bull aims at best product, top price and top
profitability. As for the price, Red Bull has a position in which it can command
a best price because there is nothing to compare it with. It is an exclusive
useful drink, promising and offering benefits that cannot be offered by any
other drink.

PAGE 10
SWOT ANALYSIS

STRENGTH-
1.Red bull is a synonym for energy drink in many countries. It has established
a brand image globally. Approximately 60 billion cans have been consumed
so far.
2.Unique brand promotion Red bull sponsors lot of sports event such as Red
Bull Cliff Diving World Series, Red Bull Air Race, Red Bull Crashed Ice to
create awareness & increase brand loyalty.
3.Red bull has a strong geographic presence. It is present in 171 countries.

WEAKNESS-
2.Red bull has short product portfolio.
3.The price which Red bull offers in the market is higher than the average
price.
The contents of Red Bull is not patented.

OPPURTUNITIES
2.Diversifying the basic portfolio.
3.Red bull should offer new flavours in the market to increase the market
share.
Increase awareness of Red Bull's dominance in the sport drink market
Strengthen the relationship between Red Bull's target audiences.
Increase Red Bull's sales in new markets such as Brazil, India as well as more
Western markets.

PAGE 11
THREATS
1.Red Bull have been associated with health risks & it is considered harmful
in some countries e.g.-France. Denmark.
2. Huge Completion from players like Monster and others.

Marketing mix strategies

The marketing mix strategy is made up the 4ps.
1.Product
2.Price
3.Place
4.Promotion

1.PRODUCT
Red Bull is a sweet, caffeinated drink aimed to give consumers the high
energy kick. It is a functional beverage with the unique combination of high
quality ingredients. Available only in rather expensive 250ml cans, 350ml
bottles, with 4 packs and different ‘flavours’ (original or sugar-free). It
contains caffeine, taurine, glucuronolactone, and B-vitamins. Red Bull
has become the world’s leading energy drink, a staple in many young and
active people’s lives.
Red bull - red edition: The Red Bull Red Edition contains the same high
quality ingredients as Red Bull Energy Drink and has a sweet cranberry
taste.

Red bull - silver edition: The Red Bull Silver Edition contains the same
high quality ingredients as Red Bull Energy Drink and has a distinctive
lime taste.

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 Red bull - blue edition: The Red Bull Blue Edition contains the same
high quality ingredients as Red Bull Energy Drink and has a fruity
blueberry taste.

Red Bull Energy Drink: A functional beverage vitalizes body and mind

Red Bull Sugar free: A beverage without sugar, with only 3 calories per
100 ml

Red Bull Energy Shot: Fits easily in a pocket, handbag, jacket or glove
box

Red Bull Cola :It is just not an energy drink and also a very special cola,
the only cola that contains both coca leaf extract and kola nut.

Quality
The water in red bull is alpine water of highest quality, which comes
from the Austrian and Swiss alps.

Product info on package

 Logo
 Slogan- “gives you wings”
 Ingredients- caffeine, taurine, sucrose & glucose, B group vitamins and
alpine water.
 Size-250ml Can
 Sweetened or diet

2. PRICE
Red Bull has a number of competitors in the energy drinks industry but yet
they are the market leaders. Hence, the pricing strategy is that of a market
leader but based on competitor pricing. Being on the top they can easily charge

PAGE 13
a premium for their products and customers will even buy it for their quality.
Red Bull was the first in its category so it will always be the number one
choice for customers and its demand will never decrease. People prefer buying
Red Bull in bulk as its’ cheaper than buying a single can. Yet overall they are
the most expensive energy drink compared to competitors like Rockstar,
Tzinga, Cloud 9, Gatorade, Monster and KS.
Allowances and discounts:
In this it encourages retailers to buy more quantity of product to get certain
amount for free.
Ex-selling a pack of 3 cans with an additional can free.

3.Promotion
Red Bull being an energy drink mostly targets sports people with their tagline
“Red Bull gives you wings” so owing to a huge customer base they organize
a lot of sports events and even sponsor teams as well as the events. Some of
these events include mountain biking, BMX, motocross, windsurfing, surfing,
skating, Formula 1, Red Bull Startos, Red BullFoxhunt, Red Bull Cape
Fear, Red Bull BC One, Red Bull Battle Grounds, etc. They also endorse
various sports athletes and celebrities. Besides sports they also have a Red
Bull House of Art where they encourage artists to display their art in a period
of 3 months at their exhibitions. They have Red Bull T.V available on laptops,
PCs, mobiles, gaming consoles and tablets airing various music festivals,
shows, films, performances and videos. Red Bull also have their own
merchandise stores online and magazines for extreme sports persons. Through
all these promotional activities they want customers to recall their brand every
time they see or hear energy drink thus increasing their customer base. Hence,
this covers the marketing mix of Red Bull.
The marketing communication strategy from Red Bull is based on five
columns. These are Above-the-line Advertising, Opinion Leader Marketing,
Event Marketing, Sampling and Sport Marketing. Red Bull is a company who
wants to act different in all ways compared to others. It is the same thing in

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marketing. Red Bull does not follow the traditional media guidelines instead
they use untraditional platforms (Hein, Kenneth).
1. Above-the-line Advertising
'Red Bull gives you wings' is the advertising message.
Because the life gets more and more stressful, the people look for products
with the extra ingredient energy. Red Bull and its campaign 'Red Bull gives
you wings' represents a lifestyle that should help people during longer
working days and strains of everyday living. The campaign reflects the
personality of the brand. Cheeky, witty, self-ironic, unpredictable and unique
are the characteristics the company wants to contribute to the consumers.
2. Opinion Leader Marketing
Opinion Leaders, especially in the sport and cultural area, are a perfect target
group for Red Bull. Red Bull has relationships with celebrities same as over
250 top athletes in the world.
3. Event Marketing
Red Bull doesn't sponsor events; they create and support their own innovative
events. Red Bull's event marketing covers sports same as culture. Famous
events organized by Red Bull were Flugtag, Music Academy or Local Hero
Tour.
4. Sampling
Sampling is done by highly motivated and well educated employees. Their
task is easy. Find tired and exhausted people at the right time at the right place.
These places are concerts, parties, festivals, sport events or high way rest for
drivers where all people need an energy boost.
5. Sport Marketing
Since a couple of years Red Bull has forced their involvement in sports
marketing. Today they have an own formula one team, an own soccer team in
New York as well as many further sponsoring commitments.

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Place

Red Bull has successfully managed to sell 5.9 billion cans worldwide in 2015
owing to its vast distribution network worldwide. Red Bull is available at
convenient locations like a supermarket, convenience store, retail outlet or
even night clubs, bars and casinos. This way it becomes very easy for a
customer to buy the product. Also, Red Bull is often stored in Red
Bull exclusive refrigerators attracting customers to buy an energy drink when
they go grocery shopping or to a bar. Red Bull is also available online either
in bulk packs or single making it easier for customers to buy it in bulk. The
main motive of selling this drink at night clubs and bars is either people prefer
mixing it with an alcoholic beverage to add some extra flavor or sometimes it
is just to help them stay up late and party with friends. At supermarkets and
convenience stores they are placed alongwith other competitive products
giving the customer a choice between which one to buy.

Distribution means the distribution and provision of goods and Services. The
distribution policy therefore includes all planned concerted measures for the
distribution and provision of Products on the way from seller to buyer. Red
Bull is distributed in most grocery stores, convenience stores and gas stations
in over 160 countries in the world.

Intensive distribution to provide saturation coverage of market by using all

availabilities market outlets such as:
-Super market
-gyms
-coffee shops
-pizza outlet and many more.

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COMPETITORS

Red bull have been enjoying a strong dominant position in many significant
markets, But now it is no longer the only player. The major competition for
Red bull’s dominant position has come from U.S based followers : Monster,
Rockstar, Full Throttle. The Strategy used by the competitors to penetrate into
the market was introducing price competition to the segment. These strategy
has really helped them to increase market share during the depression periods.

MONSTER

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Monster is the closest competitor of Red bull, Monster energy drink was
introduced by Hansen Natural Company in the year 2002, now it is under the
banner of Monster Beverage Corporation (MNST). Monster the energy drink
is following every last stride that can make it similar to Red bull and pickup
advantage by providing the item at relatively low cost. The Monster is
providing twice the quantity the Red bull is providing for the same price that
is $2 seeking more customers to buy their product due to their relatively low
cost The company sponsors Motor sports such as motocross, action sports
such as UFC, number of music concerts. Monster energy NASCAR cup series
is sponsored by Monster.

ROCKSTAR

Rockstar was founded by Russell Weiner based in Las Vegas. Rockstar Tag
line “ party like a rockstar ” is targeted mostly on younger generation
consumers who likes to be more wild and crazy. There are so many flavours
of rockstar available like cola, energy drink and juiced. In these the energy
drink has some what same taste to all the others, where as the cola product is
having the best taste, the juiced type contains 70% of real fruit juice and said
to have 100% energy content. Rockstar was the first to use the larger size cans
which later became the standard size, only Red bull company continues to use
the smaller size cans.

PAGE 18
FULL THROTTLE

Full Throttle is the energy drink produced by Monster energy, coca cola
company was its former owner. Full throttle has the same taste and uses the
same ingredients of Red bull but it takes competitive advantage over Red bull
on its pricing strategy as well as the amount of quantity they provide for the
same price. Full throttle was first introduced in the market in late 2005 and
they target 20-30 age group (young people).

RED BULL SALES ACROSS THE WORLD

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INNOVATION FOR RED BULL

“High demand for healthy and active lifestyle products”- Sugar free
doesn’t mean healthy, zero calories is not healthy either. People are looking
for energy that last for long “sugar and caffeine” kick.

REASONS FOR HEALTHY PRODUCT

Healthy products will shift “ can lovers” to “can buyers”- people use to
identify themselves with brand and lifestyle behind it, but they mostly prefer
healthy products.

Introducing healthy line of Red bull products will encourage young students
to drink it to stay more focused in academics this helps in building brand
awareness and brand relationship in young age leads to brand loyalty which
would secure future customers.

CONCLUSION

The analysis of the Red Bull GmbH shows a global company that is well
positioned in the market. The development since the foundation points out a
continuous increase in sales. Red Bull is very interesting in its development
from a marketing point of view. While other companies are considered in an
international strategy, to follow the characteristics of each country, this is not
the case at Red Bull.
Previously there was only one product and one marketing strategy for every
country. Today, Red Bull has launched various other products on the market,

PAGE 20
but they bring currently still very low turnover to the company. Despite the
new products Red Bull remains their own strategy which is contrary to the
global existing marketing theories in international marketing.
The Energy drink as such had problems to conquer and get market share on
new markets at all. The drink was sometimes classified as harmful and
sometimes even prohibited.
The high content of caffeine was the reason for this development. It is
therefore the position of the beverage to change. Rather than position the drink
as a pure energy drink we would suggest that beverage be positioned as a
sports drink. The new position of the product would be easy to reach because
Red Bull who do a lot of activities in sports marketing can spread a good
foundation for the future. Just for entering new markets such as China or South
America, this would alleviate some barriers.
Summing up all the info together it can be stated that Red Bull is a viable
company, although they must be careful in a rapidly developing market not
only to focus on them.

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