Competition Analysis Red Bull Business Essay

Abstract

Red Bull is an internationally known and leading brand in the market of energy drinks. A brief analysis on the product, its market, and its own rivals is depicted in the newspaper. To study the competitive online marketing strategy and business makes involved with this porter's examination of the five makes is performed and the major factors which make a difference the market share of Red Bull are being talked about in the paper. The supplementary research of the newspaper includes responses of a questionnaire that was made for the consumers of the product. The replies have been collected from different demographic sections of the population. Usage behavior of the beverages is also described by the questionnaire. THE ISSUES and opportunities for the merchandise are also mentioned in the paper.

The market of Energy beverages has been increasing constantly due to growing knowing of the potential customers about the demand of safer and much healthier life. The most significant market of energy beverages is the united states where more than 40% of the energy drinks are consumed on a yearly basis. The rest of the major market portion of the energy beverages includes Western European market and Japan which together accounts for 40% annual ingestion of energy beverages. These energy drinks are increasingly becoming popular among the people and children as well. The revitalizing mix of these refreshments is the key reason with their popularity. The higher level of caffeine in these energy beverages is the primary attraction point for the children. This high variety caffeine helps the consumers as a stress buster and sustains balance in personal and professional life. Everyday some new energy beverages are introduced in the market advertising about the bigger vitality with less quantity of caffeine than any other existing brand. The prevailing potential consumer section of energy drink is male dominated and the newer brands of the energy beverages are targeting more feminine customers. The marketing and branding of products are now done keeping the potential female customers at heart. Some manufacturers are using certain attractive words like 'glucose free', 'diet', 'low crab' to gain attention of the feminine customers. The marketing of such an extremely competitive product needs highly ground breaking formulas showing that their product is more mindful about medical and energy of its customers. These beverages generally targets the clients who are fond of some extreme activities like, some extreme mountaineering athletics, water sports, video recording and computer game playing, hip-hop and night time get-togethers. (Heckman, 2010)

Company and Product Review

Red Bull is labeled as a soda. It really is a non alcoholic stimulus drink with an absolutely exclusive formulation consisting of two natural substances and important metabolic transmitters such as, amino acid, taurin and glucuronolacton in addition to stimulating caffeine containing drinks, vitamins and sugars. It gives activation and revitalizes the body after effort and triggers the human being performance both mentally and physically. The industry is capital-intensive: average annual profits per creation employee are about $700, 000. (Dawson)

History of Red Bull market expansion

In 1982, Dietrich Mateschitz, originator of Red Bull and Chalerm Yoovidhya, made a decision to enter the marketplace of energy drink which was controlled by Japan and Thailand at that time.

In 1987, the merchandise was first introduced to Austria that was a difficult market for Red Bull to transport on. Quickly Mateschitz developed a online marketing strategy and as a result the product became well known in Austria and prolonged into Hungry and the rest of Germany. After that Red Bull has been efficiently accepted world-wide and has reached a market innovator position in 20 countries- in European countries, Asia and the united states. By 1997, Red Bull's excitement marketing strategy proved successful in the U. S. The next timeline shows the development of Red Bull on the market.

Date

Market Expansion

1987

Austria 3. 5. (not adult market)

1994

UK, Germany and Eastern Europe 3. 6.

1997

US and South Africa 3. 5. 3. 6.

2006

Japan 3. 7. (very older market)

When Mateschitz noticed that a great wearing event could be useful, Red Bull started sponsoring about 500 extreme sports athletes and hosting stylish celebrations. Events are now managed by Red Bull throughout the world like the Xgames and the Red Bull Air Races and thus their tagline, "gives you wings" is known worldwide. (Dawson)

Product Review

Red Bull's objective is to stretch out their wings around the world. It is a short saying that communicates vivid information about the brand. This slogan which is employed in every Red Bull campaigns worldwide is creating strong brand awareness of the product which is connecting between your brand and the merchandise type. They can be expanding rapidly into global market. They may be thinking about keeping Red Bull principles, while maintaining the control position in the energy drinks category by delivering better-quality customer service in an extremely experienced and commercial manner. (Dawson)

Direct Competitors

Although Red Bull still preserves a dominant position in many significant market segments, it is no more the one player. The major challenge to Red Bull's leading position has result from US-based imitators: Monster, Rockstar and Full Throttle which have launched price competition to the portion and this can be done to have grown to be increasingly more important through the depression intervals. (Strategy)

Monster: This energy drink is following every single step that makes it just like Red Bull and gain advantage by providing the product at relatively good deal. The cost of both products are $2 per can however the level of Monster is merely dual than that of Red Bull. Rockstar: This competitive energy drink whose motto is "party just like a Rockstar", targeted at younger consumers who wish to be "wild and crazy" and spend forever dancing. There are a number of flavours of Rockstar - cola, energy drink, and juiced. The power drink is similar in taste to all or any the others, whereas the cola product has the best taste. The juiced version is reported to be 70% real juice and 100% energy. They were the first ever to use the 16oz greater size, and this has fixed and be the standard. Only Red Bull continues to market the smaller cans, which is part of these image.

Full Throttle: It is manufactured and owned by Coca Cola, exactly like their Coke Blak combination of coffee/cola drink. Full Throttle energy drink is advertised as a rebellious drink, with erupting flames on the can. An 8 oz. offering has 110 energy (will come in a 16 oz can) and 29g of glucose. It also includes things like ginseng draw out and plenty of level of caffeine. Full Throttle comes with a citrus style and a red can. Full Throttle was first introduced to the marketplace in 2005. It really is targeted at 20-30 calendar year old men, and contains Taurine like Red Bull.

From the above explained information we will get that

1-Monster is comparable to Red bull in style, but only targets males. It includes two advantages over RB in cost and number which is double size of RB.

2- Rockstar is two times the scale and Price as it is 1. 99$ so that it is cheaper than RB.

3-Full Throttle gets the same taste and elements as RB, but it offers advantage of quantity and price

There are also other industries where Red Bull GmbH competes such as athletics, leisure and entertainment.

The Brand Positioning

In spite of the competition, Red Bull resembles a new type of refreshments called the energy drinks. Within this new market sector Red Bull has a branding as a high border quality product. The brand image and quality of Red Bull is utilized because of its brand placement. The punch type of Red Bull is 'Red Bull vitalizes Body and Head'. This placement idea has created Red Bull a brandname image in the beverage industry key top features of which are pursuing

Sarcastic

Self confident

Intelligent

Innovative

Humorous, charming

Individualist

Impulsive

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 seem 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 purchase price, Red Bull has a position where it can command line a best price since there is little or nothing to compare it with. It is a special useful drink, encouraging and offering benefits that cannot be offered by any other drink. (Strategy)

Porter's Five Pressure Analysis

Threats of new entrants

This push of market is affected by the energy of the new company that is going to enter your competition. This push becomes stronger if the investment and the cost to establish the business enterprise is low, fewer scales and expectations to follow, and the technology included are easily available for sale. These factors are also known as the obstacles for new entrants and in case there is our product a few of these barriers are not high plus some are strong enough to be breached by some new entrant. The expense of setting up the seed of energy drink is not so high so any new access on the market of energy drink can establish a manufacturing plant but the other barriers like complying with too many regulations and authorities laws is high. Energy beverages majorly contains level of caffeine as a key ingredient and the quantity and quality of the caffeine is examined on various parameters of the federal government. Another high hurdle for new entrants is the brand image of red bull in the market of energy beverages. The red bull has generated a very strong and reliable brand in the market which can't be even imagined by some new admittance on the market of energy beverages. (Porter's Five Pushes. )

Bargaining Power of Buyers

The market of energy drinks is highly competitive as there are more than 100 brands of energy drinks available for sale. But the market of these kinds of beverages is majorly captured by four leading brands: Red Bull, Monster, Rockstart and Full Throttle. The marketplace percentage of the other three brands in comparatively very low which shows that the customers of the merchandise are picking right up Red Bull over some other energy drink. But nonetheless it is a hazard for our product as the other brands are also competitive in the market and the purchasers have option to choose. The buyers have less power with them in this situation because the Red Bull has captured 75% market of energy drinks and can govern the marketplace by its monopoly. The buyers don't have power to discount which strengthens the position of Red bull in the market and it can make a decision its prices and keep them higher if needed. The buyer segments of energy drink is also the one with higher income and want to rejuvenate their body and mind after the hard work of whole day. (Porter's Five Forces. )

Bargaining Power of Suppliers

The power of suppliers is determined by the creation process and its own requirements of raw materials. Red bull will not require any specific fresh materials or subsidiary product for the creation of last product. Thus the suppliers of Red Bull don't have enough capacity to drive the costs of the product. The production process of Red bull keeps on adding value to the merchandise at each stage of the procedure and makes huge profit. Suppliers of Red bull are known because of Red bull only so they do not have bargaining electricity. (Porter's Five Makes. )

Threats of substitute products

Threat of substitute product is another major driving a vehicle force for the success and failure of the product. Red Bull majorly includes caffeine and has been a substitute for coffee in the current world. Some alcoholic beverages may also take place of Red Bull because it is merely used for high kick of energy and as a stress buster. Several alcoholic drinks can also solve the reason. The marketplace has many cheaper, useful and less unsafe products that can certainly meet the requirements of the customers and replace this costly energy drink from the marketplace. So in this circumstance the threat of replacement is higher for our product. (Porter's Five Forces. )

Rivalry

The volume of competitors of Red Bull on the market of energy drink is very less. There are just three other brands that are majorly sold in the market. However the market talk about of Red bull is a lot than the total market share of these three opponents. The suppliers and potential buyers of energy drink market don't have many options so the have an effect on of rivalry is not much in the circumstance of energy beverages. (Porter's Five Pushes. )

Factors affecting the elegance of "Red Bull"

Political and Legal Forces

When Red Bull was initially launched in the market of non-alcoholic drinks labeled with a fresh idea as a power drink, the Health Business was doubtful that Red Bull could be an appetizer treatments. Rumors declaring that to raise the energy level in the product Red Bull contain certain ingredients which can be unlawful and inhuman, put into their questions. But self confidence in the merchandise increased because of the fact Red Bull has been used in the Australian market for 9 years and in the Asian market for 30 years without any registered complaints. Additionally several studies show that although Red Bull has rousing effects like caffeine, it generally does not lead to habit.

On the other hand Red Bull still needs acceptance from each country to be sold. This procedure is frustrating and consequently costly. Some countries still have suspicions about Red Bull. Relating to msnbc. com in May, 2009, Six German claims have asked stores to stop retailing Red Bull Cola energy drinks following a test found a trace amount of cocaine. However government bodies say the medicine level was too low to result in a health risk. Countries such as Denmark, Norway, and France have prohibited the sales of Red Bull. Which means that legal factors have a high negative influence on RB. (Chong. , 2010)

Economical Factors

Red Bull is scarcely affected by monetary periods of expansion and contraction because it is a particular drink, serving a distinct segment market. The primary consumers of the product are Athletes, night time clubbers, shift personnel, professionals and long-distance individuals. Despite the availability of few substitutes, the sales of Red Bull are increasing through their well located advertisements. This factor has low influence on RB. (Chong. , 2010)

Socio-Cultural Factors

When the product was first launched people had doubts about the product and nobody wanted to try it. But now due to change of people's lifestyle, people are considering experiencing new things. Another reason for the self confidence in the product was that it did not have any health issues. Longer working time as well as increased highway traffic resulted in more need for energy raise. Nowadays Red Bull has a very stylish image and comes in a great deal of supermarkets and clubs

Technological factors

Red Bull is completely produced in Austria and after that it is exported in 28 countries. Major reasons why it is not manufactured in any other country; first, to ensure taste reliability and ensure that tastes of Red Bull should be same all around the globe. Another reason is to keep carefully the formulation of Red bull secure in one place. Energy drink Red Bull, uses digital points of sales (EPOS) data. This system allows customers' research team to check the circulation of Red Bull. This technique highlights the gaps that may be returned to the stores. (Chong. , 2010)

The Marketing Mixture Strategy

Red Bull has its own marketing which is different from the Marketing Blend Theory predicated on the 4 Ps. In 2008, Red Bull allocated to marketing approximately more than 1 million$ which equals 30% of its earnings.

Media Advertising

In order to market the product all the press network and channels are occupied by Red Bull. Thus they successfully begin their advertising campaign in many Television shows and magazines. In so doing, they let the consumers understand the merchandise and decide about the occasions they can use it themselves. Red Bull realizes this by an amusing and humorous cartoon campaign, by which they easily send the note that Red Bull, really can give you wings to journey away. These advertisements using simple toon makes the people enjoy the campaigns and at the same time keep in mind the brand's name and the message it offers. (Chong. , 2010)

Sports-and Event-Sponsoring

The company also uses sponsoring in their marketing combine strategy. Red Bull does indeed event sponsoring either by creating its own incidents (i. e. Red Bull Music Academy) or by promoting other events like Speed Ski World Championship. This strategy means that Red Bull brand shows up in the form of logos and stickers and that the product s target market is accurately defined.

The image, the stability and the awareness of the merchandise are recognized by sponsoring specific occurrences where the people's attention is drawn to the product.

Red Bull sponsors the athlete target market where Red Bull is obviously needed in extreme athletics such as free climbing and motorsports and fun sports as well. (Dawson)

Sampling

Sampling is also very important part of their three component -marketing system. The main reason for Red Bull is to boost the company samples at the right place with the right time by finding its exact target market such as driving, studying, working night time shifts and athletics. Sampling is conducted in a captivating way by extremely determined and cultured employees of Red Bull. Almost all their equipment is the merchandise, a free selection of clothes and a small, but very attractive sampling car. (Chong. , 2010)

Surveying the neighborhood market

To have some information about Red Bull's brand image and the way the people view it, we made a questionnaire of 3 areas including 13questions. The review targeted males and females whose era is between 18-34 residing in or near Abu Dhabi. 22 % of the respondents are females, whereas 78 % are guys. We used Emails to send and accumulate back again the questionnaires. (Strategy T. M. )

Significant Findings

The top drinks proposed by the market are: Red Bull, on top then come power Horses, and Monster. The major part of the total consumption of energy beverages is periodic: 80 % drink occasionally drink and 20 % frequently.

With relation to Red Bull, which of the next is important to your purchase?

For 58 % of the individuals, find the physical raise is important. 36. 4 % of the content are driven to buy Red Bull since it is sponsored by sportsmen plus some related it to Formulation-1. The flavour of the drink is very important standard. 45% and 42% consumers choose the drink due to its smell and energizing properties. Only 9. 1% choose the drink as a result of design.

Where do you buy Red Bull?

80% present of the respondents buy it from supermarkets whereas 20% buy it from fending machines at petrol stations.

What is the first term that springs in your thoughts when you notice what 'Red Bull'?

60% said superman, 30% wrote formula1, and 10% said flying in the air

Which tag series, if any, do you really most associate with Red Bull?

70% chose " Brain and body energy", whereas 30%cline" Offers you wings"

Which sports do you most associate with Red Bull?

55% Formula1 and 25 %25 % said motorbikes, 10%responded Golf and 10% decided to go with Athletic

90% defined Red Bull as the best energy drink on the market and 10% locates it well suited for their lifestyle (Strategy R. B. )

Result

People don't buy Energy beverages because they really need it but because this need is created by the manufacturer. The huge, interesting and ground breaking advertising and publicity campaigns have motivated customers to choose the product. Being an energy drink the mark consumers of Red Bull are the people who really need quick energy and amount such as sportsmen and students. This is actually the only reason the business sponsors numerous sports activities events. It's the famous slogan that makes consumers thinks that Red Bull offers more energy than common. The result is that the Red Bull has quickly received success by young people. Red Bull will keep on marketing by this young generation.

Conclusion

When Red Bull was initially released, it was easily imitated because the ingredients were printed on the can and the merchandise was not branded. Although the tastes of Red Bull did not do well in taste lab tests, it succeeded because of the marketing strategy.

It can be said that Red Bull was not only the first energy drink to be in competition with soft drinks but also created the new energy drink type in nearly all marketplaces. After Red Bull hit the market in the overdue 90s till today's, many other companies entered the power drink market but unable to contend with it.

Red Bulls has around 100 major rivals and the key competitors are Monster, Rock Celebrity and Full Throttle.

Many replacement products have been introduced and categorized as energy drinks such as GlaciersT creating a power drink called Water Glaciers, Nelly's Pimp Juice and Lil' John's, Crunk Drink.

Although these opponents are present on the market no other energy drink could maintain Red Bull's 70 90% of the market share it has in over 100 countries all over the world.

Problems

Red Bull is not really a patented drink product, therefore anyone can choose a can, browse the materials on the label and start their own business. That's the reason the market is flooded by competition. Furthermore, Red Bull as well as all the energy beverages and supplements, have received negative reports from a medical viewpoint. Elevated amounts of sugar and caffeine can lead to adverse effects on heart and soul and blood pressure. (Heckman, 2010)

Opportunities

Red Bull is one of the famous energy beverages in the global market. They attained this position by smart, consistent online marketing strategy. Red Bull has the chance to maintain their position and create a continuing pace to target their niche concentrate on consumers by significantly using untraditional and traditional marketing strategies.

Red Bull has a competitive edge over its competitors

Red Bull has a continual international online marketing strategy by sponsoring a variety of great sports to market a "cool" public image and boost brand vitality.

The product has remained the very best energy drink throughout its progress due its effective marketing strategy.

The product talks for itself and its consumers do not survey any complaints despite of negative publicity

Red Bull is rolling out a sweets free option.

Red bull has this competitive edge not only because other drinks that follow it aren't as appealing in presentation, marketing, but also because Red Bull knows their marketing troubles and they're continually changing and expanding their marketing school of thought to overcome and avoid possible rivals. (Heckman, 2010)

Red Bull Consumer Questionnaire

This questionnaire is all about Red Bull's consumers and focuses on males and females between 18 and 34 years of age and located in the Abu Dhabi.

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