Section 1: Introduction
1.1 Company Introduction
In 1982, Dietrich Mateschitz became aware of products called “tonic drinks”, which enjoyed wide popularity in Asia. In 1984 he founded the company Red Bull GmbH.
More than a billion cans of Red Bull are consumed each year. Red Bull was made for moments of increased physical and mental stress and improves endurance, alertness,concentration and reaction speed. It is very high in sugar (27 grams), and also contains glucuronolactone, B-complex vitamins and caffeine (one can of Red Bull contains 80mg of caffeine, as much as a cup of coffee).
However, its primary ingredient is taurine, an amino acid that is found naturally in the body, particularly in muscle tissue. According the company, this ingredient is essential to thebeverage as it is a key substance that the body uses at times of stress or physical exertion, and this must be replenished.
A sugar-free version has been available since the beginning of 2003. It is popular as a mixer, notably with vodka.
Dietrich Mateschitz fine-tuned the product, developed a unique marketing concept and started selling Red Bull Energy Drink on the Austrian market in 1987. Red Bullgot off the ground in no time. In 1992, it was sold in its first foreign market, Hungary. Red Bull is exclusively produced in Austria and exported worldwide. The drink is available in over 100 countries and almost 1,000 million of the slim 250ml cans were sold in 2000, 260 million of them in the UK.
Supported by sleek advertising and, with its high priced small blue and silver can, Red Bull wastargeted at young urban professionals. The advertising slogan of Red Bull in the United States and the United Kingdom is ‘Red Bull gives you wings’ and focuses on the stimulant properties of the drink.
1.2 Report Summary
The objectives of this report for Red Bull are:
1. To show how Red Bull develops its marketing strategy and identify the principles and processes involved.
2. To describe thetools and techniques used to produce a strategic marketing plan and show clearly how these have been applied.
3. To investigate whether Red Bull used option generation and evaluation in developing the strategic marketing plan.
4. To develop and produce a written strategic marketing plan for Red Bull.
Section 2: Red Bull’s Marketing Strategy
The UK total cold drinks market is large andcompetitive, with many powerful and famous brands with large marketing budgets competing for share. As a result, the market can be an ever-evolving test for brands that wish to continue to grow in a category that is currently worth £3.55 billion.
Within the cold drinks market, increases in the soft drinks category have been slowing. However, growth has been driven considerably by the Energy drink sector,which was worth an estimated £940 million in 2006 and has grown +26% since 2003. (Source: Mintel Energy & Stimulant drinks Market Report August 2006). The Energy drink category continues to grow at pace with brand extensions and new entrants to the market emerging every year. This represents both a challenge and an opportunity for the category’s leading brands.
(Source: Nielsen value sharedata, MAT to December 27th 2006).
Since its launch, Lucozade has been the market leader in the Energy drink category with just under 60% value share of the category. Key competitors include Red Bull and PowerAde with 27% and 4.5% value share respectively. 2003 also witnessed the introduction of several Private Label sport and energy drink launches from the major grocers. The rest of the market ismade up with a plethora of smaller brands, predominantly operating in the stimulant drinks sector, and distributed via the Impulse channel and the on-trade environment.
| Red Bull | Solstis | Lucozade Original Energy | Purdey's | Red Devil | Feelfine | Tesco Kick |
Average price | £0.96 | £0.90 | £0.75 | £0.70 | £0.90 | £1.09 | £0.48p |
Pack size | 250ml | 250ml | 380ml | 330ml | 250ml |...