Three-Year Marketing Plan For Redbull. Introduction Into The UK Market
Contents
TOC o “1-3” h z u HYPERLINK l “_Toc376415992” EXECUTIVE SUMMARY PAGEREF _Toc376415992 h 1
HYPERLINK l “_Toc376415993” THE CHALLENGES PAGEREF _Toc376415993 h 2
HYPERLINK l “_Toc376415994” SITUATION ANALYSIS PAGEREF _Toc376415994 h 3
HYPERLINK l “_Toc376415995” COMPANY ANALYSIS PAGEREF _Toc376415995 h 3
HYPERLINK l “_Toc376415996” 3.2 Customer Analysis PAGEREF _Toc376415996 h 6
HYPERLINK l “_Toc376415997” Competitor Analysis PAGEREF _Toc376415997 h 7
HYPERLINK l “_Toc376415998” MARKETING MIX PAGEREF _Toc376415998 h 9
HYPERLINK l “_Toc376415999” Distribution Strategy PAGEREF _Toc376415999 h 10
HYPERLINK l “_Toc376416000” PROMOTIONAL STRATEGY PAGEREF _Toc376416000 h 10
EXECUTIVE SUMMARYThe three-year marketing plan for Redbull has been developed by its management to enhance market penetration and growth within the United Kingdom (UK) market (RedBull, 2012). Although launched in 1987, Redbull has been unable to penetrate the UK market with the exception of Scotland due to the inclusion of Taurine within the ingredients, which is not permitted within the European Union list of allowable food ingredients (Persad et al. 2008). However, despite the limitation, the company has experienced immense demand within the market through its successful incorporation within the Scottish market. Moreover, the target market, which comprises of the sports-minded consumers, is highly growing and constantly in search for more energy drinks to enhance the energy levels (Mets et al. 2010). Furthermore, the product seeks to target the working market through identification of the product as a high-level energy drink thus expanding its target population to only meet the needs of the sports market, but also those of the working population, which caters for a large share of the entire market (RedBull 2012). The company also seeks to expand its distribution line through incorporation of the product within the main retail outlets both in the cities and at the country to enhance market penetration through increased consumer accessibility (RedBull 2012). In addition, Redbull seeks to explore more market options through incorporation of online selling, thus enhancing attraction of a larger business market (Mets et al. 2010). The company also seeks to incorporate more packaging options through provision of larger and less quantities than the standard quantity set at 250 ml (8.3 Oz). The marketing environment around the globe has been highly receptive of the company’s products through provision of high-energy drinks and catchy slogan that seeks to attract the interest of the customers globally (Mets et al. 2010). Over the next three years, Redbull seeks to increase its market penetration and growth within the UK market, through enhancement of its distribution capacity, development of high quality products and provision of the product in a variety of quantities and at affordable prices. Through penetration into the UK market, the company seeks to establish its product and brand as the leading energy drink within the market through attraction of more customers and development of a strong customer base and consequent market share.
THE CHALLENGESVarious challenges are existent within the UK market including:
The European Union’s allowable food ingredients list, limits Taurine as a healthy ingredient within food. This limits introduction of Redbull into the UK market as it incorporates the allowable foods ingredients list within its bureau of standards checks for food viability (Nawrot et al. 2003).
The existence of highly established and strong competitors within the UK sports and energy drink market. The UK market leader for energy drinks is Lucozade, which has developed a strong market and customer base within the UK market since its establishment in 1927 (Mets et al. 2010).
Development of a strong and divided segments within the market through identification of the refreshment energy drink segment and the sports drinks segments both dominated by lucozade (Mets et al. 2010).
Lack of a functional energy and stimulation drink segment within the UK sports and energy drink market (Terlizzi et al. 2008).
Identification of different market entry strategies for the UK market, such as use of billboards for advertising and use of word of mouth (Mets et al. 2010).
SITUATION ANALYSISCOMPANY ANALYSISEstablished in 1987 by Dietrich Mateschitz, Redbull identifies an energy drink sold by the Austrian company; Red Bull GmbH. The drink developed as an inspiration from a pre-existent Thai energy drink called Krating Daeng, which was modified through alteration of its ingredients to suit the Western market (Mets, Kertzer, Blom, Gerven 2010). Through development of a partnership with Chaleo Yoovidhya, the RedBull GmbH was developed in Austria. Redbull is sold in a slim blue-silver can around the world but in Thai, it is sold in a wider gold can retaining the original shape and ingredients thus labeled redbull classic (Redbull 2012).
The RedBull drink incorporates a variety of ingredients that include caffeine, taurine, glucuronolactone, B-group vitamins, sucrose and glucose. RedBull also incorporates a product line that is sugar-free, which substitute’s sucrose and glucose with acesulfame K and aspartame/ sucralose (Desciscio, Prabhu, Worthley, Thompson, Sanders & Willoughby 2008).
RedBull incorporates immense advertising through incorporation of its slogan ‘it gives you wings’. The company’s marketing campaign targets young individuals within the extreme sports market that includes motocross, windsurfing, snowboarding to formula one. Through incorporation of music, videogames and celebrities within its marketing campaigns, the company seeks to attract a larger market through promotion of a ‘cool’ public image, which seeks to raise the brand power (Terlizzi, Rocchi, Serra, Solien, Cortelli 2008).
RedBull products are currently sold in all major retail stores around the globe, with majority of the stores concentrated in the European, American and Asian markets. Provision of high quality energy drinks within various packaging models enhances penetration of the product within the market as it enhances affordability based on the packaging (Nawrot, Jordan, Eastwood, Rotstein, Hugenholtz, Feeley 2003). Furthermore, incorporation of a wide variety of the products such as sugar-free redbull seeks to attract a larger market in need of sugar free energy drinks. The association with a trendy feel has enhanced popularity of the product among individuals between 18 and 45 thus enhancing the market scope of the product in reference to the customers (Persad, McQueen, Cydney, Shields, Clauson 2008).
In 2012, the company sold 5.2 billion cans globally, identifying a 12.8% increase in comparison to 2011. This has led to an increased company turnover to EUR 4.253 billion. The company has 8, 966 employees in 165 countries thus providing a large and qualified workforce, which enhances provision of the best quality product together with identification of the most viable markets (RedBull 2012).
RedBull is committed to giving back to the community through providing contributions to environmental sustainability through incorporation of technology that seeks to lessen the environmental impact realized from production of the cans through enhancing minimization of the carbon footprint. Furthermore, the company has developed the RedBull corporate social responsibility program that seeks to enhance further development of the volunteer spirit within the society. Through incorporation of these activities, the company seeks to develop its individual environmental program that will enhance introduction of new processes and product lines, which will enhance distribution, entry into new markets and give back to the community.
Mission
RedBull seeks to be the premier energy drink beverage in Asia, Europe, and United States and within the entire globe. The company seeks to achieve this mission through development of long-term relationships with the individuals and societies that will enhance its success. RedBull inspires to provide the world with a quality beverage that meets and satisfies their needs (Mets, Kertzer, Blom, Gerven 2010).
RedBull seeks to enhance its penetration within the UK market through provision of the best stimulant beverage that seeks to meet the market needs pertaining to the consumers. RedBull seeks to achieve this through provision products tailored for the market through adherence to the market stipulations (Mets, Kertzer, Blom, Gerven 2010).
During the next three years, RedBull seeks to achieve the following financial and non-financial goals relating to the UK market:
Expand the company’s manufacturing capacity within the UK market through expansion of the current manufacturing capabilities that will enhance production of enough products to meet the existent and future market demand.
Enhancement of the organization’s distribution capacity through incorporation of new distribution lines within the country. Furthermore, the company seeks to incorporate the product within all major retail stores to enhance product accessibility within the market.
Introduction of a wider product range to enhance development of a larger customer based within the market based on the consumer needs.
Increase the organizational revenues by up to 70 percent within every financial year.
Incorporate immense investments into development of initiatives aimed at enhancing environmental sustainability through provision of cans with low carbon footprint
Development of a user friendly website, which will enhance organizational online sales within the UK market
3.2 Customer AnalysisThe target market for RedBull products involves active consumers between the ages of 18 and 48. The product seeks to target individuals who are physically active and involved in various sporting activities such as hiking, climbing, Formula 1 racing, motor cross, snowboarding, skiing, surfing, figure and in-line skating together with other extreme sports. In short, the consumer projections target individuals involved in extreme sports and various outdoor sporting activities (Persad, McQueen, Cydney, Shields, Clauson 2008).
The active consumers within the market identify a demographic group consisting of young energetic individuals together with blue-collar individuals whose work incorporates immense energy hence require an additional energy drink. Furthermore, the consumers incorporate individuals involved in physically active activities within industries and sports to enhance provision of extra energy. Household incomes range from $ 20.000 to $ 120.000 on an annual basis. The consumers are price conscious and seek value in their purchases. Regardless of age, the consumers are involved in highly active physical lifestyles, which forms part of a status orientation particularly within extreme sports as use of the product identifies individuals as ‘cool’. Additionally, the consumers favor association with high-quality products and are able to pay a fair price to enhance access to the product. Currently, RedBull’s largest market within the UK is in Scotland, as it has permitted sale of the product overtime, despite its ban in the larger UK due to the unpermitted food ingredients .
The trend among consumers within the market identifies a growing need for energy drinks with low-calories, low-sugar and low-cost variance within the market. This is influenced by adoption of healthy lifestyles by majority of the population. This creates a niche for RedBull as it has developed low-sugar products, which are relevant within the UK market. Therefore, through exploration of the current opportunity, RedBull will effectively penetrate the market and hence enhance its market share within the market (Mets, Kertzer, Blom, Gerven 2010).
Competitor AnalysisThe global soft drinks market is estimated to be worth more than $ 300 billion. The soft drinks market incorporates various categories including (1) carbonated soft drinks, which constitute 40% of the market, (2) bottled water constituting 35% of the market. (3) Fruit and vegetable juice constituting 12% of the market; (4) tea constituting 4.5% of the market, (5) ready-to-drink coffee constituting 0.9% of the market, (6) Asian specialty drinks constituting 2.7% of the market, (7) concentrates constituting 0.8 % of the market and (8) functional drinks constituting 3% of the market. Functional drinks incorporate three main categories: sports drinks, energy drinks and elixirs, which identify beverages with curative properties(Mets, Kertzer, Blom, Gerven 2010) .
The UK energy drink market is dominated by the Lucozade energy drink, which accounts for 55% of the market share. Various energy drinks are available within the market including 180 by Anheuser-Busch, KMX by Coca-Cola, Mountain Dew Amp and SoBe Adrenaline Rush by Pepsi. More entrants that are new are identified within the market including Snapple Venom and Monster. The energy drink market landscape has undergone significant changes with the market estimated at $ 5 billion annually (Persad, McQueen, Cydney, Shields, Clauson 2008) .
Coca-Cola and GlaxoSmithKline through the Lucozade brand are the main competitors to ReBull’s entry to the UK market. The two have a collective control of 38% of the energy drinks off-trade value in 2012 and 80% of the sports drink off-trade value. The two companies control 59% of the overall market, with increased companies entering the market and chipping off at their off-trade values. The Sports category within the UK market remains led by GlaxoSmithKline Plc through Lucozade and RedBull co. ltd, with a combined market share of 64% as of 2012. This seeks to identify the immense potential RedBull has to dominate the entire UK market through incorporation of market penetration strategies into the largest UK market as opposed to only Scotland (Persad, McQueen, Cydney, Shields, Clauson 2008).
The trend among competitors within the market identifies incorporation of low-calories, low-sugar and low-cost variant products within the market. This is influenced by the impact of low-cost alternatives within the sports and energy drinks category in 2012, which prompted a decline in the sports drinks category.
The industry has a variety of competitors and hence RedBull has to incorporate the new customer changes within the market to enhance effective penetration through growth of a larger market share.
MARKETING MIXThe following outlines details of the proposed marketing mix for RedBull products within the UK market.
Product Strategy
RedBull currently offers a diverse range of high-quality sports and energy drinks conducive for the UK market. The products is packaged in 250 ml cans bearing the company logo and slogan ‘vitalizes body and mind’. The firm through extensive research has identified the most popular colors for the can, which the consumers prefer and enjoy while enhancing sustainability endeavors. The cans are in silver, lime green/silver and blue/silver. Over the next three years, RedBull seeks to expand the product line to include more low-calorie and low-sugar elements together with incorporation of various preferred tastes by the consumers. Moreover, the company seeks to incorporate different logos for each new product line to enhance relevance to the market through production of a youthful feel (Mets, Kertzer, Blom, Gerven 2010).
RedBull seeks to expand its product line through provision of various product capacities ranging from 100 ml to 500 ml. This will help attract a larger market as the different packaging sizes will provide a variety of affordable quantities within the market thus enhancing market penetration and market share.
Distribution StrategyCurrently, RedBull is marketed through regional and local retail outlets within most of Scotland. So far, RedBull has not distributed its products through national sporting stores and chains. Introduction of the distribution process within these stores will enhance the product’s access to a variety of physically active consumers visiting the sporting stores (Mets, Kertzer, Blom, Gerven 2010).
Over the next three years, RedBull seeks to expand its distribution through focusing on enhanced distribution within retail stores, sporting shops and restaurants all over the UK. Furthermore, the company seeks to sell its products within a large national retail chains such as TESCO Plc, McBride Plc and ASDA. Provision of the products within these stores will enhance national access of the products thus enhancing penetration within the UK market. Furthermore, these stores have retail outlets around the nation thus will enhance product access to all individuals both within the cities and in the country.
In addition, RedBull seeks to expand its online sales by offering the customized product line via Internet only, thus distinguishing between Internet offerings and specialty ship offerings. Eventually, the Company may be able to place internet stores at some of the more profitable store outlets so consumers could order customized products from the stores. Regardless of its expansion plans, RedBull fully intends to monitor and maintain strong relationships with distribution channel members.
PROMOTIONAL STRATEGY
RedBull communicates with consumers and retailers about its products in a variety of ways. Information about RedBull, the company as well as its products are available via the Internet, direct mailings, and in person. The firms’ promotional efforts also seek to differentiate its products from those of its competitors.
The company relies on personal contact with retailers to establish the products in their stores. This contact, whether in person or by phone, helps convey the Red Bull message, demonstrate the products’ unique qualities, and build relationships. Red Bull’s sales representatives visit each store two or three times a year and offer in-store training on the features of the products for new retailers or for those who want a refresher. As distribution expands, Red Bull will adjust o meet greater demand by increasing sales staff to make sure it stores are visited more frequently.
Sales promotions and public relations currently make up the bulk of RedBull’s promotional strategy. RedBull staff works with retailers to offer short-term sales promotions tied to event and contests. Because RedBull also engages in cause marketing through its contribution to environmental programs, good public relations have followed.
Non-traditional marketing methods that require little cash and a lot of creativity also lend themselves perfectly to RedBull. In the next three years, the company plans to engage in the following marketing efforts:
Create a RedBull, in which the marketing department travels around the country to campgrounds to distribute promotional items such as RedBull stickers and discount coupons
Attend canoe and kayak races, bicycling events, and rock climbing competitions with RedBull tracks to distribute drinks, RedBull merchandise and coupons
Organize RedBull hikes departing from participating retailers.
Hold a RedBull design contest, selecting a winning slogan and logo to be added to the customized line.
