1. Marketing
Project On
Guided By:
Manoj Das Submitted By: Group 1
Ruchi Mishra 18A1HP013 Srihari P V 18A1HP077
Sai Mouli 18A2HP444 Saideep Y 18A2HP456
Vinay Thapliyal 18A2HP452 Md Asghar 18A3HP622
Anurup Chakraborty 18A3HP630
3. 2
Executive Summary
The report analyses the marketing strategy of Red Bull in the backdrop of creating value, communicating value
and delivering value.
Red Bull an Austrian company which was founded in 1987 has took advantage of the first mover and is now the
world leader in energy drink business in the world. It is all because of the aggressive marketing strategy adopted
by the firm. It spends around 30-40% of profit on creating content that imbibes in audience mind.
The report starts with answering the question of their product strategy, product mix and packaging concept.
Red Bull slender blue and red colour can in line with their strong logo has really created a distinct image for
themselves.
Their pricing strategy is dependent on that as it charges a premium because of their recognition and loyal
customer base.
Red Bull promotion mix is also very huge as they spend a lot of amount on promoting their brand through direct
or indirect channels. Most notable is their event organising strategy. They sponsor a lot of extreme sports to get
the youth hooked. They even own two formula 1 teams.
In the end, distribution of Red Bull is described. They use a pull strategy and let distributors come to them. They
want to create a want for associating with Red Bull brand. And, it is working fine till now without any threat of
competitors in current situation.
Red Bull has been able to create a niche name for them in the business world.
The report ends with references to the various sources from where research was done.
4. 3
Questions
Q1. Critically evaluate the product strategy adopted by the
firm. Carry out detailed analysis about the product mix,
product line length and develop a product map. Evaluate the
packaging and suggest modifications if any.
-----Product Strategy------
Red Bull is a non-durable tangible good. The original product known as Krating Daeng
[literal English translation “Red Gaur”] was invented by Chaleo Yoovidhya in Thailand,
in 1975. At that time there were many energy drinks prevalent in Thailand. But, they all
were imported, mostly from Japan. Chaleo saw this opportunity. He started manufacturing
the Krating Daeng in Thailand only.
Another thing he observed, that all the energy drinks were catering to riches or upper class of
the country. They were not available to labourers or working class. He has seen it, as he
himself was from a village. He marketed his product to those people as refreshment. It
became immensely popular among truck drivers who needed to stay awake on long drives.
Afterwards, the company started sponsoring Muai Thai tournaments which were common in
Thailand. This really made Krating Daeng popular. Since, energy drinks were mostly used
by upper class people, the improving working class liked to associate themselves with that
kind of product.
Combining these things and a growing Thai Economy made Krating Daeng a success all
over the country. By 1978 it has become the number one selling energy drink in Thailand.
In 1984, Dietrich Mateschitz who was travelling to Thailand for a business used Krating Daeng
and was amazed by its effect. It cured his jet lag. He saw an opportunity for this kind of product
in Europe. There weren’t any good energy drink available in that market. There were
carbonated soft drinks prevalent in the market, but not any kind of energy drink.
He then partnered with Chaleo and together they founded the company “Red Bull”
headquartered in Austria, in 1987. It was marketed as a youth oriented drink. It got
success because of aggressive marketing and backing it up with delivering efficient and
beneficial product.
-------Product Mix--------
If we talk about the product mix, Red Bull has kept its product mix quite simple. Apart from
the standard Red Bull flavour, it has introduced only few variants in different flavour. But,
they have introduced special editions variants form time to time. They also have only few
other products like Red Bull Mixers, Red Bull Cola and Red Bull Shot. So, we can see that
it doesn’t have much product in there line. But, there original product has been so successful
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and appealing that requirement for new product has not arisen yet. They are the market
leaders in Energy drink sector in the world having almost 45% share of the total market. In
India, they had a market share of almost 75% by volume and 90% by value in
2017[Nielsen Data].
Product Mix
Product Line Length Product Depth
Product Map
Product Monster Rockstar Red Bull NOS Energy 5-Hr Energy
Caffine
(mg/100mg)
40 30 100 80 500
Price
92 229 83 224 215
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-------Packaging------
The packaging of Red Bull is very distinctive and the can of Red Bull can be
recognized worldwide. The slender red and blue can is catchy and looks impressive.
Part of Red Bull's success can be credited to the company's small 25cl can which gives it,
a distinctive look as compared to soft drinks which used to come in 33cl can. Now they
have also started to follow Red Bull for can size. Few reasons can be accredited to the
small-can design:
1. It made the new beverage emerge on grocery store racks, dance club and bars in
a seriously aggressive commercial marketplace.
2. Offering 25cl of Red Bull rather than the standard soda 33cl measure enabled the
company to pick up a decent value point on an already premium-priced product.
Apart from Red Bull Can the important thing which can be attributed for the appealing
Red Bull packaging is its logo. Two red bulls are charging together and a yellow sun is the
exemplification of active virility and contentiousness. Bull is an image of intensity and
yellow sun implies balance and strength.
Q 2. Critically evaluate the pricing strategy adopted by the firm.
“It’s not just flavoured sugar water differentiated by colour or taste. It’s an efficient
product. I’m talking about improving endurance, concentration, reaction time, speed,
vigilance, and emotional status. Buy our drinks, or don’t. It’s totally cool. We’ll
even give them to you for free when you’re tired and thirsty.”
- Dietrich Mateschitz [C.E.O. & Co-Founder,
Red Bull]
As it can be rightly inferred from the words of its co-founder, Red Bull has surpassed its
stage of product cycle that they have stopped caring about popularity or market share or
profit from it. It has certainly become a well-known brand worldwide. They are the market
leader and were the first product of its kind in so many countries. So evidently they use this
brand equity and charge a premium for their products as compared to its competitors.
Pricing Objectives set by the company is related to Product-Quality leadership, where it
want to become quality leader in the energy drink category, combining luxury, quality and
premium prices with an intensely loyal customer base.
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Consumer Market where Price Elasticity of Demand is high (ex: - USA), Red bull Charge
much higher premium price in comparison with the market where price Elasticity of
Demand is less (ex:-India).
Price Sensitivity of red bull is also very low because of the reason that in different market
only few or no substitutes are available and consumer think high prices are justified.
Red Bull base their price on the customer’s perceived value. It has acquired a loyal
customer base who knows that the product is efficient and works. So they are ready to pay
more. Also, it is the market leader and people want to associate with it so they don’t mind
paying a premium.
Red Bull also change the price of the product based on geographical location. In
developed countries where per capita income is high (like Australia,Japan) it charges more
but in developing countries like (Argentina, South Africa) it charges a little less.
The price also changes depending upon the quantity. If you buy in bulk you have to pay less
as compared to buying a single can. This strategy was adopted as there is no bigger size of
red bull available and some hardcore gamers and coders consume a lot of Red Bull. Company
saw it as an opportunity and they created a multi pack variant.
Indian market price of Red Bull with its competitors in energy drink segment
Quantity(ml) Price(in Rs)
500
350
250
99 95
50
R E D B U L L G A T O R A D E M O N S T E R
U N F L A V O U R E D
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USA market price of Red Bull drinks in comparison with its competitors
Quantity(ml) Price(in Rs)
330 330
250
203.09
62.74 65.7
R E D B U L L C O C A C O L A P E P S I C O L A
Company Sold 630 crore units of cans worldwide in 2017 showing increase of
4% from 2016.
Company 2017 worldwide revenue was about 54,621 crore rupees.
Average price of one Red Bull Can = 54621 = 86.7 Indian Rupee
630
This implies globally Red bull is sold at the price of around Rs 86.7 and considering above
mentioned factors, price of a 250ml Red bull can get modified from one country to
another. Generally speaking Red Bull is the most costly energy drink when contrasted with
contenders like Rockstar, Cloud 9, Gatorade, and Monster. However, shoppers don't mind
paying a premium as a result of the reliability the brand has.
Q 3. Evaluate the promotion-mix followed by the firm and
suggest suitable modifications.
Red Bull uses a balanced mix of ATL (Above the Line), BTL (Below the Line), and Digital
Channels for the promotion of their products. The tagline "Red Bull Gives You Wings" has
been profoundly imbedded by Red Bull in our psyches through different promoting
techniques. While they're dynamic on a wide range of channels and utilized extensive
measure of various strategies, everything spins around one idea: creating content and
experiences people would be interested in even if they couldn’t care less about brands. By
doing so, they've turned out to be among the most discussed brands on the planet.
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Various Promotional Methods Used by Red Bull are as follows:
PERSONAL SELLING:
•Redbull identifies those events where their target customers are more in number.
•It then unleashes its “wing team members” to market the products and create awareness.
•Here the target customers are the energetic youngsters and thus they target events such as
in educational institutes and parties related to youngsters.
•They provide free samples promoting the product and thus creating new customers
and retain existing customers.
•They have partnered with brands like mini cooper for an attractive redbull car
customized accordingly.
ADVERTISING:
•Redbull’s target customers are those young people who can be reached through media
such as TV.
•The TV advertisements provided by redbull are eye-catching and appealing to young
minds with the most famous slogan- “Redbull gives you wings”.
•This slogan has attracted many customers as it meant escape using the wings.
•Redbull also attracted the customers through billboard advertisements.
•They were charming and creative to attract enough customers travelling by.
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SALES PROMOTION:
•Redbull sold its energy drink to all the major supermarkets and hypermarkets with
refrigerators specially designed for redbull drinks which promoted the drink
through attractive stickers and also reduced the cost for vendors.
•Redbull also promoted its product sales by reducing the price of redbull 4- can pack by Rs.
80. Thus offering it at Rs.320 which actually costs Rs. 400.
•Sales discounts in few regions were also done to reduce the uncertainty of new products
in the market.
PUBLIC RELATION:
•Redbull always tried to be creative to grab the attention of people and create public
talk about the products.
•They have personally sold their products communicating with public and creating
brand awareness through free trials.
•Redbull tries to solve any issues with the product quality as quickly as possible as it
might affect the brand image of the company.
EVENTS
•Redbull sponsors several events. Some of these events include music festivals, mountain
biking, surfing, motocross, skating, Formula 1, Red Bull Cape Fear, Red Bull Dance Battle
Grounds, etc.
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•They have also sponsored athletes so if at all that sportsman wins the game, it will
promote the brand and create a good brand image.
•Apart from sports it also has a Red Bull House of Art where new artists are
encouraged to showcase their art at their exhibitions.
•They also organize some extreme stunts that would make people awe in fear and
excitement and everyone freezes and watches what happens. For instance they have made
the world record for highest jump on earth from sky.
DIRECT MARKETING:
•Redbull markets its product to other businesses as well through which only redbull
energy drink will be promoted in other businesses.
•Redbull also has sent many emails to target customers with alluring taglines which was
intended to motivate them to have an energy drink during their stressful office hours.
FEW OF OUR SUGGESTIONS:
As social media is the current trend which youth follows, they could provide discounted entry
passes to those sporting events by just liking and sharing the Facebook page of redbull. This is
cost effective manner to reach millions of people in quick way.
Redbull can tie up with firms such as Harley Davidson and promote the drink through bikers who travel throughout
the country.
Q 4. Evaluate the distribution strategy adopted by the firm
and suggest modifications if any.
Red Bull follows distribution strategy of GTM (Go to Market) plan. They segregate a country
into small, autonomous cells. Then they slowly enter main markets in those pockets. They sign
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non- exclusive deals with big distributors. They also help small distributors that can solely
focus on their brand. Another important distribution strategy followed by Red Bull is that they
do conceptual distribution instead of weighted distribution. The idea behind is that company
sees distribution as part of branding and not just opening more number of stores.
Red Bull Consumer Marketing Channel
Red Bull has also given their own personalized, for Red Bull can, refrigerator to the stores.
It makes their product stand out and helps in building brand equity.
Red Bull uses the pull strategy a lot not only at consumer level but also at distributor level.
For merchandising the company tries to keep things out of consumers reach. The logic
behind that is, consumers should try hard to get hold of any Red Bull merchandise. So, when
they finally get hold of it they will regard it as a prized possession.
Red Bull wants every contact it has whether with distributor, event planner, or store owner
to be a fan of Red Bull. As a matter of fact, they have rejected many potential large
distributors on ground that they find them arrogant and were not respective enough. Red
Bull treats each of their contact point with utmost respect and regard and wants to channelize
the active and exuberant culture of the company. It has referent power over all its channel
members.
Red Bull is also using e-commerce for selling to individuals as well as businesses as it has
become norm in today’s world. Red Bull doesn’t want to be left behind. It already has a
youth-oriented culture so catching up to digital revolution was not a big task for it. It is
sold online either in multi packs or single making it easier for consumers to buy.
Red Bull has presence in over 171 countries. It has successfully managed to sell over 61
billion cans worldwide by 2018. This was possible because of efficient marketing
channels which made availability of Red Bull in markets, dance-clubs, grocery stores and
so forth simple. This is what has added to the triumph of Red Bull as a brand.
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REFRENCES
The internet is used majorly to get the information about the product. Apart from internet
marketing book by Kotler and Keller has been used for understanding marketing concepts.
Few of the references from internet are following:
1. https://medium.com/@edcbitmesra/red-bull-and-their-marketing-strategy-
6015ac99da3b
2. https://www.linkedin.com/pulse/red-bull-marketing-startegy-swapnil-jadhav
3. https://media.coschedule.com/uploads/Blog-Breonna-RedBull-infographic-1.png
4. https://coschedule.com/blog/red-bull-marketing-strategy/
5. http://www.forbesindia.com/article/special/theres-no-grounding-red-bull/50647/1
6. https://www.slideshare.net/abhizar/energy-drinks-market-india
7. https://www.slideshare.net/Ondrejurjk/innovation-for-red-bull-product-
portfolio?next_slideshow=1
8. http://www.phdessay.com/
9. https://www.redbull.com/in-en/
10. https://www.statista.com/chart/1585/top-10-brands-on-youtube/
11. https://www.slideshare.net/Ondrejurjk/innovation-for-red-bull-product-
portfolio?next_slideshow=1
12. https://www.businessinsider.com/how-dietrich-mateschitz-ignored-the-haters-and-
created-the-top-energy-drink-on-the-planet-2012-2?IR=T#now-read-about-two-
more-beverage-titans-14
13. https://www.referralcandy.com/blog/red-bull/
14. http://heartofcodes.com/marketing-mix-of-red-bull/
