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Minor Project Report On Marketing Mix of Red Bull
Minor Project Report On Marketing Mix of Red Bull
ON
MARKETING MIX
RED BULL
I hereby declare that the project work entitled Minor Project Report on
Marketing Mix of RED BULL submitted to the Guru Gobind Singh Indraprastha
University is record in an original work done by me under the guidance of MRS. -,
faculty member, Sri Guru Tegh Bahadur Institute of Management & Information
Technology.
...........................................
Place: Delhi -
…..….……………………………….....
….…...…………………………………
Signature of Guide
MRS. -
……........………………………………
I am also greatly thankful to the faculty members of our institute who co-operated
with me and gave me their valuable time. ACKNOWLEDGEMENT
……........………………………………
Inspired by functional drinks from the Far East, Dietrich Mateschitz founded
Red Bull in the mid 1980's. He created the formula of Red Bull Energy Drink
and developed the unique marketing concept of Red Bull. In 1987, on April 1,
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 totally new product category. Today Red Bull is available in 171
countries and over 62 billion cans of Red Bull have been consumed so far.
Red Bull is much more than a soft drink--it is an energy drink. It was made for
moments of increased physical and mental stress and improves endurance,
alertness, concentration, and reaction speed. In short: it vitalizes body and mind.
The effectiveness of Red Bull Energy Drink has been proven by a large number
of scientific studies and is appreciated by many of the world's top athletes and
drivers, opinion-leaders and hard-working people with active lifestyles. While
Red Bull had appealed to athletes and, in the United States, tired white-collar
workers, the real story of Red Bull's growth lay in the promise of further
endurance at clubbing, giving it a special appeal for young people exhausted
from working hard all week. The Los Angeles Times reported that the beverage
appeared to glow green under the fluorescent light of nightclubs. The drink
became a very popular mixer, especially with vodka. The company promoted
the lift the beverage offered with the slogan "Red Bull gives you wings."
Traditional advertising was limited, as the company focused heavily on getting
product samples into the right hands. The company sometimes put up edgy,
graffiti-style billboards. In the late 1990s, Red Bull produced animated TV ads
for mature markets.
5
TABLE OF CONTENT
CONTENT PAGE
NO.
1.1. BEVERAGES INDUSTRY 1
CHAPTER 1 1.2. FACTORS DRIVING DEVELOPMENTS IN 2
INDIAN BEVERAGES SECTOR
Bibliography 59
7
CHAPTER-1
INDUSTRY PROFILE
8
1.2 FACTORS DRIVING DEVELOPMENT IN INDIAN
BEVERAGES SECTOR
India is a growing and developing country which is having a very high
economic growth with the drastic increase into the population size. Due to
the developing economic condition, there is increase in the competition
among the manufacturers, retailers, dealers to promote their products at
competitive prices.
The increase in the India population has given a high demand of beverage
market products. The Indian beverage market is segmented into the two
major segments –Alcoholic and Non-Alcoholic Beverages.
In India, here are various forms of beverage market get to be seem in the
form of retailers, Restaurants, Coffee shops, Sport events, Hotels etc.
There are certain factors which are driving developments into the Indian
Beverage sector:
• Economic growth
9
• Population growth
• Power of retailers
• Globalization / Regionalization
• Technological Developments
11
• The India Alcoholic Drinks Market Is Expected to Reach The 3 Billion
Litres Mark By 2023.
12
CHAPTER – 2
REDBULL COMPANY PROFILE
In 2008, Red Bull launched its own Cola: Red Bull Simply Cola – Strong
& Natural. Very much in line with the needs of today's consumers, Red
Bull Cola - unlike traditional colas - only contains ingredients of 100%
natural sources.
In 2009, Red Bull extended its product portfolio with Red Bull Energy
Shots:
Around 4 billion cans of Red Bull are consumed every year. The
responsibility for the success of the world's No. 1 energy drink is shared by
the company's 6,900 employees around the world. In 2016, a total of 6.062
billion cans of Red Bull were sold worldwide in over 171 countries. 10,410
13
employees generated €5.11 billion in revenue. As of the end of 2009, Red
Bull employed 6,900 people in 160 countries (end 2008: 5,683 in 148
countries).
14
differentiator, with Red Bull positioned as a premium drink and
Krating Daeng as a lower cost item. In many countries both drinks
are available, dominating both ends of the price spectrum. In 1992,
the product expanded to international markets: Hungary and
Slovenia. It entered the United States via California in 1997 and the
Middle East in 2000. In 2008, Forbes magazine listed both Chaleo
and Mateschitz as the 250th richest people in the world with an
estimated net worth of US$4 billion.
15
Thailand Red Bull, or Krating Daeng, is in a smaller gold can. The
two drinks also differ in terms of taste —- Red Bull has less sugar
and is carbonated. The flavouring used for Red Bull is still
produced in Bangkok and exported worldwide.
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manner. We create a culture where employees share best practices,
dedicated to coaching and developing our organization as an employer of
choice.
Customer orientation
Best quality
Creating employment
Innovation
Employee satisfaction
Growth orientation
2.6 INNOVATION
Red Bull is an energy drink that was launched in Austria in 1987 by an
entrepreneur, Dieter Matteschitz. He built the company up to annual sales
now worth €1.5 billion. Red Bull’s success story is remarkable as the soft
helped the company cross the chasm. Since the initial target customers –
extreme sports enthusiasts and clubbers—were influential opinion leaders,
the mass market quickly reacted to consume Red Bull. Furthermore, the
segmented approach enabled Red Bull to offer its product at a higher price
as the willingness to pay of their target segment was higher than the mass
19
market. Although Red Bull now caters to the mass market, it has been able
to maintain customer’s higher willingness to pay. Finally, Red Bull
innovated new channels such as clubs and bars instead of relying on big
retailers. This allowed Red Bull to shorten its “time to market”—which
was an essential factor in fighting off mighty incumbents. Another factor
that enabled Red Bull’s success was its early solidification of a strong
brand name before the incumbents entered the fight. This was another
crucial factor that enabled Red Bull to maintain and grow its market share
in spite of its extremely limited product portfolio. In order for Red Bull to
grow in the future, we believe it is imperative to expand into new market
segments as well as horizontally expand its product offerings (i.e. energy
gel, alco-pops, etc). As the incumbents are now fiercely trying to overthrow
Red Bull from its number one position, Red Bull must enhance its brand
positioning in the market.
Product innovation :- Red Bull created a product that fills the gap in
consumer needs for a cold drink that gives mental energy.
20
Channel innovation :- Red Bull used a “pull” strategy in order to
gain shelf space in the retail channel. Pull is created by gaining
popularity among the consumers by offering products in alternative
channels, for example bars and health clubs.
Red Bull has been so successful because it’s built a brand that commands
loyalty from its customers. Red Bull is a utility drink to be taken against
mental or physical weariness or exhaustion. Energy drinks combines two
natural substances and important metabolic Transmitters - the amino acid
taurine and the glucuronolactone with stimulating caffeine, vitamins and
the energy provided by carbohydrates, Energy drinks is designed to
increase endurance and concentration, improve reaction speed, and
stimulate the metabolism.
The reason Red Bull is so successful is because it’s the king of online
branded video content. It’s turned its brand into an experience, rather than a
simple energy drink – and video is the ideal medium to accomplish this.
Video can help form a highly engaged audience that shares content widely,
because it so easily allows a bond to be formed with the audience.
22
building the brand personality. In its marketing, the company should
also enhance the use of opinion leaders and other personalities in
sports, media and culture-which are a perfect target. Red Bull should
continue building more relationships with these groups and treating
them as friends. Agreements and partnerships with top athletes is
working well for the company. Red Bull should sponsor and organize
more events, in sports and culture. This is ‘event marketing’ aimed at
enhancing the brand image of the company.
2.9 COMPETITORS
Although Red Bull still maintains a dominant position in many significant
markets, it is no longer the only player. The major challenge to Red Bull's
leading position has come from US-based imitators: Monster, Rockstar and
Full Throttle which have introduced price competition to the segment and
23
this is possible to have become more and more important during the
depression periods. (Strategy)
Consumption percentage of red bull and its competitors are as follows:
Monster: This energy drink is following each and every step that can make
itsimilar to Red Bull and gain advantage by providing the product at
relatively low price. The cost of both the products are $2 per can but the
quantity of Monster is just double than that of Red Bull.
i. Monster is similar to Red bull in taste, but only targets males. It has
two advantages over RB in price and quantity which is double size of
RB.
iii. Full Throttle has the same taste and ingredients as RB, but it has
advantage of quantity and price
There are also other industries where Red Bull GmbH competes such as
sports, leisure and recreation.
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CHAPTER – 3
INTRODUCTION
26
In Research Methodology, researcher always tries to search the given
question systematically in our own way and find out all the answers till
conclusion. If research does not work systematically on problem, there
would be less possibility to find out the final result. For finding or
exploring research questions, a researcher faces lot of problems that can
be effectively resolved with using correct research methodology.
Secondary data analysis can save time that would otherwise be spent
collecting data and, particularly in the case of quantitative data, can
provide larger and higher-quality databases that would be unfeasible for
any individual researcher to collect on their own. In addition, analysts
of social and economic change consider secondary data essential, since
it is impossible to conduct a new survey that can adequately capture
past change and/or developments. However, secondary data analysis
can be less useful in marketing research, as data may be outdated or
inaccurate.
Secondary data analysis can save time that would otherwise be spent
collecting data and, particularly in the case of quantitative data, can
provide larger and higher-quality databases that would be unfeasible for
any individual researcher to collect on their own. In addition, analysts
of social and economic change consider secondary data essential, since
it is impossible to conduct a new survey that can adequately capture
past change and/or developments. However, secondary data analysis
can be less useful in marketing research, as data may be outdated or
inaccurate.
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the population that may be less likely to respond to the census (in
countries where this is optional).
3.4 LIMITATIONS
Though there were lots of short comings in conducting the research work
from which some of them could be listed:
o Secondary data can be general and vague and may not really
help companies with decision making.
o The information and data may not be accurate. The source of
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the data must always be checked.
o The data maybe old and out of date.
o The company publishing the data may not be reputable.
CHAPTER – 4
INTRODUCTION TO MARKETING MIX
The 'marketing mix (also known as the 4 Ps) is a foundation model in marketing.
The marketing mix has been defined as the "set of marketing tools that the firm
uses to pursue its marketing objectives in the target". Thus, the marketing mix
refers to four broad levels of marketing decision, namely: product, price,
promotion, and place. Marketing practice has been occurring for millennia, but
marketing theory emerged in the early twentieth century. The contemporary
marketing mix, or the 4 Ps, which has become the dominant framework for
marketing management decisions, was first published in 1960. In services
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marketing, an extended marketing mix is used, typically comprising 7 Ps, made
up of the original 4 Ps extended by process, people, and physical evidence.
Occasionally service marketers will refer to 8 Ps, comprising these 7 Ps plus
performance.
Given the valuation of customers towards potential product attributes (in any
category, e.g. product, promotion, etc.) and the attributes of the products sold
by other companies, the problem of selecting the attributes of a product to
maximize the number of customers preferring it is a computationally
intractable problem.
4P’s
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Product refers to what the business offers for sale and may include products
orservices. Product decisions include the "quality, features, benefits, style,
design, branding, packaging, services, warranties, guarantees, life cycles,
investments and returns".
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Category Definition/ Explanation Typical Marketing
Decisions
Product A product refers to an • Product design –
item that satisfies the features, quality
consumer's needs or • Product
wants. assortment –
Products may be tangible product range,
(goods) or intangible product mix,
(services, ideas or product lines
experiences). • Branding
• Packaging and
labelling
• Services
(complementary
service, after-sales
Service)
• Guarantees and
warranties
• Returns
Managing products
through the life-cycle.
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Decisions
Price Price refers to the amount • Price Strategy
a customer pays for a
product. • Price Tactics
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exclusive
distribution.
• Franchising
• Market coverage
• Channel member
selection and
channel member
relationships.
• Assortment
• Location
decisions
• Inventory
• Transport, logistics
& warehousing.
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strategy – how to
reach the target
audience.
CHAPTER – 5
36
Red Bull drink idea came from Krating Daeng which is a non-carbonated
energy drink available originated in Thailand. Red Bull drink contained
ingredients similar to that but a few more added to accommodate the
western taste and also became carbonated. The product mix of Red Bull
can be elaborated as follows. Red Bull energy drink contains caffeine,
taurine, B vitamins, sucrose and glucose which is mainly required by
workaholics, sports people or even youth who want to party at night. As
there is a usual trend that occurs in the younger segment, they came up with
a sugar free variant called Red Bull Sugar Free which contains aspartame
and acesulfame K instead of sucrose and glucose. The drink is available in
a tall blue-silver can with 2 red bulls on the front whereas Krating Daeng is
a gold short can. The two products are produced differently and available in
different countries and red bull is a much more popular energy drink
worldwide. In addition to this, in the product mix the company also put
focus on the taste and quality of the products. The health aspects of the
customers are kept on the high priority by the company. The packing of the
products is also done in an effective way so that customers can be attracted
to a good level and gives a higher edge to the company.
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Red Bull Energy Drink is a functional beverage with a unique
combination of ingredients. It has been specially developed for times
of increased mental and physical exertion. Red Bull Energy Drink
vitalizes body and mind. Red Bull Energy Drink
increases performance
increases concentration and reaction speed
improves vigilance
improves the emotional status
stimulates metabolism
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iii) Red Bull Cola
The cola from Red Bull is a unique blend of ingredients, all from
100 % natural sources. In addition, it is the only cola which
contains both the original Kola nut and the Coca leaf. The result is
a natural, not-too-sweet cola taste, which comes from using the
right plant extracts.
Available - Austria, Switzerland, United Kingdom, Italy, Ireland,
Russia, USA, Belgium, Luxemburg.
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5.3 PRODUCT LEVEL
Core benefit - the core benefit of energy drink is to boas energy of the
consumer.
Potential product - in the future red bull could come up with various
products such as an energy drink with new flavours or
fusion of some flavours.
Based on tangibility- red bull energy drinks are tangible, i.e. one can see
and touch them.
Based on functional life- red bull energy drinks are consumables since the
demand of energy drinks is rising with high rate.
Based on price and quality- red bull energy drinks are premium or
prestige products.
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Based on utility- red bull energy dinks gives a boast to the body. It’s a
sports drink required by the sports persons more often
and its fusion with other hard drink is also trending.
5.5 CONSISTENCY
The product consistency generally depends on 3 parameters.
1) Production
2) Distribution
3) Consumer end-user
• Caffeine
The active ingredient in Red Bull is caffeine, a mild stimulant also
found in coffee and tea that can increase metabolism, concentration,
reaction time and energy. Caffeine can be addictive, and withdrawal
symptoms include headaches and irritability.
• Taurine
Red Bull contains taurine, an amino acid that has many functions. It
regulates levels of waters and salt in the body, as it can form into bile
salts. It works as an inhibitory neurotransmitter in the brain and can
also affect learning and memory. Taurine is also an antioxidant and
may play a role in formation of fat tissue.
• Glucuronolactone
Red bull contains glucuronolactone, a chemical made naturally in the
body when glucose is metabolized. Glucuronolactone may fight fatigue
and it is present in many energy drinks.
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• Vitamins
Red Bull contains several B vitamins. Niacinamide, better known as
niacin or vitamin B-3, is necessary for metabolism as well as DNA
repair and production of steroid hormones. Calcium pantothenate,
better known as pantothenic acid or vitamin B-5, is necessary to make
co-enzyme A as well as synthesize proteins, fats and carbohydrates.
Pyroxidine HCL, better known as vitamin B-6, is necessary for protein
metabolism and the reaction converting glycogen to glucose. Vitamin
B-12, also known as cobalamin, is necessary for metabolism, blood
formation and fatty acid production.
5.6 BRAND
The red bull, such as, energy drinks enjoy a strong imagery and appeal
amongst consumers. name symbolizes quality, health and great taste. And
yet, this reputation has been built, by constantly innovating and catering to
new tastes. This can be seen by the success of latest brands.
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Red bull follows both line extension and brand extension for its products. For
a product like basic red bull energy drink it followed line extension with the
introduction of red bull’s sugar free edition there flavor editions. Initially red
bull used to produce only one flavor.
5.8 PACKAGING
Red Bull’s iconic symmetrical image of fighting bulls suggests power
andendurance and is now often identified with extreme sports. Indeed, the
productis marketed towards young athletes in need of extra energy while
practicing their sport.
However, it’s not just the bull image standing out, the can itself – the
shape, size and material – is also instantly recognizable. A bold move,
indeed, by Red Bull when they first entered the market years ago. It has
become the standard for the energy drink market.
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5.9 PRICE MIX
From the marketer's point of view, an efficient price is a price that is very
close to the maximum that customers are prepared to pay. The objectives of
pricing should consider:
the fit with marketplace realities (will customers buy at that price?)
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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 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. In
all the international markets, the company sets its prices on equal level in
order to attain high degree of competitive position in the global beverage
industry.
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5.10 PLACE MIX
Red Bull has greater degree of emphasis on the place mix element of its
marketing mix strategy. Under the place mix, Red Bull does the
distribution of its products on international level. 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
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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 along with other competitive
products giving the customer a choice between which one to buy.
To increase demand.
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To differentiate a product.
The purpose of a promotion and thus its promotional plan can have a wide
range, including: sales increases, new product acceptance, creation of brand
equity, positioning, competitive retaliations, or creation of a corporate
image.
Red Bull high degree of emphasis on the promotion of the products. For
promotional purpose, Red Bull organizes several kinds of activities in its
marketing process to promote its products on the global level. 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 Bull Foxhunt, 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. Sources of its
promotion are described below –
Media Advertising –
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Red Bull uses all the available media channels, meaning cinema,TV,
radio, press and the internet. In other words, the company focuses on
the media through which it reaches its primary target market-young
people.
49
Sports and Event Sponsoring –
On the one hand Red Bull sponsors the athlete target market in either
extreme sports such as free climbing, paragliding and motorsports or
fun sports, but always where Red Bull is needed. This strategy
contributes to Red Bull that the brand appears (logos and stickers) and
that the product ´s target market is more precisely defined.
On the other hand, Red Bull does event sponsoring. The company
either creates its own events (i.e. Red Bull Music Academy .......)
where the whole events are promoted by Red Bull or they promote
other events (i.e. Speed Ski World Championship). Event sponsoring
attracts people’s attention towards the product and connects them.
Sampling –
50
Sampling is another very important part of the three-pillar marketing
system. The methods used are well tested and proven in other markets.
As the major purpose of Red Bull is to energise the company samples
at the right place at the right time, where it finds its exact target market.
This year 8 teams will sample 400,000 consumers across the entire
country.
What makes it particularly powerful is that with a little thought, it can help
you uncover opportunities that you are well placed to take advantage of.
And by understanding your weakness, you can manage and eliminate
threats that would otherwise catch you unawares.
More than this, buy looking at yourself and your competitors using the
SWOT framework, you can start to craft a strategy that helps you compete
successfully in your market.
5.13.1 STRENGTHS
53
1. Market leadership in the global scale- Red Bull is sold in more
than 169countries and about 60 billion cans of Red Bull have been
consumed so far. The company sold more than 5.9 billion of cans
in 2015 alone. Market leadership in the global scale is an
indication of a considerable strength from the viewpoint of the
brand equity and consumer loyalty.
55
A lack of choice for customers can be a considerable weakness
taking into account the increasing level of customer expectations
and a growing popularity of product customization according to
consumer needs and preferences.
5.13.3 OPPURTUNITIES
2. The vending process can increase the sale of the product and
it can represent the commitment for its distribution network.
3. Red Bull needs to expand their business and look for new
emerging markets to get good growth of its product.
5. The company can keep or improve its market share with the
introduction of new flavours of its product.
5.13.4 THREATS
1. Competition –Monster represents the biggest threat as it contains
natural ingredients, which seems more desirable than Red Bull for
some consumers. Competition is becoming more and more
dangerous in term of marketing actions (copying Red Bull).
56
2. High marketing costs –Maturity in developed markets makes
promotion harder than in the past, inducing higher marketing
costs.
2. Available almost all over the globe- 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.
3. High brand equity- All the products are of high standards and they
provide complete satisfaction to all the customers which has led to
creation of a strong brand image of the company.
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CHAPTER – 6
FINDINGS
Bull gives you wings.” It focuses on the idea that their product gives
Their values play a role in their content as well. They center around
one core phrase “giving wings to people and ideas.” Everything that
the Red Bull team communicates revolves around that tagline and
their values.
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It covers topics that interest their audience. Extreme sports, concerts
and music festivals are just a few of the topics covered on the Red
Bull website. Picture anywhere you might see someone enjoying (or
Is their ability to sell their brand but not push their product. Their
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CHAPTER – 7
CONCLUSION
Red Bull has demonstrated a novel approach to marketing and has introduced a
new product to the market that has spawned an entire new category of product.
Through its actions, the company has become very successful and has become
the market leader in its sector. Its use of a marketing message that is light on
selling the product but heavy on building the brand image and associating it with
extreme sports and other activities of interest to its target audience has possibly
shown the future direction of much marketing effort.
The current position of Red Bull remains strong in its market sector. However,
as it is now the leading brand in many markets, it will find it difficult to
maintain its position due to increased competition from other brands that have
seen the opportunities offered by the sector. The growing age of its original
target audience may also prove a factor; the company has deliberately addressed
a youthful market and as these original customers grow older, it remains to be
seen whether the product will continue to appeal to newer generations.
However, the company can n develop new markets, and it can potentially reduce
costs by focusing on domestic production. These new markets may allow the
development of complimentary new products. It is possible that these could then
be sold in its mature markets, widening its product portfolio.
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CHAPTER – 8
SUGGESTIONS
• The company should come up with new, better and attractive flavours
to attract all segments of the market.
• The company can come up with different beverages other than energy
drinks.
• Red Bull is affiliated with caffeine industry, which might help them
exploit coffee industry.
• The packaging should help retain the chillness of the drink without
which it is tasteless.
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BIBLIOGRAPHY
Text books
Magazines Referred
Websites
• https://www.wiiings.com
• https://www.google.co.in/search?
q=redbull&oq=redbull&aqs=chrome..69i57.4506j0j1&sourceid=chrom
e&ie=UTF-8
• https://coschedule.com/blog/red-bull-marketing-strategy/
• https://www.redbull.com/in-en/
• https://en.wikipedia.org/wiki/Red_Bull
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