Competition and Market Analysis for Red Bull

Competition and Market Analysis for red ink diddly-shitThis paper investigates the competition analysis of reddened bulls eye zippo confound in the commercialise and deciding about its competitive advant jump on if there is any. Some information about the energy tipsiness merchandise in general is presented. This is fol littleed by product, company background and history is presented. Then we analyzed exit slovenly persons brand flummoxing and direct competitors. after(prenominal)ward, analyze and classify the features of red-faced motherfucker through macro and micro factors to determine the strength of competition. This followed by looking at redness motherfuckers merchandising mix. We will identify the problems and opportunities of release tomentum. For that actuate we ar going to search for data about commercialize segments and market sh be of fierce pig bed and its competitors. To support any this we atomic number 18 going to bring about a local mar ket quantitative survey in the city of Abu Dhabi using a questionnaire piting youth aged 18-34.The MarketWhen looking into Energy sups market, we faecal matter nonice a doubling increase since they were prime(prenominal) introduced into the United States and europium. The current U.S. domestic market whitethorn be around $4 billion and is pass judgment to reach an estimated US $15 billion by 2011.The reasons for the increasing demand for energy topes ar attri justed to consumers concerns about time stress to keep balance betwixt work-life and private life. Consequently the market is bombarded with many new energy pledges, with strange names and claims of a amplyer energy increase comp ared to the prior brands to find their instruction in the market. There are, however, a few major energy boozings that control most of the market and do non start overly much amounts of caffeine.In addition to caffeine, a range of other energetic ingredients as taurin, Guarana, and B v itamins are added into energy drinks to make them to a greater extent effective. New prob adequate to(p) developments are pitch toward increasing the health functionality of energy drinks which will increase market approval due(p) to a growing society obsessed by health.The Energy drink market is not only limited to products or brands competing with each other but it also includes the whole non alcoholic drink market. Many outside factors have influenced the demand for this market such as the increasing attractiveness of health lifestyles and sports club membership.- companionship and Product ReviewRed damn is classified as a semisoft drink. It is a non alcoholic stimulus drink with an absolutely exclusive formulation consisting of cardinal natural substances and all-important(a) metabolic transmitters such as, amino acid, taurin and glucuronolacton in addition to stimulating caffeine, vitamins and carbohyd tempos. It gives stimulation and revitalizes the body after effort and activates the human performance both mentally and naturally. The industry is capital-intensive average annual profits per issue worker are about $700,000.History of Red fake market expansionIn 1982, Dietrich Mateschitz, originator of Red Bull and Chalerm Yoovidhya, decided to enter the market of energy drink which was controlled by Japan and Thailand at that time.In 1987, the product was first introduced to Austria which was a difficult market for Red Bull to carry on. briefly Mateschitz developed a merchandise strategy and as a result the product became wellhead known in Austria and extended into Hungry and the rest of Germany. After that Red Bull has been successfully recognized world-wide and has reached a market leader position in 20 countries- in Europe, Asia and the USA. By 1997, Red Bulls buzz marketing strategy proved successful in the U.S. The following timeline shows the expansion of Red Bull in the market.1DateMarket Expansion1987Austria 3.5. (not mature market)199 4UK, Germany and Eastern Europe 3.6.1997US and South Africa 3.5. 3.6.2006Japan 3.7. (very mature market)When Mateschitz realized that a great sporting essence could be useful, Red Bull started sponsoring about 500 utmost(prenominal) sports athletes and hosting stylish parties. Events are now hosted by Red Bull throughout the world such as the Xgames and the Red Bull Air Races and thus their tagline, gives you move is known worldwide.Product ReviewThe following table sums up the product review2Cost$2.00Cost Per Ounce$0.25Active Red Bull IngredientsCaffeine, Taurine, B-Vitamins, chouTaste Rating7.5Kick Rating8.0Final Judgment Rating9 Its the original energy drinkRed Bulls mission is to stretch their locomote over the world. It is a short phrase that communicates vivid information about the brand. This slogan which is used in all Red Bull campaigns worldwide is creating inexpugnable brand awareness of the product and is connecting between the brand and the product type. They are expanding rapidly into global market. They are keen on keeping Red Bull values, while maintaining the control position in the energy drinks category by delivering better-quality customer service in a postgraduately experienced and commercial manner. hold CompetitorsAlthough Red Bull still maintains a dominant position in many signifi fag endt markets, it is no longer the only player. The major challenge to Red Bulls leading position has answer from US-based imitators Monster, Rockstar and Full Throttle which have introduced charge competition to the segment and this is possible to have become more and more important during the depression periods.Monster energy drink does its high hat to be like Red Bull. The taste is alike(p), the ingredients are identical, and they cross the male/18-25 demographic. Though, they do have virtuoso different advantage over Red Bull total. The Monster energy drink comes in a 16 oz. can, whereas Red Bull only offers 8.3 oz cans. So, youre essentia lly acquire twice the product at the alike price ($2 per can)Rockstar competitive energy drink whose motto is party like a Rockstar, targeted at the younger consumers who want to be wild and crazy and spend all night dancing. There are a number of flavors of Rockstar cola, energy drink, and juiced. The energy drink is similar in taste to all the others, whereas the cola product has the best taste. The juiced version is express to be 70% real fruit juice and 100% energy. They were the first to use the 16oz larger size, and this has fixed and become the standard. Only Red Bull continues to market the smaller cans, which is part of their take care.Full Throttle is manufactured and owned by coca plant Cola, just like their Coke Blak mixture of coffee/cola drink. Full Throttle energy drink is marketed as a rebellious drink, with erupting flames on the can. An 8 oz. serving has 110 calories (comes in a 16 oz can) and 29g of sugar. It also includes things like ginseng extract and d own of caffeine. Full Throttle comes with a citrous fruit taste and a red can. Full Throttle was first introduced to the market in 2005. It is targeted at 20-30 year old men, and contains Taurine like Red Bull.From the preceding(prenominal) pass ond information we can find that1-Monster is similar to Red bull in taste, but only targets males. It has two advantages over RB in price and quantity which is double size of RB.2- Rockstar is double the size and Price as it is 1.99$ so it is cheaper than RB.3-Full Throttle has the same taste and ingredients as RB, but it has advantage of quantity and priceThere are also other industries where Red Bull GmbHcompetes such as sports, leisure and recreation.The Brand PositioningIn spite of the competition, Red Bull resembles a new type of drinks called the energy drinks. In this new market sector Red Bull has a branding as a elapse border brand product. The brand positioning of Red Bull comes from the benefits of the product and the brand ima ge. The positioning message of Red Bull is Red Bull vitalizes Body and Mind. This positioning idea has become the unique brand personality of Red Bull, which can be explained below.SarcasticSelf confidentIntelligent groundbreakingHumorous, charmingIndividualistImpulsiveIt 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 appear to be attracted to the general appearance and brand of Red Bull.The positioning strategy of Red Bull aims at best product, top price and top profitability. As for the price, Red Bull has a position in which it can command a best price because there is nix to compare it with. It is an exclusive useful drink, promising and offering benefits that cannot be offered by any other drink.Threats of new entrantsThe most significant development in the market of energy drinks and the main direct competitor to Red Bull is the new product from Coca Cola, Relentless. It is also cheaper because it is sold in can double the size of Red Bull but the same price.-First-mover advantage has disappeared as the market has matured. Red Bull is the giant of the stimulant drink industry, in comparison to Coca Cola and Pepsi in the cola market. Red bull has achieved economic level which would allow them to be the most competitive price in the market. Although there is a price gap between Red Bull and other cheaper energy drinks, it seems that Red Bull has surmounted the position segment of the market due to its marketing strategy which is considered a huge barrier to entry. Red bull has a strong brand power that impresses loyal customers and consequently they can charge high prices even when competition comes from Coca Cola.Analysis of Macro and Micro factors affecting the attractiveness of Red Bull in the market Macro factorsPolitical and efficacious ForcesWhen Red Bull was first introduced into the market as a new non-alcoholic drink labeled with a new idea as an energy drink, the health Organisation was doubtful that Red Bull could be an appetizer medicine. Rumors saying that Red Bull contains ingredients like bulls galls, added to their doubts. But confidence in the product increase due to the fact that Red Bull has been used in the Australian market for 9 long time and in the Asian market for 30 years without any registered complaints. Moreover a study conducted by an independent institute (ISME) in 1998 proved that although Red Bull has stimulating effects like caffeine, it does not lead to addiction.On the other hand Red Bull still needs approval from each country to be sold. This procedure is time down and consequently costly.Some countries still have suspicions about Red Bull. According to msnbc.com in May, 2009, Six German states have asked retailers to stop selling Red Bull Cola energy drinks after a test found a trace amount of cocaine. However authorities say the drug level was too low to cause a health risk. Countries such as Denmark, Norway, and France have banned the sale of Red Bull.This instrument that legal factors have a high negative effect on RBEconomical FactorsRed Bull is sonorously affected by economic periods of expansion and contraction because it is a peculiar(a) drink, serving a niche market. Red Bull target market includes sportsmen/women as well as hard working state. The main consumers of the product are Athletes, night clubbers, shift workers, executives and long-distance drivers. Despite the availability of few substitutes, the sales of Red Bull are increasing through their well positioned advertisements. This factor has low influence on RB.Socio-Cultural FactorsWhen the product was first introduced multitude had doubts about the product and nobody wanted to try it. But now due to change of peoples lifestyle, people are now much more open for new experiences. In addition they are confident to try it, because any health concerns were cleared by organisations like the ISME. The consumers are male and females regardless of age who are very sporty or work very hard. Longer working hours as well as increased road traffic led to more need for energy boost. Nowadays Red Bull has a very stylish image and is sold in a lot of supermarkets and clubs (See the graph which illustrates the categories of males and females consumers)3Technological factorsRed Bull is totally manufactured in Austria where it is exported to 28 countries. There are two reasons why it is not manufactured in any other country first, to guarantee taste reliability and to make sure that Red Bull tastes the same all over the world. Secondly in that way the formula will be kept securely in one place.Red Bull is normally produced in 250ml cans, but glass bottles are an alternative jus in case they do not have enough cans as it once happened. Energy drink Red Bull, uses electronic points of sale (EPOS) data. This system allows customers research team to check the distribution of Red Bull. This syste m points out the gaps that can be returned to the retailers.Environmental factorsRed bulls cans are purlieually friendly because they are made of recyclable aluminum. Glass bottles can also be recycled and therefore do not damage the environment either. This might give the product a competitive advantage when rules become stricter and more equal throughout Europe as well as in the rest of the world.http//researchwikis.com/Energy_Drinks_MarketMicro Factors6.1 Bargaining Power of BuyersTop 4 Energy Drinks by 2010 Market ShareRankEnergy DrinkParent CompanyMarket Share1Red BullPrivately Held42.6%2MonsterHansen Natural14.4%3RockstarPrivately Held11.4%4Full ThrottleCoca-Cola Company(KO)6.9%By working out the concent ration ratio of the 4 top energy drinks brands as seen in the above table it will be possible to come to the relative size of the products in relation to the industry as a whole and to determine the market form of the industry. By using the four-firm concentration ratio we fi nd that it is 75.3% which is high, and is bordering between oligopoly and monopoly,In this concentrated market the customers dont have high bargaining power which enables Red Bull to position high prices. Moreover, other products may find it difficult to compete with the brand loyalty due to the huge advertising spending of Red Bull.Consumers in energy drink market are not actually aware of price because they are Consumer with high income and buy it when it is required to regenerate their energy after a long day of hard work.The relationship between the manufacturer and retailer has developed along the market lifecycle resulting in swing of power. The fame of energy drinks has created a market pull where retailers have no real bargaining place.The termination of bargaining power differs according to the distribution channel.Bargaining Power of SuppliersRed Bull production process is to some extent simple therefore the power of the suppliers is apparently rather low. The added value at each stage leads to large profits. Suppliers can only enter energy drink market through the brand-owner, thus the balance of power is in the favour of the brand owner.-Threats of substitute productsRed Bull is a fast moving consumer product and, consequently, it mainly depends on desire purchasing. Although price sensitivity is a low factor inside the target segments, handiness is the average purchase criteria. Red Bull has successfully created a position where product substitution threats are low due to the brand power and customer loyalty. On the other hand, there are other products substituting the need for caffeinated drinks with less sugar and a better blend of carbohydrates and protein that give a greater energy enhancement. Also drinking plenty of fluids, such as water and herbal tea are useful. The market is full of better alternatives than relying on expensive energy drinks that only give you a momentary feeling of energy.The Marketing Mix StrategyRed Bull has its own m arketing which is different from the Marketing Mix Theory based on the 4 Ps. Red Bulls ownMarketing Mix Strategy is consisting of 1 the mediaadvertising category, 2 sports-and event sponsoring and 3 sampling. In 2008, Red Bull spent on marketing near more than 1 million$ which equals 30% of its revenue.Media AdvertisingRed Bull uses all the available media channels such as cinema, TV, radio, press and the internet in order to reach its main target market-young people.Thus they successfully advertise in TV shows like T.F.I. Friday and in magazines like Time Out and mens health. By doing so, they let the consumers understand the product and decide about the moments they can use it themselves. Red Bull realizes this by an amusing and humorous cartoon campaign, through which they comfortably send the message that this energy drink helps you to escape by giving you wings. The idea of communicating with the consumer in the form of a simple cartoon makes the people enjoy the campaigns a nd at the same time remember the brands name and the message it delivers.Sports-and Event-SponsoringThe company also uses sponsoring in their marketing mix strategy. Red Bull does event sponsoring either by creating its own events (i.e. Red Bull Music Academy .) or by promoting other events (i.e. Speed Ski World Championship). This strategy means that Red Bull brand appears in the form of logos and stickers and that the product s target market is accurately defined.The image, the reliability and the visibility of the product are supported by sponsoring specific events where the peoples attention is drawn to the product.Red Bull sponsors the athlete target market where Red Bull is always needed in extreme sports such as free climbing and motorsports and fun sports as well.SamplingSampling is another very important part of their three component -marketing system. The methods used are well tested and proven in other markets. The main purpose of Red Bull is to boost the company samples at the reform place and at the right time by finding its precise target market such as driving, studying, working night shifts and sports. Sampling is conducted in a charming way by extremely motivated and cultured employees of Red Bull.All their equipment is the product, a free range of clothes and a small, but very attractive sampling car. Red Bull is following the basic sampling rules consisting ofnever force the productalways explain the benefits of the productdrink always a full can ( 250 ml)It must always be cooledbeing cautious about whom are sampling the productSurveying the local marketTo have some information about Red Bulls brand image and how the people see it, we made a questionnaire of 3 sections including 13questions. The survey targeted males and females whose age is between 18-34 living in or near Abu Dhabi. 22 % of the respondents are females, whereas 78 % are males. We used Emails to send and collect back the questionnaires.Significant findingsThe energy drinks market proposes the following drinks Red Bull, on top then come power Horse, and Monster, The best known beverage is in the city of Abu Dhabi and avenues, is Red Bull as 88 % of the respondents have tasted it and the majority of these people find it good (41 %). The other data have no significance.The most common consumption rate for energy drinks is occasional 80 % drink occasionally drink and 20 % frequently.With relation to Red Bull, which of the following is important to your purchase?For 58 % of the people, find the physical boost is important. 36.4 % of the total respondents are influenced to buy Red Bull because it is sponsored by athletes and some re latishd it to formula 1.the taste of the beverage is an extremely important criterion. The timber and the energizing properties are very important (with respectively 45 % and 42 %). The design of the can does not influence so many consumers 9.1%buy the drink because of the design.Where do you buy Red Bull?80% present of the res pondents buy it from supermarkets whereas 20% buy it from fending machines at petrol stations.What is the first intelligence agency that springs to mind when you disclose the words Red Bull?60% said superman, 30% wrote formula1, and 10% said flying in the airWhich tag line, if any, do you most ally with Red Bull?70% chose Brain and body energy, whereas 30%chose Gives you wingsWhich sports do you most associate with Red Bull?55% Formula1 and 25 % said motorbikes, 10%responded Golf and 10% chose Athletic90% described Red Bull as the best energy drink in the market and 10% finds it suitable for their lifestyleResultPeople dont buy Energy drinks because they really need it but because this need is created by the manufacturer. It is the big advertising campaign which has convinced people to accept this product. Red Bull has been the first energy drink in the market. Red Bulls target is people who need energy and concentration such as sportsmen and students. For that reason, the comp any sponsors numerous sports events Formula 1, Xtreme competition. Red bull gives you wings. It is the famous slogan that makes consumers think that Red Bull gives more energy than usual. The result is that the Red Bull has quickly got success by young people. Red Bull keeps on marketing by this young generation.moreConclusionWhen Red Bull was first introduced, it was easily imitated because the ingredients were printed on the can and the product was not patented. Although the taste of Red Bull did not do well in taste tests, it succeeded due to 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 the majority of markets. After Red Bull hit the market in the late 90s till the present, many other companies entered the energy drink market but unable to compete with it.Red Bulls has approximately 100 major competitors and the main competitors are Monster, Rock Star and Full Throttle.Many substitute products have been introduced and categorized as energy drinks such as IceT creating an energy drink called Liquid Ice, Nellys Pimp Juice and Lil Johns, Crunk Juice.Although these competitors are present in the market no other energy drink could maintain Red Bulls 70 90% of the market share it has in over 100 countries all over the world.Problems and OpportunitiesProblems Red Bull is not a patented drink product, therefore anyone is able to choose a can, read the ingredients on the label and start their own business. That is why the market is flooded by competition. In addition, Red Bull as well as all other energy drinks and supplements, have received negative reports from a medical point of view. Elevated amounts of caffeine and sugar can lead to adverse effects on heart and blood pressure.Opportunities Red Bull is one of the most popular energy drinks in the world. They earned this position by intelligent, consistent marketing strategy. Red Bull has the opportunity to maintain their position and develop a continuing pace to aim their niche target consumers by seriously using untraditional and traditional marketing strategies. Red Bull has a competitive advantage over its competitors As we have seen Red Bull is an international energy drink that is sold by Red Bull GmbH. In 2006, more than 3 billion cans were sold in more than 130 countries.-Red Bull has a continual international marketing strategy by sponsoring a variety of great sports to promote a cool normal image and enhance brand power.-The product has remained the top energy drink throughout its growth due its effective marketing strategy.The product speaks for itself and its consumers do not report any complaints despite of negative publicity Red Bull has developed a sugar free option.-Red bull has this competitive advantage not only because other drinks that follow it are not as appealing in packaging, marketing, but also because Red Bull is aware of their marketing c hallenges and they are continually changing and developing their marketing philosophy to overcome and avoid possible competitors.Red Bull Consumer QuestionnaireThis questionnaire is all about Red Bulls consumers and targets males and females between 18 and 34 years old and based in the Abu Dhabi.Section 1(background) enthrall specify your age group by locateting an x in the recession that applies to you.18-2122-2526-2930-342)Where do you live?Please specify closest town/city.Abu DhabiShahamaShamkhaBani YassSamha3)What is your gender?M/FPlease specify.Section 2( Loyalty)1)Are you familiar with the Red Bull brand?Yes/NoPlease enter in the box.If your answer is no then please do not go past question 3 of this section and I thank you for your time.2)Which of these drinks are you most aware of?Please rank your top three 1 being youre most aware and put an x beside any others you are aware of.MonsterRockstarRed BullPower HorseFull ThrottleOthers please state3)Which of these drinks wou ld you buy, if applicable?Please rank your top three 1 being your first choiceRockstarRed BullPower horseFull ThrottleOthers please state4- With relation to Red Bull, which of the following is important to your purchase?Please rank each option by putting a circle around the distract number.Important Un-importantTaste1AHydration1BPhysical Boost1CMental Stimulant1DSponsored Athletes1EPrice1FAvailability1GImage1HCan shape, act upon and size1IAssociation with constitutional Sports1JOthers please state and rank15)Where do you buy Red Bull?Please underline all that apply.WholesalerSupermarketIndependent RetailerVending MachineRestaurantHotelOther please state Section 3 Brand Image1)What is the first word that springs to mind when you hear the words Red Bull?Please specify your word in the box.2)Which tag line, if any, do you most associate with Red Bull?Please choose a tag line by underlining itStimulation for body and mindBrain and body energyGives you wingsYour sport, our science3 )Which sports do you most associate with Red Bull?Please rank the sports 1-5 with which you most associate Red Bull. 1 being the highestPlease also put an x beside any other sports you associate with Red Bull.GolfFormula 1Skiing/SnowboardingMountain bikingAthleticsCricketSurfingMotorbikesSkateboardingObscure Extreme Sports4)Which sports do you partake in regularly?Please list in the box provided.5)Does any Red Bull advert stand out in your mind?If so please describe the advert in the box provided.6)Please try to describe Red Bulls packaging.Please describe any colours and/or emblems in the box provided.7)How would you rate Red Bulls image?Please rank your option by circling the appropriate number.CoolUn-cool123458)Which of the following statements if applicable best describes why you buy Red Bull?Please make your selection by underlining the appropriate statement.a) Red Bull fits my lifestyle choice.b) Red Bull has an image Id like to be associated with.It provides me with a welco me energy boost.c) It gets my mind in gear.d) It provides good value against the competition.e) Its the best energy drink on the market.f) It tastes good on its own or as a mixer.