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Analysing the current Market Strategy For Red Bull and proposing future strategies

1514 words (6 pages) Essay in Business

5/12/16 Business Reference this

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Red Bull is an energy drink and, Red Bull is the world’s most popular energy drink on the base of market share. It is also called pioneer in the industry of energy drink (Wördemann et al, 2010).

. In 2008, the assessed market share of Red Bull was 29% of the global market of energy Drinks. In the same year, only in USA, Red Bull possesses 47% share of the energy drink market and 50% share of the German energy drink market. Now Red Bull stands at 65% of the energy drinks industry. Red Bull has long been supported as athlete drinks; moreover, it is very popular amongst teenager students (Dahlén et al, 2010).

Current Marketing Situation


Red Bull is a sweet, caffeinated drink that promises the high energy kick to consumers. The product is available in 250ml cans, 350ml bottles with 4 packs. Product is offered in only two flavors. The product contains taurine, caffeine, glucuronolactone and B vitamins (Bach, 2007).

Red Bull being a functional product offers to improve mental and physical exertion. Brand has long been promoting as product to be used at any time including during sports and work, studying, and socializing. Moreover, Red Bull promises to enhance the performance during increased stress and strain, increase concentration and improve reaction speed, also stimulate metabolism in body. More importantly it vitalizes the body and mind.


As far as competition environment and competitors of Red Bull are concerned, Red Bull has to face two different levels of competition. The first is competition within energy drink industry and secondly sport drink industry. In energy drink, there are many large brands involved such as Coca Cola and Pepsi. Coca Cola and Pepsi being major players of beverage industry have entered into energy drink industry by launching their energy products. The invasion of globally big companies into energy drinks has created a tough market competition for Red Bull. Moreover, this market competition has grown the energy industry by maximum sale. Competition presents in sport industry grow with the existence of many sport drink energy such as Gatorade by Pepsi, Powerade by Coca Cola and Lucozade.

Product Distribution

With the use of appropriate product distribution channels Red Bull has created a brand image such as extreme events and high profile sports events. Impulsive and high profile sport events have helped Red Bull to establish a unique position in the market. In addition, Red Bull has applied strong marketing and wider distribution tactics that has led increased consumption and influenced to growth of the product. To gat itself identified and maintain this status Red Bull has adopted detailed and effective sales strategy by identifying key areas such as bars and clubs which has helped to increase brand visibility.

SWOT Analysis for Red Bull


Market Leadership: Red Bull is already a global market leader within the energy drink industry with the largest sale and large market share.

Successful Marketing Tactics: Red Bull has been employing a lot of promotions and well targeted campaigns/sponsorship which have greatly helped the brand in past to expand and increase consumer brand awareness.

Brand Name: Red Bull is the world’ most popular energy drink and with effective marketing tools product has created a brand image.

Brand Quality: Red Bull did not achieve the success and gained maximum market share only because of marketing tactics but product quality has also shared in this success of the brand. Red Bull with strong and fresh taste has become a brand identity.


High Cost and Expensive Product: The price of Red Bull is very high and it is too expensive for an average person to afford it.

Lack of Innovation and Unique Selling Position: Within the industry there are number of competitors who are utilizing innovation in product and unique selling product. Red Bull, on the other hand, is less innovative and does not use unique selling point.

Reliant on Small Product Base: Red Bull is only brand in the market with limited flavors and offers no variety in the product. Being one brand product, it is difficult to capture market.


Extension of Product: Since Red Bull is single branded product in the market, there is an opportunity for it to extend its products line by developing more innovative products. This will help Red Bull to retain market share.

Hardcore Promotions and Advertising: Red Bull has not yet used hardcore promotion and advertising and there is opportunity for it

Consumer Recognition using Sports Events Sponsorship: Sports events are best opportunity for Red Bull to recognize its product by athlete and students. Sports events are popular not only in athlete but also in students.


Health concerns: Red Bull has high caffeine content in the drink which if used in excess can be harmful. Moreover, in many countries there are strict rules on the product which contains high caffeine.

Consumer Awareness of Health: In case of consumer awareness related to health, there is possibility that consumers give up the use or avoid the use of Red Bull. Consumer may think Red bull as an alternative energy drink rather than natural drink.

Giant Competitors: The presence of large and giant competitors can affect the market position of Red Bull.

Objectives with Goals for Sales Volume, Market Share and Profit

The market objectives of Red Bull are as follows:

To expand the presence of Red Bull among a maturing market segments and

To surge new energy drinks being launched by known and beverage giants such as Pepsi and Coca Cola

To gain maximum market share by increasing the sale

Adopt and access the market segment in an effective way

The above objectives are supported by the rationale that the company’s presence is important in the market and the maturity of its target segment has called for an enhanced multi-offer approach to compensate the market’s maturity.

Goals for Sales Volume, Profit and Market Share

Red Bull is world’s number one energy drink and its sale is more than 2 billion cans annually. Red Bull, in 2004, has worth US$2 billion share in the energy drink market of North America while in Canada its market share is estimated as C$100 million. After the launching of Red Bull in the 1990s, brand has dominates the North American market and much ahead of other giant brands such as Coca-Cola and PepsiCo. Being the market leader, Red Bull in 2004 owns a 50-percent market share. In 2006 Red Bull has 42.6% of global market share in 2007 it decreased to 35.2 and in the year of 2008 brand regained its market share and now has 40%.

With new market segments (Students and Athlete) Red Bull will be able to achieve more market share because students are usually of age of 15 to 22 and they need physical as well as mental energy boost to have active life. Sports man similarly needs to physical energy that meets their requirement. Energy drinks are already very popular among youngsters. If more sportsman and students are convinced to use Red Bull it will give more profit and increase market share to brand.

Marketing Strategy

The following marketing strategy has been designed for market segment (Students and Athlete). Marketing Strategy has been designed using 4 Ps of marketing.


Product Variation

In the presence of other sports and energy drink there is massive competition and it will be difficult for Red Bull to have gain market segments. Therefore Red Bull will introduce different flavors in drink.

Product Innovation

Red Bull will use innovation such as new and attractive packaging.

Product Differentiation

To maintain brands’ different identity, exposure of product will be different and unique from other brands in the market.


Cost Recovery Pricing

Red Bull has always followed high pricing policy but for this market segment marketing policy of Red Bull will focus on average pricing policy according which new size of drinks will be introduced with lower prices.


Direct Sale

Product will be sold at different supermarkets and shops

Indirect Sale

Through this marketing strategy Red Bull will be sold at unique selling point such as educational institution, university colleges and sports places such as sports club


Individual Communication

Since celebrity endorsement is getting popular especially in sports and energy drink therefore a sport celebrity will be used to endorse the product.

Mass Communication

Product will be advertised using different means of mass communication such as electronic media and paper media.

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