EFE Matrix
Opportunities
From the above table, we know that the trend of consumers now is they are concerning more about their health that it matches with the red bull cola positioning because Red Bull Cola offers people who love to have something sweet but also love to take care their health. Fortunately, Thailand has no legal about limitation in advertising soft drink so, the company has full power to promote itself through any media. As the most important factor that we cannot overlook, weather in Thailand is really hot all year, it can encourage consumers to think about sweet drink to make them feel fresh and reduce thirst.
But they also have a bad affect, the economic problem that caused people would like to spend less and save more money. So, soft drink market will suffer from this and it will be a big problem to make the low or stable market growth rate. It means that carbonated soft drink industry has more opportunity to expand than threats that will be a barrier.
Threats
Consumers still sticking with the same old brand which is Pepsi and Coca cola and not accept much in the new brand that just coming in the market because they may not believe in taste. Pepsi and Cola are gaining almost all market shares in the market that it is a barrier for new comers which want to gain some market share in market. Because it’s hard to penetrate the market; although, the size of market is very big.
SECTION II – COMPANY PERSPECTIVE: AN ANALYSIS OF COMPANY
Company Background
Red Bull is the energy drink originated from Thailand produced by the TC Pharmaceutical Company. It has lunched this product into Thai market in 1981 and Red Bull energy drink has been popular for Thai people. Furthermore, Red Bull expanded itself into the global market beginning from Austria because Mr. Mateschitz visited Thailand in 1982 and discovered that Red Bull helped to cure his jet lag between 1984 and 1987, Mateschitz worked with TC Pharmaceutical to adapt Red Bull for the Europe market. At the same time Mateschitz and Chaleo founded Red Bull GmbH; each investing $500,000 of savings and taking a stake in the new company. Chaleo and Dietrich each hold 49% share of the new company. They gave the remaining 2% to Chaleo's son Chalerm, but it was agreed that Mateschitz would run the company. The product was launched in 1987, in a carbonated format.
Red Bull rapidly gained in popularity, giving people wings right from the start. In 1992, Red Bull touched down in its first foreign market, in Hungary. Today, Red Bull is energizing over 100 countries around the globe, such that many superstores have copied the idea with their own brand products, which invariably are inferior in one aspect or another.
In year 2003, Red Bull was successful in United States. It lunched the Red Bull sugar-free selling in Europe, America, South Africa and Asia. The company separated itself to develop and capture the market in other drinks, including Lun Aqua, a New Age brand of water bottled during full moons and also Red Bull Cola, the black carbonated soft drinks without caffeine.
Red Bull is much more than a soft 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.
From the company, they separate into 3 sub companies includes 1. The Red Bull Beverage Co., Ltd. 2. Siam Winery Trading Plus Co., Ltd. 3. T.C. Pharmaceutical Industry
6 Functional Analysis
Marketing
From the makers of one of the original energy drinks to become Red Bull Cola. It's the first major brand extension for the company and they're setting it apart from other similar soft drinks and from Red Bull itself by to be a cost leadership and differentiate the product from competitors by no caffeine and less Carbonated in Cola.
There are many new comers that want to enter in black carbonated soft drink market. Most of them fail because they face of strong competitors like Pepsi and Coca Cola that consumers prefer more than unknown brands. But Red Bull Cola has some staying power because of many reasons such as reputation from Red Bull energy drink or strong financial.
Product uses differentiation, try to come out from Pepsi and Coca Cola have because caffeine free for carbonated soft drink is quite new also with less carbonated. Concentric Diversification Strategy for Red Bull company because from the original Red Bull has a good reputation in energy drink and the machine or suppliers doesn’t change too much. Red Bull Cola try to target new customers like teenagers to consume their product and this new product has synergized with the existing product lines.
But the weak point that Red Bull Cola does not consider is advertising. It is very hard to Red Bull Cola’s advertising on TV and radio like other brands. So people will not prefer Red Bull Cola because they do not know about the advantage of this brand.
Production-Operations-Manufacturing
Red Bull is very good in production because there are many product lines about beverage but for carbonated soft drink still not quite good. And Red Bull Cola can produce at economic of scale so it can sell at lower price than other brands. But Red Bull Cola is not good in logistic because the product cannot provide to all areas in Thailand. Moreover, Red Bull Cola just only one kind of carbonated soft drink of Red Bull.
The location for producing Red Bull is at Pranburi because it appropriate for doing industry that have to use very big areas and easy to find resources and easy for transportation in production. It is a new factory and have new machine and together with high standard production under GMP standard (Good Manufacturing Practice). From this it makes Red bull believe in their quality for every unit.
Human Resource Management
Red Bull Company will hire only people who expertise in each way and distribute work that appropriate with that person to make the work more efficiency and effective.
The very important project of Red Bull is “Red Bull Spirit”, company try to create conscious and motivate their employees to do for society and help others and it has many activities and a lot of time in donation for foundations to make people who have no chance like us have a better life. They also try to convince everyone in society to help each other and let’s do it to make it real for a better future in Thai society and everyone will be happier.
Research and Development
Red Bull stay at the same position for 30 years and no taste improvement so, company try a little bit more for changing taste to make it better but it still not exact easily see but the thing that change to match with the trend and modern style for now is must be packaging and label that it’s more beautiful and more interesting.
The processing is also develop to conform to the higher standard and quality to decrease the failure and make products clean and hygiene by the controlling of Ministry of Public Health. And increase customer satisfaction.
For carbonated soft drink Red Bull company is new and not expertise in this so, It needs a lot of improvement and R&D to make better taste and satisfied consumer by finding trend now or construct a research.
Information Systems
This is an era of technology; we have to contact and find information through media especially from internet. Internet is a world wide that can let anyone know about company’s information but for Red Bull, it still lack of this and product information, it seems to be hard to find.
The improvement of online service is needed to increase consumer awareness and to promote product itself by not cost a lot money.
Online ordering through website is also necessary because if company has it, it will make the process faster and easier in management. Reduction in cost by less using of employees and transportation cost. So, if company has better service and provide necessary information, the image of company will look better because high technology in this time is very important.
Financial – Accounting
Red Bull has a very good financial position, it comes from the SBU of the company that varies, not target much in just 1 or 2 product. Company tries to go to other kinds of product that has a growth opportunity to gain some market share and make a better product to penetrate the market e.g. Puriku is the first white tea in the market and the response from consumers are really good that makes company has more chance to produce more flavors in Puriku brand.
Also with a good cooperation in international that causes a company stronger and be more believable in global and domestic market although the image is different.
According to a lot of kinds in SBU and different growth rate in each kind, the product that seems to be weak is helped by a strong SBU e.g. Sponsor, Red Bull Extra and Spy wine cooler that hold high market share and rank on the top in the market so, it’s hard for a weak SBU will fail.
Recommendations for company:
Red Bull Cola should improve this service for customers because it still less and hard to contact customer service along with less information and also the logistic to provide more distribution channel for customers. For product development, Red Bull is quite good because it lunches the less carbonated soft drink with no caffeine but it has only cola flavor, so if it launch more product line in kind of carbonated soft drink, it will be more interesting.
Product Background
1. Red Bull Energy Drink
Category: US Energy Drinks; Packaging: 8.3 oz can
Ingredients: carbonated water, sucrose, glucose, sodium citrate, taurine, glucuronolactone, caffeine, inositol, niacin, D-pantothenol, pyridoxine HCL, vitamin B12, artificial flavours, colors
Nutrition Facts: Serving Size: 8.3 fl. oz Servings per Container: 1 Amount per serving: Calories: 110 Total Fat: 0g Sodium: 200mg Protein: 0g Total Carbohydrates: 28g Sugars: 27g
2. Red Bull Sugar Free
Category: US Energy Drinks; Packaging: 8.3 fl oz can
Ingredients: carbonated water, sodium citrate, taurine, glucuronolactone, caffeine, acesulfame k, aspartame, inositol, xanthan gum, niacinamide, calcium pantothenate, pyridoxine hcl, vitamin b12, artificial flavors, colors
Nutrition Facts: serving size 1 can; calories 10; fat 0g; sodium 200mg; total carb 3g; sugars og; protein less than 1g; niacin 100%; vitamin b6 250%; vitamin b12 80%; pantothenic acid 50%
The flavor is basically the same as the original but with artificial sweetener. It’s not very exciting. In addition, they used the same packaging as the original. Also it’s not very innovative. Overall, it's the same old stuff, but with a different sweetener.
3. Red Bull Energy Supplement
Category: Int'l Energy Drinks; Packaging: 150ml glass
Ingredients
Coca leaf , Kola nut ,Lemon/lime , Clove , Cinnamon , Cardamom , Pine , Corn mint , Galangal , Vanilla , Ginger , Mace , Cocoa , Liquorice , Orange , Mustard seeds.
The result is a natural, not-too-sweet cola taste, which comes from using the right plant extracts. Red Bull Thai edition looks quite different than its US or European counterpart. As for the taste, the core flavor is the same as the other formulations, but this one is not carbonated and is much sweeter than the others. We have not to mention that the taste is actually palatable. 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. Therefore, it is a very special recipe.
4. Look Tung (ลูกทุ่ง)
It’s also an energy drink like Red Bull but it sells in lower price for 7 Baht to compete in the energy drink market because all of products price is around 10 Baht. So, this will penetrate the market and stimulate the sales.
5. Krating Daeng Coffee
Because of the market growth of ready to drink coffee is high so, Red Bull is interested to enter the market in hoping to gain market share. And from the reputation of Red Bull Extra can affect to consumer to believe in their drinks that can awake them. The price is just 12Baht per can.
6. Sponsor
Sponsor is a sport drink or electrolyte drink and its ingredients include of Sucrose, Dextrose, Chloride, Sodium and Potassium. All of it help to reduce dehydration rate when playing sports or do activities. For the price 10 Baht per bottle and 12 Baht per can.
7. Puriku
The bud is the most important part of tea which is rich in antioxidants and nutrients. A feature which appeals to today’s new generation of tea drinkers, under the concept of “Best of tea”. Its target market is 18-39 year-old customers who are already committed to the benefits of drinking tea. The product is priced at 20 baht for 500 ml.
8. Spy wine cooler
Spy wine cooler has built its popularity since its first launch in Thailand in 1986. It’s made from an aromatic blend of wine, natural sparkling water and mixture of tropical fruit flavors. Spy wine cooler is a sparkling wine and refreshing drink that can enjoy by all.
9. Monsoon Valley Wine
The Monsoon Valley Wines are fascinating; clean, light, dry and very drinkable. It is the leading wine from Siam winery, one of Asia’s biggest wine producers. It has been developed for 8 years to implement with Thai food, especially for spicier dishes. They are now available throughout the world.
10. Red Bull Cola
It is rebranding product from 10 years ago but it didn’t succeed. Product quality that it is very important for consumers to consider is the Thai version is sweeter and not carbonated. It states very clearly in two languages on the can that it's caffeine free. And they use red color and design to attract more consumers in the shelf store especially in teenager that they will like in design of this brand.
The ingredients listed here are a bit small to see, but it says: "Main ingredients (approximate): Sugar 11.7%, artificial flavors, and natural colors. Contains preservatives." Taste is very sweet. There's far less carbonation than either Pepsi or Coke, almost so that it seems flat. But after drinking a few swigs, the aftertaste of the sugar stayed a long time.
Company Portfolio
Space Analysis
Aggressive quadrant
Red Bull Cola has a good financial position because of it has a good performance of product line like Red Bull Energy drink that makes the company has high profit. The market of carbonated soft drink is attractive because the size is very big and can hope for profit even gains less market share. But the important point is Red Bull has to face with strong competitors.
Also the environmental stability is an external factor that has a high effect that suffers overall industry and it has to be concerned.
Space Matrix
Strengths and Weakness
Strengths
Trustworthy that will never change and strong brand recognition since the company long story and gain a lot of customer loyalty in Red Bull energy drink which it is a root of Red Bull Cola. Moreover the energy drink of Red Bull is a leading brand in the market that it will have more power to fight in the carbonated soft drink market even it has to face with a big competitor.
Strong International Operation, in others countries Red Bull has a good positioning and has high profit so, an operation must be good and has to cooperate with That Red Bull. It will makes a good reputation for Thai Red Bull and to be known in international.
Successful advertising and brand placement within extreme sports for energy drink that can create customer awareness and it will be easy to help advertising Red Bull Cola and build trust to customers.
Low cost cola seems to be more interesting for consumers when they compare the price and quantity with other brands in this economic situation now, Red Bull Cola can respond this to customers because they would like to spend less and save more and lower purchasing power.
Weaknesses
Less advertising for Red Bull Cola causes people less aware of it because it is a new product that just enter to the market, it should promote itself or use Red Bull Extra to be a helper to make people know of Cola.
Low information about product, hard to find and ask the detail about ingredients, promotion, or anything else. Especially for Red Bull Cola, company still didn’t provide any information in website. It has just only in business journal.
For taste is not improved and be the same for a long time for Red Bull Extra, Re Bull Cola is just only flavor in carbonated soft drink so, it’s very limited and less choice for consumers and caused less interesting in the market.
Bad logistic, Red Bull Cola lacks of this because the distribution channel is less and not provide to every places in every provinces like strong brand – Pepsi and Coke.
IFE Matrix
SECTION III – COMPETITIVE ANALYSIS
Direct Competitors
Coca-Cola is the big name company who selling beverages especially carbonated soft drink in stores, restaurants and vending machines. Coca-Cola is often referred to simply as Coke. The company claims that the beverage is sold in more than 200 countries around the world and it also gain the highest shares in global carbonated soft drink market. However, Coca-Cola is the second in Thai carbonated soft drink market.
Coca-Cola sets the price as same as Pepsi that is the highest in carbonated soft drink. But most of people still buy Coke because of the good taste, brand image and so on.
Because of lots of competitors in the market, the company tries to compete with others by lunching new products to meet the customers’ need and trend of the market such as, Coke Zero and Coke light. Moreover, it offers more choices for their customers by offering the colors carbonated soft drinks: for examples, Fanta and Sprite.
Pepsi is the famous company in carbonated soft drinks in the world. It sells the products via many channels such as, retail stores, restaurant and vending machines. Pepsi Company is the market leader in carbonated soft drinks in Thailand. The Pepsi products including Mirinda and Seven Up, in Thailand are sold by Sermsuk Company Limited.
The prices of products are sane as Coke. Pepsi can set price higher than other competitors excluding coke, because the quality and taste of product are quite similar with Coke and also Pepsi is the top of mind for Thai people.
Pepsi Company lunches many products to compete with competitors both direct and indirect such as Pepsi Lemon, Pepsi Green, and Diet Pepsi.
Indirect Competitors
Oishi Green Tea is the one of businesses in Oishi Group that is popular in Thailand in 3-7 years ago. Green tea business gains a lot of shares in soft drinks market. Many consumers in Thailand prefer to drink green tea more than carbonated soft drink. On that time, the market growth rate in green tea business increase sharply that causes many competitors enter to the market. Nowadays, the growth rate of green tea business is drop. Oishi tries to stay in the market and lunch new products such as, Coffeo, Zeki orange juice and Amino OK.
For the fruit juice market, there are many companies in the market for a long time. Thai consumers are already known this market. They gain a bit shares in soft drink market. Tipco Food Company offers consumers about healthy drinks especially fruit juice. They focus on the consumers who concern about their health.
Strength and weakness of Coca Cola
Strengths
1. Coca Cola is a strong company to say the least. Not only are they a $23 billion company but in 200 nations. Coke sells about 400 drink brands including four of the top five sellers right now. They own 36% of the largest coke bottles in the world, Coca Cola Enterprises, which staffs facilities all over the world.
2. Coca-Cola has been able to survive and grow in an ever-changing market because of its ability to systematically innovate and deliver new products.
3. Coca Cola is an organic product and become more and more popular while there are not many well know organic companies.
4. Their biggest strength is the brand loyalty their customers have. When this product is launched, avid Coca Cola drinkers will choose this organic fruit juice or soda over any other competitor simple because it’s a Coca Cola product and they trust it.
5. Coca Cola’s bottling system is one of their greatest strength. It allows them to conduct business on a global scale while at the same time maintain a local approach .
6. Coca Cola has many product lines.
Weaknesses
1.Coca Cola has negative publicity. Despite Coke’s reputation of continuing innovation and recent product line expansion, the company is still best represented by its flagship product, Coca-Cola Classic. This product, know to contain high levels of sugar and caffeine is causing a recent uproar on our increasingly health-conscience world. One of Coca-Cola’s major concerns is the very real possibility that obesity concerns may reduce demand for some of their products. In addition, lawyers are threatening to go to court over alleged deceptive practices involving contracts to sell soft drinks in schools. This puts the pressure on Coke to provide healthier alternatives to their carbonated drinks if they want to keep selling in schools.
2. They‘re poor communication. They are an extremely large company with thousands of people working on many different levels in the organization. One of the most important tools essential to this type of organization is good communication between all levels, and some Coke employees are saying that it could and should be better. Some workers describe the communication as disorganized, saying how difficult it is to exchange information with superiors and convey ideas about fixing problems that may occur on the “street level” of day to day operations.
3. It costs money for Coca Cola because they do not have ties with organic suppliers nor they do have the equipment or materials needed to manufacture such a product. They will have to create new manufacturing process.
Strength and weakness of Pepsi
Strengths
- They are so experienced and stationed in people's mind deeply. Now no one
doesn't know the brand Pepsi-Cola Whenever the name Pepsi is heard, people will conjure up the image of fresh and cool drink.
- It has the ability to place a Idle sum of money to the promotion. We can see
that the advertisement of Pepsi-Cola is so attractive. It also invited the top famous people to advertise for it. The advertisement is so elaborate and attractive so that Pepsi gained the special prize of the advertisement.
3.They always update its own quality, flavor and also package promptly in order to satisfy the consumers' need.
4. The Pepsi production to meet the different need of the consumers. That is customer-orientated
Weaknesses
1. The design of Pepsi-Cola's package is not as attractive as Coca--cola. It still needs to be improved. We suggest that the package needs to be designed more colorful to attract people's attention.
2. The one strength that has been credited for most of its success in the past has now become a weakness for Pepsi. This former strength is the franchise system. The franchise system in Pepsi Corporate view has become a liability.
3. Pepsi is inferior is in the fountain soft drink division. This has always been a problem for Pepsi because of their ownership in fast food restaurants.
4. Pepsi also has a weakness in the international beverage market.
Strategic groups
High
Price
Low High
Market Share
From the graph above, we show x axis for market share and y axis for price and as we know that Pepsi hold the highest share and next is Coca cola and the price for these are the highest in the market is 14Baht. Red Bull Cola gain 1%market share and price almost lowest for low cost cola. Mecca cola, RC cola and Aje Big cola are also low cost cola that gain very low market share but about the price, Mecca cola 13baht, RC cola 11Baht and Aje Big cola 10Baht but for 535 ml that’s difference from others that contain just 325 ml.
We use these 2 factors because of the differentiation in market share it can easily see because 2 big companies in carbonated soft drink market in Thailand that hard to compete with. And price, it has just 2 level 1. Normal price is for 2 big brands and 2. Low cost cola that just entering to the market is not too long and try to compete by use price sensitivity of consumers.
Competitive Grid
Competitive Factors:
Rating 1 – 10 Scale for the competitive factors; (1 = weakest and 10 = strongest)
Strategy Canvas: Industry Red Bull Cola
Pepsi
Red Bull Cola
As you see in “strategy canvas of the industry of Red Bull Cola”, Red Bull Cola compares their strategy canvas with Pepsi and Pepsi has the higher than Red Bull Cola. The reasons are Pepsi used the high quality of ingredients and had high brand image more than Red Bull Cola so that the price of Pepsi is supposed to be higher than Red Bull Cola. Red Bull Cola use the brand image of Red Bull energy drink and Red Bull’s image is in the low-class customer such as worker. Also, Pepsi is being more sponsorship more than Red Bull Cola so that Pepsi has well in brand image. Pepsi emphasize on the performance to serve the best to the customer more than Red Bull Cola. Also, Pepsi has better in packing such as bottle and can but Red Bull Cola just only has one package that is can. Pepsi has more product variety such as Pepsi Max, Pepsi green and Pepsi twist. Pepsi use more IMC by advertising their product through the media such as TV, billboard and newspaper. Pepsi uses the celebrity and well known people such as football players to be their presenters. Red Bull Cola does not have their product’s advertisement through the media so many customers do not know that Red Bull has Cola. Customer will be loyalty to buy Pepsi more than Red Bull Cola and other because of quality, marketing strategy, logistic and others. So, Red Bull Cola should improve their quality and strategy in marketing and product.
Competitive Profile Matrix ( CPM )
Red Bull Cola identifies the strength, weakness, opportunity, threats, capability, objective and strategic with the rival company (Pepsi). Red Bull Cola is good in financial position more than Pepsi because Red Bull Cola use the same financial with Red Bull energy drink. But Red Bull Cola is poor in logistic, distribution channel, advertising, product line and customer loyalty than Pepsi. When compare with Pepsi, Red Bull Cola does not have their transportation. They use Red Bull energy drink’s transportation. It is hard to find the stores that sell Red Bull Cola because Red Bull Cola sells only in 7-11. Also, they do not sell their product in many channels such as on internet. Red Bull Cola does not have their advertisement through the media so customer does not know about the product. Red Bull Cola does not have the product line because Red Bull Cola just only have one variety in Cola not like Pepsi. Pepsi has many product lines such as Pepsi and Pepsi Max. Pepsi get the customer loyalty more than Red Bull Cola because brand image and quality. Red Bull Cola is lower in product quality than Pepsi but not much because Red Bull Cola is concern about the customer’s health. Red Bull Cola is less carbonated and caffeine free that more healthy for people who would like to consume carbonated soft drink. So, Red Bull Cola provides less dangerous to customer’s health. Red Bull Cola has the same organization structure with Pepsi because both of them are the well-known company and has the good backgrounds.
Strategic Competitive posture
Positioning Statement
TO people who health conscious but still like to consume something sweet and also for low income people from the root of Red Bull original , Red Bull Cola is less carbonated and caffeine free that more healthy for people who would like to consume carbonated soft drink. Because the ingredients are free caffeine drink that offer you the less ingredients of caffeine and carbonated then provide less dangerous to your health.
Positioning Mapping
To customers who love to drink carbonated soft drink, Red Bull Cola offers the differentiated product with lower price is less carbonated and caffeine free cola, but it has only one flavor. Also, A&W provide consumers only root beer flavor that is different from Red Bull, Coca-Cola and Pepsi. For Coca Cola and Pepsi, they have strong brand images because they are in the carbonated soft drinks market for long times. Moreover, they provide many products to consumers to catch more consumers in carbonated soft drinks market.
SECTION IV – COMPANY COMPETITIVE STRATEGY AND A FINAL ANALYSIS
BCG Matrix
As you can see from BCG Matrix, it shows you the SBUs in Red Bull Company are in what position in the market. First, Red Bull energy drinks and Sponsor are today’s breadwinners of the company because they are the market leader in energy drinks business but market growth rate in this business is not high. Also, Red Bull energy drink and Sponsor can bring the highest profit for the company. Therefore, Red Bull should maintain and harvest in this SBUs. Next, Spy wine cooler is in the Star position. It is the market leader in wine cooler market that has quite high market growth rate. Red Bull should invest more in these SBUs because they may generate high profit for the company in the future. Puriku white tea and Monsoon wine are positioned in Question mark because they are not the leader in the markets. The company should develop both of them to be in the Star position because growth rate in tea market and wine are quite high and company can benefit in these markets. In addition, Red Bull Coffee is also in the Question mark but it is failures business because is gain very small share in the market, so the company should divest it out of the business. For Red Bull Cola, it is in Dog because Red Bull Cola is a newcomer in the carbonated soft drink market that is slowly growth. Also, it gets a bit share in the market. Although the growth rate in carbonated soft drink market is low, the value in the market still high. Therefore, the company should keep it in the company portfolio and harvest to gain profit or divest by selling it to other companies.
According to IFE Matrix, Red Bull Cola is in cell-5 (IFE = 2.465 and EFE = 2.97) can be described as hold or maintain. Red Bull should use product development strategy. It has to lunch new flavors to satisfy consumers. Also, it should develop the package of Red Bull Cola to be more attractive. That can help Red Bull Cola to maintain their sales and market share.
Strategic option / Future directions
1. Red Bull should use the advertising campaign to Red Bull Cola by using word of mouth, advertising transit through TV, radio and newspaper. They should use sale activities and marketing campaign by using promotion, improve their package, sale service and have more channel for customer to purchase such as the customer can order the product on Red Bull web-site. Also, Red Bull should give their information to customers by having call center.
2. Actually the price for Red Bull is already low so, it may means that they use penetrating pricing for people who price sensitive so, they should use this point to be a benefit for the company and also the good reputation from others products can affect to the sales of new product – Red Bull Cola.
3. Because of Red Bull Cola is rebranding this product, it should improve more than this about taste and image to make consumers impress when they try it first and next time will coming.
4. For distribution channel, it still less as you can see that you cannot find it every retailer like Coke and Pepsi. It avails in Bangkok just 7-11 and 108 shops but for outbound and other provinces, it can find easier because it targets more on rural.
5. Red Bull Cola as a market challenger because it has least market share and also a new comer by rebranding. It uses flank attack because Pepsi and Cola are very strong and they can’t see any weak point so, it just only one thing that Pepsi and Cola look over is they forget to care for low income consumer that buy 1 can for 14Baht may be too high especially in rural countries.
6. Perceived value pricing – it concern more on consumer’s perceived value, not seller’s cost because it targets much on blue collar worker and health conscious.
7. For Red Bull Cola, Red Bull energy drink that is a product line of the company may affect to the pricing strategy because image and target customers, it’s quite concentrates on low income people.
8. When Red Bull Cola launched to the market, it provided free trial to let people know the taste, if they like, they will come back.
9. Corporate Strategy – Integrative growth for the related business from the current product line by using forward integration because he current distributors are still low number and company already had a good financial position and employees also R&D to develop their product.
9. Generic Strategy
Red Bull Cola is “Cost Leadership” and focus in low cost when compare with competitors such as Coca Cola and Pepsi. In the same quantities as competitors, Red Bull Cola’s price is 10 baht per can when Pepsi and Coca Cola’ price is 14 baht per can.
10. More ways to improve Red Bull Cola performance
New uses
Red Bull Cola can be composition to the new uses of mixer in cocktails, ice-cream cola and cola ice.
New users
The new users of Red Bull Cola are athletics’ drink in energy drink, kids and teenagers that it may gain more market share.
Frequency
Red Bull Cola should use promotion and campaign on selling such as public relation, events, being sponsorship for extreme and motor sport and word of mouth. Also, it should use more advertising on TV, radio, and newspaper.
New products
Red Bull Cola should create the new size in bottle, can, and long can. It should design the new packaging such as in World’s cup Football and other seasonal. Also, Red Bull Cola should create new variants and new form to ice cube.
Alliances
Red Bull cola should join with snack such as Lays in buying cola combine with lays will get discount only at 7-11
Add Value
It should add value in pricing differentiation for low price, product differentiation for no caffeine and less carbonate, promotion and channel differentiation for discount, e-commerce, and expand to the grocer shop. Also, it should add value in image for being sponsorship in Olympic, extreme and motor sport.
Product mix
Red Bull has many product mixes in their company such as Red Bull energy drink, Red Bull Cola and grape wine.
Reduce cost
It should reduce warehousing cost and transportation cost ex; Red Bull Co. distributes Red Bull Cola to the retailers for every two weeks. So, Red Bull should change to distribute the products to the retailers for 3 weeks in more quantities.
RECOMMENDATIONS
Red Bull Cola still not improve in some process and need to analyze their company performance to make it better and develop to compete with a big brand in the market because if it use just only low cost to compete, it may difficult to penetrate the market because people now more concern in value of the product so, Red Bull need to use 4 actions framework of blue ocean strategy to create value innovation that provide more ways for customers.
Reduce
- Sponsorship for less attractive activities.
- Unskilled labors because the efficient task comes from skill labors.
Eliminate
- Old brand image that more target on low-income person.
- Some production process.
Create
- None chemical ingredient.
- Using herb to be ingredients.
- Mix Red Bull energy drink with Red Bull Cola to be a new product.
- Create more Red Bull soft drink by mix with fruit flavored.
Raise
- Size to have many sizes (can and bottle)
- Distribution channel through wholesalers and retailers.
- Advertisement through TV, radio and booths in department stores.
- Improve technology in online service and online selling.
- R&D cost in Red Bull Cola to improve it to have more product line