• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Redbull in India - SWOT analysis. The Indian Energy Drink Market is estimated to be 100 crores. Red Bull is currently the market leader in that segment. The company has a very good success story in the western countries behind it.

Free essay example:

image00.png

MARKETING MANAGEMENT

ENERGY DRINK: RED BULL

image22.png

Submitted to: Prof. Avinash G Mulky

Report by:

Chandraprakash. V (0911228)

Karthigeya Prabhu. R (0911242)

Navin M (0911256)

Shashank More (0911270)

Vivek (0911285)


TABLE OF CONTENTS

CHAPTER 1 COMPANY ANALYSIS: Red Bull

1.1 SWOT Analysis

1.1.1. Strengths

1.1.2. Weaknesses

1.1.3. Opportunities

1.1.4. Threats

CHAPTER 2 Customer Analysis

2.1. Needs

2.2. Laddering of Needs and Goals

2.3. Customer Value Analysis

CHAPTER 3 COMPETITION ANALYSIS

CHAPTER 4 COLLABORATOR

CHAPTER 5 CONTEXT

5.1. Economic Aspect

5.2. Socio- Cultural Aspect

CHAPTER 6 MARKETING STRATEGY


  1. COMPANY ANALYSIS: Red Bull

Tagline: “It gives you wings”

Red Bull is an energy drink. It is the flagship product of an Austrian Company, Red Bull GmbH. It is a pioneer in Energy Drink brands worldwide. It was found in 1984 and entered the Indian markets as recently as 2003. It pioneered the Energy Drink category in India.

  1. SWOT Analysis

  1. 1.1.1. Strengths

The Indian Energy Drink Market is estimated to be 100 crores. Red Bull is currently the market leader in that segment. The company has a very good success story in the western countries behind it.

  1. 1.1.2. Weaknesses

  1. Cost

Red Bull in India is priced at Rs. 75/- for a 250 ml can. This is more expensive than most drinks even alcoholic. A 700ml bottle of Kingfisher beer costs Rs. 65/-

  1. Taste

The taste of Red Bull is not conventional. It is similar to that of a cough syrup.

  1. Variety

The company is new in India and has just one product. There is no diversification being done.

  1. Patent

The recipe of red bull energy drink is not patented. Any other company can copy it.

  1. 1.1.3. Opportunities

The drinks market for other category is saturated and the market for energy drinks is still untapped. It is an opportunity for Red Bull to look into different markets.

  1. 1.1.4. Threats

  1. Social environment

Red Bull does not support healthy lifestyle. It is high on fat and caffeine content. People might not accept it. Also it is quite difficult for people to consider it to be non alcoholic.

  1. Political environment

Similar to movements in USA, it is possible that it has to prove its non-alcoholic nature in India also in return of some organization filing a litigation.

image23.png

Fig 1.1. SWOT Analysis

  1. Customer Analysis

2.1. Needs

Stated Needs

The primary stated need that Red Bull is looking to cater to is that of providing energy to consumers when they are out of it.

Unstated Needs

The consumer is also trying to ensure that whatever product he buys is safe and healthy. Thus, the makers of Red Bull should clearly indicate that there is no undesired side-effect or impact on health caused on drinking Red Bull.

Real Needs

When customers are involved in activity and seem to run out of energy to complete it in the face of an impending deadline, they are looking for a product which will keep them going till the goal is reached. Thus, Red Bull is marketed as this product which gives them the extra push (“wings”) for this purpose.

Delight Need

The customers are also trying to portray themselves as someone who is stylish and making a statement about the same through the consumption of Red Bull.

Secret Need

The product that they are buying for the purpose of providing energy and making a style statement should not be very heavy on his/her purse.

2.2. Laddering of Needs and Goals

We believe that there are 2 kinds of consumers who drink Red Bull, one segment being those who drink it for the basic need for which it is designed i.e. to provide energy and the other being

those who are trying to make a style statement by drinking Red Bull.

image01.png

image11.png

image15.png

image16.png

image17.png

image18.png

image19.png

Fig.2.1. Ladder (i)

image20.png

image03.pngimage21.pngimage04.pngimage02.png

image07.pngimage05.pngimage05.pngimage06.pngimage09.pngimage08.png

image12.pngimage10.png

image14.pngimage13.png

Fig.2.2. Ladder (ii)

2.3. Customer Value Analysis

The purchase of an energy drink falls into the “Habitual buying” segment. For, even though there are many products in the market, a consumer doesn’t follow a complex decision making model before purchasing it and continues buying one brand if he/she likes its taste and is attracted to it. We believe that there is some amount of brand loyalty involved in the decision making process in buying an energy drink.

Customer Survey:

We conducted a survey to find out the perception of people towards energy drinks and the product Red Bull in particular. The people surveyed were in the age group 18-35, both students and working professionals. Most of them were people living in metro cities and belonged from middle to high income level. We had around 84 respondents. These were the conclusions that were drawn regarding the importance of attributes and the value that they derive from Red Bull from the same.

Attribute

Rating (on 5)

Health aspects

4.07

Energy

3.94

Taste

3.88

Cost

3.86

Availability

3.56

Packaging

2.56

Brand Ambassadors

1.95

When asked to rate Red Bull on the same attributes, this was their response.

Attribute

Rating (on 5)

Health aspects

3.02

Energy

3.57

Taste

2.52

Cost

2.20

Availability

3.37

Packaging

3.52

Brand Ambassadors

2.61

From the responses we can safely conclude that the most important aspect before the buy is done with regard to the impact it has on health. Here, the customer is satisfied, but there is scope for conveying clearly that there are no side-effects of using Red Bull. But the most significant results come in the attributes taste and cost, where customers are not very satisfied with the product and enough scope to push the product through changing the cost of the product. The customer seems to be satisfied with the energy content and packaging. Red Bull is also readily available as they are sold in most retail supermarkets.

  1. COMPETITION ANALYSIS

Red Bull is operating in energy drink segment of soft drink market. It is differentiating itself with the energy content that it is providing to consumers. This is responding to customer’s interest on well being and performance. If we divide the soft drinks market, here are some basic categories.

  1. Carbonated Drinks
  2. Diet Drinks
  3. Sports Drinks
  4. Energy Drinks

Red Bull falls in energy drink category. Red Bull competes with other three categories indirectly. To identify the strength and weakness of competitor’s top selling brand from each category is analyzed.

  1. Carbonated Drinks:

Competitor Name

Strengths

Weakness

Coca Cola

Pepsi

Mirinda

Sprite

Limca

Fanta

Thumsup

  1. High Availability
  2. Excellent Distribution channel
  3. Low Price
  4. Taste Good
  5. Variety in Flavor
  6. Variety in Size
  7. High Advertisement
  1. High Carbon Di Oxide Content
  2. Not preferred by Health Conscious
  3. Imaged as non healthy drink
  1. Diet Drinks:

Competitor Name

Strengths

Weakness

Diet Coke

Diet Pepsi

  1. Medium Availability
  2. Good Distribution channel
  3. Medium Price
  4. Taste Good
  5. Variety in Flavor
  6. Variety in Size
  7. Health Conscious
  8. Sugar Free
  9. Low Calorie
  1. High Carbon Di Oxide Content
  2. Doubts on Actual Results
  1. Sports Drinks:

Competitor Name

Strengths

Weakness

Gatorade

Lucozade Sport

  1. Medium Price
  2. Variety in Flavor
  3. Variety in Size
  4. Health Conscious
  5. Athlete Drink
  1. Poor Taste
  2. Low Availability
  3. Weak Dist Channel
  4. Moderate Taste
  1. Energy Drinks:

Competitor Name

Strengths

Weakness

Amul Stamina

Cloud 9

Bling

X365

  1. Health Conscious
  2. Athlete Drink
  3. High Energy Content
  4. Keeps you awake
  1. Poor Taste
  2. Low Availability
  3. Weak Dist Channel
  4. Poor Taste
  5. High Price
  6. No Variety in size
  7. No Variety in Flavor

Pepsi (KMX) and Coke (Adrenaline Rush) are the global energy drinks which have not yet made their entry in Indian market. These potential competitors have huge parental advantage. Coke and Pepsi both have excellent distribution network. Apart from distribution networks their spending on advertisement is huge which may directly affect Red Bull in future.

There is an additional advantage with Red Bull with competitors. The energy segment is largely unknown in India at this point of time. The competitors spending on advertisement will create a new market for energy drink which will increase the size of market as a whole. During initial years with competitors it is more likely that the sales of each participant increases.

Apart from all these categories, there are some indirect competitors which threaten the Energy Drink market. Tea, Coffee, Ready to Drink Juices, canned coffee products (Amul Café), Ready to drink milk also are indirect competitors of Red Bull. Since they also serve the purpose of keeping one awake for some time, these products are used by people because of their easy availability, low prices and ease to make at home.  These are the proxy products which eat into the market, but Red Bull is not directly competing with in the market.


  1. COLLABORATOR

The following channels can be considered as collaborators for Red Bull Energy Drink:

Colleges

As the major target market for Red Bull is youth, it is essential for it to target colleges for promotion and sales. Red Bull has been doing this in an effective manner. Red Bull has been the sponsors for various college festivals. They use this as an opportunity for creating awareness by distributing Red Bull cans. The all famous Red Bull van, with a huge Red Bull can at the back is a very common sight in colleges. Red Bull distribution girls can be seen in Delhi University Campus almost every day distributing free cans. Further Red Bull should also form alliances with colleges to sell Red Bull in their messes. Red Bull is currently being sold in our mess at IIM Bangalore.

Clubs

An important collaborator of Red Bull is Clubs. Clubs sell Red Bull for non alcoholic customers. They now cherish the idea of drinking a drink like Red Bull over Fresh Lime soda. Red Bull is considered as a club drink.

Also the mix of Red Bull with vodka, popurlarly known as “Birch”  is considered to be a very good combination and has become very famous. As such cocktails are sold mostly in clubs and pubs, Clubs are very important collaborators of Red Bull.

Sports and adventure

Red Bull has collaborated with many Go Karting Circuits in India to promote its drink. In USA, Red Bull has associated itself with the extreme adventure sports. It has not done so in India maybe due to a lack of such activities in the country. Red Bull can collaborate with such events which is very common in Goa. One thing Red Bull has failed to do so far is associate it with cricket which might be a very important avenue to look for.

Supermarkets

This is probably the biggest collaborator in terms of volumes. Red Bull should focus on how to push sales through this.

  1. CONTEXT

5.1. Economic Aspect

The cost of a Red Bull is above the purchasing power of an average Indian consumer. This makes the sale restricted to a select segment in the market. From what we understand, even though the volume of sales is low, the margins of profit involved for the product are very high. Since an Indian consumer is markedly different from those abroad and considers price as a very significant factor before making the purchase, it would pay results if the company looks back at its pricing strategy.

5.2. Socio- Cultural Aspect

An Indian consumer is not used to a product such as Red Bull, a high-priced non-alcoholic drink that gives him energy to finish his activities. There is a tendency for him/her to associate Red Bull to an alcoholic drink and hence the natural aversion to alcohol and spirits in the culture keeps him away from purchasing it. Another factor that plays a crucial role is that of taste. The purchase of any beverage outside of home is heavily decided by the taste of it. The taste of Red Bull is not naturally liked by the Indian consumer. The high level of caffeine in Red Bull is also a worrying factor for the consumer who has fears of getting addicted and hence becoming a regular user of Red Bull.

  1. CONCLUSION

Based on our understanding of the 5Cs, we conclude the if Red Bull targets the right market, it has an immense potential in India. To increase the profits, we think that Red Bull should capitalize on Volumes and compromise on its price. The huge margin it has right now will make that possible without inculcating many changes in the production process and go ahead with an expensive marketing strategy. Red Bull has the advantage of being the market leader, but it also has to keep in mind that there is huge scope of competitors entering the market. These potential competitors viz products of Pepsi and Coke, already have an established supply chain in India and hence will take advantage of that in the pricing. Red Bull has to focus towards establishing a low cost supply channel. The company also has to make sure it lobbies with the Government officials well to make sure any litigation against the drink is kept in check. Overall, we believe that with the right strategy in mind, Red Bull can become a very profitable and successful brand in India.

Red Bull: Marketing Management                                                                                                

This student written piece of work is one of many that can be found in our University Degree Marketing section.

(?)
Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Related University Degree Business and Administrative studies Skills and Knowledge Essays

See our best essays

Related University Degree Marketing essays

  1. External analysis for Tesco's

    The forces of competitive rivalry have reduced the profit margins for supermarket chains and suppliers. 3.3 Bargaining Power of Customers Porter theorized that the more products that become standardized or undifferentiated, the lower the switching cost, and hence, more power is yielded to buyers Porter M.

  2. Free essay

    Marketing analysis of detergents in the Indian Market.

    The following is a print ad featured during this period: Relevance The concept of detergent powder as a means of washing clothes was new to the Indian house hold at that point in time. So to create market for it, the marketers relied on the propositions of Superlative whiteness and washes whitest.

  1. strategic analysis of walmart

    A strategy combining elements of low cost, price and leadership is known as hybrid strategy .Mintzberg advocated the hybrid strategy for it combines both elements of low cost leadership with differentiation. However, the fact can not be denied that Wal-Mart has a focus strategy as well as a differentiation strategy.

  2. Market Environment of Amul Dairies of India.

    Indian milk production, however, in contrast to other milk producing countries, is characterised by lakhs (millions) of small and marginal farmers including landless milk producers for whom it is not only a business but also the main source of earning.

  1. marketing syrategy of sunny delight

    low growth. These products provide current profits and cash for the development of new products and/or shareholders dividends. > Dog = These are products with a low share of a low growth market. These may be associated with the decline stage of the product life cycle, and may be discarded if profitability declines in the further.

  2. Consumer Behaviour in the Soft drink Market - Coke.

    The asthma and Allergy Research Centre stated that additives in 40% of children's drinks can cause fidgeting, rudeness and excessive behaviour.

  1. The South African Breweries (SAB) has been operating since 1895 and holds 98% of ...

    Excluding the two largest national parks, only approximately 4% of the surface area of South Africa is formally protected. Economy The currency of South Africa is the Rand (approximately R 6.10 = US $1). The economy has grown steadily since 1992, although the rate has slowed.

  2. Marketing report Absolut Vodka

    The above technique had been utilised by Absolut wherein the messages within its advertisements were carefully penned down in order that they incorporate certain codes which can be deciphered only by the targeted audiences. To this day, Absolut had created more than 1500 advertisements and the ads also won about 30 awards (Lewis, 1996).

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work