Type: Profile Essays
Sample donated: Dawn Hicks
Last updated: August 16, 2019
INTRODUCTION AND CONTENTS PAGE This presentation is about the Red Bull company in the United Kingdom. ??? we will be looking at the background of the company, customers and consumers, as well as the competition and the market analysis of Red Bull. ABOUT RED BULL ??? In 1982, Dietrich Mateschitz became aware of products called “tonic drinks”, which enjoyed widespread popularity throughout the Far East. His idea to market these functional drinks outside Asia evolved whilst he sat at a bar at the Mandarin Hotel in Hong Kong. ??? In 1984, Mateschitz founded Red Bull and started selling Red BullEnergy Drink on the Austrian market in 1987. ??? This was not only the launch ofa completely new product, in fact it was the birth ofa totally new product category.
??? Since 1987, around 30 billion cans of Red Bull have been consumed, more than 4. 6 billion in 2011. STATISTICS USED The statistics used in the following presentation are taken from Mintel, Euromonitor and Keynote. ??? Though we feel that Red Bull should be placed in the Energy Drinks market only, these reports place Red Bull along with Sports and Energy Drinks and Soft Drinks as well. ?? We have included the above as there may be some iscrepancies in the figures shown.
??? In addition to that, we are looking at Red Bull in the UK market. WHY RED BULL We chose red bull, majority in the group is generationally known as the millennium or we consume it as a drink or a mixer. As well as it is young, fresh and fashionable.
??? Thirsty, taste preferences as well having a boost in energy. MARKET SIZE AND FORECAST – SPORTS AND ENERGY DRINKS ??? Market size and forecast for I-JK value sales of sports and energy drinks, 2007-17 taken from Mintel. ??The market value of the Sports and Energy Drinks sector has grown from E800 million in 2007 to El,200 in 2012. The forecast for the market shows that even in the worst case scenario, the market will grow by around E500 million in the next 5 years.
COMPETITION ??? Here we have a look at the sports and energy drink market. As we can see, Redbull has a 22% share of the market, while 6SK has 39% of the market share in total with its drinks Lucozade Sport and Lucozade Energy. ???This data was taken from Mintel. Next we are going to look at the industry environment. ?? In comparison to the energy and sports drink market, we can see that this market is more mature and will therefore be more difficult to penetrate.
?? As per the Mintel report, Red Bulls main competitors – Coca Cola and Pepsi continuously invest in above the line advertising and this supports the category by keeping it in front of the mind with the consumer and also going forward. COLA BEVERAGES As we can see in this diagram from Mintel, Coca Cola is clearly the market leader in the soft drinks take home market.Statistics taken from Euromonitor illustrate that: Coca-Cola and Diet Coke are the market leaders in the carbonates market with 14. 8% and 13. 3% respectively. ??? PepsiCo Inc is the second company with 5. 5% market share.
?? In this industry, Red Bull Cola accounts for Just 0. 2% of the market share. MACRO ENVIRONMENT Political/Legal Regulation of energy drinks in Ireland, Sweden, Canada, and Norway. – Outright ban in Denmark and France, until 2008.
A number of other countries now require energy drinks to carry health warning labels. Miller, 2008) ??? Economical Relatively high price premium for sports and energy drinks. – The market has posted strong growth in recent years despite the pressures on household incomes, suggesting that the functional benefits have succeeded in Justifying their price remium to users. ??? Social/Cultural With almost seven in ten enjoying the boost that these drinks provide, there is potential to further emphasise the functionality of energy drinks. – Health remains a barrier to consumption, with more than a quarter of non-users saying that sports and energy drinks ‘are not very good for my health’.Diet versions are, however, drunk by around three in ten users, allowing more health-conscious consumers to continue buying into the category.
– The over-55s, who are less likely than average to have drunk sport and energy drinks, are due to experience growth of 8. % to around 20 million by 2017, threatening growth in the market. – Energy drinks have had exponential growth in the past few years. With a society of time-scarce consumers struggling to maintain a work-life balance and a younger generation accepting the products market appeal, this growth most likely will continue. ?? Environmental Made from fully recyclable material (aluminium). Reduction in can weight to reduce carbon footprint REDBULL PRODUCT LINE SKU GSK PRODUCT LINE BCG GROWTH – SHARE MATRIX We looked at 2 figures in the market and we found that the energy drink is unreliable ecause its with the sports market. In the BCG we have placed Redbull as a Dog relevant to the market share however we feel Red Bull is still doing remarkable well as it shouldn’t be divested. We think that if Redbull was only in the energy market it would perform better and not be discontinued.
CONSUMERS – USAGE AND OCCASION CONSUMERS – BARRIERS TO DRINKING ENERGY DRINKS CONSUMER – ATTITUDE TOWARDS SPORTS AND ENERGY DRINKS Here we see people like to consume sports and energy drinks moderately, taste is also a vital preference. And public tend to also favour branded drinks as we urselves would fit into this category as we believe the brand personality of Red Bull. This graph also shows that consumer highly disagree with this market because they worry about becoming addicted and reliant on artificial energy substances.TARGET GROUPS – SPORTS AND ENERGY DRINKS CUSTOMERS AND CONSUMERS BRAND ATTITUDES PRICING PRICING IN RELATION TO COMPETITORS Here we looked at the main energy cans sold in Sainsbury and compared prices by ml to see what was the most expensive.
We can see that Red Bull has a margin of El . 19 compared Relentless and Monster. Here Red Bull Cola is expensice that coke nd pepsi but has more volume than the two. Three times the amount – brand personality , mixers taste preferences DISTRIBUTION The take-home channel continues to dominate the overall sports and energy drinks market, accounting for 85% of sales. ?? Sales through the impulse channel have continued to exceed those in the multiples, although growing at a slower rate slowed.
The increased focus on food and a fall in overall alcohol consumption, however, is likely to continue to dampen sales of sports and energy drinks. The impulse channel captures an unusually high share in the sports and energy rinks market, at nearly a half, against the major supermarkets which dominate as a grocery shopping destination, the top four players alone capturing nearly two thirds of total food retail specialists’ sales. ?? The major supermarket operators generally benefit from their economies of scale in offering competitive prices on brands, as well as a price-led own-brand offering and the physical size of the stores which facilitate a comprehensive range. ??? However, sports and particularly energy drinks are primarily an impulse-driven purchase rather than a planned one, supporting uptake through the impulse channel.Meanwhile, the young user profile of these drinks means that their grocery purchases are less likely to revolve around the weekly shop at a major supermarket, again in favour of the impulse channel.
??? Innovation regarding pack sizes, such as I-litre formats (as seen by Mountain Dew) and an expansion in multi-packs, has however helped to drive sales in the multiples, along with greater distribution and an increase in promotional activity by the retailers, encouraging bulk purchasing. ?? The continued expansion of multiple chains’ convenience formats, eg Sainsburys Local, Tesco Metro and M Food and the mergence of Little Waitrose in 2011 is, however, putting further pressure on the impulse channel. Morrisons is set to follow suit by launching 70 convenience outlets by the end of 2014, aiming to capture its share of the convenience sector. ?? As evidenced in the Segment Performance section, the on-premise channel has experienced slower growth when compared to the take-home market, in part reflecting the recent wider troubles of the on-premise channel, as consumers have cut back on drinking out-of-home and nights out. ???However, sales through the channel come at considerably higher average prices than in the off-trade, and the ontinued popularity of mixing a spirit with an energy drink mixer, for instance, J?¤germeister and Red Bull, has helped to drive value sales. ?? The fact that sports and energy drinks are not typically consumed with food does present a barrier to on- premise consumption, particularly with the on-premise market seeing an increasing focus on food and a fall in alcohol consumption. SOFT DRINKS DISTRIBUTION More is consumed at home Red Bull Cola should look at ways to make it easier to buy in bulk rather than individually as then it can be easily consumed.
PROMOTION Red ball sponsors a lot of events such as; Red bull air raceRed bull hockey Red bull entertainment include; music academy which was founded in 2007 in Santa Monica in California, art, dance and video games Red bull sports and athletes Red bull skateboarding Red bull concerts Red bull advertises to generation y known as the millennial born after 1981, red balls Is ‘Dare to be discovered’ Event attracts people towards the product and people remember and associate the products with the events.SWOT FOR RED BULL Strengths – Market leaders – Marketing efforts – Strong, fresh and fashionable brand identity -Almost half of sports and energy drink users prefer branded varieties, with their remium price tag providing a boost to value sales growth in the sector. – Energy drinks brands in particular, have benefited from their youth-focused marketing and strong associations with action sports, which have given them a fun and vibrant image. ?? Weaknesses – Above average prices – Lack of innovation – Reliant on small product base – Lack of patent Opportunities – Extension on product line – Advertising and promotions – Consumer recognition through sponsorship of sports events – New ventures like partnership with Facebook – NPD has strong potential to support engagement in the market, with a large inority of users interested in new flavours, pack sizes and healthier options. ?? Threats – Health concerns – Government regulation on high caffeine content – Consumer awareness of health and well being – Drinks might not be accepted in new markets – Organic energy drinks might steal market share CONCLUSION BIBLIOGHRAPHY Bloomberg Businessweek Magazine (2011) “Red Bull’s Billionaire Maniac.
” coniine] maniac [Accessed 17 October 2012] ??? Keynote (2012) “Soft Drinks (Carbonated & Concentrated) Market Report 2012. ” [Online] Available at: http://O- www. keynote. co. uk. lispac. lsbu. ac.
uk/market-intelligence/view/product/10640/soft- rinks–carbonated-%26-concentrated? ighlight=energy +drink&utm_source=kn. reports. search [Accessed 17/10/2012] ??? Miller, K. E.
(2008) “Energy Drinks, Race, and Problem Behaviours Amongst College Students. ” Journal of Adolescent Health, Vol. 43 pp. 490-7 ??? Mintel (2012) “Sports & Energy Drinks- I-JK. ” [Online] Available at: http://o-academic. mintel.
com. lispac. lsbu. ac. uk/display/ 6333341.
[Accessed on 12/10/2012] ??? Mintel (2012) “soft & LOW Alcohol Drinks the On-Trade- I-JK. ” [Online] Available at: http://o-academic. mintel. com. lispac. lsbu. ac. uk/ display/641328/ [Accessed on 1 5/10/2012]