Red bull Marketing report

[Marketing Report] Red bull

CONTENT

1. Induction....................................................4

2. Body.........................................................5

2.1 Part A Influence factors of macro environment.............5

2.1.1 Demographic............................................5

2.1.2 Economic...............................................5

2.1.3 Natural................................................6

2.1.4 Technological..........................................7

2.1.5 Political..............................................8

2.1.6 Cultural...............................................9

2.1.7 Reference list of Part A..............................10

2.2 PART B Segmentation of Red bull..........................11

2.2.1 Australian market.....................................11

2.2.2 How big and how fast it growing.......................12

2.2.3 Relevant trends.......................................12

2.2.4 Market segmentation...................................13

2.2.5 Market targeting......................................14

2.2.6 References list of Part B.............................16

2.3 Part C Competitors of Red bull & all companies’ competitive

position.....................................................18

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2.3.1 Goals, strategies, strengths and weaknesses of Red

bull’s competitors..........................................18

2.3.2 Competitive position of energy drinks in Australia....19

2.3.3 Reference list of Part C..............................22

2.4 Part D Red bull’s competitive advantage & perception of

itself and customers.........................................23

2.4.1 Differentiation competitive advantages................23

2.4.2 How Red Bull to be perceived by its target market.....24

2.4.3 Positioning statement.................................25

2.4.4 How Red bull to be perceived by customers (by a face- to

–face questionnaire)........................................25

2.4.5 Possible Value Proposition............................26

2.4.6 Reference list of Part D..............................27

Conclusion.....................................................28

Appendices.....................................................29

Questionnaire of Energy Drink in Australia.....................31

Page2


Executive Summary

This report is for research and analysis of performance of Red

Bull Operation Company in Australian market.

The Part A is about how six macro environmental forces impacting

the company’s environment in industry, company, product and brand

areas. Red Bull has succeeded to develop marketing approaches for

the Australian market and consider different macro environmental

factors with demographic, economic, natural, technological,

political and cultural.

Part B is Red Bull to defined Australian market by customers,

competitor and Demography. Then analysis the how’s situation of

development of Australian market, and digital age and sustainable

development could influence the growth of the market. There are

three market segmentation could help for Red Bull more effective

in the market, which are Demographic, Behaviour and Geographic.

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The target market of Red Bull is male with age between 18 and 35

years old. These customers live in cities and they may be

students, athletes, professionals and drivers.

Part C is analysis Red Bull’s advantage and disadvantage compared

competitors, and it is also predict their marketing strategy by

different type of market groups, such leader, challenger,

follower and nicher. Red Bull as challenger of the market has to

learn more from the leader.

Part D is about search differentiation of Red Bull by product and

image of brand and how it can be competitive advantages. Red Bull

develop “stress marketing” strategy, the “Wings team’s” has the

role to get relationship with customers by talking with them

about product and convey information from them. Red Bull would

like to maintain prices relative similar and high compared the

rest of the Energy Drinks industry.Red Bull positioning statement

is provided most valuable energy drink for customers with highset

price. For flavors and packages, providing more flavors can bring

more attractive packages and stimulate consumer confidence which

is beneficial for the development of a company. The Red Bull

value positiona is providing the best product with higher price,

also the cost is expensive.

1. Induction

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In recent years, more and more people would like to have energy

drinks to replenish necessary power to catch the quick pace of

life and work. Based on the demand, there are a large number of

energy drinks in the market, particularly in Australian market.

This report focuses on a world famous brand, Red bull, to analyze

its current marketing situation. The purpose of this research was

first to carry out how the marc environmental factors influenced

Red bull. The second aim was to look at the segmentation of the

company. On top of that, the next aim was to get out the Red

bull’s competitors’ goals, strategies, strengths and weaknesses

and discuss the competitive position in the whole market in

Australia. All in all, the final purpose is find Red bull’s value

proposition by using positioning map and perceptual map.

According to the results of this paper, some related

recommendation will be given in the end.

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2. Body

2.1 Part A Influence factors of macro environment

2.1.1 Demographic

In Australia market, the youth people being the major consumers

and also bring a peaked of the consumption of Energy Drink in

recent years. The age from 16 to 45 all enjoy Energy Drinks which

can improve their effective of the work, study and sports.

The operation of the Red Bull in Australia was located in Sydney,

which city is the most population and economic city in Australia,

and the most population of Australian was distributed on the

Australia East Coast. The location of company could benefit for

marketing research and better to understand the feature of

demand.

For different level of age structure and consumers, Red Bull

published different types of products. Red Bull sugar free and

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Red Bull zero for older clients and Red Bull Edition of younger

clients. (Red Bull site, Products) In Australia, obesity and

overweight always one problem for local people, and Australian

realized health food in life.(National Health and Medical

Research Council) The Red Bull sugar free and Red Bull zero are

the keys to open the potential consumer market. Red Bull Edition

has three taste drinks which are Cranberry, Lime & Blue Berry,

and these different tastes of drink satisfy younger people for

seeking different taste of drink.

Red Bull as the first energy drink in Australia, it has “first

mover” advantage in the market. The older people still choose Red

Bull even after V, Mother and Rockstar entry the market. Other

hand Red Bull’s loyal consumers not only include older age’s

consumer, but also people who love sports or activities which Red

Bull sponsored.

2.1.2 Economic

The economic environment won’t have much impact on the Energy

Drinks industry. Australian average weekly expenditure on the

food and non-alcoholic beverages are about $204. The price of

Energy Drink in Australia still between the range of $2 to $5 and

belong to special drink and niche market, just few substitutions

such as coffee and normal drinks. (Australian Bureau of

Statistics, 2011) Compare coffee or other normal drinks, Energy

Drinks could provide most energy for people who need the power,

and that its unique feature which cannot substitute.

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In Australia, company invest different kind of sports and events,

for example, the Racing Australia, Formula One World Championship

2013 and other exciting sports. All these sports and activities

are attracting attention of people all over the world.

The price of Red Bull price still more than at least 10% of other

Energy Drinks. Food and non-alcoholic beverages is the second

expenditure on the goods and services, that means there are

enough potential consumers in Australia, and Red Bull want

provide price premium and show they are the best in the Energy

Drinks, not only their price, but also product’s quality.

Red Bull has more effective branding campaign than its

competitors. Red Bull investing huge capital on grass-roots

campaign, which can help them attracting new consumers and

maintaining the loyal the old customer. (Mullins, J.W., Walker,

O.C.)Like Racing Australia could be provided honour and raise

awareness for Australia, that could help more consumers accept

Red Bull in psychological aspect.

2.1.3 Natural

Energy Drink is one type of drink would help people stimulant

drugs, and it may be contains carbonated and usually have huge of

caffeine and other stimulants, sugar or other sweeteners. (Energy

Drinks, Australian Beverages) Planting materials, manufacturing

pollution and product recycle could influence the natural

environment.

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Red Bull Australia crossing managed transportation, logistics and

channels to saving cost and energy waste. Firstly is WALL-TO-WALL

Production. Red Bull’s manufacturing base in central Europe, not

Australia, and also provide lots of benefit, such as explicit

local high quality ingredients, protect local resources

immediately and 80% is sourced from renewable energies in the

Europe. (Can Lifecycle, Red Bull site)Next is ideal transport

packaging. Red Bull can is effective transport packaging because

of its form and low weight, and it can saved at least 30%

compared with glass bottles and PET bottles. (Can Lifecycle, Red

Bull site)The last is Efficient Cooling. Red bull promotes the

uses of ECO-Coolers, which could avoid greenhouse gases. (Can

Lifecycle, Red Bull site)

Red Bull always be careful the recycling of the product, they has

chosen the use of aluminium cans. The use of aluminium has

several benefits, could be recycled many times without damage of

quality, saving more energy by using reclaimed aluminium, lower

weight than before, smaller carbon and keep drink fresh for long

time.

Red Bull implements sustainability development strategy for built

the ethical and environmental brand, which can help them to

receive competitive advantage when Australian more focus on

social responsible as well as the rest of the world. In Australia

‘Green’ brand is more easily accepted by the customers, and it is

also the key to get the advantage of brand reputation.

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2.1.4 Technological

Energy Drink as an emerging industry can be traced decades ago.

The first ‘energy’ drink - Coke was published in 1886 and it contained

caffeine and stimulant which can provide people extra energy.

(Samantha Lile, 2013) After decades years, Energy Drink keeping

improved and innovation. In 1929, published of Luzocade which

contains 46% milligrams of caffeine and 37% of sugar. (Samantha

Lile, 2013)In 1949, Dr.Enuf developed a soft drink which named as

‘energy booster’ and it is not only contains caffeine and sugar,

but also mixed with B vitamins. (Samantha Lile, 2013)Then Japan

published popular energy drink of Lapvitan in 1962, and Thailand

developed “Thai Red Bull” was popular in East Asia which is now

Red Bull. (Samantha Lile, 2013)As the technological innovation,

Energy Drink not only brings more energy for consumers, also

trending to be health drink. Therefore technological improvement

brings unlimited possibilities for Energy Drink.

Technological could reduce the cost of Red Bull, especially on

the transportation, logistics and channels, such as WALL-TO-WALL

Production and ideal transporting packaging. Red Bull was

manufacturing product in Austria and export products to other

countries. It not only can promise the same taste of the product,

but also a safe way to keep secret of the recipe.

For product, Red Bull invested search and development on the

taste, shape and materials of can. For taste, Red Bull published

RED BULL EDITIONS with three specific flavours: Cranberry, Lime

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and Blueberry. Red Bull designed the shape of can, which is

better to transport. The use of aluminium on the material of the

Red Bull product can, the kind of material easier to recycle for

reduces the cost of the new can. In other hand the design of

250ml can is for quickly to drink and effect. With developing of

technology, people buy Red Bull products are no longer limited to

convenience stores and supermarkets, online shopping or phone

shopping also became a trend. Customers only need to shop in

front of computer or phone at home.

Logo of Red Bull combined two red bulls which face each other and

one gold sun. Two red bulls and golden sun are representing the

power, speed, energy and aggression. Two red bulls build a pair

of wings which is Red Bull’s official slogan – “Red Bull gives

you wings”, everyone has right and power to fly.

2.1.5 Political

In Australia, there’s no enforcement law to limit for consumption

of caffeine, but Food Standards Australia New Zealand (FSANZ)

recommend 201 mg caffeine per day per adult. In Energy Drink

250ml contain 80mg of caffeine, so the maximum amount of daily of

Energy Drink should be two can of 250 ml. (FindLaw Team, Find Law

Australia) The Standard 2.6.4 published by Australia New Zealand

Food Standards Code which is formulated caffeinated beverage must

not be mixed with non-alcoholic soft drink to produce product.

(FindLaw Team, Find Law Australia)The standards Code also limited

the maximum amount of caffeine of Energy Drink is 320mg per

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litre. (FindLaw Team, Find Law Australia)Therefore, excessive

intake of Energy Drinks that possible to damage the health of

consumers.

Red Bull Company claims their drink is safe, and the level of

caffeine and taurine is safe as a cup of coffee. Some people

still dead after too much Red Bull or mixed with wine, and some

people dead had used Red Bull as a mixer with alcohol. Some

countries limit and ban Red Bull, for example, France, Denmark

and Norway just allow Red to be sold in Pharmacies. (Dan Harris,

ABC NEWS)

Red Bull has warning consumers on the product package, such as

contains caffeine, not recommended for children, pregnant or

lactating women or caffeine sensitive persons and it is also

statement the maximum can or bottles daily.

For the brand, Red Bull always focuses on social responsible,

make sure the brand reputation over the world. Red Bull not only

concerned about environmental protection and sustainable

development, but also aims to organize charity event. Red Bull

through publicity activities to promotion and raising charitable

fund. Red Bull use charitable funds to invest in the development

of disease and poor countries. (2012, Red Bull charity campaign

raises €1 million)

2.1.6 Cultural

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Australia as a nation of immigration, it is easier to accept

different culture or new experience. Energy Drink as new type of

drink, Australian would like to taste it. Major cities in

Australia, such as Sydney, Melbourne, as the pace of people’s

life is speeding up, they need Energy Drink provide them extra

energy.

Red Bull Company has positioning customers on top athletes, busy

professionals, active students and drivers on long journeys. In

Australia, company promotion crossing local activities and

promotion, for example, Racing Australia, Surfing Match, and free

Red Bull in university.

Red Bull has produced different types of product to satisfy

different subculture groups. For example, Red Bull Edition has

three different kind of taste corresponding to different

favourite tastes groups, and Red Bull sugar free and Red Bull

Zero aim to group of customers who do not want sugar and

caffeine. The research statement there are more than 50% of men

and women and at least 20% of children are overweight or obese.

(Wellbeing Centre, Chemmart) These statistics Red Bull sugar free

and Red Bull Zero have enough potential market in Australia.

The core of Red Bull brand is “Red Bull gives you wings”. In

Australia, people are said to value equality and a ‘fair go’ for

others. Therefore, the meaning of “Red Bull gives you wings” is

that creates same opportunity as positivity and confidence in the

consumer, because all consumers have the energy and the ability

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to do whatever they want. They are not constrained or restricted,

if they have been given wings to set off and complete their tasks

ahead.

2.1.7 Reference list of Part A

Australian Bureau of Statistics, Household Expenditure Survey,

Australia: Summary of Results, 2009-10, Cat. No. 6530.0 September

2011.

Can Lifecycle, Red Bull site,

http://energydrink-au.redbull.com/can-lifecycle-0#video/210811738

1001

Dan Harris, ‘Red Bull Drink Raises Red Flag’, ABC NEWS,

http://abcnews.go.com/WNT/story?id=130751&page=1

Energy Drinks, Australian Beverages,

http://australianbeverages.org/products/energy-drinks-2/

FindLaw Team, ‘Energy Drinks and the Law in Australia’, Find Law

Australia, http://www.findlaw.com.au/articles/4298/energy-drinks-

and-the-law-in-australia-.aspx

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Red Bull site, Product, http://energydrink-au.redbull.com/red-

bull-energy-drink

Mullins, J.W., Walker, O.C., ‘Targeting Market Segments’,

Marketing strategy, McGraw Hill Education Answers,

http://answers.mheducation.com/business/marketing/marketing-

strategy/targeting-market-segments

Obesity and Overweight, National Health and Medical Research Council,

Australian Government,

http://www.nhmrc.gov.au/your-health/obesity-and-overweight

Samantha Lile, 2013, ‘The History of Energy Drinks: A Look Back’,

WALL STREET INSANITY, http://wallstreetinsanity.com/the-history-

of-energy-drinks-a-look-back/

‘When excess body fat becomes a problem’, Wellbeing Centre,

Chemmart, http://www.chemmart.com.au/when-excess-body-fat-

becomes-a-problem/w2/i1011586/

2012, RED BULL CHARITY CAMPAIGN RAISES €1 MILLION, James Allen on

F1 Ja.F1 The official Website,

http://www.jamesallenonf1.com/2012/06/red-bull-charity-campaign-

raises-e1-million/

2.2 PART B Segmentation of Red bull

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2.2.1 Australian market

Australia is an important market of Red Bull. This is because the

advantage about customers, competitors and demography.

a. Customer

Red Bull defines Australian market because of Australian customer

behavior. Australia is a developed country with sporting culture.

According to Department of Foreign Affairs and Trade Australia,

Australian lifestyle under sporting culture is mentioned that:

there are more than 11 billion Australians of 15 and over years

old play sport at least once a week (DFAT 2012). This is one of

main factors for Red Bull to choose Australian market.Energy

drink product will be the most chosen by young people, who need

more energy in the process of playing sport. Therefore,

Australian market is really appropriate for Red Bull to develop

its product.

b. Competitor

Australia may be a good market because there are not many

competitors. Australia has its own energy drink products, such

as: V, monkey. Moreover, there are oversea brands with Rockstar

and Mother of Coca-Cola. However, According to Weston, Australia

has to import energy drink with more than 100 liters per year

(Weston 2013). It can be seen that locally produce is not enough

supply for demand of Australian people. Therefore, Red Bull with

advantage of the leader in energy drinks market; it will have

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many opportunities to develop on the Australian market, where

there is high demand of the market but not too many competitors.

c. Demography

The trend of growing population is one of the most important

factors of Red Bull to define Australian market. Australian

Bureau of statistic shown the growth trends of Australian

population that: there are 2.6 million customers of aged 10 to 19

and it is increasing from the early 1990s (2007 cited in Kotler

at al. 2013, p.123). Youths and students are the main customers

of Red Bull. Hence, with the increase of this group, Red Bull can

increase its market and get more sales. Because of this reason,

Australian market is one of the appropriate markets for Red Bull

which was chosen to expand company.

2.2.2 How big and how fast it growing

Australia is one of the biggest markets of Red Bull in the world.

In 2011, Red Bull got 32% market share of energy drink Australia

market, just follows V with 37% (Eurominitor 2012). According to

drinkstrade, the profit of Red Bull in Australian market is shown

that “By the end of 2000, Red Bull had secured 7,685,928 unit

sales through the on-premise channel and in seven years, it now

represents 21,560,640 million units (year end 2007).”

( drinkstrade 2009). It can be seen that, Australia is a

successful market of Red Bull. Only in 7 years but Red Bull can

quickly grow and earn lots of profit from this market.

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2.2.3 Relevant trends

There are two relevant trends that affect this market. The first

one is the digital age and the other is sustainable marketing.

a. The digital age

Nowadays, technology significantly develops that leads to the

digital age. People depend more on the development of technology,

particularly internet. It is an important trend that affects

directly to Red Bulls’ market. This is because its main customers

are young teens, who pay lots of time on social network and

internet. Zoaustralia maintained that: there are 94% Australians

access to internet and 69% aged group of 25-34 have shopped

online ( Zoaustralia 2012). According to Abramovich, the author

mentioned the digital strategy of Red Bull that: company has

successful digital strategy with its music showcases, blogs and

video contents (Abramovich 2012). Capturing this trend, Red Bull

may take more communication and advertising to its customers.

Moreover, it can build a better relationship and get more

customer needs. Thus, this trend can be one of the most relevant

trends affects Red Bulls’ market.

b. Sustainable marketing

Secondly, today companies are expected to deliver value to

customer in environmental responsible way (Kotler at al. 2013,

p.18) because customers are paying more attention to protect

environment. Hence, customers will pay more satisfaction and

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loyal to companies which have responsibility to environment. Red

Bulls have its own strategy to protect environmentbyusing up to

80% renewable resources, smart transport by train and ship to

reduce CO2 emissions and supply 313.000 ECO-cooler over the world

to reduce greenhouse gases (Red Bull 2012). It can be seen that

Red Bull captured the trend of its customers. They more want to

associate with companies that are friendly with environment.

Therefore, Red Bull with its environmental responsible will get

more loyal customers.

2.2.4 Market segmentation

Red Bull is one of the first energy drink products for adults who

need more energy. Thus, it is important for Red Bull to indicate

market segmentation. It was indicated base on different

variables, include: demographic, behavior and geographic.

a. Demographic

Customers have difference needs, wants and usage rates that

closely to variables of demographic ( Kotler at al. 2013, p.

249). Therefore, it is an important aspect for Red Bull to define

its market, particularly depend on age, gender and occupation

segmentation.

①Age and gender

In 2012, Australia has 42.2% people from 25-54 years old, with

4,713,552 males, and the second group is 13,5% of 15-24 years

old, with 1,524,835 males (Indexmundi 2013) . This age group has

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the most dynamic daily activities that need to get more energy.

According to O’brien, Red Bull focus on male between 18 and 35

years old ( O’brien 2012). Hence, with this energy drink, this

group is the most appropriate with its product. Moreover, when

choose this segmentation, Red Bull is successful to promote to

its customer by sponsoring for game contexts, music concepts and

social media. This can help Red Bull bring it product directly to

its customer.

②Occupation

Red Bull gives more energy for its customers. Thus, its customers

are mentioned that: they are active students, athletes, busy

professionals and long distance drivers ( FnBnews 2006). These

people always suffer mental and physical stress. They need a

special drink that can help them increase their capacity and

concentration. Hence, red bull with features characteristic of

its products can satisfy these customers.

b. Behavior

The variable in this segmentation that was indicated is Usage

rate. There are three types of usage rate, there are light user,

medium user and heavy user ( Kotler at al. 2013, 247). According

to Jessie, the most customer of Red Bull focus on is heavy user

and these users bring the most profit for Red Bull, with nearly

$2 billion in 2012 ( Jessie 2011). Red Bulls’ customers are

mainly men in 18 and 35 years old. This aged group is the heavy

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user that Red Bull focuses on since they have the most demand on

energy drink products.

c. Geographic

Red Bull bases on the density of geographic to define Red Bull

market. According to Indexmundi, in Australia, 89% of total of

Australian population is urban population (Indexmundi 2013). They

have a more active and busy living so they willbe potential

customers of energy drinks. Moreover, in cities there are more

bars, night clubs and pubs, where Red Bull is one of the most

popular and favorite drinks. This is place where Red Bull has the

most customers and gets the most profit of sale. Therefore, Rural

will be the main market targeting of Red Bull.

2.2.5 Market targeting

The target market of Red Bull is male with age between 18 and 35

years old. These customers live in cities and they may be

students, athletes, professionals and drivers. Therefore, they

want to choose an energy drink to become more concentrate and

capacity. Moreover, its customers are also the people who like

going bars, night clubs and pubs, where Red Bull is a popular

product. With an appropriate market targeting, Red Bull can make

lots of sale to increase its profit over years. According to

energyfiend, the profit of Red Bull is shown that:

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YearProfit

( $ Million)

2013 3,433

2012 2,950

2011 2,300

(Energyfiend 2013)

It can be seen that, while being the leader of energy drink, the

profit of Red Bull is increasing from 2011 with 2,300 to 3,433 in

2013. This is because Red Bull successfullyindicates its own

market targeting. This market is really relevant with its product

and this is one of the main reasons for the success of Red Bull.

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2.2.6 References list of Part B

Department of Foreign Affairs and Trade 2012, People, Culture and

Lifestyle, DFAT, viewed 07 October 2013,

http://public01.library.uow.edu.au/refcite/style-guides/html/

Weston, S 2013, Homegrown energy drinks fuel the market in Australia and New

Zealand, Foodbev, viewed 06 October 2013,

http://www.foodbev.com/news/homegrown-energy-drinks-fuel-the-

market#.UllyTFBmiSo

Kotler, P, Burton, S, Deans, K, Brown, L & Armstrong, G 2013,

Marketing, 9thedn, Pearson, Australia.

Abramovich, G 2012, Inside Red Bull Canada’s digital strategy, Digiday, viewed

06 October 2013, http://digiday.com/brands/inside-red-bull-

canadas-digital-strategy/

RedBull 2012, Can lifecycle, Red Bull, viewed 07 October 2013,

http://energydrink.redbull.com/can-lifecycle

O’rbien, J 2012, How Red Bull Takes content Marketing to the Extreme,

Mashable, viewed 06 October 2013,

http://mashable.com/2012/12/19/red-bull-content-marketing/

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http://mashable.com/2012/12/19/red-bull-content-marketing/

http://energydrink.redbull.com/can-lifecycle

http://digiday.com/brands/inside-red-bull-canadas-digital-strategy/

http://digiday.com/brands/inside-red-bull-canadas-digital-strategy/

http://www.foodbev.com/news/homegrown-energy-drinks-fuel-the-market#.UllyTFBmiSo

http://www.foodbev.com/news/homegrown-energy-drinks-fuel-the-market#.UllyTFBmiSo

http://public01.library.uow.edu.au/refcite/style-guides/html/


FnBnews 2006, Energy drink Red Bull to start a rage in satellite cities, FnBnews,

viewed 07 October 2013,

http://www.fnbnews.com/article/detnews.asp?

articleid=17183&sectionid=32

Louver, C 2011, Red Bull: A Brand Built on Marketing, Business

Development Strategy, viewed 05 October 2013,

http://wearedevelopment.net/2011/12/28/red-bull-a-brand-built-on-

marketing/

Energyfiend 2013, The Top 15 Energy Brands, Energyfiend, viewed 05

October 2013, http://www.energyfiend.com/the-15-top-energy-drink-

brands

Drinkstrade 2009, Flight of The Bull,Drinkstrade, viewed 06 October

2013, http://www.drinkstrade.com.au/ContentFiles/Documents/Drinks

%20Trade/Public/Library/insights/other%20categories/Issue

%2007%20Oct-Nov%2008%20Red%20Bull%20Australia%20Janelle%20Neath-

%20Head%20of%20Communications%20insights.pdf

Zoaustralia 2012, Growth Continues in Australia E-Commerce,

Zoaustralia, viewed 06 October 2013,

http://zo-au.com/2012/10/24/growth-continues-in-australian-e-

commerce/

Indexmundi 2013, Australia Demographic profile 2013, Indexmundi, viewed

06 October 2013,

http://www.indexmundi.com/australia/demographics_profile.html

Page24

http://zo-au.com/2012/10/24/growth-continues-in-australian-e-commerce/

http://zo-au.com/2012/10/24/growth-continues-in-australian-e-commerce/

http://www.drinkstrade.com.au/ContentFiles/Documents/Drinks%20Trade/Public/Library/insights/other%20categories/Issue%2007%20Oct-Nov%2008%20Red%20Bull%20Australia%20Janelle%20Neath-%20Head%20of%20Communications%20insights.pdf



http://www.energyfiend.com/the-15-top-energy-drink-brands

http://www.energyfiend.com/the-15-top-energy-drink-brands

http://wearedevelopment.net/2011/12/28/red-bull-a-brand-built-on-marketing/


http://www.fnbnews.com/article/detnews.asp?articleid=17183&sectionid=32

http://www.fnbnews.com/article/detnews.asp?articleid=17183&sectionid=32


Euromonitor 2012, Sports and energy drink in Australia, Euromonitor,

viewed 06 October 2013, http://www.euromonitor.com/sports-and-

energy-drinks-in-australia/report

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http://www.euromonitor.com/sports-and-energy-drinks-in-australia/report

http://www.euromonitor.com/sports-and-energy-drinks-in-australia/report


2.3 Part C Competitors of Red bull & all companies’ competitive

position

2.3.1 Goals, strategies, strengths and weaknesses of Red

bull’s competitors

a.Frucor Beverages Ltd

A famous drink company in the world, Frucor Beverages Ltd from

New Zealand, has three products of energy drinks including V,

Rockstar and Protein Revival. With regards to V, it has developed

so well and became one of the most popular energy drinks in

Australia since 1999.

Firstly, its objects are meeting clients’ demands by selling

various energy drinks. In order to catch the different customers’

tastes, it provides many kinds of flavours such as coffee and

persimmon (V-energy 2013). Secondly, for increasing the products

which can be supplied to the customer, V implemented sponsorships

being its strategy. In 2007, for increasing young customers, V

held an activity called V-RAW which helped young people to find

their ideal jobs (mediahunter 2009). In addition, V has high

brand awareness in Australia. According to a report of Sports and

Energy Drinks in Australia (2012), it shows that it has occupied

more than 37% of market in Australia. Finally, there are some

weaknesses in V as well. It did not use a competitive price in

Australia. In Woolworths, a famous supermarket of Australia, the

Page26


price of 500ml V ($6.04) is higher than the same size of Mother

($5.00) (Woolworths 2013).

b. Coca-Cola

In terms of Mother, an American product, which comes from Coca-

Cola, it is another energy drink brand in Australia. With the

local customers’ high expectation, Mother, which is a natural

energy drink from America, was launched in 2007 (Coca-Cola 2013).

From then on, because of the good quality and suitable market

strategy, it quickly covered a large number of target customers.

To begin with, increasing 20% of the market share year should be

the goals of Coca-Cola in Australia (Coca-Cola 2013). To achieve

this purpose, there are two related strategies following. One is

focusing on products: taste is the first thing which needs to be

considered by producers. Hence Coca-Cola attached more importance

on the customers’ taste experience. In 2012, Mother launched

Mother Frosty Berry, which added a strong and refreshing sweet

option for Aussies (Campaignbrief 2012). The other is focusing on

promotion: Mother knew how to built good relation to public that

can stimulate their purchase desire. In 2010, it became the

official energy drink of the V8 Supercars which is made a deep

impression by the public. What is more, there are also some

advantages of Mother. It belongs to Coca-Cola, which is the

largest beverage company in the world so it can develop itself

quite well by using the parent company’ capital support. However,

the shortcomings of Mother should not be neglected as well: it

Page27


has low brand awareness and low brand value. It could be because

that it just established in 2007 so it is much younger than other

brands in Australia.

c. Buzz Monkey

In terms of Buzz Monkey energy drink, it originates from

Australia in 2005. First of all, its market goal is catching the

eyes of more local clients (Buzz Monkey 2013). Due to the

objective, it prefers new distribution channel to increase the

number of customers such as using online stores instead of entity

shops. For instance, it is convenient to buy the products on

Alibaba.com (Alibaba 2013). Besides that, coming from Australia

may be its advantage: the culture of brand can easily attract

more local people in Australia. However, the disadvantage of Buzz

Monkey is manifest as well: the size of company is so small that

there is little financial support of it. For example, it cannot

spend much money on advertisings, which means it could be lose

some potential customers.

2.3.2 Competitive position of energy drinks in Australia

In energy drink markets of Australia, there are four brands

playing different roles in 2011. Firstly, Frucor Beverages Ltd,

with 37% market share, is the leader in Australia, by V brand.

And then, Red Bull reached 32% share being a challenger. Besides

that, Coca-Cola got 21% share through it Mother brand being a

Page28


follower. Finally, the rest of the marker share in Australia

belongs to Buzz Monkey, the local company (Euromonitor 2012).

a. Market leader (Frucor Beverages Ltd)

Generally speaking, a leader usually has the greatest market

share (40%) and always leads other companies in price change,

promotion spending and distribution coverage. What is more, for

keeping the status, it chooses to expanding total demand, protect

market share and expand market share (Kotleret al.2013, p.100).

Frucor Beverages Ltd with the brand V is nearly 40% should be the

market leader. During the past 15 years, it has made totally

effects on remain No.1 in Australian energy drink market. To

start with, increasing new customers of its products is a

fabulous way to expand the total demand. According to a report,

busy mothers who have to take care of their babies need more

energy than the young students who study at school (Alternet

2013). Because of that, V made young mothers their new target

customers (V-energy 2013). In addition, an effective market

leader will focus on leading the industry in customer service,

promotion and cost cutting to protect market share. With regards

to promotion, in 2013, it used V-media to hold a sale programme

in Sydney. Some workers assigned the free drinks to young people

who were 13-25 years old in some shopping malls such as Westfield

in Bondi Junction (V-energy 2013). Finally, expanding market

share is also vital for market leader. Frucor Beverages Ltd used

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various products including V, Rockstar and Protein Revival to

keep its whole market share in Australia.

b. Market challenger (Red bull)

Companies which are very large with 30% market share but stay

second or third status in an industry called market challenger

and they have capacity to challenge the market leader (Kotler et

al. 2013, p.101).

Red bull occupies roughly 30% in the market of Australia, it

could be the market challenger. In general, it chooses the direct

way to attack the market leader on the business battle. Speaking

of the advertising strategies, Frucor Beverages Ltd, it just

holds some entertainment activities to catch more young

customers. In 2012, it held a live music performance in

Australia, and then 15% sales increased in V Energy Drink (V-

energy 2013). However, as to Red bull, it usually

sponsors big and professional sports events to enhance the brand

reputation. On 2rd Feb 2013, Red Bull Cliff Diving World Series

2013 Qualifier was held in Australia (Red bull 2013). After that,

the brand awareness will be higher than before in the athletes

circle. What is more, fans of some famous athletes may become new

customers of Red bull.

c. Market follower (Coca-Cola)

Some firms with 20% market and they just chose to learn from the

leader’s experiences instead of challenging them are called

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market follower. It may be because copying the successful

behaviorsfrom leaders can bring them more profit but save the

research and development costs (Kotler et al. 2013, p.102).

Mother from Coca-Cola just made up about 20% could be the

follower in Australian market. It did some activities to copy or

improve the market leader, V from Frucor Beverages Ltd. This

product includes many flavors: V green with original flavor, V

sugar free, V black with coffee flavor, V Not Orange with

persimmon flavor and V blue (V-energy 2013).

With the abundant types of products, Frucor Beverages Ltd

attracted a throng of shoppers. Similarly, Coca-Cola prefers the

same strategy to develop its product, Mother. Up to now, it has

consisted of Mother original, Mother sugar free, Mother green

storm, Mother frosty berry, Mother surge and Mother lemon bite

(Coca-Cola 2013). Above all, Coca-Cola should be an adaptor: it

copied the idea from Frucor Beverages Ltd but added one new

flavor for getting more customers.

d. Market nicher (Buzz Monkey)

Companies which have small size with limited resources and mini

market share are called nichers in the market. The truth is that

using suitable niching strategy, these firms also can be great

successful and profitable (Kotler et al. 2013, p.105).

Buzz Monkey definitely is the market nicher because it gets the

rest market share (10%). Firstly, it tries to promote the low-end

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market. Since 2005, it has kept pricing policy to catch low-

income groups. Nonetheless, other companies usually ignore these

clients. In addition, it implements on-line selling strategy

which not only can get more on-line customers, but also can avoid

the serious competition in the physical stores.

2.3.3 Reference list of Part C

Alibaba 2013, Buzz Monkey Energy Drink, Buzz Monkey, viewed 28th

September 2013,<http://www.alibaba.com/product-free/>.

Alternet 2013, Young Mothers Are Some of the Biggest Consumers of Energy

Drinks,Alternet, viewed 28th September

2013,<http://www.alternet.org/drugs/>.

Buzz Monkey 2013, It’s all about the buzz, Buzz Monkey, viewed 28th

September 2013,<http://www.buzzmonkeyenergy.com/>.

Campaignbrief 2012, Mother adds 'Frosty Berry' to range of drinks in new print

campaign via McCann-Erickson Sydney,Campaignbrief, viewed 28th September

2013,

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<http://www.campaignbrief.com/2012/03/version10-

starthtml0000000149-182.html>.

Coca-Cola 2013, V8 Supercars And Coca-Cola Amatil Extend To 2015, Coca-Cola,

viewed 28th September 2013,

<https://www.coca-cola.com.au/index.jsp>.

Euromonitor 2012, Sports and Energy Drinks in Australia,Euromonitor, viewed

28th September 2013,<http://www.euromonitor.com/sports-and-

energy-drinks-in-australia/report>.

Kotler, P., Burton, S., Deans, K., Brown, L. & Armstrong, G.

2013, Marketing, 9th edition, Pearson Australia, Frenchs Forest,

pp.100-105.

Mediahunter 2009, V Energy drinks engage audience online with RAW,

Mediahunter, viewed 28th September 2013,

<http://www.mediahunter.com.au/v-energy-drinks-engage-audience-

online-raw>.

Red Bull 2013, Cliff Diving on the Hawkesbury,Red Bull, viewed 28th

September 2013,<http://www.redbull.com.au/>.

V-energy 2013,In the beginning, V-energy, viewed 28th September

2013,<http://v-energy.com.au/>.

Woolworths 2013,V Energy Can Drink 500ml, Woolworths, viewed 28th

September 2013, <http://www.woolworths.com.au/>.

2.4 Part D Red bull’s competitive advantage & perception of

itself and customers

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2.4.1 Differentiation competitive advantages

There are two differentiations that create the advantage

competitive for Red Bull. They are product differentiation and

image differentiation.

a. Product differentiation

Nowadays, there are more competitors on the market. Thus,

developing product to make it different that will attract and get

more customer satisfaction. Because of this reason, Red Bull is

expanding its product with more flavors: cranberry, blue berry

and crimebut they sale it in the limited time (Aaker 2012). Red

Bulls’ customers now can get more choices with their

favoriteflavor. Moreover, it changes its design and packing with

8 tiny cans (Aaker 2012). Thatwillgivecustomersmore vary choices.

Therefore, Red Bull can gain more customer satisfaction.

b. Image differentiation

Nowadays, there are many competitors on energy drink market. By

establish the image differentiation, company will be more

perceived by its customers (Kotler 2013, p. 265). Beside creative

advertisings, Red Bull develops its image by sponsoring for many

sports and racing game in many countries like Red Bull Air Race,

New York Red Bull or Skateboarding in Colorado (Aaker 2012). By

sponsoring for these events, Red Bull may communicate and build

strong image to the customers. Hence, it will gain advantage

competition because of the widely known from its customers.

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c. Differences to promote

Red Bull promote on two difference factors to position

themselves. They are communicable and important factor.

d. Communicable

It is important to choose an appropriate strategy to well

communicate with customers. Targeting customers of Red Bull are

most of young people. Therefore, Red Bull develop “stress

marketing” strategy, the “Wings team’s” has the role to get

relationship with customers by talking with them about product

and convey information from them (Louver 2011). This strategy

will directly communicate to its customers. Hence, customers will

have a better image about product and company can get more

positive impact from its customer.

e. Important

The importance is to deliver higher value to target

customers(Kotler 2013, p. 266). Red Bull is energy drink that

brings more energy for customers. However, with a high rate of

caffeine, it is considered that it is not good for the health of

users. Thus, Red Bull is proposing to develop its product by

using natural resources and nutrition supplement that not only

provides energy but also increases memory and others healthy

benefits- according to redbull-brand (Redbull-brand 2011). With

these new products, Red Bull will be energy drink but good for

Page35


the health. Thus, it can get more advantage strategy by

delivering more value from product to customers.

2.4.2 How Red Bull to be perceived by its target market

As the positioning map shows, Red Bull has highest price with

highest brand image respect to competition. Red Bull has founded

at least 25 years with kept shaping their own brand image – Red

Bull gives you wings. Red Bull events as a unique and trying to

guide drinkers to Red Bull events, it will attract consumers and

improve consumption in target marketing. The events could help

people be part of exclusive the Red Bull family. Red Bull gives

you wings Red Bull will continue to use the tagline on product

and just make the tagline more evident on product, such as on

the give-a-ways that the college Reps will be giving out. These

students would be encouraged to make activities on university

campuses.

Red Bull would like to maintain prices relative similar and high

compared the rest of the Energy Drinks industry. This is for

keeping the image of a premium and high quality product. Red Bull

price premium could even sell more than 400%. (Health & Beauty

Close – Up, 2009) In Australia, the normal energy drinks price

are between 2$-4$, but Red Bull price between 3$-5$. Therefore

compared other competitors, Red Bull could provide consumers most

energy they need with highest price, and also they want present

Red Bull worth the high price. Red Bull brand positioning is the

premium product, premium price and premium profitability.

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2.4.3 Positioning statement

Red Bull positioning statement is provided most valuable energy

drink for customers with highset price, and also they are the

best in energy drinks. In target market, consumers need energy

for working, studying and sporting, and Red Bull can provide most

energy compared other energy drinks.

2.4.4 How Red bull to be perceived by customers (by a face-

to –face questionnaire)

a. Method

First of all, the sample size was 10, these respondents were

selected from different genders and occupations. Besides that,

the data collection was got out through the use of a

questionnaire with a face-to-face interview.

b. Findings

① Finding regarding the relationship between advertisements and

brand awareness

The number of energy drink advertisements may have a relationship

with these products’ brand awareness. According to the data of

Figure 1 and Figure 3, when it comes to V, Red bull and Mother,

it shows that there is a bigger amount of advertisements linking

to a higher awareness in customers’ mind. However, as to in terms

of Buzz Monkey, its situation is different from these products

which are mentioned before. It just made very fewer which reached

Page37


average mark 3 advertisements to the public, as a result, it is

related a quite lower brand awareness which average score is 3.

All in all, there is a positive correlation between the number of

advertisements and the brand perception of customers. It could be

because that advertising is an easy way to create awareness of

new products and brand in order to influence customers’ buying

behaivor.

②Finding regaring the correlations between flavours and packages

There are correlations between the energy drinks’ flavours and

packages. Figure 2 illustrates how customers’ percept about the

energy drinks’ flavours and packages. With regards to V and

Mother, they both have attractive packages and various flavours.

However, as to Red bull and Monkey, they are in the opposite

situation. It may lead to the loss of clients for the two

companies in the future. By the total data from Figure 3, it is

clear to find that, if there are more flavors for an energy drink

product, the packages will be more, and vice versa. It could be

explained by that, the more flavors of products can derive the

demand of more packages.

c. Recommentation

According to the two findings above, there should be some

recommendations following. As to advertisements and brand

awareness, energy drink companies should focus on advertising

strategy to develop their products, it will enhance their brand

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awareness and enlarge the market share in the future. In

addition, for flavors and packages, providing more flavors can

bring more attractive packages and stimulate consumer confidence

which is beneficial for the development of a company.

2.4.5 Possible Value Proposition

For Red Bull, the Possible Value Proposition should be ‘more-for-

more’ which is providing the best productwith higher price, also

the cost is expensive. In this value proposition, Red Bull could

give prestige to the buyer with high valuable. ‘Red Bull gives

you wings’ represent status and a loftier lifestyle, Red Bull

events brings challenge, enthusiasm, and vitality for people

life, it is also belong to self-concept for psychological. For

example, Successful mission to the Edge of Space shows Felix

Baumgartner (AUT) fly supersonic after a jump from one of the

biggest helium balloons ever from 128000 ft. People can watch the

video from YouTube and also find Red Bull icon on the Space suit.

(Red Bull site, 2012) That is other challenge self-concept, also

present ‘Red Bull gives you wings’.

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2.4.6 Reference list of Part D

Aaker, D 2012, How Red Bull Creates Brand Buzz, HBR Blog Network,

viewed 07 October 2013, <http://blogs.hbr.org/2012/12/how-red-

bull-creates-brand-buzz/>.

Kotler, P, Burton, S, Deans, K, Brown, L & Armstrong, G 2013,

Marketing, 9thedn, Pearson, Australia.

Louver, C 2011, Red Bull: A Brand Built on Marketing, Business

Development Strategy, viewed 05 October 2013,

<http://wearedevelopment.net/2011/12/28/red-bull-a-brand-built-

on-marketing/>.

Redbull-brand 2011, Red Bull Brand Strategy: Product Line Extension, Redbull-

brand, viewed 06 Octorber 2013, <http://redbull-

brand.blogspot.com.au/2011/11/red-bull-brand-strategy-product-

line.html>.

2009, “Research and Markets Adds Report: Energy Shots: Birth of a

New Premium-Priced, High-growth Category”, Health &Beauty Close –

Up,

<http://ezproxy.uow.edu.au/login?url=http://search.proquest.com.e

zproxy.uow.edu.au/docview/818848191?accountid=15112>.

2012, Red Bull site,

<http://energydrink-au.redbull.com/milestones-0>.

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http://energydrink-au.redbull.com/milestones-0

http://ezproxy.uow.edu.au/login?url=http://search.proquest.com.ezproxy.uow.edu.au/docview/818848191?accountid=15112

http://ezproxy.uow.edu.au/login?url=http://search.proquest.com.ezproxy.uow.edu.au/docview/818848191?accountid=15112

http://redbull-brand.blogspot.com.au/2011/11/red-bull-brand-strategy-product-line.html





http://blogs.hbr.org/2012/12/how-red-bull-creates-brand-buzz/

http://blogs.hbr.org/2012/12/how-red-bull-creates-brand-buzz/


Conclusion

In summary, firstly, company’s environment is impacted by macro

environment, such as: economic, political, technological,

cultural, demographic and natural. Secondly, Australia market is

defined base on customers, competitors and demographics. This is

a big market and develops over the years. In addition, Red Bull

indicate its segmentation and target market by analyse

demographic, behaviour and geographic of the country. Thirdly,

this report presents objectives, strategies, strengths and

weakness of Red Bulls’ competitors, such as: Frucor Beverages

Ltd, Coca-Cola and Buzz Monkey. Moreover, it also shows the

competitive condition of Australian energy drink, with market

leader: Frucor Beverages, market challenger: Red Bull, market

Page41


follower: Coca-Cola and market nicher: Buzz Monkey. Finally, Red

Bull develops the differentiating competitive advantages by

product differentiation, and image differentiation. Red Bull also

focuses on two different factors: communicatable and important to

position themselves. In addition, Red Bull wants to keep a image

of premium price and high quality. Therefore, it can be seen that

Red Bull is really successful with its marketing program.

Appendices

Positioning Map

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Perceptual Map

Product Advertisem

ent

Brand

awareness

Flavour Package

V 8 8 7 8Red Bull 8 7 5 5Mother 7 6 6 7Buzz

Monkey

3 3 3 3

Figure 3: customers perception on Advertisement, Brand awareness,

Flavors and Packages

High price

High brand image

Low price

Low brand image

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More flavoursFewerflavours

Boringpackages

Attractive packages

Figure 2: Perceptual map1 (flavours VS packages) awareness)


(1= lowest score, 4 = average score, 7 = highest score)

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High Brand AwarenessLow brand Awareness

Fewer advertisements

Figure 1: Perceptual map2 (ads VS brand awareness)


Questionnaire of Energy Drink in Australia

General Questions:

1 What is your name?

2 Gender: A: Male; B: Female.

3 Which country are you come from?

4 Do you work or study now? A: Work; B: Study

Specific Questions:

1 What is the most important factor to influence you buying an

energy drink?

More advertisements

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A: Brand; B: Quality; C: Flavor; D: Package; E: Advertisement

F: Other

2 How do you like these products?

Products Scores( 1-very satisfied,4-

average,7unsatisfied)VRed bullMotherBuzz Monkey

3 What is your feeling about the number of these products’

advertisements?

Products Scores(1-very few, 4-

average,7-too many)VRed bullMotherBuzz Monkey

4 What do you think about the options of these products’ flavor?

Products Scores(1-very few, 4-

average,7-too many)VRed bull

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MotherBuzz Monkey

5 What do you think about the flavors of these products?

Products Scores(1-very attractive,

4-average,7-too boring)VRed bullMotherBuzz Monkey

6 What is level of the duration time after drinking these

products?

Products Scores (1-very short,4-

average,7-very long)VRed bullMotherBuzz Monkey

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