Introduction To Marketing: Red Bull

Topic 1: Introduction to Marketing

Red Bull

1. The Product/ Competitors/Industry

1.1 Product

Red Bull is a sweet, caffeinated drink aimed to give consumers the high energy kick. Available only in rather expensive 250ml cans, 350ml bottles, with 4 packs and only two �flavours’ (original or sugar-free). It contains caffeine, taurine, glucuronolactone, and B vitamins. Founded in 1984 by Austrian businessman Dietrich Mateschitz, Red Bull has become the worlds leading energy drink, a staple in many young, and active people’s lives.

1.2 Competitors

Big global companies such as Coca Cola and Pepsi have introduced their own energy drink versions to their product base. Mother (by Coca Cola), Amp (Pepsi), V, Battery, 180, RedEye and Bennu being just some in the ever-growing energy drink market.

Competition also presents itself in original sports drinks, such as Gatorade (Pepsi) and Powerade (Coca Cola). Furthermore, premixed alcoholic drinks like the Smirnoff range form part of the competition.

1.3 Industry

Red Bull has becoming hugely successful and operates within the global soft drink marketplace. Within the soft drink industry its niche is the �energy drink’ market, of which Mateschitz was largely responsible for creating. Red Bull currently is the leading energy drink across the entire globe. It holds 70% of the market worldwide (Gschwandtner, 2004). Once the drink was passed by health ministries, Red Bull entered the Austrian market, soon thereafter then moved into Germany, United Kingdom and the USA by 1997.

2. Needs, Wants and Demands satisfied by Red Bull

2.1 Needs

There are three basic human needs that Red Bull satisfies, physical, social and individual needs. �Human needs are states of felt deprivation… marketers do not invent these needs; they are a basic part of human makeup…People in industrial societies might try to find or develop objects that will satisfy their needs.’ (Kotler et al. 2006)

Firstly, a physical need is when tired drivers are feeling the need to fall asleep due to fatigue; and this can compromise their safety. A driver needs to stay awake and alert when driving to avert danger and this need is satisfied by Red Bull. In fact it has become a �hot item amongst tired drivers stopping at gas stations.’ (Gscwandtner 2004).

A social need for example is where �humans have a social need for belonging’ (Kotler. 2004) and this need is satisfied by belonging to a group. A group could be people with the same interests eg extreme sports. Red Bull associates itself with energy, danger and youth culture, and markets its product through its sponsorship of youth culture and extreme sports events. Consumers who drink Red Bull are �automatically’ introduced to the Red Bull culture, and their social need is then satisfied.

The final need is individual. An individual may have a need for concentration or self-expression and this could be inhibited by fatigue or weariness. Red Bull realised that it could satisfy this need by �energising and stimulating the mind’ (Red Bull 2008). For example, if they are fatigued, a university student may experience an inability to retain knowledge and therefore show an inability to express themselves.

2.2 Wants

A want can be defined as �the form taken by human needs as they are shaped by culture and individual personality’ (Kotler et al. 2006)

Extreme athletes want to accelerate their performance and to revive themselves quickly after each event and this want is satisfied by Red Bull. Red Bull promotes its consumption �to increase physical endurance, improve concentration and reaction speed, improve vigilance and stimulate metabolism.’ (Red Bull, 2008).

2.3 Demands

�Demands are human wants backed up by buying power and given their resources, people demand products with benefits that add up to the most satisfaction.’ (Kotler et al. 2006). Another way of putting it is that �demand for a product…is both a willingness and an ability to pay for the product that will satisfy a particular want’. (McColl et al. 1998)

Red Bull is arguably one of the most expensive soft drinks on the market, a can of Coke generally costs around $2.50 for 375ml whereas a smaller 250ml can of Red Bull is sold at $3.75. Consumers are willing to pay the higher price for Red Bull because it satisfies their needs and wants, it also delivers on its promise to �Vitalize Body and Mind. So regardless of size of the can or price, consumers are willing to pay for Red Bull’s product.

3. The Marketing Management Philosophy

In our opinion, Red Bull fits into three of the marketing management philosophies. When it first entered the market it could be viewed in the selling concept phase. Founder Dietrich Mateschitz even stated. “If we don’t create the market, it doesn’t exist.” (Gschwandtner 2004). Mateschitz used buzz marketing to promote the product by giving consumers free samples.

Once Red Bull established itself it then moved into the product concept philosophy. It seems that many consumers buy the Red Bull product wholly based on what benefits it can give them, i.e. increased wellbeing and energy. Red Bull cans are branded with the tagline �Vitalises body and mind’ and it is well known by consumers that drinking Red Bull can alleviate tiredness.

The final philosophy the product fits into is the marketing concept. �This is where an organisation delivers target market satisfactions more effectively and efficiently than competitors.’ (Kotler et al. 2006). This can be done by researching its target audience and the company has shown this by the fact that �Red Bull has a 70 to 90 percent market share in over 100 countries worldwide’. (Gschwandtner 2004). This clearly indicates that Red Bull’s current marketing strategy is working well and they are ahead of their competitors in the market place.

4. The Marketing