Red Bull Marketing

Venezuela is located on the northern end of South America. Its coastline borders both the Atlantic Ocean and the Caribbean Sea. The country is just over the size of two California’s and has a population of approximately twenty-six million people. Venezuela gained its independence from Spain in 1830. Its government is democratically elected with Hugo Chavez as the current president. Chavez is currently pushing his political idea of “21st Century Socialism” and is nationalizing many of the infrastructural industries. The economy of Venezuela is facing twenty percent inflation rates and a national debt that is twenty-seven percent of the gross domestic product (GDP). Petroleum and agriculture are the two main industries in Venezuela. The service industry creates the most jobs in Venezuela. Petroleum export is the leading source of income for the government. Therefore, the Venezuelan economy is closely tied to the price of petroleum. For the product introduction, Red Bull will be targeting the growing economy of Venezuela. After a few years of recession, the Venezuelan economic structure seems to be turning around based on the rising petroleum prices. The goal is to introduce the Red Bull energy drink to Venezuela’s growing, youthful population.

Red bull is an internationally popular energy drink that is intended to taste like mixed berries. Red Bull is packaged in a slim aluminum blue and silver container with two red bulls as the logo. It provides 8.3 US fl. oz. of thirst quenching power fluid and contains 80 mg. of pure caffeine; this energy drink combats mental and physical fatigue. Red Bull however, was not always Red Bull; this energy drink originated in Thailand and it was sold under the name “Krating Daeng”. It was transformed into a global brand by Dietrick Mateschitz, an Austrian entrepreneur. Mr. Mateschitz was an international marketing director and in 1982 when he visited Thailand someone handed him a can of “Krating Daeng”, which cured his jet lag. After that point, he worked hard to perfect the product and in 1987, Red Bull made its dÐ"©but in its new form in Asia and Austria. Red Bull is Austrians biggest and most famous export product, just after five years it spread into neighboring countries. Red Bull single-handedly established and lifted the booming energy drink from a base of $12 million to $42 million in 1992. Then the sales increased to $130 million in 1993 and last year the company recorded $2 billion in sales worldwide.

Venezuela’s population is overwhelmingly urban with only 11.2% of the people living in rural areas as of 2000. The largest city is the capital of Caracas. The population is growing due to some of the best overall health and medical care in South America. The population is also considered young, with over sixty percent of the people between the ages of 15-64. The population has an almost even ratio of males to females. The top ethnic groups in order are: Spanish, Italian, Portuguese, Arab, German, African, and indigenous groups. Roman Catholicism is overwhelming the largest religion. Spanish is the official language although the use of English is becoming more common due to the petroleum export business. The literacy rate is ninety-three percent with between 20-30% going on to earn the equivalent of a bachelor’s degree. It is a growing trend to see women enter the workplace to help support the family. Family life is the basis of the Venezuelan culture. Most families live near to extended family members so as to maintain close relationships with them. The per capita income for 2007 was $12,800. However, almost forty percent of the population was living below the poverty line in 2007 and the unemployment rate is over nine percent. Chavez has recently enacted a new minimum wage to help fight the poverty in the country.

Venezuelan population falls within the boundaries of what Red Bull’s market is looking for. The prime target audience focus for Red Bull is the between the ages of 16 to 35 years old. In Venezuela that happens to be one of the largest sectors that are being targeted, because census population indicate that 15-64 years is the over all largest sector which is about 63.4%. The next highest crowd’s age is 0-14 years and is 31.6% of the population and a market for future growth. The remaining 5.1% are over 65 years. The age target market is there for the Venezuelan economy; its greatest consumers equal the greatest population so large volume of sales can be expected. When the company goes into a new region, immediately it goes into a city-by-city basis. Venezuela is the sixth most populous country in Latin America and about 85% of the population lives in urban areas; which is precisely what Red Bull sales reps are looking penetrate. Each unit is responsible for creating distribution, making sales calls and developing a targeted marketing plan.

The people of Venezuela are receptive to Western culture even if the government is not. Since World War II, Western ideas in architecture, fashion, and entertainment have been embraced. The ideas of beauty and strength for women and men respectively are highly esteemed in their culture. Televisions and telephones are used in most of the country and internet usage is growing as more than four million currently have access. The availability of media forums will help spread the use of new products marketed in Venezuela. Traditionally, the culturally accepted non-alcoholic drinks have been coffee and fruit juice. Any new company will need to understand that coffee is deeply intertwined the Venezuelan traditional hospitality so an energy drink should not be marketed as a replacement for it. As the economy grows and more women work outside of the home, the sales of soda and other convenience drinks is growing. The soft drink market is booming and many new companies are entering the energy drink market. Another trend that shows the cultural changing of Venezuela is the increase in the number of convenience stores in urban areas as opposed to the traditional marketplaces and exchanges.

The legal and bureaucratic environment climate of Venezuela is in a state of flux. The government is constantly battling corruption and President Chavez is trying to gain more power. It has become more difficult to gain foreign investment capital since Chavez is nationalizing many industries in the country. However, investment opportunities have steadily grown with new legislation designed to attract foreign investors. Today, the country offers low tariffs and competitive tax rates. There is no capital repatriation limitation, no profit transfer limitation, and no prior authorization requirement for investment in the economy. Foreign companies are not treated any differently for their