Q1. How will you characterize Red Bull’s overall global marketing strategy? Red Bull has built an image as a trendy energy drink, catering to young adults and young professionals between the age groups of (16-29) years. It also targets young club-goers and private parties in order to spread its picture as a stylish drink. It also believes that it is not just selling a beverage, but instead it is selling a ‘way of life’. Red Bull also uses a catchy slogan as ‘Red Bull gives you wings’. These non –traditional marketing strategies of Red Bull are not unique to any market. The term ‘Glocal’ means to market globally, yet tailor the ‘message’ to appeal to local tastes.
Red Bull does not follow a Glocal Marketing Strategy, as it does not alter the marketing techniques to any particular country. In all the markets, they cater to the same crowd and use the same pricing, distribution and advertising methods. Red Bull only offers its product in one size (250ml) cans, and design all over the world. Businesses that use global marketing embark on the same product, same marketing techniques and even the same brand names and packaging in all markets.
Red Bull believes in marketing its product with one brand image all over the world. Hence, I can characterize Red Bull’s overall marketing strategy as ‘Global’. In addition, Red Bull does not use local marketing strategies as they do not conform to local considerations. Example Red Bull offers only two varieties in all the countries irrespective of the local demand or taste for a new variant. It also uses the same marketing campaigns of ‘buzz marketing’ or word-of-mouth in all the countries, irrespective of the nature of market in a particular country.
Q.2 Argue for the most relevant segmentation criteria to be used in the International Marketing Selection process. The International Market Selection Process is a very complex process of foreign market screening that considers many factors. For a product like Red Bull, the size and per capita income of its target market is the most important criteria used in International Market Selection. Red Bull’s target market is young adults and young professional (aged 16-22). If the number of people in this age – group form a small fragment of the country’s overall population, then entering such a market would be risky and not profitable enough.
Red Bull has built a brand image of a youthful energy drink and hence it can be successful only in markets that have a large number of young people. Red bull has dominated the energy market for a decade now. Its popularity and stylish design has allowed it to be charged at a premium price. Red Bull is a stylish and vibrant energy drink that is priced at least five times higher than the ordinary soft drink.
Red Bull strongly believes that it offers its consumers something more than a beverage; it believes that it offers them a ‘way of life.’ It provides its consumers with energy and related brainpower to make the most of their time. Due to all of the above reasons, Red Bull can afford to price itself at such a high price. Therefore, it is important that Red Bull chooses those markets where the people have the financial capacity to purchase their product
Q3. Which changes would you suggest for Red Bull’s future global marketing mix, in order to meet the future challenges? After seeing the success that Red Bull has got in the energy drinks market, new brands are entering this market. Hence, it is essential for Red Bull to make certain changes in its marketing, production and distribution strategies. Red Bull offers only one product with two flavor varieties. The new age consumers want variety hence; Red Bull should launch a new flavor depending on local taste.
Also, Red Bull currently offers only one packaging size, it can introduce 1 litre Red Bull bottles that will be beneficial for the Clubs owners in terms of Raw Material costs and Red Bull in terms of Manufacturing costs. Red Bull’s pricing strategy has been beneficial to the company however, they should lower their prices a little in order to gain more consumers in certain markets. The marketing strategies of Red Bull are highly global. They do not alter their strategies according to local considerations. In order to gain an edge in this competitive global market it is essential for Red Bull to start taking local demands and tastes into consideration.
Red Bull’s distribution strategy targets small retailers and distributors that spread the brand name through word of mouth to local consumers. They also use college students to help distribute the product. One thing that they can do in order to improve their product placement is start Red Bull kiosks. This can also act as a marketing tool. Red Bull uses non- traditional and out of the promotion techniques. They spend 30% of their revenue on marketing and promotion. I believe that their unique marketing techniques have worked for them and they should continue with them even in the future.
Q.4 Red Bull is available in large cities in India across super markets, restaurants and bars. Evaluate the opportunities for market expansion in India. Red Bull has already targeted the right market in India i.e. young adults and professionals. Hence, in order to expand in India Red Bull needs to find new ways of attracting this crowd. Red Bull is priced at a high rate, youngsters get a fixed budget every month and cannot afford to spend so much regularly on an energy drink. Hence, Red Bull should be made available in college cafeterias at subsidized rates.
In addition, Red Bull should be made available at call centers and night offices as a more energetic substitute to coffee. Red Bull contains less amount of caffeine than the amount of caffeine in a coffee cup. This information can be used to promote Red Bull over coffee. India has a large number of cheaper substitutes of energy drinks, therefore in order to tap the huge market share of India it is advisable that Red Bull reduce its prices for the Indian Market. Another strategy that Red Bull can use to expand in the Indian Market is to carter to the larger number of truck drivers that India has.
Red Bull originally cartered to provide energy to truck drivers. It can start following the same strategy in order to increase its consumer base in India. It can start by making Red Bull available at highway dhabbas, and shops. However, in order to carter to the truck drivers Red Bull would need to slash its prices, until that is done this strategy will not work. Thus by following the above mentioned ways Red Bull can build a stronger and larger consumer base in India.