Strategic Recommendations for Red Bull

strategical Recommendations for flushed tomentumKeeping the cerise dump Flying- strategical Recommendations to Buildthe Brand and Drive Revenue GrowthSince its launch in 1995 in Austria, Red son of a bitch has, in essence, created the hip and fashionable grade of functional energy drinks. Its market program has been the epitome of buzz marketing in which pull strategies be utilized to expand proceeds statistical statistical distribution methodicall(a)y on a global scale. The promotion of Red home run has been pure and focused on the elements of the fruit the distinctive silver and muddy 250mL can, the singular marketplace go, the unique logo and underlying mantra Energy racket followed by a campaign of selective introduction to the particularly chill consumers via sampling and endorsement by personalities synonymous with the brand personality of the intersection point. settle by offsprings alone, the remarkably consistent (albeit with the notable in body of the Uni ted earth harvest-home introduction) marketing plan has been a tremendous success as evidenced by the entrance of so many me-too products. Despite the first appearance of the big dogs (i.e., Coca-Cola, Pepsi, et al), Red hog had managed to achieve sales of near $1billion by the end of 2001. The success of the bran is also evident by the exorbitant price premium that consumer are leaveing to pay ($1.99 $3.00) for just 8.3 fluid ounces of product that was until recently, only available in a single(a) serving (initial offering of 4- packs retained the pricing per ounce of the single serving size).The targeted audience for this product is, anyone who is faint mentally or physically. Despite this shotgun approach, penetration is far slurreder in younger demographics, especially the 14-19 hosts (65% in Austria, 28% in the UK). A elephantine part of the products continuing success is the uniform consistency of the brand anatomy as it is positioned in each market. Competing on t he foothold of a premium product consumable by anyone with the universal lease to reduce fatigue, the product has taken first- liver advantage and remained on top by the maintenance of a premium product that fulfills a commoditized-niche need of the consumer.In terms of the Red Bulls competitive position, the emergence of the home and the success of Red Bull has created a highly competitive scene of action of me-too and novel products. Despite this competition, Red Bull remains a queen-sized but niche product that has become a powerful pilot film brand. Threats to their market position include the wake of new and existing products from companies with deep pockets, extensive distribution networks and substantial marketing prowess some of the 75% (in the UK) market share will be lost (Choeke 2005, p.3 Clark 2005 Euromonitor 2005, p. 3). The opportunities that Red Bull has are a direct result of their weaknesses a single product made in a single location. This is the epitome of the clich that warns against putting all ones eggs into a single basket. As a consequence, Red Bull places a strong emphasis on non submitive inventory strategies by having 45 60 days of products at distribution centers (in the US) ( forward-looking Materials Handling 2005), p. 11). While the emphasis on being at the ledge is admirable, this represents a significant (up to almost 17%) of ones annual volume posing around 17% of ones annual revenue fix up in accounts receivables.To continue to induce upon this success, it is recommended that Red Bull acquire a two-fold strategy. First, thither is considerable equity in the brand and the drinking that can be leveraged importantly in a brand appendage of a product much(prenominal) as an energy bar. The come across risk of exposure of this strategy is that the pure, singular product offering of today will be diluted. Despite this risk, the continuation of what Red Bull actually represents does not necessarily dilute but can li kely reinforce the approximation that the brand of Red Bull represents, what you consume not just drink when you are fatigued versus the more restricted drink cateogory. By redefining the frame-of-reference, the category can be effectively extended and a like-branded product such as Red Bull Solid Fuel can effectively capture money left on the table while presenting minimal risks for damaging the present-day(prenominal) substantial brand equity of the beverage product alone. This brand extension is compatible with the spirit of the catamenia product, a distinguish factor in the likelihood of consumers accepting and even embracing an redundant product (Yeung Wyer 2005, p. 495).An alternate(a) to SolidFuel is an redundant beverage such as a sports drink. While this is a legitimate possibility, the risk of brand dilution is enormouser as both(prenominal) products are beverages though intended for different consumers. SolidFuel is a different but link up category that seeks t o gain a larger share of wallet though not necessarily expanding the existing customer base. This product will support rather than potentially compete with the original Red Bull product and utilize the paradigm of a branded house rather than a house of potentially competing brands (Aaker Joachimsthaler 2000, p. 9),In addition to efforts to grow revenues through brand extensions, an additional recommendation alluded to earlier, it that Red Bull should expand production from solely Austrailia to a site in Europe and North America. By having a single facility to product product for a globe, unnecessary costs are being built into the supply chain. In addition to being strained to produce, manage, move and store massive quantities of material, there is the presence of a great deal of risk if something should happen. With but a few additional sites, risk can be virtually eliminated and distribution and holding costs significantly reduced.To address the concern of the fact that Red Bull is perceived to be a niche product, it is recommended that a action be taken to build brand awareness and specifically to penetrate both deeper and in additional demographic segments, it is recommended that Red Bull develop mass media advertisements such as television spots. These clips should device characteristic a key fatigue driver. By this, it is meant that activities besides extreme physical exertion should be utilized such asA long road-trip This should feature a middle-aged, yet well-groomed commercial truck driver that focuses on a route map. This map should prominently feature a long line which traverses several states. Further, this individual should cast out coffee, instead, he should be shown enthusiastically consuming a Red Bull .A series of relentless meetings This clip should show a time indicating an early hour and a business meeting in progress that, according to the clock, keeps going. Similar to the above example, the shot should demonstrate that Red Bull is an attractive alternive or substitute for coffee and could also play upon the feature s of consistent quality of Red Bull (versus the variance of a secretarys coffee making skill).A grueling civilize assignment The obvious shot would include a workplace group at a late hour just beginning to study for a major test of solve a lengthy problem. Of course, Red Bull is there.Each of the above scenarios are representative of mental or physical fatigue and the break-through that can be attained by the key benefits and attribute of the Red Bull product. These also particularly lend themselves both to brand extension and extensions of the current most likely to use demographic segment.In summary, Red Bull has seen seemingly indefatigable success of a single product. By taking steps to simultaneously launch SolidFuel, the result will be the success that is achieved simply by meeting the already expressed needs and desires of the marketing with a product that is positioned to leverage th e current awareness, recognition, and image of the current product. As this strategy entails the creation of a category-extension, there is minimal risk of the dilution of the powerful core brand value and the image that is currently held. Further, to maintain and even build the markets for these products, Red Bull should move away from the successful cartoon-type advertisements and focus on the next thing for a fickle consumer mass. This advertising should be of an experiential nature that focuses on incident in which Red Bull products can be utilized for a key benefit while each advertisement closes with a interchange brand reinforcing image such as the Red Bull logo. works ConsultedAaker, D., and Joachimsthaler, E. (2000, Summer). The Brand Relationship Spectrum The Key to the Brand Architecture Challenge. atomic number 20 Management Review, (42)4, pp. 8-23.Choeke, M. (2005, October 11). Coke Eyes Red Bull with Launch of til now Energy Drink. tradeing Week. October 11, 2005 edition.Clark, N. (2005, December). Coca-Cola adds Taurine to Product. Marketing, December 14, 2005 edition.Euromonitor. (2005, December). UK Market for Functional Drinks. Euromonitor Market Research Monitor. Accessed online March 9, 2006.Modern Materials Handling. (2005, December). How Red Bull Puts a Charge in Its Supply Chain. Modern Materials Handling, p. 11.Yeung, C., and Wyers, R. (2005, November). Does Loving a Product Mean Loving Its Products? The Role of Brand-Elicited reckon in Brand Extension Evaluations. Journal of Marketing Research (42), pp. 495-506.