Marketing Plan

Hypothetical Product Healthy Energy by Red Bull Introduction

Since its launch in 1987, Red Bull has become the most popular and successful energy drink in the world due to its marketing through advertising, sports events, celebrity endorsements, and music. However, consumers are becoming more health conscious. With this ever increasing trend in health conscious consumers, our plan for Red Bull is to create a new healthier energy drink which we believe is important for Red Bull’s image, as well as vital for the company to be able to reach these consumers and to no longer alienate them. For our proposal, we will discuss our marketing plan, which will include internal and external analyses, as well as our methods for collecting data. Environmental Context/Background of Problem

There is still an obesity epidemic in the United States, but at the same time, more individuals are trying to boost their health through diet and exercise, meaning a tremendous opportunity exists for marketing to health-conscious consumers (Vong, 2012). As more Americans are becoming more concerned about what they put in their bodies, with regards to the different types of food and drink, Red Bull needs to be able to target these specific demographics that are demanding healthy beverages. For this demographic of health consumers, there are three types which consist of: millennials, baby boomers, and females between the ages of 40 and 55 (Berry, 2013).

In order to appeal to all of these demographics, Red Bull needs to make sure that this drink meets the core requirements: healthy, has a good taste, and is able to give consumers the energy they need throughout the day. In order to appeal to each demographic individually, Red Bull needs to be able to have the energy drink presented in various formats, such as cans, bottles, and cartons. Baby boomers and older women are more likely to drink from a bottle or a carton, while millennials will most likely drink from a can. Out of all of these demographics, the most important demographic that Red Bull needs to be able to target are the millennials. Millennials are between the ages of 19 and 32. They are the most aware of and are a part of the healthy lifestyle trend more than any other generation. Millenials want to understand and become a part of the brand through social media sites and interacting with their friends. If the product does not meet their expectations, they have no trouble switching to another brand or actively ruining the brand by telling their friends how much they disliked the product through word of mouth.

Red Bull also needs to combat their perceived image about how unhealthy their energy drinks are. These drinks usually contain high levels of caffeine and other additives, such as taurine, ginseng, and carnitine that act as stimulants (Koelliker, MD). Coffee has about 100 mg

of caffeine, while energy drinks can contain 500mg of caffeine. Energy drinks are sold as nutritional supplements, which means they do not fall under FDA regulations. This means that there is no limit to the amount or content of the ingredients in energy drinks. If someone drinks a large quantity of energy drinks, it can cause high blood pressure, restlessness, seizure, abnormal heart rhythms, and even death.

Red Bull needs to counter this by making sure their new line of healthy energy drinks are made from healthy mostly natural ingredients. Since energy drinks don’t fall under FDA regulation, they need to be able to regulate themselves and earn the consumer’s trust by properly labeling the ingredients on the back of their cans, bottles, and cartons. Red Bull should also lower the caffeine dosage, to at least the standard amount that Coffee has. They also should take out and replace some of the additives. The drink needs to be able to be healthy enough so that a consumer can drink large quantities of it, without being in danger of their health. If this new energy drink is successful, it would not only help Red Bull’s image, but the image of energy drinks as well. Problem Identification 1. Industry Image.​ There is a disconnect between energy drinks and a healthy way of living. Energy drinks are for the “extreme” consumer who cares about living life to the fullest and pushing their boundaries. Staying up too late, needing extreme amounts of caffeine to function, doing activities that are dangerous to the normal person are some basic situations where energy drinks are warranted. An unhealthy lifestyle is synonymous with energy drinks. This will be a hard stereotype to break away from, especially if the new “Healthy Energy” is displayed in the same section as normal energy drinks. 2. High Competition.​ New energy drinks are coming on to the market almost daily. With this low new entrant level making it easy for new competition to penetrate the market, it is hard for Red Bull to keep their standing. Red Bull competes with other well-known energy drinks like Rockstar and Monster, both of which are large sponsors of events and sports, much like Red Bull is. In addition, there are also other large players that offer products that compete with energy drinks or serve a similar purpose to an energy drink even if the users are not the same. Products such as the 5 Hour Energy, SK Energy Shots, Starbucks Espresso Double Shot and a host of other energy shot like products also are quite popular in the market In fact Redbull and its major competitors also carry energy shot products. 3. Pricing.​ Energy drinks and energy drink products are often known to be expensive. This coupled with the overall industry image of it being an unhealthy beverage linked to an unhealthy lifestyle will be a problem. Trying to offer a better product while hoping to be the cost leader in this segment will be a feat almost undoable. Pricing will determine ultimately how successful this drink will become. If it is too expensive for people (especially millennials) to afford, then our target market is almost useless. 4. Breaking habits.​ People with a predisposition to drinking energy drinks, or their preferred source of caffeinated product have likely had that predisposition habitualized. Getting users to switch from coffee, tea, or an energy drink to another alternative will be a difficult challenge for

the marketing message. If free sample are given at events, and the marketing message weighs heavily on the health aspects of this new product, only then will consumers try our product and potentially break their old habits. Product/Business Concept Target Consumer​: Young, adventurous, and hardworking consumers who are health conscious that need that extra push drive at any given moment or situation. Benefits​: A new alternative energy drink for consumers without the additive ingredients with this new health-conscious energy drink Red Bull can differentiate their products from competitor’s energy drinks and tap into the health-conscious consumers. Comparative Claims​: Using health conscious energy-building ingredients, Healthy Energy can still provide the benefits of what a traditional energy drinks contain that helps improve concentration, increase alertness, contributes to normal mental performance, and reduction of tiredness and fatigue. Consumption​: Consumers will be assured that while still attaining the energy effects of that in a regular Red Bull can, they will also feel positive in that the ingredients being ingested into their bodies are a healthy alternative. Marketing Challenge​: There are many misconceptions with healthy alternatives especially pertaining to taste. While avoiding any adverse effects such as the large quantities of sugar in regular Red Bull cans, most consumers might feel that flavor or taste would be compromised. Current consumers may not feel any particular way to healthy alternatives or could be biased as to not giving healthy Red Bull a fair chance in the market, maybe leading inevitably to a product flop. Can we still call this a Red Bull product without all of the Red Bull ingredients? Will this product be effective and still give consumers the wings experience? Secondary Data Collection Although data based on a primary research would be ideal for this project, because of time constraints we will limit our data search to only secondary sources. We plan to investigate thoroughly all the available secondary data sources with a special focus on other drink categories that may be competition to Red Bull. During this research we hope to find out: -What is our most attractive target market? -How old are they? What do they do for a living? -What are the most popular beverages people use to stay awake?

-Coffee? Tea? Energy Drinks? Other? - Breakdown by percentages -How many servings do users drink? By the cup/can/shot? -What are people’s habits with regards to energy drinks and other caffeinated beverages?

-Usage times/situations? -How often do they use? -What are people’s thoughts on the health effects of energy drinks?

-Do they have a bad stereotype attached to them?

From the research and the data that we collect, we will determine how to best market our alternative to the unhealthy energy drinks to a consumer that may be more health conscious, but not prefer the taste of coffee or tea. The research findings will assist us in positioning the product, create a marketing message that will appeal to our target market and price the drink at an appropriate pricing level for success in the long term.