Need an A on week 5 assignment

Running head: MARKETING PLAN: PRODUCT IDENTIFICATION AND SWOT ANALYSIS 1

Product Identification and Swot Analysis: Red bull GmbH

Stephanie Hicks

Ashford University

BUS330: Principles of Marketing

December 11, 2016

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Marketing Plan: Product Identification and Swot Analysis 2

Red Bull GmbH

Red Bull GmbH is an energy drink manufacturing company based in Fuschl am see,

Austria (Bodner, 2011). Red bull’s main product is the Red Bull energy drink. It is a

multinational with branches in over 169 countries in the world. Red Bull as an energy drink was

established in 1987 in Thailand by an Austrian entrepreneur Dietrich Mateschitz and a Thai

business person Chaleo Yoovidhya, (Pahl & Richter, 2007). Although red bull is currently the

market leader in sales of energy drinks, its sales can be significantly boosted by targeting a

different demographic.

Red Bull was founded in the mid-1980 from inspiration by other energy drinks in the Far

East and especially in Thailand. Red Bull energy drink was sold for the time in its home market

of Austria on April 1st 1987 and this has seen it grow to a multinational with millions of euros in

revenue annually. It is estimated that as at 2016, over 60 billion cans of the energy drink have

been sold worldwide (Bodner, 2011). Apart from energy drinks (which is red bulls primary

output), red bull also distributes other products including the drinks ‘simply cola’, the Cape

Diem range of herbal soft drinks and the Sabai wine spritzer line of winery (Rendle, 2011).

Red bull’s main competitor is Monster energy drink made by Monster Beverage

Corporation based in California, USA. According to time magazine, Red Bull enjoys about 43%

of the American soft drink market with its closest competitor Monster commanding about 39%

of the market share. The number 3, but the relatively distant competitor is ‘Rockstar’ which

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Marketing Plan: Product Identification and Swot Analysis 3

commands a 3% market lead. Coke owned NOS and Pepsi-owned Amp are also players in the

energy drink market although commanding a very small portion (Pahl & Richter, 2007).

Red Bull energy drink is an interesting choice of product to conduct a strength, weakness

and threats analysis on given its current market share. Red Bull commands a significantly huge

market space, but there is still much to be improved upon. The market segment it majors on is

small and can be significantly increased to target different areas of the demographics in exchange

to better profit margins.

Strengths

The main strength displayed by Red Bull is its stature in the current energy drink

market. Red Bull has stood for years as the number one energy drink across the major markets in

the world (Bohm, 2009). This is a unique force of influence. It was the first energy drink to bë

developed, and it has stood as a force to be reckoned with ever since. This partly means that the

red bull brand is synonymous with the energy drink industry. This makes marketing the energy

drink a relatively easier job as compared to other relatively unknown energy drinks (Pahl &

Richter, 2007).

Another Red Bull’s strength is its presence (Rendle, 2011). Red Bull is present in almost

all major countries and sectors across the world. Apart from the energy drink market, Red Bull is

a known major sponsor and stakeholder in the world’s major sporting events (Bodner, 2011). RB

Leipzig, a German football club purchased by Red Bull in 2009 is the current leader of the

German top flight football league the Bundesliga. This is a unique marketing platform for red

bull as its brand exposure through sports is huge. Apart from football, red bull also sponsors and

owns stakes in other sports such as racing, hockey and Motorsports (Rendle, 2011).

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1

1. Apart from the energy

drink market, Red Bull is a

known major sponsor and

stakeholder in the world’s

major sporting events

Never underestimate the

marketing value in

sponsorship. There is

perhaps no better way to

build brand recognition.

[Cynthia Goussak]

Marketing Plan: Product Identification and Swot Analysis 4

Red bull’s current partnership with Coca-Cola was a bold move. By utilizing coca cola’s

major outlets and market shares in the world of soft drinks, Red Bull is looking into market

penetration frenzy (Bodner, 2011). Coca-Cola is basically in all the markets in the world except

from north Korea and Cuba which are both under a long time United States trade embargo. This

is a unique opportunity for the company to expand to new horizons and establish itself firmly at

the top of the energy drink market (Pahl & Richter, 2007).

Weaknesses

Potential health threats. The major weakness in the energy drink market and which has

weighed down Red Bull is the recent USA food and drugs administration scrutiny into the major

energy drinks (including Red bull). According to the FDA, Red Bull’s consumption has been

associated with increased cases of diabetics amongst teenagers as a result of its unusually high

levels of caffeine (Pahl & Richter, 2007). This has threatened red bulls market share and more so

because it targets the younger generation. The FDA made recommendations for the energy drink

to be banned in schools and universities, a move that will jeopardize red bulls stand in the market

(Rendle, 2011).

Change in customer taste. This has been another nightmare in red bull’s ranks. In the

past, red bull commanded comfortably the upper market in the energy drink industry, this has

been drastically changing in the near past (Bodner, 2011). The introduction of other high-end

products like Monster has significantly dwindled red bulls stand as the de facto energy drink

market leader.

Non-patented recipe. Unlike its marketing partner Coca-Cola, red bull’s recipe is not

patented and this paves the way for other market players to copy its manufacturing and produce

similar or close products which may put Red Bull’s market stand in grave danger (Rendle, 2011).

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1

1. Non-patented recipe.

Interesting weakness

consideration, that many

would overlook. [Cynthia

Goussak]

Marketing Plan: Product Identification and Swot Analysis 5

Opportunities

Geographical expansion. With its new partnership with coca cola, red bull is looking to

new marketing horizons. Coca cola’s worldwide marketing share is smiling back at red bull’s

management, and this offers a unique marketing experiment. For the first time in history, Red

Bull could become an international distributor with subsidiaries (thanks to coca cola) in all the

markets in the world (Rendle, 2011). This holds a promising growth for red bull.

Enhancing Red Bull’s nutritional aspects. To successfully fight the FDA, the red bull

could revise the energy drink’s nutritional capacity (Pahl & Richter, 2007). This could go miles

in restoring public confidence and especially after the past reported deaths linked to red bull

consumption. The red bull could revamp the amount of caffeine content in their drinks and thus

lowering the health risks in the drinks. This could mean increased intake by the current

consumers since the health question is out of the equation.

Threats

Competitors (Shawn Milligan, August 12, 2015). Thee major threat in red bull’s

existence as a brand is competition. The rise of Monster as a significant market share holder have

proven a marketing nightmare to red bull. Red Bulls market share can be directly mapped to

monster’s growth, and this is worrisome to red bulls marketing team (Bodner, 2011).

Negative health implications. This is the major threat concerning red bull’s existence.

Although competitors like Monster have taken a bigger hit, red bull is under FDA scrutiny over

reports that consumption of their energy drinks has been linked to major health issues and some

instances as grave as death (Pahl & Richter, 2007). This is particularly worrisome as it may lead

to not only reduction in the market but total withdrawal of the product from the market.

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Marketing Plan: Product Identification and Swot Analysis 6

From what we have observed, it is pretty clear that Red Bull as energy drink more than

deserves marketing investment on its own. This is expected to significantly boost red bulls stand

as a market leader and increase its sales drastically. This should also aim at re assuring its current

consumers of its safety and nutritional value. Advertising red bull to the middle-aged

demographic as a ‘work booster’ and as a health sanctuary will go miles in selling red bull as a

niche.

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1

1. Advertising red bull to

the middle-aged

demographic as a ‘work

booster’ and as a health

sanctuary will go miles in

selling red bull as a

niche.

Well considered strategy,

given your SWOT

observations. [Cynthia

Goussak]

Marketing Plan: Product Identification and Swot Analysis 7

References

Bodner, B. (2011). Company Analysis of Red Bull. Munich: GRIN Verlag.

Bohm, A. (2009).̈ The SWOT Analysis. Munchen: GRIN Verlag.̈

Pahl, N. & Richter, A. (2007). SWOT analysis: idea, methodology and a practical approach.

Munchen: GRIN Verlag.

Rendle, S. (2011). Red Bull racing F1 car: an insight into the technology, engineering,

maintenance and operation of Red Bull Racing. Sparkford: Haynes.

Shawn Milligan (2015, August 12). Ashford University. Retrieved December 10, 2016, from

https://www.ashford.edu/online-degrees/business/strategic-planning-and-the-swot-

analysis

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1

1. References

Center [Cynthia Goussak]