Definition of marketing

Marketing is the science and art of exploring, creating, and delivering value to satisfy the needs of a target market at a profit.  Marketing identifies unfulfilled needs and desires. It defines, measures and quantifies the size of the identified market and the profit potential. It pinpoints which segments the company is capable of serving best and it designs and promotes the appropriate products and services.

Red bull’s marketing philosophy

Inspired by functional drinks from the Far East, Dietrich Mateschitz founded Red Bull in the mid 1980's. He created the formula of Red Bull Energy Drink and developed the unique marketing concept of Red Bull. In 1987, on April 1, Red Bull Energy Drink was sold for the very first time in its home market Austria. This was not only the launch of a completely new product, in fact it was the birth of a totally new product category.

Being one of the highest priced energy drink in the Indian market it still manages to capture a major chunk of the market share so it might be doing something right.

So marketing according to red bull is identification and development of a new product category (red bull) to satisfy the needs and wants of the target market at a profit.

Branding and Branding Management

According to AMA “A brand is a customer experience a represented by a collection of images and ideas; often, it refers to a symbol such as a name, logo, slogan, and design scheme, brand recognition and other reactions are created by the accumulation of experiences with the specific product or service, both directly relation to its use and through the influence of advertising, design, and media commentary.”

 “A brand often includes an explicit logo, fonts, color schemes, symbols, sounds which may be developed to represent implicit values, ideas, and even personality.”

The intense promotion of Red Bull has not only established the brand but also driven the growth of the market of energy drinks as a whole. Within its target group the brand awareness is significant.  
The brand equity has developed during a number of years and is very hard to copy. They have managed to build an authentic, credible and qualitative brand which consumers have been willing to pay a premium for. Their advertisement through extreme sport events and similar opportunities has through its unexpected and outstanding approach established the Red Bull brand awareness.  

Red Bull is a powerful global brand, and is THE largest selling energy drink in the world. Its logo of the two bulls locking horns is explicit and has a red color scheme to it on a blue and silver backdrop.

Major elements which a Brand should convey:-

Brand Equity: It is the added value endowed on products. It is reflected in the way consumers think, feel and act with respect to the brand, as well as in the prices, marker share and profitability the brand commands for the firm.

Brand Promise: Is the marketer’s vision of what brand must be and do for its consumers. What benefit it going to give to the customer so that they feel like associated with the brand. For Red Bull, its focus will be to provide their consumer with superior taste and energy. They associate this to their tag line of ‘red bull gives you wings!”

Brand Awareness: In the case of Red Bull, it is necessary to convey existing and prospective customers of its existence as the best-selling and most effective energy drink. This is done by Red Bull with the help of various services or promotional activities like sampling (red bull girls giving free samples) and sponsorship of events.

 Brand Attitude: A brand should follow the attitude of a problem solver or problem avoider. Red Bull has maintained its status among the consumer base by keeping their flavor unique.

 Brand Purchase Intention: Red Bull has an effective marketing policy that attracts new and keeps existing customers. For this they offer some things that are superior to any of the competitors, which are as follows:

·        Variety

·        Taste

·        Quality

·        Ingredients

Organisational Buying Behaviour

“Organization buying is the decision-making process by which formal organizations establish the need for purchased products and services and identify, evaluate, and choose among alternative brands and suppliers.”

It is basically the decisions made during B2B transactions so as to maximize profits. Buyer behavior among B2B companies today is complex. Marketers tend to talk about “the B2B buyer” as an individual tasked with making decisions on behalf of the organization, but the buyer is often a group of people with different perspectives and requirements. Steps involved in organizational buying can be shown as follows:

Being a strong Brand and a large Company Redbull would manage to get its way in terms of negotiation when it comes to B2B dealings. It will also have the advantage of a great history and current position of market leader in its product category. A bar directly buying from Redbull or a MNC that buys it in bulk for its office use can be examples for organizational buying of redbull.

To understand this concept better, it is also important to evaluate what basic differences there are between individual and organizational buying. They are as follows: 

Buying Step	Business to Business	Consumer
Problem Recognition	Anticipates and plans for purchase on a routine basis	Reacts to needs when they arise
General Description	Extensive, objective cost benefit analysis	Limited analysis of benefits, concern with total cost
Product specification	Precise technical description using techniques such as value analysis	Description more in terms of benefits
Information/ supplier research	Extensive search that extends to the search for supplier	Limited search – geographically and in terms of sources
Proposal solicitation	Formal, such as in a tender process if large volumes or values involved	May be verbal
Buying Step	Business to Business	Consumer
Supplier Selection	Made after extensive evaluation of objective information	Limited analysis with subjective and anecdotal information influemcing the decision
Order routine specification	Routine calculation of re-order points as well as time and place of delivery	Not routine
Post Purchase performance review	Extensive comparison made and feedback given, concern with quality management at source	Little basis for comparison

Distribution Decisions

Distribution channel or the marketing channel plays a very crucial role in making the product available to the final customer or the target consumer. There are various types of marketing channels or distribution channels. These are:-

 Push and Pull Strategies:

In push strategy, manufacturer uses his sales force, trade promotion, money or other means to include intermediaries to carry promote and sell its products to end users. Red bull does not include any push strategies as they do not believe in involving intermediaries in their distribution process.

In pull strategy, manufacturer users advertising, promotion and other forms of communication to persuade the consumer. This is the form of communication Redbull prefers and uses.

Direct and Indirect Channel:

Direct channel- the type of distribution channel used by Redbull is the direct channel in which they directly provide the finished goods to the customer without any intermediaries and have been successful at it till now.

Indirect distribution- Indirect distribution channel consist of one or more intermediaries between the manufacturer and the final customers. In India Red Bull does not resort to such measures.

The retail channel is the contact-point of the product and the end-consumers. For energy drinks, retail outlets include bars and night clubs, supermarkets, convenience stores, health clubs, etc. Red Bull is available in all of these channels, and is considered the number one energy drink brand in all of them.

 Smart Transport:- 

Red Bull Energy Drinks travel to their destination predominantly by train and ship. They only use trucks when it's absolutely necessary. Since their cans are compact in shape and light in weight, they are a more efficient transport packaging than PET or Glass Bottles.

Transportation to more than 165 countries around the world:-

As soon as the Red Bull cans have been filled, they're transported from Austria and Switzerland to more than 165 countries worldwide. The cans travel long distances, whenever possible by ship and rail. Transportation by truck is the last resort when there's no other means of delivery - it remains Red Bull's priority to allocate ever more transport to rail and shipping.

Promotion Decisions

Red bull has always been on top when it comes to promotions. It promotes heavily through sport events and competitions. Red Bull's integrated marketing communications mix has been so successful that the company has created an entirely new energy drink category and has become multimillion dollar brand among competition from beverage kings like Coca-Cola and Pepsi. In less than 20 year, Red Bull has become the energy drink market leader by skilfully connecting with the global youth.

Promotion (also one of the 4P’s of marketing) which is known as marketing communication is one of the major attribute for any of the product or services. For any brand one of the major issues faced is that of sustaining its market share. They need to trade off between maintain their brand in the market coupled with making acceptable profits. To attract more customers and to increase their market share, companies adopt various promotion techniques which help in generating revenue. For this purpose there are 8 major modes of communication in marketing communication mix as follows:

·       Advertising

·       Sales Promotion

·       Event and experiences

·       Public relations and publicity

·       Direct marketing

·       Word-of-mouth marketing

Advertising:

Red Bull looks at little but effective television advertisements. Animation ads with the slogan “red bull gives you wings” are catchy and effective. In addition to this, they also do celebrity endorsements (Popular rap artist Eminem) and own a record label Red Bull Records. They are also very active on social media.

Sales Promotion:

Examples of devices used in sales promotion include coupons, samples, premiums, point-of-purchase (POP) displays, contests, rebates, and sweepstakes. Incase of Redbull, they focus on only sampling for this bit. Redbull girls dressed in red bull colors, riding customized cars (again in the colors of red bull) give out free samples in youth events like fests, football matches etc.

Public relations and publicity:

By associating the drink’s image with these activities, the company seeks to promote a “cool” public image and raise brand power. The energy drink has created a market for over 150 related types of merchandise like Red Rooster and Blue Lightning.

Direct marketing:

This is a channel-agnostic form of advertising that allows businesses to communicate straight to the customer, with advertising techniques that can include interactive consumer websites, online display ads, fliers, catalog distribution, promotional letters, outdoor advertising etc. Red Bull believes in direct marketing, however does not resort to outdoor advertising. They limit their direct marketing to interactive websites and online ads.

Word of mouth:

From the beginning, the marketing for red bull was conducted via word of mouth and viral marketing in the youth oriented underground.

Pricing Concepts, Effects and Decisions

Pricing is the process of determining what monetary benefit a company will receive in exchange for its products. Factors that affect pricing of any product are as follows:

·       Manufacturing cost

·       Market places

·       Competition market condition

·       Quality of product

Pricing is the revenue generating element among the 4 P’s of the marketing and is considered to be one of the major determinants of a consumers buying decision process.

Pricing strategy of products change due to factors like

·        Income level

·        Standard of living

·        Competition in the market.

Red Bull follows a pricing policy that does not differentiate its prices around the world. Even though it is not one of the cheaper priced drinks in the Indian market, they associate a certain amount of luxury to their drink which the consumers relate to while paying that extra bit. Even though it is prices almost double of its close competitors in India, it still leads the market in the sector.

A comparative pricing chart for Red Bull and its major competitors in the Indian market is as follows:

Name of the Drink	Quantity (in ml)	Cost (in Rupees)
Red Bull	250	95
Cloud 9	250	75
Gatorade	500	35
KS energy drink	250	95
Tzinga	200	25
Monster	250	80
Rockstar	500	95

Hence we observe that even though Red bull is priced at more than a lot of its competitors, it still enjoys the luxury of being the highest seller of energy drinks in the world.

Product Mix

According to AMA, Product mix is defined as: “The full set of products offered for sale by an organization. The product mix includes all product lines and categories. It may be defined more narrowly in specific cases to mean only that set of products in a particular product line or a particular market”.

Every company’s product mix has a certain width, length, depth. In case of red bull, since it makes only beverages, there will be no width of the product; however the rest will look as follows:

Product Hierarchy

Need family	Revitalizing drinks
Product family	Beverages
Product Class	Caffeine drinks
Product Line	Energy drinks
Variants	Energy Drinks and Colas
Items	250 ml, 500 ml, 750 ml

Red Bull product Mix:

a) Variety :: Red Bull's portfolio consists of 4 different products - Energy Drink, Sugar Free, Cola and Energy Shot. In the Singapore market, Red Bull currently only provides the Energy Drink and Sugar Free product.Apart from its red and royal blue can, it also has red, blue and silver edition.

Building on their momentum of the Red Bull Editions, the energy drink manufacturer will launch a new flavor exclusive to 7-Eleven locations in Canada and the U.S.  Aptly named the “Summer Edition”, the drink’s packaging is a sunny-yellow colored 12oz (355ml) can.  The tropical fruit-flavored drink adds to the Red Bull Editions line-up of the Red (cranberry), Blue (blueberry), and Silver (lime) flavor offerings.

Red Bull has launched a range of products, including Red Bull Cola in 2008 and Red Bull Energy Shots in 2009.

b) Design : Red Bull's design is very simple. It is a cylindrical shaped can, light in weight and very sturdy. A can is easy to transport because of its form and low weight. Thus, it can be said that the can is an ideal transport packaging, especially when compared to other forms of packaging: it saves about 40% in truck loads compared to glass bottles and about 30% compared to PET bottles

 Since the cans are compact in shape and light in weight, they are a more efficient transport packaging than PET or Glass Bottles.

Glass Bottles: need 40% more space

PET Bottles: need 30% more space

Our Can: light and compact

c) Ingredients :

Taurine: – amino acid that supports the heart, brain, and nervous system. Reduce stress levels and improve althetic performances.

Inositol: have similar vitmain properties to treat various health issues such as diabetic nerve pain, high cholesterol, insomnia, cancer, depression,Alzheimer’s disease, and more…

Caffeine: About 76mg of caffine is in a can of Red Bull. Caffine can definitely increase your metabolism and attentiveness.

Guarana: A study in the journal Appetite showed that people showed less sign of fatigue and faster reaction time with this ingredient.

d) Features: Red bull has a unique taste. it one whole can makes a person highly energetic and revitalises the body.

e) Brand name : It is the top most brand in the energy drink category. the brand loyalty is very high seeing the no. of cans sold each year.

f) Packaging :Packaging the finished mix is packaged into cans, bundled into cartons, and sent to distribution. This is a highly capital intensive operation that requires specialized high-speed lines. Red Bull is packaged at its Austrian Plant.  It has the red and blue packaging with its famous logo in centre. Red Bull has come up with various variant which differ in their packaging.