Red Bull GmbH Austrian Company: Marketing Plan Paper (Research Paper Sample)

1.INTRODUCTION
In wake of globalisation, competition on global level and emerging markets all around the world; it has become essential for organisations to pursue continuous growth and expansion in order to address the factors in the external environment threatening the long term survival of the organisation. There are a number of growth strategies available for an organisation. Some of the options may include: establishment of a completely new business, acquisition of another business, merger with an existing business, and identification of new target markets for expansion of business through brand extension or brand stretching. The last option may be highly feasible for businesses that have strong brand presence in the global markets. This paper includes identification of two new target markets in the UK market for Red Bull and presents marketing plans appropriate to both the identified target markets. The paper provides an overview of Red Bull followed by an extensive environmental appraisal analysis of the organisation. The environmental analysis includes application of multiple frameworks such as: SWOT, PESTEL, value chain analysis, and competitive analysis. After the environmental analysis, the paper presents identification of the two target markets, the characteristics of customers in each market, and positioning to be conducted in the markets. The last section of the paper specifies marketing mixes for each target market including the marketing objectives and control mechanisms.
2.OVERVIEW OF RED BULL
Red Bull GmbH is an Austrian company established in 1987. The company sells the world’s most popular energy drink ‘Red Bull’ in more than 165 countries. The company started when the Austrian entrepreneur Dietrich Mateschitz discovered the Thai energy drink Krating Daeng during his trip to Thailand (Johnson, 2013). Foreseeing the potential of the energy drink in other markets, he acquired the rights to sell this energy drink in other markets and renamed the drink as ‘Red Bull’ which is the literal translation of its Thai name. At first, he started selling the drink in Austria and gradually entered other markets (Lange et al., 2002). The company entered the UK market in 1995 through Scotland. Among the main ingredients of the energy drink is Taurine which was not permitted to be used in England at that time. At the time of Red Bull’s entry in the UK market, the market leader was Lucozade. Due to Red Bull’s inability to use its main ingredient, the company introduced Red Bull as sports drink however this strategy did not prove to be successful as the company did not gain any considerable market share in its first year. Following its failure to make a mark in the UK market, the company repositioned the brand and reintroduced the product as a functional energy drink. The new market strategy proved to be successful and Red Bull started acquiring larger market share. Currently, the UK energy drink market is led by Lucozade with Red Bull holding the second largest market share.
3.ENVIRONMENTAL APPRAISAL ANALYSIS
Environmental appraisal analysis includes a comprehensive evaluation of the external and internal environment of Red Bull in context of the UK market. The external environment includes micro-environment and macro-environment (Aaker & McLoughlin, 2010). The micro-environment pertains to different aspects of the industry therefore an analysis of the energy drink industry in UK will be performed. The macro-environment goes beyond the industry environment and includes different aspects of the region where the industry is located. The assessment of the internal environment of an organisation includes identification of the strengths and weaknesses of the organisation, and the opportunities and threats faced by it. The following sub-sections include different analytical frameworks used to perform the environmental appraisal analysis of Red Bull in the UK market.
3.1PESTEL Analysis
PESTEL analysis is among the most effective tools for evaluation of the external environment of an organisation (Hooley et al., 2008). This framework for environmental analysis helps in assessing the macro-environment which extends beyond the industry environment. The analysis includes a critical evaluation of the political, economic, social, technological, environmental, and legal environment surrounding an organisation (Lynch, 2006). The following sections present the PESTEL analysis in context of Red Bull as it operates in the energy drink industry in UK.
3.1.1Political Environment
The energy drink industry in UK is significantly influenced by the political environment prevailing in the region. The government policies pertaining to the production and sale of food and drinks are the most important factors that influence the business of the energy drink industry. The policies regarding sale of energy drinks in UK are strict as the government discourages the use of such drinks. In addition to the government, there may be other political forces that may influence the business of firms operating in an industry. Some of the examples highlighting the political environment include: ban on sale of energy drinks including Red Bull to individuals under 16 by Morrisons supermarket, ban on sale of energy drinks in some schools, and proposed hikes in tax on energy drinks in order to discourage excess usage. The ban by Morrisons supermarket is not enforced by law and it is the policy of the supermarket, however such an action from a major supermarket chain in the country can lead towards widespread shifts in policy by other supermarkets and eventually by the government. Sainsbury’s, another major supermarket chain in the region, stated that it will ban sale of energy drinks to individuals under 16 if such a law is enforced by the government (Bouckley, 2013).
3.1.2Economic Environment
The economic environment includes the economic growth, rate of inflation, interest rates, and taxes. The economic environment influences the cost of production and sales of products. In an optimum economic environment, the cost of sales will be low and the sales will high. In context of UK’s economy, the rising disposable income of consumers encourages them to purchase products such as energy drinks. Soft drinks and energy drinks are not basic necessities therefore at the time of economic downturn there may be sharp decline in the sales of such products. Therefore, the stability of the economic environment is essential for the profitability of energy drink brands such as Red Bull. Currently, the economic environment is favourable because a wide majority of consumers are able to purchase energy drinks.
3.1.3Social Environment
The social environment of a company is made up of social trends, choice of the users and cultural factors (Drummond et al., 2008). The social environment helps a company identify the consumer trends on a timely basis and develop successful strategies. The success of a company in the energy drink business depends mainly on its goodwill and brand positioning. For example, there are numerous drinks available in the market however Red Bull and Lucozade are famous among consumers because of their established brand positioning in the market. In case of Red Bull and the energy drink industry in UK, the social environment plays a very important role because the demand for these products relates directly to the social sentiment regarding the brand. Energy drinks have been associated with negative impacts on health which give rise to scepticism among consumers and leads towards decline in sales. On the other hand, the effects of energy drinks on mental and physical capabilities make these drinks popular among individuals with demanding schedules. In UK, the consumer trend for energy drinks is feasible because a large number of consumers use energy drinks on regular basis. Despite the positive outlook of social environment, there is a strategic uncertainty involved because the rising awareness regarding the negative health impacts of the drinks may cause impairment in the demand for the energy drinks (Sharma et al., 2010).
3.1.4Technological Environment
Technological environment of a company is mainly determined by the extent of research and development work done in the industry and the dependence of the company on the use of technology. For example, some industries thrive on continuous evolution of technology and there are rapid advancements in technology. On the other hand, some industries do not depend on technology and any changes in technology do not influence the operations of the companies. For energy drink industry in UK, the technological environment is evolving positively because new technologies allow the companies to enhance their operations, distribution, and marketing. In case of Red Bull, continuous research and development allows the company to find innovative ways to produce and present its products. Development of new flavours and differentiation of the energy drinks is important for long term survival in the industry. In addition to that, enhancements in communication technologies help Red Bull identify consumer trends and develop marketing strategies accordingly. The emergence of social media has also had positive influence on marketing by providing virtual space for advertisement and a platform for real-time communication with consumers (Svatosová, 2012).
3.1.5Ecological Environment
The ecological environment includes the environmental and health impact of the operations of an organisation. In wake of easily accessible information, customers are becoming more concerned about the protection of the environment and hence prefer companies which have environmental friendly products and processes. In order to minimize its impact on the environment, Red Bull has designed its operations in such a ...