porProduct Life Cycle Stage

Red-Bull

Red bull is on the peak of the introduction stage because it was available through gray

channels in Karachi since 2003 and the ad campaigns could be seen on different satellite

channels. In 2003 it already had 90% market share and its target market had a little

awareness about it because they knew this was available in other countries where they

might have gone before.

In 2004 Red-bull had its proper setup and got rid of the gray channel material. According

to our sources it was the first energy drink brand to educate the local public through the

self-educating pamphlets. Initially it was not concentrating on advertising because the ad

campaign of red-bull was already airing on star plus and other satellite channels.

Therefore, people tried and accepted red-bull as energy drink when they were informed

what is energy drink all about and it became a generic name. So, we can say that it is on

the peak of the introduction stage with 54% of market share despite the fact that new

competitors have entered into the market but it remains the pioneer. Recently they have

started their ad campaigns on GEO, ARY and Indus channels, FM89 and institutes.

Blue-Ox

Blue-Ox is in the middle of introduction stage with 23% of market share despite the fact

that it was launched after Bomba Energy. Blue-Ox was able to get immediate success

firstly because it was the only energy drink brand to educate people through electronic

media (television) as its distribution license is purchased by ARY Group of companies.

Secondly it’s the only brand being promoted with all four different variants altogether.

That is why we can say that in such a short time it has enjoyed a major chunk of the profit

and gained consumers trust.

Bomba Energy

Bomba Energy despite the fact it was launched after Red-Bull but has not contributed in

the awareness of its brand or about energy drink to its target market as it feels that this

work has already been done by Red-Bull and Blue-Ox. The only attractive feature about

this drink is its grenade shaped glass bottle available in four different flavors, which was

noticed by the target market. But, because it has not invested in lot of awareness

generation and promotional activities major chunk of the target market is still not aware

of Bomba and its flavors are also not available altogether which leads to its low sales and

low market share of 7% only. Secondly, there global campaign doesn’t match with our

Islamic culture, which indirectly hampers its image and sales.

BCG Matrix

?

Since the overall energy drink industry is growing rapidly, Red-Bull is a star in the BCG

matrix as it has the highest market share, highest growth rate and highest competitive

position than Blue-Ox and Bomba Energy. The reason being that it was the pioneer, in

the energy drink industry and has also contributed in increasing the awareness of energy

drinks to its target market (urban and upper class). Because of its availability in other

countries and its target market that travels abroad adapted to its taste very quickly.

Blue-Ox is also a star in the energy drink industry but stands at a lower position in the

BCG matrix’s-star grid because it has high growth rate and comparatively lower

competitive position than Red-Bull but higher competitive position than Bomba Energy.

Even though it was launched after Bomba Energy it gained a higher market share by

establishing its identification and importance through aggressive advertising on ARY

Digital and offering four different flavors.

Bomba Energy has a high business growth rate i.e. it has the potential to grow further in

the industry but it has a weaker competitive position than Red-Bull and Blue-Ox as it an

BUSINESS

GROWTH

RATE

RELATIVE COMPETITIVE POSITION High Low

High

LowDogCow

Star Question Mark

inactive competitor. It occupies a low market share for a number of reasons including that

it has not done aggressive advertising (because there global campaign cannot air due to

cultural issue) or awareness of its brand and thirdly it’s a Karachi based brand only. The

only appealing factor is that it is available in a grenade shaped glass bottle in four

different flavors.

Competitive Strategies

Red-Bull

Red-Bull being a market leader has a share of mind (red-bull is mostly the first energy

drink brand when asked people to recall) and has become a generic name. It uses the

following strategies to expand its total market:

1. New Users Red-bull has the potential of attracting buyers who are unaware of it

or who are resisting it because of price. So they try to cater through new-market

segment strategy (for those who have never used it e.g. distributing self-educating

pamphlets in English and Urdu and even there sampling teams go to different

institutions) and geographic expansion strategy (those who live elsewhere e.g.

after its success in Karachi know it wants to concentrate on Lahore and Islamabad

market)

2. New Uses It suggests that Red-Bull is for world class athletes, busy professionals,

active students and long distance drivers as it:

o Increases performance

o Increases concentration and reaction speed

o Improves vigilance

o Improves the emotional status

o Stimulates metabolism

3. Mobile Defense Strategy Red-bull stretches its domain over new territories that

can serve as future centers for defense and offence. It spreads through market

broadening (it has already accomplished by becoming a generic name in energy

drink market in Karachi so now it is promoting itself on the generic need i.e. its a

functional drink for extra energy supply when needed).

Blue-Ox

Blue-Ox aims its attack towards the market leader. This is a high risk and potentially high

payoff strategy but it’s worth it. Blue-Ox uses combination of following competitive

strategies:

1. Flank Attack i.e. it serves not just the urban cities Karachi, Lahore and

Islamabad but has also spread out its distribution in the sub-urban cities where

Red-Bull and Bomba have not concentrated as yet. Hence, expanding its target

market, increased sales and developing share of mind in the sub-urban cities.

2. Product Proliferation Blue-Ox has attacked Red-Bull by launching a larger

product variety_ Blue-Ox Original, Blue-Ox Orange Rush, Blue-Ox Citrus Max

and Blue-Ox Black Cherry.Thus giving buyers more choice.

Bomba Energy

Fine foods of the world have just imported Bomba Energy and distributed the product in

Posh areas of Karachi and has not used any competitive strategy as yet it is still inactive.

The reason being that Bomba Energy has only one global image, which contradicts our

Culture so; it can’t use its thorough global image strategy. That is why the management is

still waiting to launch its global campaign until the market gets mature and is able to

broaden its perception. It is not very active as Red-Bull or Blue-Ox in promotional

activities as they think profit margins are low for imported products. Basically it wants to

sell the product as much as they can without adhering additional expenses. The only

strategy it is using is:

1. Prestige Goods Bomba Energy has introduced grenade like glass bottle to attract

its consumers charging a premium price of Rs.85/=and is also available in slim

cans worth Rs. 75/=. With innovative packaging it has been able to get a little

chunk of the market.

Segmentation

Red-Bull

GeographicWorld Region PAKISTAN City Karachi, Lahore, IslamabadDensity Urban DemographicAge 18-30

Gender BothIncome Rs. 40,000Occupation Athletes, Doctors, Drivers, StudentsPsychographicsSocial Class Upper ClassLifestyle Workaholics, Partygoers, Adventurous, Status-orientedBehavioral

Occasion RegularBenefits Improves performance, concentration, metabolism and

vigilance

Blue-Ox

GeographicWorld Region PAKISTAN City Karachi, Lahore, Islamabad, Multan, Hyderabad,

Quetta, Peshawar etc.Density Urban and Sub-Urban

DemographicAge 15-25

Gender BothIncome Rs. 40,000Occupation All professionalsPsychographicsSocial Class Upper Class and Middle ClassLifestyle Workaholics, Partygoers, AdventurousBehavioralOccasion RegularBenefits Improves mental and physical functionality.

Bomba Energy

GeographicWorld Region PAKISTAN City KarachiDensity UrbanDemographicAge 16-35

Gender Both

Income Rs. 40,000+Occupation All professionalsPsychographicsSocial Class Upper Class Lifestyle Partygoers, Workaholics, Westernized and thrill

lovingBehavioralOccasion RegularBenefits Instant energy supply

TOWS

WT STRATEGIES

It should develop itself as a bigger

name (image and SKUs).

Should maintain close relations with

retailers.

ST STRATEGIES

Secrecy should be increased in the

management decisions to counter the

smuggled and imitating brands.

Advertising awareness should be

created to clarify extremist

propagation of it being Haram.

THREATS (T)

Limited consumer base.

Counterfeited products.

Smuggled products.

Extremist’s propagation.

Addiction may lead to increase

in mortality rate.

WO STRATEGIES

Overcome inconsistency in retail price

by setting a standard price level.

They should give incentives to

retailers.

As it’s a growing market so risk can

be taken to launch a new SKU.

SO STRATEGIES

Become what it preaches.

Should develop brand equity as the

market is growing and it has become

a generic name.

It can increase its customer base by

going into different institutes.

OPPORTUNITIES (O)

Industry attractiveness is high in

Pakistan.

Growing and futuristic market.

Nutritional value product

Sugar free version available

worldwide.

WEAKNESSES (W)

Limited flavors and SKUs (small

product line).

Inconsistent retail price.

STRENGTHS (S)

Pioneer in the category.

Practically has become a generic

name.

TV advertising support via satellite

channels.

Organized and well managed.

Transit promotion through Chevrolet

cars going in different institutes.

Certified by Aga Khan Hospital.

IFA

EFA

Red-Bull

WT STRATEGIES

Increase sales force in other areas of

Pakistan where red-bull and Bomba

and others are not active.

Build each variant according to its

USP.

ST STRATEGIES

Conduct seminar with high profile

medical professionals.

Increase social awareness against

smuggling via promotional

activities.

Aware people about max intake.

consumtion

THREATS (T)

Limited consumer base.

Counterfeited products.

Smuggled products.

Extremist’s propagation.

Addiction may lead to increase

in mortality rate.

WO STRATEGIES

Engage in direct marketing campaigns

to increase interest in the market from

the growth angle.

Create proper brand portfolio

architectures for its product line.

SO STRATEGIES

Should enhance the image of being

an international brand.

Create more usage.

Promote itself on more than one

channel to increase awareness and its

customer base.

It can increase its customer base by

going into different institutes.

OPPORTUNITIES (O)

Industry attractiveness is high in

Pakistan.

Growing and futuristic market.

Nutritional value product

Sugar free version available

worldwide.

WEAKNESSES (W)

Although has four variants but is not a

market leader.

Management of four variants is not

efficient.

STRENGTHS (S)

ARY Network is its sole distributor

in Pakistan.

Only drink with four different

flavors available in the market.

It was first to promote itself through

electronic media (ARY Digital).

Transit promotion through foxy cars

in different institutes.

Affiliated with Hilton Pharma.

IFA

EFA

Blue-Ox

WT STRATEGIES

Should indulge in promotional

activities according to culture to

establish its identification.

Should develop its brand in Karachi

so that it helps in leading to

geographical expansion.

ST STRATEGIES

Should co-brand with other branded

stores.

Increase social awareness firstly

through functional benefits rather

than emotional appeal.

THREATS (T)

Limited consumer base.

Counterfeited products.

Smuggled products.

Extremist’s propagation.

Addiction may lead to increase

in mortality rate.

WO STRATEGIES

It needs to promote its brand so that it

can increase its customer base.

Inconsistent in meeting the retailer’s

order demand.

Grenade shaped glass bottle requires

more shelf space so they should

encourage sales via slim cans and

introduce pet bottles.

SO STRATEGIES

Create more usage.

Should include brand activator

(strategic implementer) in their team.

Build public relations & direct

marketing programs to increase

customer base.

OPPORTUNITIES (O)

Industry attractiveness is high in

Pakistan.

Growing and futuristic market.

Nutritional value product

Sugar free version available

worldwide.

Pet bottle available worldwide.

WEAKNESSES (W)

Unknown brand in Pakistan as its

Karachi based only.

Believes not spending on much on

promotional activities, as profit

margin is low.

Has not been able to promote its

global image in Pakistan.

Shortage of supply of its different

variants.

STRENGTHS (S)

Organized operational structure

leading to wider distribution

coverage.

Attractive grenade shaped glass

bottle with a ring.

Partnership marketing with Hang

Ten.

IFA

EFA

Bomba Energy

Critical Success Factors

Following are critical success factors for all the players if they want to survive in a very

competitive enviroment as the energy drink industry is a new born industry with high

industry attractiveness and market oppurtunity:

o Close relationship with the retailers.

o Aggressive promotional activities.

o Effective distribution network.