Red Bull Imc Plan

Executive Summary

Red Bull can be called as a pioneer in the energy drink category worldwide. In

Egypt too, Red Bull was the brand that created the energy drink category.

The brand came into existence in 1984.

Red Bull Energy Drink is a functional beverage. Thanks to a unique combination

of high quality ingredients Red Bull Energy Drink vitalizes body and mind.

Red Bull Energy Drink has been developed for people who want to have a clear

and focused mind, perform physically, are dynamic and performance-oriented

whilst also balancing this with a fun and active lifestyle.

In short, Red Bull gives wings to people who want to be mentally and physically

active and have a zest for life

History

Originated in Thailand in the 1970’s it was first called “Krating Daeng”.

The recipe was recreated by Dietrich Mateschitz in 1987 to better suite Austrian

tastes.

Red Bull was launched in Germany in 1994 after meeting with huge success it

was launched globally in 1997.

In 2003 the sugar-free Red Bull was introduced into the market.

Red Bull was released in Egypt in 2006.

Problem Statement

Red Bull has recently faced Decrease in perceived value of the product due the

fact that Red Bull has recently faced much controversy in regards to the health

concerns associated with it. Due to the high levels of taurine and caffeine it has

been banned in countries such as; Denmark, Norway, France, Uruguay and

Iceland. Red bull loses out on women, teen agers and seniors as these groups

won’t pay for a drink that doesn’t include the ingredients they needs nor branded

for their life style .Perceived to be Above-average prices with lack of innovation-

Reliant on small product base- as the company only markets one branded

product. In addition RB core benefits don’t fit into new trends , there are new

trends to focus more on being natural, healthy ,new trends not only towards

boosting body and brain but also memory ,intelligence ,lowers stress and

depression accordingly RB seems not to be appealing to the next generation

Situational Analysis

SWOT Analysis

Strengths

Market leadership- Within the energy drinks market Red Bull is the industry

leader throughout the world. Marketing Efforts- a lot of promotions and well

targeted campaigns and sponsorship e.g. formula 1 helps to expand Red bull

brand and increase consumer brand awareness.

Strong, fresh & fashionable brand identity.

Weaknesses

Above-average prices.

Lack of innovation-Reliant on small product base- The company only markets

one branded product

Lack of patent on RB‘s recipe means anyone can copy it.

Red bull loses out on women ,teen agers and seniors as these groups won’t pay

for a drink that doesn’t include the ingredients they needs nor branded for their

life style

Decrease in perceived value of the product due the fact that Red Bull has

recently faced much controversy in regards to the health concerns associated

with it.

RB core benefits don’t fit into new trends , there are new trends to focus more on

being natural, healthy ,new trends not only towards boosting body and brain but

also memory ,intelligence ,lowers stress and depression accordingly RB seems

not to be appealing to the next generation

Opportunities

Increase in the percentage of the target market within the Egyptian population

due to the high birth rates and the low death rates

Marketing researches shows that Middle East and Africa shows the largest

growth of energy drinks consumption 255% 2007 – 2011 ,mainly by young

customers who may choose not to drink alcohols due to social and religious

reasons in café’s and music venues

The new cultural shift towards weight loosing and having in shape bodies would

be an opportunity if RB RB introduced a low calorie product /Sugar free product

The new cultural shift especially of guys towards body building and going to the

gyms

The Egyptian consumers are price sensitive ,introducing a high quality product

compared to competitors with slightly lower prices would be very effective

The Egyptian consumers are size sensitive ,introducing a larger pack relative to

competitors with lower prices would be a very effective

Experiences create word of mouth which to a great extent positively affect my

acquaintances (relatives –friends –colleagues) buyer decisions

The increasing demand of the Egyptian customers to soft drinks, juices, etc…

Threats

Health concerns- expected tougher rules from government on high caffeine

content.

Consumer awareness of health and well being- people may start to drink other

alternatives as it is associated with healthier life style.

Organic energy drinks might steal RB’s market share.

Numerous substitutes

Low capital requirements to enter the industry

High level of intensive competition with energy drinks and other carbonated soft

drinks producers as well as juices Pepsi, Coke, Schweppes, Johanna juices

Increasing health and hygiene awareness among Egyptians has greatly

increased sales of fruit juice products for health watchers as well as bottled water

and sparkling water

Experiences create word of mouth which to a great extent negatively affect my

acquaintances (relatives –friends –colleagues) buyer decisions in case of initial

bad experiences using the products

Easy entrance to the market due to easy access to distribution channels

Low switching costs by buyers

Consumer behavior and Market analysis

Controversies

Seen as addictive, drug-infused beverages with negative health implications .Red

Bull has recently faced much controversy in regards to the health concerns

associated with it. Due to the high levels of taurine and caffeine it has been

banned in countries such as; Denmark, Norway, France, Uruguay and Iceland. It

has been proven that caffeine can be deadly when consumed in massive doses,

but the amount estimated to prove fatal is 10 grams, which would require 125

cans of the drink .A study conducted in 2007 by American researchers found that

although consumption of Red Bull could increase both blood pressure and heart

rates it was only dangerous for those people with heart disease. Most claims

about the dangers of Red Bull and other energy drinks have been proven to be

nothing more than urban myths.

Current customers are :

1. Young people are especially open to determined exhaustion and

insufficient energy.

2. More specifically male teenagers & people in their 20s, are also most

likely to believe in the authenticity of the energy drinks’.

As a result, the majority of energy drinks are developed for and advertised to

this younger generation. Appeal to very specialized groups, such as gamers,

extreme sports enthusiasts, and the hip-hop crowd.

The power of consumers is decreasing due to :

1. Low loyalty to RB

2. Low switching costs

3. Health issues

4. Low value perceived

5. Many substitutes

6. Over average price

7. More price sensitivity due to economic situations

Competitive analysis

Market Share of Red Bull in compared to AMP by PepsiCo, Burn by Coca cola

and Power Horse be Heineken is as follows :Red Bull controlled approximately

60% of the market in 2009 with Red Bull has managed to maintain their strong

market share through advertising and heavy event sponsorship.

RB is facing High level of intensive competition with energy drinks and other

carbonated soft drinks producers as well as juices Pepsi, Coke, Schweppes,

Johanna juices .Coca Cola is thinking of adding energy to its regular

drinks .Numerous substitutes as coffee ,energy bars ,energy gums and even fruits

are available

Current Product analysis

In Egypt there only exists one size 250 ml can ,with no flavors

Ingredients Include :

1. Caffeine

Caffeine is known for its stimulating effects on mental and physical functions such as endurance, performance, reaction speed, alertness and concentration.

2. Taurine

Taurine is an amino acid, naturally occurring in the human body and contained in the daily diet that has several physiological functions in the human body, inter alia is acting as a detoxifying agent and has various neurological functions.

3. Glucuronolactone

Glucuronolactone is a body constituent and is also contained in the daily diet; it is a derivative of sugar which for instance is present in various foodstuffs such as grain.

4. B-group vitamins

B-group vitamins are important for the energy metabolism and neurological functions; they have a positive impact on mental and physical performance.

5. Sucrose & Glucose

Sucrose and Glucose are different types of sugars that provide energy to body and mind.

6. Alpine Spring Water

Naturally, water is a key ingredient of Red Bull. The water used for Red Bull is fresh alpine water of best quality which comes from springs nearby the production sites in Austria and Switzerland. This region, the Alps, is known as one of the world’s biggest water reservoirs, where water as a resource is available in abundance and constantly replenished. Hence, to ensure consistency of the upmost premium quality around the world, Red Bull is produced in the Austrian and Swiss Alps

Target Audience

New target groups should be targeted and approached with new values and accordingly product versions

1. Young ambitious nerdy students who need brain energy ,they don’t have purchasing power yet ,accordingly their mothers are targeted through personal selling sampling ,the personal selling should illustrate the difference between regular RB and Red Bull Brainergy ,distribution channels include the regular ones in addition to school cafeterias ,design should be in different color for differentiation

2. Young generation who always need differentiation with a slim making coffee energy drink (Black color ) called Kryptonite(Buzz marketing –vending machines –college cafeterias )

3. Career driven fashionable females looking for other benefits as vitamins ,slim making and longer period energy ,the traditional RB has a male image ,accordingly a anew package with a softer image or a name flower with a new berry flavor

4. Health watchers through launching sugar free RB and focusing on other ingredients in the original RB as vitamins

Accordingly our segments and targeted segments will be as follows:

TYPE Targeted Segment

Geographical country Urban, suburban

Demographic Age 15-19,20-34,35-49

Gender Male , Female

Income Middle /High

Education Educated

Psychographic Social class Middle and High Class

Behavioral Occasions Regular occasion

Benefits Convenience ,Health, slim making ,brain energy

User Status Non-user, first time user

Usage rate medium user , heavy user

Loyalty status medium , strong

Readiness stage Un aware , aware ,interested , intended to buy

Attitude towards product

Positive, enthusiastic

Positioning Strategy

We are seeking to be:

Clear ,engaging ,unique and relevant to the target audience

Delivering a positive emotion to the audience rather than just good through

providing the benefits needed by every single target audience

Delivering high perceived value as the customer is ready to pay for the drink

which meet his changing needs through changes in our products

Positioning Statement

“A high perceived value products offering all benefits you need, health energy,

multiflavored, slim making ,brain energy bundle of products ,we clear ,engaging and

unique seeking more than sales ,we are seeking loyalty through convenience “

Objectives

A-Marketing objectives

Short-Term Objectives

Aggressive Marketing Strategy can take advantage of the positive press on the

health benefits of new product versions and the existing vitamins of the original

RB to boost the sales of the product line. The company can use recent studies

on the new health and brain benefits as the basis of its press releases and

advertising campaigns.

Introduce the new available product versions as Kryptonite, Brainergy ,Sugar

Free and She to the

Focusing on the wrong health claims that has been facing original RB

Long-Term Objectives:

Customer Loyalty perceiving RB as a major choice at thirst ,with health

benefits ,differentiated flavors, reasonable prices

RB must continue its innovative research and development strategy to come up

with new flavors and products using its extensive research facilities on product

improvement. The company , can use its resources and professional expertise to

come up with new flavors that will suit the continuous demand

B- IMC Objectives

Delivering a new message to customers “We provide

tasty ,healthy ,reasonably priced ,multi flavored drink with all required benefits

,energetic ,health ,brain energy and slim making “

Delivering new Products’ Image

1. Healthy

2. Brain energy

3. Multi flavors(Regular /Berry/Coffee )

4. Slim making (Sugar Free)

5. Average priced

6. High Quality

7. Natural Ingredients

C-Media Objectives

To initiate strong awareness about the launch of new product versions To win

market shares over our top functional drinks competitors

The promotional activities will convey the clear message that “We provide

tasty ,healthy ,reasonably priced ,multi flavored drink with all required

benefits ,energetic ,health ,brain energy and slim making product not only to

young males “

BR is a market leader with an European origin

Marketing Mix Strategies

The marketing mix strategy is made up of the 4ps

Product

Price

Place

Promotion

First Product Portfolio

1. Brainergy

Young ambitious nerdy students who need brain energy ,they don’t have purchasing power yet ,accordingly their mothers are targeted through personal selling sampling ,the personal selling should illustrate the difference between regular RB and Red Bull Brainergy ,distribution channels include the regular ones in addition to school cafeterias ,design should be in different color for differentiation

2. Kryptonite

Young generation who always need differentiation with a slim making coffee energy drink (Black color ) called Kryptonite(Buzz marketing –vending machines –college cafeterias )

3. RB Female

Career driven fashionable females looking for other benefits as vitamins ,slim making and longer period energy ,the traditional RB has a male image ,accordingly a anew package with a softer image or a name flower with a new berry flavor

4. RB Sugar Free

Health watchers through launching sugar free RB and focusing on other ingredients in the original RB as vitamins

5. Regular RB

Product Info On package

Flavor

logo

Slogan “ Charge up on Red Bull”

Ingredients

European origin product

250 ml Can

Nutritional Details(High lighting vitamins ingredients)

Sweetened or Diet

Second Pricing

Pricing In the second ‘P’ pricing we have observed that RB is continuously increasing its

prices as compared to its competitors mostly in other products which a number of customers use rarely so some times he feel uncomfortable when he compares the prices which were sometime before The different cost are used in managerial analysis in managerial analysis like AVC, ATC, FC, VC, MC are all the prices which are involved in production process of a product. So we wi l l concentrate on these factors very much.

There are two main types of pr ice set t ing: Penetrat ion and skimming

Penetrat ion is used I t ’s an approach in which we set f i rst ly low and then as demand increases we increase the price .We are fol lowing this strategy for competi t ion based pricing to achieve high customer loyalty after encouraging customers use the original and new products

3 rd Placement (Distribution)

Distribution Strategy

Intensive distribution aims to provide saturation coverage of the market by using all available outlets such as:

1. Super markets,

2. Gyms

3. Coffee Houses as Costa Coffee

4. Hyper markets

5. School and college cafeterias

6. Pharmacies

4 th Promotion (Marketing )

Promise & Support: All benefits you need from Body health to brain health Slogan: “Charge Up on Red Bull ” Theme: Red Bull For every One Core Benefit:- Fulfillment Functional Benefit:- Makes Energy Push VS Pull: push strategy is applied as benefits and values are announced

expecting demand in response Value Preposition: Best value for money. Marketing Strategy Used:- Penetration strategy supported by product

differentiation

Media Strategy

It’s a 1 year national campaign focusing on urban areas. We are launching in the fall as demand for soft and cold drinks decreases at fall

and it is the back to school season and then continues at a high intensity through the busy holiday season.

To maximize total impressions and utilize a broad range of channels, a pulse approach will be used in scheduling media Pulse scheduling (promotional presence year-round, but emphasized and intensified before and during summer).

. Reach is key – moderate frequency to avoid annoying overplay. Transit, outdoor, print, television media are used A profile match strategy will be

implemented.

Approaching females through Women’s magazines such as and TV Female oriented channels and the message should support independence

We will also use Event marketing/sponsorship

Reach/Frequency/Continuity

1. Reach :Brand awareness and image are necessary to succeed 2. Campaign must connect with the target to encourage trial purchase

and eventually brand loyalty3. Frequency to ensure the consumer recognizes the product’s new image

Market Coverage

1. Trendsetting areas - major urban markets 2. Reaching the trendsetting female is the main concern of the

campaign and the extent of coverage will rely entirely on the substantial budget

Timing

1. Energy drink sales decline in the fall 2. campaign will focus heavily on promoting Red Bull from

September 1st to December 31st

3. prime time television ads will be prominent as well as the alreadyexisting pulse flight of outdoor, transit and magazine advertising

Media Selection Rationales

TV:

Still a corner stone in any major media campaign and is the most viewed channel for now a day’s concerning out target customers

TV communicates with sight, sound and motion, which is needed for RB. It is the only media that can reach 99% of the homes at once.

RB has the budget to cover the high costs of this media.

Television allows a demonstration of the advantages of Red Bull Good reach and proven impact

Female oriented TV programs and channels are approached

Radio:

FM 100 in Cairo/Giza ,FM 97.6 IN Alexandria are mostly listened by target

groups considered music stations

Magazines:

We should take advantage of the fact that magazines have become a very

specialized medium. There are many consumers' magazines in Egypt.

Good color production is also an advantage that creates strong images which is

the purpose of RB

EEN Magazine addresses young customers of both genders, Arabeati mainly

targets males. Flash and Origami addresses well educated relatively high income

customers

Provides critical brand awareness as well as clear and precise demographic

selectivity

Provides geographic flexibility across many urban markets

Internet:

Online advertising is similar to print advertising in that it offers a visual message.

It also has additional advantages; it can also use the audio and video

capabilities. As we are targeting our ads to young outgoing people, sound and

movement may attract more attention from viewers and has the unique feature of

being interactive. Interactive media would RB the opportunity to reach younger

of both genders ,to reach consumers who have developed a preference for

online communication. Initiating a campaign on face book is very important to

create buzz marketing and reach brand awareness we are targeting

Outdoor:

On buses which is an efficient carrier reaching mass audience

Billboards in specific geographical area would allow us get a good reach and

frequency. It is a low cost and flexible alternative. (Campus, malls and metro

stations)

Sales Promotional Mix

Must encourage the first purchase of the product in store and make the new target market aware of the product and its benefits

Large displays integrated into the cooler shelves that hold the product Freestanding units at the point of purchase Bull hoof-print stickers placed on the floor leading from the door to the

freestanding rack or coolers Bull sound when you step on the last footprint

Contests:

“Win another RB”, “Uncover a secret code underneath the bottle cap and win

sporting goods and electronics by logging on the website”, “Win a trip Paris

increasing consumer purchases and encourage consumer involvement with the

product

Samples:

Distributed in supermarkets, school/universities. Samples are a way to avoid product

resistance as It will encourage new product purchases and it represents low risk for

consumers since they get it for free. They have nothing to lose by trying it. Sales

people will try to explain the new benefits of new product versions

Point-of-purchase:

In supermarkets to reach the parents of nerdy teen ager students seeking brain

energy, increasing product trial and provide a good product visibility.

Allowances and discounts:

Case allowance as the goods approach will be used so it can encourage retailers to buy

more of the product to get a certain amount free .Example selling a pack of 5 cans with

an additional can free

Cooperative advertising:

To encourage retailers to buy our product and to maintain our high level of

advertisement that consumers expect

Public Relations (Getting Involved)

Effectively build the Red Bull brand in association with female culture Target market is among the world’s most intelligent and critical consumer

segments Red Bull brand must make substantial, visible contributions to causes

affecting the modern woman Red Bull will announce a donation of

L.E 1million to the Egyptian Breast Cancer Foundation the most publicized issue affecting women worldwide

Funds have been earmarked as part of the marketing budget We will focus the public announcement of the donation in our media tools Red Bull becomes a key national organizer and sponsor of the women’s breast

marathon Run and will have a presence at the main event on September 30, 2007 where individuals dressed in Red Bull apparel will be handing out free product samples as well as Red Bull branded merchandise

Personal Selling

As previously stated new target customers include Young ambitious nerdy students who need brain energy ,they don’t have purchasing power

yet ,accordingly their mothers are targeted through personal selling sampling ,the personal selling should illustrate the difference between regular RB and Red Bull Brainergy ,distribution channels include the regular ones in addition to school cafeterias ,design should be in different color for differentiation

Creative Plan

To communicate that Red Bull can restore mental awareness andenergize a busy, independent person, provides brain energy

Communicate that Red Bull is an effective, good tasting substitute forother caffeinated beverages (coffee, tea, pop);Diet drinks (sugar free version ) and it contains all natural ingredient

As a mature brand RB is targeting new segments as females accordingly ads should Show attractive women consuming Red Bull as a substitute for coffee and other energy supplements Show attractive women consuming Red Bull as a substitute for coffee and other energy supplements .There must be a clear contrast between the average, dull woman and the successful, vibrant Red Bull drinker .The target market will see how effectively Red Bull fits into their busy lifestyle, highlighting the small can and the well-known Red Bull label will also create brand awareness in association with the female market

Humor will be used to stress the advantages of Red Bull over other energy supplements and competitive brands

The positive aspects of Red Bull will be presented in contrast to the negative aspects of the alternatives ,demonstrated visually as well as implied

A new Slogan is used instead of The previous slogan “Red Bull gives you wings” and will be replaced by: “Charge up on Red Bull” in order to effectively presents Red Bull as a slightly different brand than in the past

Media Action Plan

Step OutputPeriod of

timeArguments

1Personal selling

1st month to 2nd month

To make retailers aware of RB so they can order it in time

2 Radio spots2nd month to mid of 3rd

month

Radio is the most listened media by students and peoples on the go

3Magazines ads

Mid of 3rd

month to 4th

month

The target market will then match an image with the name of the product more easily. The recognition of RB will be faster.

4Television spots

Mid of 3rd

month to 4th

month

To send a wide message over Egypt that RB is now available.

5Point of purchase

5th month to 6th month

Making a special section for the RB in Grocery store will help the new potential buyers to find our product faster and more easily.

6 OutdoorsMid of 3rd month to 4th month

Putting adds in specific places where Generation Y hangs out will create an increased awareness of RB

7Public Relations

6th month to 7th month

We will use special events (sports and others) to promote RB and to get in touch with our potential market. It will allow RB to interact with our Generation Y Consumers.

8 Contest7th month to 8th month

We will use contest to give a second "push" to the sales of the RB.

9 Publicity All the time Use of TV ads and news to make the public aware of

the existence of RB.

Tactics

Marketing Department Chart

Tactics to implement the previously discussed IMC Program is done through the

marketing department chart :

1. Market Research Manager: Collects data about customer needs, benefits

expected from the market products, current status of loyalty to competitors, Level

of satisfaction, the relationship between customers and the brand .

2. The brand Manager reviews all aspects of the IMC program including: targeting,

segmenting, positioning, pricing, promotion, packaging

3. The distribution manager works with retailers ,ensures transportation on time

considering lead time ,ensures favourable shelf spaces

4. The advertising Manager reviews and implements the media selection and the

action plan part of the IMC program, including advertising

schedules ,contests ,promotions in areas where demand is low

5. The sales Manager works with retailers, large communities as clubs, colleges,

schools, negotiate quantity discounts, price reductions .

6. The Marketing director receive reports from all the previous managers ,puts the

broad strategies ,evaluates the implementation and the success of the overall

IMC program ,make strategic pricing ,promotion, product strategies

MARKETING DEPARTMENT

DIRECTOR MARKETING

SALES MANAGER

ADVERTISING MANAGER

DISTRIBUTION MANAGER

BRAND MANAGER

MARKET RESEARCH MANAGER

Budget

The estimated cost that will incurred while marketing of RB new Products

relaunched ranges around 14.2 Millions as estimated as follows :

The details are as follows:

Media Explanation of estimated cost that will incurred for 1 year

T.V Adds on TV with different celebrities for one year will cost approx. 7 Millions

NEWS PAPER Add in leading news papers will cost approx. 2 million

RADIO For 30 second ad for 2 months will cost approx. 400,000

MAGAZINE For 1 month advertising will cost approx. 200,000

BILL BOARDS For bill boards on main locations acquiring will cost approx. 1.5 million

FREE SAMPLING TO RETAILORS

Free sampling to main retailers will cost approx. 300,000

CONTESTS After 6 month of operation if there will be a need to give a 2nd

push to our sales and a contest has to be arranged that will approx. cost about 5million

Evaluation

In the first month of operation Management will over view that whether the

Marketing goals and objectives are going in right direction or not if not than what

went wrong and what are differences between actual and expected performance.

This may require changing the action programs or even changing the goals.

Involves checking ongoing performance against the annual plan and taking

corrective action when necessary. It will ensure us that the com-any achieves the

sales, profits and other goals set out in annual plan. It also involves determining

the profitability of product.

It involves looking at whether the company's basic strategies are well matched to

its opportunities. Marketing strategies and programs can quickly become out-

dated and there will be need of periodically reassess its overall approach to the

market-place. A major tool is marketing audit.

Marketing Audit

There will be a need of monthly marketing audit regarding current activities and

sales volume. It will cover all the marketing areas of business. It will include audit

of:

1. Marketing Environment

2. Marketing Strategy

3. Marketing Organization

4. Marketing Systems

5. Marketing Mix

6. Marketing productivity

7. Profitability

8. Measuring and Managing return on Marketing Investments

9. After six months of operation, we have to measure that whether our

investment is being spent well or not. Are we getting targeted Return on

Investment or not

10.The net return from a marketing investment divided by the costs of the

marketing investment. It measures the profits generated by investments in

marketing activities.

Red Bull Imc Plan

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Transcript of Red Bull Imc Plan