PRINCIPLES OF MARKETING

Principles of marketing



Principles of marketing

1. Within their UK market considers which types of segmentation: geographic, demographic, psychographic and behavioural are likely to be most useful to RED BULL ENERGY drink in segmenting their market.

Since it appears that most energy drink consumer is college students, three segments of energy drink consumers were considered within the college-aged population. The first segment consists of heavy users who find effectiveness, taste, availability, brand name, mixability and price to be the important. The heavy user segment can be further divided into two categories: Red Bull users and non-Red Bull users. Segment two is made up of health conscious users. The effectiveness, transportability, price and availability of low sugar, low carbohydrate or low calorie versions are important to users in this category. The third segment is made up of athletes who find effectiveness and availability of low sugar, low carbohydrate or low calorie versions to be the two most important attributes.

The costs for any beverage, and particularly Red bull, are broad. In addition to development costs, Red bull's costs also include packing, shipping, and distribution and retail costs, in addition to marketing and employee costs. Advertising costs alone were 7.3% and across the soft drink manufacturing industry, costs of operations in 2003 were 49.6% of total operating income (Almanac of Business and Industrial Financial Ratios). The profit margin before and after taxes of the industry were 10.1% and 7.0% respectively.

Following the Decision Tree for Marketing, we have decided to focus on trial for our target segment. Industry Sales are increasing, and there is a great potential for Red bull to surpass Red Bull as the industry leader. Since Red Bull is heavily used in clubs and bars, Red bull is equally capable of infiltrating the club scene to replace Red Bull.

Based on customer interviews, awareness and knowledge of Red bull are already present. Most people purchase Red Bull because of the reputation and availability. Some consumers in our interviews said that Red bull is very similar to Red Bull in taste, quality, and effectiveness, and because of its competitive price compared to Red Bull, it is the preferred choice. If more people actually experience this similarity as well, Red Bull users may convert to Red bull. Compared to Red Bull, Red bull has a minimal to non-existent advertisement campaign, which also plays a factor in its position in the energy drink industry.

2. How is RED BULL ENERGY DRINK differentialted from its competitors?

Although Red bull is only the second best-selling energy drink, its competitive edge can be seen in a positioning matrix. Energy drink consumers have rated Red bull high in quality, convenience, signaling and pricing, making it on par with the leading Red Bull. In terms of quality, Red bull is equal or better than its competitors, including Red Bull, in effectiveness, taste, ingredient content and availability of low sugar, low carbohydrate or low calorie versions. Red bull is the strongest in ingredients because the drink is packed with vitamins, herbs ...