CONSUMER BEHAVIOR Initiator: the one that begins the process. Info gathered from this person will influence the next step BRAND MANAGERS AT UNIVERSITY (7-5) DJS IN NIGHT CLUBS Influencer: they collate the info and impose their choice onto others BAR STAFF IN CLUBS AND PUBS HAVE INFLUENCE OVER THE LOCALIZED CONSUMPTION TRENDS (XX) Decider: The one with the ultimate financial authority and power BAR/CLUB OWNER WHO WILL BE INFLUENCED BY THE WORD ON THE STREET Buyer: The one that places the order COULD BE SAME AS DECIDER – THE CLUB OR PUB OWNER. User: the one that actually consumes it GEN YERS, SPORTSMEN, CLUBBERS, TRUCKERS, BUSINESS MEN

2 - Consumer, Target market, Segmentation

BEHAVIOURAL SEGMENTATION Benefits sought: different benefits from same product FUNCTIONALITY SEEKERS: STAY AWAKE, CONCENTRATE (3-2) PLEASURE SEEKERS: DRUG FREE BUZZ (3-2) IMAGE SEEKERS: THE NEXT BIG THING (4-1) Purchase Occasion: frequency and time of year AVAILABLE IN CLUBS AND BARS AT WEEKENDS (4-1) Purchase behaviour: targeting the innovators segment IN-CROWD WANT TO COPY THE HERO DJ (4-1) Usage: heavy, light or non users get different attention HEAVY USERS IN CLUBS DURING 90’S (4-4,5) IRISH IN 2002 WERE HEAVY WHY NOT YANKS? (10-2) Perceptions/beliefs/values: if values are shared so are tastes ANTI-BRANDERS GEN Y’ERS (4-5)

Psychographic Segmentation Lifestyle: grouping by ways of living CLUBBERS 80’S-90’S WERE EARLY ADOPTERS/INNOVATORS (4-1) (4-5) MUSICIANS (5-4), DANCERS (6-3), ARTISTS (6-3), STUDENTS (7-5) Personality: those who use purchase as a reflection of self expression. The brand as a badge ANTI-BRANDERS BUY IT AS A PROTEST AGAINST COKE ET AL (4-5) IN CROWD SEEN AS USING IT FOR STATUS (4-1)

Profile Segmentation Demographic Age: 16-30 year olds Gen Y’ers (10-3), (4-5) SEX: MIXED LIFECYCLE: THRILL SEEKERS WITHOUT FAMILY TIES

Socio-economic SOCIAL CLASS: NON-CONFORMISTS AND ME-TOOS (7-6)

Geographic LOCATION: DIFFERING NEEDS IN DIFFERENT GEOGRAPHICAL AREAS (9-1) HALLS OF RESIDENCE, GYMS, BARS (5-3), (4-1)

MICRO-ENVIRONMENT – actors in immediate environment that

affect RB’s capabilities to operate effectively in its chosen market Competition – (Understand the SWOT of your enemy to stay ahead.) COKE, PEPSI, ASDA, SCHWEPPES (8-6) Customers – (MASLOW, TORA, BDP, all help you keep in touch with the ever changing needs of customer) TWO WAY RELATIONSHIP FOSTERED WHERE R.B. NURTURED TALENT AND REWARDED SUCCESS (6-1) Suppliers – (PORTERS5, establish where power is) AVAILABILITY OF PRODUCT PROVIDES CHALLENGES WHERE REGIONAL MIX HAS BIG EFFECT ON PRODUCT TAKE-UP (10-2) Distributors – (The influence of supply chain on product delivery) FORWARD INTEGRATION! (3-5), VENDING MACHINES (4-3), OZZIE SHWEPPES DEAL WITH COMPETITOR (4-3)

MACROENVIRONMENT – the broad forces that affect a

company’s capability to operate effectively SEE PESTEL

Who is

important in

buying

process?

Understanding

Consumer buying

behaviour How do

they buy,

what is

their

decision

process?

TORA – THEORY OF REASONED ACTION: a person's volitional (voluntary) behaviour is predicted by his/her attitude toward that behaviour and how he/she thinks other people would view them if they performed the behavior. A person’s attitude, combined with subjective norms, forms his/her behavioural intention 1-Identify strengths and weaknesses assoc with buying brand. 2-How do others influence buying intention 3-Strengthen beliefs about a positive buying experience 4-Weaken negative beliefs about the consequences of buying 5-Change their evaluation of the consequences of buying the product 6-Add a new positive belief 7-Add a new positive normative belief

What

are their

choice

criteria?

CHOICE CRITERIA Technical: attributes and benefits used in selection Reliability – PERFORMANCE ENHANCING STIMULANT Durability – SMALL CAN EASY TO CARRY Performance – GIVES ME WINGS Style/looks – CLASSY CAN, COOL TO BE WITH Delivery –AVAILABLE WHERE IT IS NEEDED Taste – YUK! BUT WHO CARES – COMPETITORS USE THIS TO TRY AND GAIN A DIFFERENTIAL ADVANTAGE Economic: Price: PREMIUM Value for money: 70% OF THE MARKET THINK SO Social: Status – IF YOU ARE INTO DANGER HOLD ONE IN YOUR HAND Belonging – ANTI-BRANDERS WET DREAM Fashion - THE COOLEST PEOPLE IN THE COOLEST ACTIVITES USE IT SO YOU SHOULD TOO Personal: Self-image – IF YOU ARE EDGY BE SEEN WITH IT Risk Reduction – IMPROVED REACTION TIME Ethics - ANTI-BRANDERS WET DREAM

Why do they

buy?

TARGET MARKETING STRATEGIES Undifferentiated Marketing (No strong differences in customer characteristics or a lack of appreciation of a segmented marketplace) RED BULL GIVES YOU WINGS IS A GENERIC MESSAGE Differentiated Marketing (Segmentation reveals several potential targets, specific marketing mixes are developed to appeal to each of them) VISIBILITY VIA IN-CROWD GIVEN MERCHANDISE (4-1) BARS STREWN WITH EMPTIES, SOME BARS DENIED ACCESS TO SUPPLIES (4-1) SEEDING STUDENT CAMPUS WITH FREE GOODS (7-5) SAMPLING FOR WORKERS AT TRUCKSTOPS, OFFICES, GYMS, BUILDING SITES (7-2) Focused Marketing (Identifying several potential markets but focusing on one niche. Due to resource issues or market attractiveness) Customised Marketing (Choosing individual customers)

Create Awareness

Trial

Reinforcement

WEAK THEORY - ATR

ADVANTAGES OF SEGMENTATION

MASLOW- NEEDS, DRIVES, GOALS Physiological (fundamentals of survival) THIRSTY CLUBBERS (4-5), (7-3) SEXUAL POTENCY OR PROWESS (11-2)

Safety (protectiveness) SPORTSMEN USE IT TO CONCENTRATE IN DANGEROUS EVENTS, TRUCK DRIVERS ON LONG JOURNEYS (2-5) SAFER INTOXICANT THAN DRUGS (3-2)

Belonging (Accepted by those they respect IN-CROWD WANT TO COPY THE HERO DJ (4-1)

Esteem (A perceived high std relative to others, prestige, elitism, reputation) YGEN WERE ANTIBRANDERS AND PROUD (4-5)RED BULL INCREASED THIS WITH MYSTIQUE (11-5), (4-5)

SELF Actualization (self fulfillment for own sake) SPORTSMEN AND CLUBBERS LEGAL HIGH (3-2)RED BULL BROUGHT PEOPLE TO BRAND (5-2)

STRONG THEORY OF ADVERTISING - AIDA

MARKETING MIX VARIABLES

22

PORTERS FIVE FORCES

1 - Marketing planning and strategy

2 NEW ENTRANTS New entrants can raise level of competition, thereby reducing its attractiveness. HIGH MARGIN ATTRACT COPYCATS (8-6) INDIRECT COMPETITORS IN ADES AND POPS (9-4) The threat is governed by key barriers to entry: Economies of scale, Capital requirements to set up the operation Expected retaliation by the incumbent TRADEMARK INFRINGEMENT RETALIATION (9-5) To reduce the threat of new entrants – take out patents and tying up suppliers and/or distributors. DEDICATED SALESFORCE (3-5)Build a strong brand that will attract loyalty

and repeat buying

1 SUPPLIER POWER Cost of raw materials & components have affect on margin. Higher bargaining power of supplier = higher costs to you. 1987-2000 FEW COMPETITORS LEFT RED BULL DOMINANT (8-6) THREAT OF FORWARD INTEGRATION BY RED BULL (3-5) BYPASSING WHOLSALER AND GOING TO SMALLER DISTRIBUTORS WHO THEY HAD MORE LEVERAGE OVER. THIS CREATED A FAST TRACK TO MARKET (3-5) SELF BELIEF THAT THEY HELD KEY TO BRANDED MARKET (9-5) BBC QUOTE THEM AS PORSCHE OF SOFT DRINKS (8-1 To reduce bargaining power of supplier- seek new sources of supply, threaten to integrate backward into supply. Finding new suppliers, designing standardized components that many

Suppliers are capable of producing.

3 BUYER POWER Bargaining power is greater with little differentiation, or fewer buyers than sellers, ASDA threat of BACKWARD INTEGRATING with own brand of drink(8-6) CONSUMER BACKLASH – WIPEOUT 2012 a blatant anti-antibrand event (7-4)

4 THREAT OF SUBSTITUTES Devaluation of the brand by substitutes, lowering of market attractiveness CHEAP IMITATIONS (9-3)

REDUCED BY DISTRIBUTION ALLIANCE WITH RIVAL (4-3

SWOT involves specifying the objective of the business venture or project and identifying the internal

and external factors that are favourable and unfavourable to achieve that objective. Strengths: characteristics of the business or team that give it an advantage over others in the industry. Weaknesses: are characteristics that place the firm at a disadvantage relative to others. Opportunities: external chances to make greater sales or profits in the environment. Threats: external elements in the environment that could cause trouble for the business.

If the threats or weaknesses cannot be converted a company should try to minimize or avoid them STRENGTHS

1) FIRST MOVER ADVANTAGE 2) BRANDED MARKET NOT GENERIC (9-5) 3) TARGETING GEN Y’ERS WITH DISPOSABLE INCOME (4-5) 4) SHORT DISTRIBUTION CHAIN & INTEGRATED MARKETING (3-5) 5) CONTRASTING LOVE VS HATE BRAND 6) STRONG LIFESTYLE BRAND – PSYCHOGRAPHIC SEGMENT (5-2) 7) MARMITE LIKE BRAND LACK AMBIVALENCE (3-1) 8) 70% MARKET SHARE NO NEAR COMPETITIORS (2-1) 9) REGIONAL BRAND COACHES USE LOCAL MARKETING MIX (8-5) 10) BRAND ALIGNMENT WITH TECHNOLOGY JAGUAR F1 (11-3),

FLIGHT (11-1), PLAYSTATION)

WEAKNESSES 1) TASTED BAD, LOOKED BAD (3-1) 2) OUTCOMPETED IN CERTAIN REGIONS (9-1) 3) MARKET GROWTH REDUCED TO SINGLE DIGIT (10-1) 4) LIMITED PRODUCT RANGE REGULAR, DIET, WATER (10-4) 5) GOING MAINSTREAM LOSES CORE MARKET (11-2) 6) EXISTING USERS GROW OLDER AND CONSUME LESS (10-3) 7) NON PATENTED RECIPE ENCOURAGES COPYCATS

Opportunities 1) ANSOFF – PROD DEV (10-4) 2) BCG – DEFEND STAR, USE BUILD –(8-6) 3) LEGAL HIGH (8-1) – PROFESSIONAL SPORTSMEN 4) SEX POTENCY (8-1,2) (11-2) – GOLDEN GEN 5) MEMORY AID (2-5) - STUDENTS 6) USA SHOULD MIRROR IRISH CONSUMPTION (10-2) 7) BRAND AWARENESS WITH CAR RACING FANS (11-3) 8) BRAND ALLIANCE – CADBURY UPTICK (4-3) 9) SOAPBOX ADVERTS , FLUGALS (11-2) GOLDEN GEN 10) ESTABLISHMENT CREDIBILITY (11-1) MUSEUM VISITORS 11) FURTHER EXPANSION INTO AFRICA? (5-1)

Threats 1) NEW MARKET OF 16 YR OLDS NEEDED TO REPLACE DRIFTING STUDENTS WHO HAVE CHOICE IN COMPETITOR BRANDS (10-3) 2) BACKWARD INTEGRATING SUPERMARKETS (8-6) 3) LOSS OF MYSTIQUE (11-2) 4) SAFETY CONCERNS (8-3) 5) GOING MAINSTREAM (11-2),

6) NEW MARKETS MAY REJECT IT (9-1)

CONVERSION STRATEGY

MATCHING

STRATEGY

PESTEL - Factors that influence markets and customers

Political: Changes in policy, warfare, civil unrest. Impacts consumer confidence. Taxes,

interest rates, spending power. 2001 WAS TOP 5 BRAND IN AFRICA AND EUROPE (5-1) BANNED IN FRANCE & DENMARK ON HEALTH GROUNDS (8-3) EURO AS A COMMON CURRENCY OPENED MARKETS

Economic: Rate of growth, inflation, savings, exchange rates. Impacts consumer demand,

more saving, less spending in tough times 1990 – 2009 – WORLD ECONOMIC GROWTH £2.5B DRINK BUSINESS – 70% SHARE (GROWTH SLOWING) (2-1) £1.26B GLOBAL SALES IN 2003 (3-4)

Social/Cultural: Where people live, social classes, cultural values, beliefs and subgroups.

Marketing approach changes as different types are receptive to varied things. RELIGION – ADAM & EVE ADVERTS (11-2) SEX – LIQUID VIAGRA & BULLS BALLS (8-1) DRUGS – LEGAL HIGH LIQUID COCAINE (8-1) ROCK N ROLL – MUSIC LOVERS (5-4) (6-1,2) DEATH – IRELAND AND SWEDEN UNSUBSTANTIATED LINK (8-3) AGEING – CHASING 16 YEAR OLDS TO UNIVERSITY (10-3) (7-5) REBELLION – ANTIBRANDERS (4-5) (7-4) REGIONAL – TARGETTING BY LOCAL BRAND MANAGERS (8-5)

ANSOFF – The output from the Ansoff product/market matrix is a series of suggested growth strategies that set the direction for the business strategy. Often used to 1 MARKET PENETRATION-Maintain/increase market share, secure dominance, drive out competition

by aggressive re-pricing, loyalty cards.Use when-market NOT saturated, there is growth in the market, competitor share is falling, increased volumes supports Economies of Scale, scope for selling more to same people 2 PRODUCT DEV -New products into familiar markets, augmented offerings, endorsement, trials for

usersUse when-firm has strong R&D,growing market,rapid change, competitor has better products,can easily build on existing items 3 MARKET DEV-sell into new geographical area, packaging, channel, segment Use when-firm has excess capacity,new ventures beckon, attractive channels exist to enter new markets 4 DIVERSIFICATION -Related Diversification-beyond current market but broadly within same industry, builds on assets/activities familiar to firm

Unrelated Diversification – total departure from current markets/products/industry mix.

BOSTON CONSULTING GROUP GROWTH-SHARE MATRIX

It is based on cash flow – not profit! More market growth: adverse effect on cashflow due to need of investment in plant and marketing to finance

growth. More market share: positive effect on cash flow as profits are related to cash flow.

Build Market Share: Make further investments (for example, to maintain Star status, or turn a Question Mark into a Star.) Hold: Maintain the status quo (do nothing) Harvest: Reduce the investment (enjoy positive cash flow and maximize profits from a Star or a Cash Cow) Divest: For example, get rid of the Dogs, and use the capital you receive to invest in Stars and Question Marks.

RedBull BCG – STAR INTO COW Build: Sales and/or market share

IRISH CONSUMPTION MODEL IN US (10-2)

Invest: to maintain/increase leadership position

35% TURNOVER IN MARKETING/SPONSORSHIP (5-2)

Defend the market leader position: the case for RB

KEEP MESSAGE FRESH & INNOVATE WITH PLAN (8-5)

MARKETING PLANNING PROCESS - ONGOING Business Mission: A BROAD STATEMENT THAT SEPARATES RB FROM OTHERS AND STATES THE

REASON FOR THEIR EXISTENCE- To build mystique in the product, build a branded market, provide support to our partners & customers, sell not just a drink but a way of life (11-5), (5-2)

Marketing Audit: MACRO/MICRO ENVIRONMENT & INTERNAL AUDIT.

Where are we now? MARKET LEADER (70% IN 2004) (2-1) How did we get here? By bringing people to the product. (5-2) Where are we heading? GLOBAL

SWOT: An evaluation of the current business position – see above

Objectives: The output of audit and SWOT feeds this

Strategic Thrust / future business direction-ANSOFF SAYS DIVERSIFICATION (10-6) Strategic Objectives for each product – BCG SAYS BUILD THE STAR

Core Strategy: Once objectives are set the means for achieving them are needed

Target Markets: GEN Y’ERS – USE SEGMENTATION (4-5) Competitor Targets: COKE, PEPSI ASDA (2-1)

Competitive Advantage: Better performance through DIFFERENTIAL ADVANTAGE over the

competition. Being better: 70% market share 2004 (2-1), Being faster:Swift localized marketing and distribution (3-5), Being closer: Hands-on (7-1), 2-way relations (6-1), peer networking (7-5)

Marketing Mix decisions: Use of the 7P’s to provide a superior offering to customer at a fair price

use of POSITIONING to align the product in the minds of the consumer

Organization & implementation: Style of execution of the plan and structure of the function

Control: Reporting and monitoring.

Technological: New products, services, work methods, communication methods, and ways

of distribution. Impacts the way the message is put across and the receptiveness to innovation POSITIONING IN COMPUTER GAMES (7-4) INTERNET BUZZ MARKETING ( ASSOCIATION WITH F1 RACING, AIR TRAVEL, HIGH CLASS FOOD VENUES (11-1,3)

Environmental: Climate change, natural weather patterns, peoples attitudes to these major

global factors. Impacts attitudes and creates new needs to be satisfied (organic food) weather events create opportunities (insurance – floods) ANTIBRANDERS (4-5) (7-4) LUNAQUA – MADE FOR NEW AGERS UNDER GLARE OF FULL MOON (10-5) SUN, SEA SAND = SURF COMPETITIONS (5-3) AIR, SKY FREEDOM = PARAGLIDING, SKYDIVING (5-3)

WIND RAIN SNOW = KITEBOARDING, SNOWBOARDING (5-3)

Legal: legislation and laws that govern the way business can be done. Impacts customer rights,

legal action EUROPEAN UNION UPHOLD FRENCH BAN (8-3) TRADEMARK INFRINGEMENT (9-5) FERTILITY CLAIMS SCRUTINISED BY REGULATORS (11-2)

5 INDUSTRIAL RIVALRY Intensity of rivalry is dependent on market share BULL HAD 86% MARKET SHARE rivalry was low (8-6)

MORE INTENSE FOR 23 NEWBIES fighting for 14% (8-6)

CONVERSION STRATEGY

COMPETITORS

COMPETITIVE BEHAVIOUR