Red Bulls Marketing Strategy Marketing Essay
Red Bulls Marketing Strategy Marketing Essay
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All big brands around the world are now shifting towards the
phenomenon of globalization. A product is no more confined to
geographical boundaries. Globalisation calls for global marketing
strategies being implemented around the world to resonate the
brands identity and its image to target customers. A synonymous
marketing strategy is cost-effective and this is the strategy
applied by many big companies around the world. However, experts
also say that this is not always a wise strategy because consumer
behaviour around the world varies from culture to culture and from
nation to nation. For instance, an American consumer will react and
respond differently as compared to a Nepalese consumer. Thus, while
implementing global marketing strategies, a wiser move would be to
tweak it, customise it, and to relate it with the local consumer
behaviour. Similarly, few international big names in Nepal have
only implemented their global strategies and are not probably
exploiting the huge potential they have. One such case is that of
Red Bull in Nepal. Since the entrance of this drink in Nepal, it
has done well enough to survive in the Nepalese market as compared
to some of the other energy drink brands. Red Bull has implemented
its global marketing strategy such as unconventional method without
really evaluating its effects on the customer loyalty in Nepal.
Thus, the question still remains whether the customer loyalty is
influenced by Red Bull in Nepal that uses global unconventional
marketing strategies.
Statement of problem
Red Bulls marketing strategy around the world is to use
unconventional strategies that involve guerilla stunts and buzz
generating tactics to communicate to their customers. Guerilla
marketing is based on below-the-line (BTL) activities where brand
recall is created through events and stunts that are mostly related
to sports (X-games), parties, adventure and music. The sports Red
Bull supports are ones that are not popular in Nepal. Formula one
and X-games are not really popular. Similarly, Red Bull does a lot
of promotional events at discotheque to enhance its brand. But this
is not applicable in Nepalese situation because we dont have any
such type of place. This is where the problem lies for Red Bull in
Nepal. Like everywhere, the strategy depends on unconventional
marketing which is not applicable and does not relate to the
Nepalese culture and tradition. For example, how many people in
Nepal would be interested in free style football? Hence, if they
conduct a sports event based on free style football, still many
people who are unrelated to these events will not consider joining
there. Also, the idea of X-games that involve moto (motorcycle
racing), skiing (ski big air, skier cross), snowboarding,
snowmobile, Inline skating, skateboarding, and car racing are not
played in Nepal. Thus, any event based on these games would be
absolutely useless here. We do not have well organised night clubs
and discotheques, as already described. These areas are the best
places where most of Red Bulls promotions and selling would take
place around the world. Red Bull also conducts a lot of its
adventurous events around the world in deserts and mountainous
areas. In these contexts, security is the prime issue. One would
also argue Red Bull should use above-the-line (ATL) methods of
promotions (e.g. television, print and radio) to communicate to a
larger audience. The bottomline here is that Red Bull Nepal is not
considering the local culture and consumer behavior and is blindly
implementing its global marketing strategies to communicate with
its customers. That is why the current research has been done to
find out the effectiveness of Red Bulls global unconventional
marketing strategy, for example BTL method, in customer loyalty in
Nepal.
Aim and Objectives
Aim
The current research was conducted to find out the effectiveness
of Red Bulls global unconventional marketing strategy (e.g. BTL
strategy) in customer loyalty in Nepal.
Objectives
To analyse the situation of consumers in energy drink
Do they consume energy drink?
Are they aware of energy drinks available in markets?
Do they prefer any energy drinks?
To analyse the factors that affect potential target market of
Red Bull in Nepal.
Do gender, age-groups, marital status and income of consumers
have any effect on Red Bull market in Nepal?
Analysis of the Red Bull brand in customer loyalty
What consumers think about Red Bull quality?
Why consumers think Red Bull was unique among drinks?
What consumers think about Red Bull brand?
Will Red Bull consumers keep on purchasing it on future?
Will Red Bull non-consumers consider purchasing it on
future?
To analyse the effectiveness of Red Bulls marketing strategy in
customer loyalty in Nepal?
Will sampling affect customer loyalty?
Will promotion events affect customer loyalty?
Any suggestion in enhancing customer loyalty?
Justification of the study
At the end of this study, our research will help understand the
effectiveness of Red Bulls global unconventional marketing strategy
(e.g. BTL strategy) in customer loyalty in Nepal. In addition, this
study will be important to analyse the Red Bull brand in customer
loyalty.
A detailed report would be generated regarding consumer
behavior, preferences, attitudes, reactions, lifestyles, and
characteristics which would help us prepare an in-depth analysis on
our research objectives. An exciting prospect of this project would
be to find out to what extent Red Bull possesses the ability to
reach markets and reach consumers as using unconventional marketing
strategies limits their reach and opportunities. Lastly, the study
will generate recommendations that will be crucial in Red Bull
marketing strategy in future.
Scope of the study
The study comprises of conducting a research in different parts
of Kathmandu targeting individuals and groups (principally
university and college students, celebrities and media related
persons) falling into our target criteria in order to find out the
effectiveness of Red Bulls unconventional marketing in Nepal. The
research also involves interviews with industry experts to gain
their viewpoints and comments on the matter which was important to
understand about Red Bull markets in this country.
LITERATURE REVIEW
Unconventional marketing
In the corporate world, the term marketing simply refers to
activities carried out by organizations or individuals in order to
generate awareness capture interest and boost sales. There are
mainly two strategies to generate marketing, for example
conventional and unconventional marketing. The first, conventional
marketing, a traditional marketing technique, mainly refers to the
use of media or ATL activities for the purpose of promoting the
brand. These conventional methods comprise of television
advertisements, print advertisements in newspapers, magazines,
broadcasts on radios, billboards or hoardings and other sources of
media. Unlike conventional marketing, the unconventional marketing
refers to all those forms of marketing that require lower budgets
and more time, imagination, creativity and a lot of energy rather
than monetary support. Compared to conventional marketing that
lacks an interaction between the organization and the end user,
unconventional strategy is more interactive with customers and gets
them really engaged with the activity itself. Examples involve
public interceptions, random giveaways or free sampling, and
publicity stunt (PR).
Unconventional marketing is synonymously used as guerrilla
marketing, buzz marketing, public relation tactics, viral
marketing, social media, BTL in various literatures. This marketing
campaign is principally interactive with consumers who are
unexpectedly targeted in unexpected places. Therefore, this
campaign is aimed at generating buzz and viral marketing via a
unique, engaging and thought-provoking ideology (Romane Knight, The
Best "Guerrilla Marketing" Strategies,
http://marketingnotesja.hubpages.com/hub/The-Best-Guerrilla-Marketing-Strategies
(Blog), accessed on 21 September 2012).
While both forms of marketing result in increased awareness,
persuasion and education of the brand, unconventional marketing
helps build a bond between the brand and the customer. The Exforsys
Inc. website (2011) states that unconventional marketing is an
experiential marketing which appeals to the emotions. The customer
develops an emotional attachment to a brand, product, person, or
idea. Therefore, unconventional marketing greatly enhance the
customer interaction in order to gain valuable insights and
consequently enhance loyalty.
Customer loyalty
When a company or a business organisation is opened, it is aimed
to generate and retain a loyal customer who would continuously
attach with the company in the context of its long-term
cost-effective business. The ideology of retaining a long term
relationship with brand loyal, i.e. the customer who has the
continuous requirement of the same product is called customer
loyalty. Customers will leave the company or organisation if it is
not aimed at curomer loyalty. Various explanations have been found
regarding customer loyalty in literatures. Sivadas and
Baker-Prewitt (2000) said there is an increasing recognition that
the ultimate objective of customer satisfaction measurement should
be customer loyalty. Anton (1996) described satisfaction is
positively associated with repurchase intentions, likelihood of
recommending a product or service, loyalty and profitability. In
1997, Guiltinan, Paul and Madden (1997) said that satisfied
customers are more likely to be repeat (and even become loyal)
customers (Guiltinan, Paul and Madden 1997). While these statements
indicate that customer satisfaction is one of the factors of
customer loyalty, customer dissatisfaction does not always lead to
a reduction in loyalty. For example, even dissatisfied, some
customers may be loyal because they dont expect to get any better
service even if they did change (Reichheld 1996).
In addition to customer satisfaction, brand loyalty may be
another factor which may play in customer loyalty. Sometimes,
customers can also feel a sense of loyalty and emotional attachment
to a particular brand (Fournier 1998). However, the relationship of
the brand with a customer is a two-way process in which it is not
concerned how a customer feels to a particular brand, and this
association is just preference or proclivity (Peppers and Rogers
2004).
Customer Acquisition
The assurance phase
Customer Development
The education & bonding phase
Customer Commitment
The sales phase
Customer Retention
The continuation& activity phase
Customer Loyalty Cycle
Satisfaction
Satisfaction
Satisfaction
Satisfaction
S2
S1
S3
S4
Figure 1: Customer Loyalty Cycle as a Business Model used by the
Scuba Schools International (SSI) Dive Centres. They acquire
students and convert them into loyal customers. S1: Step 1, S2:
Step 2, S3: Step 3 and S4: Step 4 (Adapted from
http://divessi-indo.com/acquisition/systems.php, accessed on 24
September, 2012).
Finally, price may be one of the determining factors of customer
loyalty (Fisher 2001). For example, good pricing is an important
factor in encouraging customer loyalty (Abratt and Russell 1999).
In contrast, if a customer is loyal to a brand, he/she will not
care of future price changes (Clark et al. 1995) indicating price
may not play a role in customer loyalty.
While customer loyalty depends on different factors, the process
of customer loyalty is not an easy task in business. The process of
customer loyalty can be achieved in 4 steps (Figure 1). The first
step is called the assurance phase in which customer is acquired
via different marketing or business strategy. Then, customers are
made satisfied and then, they are given different trainings and
education programs to keep them bonded. This is the education and
bonding phase and is the second step of customer loyalty. Again,
the customers are made satisfied and customers make commitment in
the sales phase or third phase. The satisfaction to customers is
continued and customers will stick to the same brand or the same
company in the continuation and activity phase. This is quite
important to keep the customers retention. The cycle is repeated
followed by customer satisfaction. Therefore, customer satisfaction
may be one of the important factors in customer loyalty (Figure
1).
Measuring marketing effectiveness
Companies spend billions of dollars annually on marketing.
Because of increasingly competitive markets, firms strive to
produce higher and higher profits. This leads to calls for
justifying the marketing expenditures (Rust et al 2004). Powell
(2002) states that marketing effectiveness is the quality of how
marketers perform their marketing activities in order to optimize
their expenditures and achieve both short and long term goals. The
difference between marketing effectiveness and efficiency is
explained by Rust et.al (2004) as they state for example, that
price promotions may be efficient in delivering short-term revenues
and cash flows but ineffective in the long run if it is destroying
profitability and brand equity in the long run.
Figure 2: The Chain of Marketing Productivity (Adapted from
Journal of Marketing 2004, vol. 68, pp. 76-89).
The Chain of Marketing Productivity is a conceptual context that
can be utilized for evaluating marketing effectiveness (Figure 2).
This model explains the effects of certain marketing actions of a
firm on its position and standing in the market. Rust et al (2004)
believe that every firm must have a business model which is used to
track the effectiveness of marketing expenditures in influencing
the knowledge, beliefs and emotions of the customers that
ultimately leads to purchase behaviours. They stress on the fact
that marketing efforts such as advertising and product improvements
help in building long term assets such as brand equity. These long
term assets are leveraged to deliver profitability in the short
run. Customer thoughts, beliefs and feelings that lead to purchase
behaviours are usually measured through non-financial measures such
as attitudes and behavioural intentions. These non-financial
measures drive financial performance measures like sales, profits
and stock values in the short and long runs (Rust et al 2004).
Behaviours
Hoyer and Macinnis (2009) states that consumer behaviour
reflects the sum of all consumer decisions from acquisition to
disposition of goods, services and experiences. Behaviour of the
consumers is a dynamic process reflecting acquisition, usage and
disposition activities. The questions of what, why, how, when and
how much to acquire, use and dispose a particular offering can have
a major impact on how strategies for marketing and communications
are developed. In order to produce, communicate and provide
appropriate goods and services, marketers need rich insights on
consumer behaviours and what they value (Hoyer & Macinnis,
2009).
Marketing efforts such as communications and promotions have a
long term impact on consumer behaviour. In recent years, consumers
have become more price- and promotion-sensitive over the time
because there is a lot of information and choice available to them.
This is why more and more companies are attempting to influence
consumer behaviours through marketing efforts such as promotions
and communications (Mela, Gupta & Lehman, 1997).
Sales Revenue
Sales revenue numbers are the most objective measures of
marketing effectiveness. Financial benefits, such as sales, from
particular marketing efforts are assessed in numerous ways. One
traditional method is the Return on Investment (ROI) which is the
relative return that is obtained from the required expenditure.
Financial impacts like these affect the firms financial position in
terms of profit and cash flow. However, these methods are
controversial and ineffective if relied upon solely. This is
because most of marketing efforts are played out in the long run;
there effects cannot be observed in the short run, while methods
such as ROI only assess short term effectiveness of marketing
efforts. A better usage of such methods must incorporate future
cash flows so as to predict and determine the long run marketing
effectiveness (Rust et al 2004).
Brand Equity
Brand equity is a relatively new concept which has developed
from the past two decades as core marketing concept. It suggests
that brand value can be derived from the discounted cash flows
received from the sale of products/services as a result of
associations of the brand with those products/services (Rust et al
2004). Rust et al. (2004) further cite Tybout and Carpenter on the
enormous brand equity of Home Depot which was the US$84 billion in
1999. This shows that even though there may be a short-term divide
between ROI and marketing efforts, it may not be completely
ineffective due long laSting value offered through brand equity.
Elements of brand equity such as customer lifetime value, brand
awareness, associations and recognition can be determined by
recognizing prevailing perceptions regarding the brand and
functional as well as emotional value propositions that the brand
provides (Dunn &Halsall, 2009).
The impact on customers and resultant developments in valuable
assets such as brand and customer equity influence a brands market
share and revenue, hence, enhancing its competitive position in the
market. Long term benefits of these assets can increase customer
responsiveness to brands and its extensions, willingness to pay
premiums, referrals, increased usage rates, lower after sales
support costs, customer retention and loyalty. All of these factors
reflect a larger market share to be enjoyed by the brand with
guaranteed greater profitability (Rust et al 2004). There is a
wealth of means to measure market effectiveness. Methods to
evaluate marketing tactics and impact of marketing expenditures
provide the necessary tools to affect the practice of management
and to bring further credibility to marketers. From an accounting
standpoint, marketing productivity must be categorized into
modifications in financial assets as well as intangible assets such
as brand equity (Rust et al 2004).
Red Bull-History
Red Bull is a popular energy drink that had been manufactured
since the early 1962 by the TC Pharmaceutical Co., in Thailand by
Chaleo Yoovidhya. The name of the company was subsequently changed
into Red Bull Beverage Co. Ltd. It was introduced into the Europe
by the Austrian guy Dietrich Mateschitz, who found out that one of
the Thai energy drink called Krating Daeng (Thai: Red Bull) was
good at soothing the Jetlag. He finally realized that the Asia has
a wide potential market for Energy Drinks and there was no such
kind of product available in the West or the Europe. In 1984, he
established an Austrian company called Red Bull GmbH that sold
about a million cans in 1987. Consequently the sale was expanded to
other countries like the UK, Germany, Switzerland and others
(http://www.fundinguniverse.com/company-histories/red-bull-gmbh-history/).
Throughout the world, it is the leader in the energy drinks market
and has about 70% of the market share and has annual sales of
billion dollars (Data Monitor, Red Bull GmbH, 2004).
Red Bull-Branding
When introduced to the markets of the world, very few believed
in the successful potentiality of Red Bull as a brand and product.
The mere concept of energy drink was brought into inception by Red
Bull and most believed that such a confined product category of
energy drink was not required when you had other options such as
tea or coffee as energy boosters. Beardwood (2010) remarked that
Red Bull might be a slightly safer alternative to alcohol. Although
there are negative assumptions related to Red Bull brand, it has
now become the leading energy drink manufacturer around the world.
Regani in 2006 believes that the soul reason of the success of Red
Bull in marketing is due to its audacity to think out of the box
and its trend setters rather than followers (Regani (2006).
Red Bull-The brand
While considering Red Bull as a brand, it reflects energy,
enthusiasm, active life, trend setters, adventurous and everything
that is about youth and its whereabouts. When a person is found to
consuming Red Bull, the image created in mind is a cool and trendy
one and that is the kind of positioning they have achieved as a
brand. All brand managers at Red Bull maintain that the positioning
of Red Bull will never change no matter what the situation is, as
that is what Red Bull, as a brand has thrived on. Red Bull is more
about the brand than the product itself. According to Gschwandtner
(2004), it is not Red Bulls sales strategy that helps it sell like
hot cakes around the world, but it is its innovative branding
strategy that has helped it become the number one energy drink name
of the world.
Red Bull-Marketing strategy across the world
Red Bull as a brand is rebellious in nature and it certainly
proves the kind of unconventional marketing strategy it has chosen.
They absolutely refuse to advertise and use some of the
conventional modes of promotions such as billboards, banner
advertisements, taxicab holograms and blimp in a way that many
brands would opt to do. Even their TV spots are very different from
others. Played only on niche channels, they are merely sketches of
a mysterious Austrian artiest that tries to amuse the audience more
rather than educating them. They completely pursue unconventional
marketing techniques to build the brand that majorly includes buzz
generating tactics, event-based marketing, hiring brand
ambassadors, supporting student projects, free sampling and
others.
Rather than going on mass, Red Bull targets underground style
with BTL activities. It aims to produce viral buzz by paying
college going students, disc jockey (DJ)s and young opinion leaders
to host events and parties where the drink can be served. These are
the sort of parties Red Bull encourages its ambassador to lead or
organise as it aims to associate its brand with such events.
Therefore, strong Red Bull branding can be observed at club, caf
and discotheque where young crowds are mostly present.
Red Bull does not spend on advertising and flashy celebrity
endorsement. They hire hip youngsters, students and unconventional
sports athletes to endorse their brand and promote it. These not
only cost less but are also more effective as they are closest to
the target market and know the required consumer behaviors. Besides
that Red Bull organize and sponsor extreme sports events like the
X-games and freestyle football which against complements their
strategy of unconventional marketing.
Campaigns
Their campaigns are mostly based on organizing events that are
associated with the brand. These events usually include
unconventional sports, parties, student based events and
exhibitions. They use such events to heavily brand their product
using all kinds of aesthetics and tools. Plus, they also sample at
these events to generate product trial and to let their target
consumer experience the functionality of Red Bull. Their most
recent campaign was the world tour of free style biking champion
Kenny Belaey who was taken to all Red Bull operating countries
where he performed stunts at different schools, colleges and
universities. This event was used to build an impression for Red
Bull as an adventurous, outrageous and unique brand. Sampling was
also conducted at all stunt venues. Before the tour of Kenny
Belaey, Red Bull organized the Free Style footballing competition
all around the world where youngsters flaunted some cheeky skills
to win the major prize of going to the World Cup in South
Africa.
Publicity stunt/buzz generating tactics
The main motive of Red Bull behind using unconventional and
unique marketing strategies is to generate or create people talking
about them that gradually support to promote them. They aim to
create a buzz through their events that is why they do not prefer
using the conventional modes of communication (e.g. TV, radio and
print media). Red Bull aims to create a viral fever through its
events where people are amazed by the activities they perform and
talk about it. The message spreads like wild fire that is the thing
each Red Bull brand manager or brand ambassador targets in all its
operating countries. Main motive is to do something so outrageous
and unique, that people keep talking about it. Therefore, the brand
is both getting the required mileage and developing a customer base
for itself.
A small example of how Red Bull tried to generate a buzz was the
high jump that their hired athlete attempted from the tallest
buildings in all the Red Bull operating countries. Media was
invited to the stunt and heavy Red Bull branding was exhibited.
There was great hype and anticipation because of such an outrageous
attempt being made by a person. People kept talking about it and
there was a certain buzz about this stunt. The venues for the stunt
were heavily branded with Red Bull aesthetics to demonstrate that
it is Red Bull who owns the event. The stunts were successfully
completed in all Red Bull operating countries with the media
heavily publishing it on TV, print and radio. The amazing factor
was achieved as people were talking about it and this was exactly
what Red Bull wanted to achieve with this stunt. In this context,
it might not be selling the product through these stunts but it is
actually developing the brand as an adventurous and unique one and
also that it is creating a buzz about Red Bull which is basically
the target and aim of the Red Bull brand manager or ambassador at
the closing of the event.
Endorsements
Red Bull does not really rely on celebrity endorsement as that
is not its style. What it does is acquiring sports teams around the
world and supporting them as its official sponsor. The following
endorsements are currently made by this brand:
Red Bull is the official sponsor of all X-games conducted around
the world. This endorsement complements their marketing strategy of
being unconventional. All venues and player dresses are Red Bull
branded and heavy sampling is done at these events.
Red Bull has acquired two football teams around the world. One
plays in the Major League Soccer in the United States of America
and is known as the New York Red Bulls
(http://www.newyorkredbulls.com/), accessed on 25 September, 2012).
The other one is in the Austrian Football League and is known as
Red Bull Salzburg (http://www.austria-salzburg.at/, accessed on 25
September, 2012). Both the teams have their kits branded with Red
Bull. Red Bull Salzburg even have their stadium named after Red
Bull and is called the Red Bull Arena. One can easily notice the
heavy branding of Red Bull at the stadium. This is an effective
plan that involves the heavy media coverage of football all over
the world.
Red Bull owns a Formula One team which has been doing incredibly
well since the acquisition took place
(http://www.formula1.com/news/headlines/2010/5/10796.html, accessed
on 25 September, 2012). The car and the drivers dress are
completely branded with Red Bull logos. This is again a very
effective because Formula One racing gets a lot of coverage around
the world and gives Red Bull the required mileage in its target
audience.
Red Bull endorses the major stars in unconventional sports and
gaming. A stand out example is Kenny Belaey who has been supported
by Red Bull throughout his career as a free style biker
(http://www.tribalzine.com/?Kenny-Belaey-after-the-success-of,
accessed on 25 September, 2012).
Sampling through brand ambassadors
Another strategy of the marketing by Red Bull is the contract
with brand ambassadors at schools, colleges and universities to
represent the brand at social events and hangouts. These brand
ambassadors are given cartoon/s of Red Bull to sample at parties
and spots where Red Bull might be needed. These situations occur
when students are in mental or physical stress due to various
reasons, for examples sports events or time of academic
examinations. The idea is to hire cool college going students to
represent the brand amongst its intended target market.
Another promotional strategy is involved in educating consumers.
Red Bull organises travel in by its staffs in a car that carries
large cans of Red Bull. The Red Bull staffs target those
individuals who lack energy and wishes of energy. Then, the staffs
give a free can of Red Bull to these people. This strategy seems to
be successful during the introduction of Red Bull into public.
Red Bull-Establishment in Nepal and structure
Red Bull was finally launched in Nepal in 2002 and since it has
been a leader in the market with relatively lesser competition. Red
Bull was brought to Nepal by S.M. Chawla Company that only handled
distribution of Red Bull initially. When the headquarters in Dubai
assessed the sales in Nepal, they decided to officially start their
operations in an office of their own. In 2004, Red Bull Nepal was
established with three functional departments namely Marketing,
Sales and Finance. Red Bull is currently being operated in
Kathmandu with the Asian head office being in the United Arab
Emirates (Figure 3). It has set up its premises in all three cities
where distribution and marketing operations are executed. The
current organizational structure of Red Bull Nepal is shown in
Figure 3.
Figure 3 : The current organizational structure of Red Bull
Nepal.
Marketing
The current organizational structure of Red Bull Nepal is
governed by Asian Head Office. This office primarily plans and
executes BTL promotional activities for Red Bull. Understanding the
consumer need and coming up with activities to fulfill them is one
of their most important tasks. Pre- and Post- event communications
of all promotional activities are also taken care of by this
office. Each city has one marketing head and three Student Brand
Managers hired from popular universities to work as a team.
Marketing department also handles communication via social media
like Facebook and others.
Sports and Events
This is a dedicated team that plans around the year activities
based on sports and other functional events. Red Bull conducts all
its marketing through guerilla style and that is why this
department has its special importance. They primarily plan and
execute accompanied by collaboration with the marketing
department.
Finance
Finance Department consists of a precise and dedicated full-time
team member. The finance team distributes the budget for executing
the marketing activities. This department also looks after the wage
control system. The team also maintains and keeps track record of
monthly sales. This department submits the monthly reports of sales
performance to the head office in Dubai.
Communication
This department handles all the pre- and post-event
communication of Red Bull events and activities through all media
that include TV, print, radio and social media. This strategy is
similar to the idea of communication in unconventional marketing of
Red Bull brand to its audience. This department actively stays in
touch with people in the media to disseminate news about everything
that Red Bull is doing not just in Nepal but also around the
world.
Sales
Since Red Bull is imported from Dubai (Asian Head Quarters), a
production department is not required. The distribution department
takes in-charge of the inventory management duties of Red Bull.
They also conduct all distribution operations of the city.
The strategic dimensions of Red Bull branding
Red Bull isnt a drink, its a lifestyle says Dietrich Mateschitz,
CEO of Red Bull GmbH (Speed-In-A-Can, The Red Bull Story,
http://www.slingstone.us/uploads/Speed_In_a_Can.pdf, accessed on 25
September, 2012). He adds that we dont bring the product to the
people; we bring the people to the product. With the energy drink
market established as it has today, there is truth in Mateschitz
words. Red Bull had become a cult brand with loyal customers in a
short period of time. To analyze it, we implement the strategic
dimensions of branding from Fill (2005) (Figure 4).
Figure 4: Strategic dimensions of branding (Adapted from Fill
2005).
Integration
A brand can only work when it communicates in a consistent and
meaningful way. A successful branding is partly the result of
effective integrated communications, stated Fill (2006). Red Bull
has always been known for unconventional form of integrated
marketing communications. The fact is that they only used small
distributors that sell Red Bull exclusively without any motivation
of dealing with large distributors.
Differentiation
Red Bull takes differentiation as a core aspect as it is a
pioneer, the first of its kind in the market. Being the first
energy drink, it has has various advantages, though it is not easy
to open a new market category. But Red Bull took the
differentiation further, by taking a different approach in their
marketing, sales, promotion, and distribution. Judged by the
targeted consumers, the generation Y, differentiation is essential
as they strive for their own identity. Gobe in 2001 explains They
are looking for authenticity, self-identity, and community in the
brands they endorse. And for Red Bulls target audience, being
authentic means being a bit irreverent, a bit anti-establishment,
and every bit different from your parents (Gobe 2001)
Added value
As the final key aspect in the strategic dimensions of branding,
added value enables the customers to derive extra benefits as one
brand can provide different advantages to another. These advantages
can come in the form of rational attributes-based advantages or
emotional-based advantages through the augmented aspects of the
products. Red Bull has added value in both aspects. As it is an
energy drink and has proven that it can revitalize the body and
mind, it fits as an advantage in the rational sense. As for the
emotional-based advantage, the product marketing communication
positioned Red Bull as a lifestyle product, for example, it is
aligned with the lifestyle associated with action or extreme
sports. Value is added to brands through three main components:
perceived performance, psychosocial meaning and the extent of
brand-name awareness.
Perceived performance
Perceptions derived from consumer on the relative quality and
perceived associations are concerned as a key attribute. Red Bull
as an energy drink has done its job that it was promised to do for
the consumer. Red Bull even utilised the enhancing and vitalising
effects to associate the relationship in distribution.
Psychosocial meanings
It refers to the immaterial associations that consumers make
about brands such as meanings about personality and expressions of
individuality. With Red Bull, it had been perceived as a brand with
an edge, as Gobe (2001) explained Red Bull is not about safety,
thats the brand emotion is over the edge; its pushing the envelope.
Danger is part of the deal. If you can survive Red Bull, you are
cool.
Brand-name awareness
It has been argued that the level of name awareness can provoke
feelings of familiarity and reduced risk or uncertainty. The origin
and development of the name Red Bull itself was not based on the
familiarity of the market, it was based on the drinks name in
Thailand. But Mateschitz had tweaked the meaning a little bit to
make it more familiar for the western market, from red water
buffalo to Red Bull, as bull is associated with strength and
virility.
Marketing strategy of Red Bull in Nepal
Red Bull has adapted a very unconventional style of marketing in
Nepal which relies completely on BTL activities. Unlike elsewhere
around the world, where there is a certain percentage of marketing
activities done through TV, radio and print, they do not do ATL
promotions in Nepal. Some of the tools that Red Bull doesnt use in
Nepal are TV, radio, billboards, banner advertisements, taxicab
holograms, and blimps.
Red Bull has strongly adapted the practice of viral marketing by
paying students and young opinion formers to organize Red Bull
events at colleges and universities. They have also hired three
Student Brand Managers from Kathmandu University, Purbanchal
University and KMC which are the top three institutes of Kathmandu
and have done the same in the rest of the cities. With students
acting as their representatives, Red Bull provides them free
cartoons of Red Bull and encourages them to throw parties and
events. This results as an effective way to spread the good word
about Red Bull as it doesnt require a huge amount of money, its
quick and the student advocates offer credibility to a product
competing in the beverage market. Another advantage is that the
student also provides research data that are valuable for the
company.
Red Bull in Nepal is still in the process creating a market.
People still have to be educated about the concept of energy drink.
Another promotional strategy, as discussed previously, involved in
educating consumers is that Red Bull recruits staff that looks
after the people who want energy.
They also organise promotional events involving university and
college going students with themes like sports, art, part and
music. Although this serves to attract only a certain percentage of
the market, this is all Red Bull relies on to communicate with its
target market.
Red Bull Nepal has adopted the same strategies as around the
world. Although with majority of the population can be communicated
to through mass-media, it still sticks to its strategies of
unconventional marketing.
Campaigns in Nepal
Since its inception in Nepal, Red Bull has organized a few buzz
generating events that resonates the brand identity to its
customers and they are as follows:
Red Bull BASE jump: This was a global campaign where they hired
an athlete to jump from the tallest building in the city to create
a hype about the product. In Nepal, this stunt was performed among
various people in the presence of media. They were invited to
experience this outrageous act. The event was a huge success in
terms of the frequency the brand distribution.
Red Bull Free Style Soccer: This again was a global campaign
where youngsters from all over the country were selected on the
bases of their footballing skills and were provided a platform to
flaunt their talent in front of the common public. This event was
conducted in Kathmandu. The turnout of participants was
considerable low as compared to the turnout in other Red Bull
operating countries because of the lack of popularity of the sport
in Nepal.
Doodle Art Competition: Students from all over the city were
encouraged to submit artwork to be selected for exhibitions
conducted at different universities. This was a smaller sized event
but was effective as there were many students who liked the idea of
rough sketching and doodles.
The Tour of Kenny Belaey: This free style biker was taken to
different schools, colleges and universities in Kathmandu where he
performed his stunts.
Competitor review
Red Bull was the first energy drink which was successful and was
enjoying a good market share. Later on, few companies realised that
there is a huge potential market of those people who like to have
energy drinks and after observing the successful Red Bull, some big
companies like Pepsi and Shezan decided to enter into the energy
drink market with their part of shares. One of the major factor
that differentiates energy drinks is that they are costly than
other drinks, juices, malt, carbohydrate drinks and others. Another
factor which plays an important role is the taste of the drink.
Every energy drink in the market is trying to compete with one
another in every possible manner and thus taste might be the major
factor on which every drink tries to differentiate itself as taste
is the most prominent change in energy drinks. The two major
competitors of Red Bull in Nepal are Sting and Speed.
Sting
Pepsi has introduced its energy drink in Nepal with the name of
Sting. Sting placed its marketing strategies on the basis of the
Nepalese culture. It utilized the mass market tools of ATL and BTL
to reach out to the maximum customers. Their advertisement of
energizing and revitalizing by claiming to be energy drink which
has the ultimate taste and extreme energy was appealing and many
people went out and tried out Sting. Like Red Bull, which has
sampling car Mini Cooper, Sting also introduced its association
with hummer and used to carry drinks in hummer for sampling. The
outlook of hummer was painted with Sting written all over it and
was made attractive enough. Other advertisements were included in
TV and radio, and billboards. In addition, BTL activities were also
run in different parts of the country in which many sporty events
were sponsored along with rock concerts.
Sting entered into the market with a more sweet taste of energy
drink. Competing with Red Bull, they have introduced two flavours,
one is red in colour and another is yellow. It is sweet in taste as
compared to other energy drinks. The main core differentiating
point is that Sting is competing on price with other energy drinks
which is usually high in price. Sting was started with the price of
0.67US$ per can. The quality was backed by the parent company Pepsi
Co. So, low price didnt have much impact on the quality of the
product. Through low price they are catching the mass market. They
are the cheapest energy drink with a fine taste. Sting is also
found in a bottled-filled that costs 0.44US$ per bottle. Sting thus
tends to focus on mass market and is leading towards more of a
beverage drink rather than an energy drink. Their packaging is also
attractive and different.
Speed
Speed energy drink comes from the House of Shezan. After seeing
a good potential market for energy drinks Shezan also introduced
its energy drink with the name of Speed. Speed followed BTL as well
as ATL as it was advertised on billboards in different strategic
positions of the country, TV and radio advertisements were being
run on every potential channel. Free sampling, sponsoring concerts,
sports events and organizing some outdoor activities which involve
people are all parts of their campaign. Therefore, Speed is
communicating with mass market in order to reach out the maximum
people of their target market.
Their packaging was different and eye-catching. The price of
Speed was started from the price of US$ 1.33 per can. This was not
reduced unlike some other new energy drinks in the market. Speed is
not competing on price and thus is keeping its price above which
might attract buyers about its quality and uniqueness. But the
review is not the same as people after having it. It has been shown
that people didnt experience any difference in taste and it was a
yellow coloured energy drink. Similar types of characteristics are
found in other low-priced energy drinks were offering.
Effectiveness of Red Bulls marketing strategy in Nepal
The term marketing effectiveness is the quality of how marketers
perform their marketing activities in order to optimize their
expenditures and achieve both short and long term goals (Marketing
effectiveness, Marketing specialist knowledge group 2009,
https://www.cips.org/Documents/Resources/Knowledge%20Now/Mkt_Effective_V3%20200409.pdf,
accessed on 25 September, 2012). Terminologies such as marketing
return on investment (ROI) and return on marketing investment ROMI
are often related to marketing effectiveness as they measure the
return on the investment made by marketers through different
marketing functions.
Each marketing program must be measurable in terms of ROI and
ROMI. In the short run, the goal may be to generate more revenue in
terms of sales figures. However, ROMI in the longer term build more
brand recognition. ROMI is a tool to yield more out of marketing
programs. This helps the marketing team to conceptualise marketing
programs, plan and budget them, communicate their goals and
objectives, execute and manage, measure and monitor, and if
successful, go back to the well for more money to scale them for
even more success. Thus, marketing effectiveness is needed to be
considered not only in terms of ROI and ROMI, but also as a
benchmark for future marketing programs.
The study of measuring the effectiveness of marketing programs
of Red Bull in Nepal may follow the three parameters (Figure
5).
Figure 5: Parameters used in measuring the effectiveness of
marketing programs of Red Bull in Nepal.
Behaviours
Behaviour is one of the measuring factors of marketing
effectiveness. It consists of subfactors or the characteristics of
a person or a customer. Attitudes, motivation, personality,
lifestyle are some intrinsic subfactors that determine the
behaviour of a person. In addition, the buying decision process
also significantly plays a role in behaviour that is important in
measuring the effectiveness of marketing program of Red Bull in
Nepal.
Sales revenue
This focuses on the effectiveness of marketing expenditures in
achieving short-term returns. Program or campaign specific models
are usually applied to measure the immediate impact or net value of
expected profits to be derived from the investment (Pat LaPointe,
Marketing by the Dashboard Light: How to get more insight,
foresight and accountability from your marketing investments, 2005,
ISBN: 1-56318-036-7). These inputs give valuable information on
optimizing resource allocation in the context of generating
near-term results. To calculate the Red Bulls marketing
effectiveness, company estimated sales figures is extracted from
particular marketing programs.
Brand equity
These metrics seek to track the development of the longer-term
impact of marketing programs through the brands perspective. This
includes gauging current and prospective customers perspectives of
the brand through surveys (Pat LaPointe 2005). This perspective is
measured in the brands functionality, personality, accessibility
and value propositions (Pat LaPointe 2005). It is a fact that
higher brand equity, even though intangible in nature, tends to
drive stock returns and hence the actual worth of the organization.
Therefore, it is vital to manage the brand equity elements of every
product and measure the effectiveness of marketing on these
elements.
CHAPTER-3
RESEARCH METHODOLOGY
Research approach
In the current research, all data were collected from primary
sources. The primary data for this research was obtained from a
questionnaire that was completed by people in Kathmandu and from
Skype-to-Skype interviews. Though data were primarily associated
with primary sources, secondary data such as information about Red
Bulls events, market structures were provided by respondents. In
addition, the data related to energy drinks were found in published
articles and books.
Types of data
Quantitative data
In this study, numbers or percentages of the respondents or the
level of income (1United States Dollar, US$=90 Nepalese Rupees) or
other quantitative data were calculated using numbers and
percentages.
Qualitative data
The qualitative part (gender, behaviours, brand awareness and
loyalty) were calculated using questionnaires or interviews.
Population
The frame of reference for the study was limited to the Nepalese
market for energy drinks which was aged above 18 and resides in the
urban areas. Red Bulls target market category is considered to be
the high-income groups of SEC A and 1832 years age groups.
Therefore, these types of population were considered during
sampling.
Sampling
For the current research, the samples were restricted to the
urban areas of Kathmandu only. Based on a purposive sampling
method, 200 individuals who fall under the target market category
for Red Bull were selected. These individuals were either
interviewed via Skype-to-Skype talk or distributed questionnaires
via Facebook and emails which were easy for data collection.
Measurement/Instrument selection
Data Collection: As already stated, secondary data was collected
via literature review that consisted of the previous studies
conducted on the prevalent strategies adopted by Red Bull globally
as well as locally. Primary data were collected via interviews and
questionnaires.
Tools for primary research: Primary research has been conducted
through interviews and survey questionnaires (open ended) have
designed for collection of data.
Variables
The variables which are very important and playe an integral
part in derivation of the research results were:
Introduction of new/modified marketing strategies by Red Bull
Nepal
Awareness of these strategies in the target market
Change in execution of globalized strategies in a local
perspective
Competition with different brands of drinks
All these variables are those which impact the effectiveness of
Red Bulls unconventional marketing strategies in the Nepalese
market.
Data analysis
Diagrams (cartoon, SmartArt), charts (Bar charts and Pie Charts)
and tables (normal and 2X2 or 3X2 contingency) were prepared using
Microsoft Office, and Microsoft Excel. Data were presented in
percentage (%) which was calculated by dividing by the total
numbers of respondents in each question. Data in contingency table
were analysed to find out the hypothesis whether there was
significant difference among variables, for example, age-groups and
Red Bull target market, gender and Red Bull target market, marital
status and Red Bull target market and income and Red Bull target
market. Depending on the types of data, these differences were
analysed by different Chi-square test, for example, normal
Chi-square test, Chi-square test with Yates correction, and Fishers
exact test by GraphPad Prism softwares (Prism 5 for Windows Version
5.00, March 7, 2007). Data were considered to be significant if the
p values were less than 0.05 at 95% confidence interval.
Consumer profile analysis
The consumer profile analysis was conducted on the basis of the
gender, age-groups (years), marital status and income (US$ per
month).
Promotional events and their effectiveness
As discussed earlier, Red Bull in Nepal promotes themselves only
through BTL activities. These BTL activities include promotional
events and buzz generating stunts that are targeted mostly to the
youth of the country. This strategy is the main target segment for
Red Bull not only in Nepal but also around the world. These
promotional events are usually themed on sports, parties, youth
related events, art exhibitions, youth seminars, workshops,
concerts, gigs and all those events that are for the youth and the
media industry. The following parts of this chapter will give a
clear evaluation of the success rate of Red Bulls promotional
events in terms of relevance to the target market, sales generated
from the events and behaviours of the Nepalese people.
Consumer Insight
Lastly, it was asked the respondents to understand the way that
should be done to enhance the frequency of communication to their
target consumers. A lot of interesting responses were given but one
of the most common one was that Red Bull should start ATL marketing
which involves the use of conventional media like television,
print, and radio. Other responses include the wide application of
the BTL, for example, campaigns of Red Bull can be organised in
sports such as crickets and football which are gaining popularity
in Nepalese youths.
Discussion
Energy drink consumer analysis
In the first part of the thesis, energy drink consumer analysis
was conducted. Interestingly, a huge potential market for the
energy drinks was found to exist in Nepal because proportionately
higher numbers of people would like to consume energy drinks. This
shows that this is a good sign and worthwhile for any potential
organisation to invest in the energy drink category. In addition,
the breakthrough of different energy brands, for example Virgin,
Coca-cola, Pepsi and Shezan became competitive in Nepal, however,
Red Bull dominates all of these energy drinks which have been found
on the basis of the highest % of the people were both known to this
brand and preferred this brand for drinking. This is also
attributed to the international notion that Red Bull is the first
successful energy drink with an international success and is the
pioneer in the energy drink market (Buchhloz, 2005). Though Red
Bull succeeded in building a dominance position over Nepalese
energy drink market, Sting, a new brand, cannot be ignored in
future because this brand seems to be a close competitor of Red
Bull in the current scenario. Therefore, marketing an energy drink
or functional drink for example, Red Bull is the most challenging
task due to emerging competitors (Richey 2001). In addition,
consumers are being more likely the price and promotion-sensitive
over the time because there is a lot of information and alternative
choice available to them (Mela, Gupta & Lehman, 1997). However,
Mateschitz, the owner of Red Bull thinks is not worried about the
competitive market because if one really likes the product, then he
or she really wants to try out the original one that is the best in
the market and not a copied version (Johnson 2002). It is also
supported by the fact that most of the energy drink brands are
still on the road of establishment whereas Red Bull is already an
established brand (Riedel 2003).
Factors that affect potential target market of Red Bull in
Nepal
While Red Bull has dominantly taken Nepalese energy drink
consumers in Nepal, there are several factors that affect potential
target market of this drink. Among these factors is the gender of
the consumer. Nepal is culturally a unique country where boys and
girls have equal rights legally, however girls rarely go outside
for example in concerts, music, or any type of public events.
Contrasting scenarios are found in the context of boys in Nepal
especially in sports and athletics where boys are more involved
than girls. That is why Red Bull is naturally preferred more by
males than by females. Similarly, this drink is a type of youth
drink which is mostly consumed by people of age groups 1825 years
old. These groups of people are mostly engaged outside the homes
because they are college- or university-goers and are more likely
involved in parties, music, concert and public events. They have
many friends outside and enjoy taking various drinks to satisfy
their thirst by energising their body via drinking energy
components, for example Red Bull. People above this age, though
outside the home, are mostly responsible to their lives and do jobs
for their families and are less likely to involve in those events.
Therefore, they are less likely found drinking energy drink. In
this context, marital status may also directly affect the Red Bull
drinking habit. Married people may be more responsible than
unmarried in the context of staying inside homes, therefore, even
psychologically married people think they should not consume energy
drink because these types of energising drinks are not for them. In
contrast, unmarried or single persons believe that they are freedom
to decide anything and to drink anything. This can be analysed by a
fact that when a person starts growing up, he/she gets more
inclined towards drinks like tea and coffee for refreshing the mind
and predominantly prefers consuming energy drink for body and mind
revitalization. However, it is difficult to predict the cause of
this differentiation as it may depend on personal daily life and
personal behaviour and characteristics.
Not only sex, age and marital status play a role in determining
consumption of Red Bull in Nepal, but also household or personal
income plays a crucial role in this context. The current research
suggests that the Red Bull brand is a drink for SEC A and B type of
people. In other words, it is a category for the high income group
because not all individuals are able to afford an energy drink. A
250mL Red Bull can costs US$ 0.56 which might be expensive for the
poor people who have low income and do not have money to complete
their own basic needs. Therefore, Red Bull is a drink for the rich
people.
Red Bull brand in customer loyalty
Red Bull brand is also able to keep customer satisfaction and
customer loyalty though various responses were obtained in the
current research. These two points are the important issues to gain
a great competitive advantage for a business (Reichheld 1993).
Therefore, measuring customer loyalty to Red Bull in an effective
way is important in business is a key question of the current
thesis (Reichheld 1993). Therefore, measuring customer loyalty to
Red Bull in an effective way is important in business is a key
question of the current thesis (Reichheld 1993). It has been
measured by different factors such as Red Bull brand perceived
quality, USPs or uniqueness of the brand, identity and positioning
of this brand, Red Bull consumers perception about future purchase
or retention and Red Bull non-consumers perception about future
purchase after this research. Interestingly, Red Bull has created
the desired image and perception about itself in the minds of the
target market as they are associating Red Bull with the right
elements. Red Bull being an energy drink has made it clear in the
minds of consumers that it is all about energy and taste or energy,
taste and packaging and this company with an excellent or good
brand in the market. This product is majorly responsible for the
energy revitalization of the body and mind. The taste of the Red
Bull seems to be different from the usual beverage drinks even from
the newly introduced energy drink, Sting which has a sweeter taste.
Taurine is one of its key ingredients that separate Red Bull from
other energy drinks. Red Bull consists of unique packaging with two
Red Bulls colliding head to head and the tag line of Red Bull Gives
You Wings and its functionality of being an energy drink is
attractive enough. Unlike an ordinary traditional soft drink, its
not packaged in a 12-ounce can, nor sold in a bottle. Instead, it
used an 8.3-ounce slim can. Therefore, energy and taste production
and packaging are the factors that determine the uniqueness of Red
Bull among the consumers and keep on customer loyalty among these
populations in Nepal. Notably, many responses regarding uniqueness
of the brand, to no surprise, were High Price. This may be an
important issue of customer loyalty. The current market is
price-sensitive and customers keep looking for cheaper alternatives
and substitute to fulfil needs. The same notion may be applied for
those respondents who thought Red Bull as a high price drinks
leading the lack of future retention on the drink.
While customer loyalty comes in mind regarding Red Bull
customers, respondents felt themselves enumerating various adverbs
for this drink such as energy, athletic drink, a good drink for
late night study, sports drink, high profile drink, high priced
drink, music drink, party drink and concert drink. This indicates
that these perceptions play a great role in starting, engaging, and
retention of this drink among students, youths, sportsmen, and
customers who feel themselves energetic and high profile in the
society.
The customer loyalty was also measured by the consumers and
non-consumers perceptions about future purchase of Red Bull. While
lots of Red Bull consumers enumerated that they would keep on
purchasing this drink in future, still many consumers were either
not sure about purchasing or not wanted to purchase again. This
indicates that Red Bull consumers are not fully satisfied related
to the drinks and many of them do not want to fall on customer
loyalty. In the same way, during this research half of the
population who never drank Red Bull wanted to be a new customer of
this drink. This suggests that Nepalese customers want to
experience new energy drink in future.
Effectiveness of Red Bulls marketing strategy in customer
loyalty in Nepal
Next, the effectiveness of Red Bulls marketing strategy in
customer loyalty in Nepal was analysed. Red Bulls marketing
campaigns are unconventional and BTL however the competitors are
reaching out the mass target audience but using both means of
marketing conventional as well as unconventional marketing
strategies in order to reach out to the maximum target audience and
capture greater market share (Thomas et al. 2008). The brand Red
Bull is being perceived differently in different cultural aspects
(Thomas et al. 2008) and Nepal might be an important place for this
drink.
Among BTL techniques, sampling and are the usual ways of
measuring effectiveness in customer loyalty. Though majority of
respondents were unaware of experiencing free sampling, Red Bull
seems to be not fully successful in sampling enough people. This
may be because of the failure of the Red Bull brand in proper
sample selection that may include persons with defined gender,
age-groups, marital status and monthly income. In addition, the
free Red Bull sampling strategy might not been fully reliable
strategy in Nepalese markets because majority of people did not
purchase even after trying free samples. This indicates that people
are though associated with free sampling Red Bull, they may take it
for granted and and look at it as an opportunity for free drinks
rather than utilizing it with the intention of experiencing its
energy. Therefore, it can be clearly stated that this method of
unconventional marketing is not generating the desired result. This
can be depicted from the result in which majority of the
respondents are in view of unsuccessful strategy regarding the
sampling technique.
While sampling technique might not be effective in customer
loyalty regarding Red Bull, the role of promotional events in Red
Bull marketing was analysed. It has been found that Red Bull is not
gaining full success rates to communicate to its target audience
about the things they were doing. It also shows that certainly
there is a problem with the way they are promoting themselves. If
they impose so much emphasis on promoting themselves through
events, there should be adequate amount of promotion for these
events so that people at least know about what is happening and can
go and experience these events. Among many campaigns, Red Bull,
Kenny Balaey Tour of Nepal, Red Bull Air Race Party, Red Bull
Doodle Art Competition, Red Bull Street Style Football, Red Bull
Tum Tum Pa, musical concerts and gigs, cricket, football and
volleyball, exhibitions and concerts seem to be popular among
people who took part in Red Bull campaigns. Even during these
campaigns, majority of people did not buy Red Bull indicating these
events are not successful in marketing strategy of this drink.
Therefore, alternate mechanisms of BTL activities can be organised
to enhance customer loyalty. For example, popular celebrities, like
the young and hot cinema actors or actresses or models, or
sportsmen should be involved to represent the brand ambassador as a
symbol of the young sensation for an official endorsement of Red
Bull. In addition, campaigns of Red Bull can be organised in sports
such as crickets and football which are gaining popularity in
Nepalese youths. Finally, as suggested by the respondents, ATL
marketing strategy that involves the use of conventional media like
television, print, and radio cannot be ignored in future.
CHAPTER-5
CONCLUSIONS, RECOMMENDATIONS AND FUTURE STUDIES
Conclusions
Energy drinks such as Red Bull, Sting, Pepsi Max, Gatorade, Blue
Ox, Speed, Burn, Booster and Power are known to Nepalese consumers,
however, Red Bull is popular among these people.
Gender, age-groups, marital status and income are the factors
that affect potential target market of Red Bull in Nepal.
Customer loyalty is found in purchasing of Red Bull brand by new
customers and in retention of purchasing of this drink by old
customers in Nepal. This is attributed to the brand perceived
quality, USPs, and energy, taste and packaging of this drink.
Red Bull is synonymously used among consumers as various names
for example, energy, athletic drink, a good drink for late night
study, sports drink, high profile drink, high priced drink music
drink, party drink and concert drink indicating this drink has an
influence by various ways among students, youths and persons who
think themselves as a high profile candidate of the society.
BTL activity (Sampling technique) might not be a successful
strategy to enhance marketing strategy of Red Bull in Nepal.
Another BTL activity (promotional event) though popular among
Nepalese youths is not gaining advantage of marketing target in
this country.
Recommendations
There are certain new ways of going about things that we think
Red Bull needs to adopt if it is to thrive in the up and coming
years considering the ever increasing amount of competition.
Red Bull needs to start promoting through ATL activities. They
need to make full use of mass-media like its biggest competitor
Sting is doing. With the help of television, radio and print
communication they will be able to reach out to a much larger
audience. Holding promotional events might work wonders for them
outside Nepal but the target market in Nepal cannot relate to
extravagant club partying, extreme sports, and DJs totally. Only a
small percentage can relate to such kinds of activities. Hence, it
is important that Red Bull use mass-media and start communicating
through television, radio and print so that it can reach out to a
sea of audience that are yet to learn about the brand Red Bull in
Nepal.
To attract more customers, it is imperative Red Bull make
intelligent celebrity endorsements so that it can create
associations with the brand. Red Bull can also start financially
support sports events as well as student projects in order to
create good will and positive associations for Red Bull. This way
they will also be able to get a lot of exposure in front of their
target market.
Red Bull should invest heavily to improve its distribution
network in Nepal. Currently, it is only available at either posh
cafes or restaurants or at expensive retail outlets in posh areas.
The edge Sting has over Red Bull is that it is backed up by Pepsis
strong distribution network. Red Bull also needs to make sure that
it is made available in all parts of the city and hence heavy
investments should be made to improve its distribution network.
The marketing expertise should be hired or increased in future
and not rely completely on the team of Student Brand Managers. In
todays extra ordinarily competitive world, there is a dire need of
expert people handling your operations. Hence Red Bull should hire
more staff for its marketing department who can dedicatedly work to
improve and further enhance the current situation of Red Bull in
Nepal.
It should be kept in mind while planning any marketing activity
is that Nepalese consumer differs from that around the world. Hence
everything planned should be in sync with Nepalese culture so that
people can relate to it. If they are able to do this successfully,
it will automatically be able to create several associations with
its brand.
Future outlook
The staff currently handling marketing operations right now is
clearly inadequate and not much can be expected from the Student
Brand Managers as they are still students.
Red Bull is not available to all parts of the country.
Therefore, planning to get distribution agencies on board who can
make sure that Red Bull should be made available in all parts of
the city.
Improving and organising own Red Bull warehouse and store
facilities as well as own means of transportation should be done in
future.
Current marketing strategies should be reviewed and changed if
it is possible.
