Red Bull has been the market leader in the energy drink sector for many years. The problem that red bull is facing now is that other drink companies are starting to break into the energy drink sector. Some of the companies that are now producing energy drinks are larger than Red Bull and have many valuable resources such as strong distribution channels.
With the resources that the larger companies have, we are scared that they will start to take away even more of Red Bull’s share in the energy drink market. The Answer: Red Bull should extend its line by creating different flavors and producing new drinks to give consumers more choices.New drinks could be things beverages such as cola’s and sports drinks such as Gatorade and PowerAde. Red bull can stick with the same marketing strategy because it has worked and has a good conceptual fit with the drink. During the sporting events that Red Bull is sponsoring they can give out free samples and make it known that Red Bull is more than just an energy drink now. They can also have their reps and distributors set up displays in the stores that sell Red Bull.
Rationale: Red Bull is still the leader in the energy drink market, but some of its market share is starting to be taken away.The other drinks that are coming out on the market now have more to offer than Red Bull (more oz per can, different flavors ect. ) at a price that is the same or even lower. If Red Bull came out with different flavors and different types of drinks it would broaden the options they have to offer in the energy drink sector and break into other drink sectors. Not only would this help Red Bull to make more money, but also it would minimize risk by having Red Bull diversify itself. For example if the energy drink market were to take a major hit because of government regulations they also be in other markets, so they wouldn’t be hit as hard.
The facts of the case. This section is optional and should have a brief synopsis of any salient details that might be impactful in your later discussion. This could be a paragraph, maybe a few more, but definitely not multi-paged. For example, you might note that Red Bull had undergone unsuccessful market entries in the past if you think this is relevant to decision making. The strengths that Red Bull possess have been the key factor to their success that would be hard for any other company to imitate.Being the first energy drink in the market gives Red Bull a huge advantage over competitors because it is perceived as the “premium” original energy drink on the market.
Being perceived as a “premium” beverage, consumers are more willing to pay almost twice as much per ounce than the other energy drinks. The marketing efforts have given Red Bull a strong brand image that goes hand in hand with the benefits that Red Bull provides. Being that the energy drink market is still increasing also gives Red Bull the opportunity to grow with it.
