Marketing Mix – Red Bull
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The marketing mix, otherwise known as the 4 Ps of marketing, consists of product, price, promotion and place. These are the essential elements to creating an effective and large target audience. A company is likely to make higher profits with a large target audience because they are matching products to customers that actually want what is being sold. Creating and perfecting a successful marketing mix can be the key to increasing sales.
Red Bull is an organization that was created by Dietrich Mateschitz in 1984. The company sells a highly caffeinated energy drink called Red Bull Energy Drink as well as Red Bull Energy Shot (a concentrated version of the energy drink), and Red Bull Cola. The main product is based on an Asian drink Mateschitz discovered while traveling the Far East. (Red Bull, n.d.). Red Bull is an organization that effectively uses the 4 Ps to the advantage of their marketing strategy. Their long standing history as a multi-billion dollar company is a testament to this effectiveness. In 2003 Red Bull dominated over 70% of the energy drink market veritably confirming their success. (Grus, 2003).
Product
The product is the tangible item or intangible service provided by a company. The main elements of product are the functionality, quality, packaging, safety, and brand. Red Bull produces energy drinks that are unique in taste and chemical makeup. “The key ingredients of Red Bull are taurine (1000 mg), glucuronolactone (600 mg), and caffeine (80 mg) in a 250-mL can.” (Prenhall, 2007). The company offers many different sizes and options for their customers, including sugar free and low calorie for health conscious buyers. The silver and blue packaging is unique to Red Bull and provides customers with a distinct brand they can find easily amongst other brands. The packaging is aimed to be interesting and appealing to customers. Red Bull has performed extensive scientific testing on their product to determine its safety for public consumption and has been approved by the FDA; however, the effects of long term heavy consumption of the product have yet to be determined. This testing has also been performed to determine the products efficacy. Red Bulls website states that these tests have proven that Red Bull Energy Drink increase performance, increase concentration and reaction speed, improve vigilance, stimulate metabolism and make you feel more energetic and thus improves your overall well-being. (Red Bull, n.d.). There are several different types of consumers who purchase Red Bull for a variety of reasons: students use Red Bull to help them stay awake and alert while studying, fitness enthusiasts use Red Bull to enhance their performance and to help lose weight, nightclub and bar patrons mix Red Bull with alcoholic beverages to create different mixed drinks, and some consumers simply like to feel more awake at work. This list is not all inclusive of consumers who purchase this energy drink, but these are the major categories of buyers. Each of these demographics must be considered when creating the product portion of the marketing mix to ensure that all audiences are being targeted effectively.
Pricing
Pricing includes the determination of how much to charge for a particular product. The price of a product is determined by the value placed on it by the consumer. Charging too much or even too little for a product can drive away consumers to competitors. Red Bull prices their beverages higher than that of their competitors making it a premium product. This pricing allows customers to believe that Red Bull is of a higher quality than other energy drinks even if that is not the case. Red Bull is able to charge a much higher price than regular caffeinated beverages because of its extra ingredients and high dose of caffeine. Red Bull does occasionally offer coupons and discounted pricing at certain retailers. One aspect of the companys marketing strategy is to give away Red Bull for free to entice customers to buy in the future. I have personally seen a Red Bull truck show up at social functions offering free Red Bull energy drinks to prove how well it works. Giving away free products creates brand loyalty by giving customers confidence in the product.
Promotion
Promotion includes any strategy used by a company to increase consumer knowledge and sales of a product. This can include traditional advertising such as television and radio advertisements or one on one sales tactics performed by a sales force. Red Bull uses two distinct types of promotional approaches which are listed as above-the-line and below-the-line. (Above-the-line promoting consists of traditional advertising. Red Bull uses several cartoon characters in their television commercials with the tag line, “Red Bull gives you wings.” These commercials tend to be on the inspiring and/or comedic side.