Tiago LK, Jovan A., Tamas F.
BBCi_Principles of Sales
RED BULL REPORT
Red Bull operates within the energy drink sector of the soft drink market and has been the leading market share holder in this area for the past several years. It was founded by Dietrich Mateschitz, an Austrian who studied world trade and commerce in Vienna. In 1982, Mateschitz came back to Austria from a visit to Thailand with some samples of an energy drink called Krating Daeng (which is Thai for “Red Bull”). Two years later he founded the company Red Bull GmbH as a 49 percent partner with Chaleo Yoovidhya, founder of Krating Daeng drink in Thailand. Red Bull is a company and a brand at the same time; they do not stretch their brand out (for example, they do not sell energy bars) instead they decided to stick to the drinks sector of the ‘functional’ foods market only. The four products they currently sell are Red Bull Energy Drink, Red Bull Sugarfree, Red Bull Simply Cola, and Red Bull Energy Shots. This report will cover several topics regarding sales force and sales forecasting strategies already implemented by the organization, or strategies they might want to consider. However, before this paper can explain the strategies clearly, a good understanding of Red Bull’s current channels is important. Red Bull gained popularity throughout the years for various reasons: some say the way they marketed was exceptionally important to their success and others believe they became a leader in the market (with about 70% market share by 2003) not only because they were the first to endeavor selling a soft drink with no intention to sell a good taste (unlike Coca-Cola, or Gatorade), but also because as Markus Pichler – who was in charge for engineering Red Bull’s introduction to the USA – claims “The basic thing is that the product works. It delivers benefits that are relevant to consumers. We provide them with energy. We are relevant for their lifestyles.” Red Bull does not have a shop entirely dedicated to selling their products only. They channel their products in three different ways: 1. Convenience stores and supermarkets
2. Sports events and sponsorship
3. Night scene (clubs, bars, etc)
The method they used for each channel has been changing as the product progressed throughout its life cycle. As Red Bull was still in its introductory phase, their strategy was to focus on gaining attention and visibility. They would not close deals with big chains for the process was too slow – it goes faster to deal with individual accounts. Because they were targeting 16 to 29 year old consumers, they concentrated on students and sold the products where the students would hang out (near schools, clubs, gyms, etc). They hired young students to throw student parties and provided them with cases of Red Bull and other free items with their brand on it. Red Bull relied on the mouth to mouth propaganda (or ‘buzz marketing’) and used the underground scene to develop their cult-like status amongst their target group. When hot clubs and trendy bars bought cases of Red Bull, they would also receive a branded cooler and other POP items which helped Red Bull create visibility. When Red Bull reached Germany, it was claiming a quarter of the sports drink market, beating Gatorade. Red Bull started to associate itself with sponsoring extreme sport events worldwide and became one of the biggest influences in the extreme sports movement. They launched their own flying machine contest call Flugtag (Mateschitz is a passionate vintage aircraft collector). At these events, celebrity extreme sportsmen (sponsored by Red Bull) advertised for Red Bull simply by wearing the logo, and in most cases there was a car completely decorated in the brand. Of course, everyone walked around with a can of Red Bull during these events too. Basically, Red Bull knew that they would not be able to keep market share if they marketed...