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Analysis of Industry
Before understanding where Red Bull stands within the energy drink industry, it is important to define the energy drink industry itself. Red Bull is an energy drink, which is defined as, “beverages that contain, besides calories, caffeine in combination with other presumed energy-enhancing ingredients such as taurine, herbal extracts, and B vitamins,” (Heckman, Sherry, & De Mejia, 2010). The same article places energy drinks in the “functional” category of drinks, a category that also includes, but is not limited to, sports drinks and work-out supplemental drinks (Heckman, Sherry, & De Mejia, 2010). Now that it is clear what industry Red Bull belongs to, take a look at how they fit into the functional drink industry. According to an article in Nutrition Journal, Red Bull is the current leader in the energy drink market (Malinauskas, Aeby, Overton, Carpenter-Aeby, & Barber-Heidal, 2007). Supporting evidence was supplied in an assessment of the energy drink market size in 2010 stating that energy drinks account for 62 per cent of their market in the United States, Red Bull holding 42 per cent of that 62 per cent (Heckman, Sherry, & De Mejia, 2010). Simply put, Red Bull, a single and private company, dominates almost half of the functional drink market. This proves they make trends. They were the first company to distribute such a drink, which is why they are still the most popular. Not only is Red Bull the originator, they are the best. Because Red Bull has the best product on the market, nothing seems to affect their sales. Everyone knows the past few years have been slow economically. While it seems to affect other products and industries, Red Bull seems to be experiencing minimum negative effects. “The numbers indicate that energy drinks will see their strongest growth between the years 2007 and 2012,” (Heckman, Sherry, & De Mejia, 2010). If this assessment had been published or 2 | P a g e
researched prior to 2007, it would not have much validity. However, because it was published in 2010, mid-way through the expected growth dates, the assessment proves the energy drink market is still growing, with Red Bull leading the group. Since not even horrible economic times can hurt the sales of energy drinks, specifically Red Bull, there is no emerging industry that will infringe on Red Bull sales. Analysis of Company
Red Bull Energy Drink was developed by Dietrich Mateschitz. While in Asia on business, he tried some syrups that people would add to their drinks to give them energy. Mateschitz worked to develop an energy drink called, Red Bull Krateng Dang. This original drink was only sold in Asia. After, making some changes to the drink, Mateschitz founded the company. In 1987 Red Bull was launched in Austria (Hoover's Inc., 2011). Every company goes through highs and lows. One low for Red Bull was when it was initially created. The original drink was not carbonated and very syrupy. This was not good for sales. Red Bull re-developed the brand, took out the syrup, and made it carbonated (Hoover's Inc., 2011). Since then Red Bull has been growing. Red Bull is experiencing the high point of the brand. Currently Red Bull commands about 70 percent of the energy drink market (Gorse, Chadwick, & Burton, 2010). The philosophy behind Red Bull is to never give up, it is shown in their history that they keep doing more and reaching out in new ways to promote the brand. Whether it’s buying a sports team or creating a magazine, Red Bull does not give up. (Gorse, Chadwick, & Burton, 2010). 3 | P a g e
The main way media has covered Red Bull is through the sports that Red Bull sponsors. A lot of Red Bull’s marketing is done through extreme sports, which is a new and innovative approach to promote a brand (Gorse, Chadwick, & Burton, 2010). Red Bull is very involved with the community. The company hosts many sports events in a way to market their product. Red Bull has come into the community by being such a...
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