Red Bull Energy Drink 

 

Group 5 

Amar Deep Singh    1111005 Chander Prakash     1111018 Irshad Ahamed M A         1111031 Niharika Bhatnagar   1111044 Sachin G                      1111057 Swati Murarka           1111071  

Marketing Management Project Submitted to: Prof. Nagasimha Balakrishna Kanagal

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Table of Contents

1. Energy Drinks Market in India - An Overview .............................................................................. 4

2. Indian Organic Food Industry - An Overview ................................................................................ 7

3. Problem Formulation ...................................................................................................................... 8

4. Rationale to Launch Organic Energy Drinks .................................................................................. 8

5. SWOT Analysis of Red Bull's Brand Equity .................................................................................. 9

6. 4C Analysis of Red Bull Natural .................................................................................................. 11

7. Methodology for Launch Strategy of Red Bull Natural ................................................................ 12

8. Inferences - Secondary Data and First Consumer Survey ............................................................ 13

9. Product Conceptualization ............................................................................................................ 14

10. Inferences - Second Consumer Survey (Concept Testing) ....................................................... 15

11. Product Specifications............................................................................................................... 16

12. Segmentation, Targeting and Positioning ................................................................................. 17

A. Market Segmentation ................................................................................................................ 17

B. Consumer Targeting .................................................................................................................. 19

C. Product Positioning ................................................................................................................... 19

13. Customer Value Proposition ..................................................................................................... 20

14. Brand Identity and Personality .................................................................................................. 22

15. Demand Estimation and Price Setting ...................................................................................... 23

A. Market Sizing - Demand Estimation ......................................................................................... 23

B. Product Pricing .......................................................................................................................... 24

16. Value Proposition Statement ..................................................................................................... 25

17. Unique Selling Proposition ....................................................................................................... 25

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18. Tag Line .................................................................................................................................... 25

19. Product Promotion .................................................................................................................... 25

A. Promotion Strategies ................................................................................................................. 25

B. Promotion Budget ..................................................................................................................... 28

20. Scope and Limitations ............................................................................................................... 28

21. Appendix ................................................................................................................................... 29

A. First Consumer Survey ............................................................................................................. 29

B. Second Consumer Survey ......................................................................................................... 32

1. Energy Drinks Market in India

The energy drinks market in India, though still in its infancy

The current market size is around Rs 500

at around 1.5 million cases of 24 cans.

young country and its impressive economic growth has pumped in enormous

middle and upper class households. This has resulted in

The party-going segment is growing and youngsters are willing to try out s

drinks have become an urban phenomenon with supermarkets being the primary

from retail sales, energy drinks are also sold in bars and pubs along with alcohol.

Figure 1: Market shar

Competitive Landscape and Market Share

The introduction of energy drinks in Indian markets can be traced to Coca

the 1990s with a drink called Shock.

exited the market. Red Bull, an Austrian brand

undisputed leader of the energy drink segment in India. Since the very beginning Red Bull

enjoyed a market share of around 60% amongst energy drinks

entered the market in recent years and

Cloud 9 whose strategy is to directly attack Red Bull’s sha

1 http://www.business-standard.com/india/news/kit

2 http://www.business-standard.com/india/news/red

3 Report ‘Flavours in Soft Drinks in India

4

Energy Drinks Market in India - An Overview

The energy drinks market in India, though still in its infancy, is expected to grow at a CAGR of 25%

nt market size is around Rs 500crores. In 2010, the total consumption of energy drinks stood

at around 1.5 million cases of 24 cans.2 Awareness among the consumers is on the rise.

d its impressive economic growth has pumped in enormous sums of

middle and upper class households. This has resulted in a substantial increase in lifestyle expenses.

going segment is growing and youngsters are willing to try out something different. Energy

urban phenomenon with supermarkets being the primary sales

from retail sales, energy drinks are also sold in bars and pubs along with alcohol.

: Market share of various categories of soft drinks in India in 2011

Competitive Landscape and Market Share

The introduction of energy drinks in Indian markets can be traced to Coca-Cola, w

with a drink called Shock.1 The response was not favourable and as a result

, an Austrian brand, entered Indian markets in 2003

nergy drink segment in India. Since the very beginning Red Bull

a market share of around 60% amongst energy drinks. However, numerous

entered the market in recent years and are giving it tough competition. In India, its main competitor is

Cloud 9 whose strategy is to directly attack Red Bull’s share. Coca Cola has also launched its premier

standard.com/india/news/kit-non-alcoholic-beverage-market-in-india/452713/

standard.com/india/news/red-bull-to-bankf1-to-beefbrand-equity/147952/on

Flavours in Soft Drinks in India’ – Euromonitor

is expected to grow at a CAGR of 25%.1

crores. In 2010, the total consumption of energy drinks stood

Awareness among the consumers is on the rise. India is a

sums of money into the

ubstantial increase in lifestyle expenses.

omething different. Energy

sales channels. Apart

e of various categories of soft drinks in India in 2011

3

Cola, which first entered in

as a result, the product

Indian markets in 2003 and has become the

nergy drink segment in India. Since the very beginning Red Bull has

numerous new brands have

its main competitor is

also launched its premier

india/452713/

equity/147952/on

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niche energy drink ‘Burn’ in India. Apart from these, there are other small players in this category like

Monster, XXX and Rockstar. The market share of these brands is very small compared to Red Bull.

Table 1: Market share (by volume) of leading energy and sports drinks in India4

2005 2006 2007 2008 2009 2010

Red Bull (Red Bull GmbH) 95.5 38.7 43.6 47.0 46.7 41.1

Gatorade (PepsiCo Inc.) - 58.0 47.5 41.9 38.7 34.4

100 Plus Isotonic Drink (Fraser & Neave Ltd.)

- - 4.4 4.2 4.0 3.4

Cloud 9 (Goldwin Healthcare Pvt Ltd.)

- - - - 2.8 2.9

Others 4.5 3.3 4.5 6.9 7.8 18.2

Total 100.0 100.0 100.0 100.0 100.0 100.0

Promotion Strategy of Existing Players

Traditional promotion activities fail to engage Generation Now and Generation Next. They being the

target consumers, energy drink makers are compelled to come up with innovative ways to promote

their products. A brand image is created and cultivated which associates the drink with youth culture

and extreme adventure sports, such as dance music parties, motor sports, mountain biking and

snowboarding. Red Bull associates itself with the following brand qualities: Energy, Danger and

Youthfulness. Hence, the brand has chosen to sponsor and/or associate itself with extreme sports. It is

banking on the success of its F1 racing team in the first ever F1 race to be held in India, to further

strengthen its brand equity. Also, it has struck a barter deal with retail chain Big Bazaar, under which

the firm will organize promotional events at Big Bazaar stores and its cars will sport Big Bazaar logo

during the events.5 Burn (by Coca Cola), as part of the brand’s first on ground activation, launched the

Burn Car – a vehicle designed by ace automobile designer Dilip Chhabria – to conduct sampling of

the brand.6 In another unique initiative, termed ‘Burn Curate’, it invited participation from the creative

4 Report ‘Sports and Energy drinks – India’ – Euromonitor

5 http://www.business-standard.com/india/news/red-bull-to-bankf1-to-beefbrand-equity/147952/on

6 http://brandactivationideas.blogspot.com/2010/01/coca-cola-launched-its-energy-drink.html

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community to showcase the best of fashion, installation, painting, and photography.7 The winning

creations were awarded Rs. 50,000 each and an opportunity to be featured at Lakmé Fashion Week

Summer/Resort and Wills India. In case of XXX, famous celebrity Shah Rukh Khan unveiled and

launched the product.8 Every other brand is using social networking sites like Facebook, Twitter and

Hi5 for brand communication and promotion.

Consumer Preferences and Perception

Today most Indian teens, bombarded by advertising, pressured by their peers and seeking to showcase

their individuality, consider themselves fashion-conscious. Traditionally, parents and primary groups

had a say in the consumption behaviour of the youngsters. However, this has changed among urban

and high-income families. Secondary groups developed on social networks exercise significant

influence on their preferences and perceptions. India’s rapid economic growth and better employment

opportunities have put enormous money into the hand of Generation Now and Generation Next, thus

increasing their discretionary spending. The common source of income for teens in India is pocket

money which they end up spending on music, mobile phones, fast food and soft drinks. Efforts to

reduce high-stress lifestyles, improved disposable incomes and a growing emphasis on health have led

to a growing preference for natural alternatives of energy drinks.

Industry Standards on Pricing

The retail price of Red Bull is INR 75 and for similar energy drinks it ranges from INR 65 to INR 80.

Considering the price point, penetration in to rural markets is not feasible for the time being.

Reasons for Consumption of Energy Drinks

Various reasons for consumption of energy drinks are stated below:

• To increase stamina and physical performance

• To reduce fatigue and improve concentration

• To remain awake for long hours

7 http://www.burncurate.com/BurnGallery/whatson.html

8 http://www.financialexpress.com/news/xxx-launches-fat-burner-%5Cenergy%5C-drink/729821/

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• To boost energy during workouts or jogs

• To look stylish drinking a premium energy drink in public places

• For partying and lifting the spirits, sometimes addiction as well

2. Indian Organic Food Industry - An Overview

Organic energy drinks as a concept are very new to Indian consumers. Hence, the organic food

industry was studied to gauge the prevailing situation, growth prospects and consumer behaviour and

preferences.

Indian organic food market is growing at an annual rate of 40% due to significant growth in

consumers with high disposable income and health consciousness. According to ASSOCHAM,

organic farming in India is likely to be worth Rs 10,000crores by 2015 from the current levels of

about Rs 2,500crores.9 As per a survey conducted by ACNielsen, India is among the top ten countries

where health food, including organic food, is demanded by consumers.10

Another key factor driving demand has been the change in the consumer perception from organic

products being elitist to healthy. Other incidental benefits such as better taste and better environment

are also driving growth. There is growing awareness about the environment and the dangers of

chemically grown products. Besides, with a considerable number of retailers offering various organic

products, their visibility had increased and therefore, are more likely to generate demand.

The pattern of organic food consumption in India is much different than in the developed countries. In

India, consumers prefer organic strawberry, organic tea, organic honey, organic cashew butter and

various organic flours. This trend seems to be encouraging for the launch of organic energy drinks.11

However, further penetration of organic product consumption has been jostling with lack of

awareness, knowledge and confidence about food products among consumers. There are many

9 http://indiamicrofinance.com/organic-farming-india-2015.html

10 http://www.acnielsen.co.in/news/20060220.shtml#Table10

11 http://www.organicfacts.net/organic-food/organic-food-trends/organic-food-consumption-in-india.html

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consumers who are unaware of the concept of organic food. There is also limited expertise in

marketing of organic products. Additionally, India has low organic food consumption among the

educated and health conscious in metros because of its high cost.

Key players in Indian market are Reliance, Godrej Agrovet, ITC foods, FabIndia and Organic India.12

3. Problem Formulation

The project aims to study three main aspects of the launch of Red Bull Natural, an organic variant of

Red Bull in the Indian energy drink market. The first is the pre-launch study of the existing energy

drink market to understand the unaddressed consumer concerns. Drawing upon the results of this

study, the project aims to propose the right mix of product features for an Organic Energy Drink that

targets the Indian consumers. Product launch process involves various stages of analysis and

execution by the marketing team. Out of these, the project will focus on the segmentation, targeting

and positioning of Red Bull Natural, the customer value proposition and the promotion strategy to

showcase Red Bull Natural to the target audience.

4. Rationale to Launch Organic Energy Drinks

There are three main rationales for launching organic energy drinks in India:

Issues with Energy Drinks Currently Available

Presently, energy drinks are perceived to be detrimental to health and people have apprehensions

towards their consumption. Some of the negative effects are as follows:

• High Caffeine Content - this is harmful to the health

• High Sugar Content - this can lead to complications like diabetes and Insulin resistance

• High Sodium Content - this can cause heart complications and kidney problems

• Sleep Deprivation

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http://www.businesswire.com/news/home/20110617005043/en/Research-Markets-Organic-Food-Industry-

India--

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Increasing Health Awareness and Non-availability of Organic Energy Drinks

Currently, there is no prominent organic energy drink available in the Indian market. The few

available are not properly developed, positioned and marketed to suit the needs of Indian consumers.

People are becoming more health conscious in India and are slowly switch to natural alternatives e.g.

Tropicana juices. The organic energy drinks market is untapped and there is an immense opportunity

for Red Bull to extend its product line and gain first mover advantage.

Regulations on Caffeine Levels in Energy Drinks

The Central Committee on Food Standards (CCFS) had set a standard of 145 ppm for caffeine in

carbonated beverages as a safe limit. Most of the energy drinks sold in the market have caffeine more

than double this limit. There are many countries which have either banned the energy drinks

altogether or have implemented strict regulations on the ingredients being used, thereby spurring the

need for healthy, organic energy drinks.

5. SWOT Analysis of Red Bull's Brand Equity

Strengths

• Market leadership - First and largest player in energy drinks market in India

• Aggressive marketing - Buzz marketing, tournament sponsorship, world championship

winning Formula 1 racing team ownerships, celebrity endorsements, music concerts and

college festivals

• Strong brand establishment - Successfully established as fashion and lifestyle brand identity

using ad campaigns which emphasized the functional benefit of the product saying “Red Bull

gives you wings”

• Association with sports - Helped Red Bull to position itself amongst youngsters and claim the

sports drinks market.

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Weaknesses

• High pricing - Categorized as an expensive energy drinks with above average prices

• Adverse health effects - Due to high levels of caffeine and other chemical ingredients, many

countries like France, Norway, Denmark and parts of Germany have banned energy drinks

• Lack of innovation - Red Bull is strongly dependent on a single product line. Market has

evolved with many strong players, each with its own USP to strongly position itself

• Lack of patent - Red Bull does not have any patent on its recipes making it prone to copying

• Packaging - Currently, only single kind of packaging is offered. There is a strong need for

different packaging to suit the needs of customers e.g. glass bottles, plastic bottles and cans of

different volumes

Opportunities

• Extension of product line - Besides introducing new flavors and versions, expansion to

organic energy drinks segment will help Red Bull expand its existing customer base

• Availability of the product - Red Bull products are usually available in big general stores and

super stores. Opportunities can be explored in universities which have a large target market

• Expansion of target markets - Red Bull is currently targeting urban youngsters from

Generation Next and Generation Now. Expansion to organic products will attract health

conscious consumers

• Corporate tie-ups - Red Bull can further explore corporate tie-ups to increase sales

Threats

• On-going legal battles - Red Bull is currently facing law suits in various countries regarding

the ingredients used in the product

• Health concerns - A large segment is wary of the adverse health impact of energy drinks

• Misconception -It is widely believed that Red Bull provides instantaneous and artificial

energy with no natural ingredients

• Competition - Red Bull is facing strong competition from other energy and sports drinks

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6. 4C Analysis of Red Bull Natural

Customer

Organic energy drinks as a concept are new to India and hence to understand the consumer’s profile

and preferences, we will conduct a consumer survey and interview a organic products’ dealer. This

would analyze the consumer buying behavior, preferences, decision making and the influences of

personal, social and cultural factors. From secondary study, we could confirm that consumers are

moving towards organic foods.

Company

Presently, Red Bull’s product line-up includes:

• Red Bull energy drink- 250 ml flagship product

• Red Bull Cola – 250 ml sugar free variant

• Red Bull Energy Shots- 60 ml SKU

Since its launch in India in 2003, Red Bull has maintained a dedicated one brand distribution network

across the country operated by self. This has played a significant role in the product’s success across

geographies. Red Bull’s brand equity and distribution network will significantly support the launch of

the organic variant.

Competition

Today, there are no significant players in the organic energy drink market. However, there is a strong

possibility for the existing energy drink players to enter this space. By being the first major player to

enter the market Red Bull will gain first mover advantage that will help us in cementing our position

and thwart any competition.

Context

In India, there are yet no defined standards for energy drinks under PFA Act, 1954. The standards of

carbonated water under PFA Rules, 1955 specify the maximum limits of caffeine as 145ppm.

Scientific review of energy drinks has thrown up series of health concerns due to the high levels of

caffeine. In the wake of these developments, Food Safety and Standards Authority of India (FSSAI)

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has proposed a regulation for energy drinks in India. This will enable fixation of the ingredient levels

and caffeine content, address other risk factors and will lead to appropriate regulation of the product.

Analyzing the above criteria and constraints, it can be concluded that Red Bull should consider

diversification of its portfolio by entering the Organic Energy Drinks segment.

7. Methodology for Launch Strategy of Red Bull Natural

Secondary data was used to study the evolution of the Indian energy drink segment, the current

market scenario, market share of various energy drinks in India, the position of various competitors,

data about the strategy of the existing players on promotion and pricing, consumer preferences and

perceptions and industry standards on pricing. Primary data was used to get real-time estimate of

consumer choices and preferences. The various sources of primary data, along with their main

objective were as below:

• Consumer Survey 1 - The first survey was intended to study the existing market for energy

drinks in India, to understand the current consumption pattern of energy drink consumers and

to gather insights into the features they perceived to be absent. The survey also aimed to

explore whether a latent need for healthy or organic energy drinks existed among Indian

consumers and whether such a product would be supported by the market. It also aimed to

understand what the Indian consumer related with the word 'organic' and hence, what would

be expected of an organic energy drink when it was launched. Considering that people have

varied perceptions and understanding of organic products, possibilities of the following types

of organic energy drinks were explored–

1. No-pesticides energy drinks - Natural ingredients grown without pesticides

2. Herbal energy drinks - Made only from natural herbs and no chemicals

3. Ayurvedic energy drinks - Uses Ayurvedic ingredients to boost the energy

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• Consumer Survey 2 - The second survey was conducted to record consumer responses to Red

Bull Natural and to get target consumers to rate product features. This was aimed at

estimating the demand for Red Bull Natural and finalizing product aesthetics as per consumer

preferences. The key features that were explored were quantity per serving, packaging,

product colour, flavour and scent.

8. Inferences - Secondary Data and First Consumer Survey

As seen through secondary data analysis, in recent years, the energy drinks market in India has shown

tremendous growth potential and has witnessed the rise of many new players. As per this study, it

would be profitable to launch Red Bull Natural, the organic variant of Red Bull targeting people

between 18 and 35 years of age living in urban India.

The results of the primary study support this hypothesis. Key findings and inferences were:

• 41% of the survey respondents were either always or frequently under stress. Thus, a large

subset of the population would be willing to consider having an energy drink while working.

The respondents who experienced high stress levels and over 76% of respondents who

experienced stress frequently were in the 21 - 30 years age group.

• The most effective way of marketing for energy drinks so far has been TV commercials and

friends (encompassing 92% of the respondents). Thus, television advertisements and buzz

marketing should be used when launching the new product.

• Out of the respondents who had never consumed energy drinks, 39% cited 'Adverse health

effects' as the major reason. The new product proposed is going to be a healthy variant of Red

Bull and thus, will aim to capture this consumer segment.

• The primary reason for consumption of energy drinks emerged to be the energy boost they

give and the resulting decrease in fatigue. It is imperative to retain this functionality in the

new product.

• 38% of the respondents indicated that they understood an Organic Energy Drink to be one

that had only natural extracts.

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• Taking into consideration the entire respondent set, the most negative feature of energy drinks

is perceived to be the adverse health effects, thereby reinforcing the need to launch a healthy

variant. This was also emphasized by the response to the question of the main factor that was

missing in energy drinks, where 54% of the respondents chose the 'Health Factor'.

• 83% of the respondents indicated an equal to or increased consumption of an organic energy

drink indicating good potential for the new product.

The key takeaways from the secondary study and the first survey were used to build the concept of

Red Bull Natural, a new product to be launched in the Indian energy drink space.

9. Product Conceptualization

Need can either be recognized or generated. Most utility-based products in the market are introduced

because there exists a need for such a product. There was a need for an energy drink in the Indian

market because of increased stress levels in individuals. This need was partially tapped by Red Bull,

Shark and Burn energy drinks in the recent years, but with limited market penetration due to reasons

such as adverse health effects, high price and a unique taste that was popular with a limited customer

segment. Hence, launch of a new product, Red Bull Natural was proposed with the aim of addressing

a wider market.

The concept of Red Bull Natural is a combination of features that address the needs of consumers,

both stated and latent. Apart from being an instant energy drink, Red Bull Natural will be a product

prepared using only natural ingredients. The natural ingredients would include the following:

• Raw Brazilian coffee seed to replace caffeine; good for better body metabolism

• Ginseng, the roots of which are consumed to enhance body’s resistance to stress

• Brazilian guarana for improved physical and mental endurance

• Elderberry juice which contains anti-aging anti-oxidants and other natural extracts

• Natural crystal sugar

• Natural fruit juice for flavour

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The drink would be launched in multiple flavours using natural fruit extracts and without any artificial

preservatives. Attributed such as packaging type and size, drink colour, taste and scent were finalized

based on consumer preferences, as indicated in the second survey.

Each and every product attribute would be designed to address nothing but the health benefits to

consumers.

10. Inferences - Second Consumer Survey (Concept Testing)

Key findings and inferences from the survey were:

• Two distinct quantity per servings were endorsed by respondents – 150 ml and 250 ml. This

would segment the organic energy drink market into light users and heavy users.

• There was a clear preference towards cans for the packaging of the new product .This was in

line with Generation Y's stylish attitude.

• In terms of colour and scent, majority of the respondents favoured berry – red colour with a

sweet and citrus scent.

• Amongst flavours, there was a clear indication for need of new flavours, as people ranked the

existing Red Bull flavour the lowest. This is consistent with the results of the first survey. At

the same time, there was no strong preference for one particular flavour, indicating high

segmentation.

• The results showed positive correlation between the frequency of consumption and stress

levels i.e. the consumption frequency per week increased as stress experienced per week

increased. As the stress levels are constantly on the rise in Indian urban population due to

increased corporate workloads and competitive environment, it is expected that the product

would find greater acceptance by the day.

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11. Product Specifications

Red Bull Natural will have the following product specifications:

Table 2: Red Bull Natural Specifications

Features Specifications

Appearance Liquid

Colour of drink Berry Red

Flavours Berry and Orange

Scent Sweet and Citrus

Carbonation Light

Key ingredients Caffeine from raw Brazilian coffee, Ginseng extract, Brazilian guarana extract, Elderberry juice, Natural crystal sugar, Sparkling filtered water

Key Nutrients Citric acid, Sodium citrate, Vitamin C, Vitamin B6, Folic Acid, Vitamin B12

Packaging Can

Serving size 150 ml, 250 ml

Table 3: Nutritional Content of Red Bull Natural

Units Amount per 100 ml

Energy kcal 42

Carbohydrate g 10.6

Protein g 0

Fat g 0

Caffeine mg 10

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12. Segmentation, Targeting and Positioning

The target market for Red Bull Natural would be defined through more than one dimension and would

be targeted towards Generation Y, with purchasing power to spend Rs. 75-85 on an energy drink and

who are health conscious.

A. Market Segmentation

The data collected was used to profile the target market on the following dimensions:

• Geography

• Demographics (Age, Gender and Income)

• Psychographics (Lifestyle)

• Behavioural (Usage rate)

Geographic Segmentation

The major demand for energy drinks came from metropolis, Tier I and Tier II cities where people lead

a fast, stressful life and are in the constant need of energy. It also resonated with their idea of a style

statement. Analysis of the first survey indicated that 65% of consumers from metros, tier 1 and tier II

cities were users of energy drink. Of this, about 70% showed inclination to switch to organic energy

drink were it made available. Hence, the launch of Red Bull Natural would be aimed at urban areas

and the product would be made available in the market through modern retail stores. Local kirana

stores would not be suitable for selling this product as they would not gel with its premium-product

image.

Demographic Segmentation

Age

Red Bull Natural would be focussed towards the young and the middle age group people i.e. between

the ages of 18-35 as the main benefits and features would cater to their needs. For example, students

and young executives need to work hard and remain awake for long hours. Another significant use is

as a mixing beverage during parties. This was supported by the survey numbers. In urban areas, 70%

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of the people from 20 to 30 years of age consumed energy drinks. Of this, 66% were willing to shift to

organic energy drink if available.

Gender

Historically, energy drinks had appealed only to the male consumer segment. However, there is a

rising consumption trend among the young, female population. Hence, both genders would be

targeted as potential consumers.

Income

Red Bull Natural will be a premium energy drink with added health benefits. Since it would be priced

in the Rs. 80-85 range, the higher and upper middle class people would find it affordable. Essentially,

the product is expected to find higher consumption with people whose family income is greater than

Rs. 3 lacs p.a.

Psychographic Segmentation - Lifestyle

With the pricing, packaging and promotion strategies and the brand image of Red Bull, Red Bull

Natural will gain an image that reflects high class, top-level achiever, fashion icon and trend setter

with added benefits on the health front. It is suited to the lifestyle of party-going social animals as a

source of energy with health and style; to students and young professionals who stay up long hours

and lead a stressful life and to adventurous, fun-loving people. Being natural, it is also well suited to

the lifestyle of people with lot of indulgence in sports.

Behavioural Segmentation - Consumption Rate

Based on the survey, two major groups were identified - light users and heavy users. Hence, the

product will be launched in two can sizes- 150 ml and 250 ml. This will also be in-line with the lower

consumption capacity of females and would increase penetration in this segment.

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B. Consumer Targeting

Based on the segmentation and survey results, Red Bull Natural will target consumers with the

following profile:

• young and middle-aged people belonging to the 18-35 age group

• people living in urban areas – Metros, Tier I, Tier II cities

Both genders would be targeted as it is believes that more females would be attracted to the product

once the brand goes organic. To cater to the different consumption capacities of individuals, the

product would be introduced in two sizes.

C. Product Positioning

Red Bull Natural will be positioned towards health conscious minds who want energy and benefits of

an energy drink without any of its adverse effects. In line with consumer perception derived from the

first survey, Red Bull Natural will be positioned as an organic drink with natural extracts and no

added artificial flavours. The product aims to occupy the minds of consumers as a source of instant

energy and wellness. This would tap the existing market space unoccupied by energy drinks due to

concerns around health issues associated with energy drinks.

Positioning Statement

To the urban youth and office-going professionals, Red Bull Natural, an organic energy drink made of

natural extracts will be positioned as a ‘Value for Money’ product that offers instant energy to keep

the mind alert and provides fun for party lovers with no adverse affect on health.

Points of Parity and Points of Differentiation

‘Red Bull Natural’ has been designed to ensure that the following points of parity and points of

differentiation are established with other energy drinks available in market. This will enable the

product to gain entry in the energy drinks segment of the country.

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Points of Differentiation

• Organic Nature – Currently there is no prominent organic energy drink available in the Indian

market. Red Bull Natural’s organic nature will differentiate it from normal energy drinks.

• Natural Extracts – Our product will not have any artificial ingredients or preservatives. It will

be completely made of natural extracts unlike other energy drinks available in market.

• Health Appeal – Regular energy drinks are perceived to have an adverse effect on health

while Red Bull Natural, by virtue of being natural, will not.

• Smaller Can Size – All available energy drinks come in a can size of 250 ml or greater.

However, a serving of 150 ml was the preferred option in our survey and simultaneous launch

of 150 ml and 250 ml of Red Bull Natural in 150 ml was proposed.

Points of Parity

• Instant Energy – The core benefit of energy drinks is the instant energy on consumption and

since a large (%) number of people consume energy drinks to fight fatigue, Red Bull Natural

will keep the instant energy appeal while launching and promoting it..

• Lifestyle Drink – A considerable segment of customers consume energy drinks during parties

or drink for style statement and Red Bull Natural will carry with the same identity.

• Can Packaging – ‘Can Packaging’ was the most preferred packaging. Thus we will continue

with the same Can Packaging like other energy drinks.

13. Customer Value Proposition

Using the Resonate Focus Approach to Customer Value Proposition ("CVP") as opposed to the All

Benefits Approach or the Points of Difference approach, certain captivating features of Red Bull

Natural and a point of parity associated with Classic Red Bull are highlighted below:

100% Natural

All natural ingredients, from naturally extracted caffeine from raw Brazilian coffee seeds to zero

preservatives, would make Red Bull Natural the first of its kind in India. Its lightly carbonated form

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would be finely balanced to ensure that there is not too much fizz to spoil the refreshing experience of

energy while still retaining the fun of a light beverage. Adding more to the drink, it would be fortified

with a shot of Vitamin-B to provide that extra special kick with all-natural energy.

Instant Energy

Red Bull Natural, an all-natural energy drink, would be based on Red Bull's formula of providing the

much-needed spurt of instant energy in everyday stressful life. Red Bull Natural would provide the

same performance benefits of increased energy, increased concentration, increased reaction speed,

improved mental alertness and increased metabolism, as Red Bull, the highly successful energy drink,

but with more health benefits than a consumer could imagine.

Healthy Lifestyle

Red Bull Natural has been developed for people who want a clear and focused mind, high physical

performance stamina, are dynamic and performance-oriented whilst wanting to balance this with a fun

and healthy lifestyle. Indeed, Red Bull Natural would serve the purpose of keeping up one’s healthy

lifestyle energetic by its innovative approach to the energy drink concept. It would no compromises

on health of the consumer and would aim to provide a sustained balance of natural energy in the

consumer's everyday life.

Two Vibrant Flavours

Red Bull Natural would be available at stores in two attractive flavours and vibrant tastes: the new

and refreshing ‘Berry Red’, filled with goodness of berries and its extracts and ‘Juicy Orange’, filled

with the healthy citrus extract. Red Bull Natural would be packaged in cans of two quantities, 150ml

and 250ml to serve an individual's thirst for instant energy.

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14. Brand Identity and Personality

Red Bull Natural's brand identity can be anchored at various levels of brand meaning as tabulated

below:

Table 4: Red Bull Natural's Brand Identity

Brand Meaning Brand Identity

Ingredients Caffeine from raw Brazilian coffee, Ginseng extract, Brazilian guarana extract, Elderberry juice, Natural crystal sugar, Sparkling filtered water

Attributes Colour - Berry Red

Scent - Sweet and Citrus

Flavours - Berry and Orange

Benefits 100% natural ingredients, Instant energy, Health, Mentally Alert

Values Adventurous, Fun-Loving, Healthy Lifestyle

Brand Personality Phrase Fresh and Active

Brand User Ambitious and fun-loving youth with healthy lifestyle

Red Bull Natural's brand personality is defined by the following unique set of human attributes that

can be attached to it for recognition and resonance with the targeted customer segment of ‘Generation

Next’ and ‘Generation Now’:

• Promise for health

• Purely natural

• Full of energy

• Fun-Loving

• Confident and Strong

• Out-going and Active

• Passionate and full of esteem

Brand personality will be supported by product aspects and features and will be portrayed in brand

advertisements. It will be effective when synchronized with brand campaign elements and the

consumers’ expectations.

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15. Demand Estimation and Price Setting

A. Market Sizing - Demand Estimation

Estimate of Red Bull Natural's demand was calculated is the steps listed below:

• Estimation of total population falling in Generation Now and Generation Next segments and

calculation of the number of consumers in these segments that have annual household income

greater than Rs. 3 lacs.

• Refining data set further to target population in urban areas, thereby estimating the size of the

target consumer base.

• Assuming a conservative penetration level of 5% based on secondary study to estimate the

total number of energy drink consumers

• Demand estimation by assuming Red Bull Natural will capture 3% of market share in the

launch year. This is a conservative estimate considering the significant brand equity enjoyed

by parent brand ‘Red Bull’ and increasing need for organic products by Indian consumers

Thus, as per calculation, the total annual demand faced by Red Bull Natural in the first year would be

4.96 million cans, of which 67% would be the 150 ml cans.

Table 5: Demand Estimation

Steps Size

Total country population in Generation Now and Generation Next segments

600 million

Percentage of the population with income > 3 lacs per annum13

42.0%

Generation Now & Generation Next population with income > 3 lacs per annum

252 million

Urban population percentage in India 27.8%

Gen Now and Gen Next population with income > 3 lacs per annum in urban areas

70 million

Penetration of energy drinks in Target Population (%)14

5.0%

13

http://greenisfuture.wordpress.com/2010/03/08/income-distribution-and-consumer-pattern-in-india/

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Steps Size

Total target population consuming energy drinks 3.5 million

Using the consumption data from Survey 2 , total annual consumption of all energy drinks (cans per annum)

165.3 million

Initial Market segment captured by Red Bull Natural (Assumption) 3.00%

Total annual consumption of Red Bull Natural (Can Per Annum) 4.96 million

Annual Consumption of 150 ml Cans 3.32 million

Annual Consumption of 250 ml Cans 1.63 million

B. Product Pricing

The retail price of 250 ml of Red Bull is Rs. 75 and it ranges between Rs. 65 to Rs. 80 for other

energy drinks. Factoring a premium of Rs.10 over the common variant of Red Bull, 250 ml of Red

Bull Natural will be priced at Rs. 85. Similarly, 150 ml of Red bull Natural will be priced at Rs. 55.

The premium was arrived at on the basis of the calculation below:

• As per the primary survey, 70% of the respondents were willing to pay a price equal to or

more than the current price of energy drinks

• Factoring in strategy to capture a part of consumer surplus and maximize current profits

before competition set in.

Initially, Red Bull Natural will be able to capitalize on its first-mover advantage and the Price

Skimming Approach will be used. The price will be initially set at a high level and then reduced

systematically over time with the objective of capturing a part of consumer surplus till other players

come up with a similar product, thereby increasing competition and lowering prices.

When competition intensifies, the Market-Penetration Pricing Strategy will be adopted, with

emphasis on gaining market share by lowering prices. A lower price will increase sales volume and

will discourage the actual and potential competition.

14

http://www.censusindia.gov.in/Census_Data_2001/India_at_glance/rural.aspx

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16. Value Proposition Statement

'Red Bull Natural – An organic energy drink made purely of natural extracts for providing instant

energy to keep the mind alert and body active for the wellness of your health.'

17. Unique Selling Proposition

‘Red Bull Natural’ is purely organic and made only of natural extracts. This differentiates it from the

other energy drinks available in the market. Instant energy will be a point of parity with energy drinks

but the added ‘health’ and ‘wellness’ aspect will be the product's Unique Selling Proposition ("USP").

18. Tag Line

On the basis of product attributes and brand personality that is to be in resonance with customers, the

following tag line is proposed for Red Bull Natural:

‘Natural Energy, Amazing Attitude’

Natural Energy resonates with the health factor and natural ingredients of the product, while Amazing

Attitude brings out the confident, energetic, active and out-going aspects of the product's brand

personality. This fits perfectly with the personality of the youth being targeted while proposing the

health value add.

19. Product Promotion

A. Promotion Strategies

Red Bull Natural's promotion strategy is based on the following findings from of the primary and

secondary studies:

• Potential customers include urban consumers aged between 16 years and 35 years who have

stressful routines and are looking for healthy energizing drinks to improve their performance.

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• Primary survey results confirmed that broadcast media and buzz marketing were the principal

source of information for consumers regarding energy drinks.

• Secondary study showed that electronic and display media, association with sports and

fashion events, celebrity endorsements, branding through social networking sites, etc have

been fairly impactful.

The health and wellness factor of the product offering, as a result of using only natural ingredients,

will be the main differentiating factor with respect to other existing energy drinks. Hence, these will

be our USP and the marketing and promotion activities will emphasize on these factors apart from the

instant energy delivery aspect.

The main objectives of Red Bull Natural's promotion campaign will be to:

• Grab consumer’s attention and create awareness about organic energy drinks

• Establish the brand identity of Red Bull Natural

• Emphasize the promise of healthy energy drink with natural ingredients

• Create buzz marketing about the organic nature and related benefits of Red Bull Natural

• Pay special attention to students and young executives

Based on the above the following Integrative Marketing Communication strategy is proposed for Red

Bull Natural:

Advertising through Celebrity Endorsements

The product's appeal to the youth and carries an adventurous and energetic brand personality with an

added health value. Therefore, Red Bull Natural will be promoted with the involvement of a young

celebrity whose personality can resonate with that of the product.

College Tie-up Promotional Programmes & Sponsorships

Various events like slogan-writing and logo-design will be organized through tie-ups with colleges.

Also, opportunities of sponsorships with the college festivals will also be explored to pitch the

product directly in front of potential consumers.

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Public Relations

Being a new product, consumers will need to accept the concept of an organic energy drink before

consumption. Therefore, the company will emphasise on developing relations with consumers, traders

and distributors. Special training sessions will be organized for traders and distributors while press

relations will be used so as to make consumers aware about the concept of organic energy drinks

through media reports and articles.

Events

The parent company, Red Bull can plan to tie-up with famous sports events like F1 Formula Racing,

IPL and Cricket World Cup so as to pitch Red Bull Natural to the youth. Events based on the ‘Green

Theme’ and ‘Health Consciousness’ will also be organized to emphasise on the point of

differentiation of the product.

Buzz marketing

Since Red Bull Natural will be introducing a new concept, buzz marketing will play a significant role

in passing on the message amongst the youth. It will also help establish the product against the other

energy drinks in the market that are considered to have adverse health effects. Technology will also be

leveraged via using social media marketing.

Sales Promotion

The following schemes will be used for promoting sales:

• Bulk discount of 10% on purchase of more than a dozen cans.

• Special discount offers to the college students on production of student I-cards

The promotion strategy will look at marketing as a 360 degree solution, that will include innovative

branding, from movies to sports(e.g. including the IPL and Bollywood Blockbusters). An experienced

and dedicated marketing team will be setup to focus on market segments like malls, multiplexes, retail

stores, 5 Star hotels and restaurants, pubs, discotheques, gym, spas, cafes and airlines. Each tie-up will

be supported with promotional and merchandising materials, loyalty programmes and consumer

offers.

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B. Promotion Budget

In line with the requirements of a new product and new concept launch, the Objective and Task

Method will be used to budget for promotion. This will be based on the targeted market share, the

target increase in tester percentage and the target reach/awareness about the product.

20. Scope and Limitations

The project is hypothetical in nature and the following limitations were likely encountered:

• The consumer base studied was restricted to a few geographical areas.

• Change in the competitive landscape of the energy drink segment during the course of study

was not considered.

• Consumer biases towards energy drink brands could not be eliminated in the primary study.

• The survey respondents base might not have been a true representative sample of the

consumer base.

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21. Appendix

A. First Consumer Survey

The first survey to study the current energy drink market was composed of the following questions:

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31

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B. Second Consumer Survey

The second survey to study the response to Red Bull Natural was composed of the following

questions:

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