Red bull is a global product that has its outlets and company branches in New Zealand. Even though the company has its headquarters in Austria, it is still a New Zealand company, and this is because it has extended its operations to the New Zealand markets. The report will be looking at the situational analysis of Red Bull New Zealand. The purpose of the report is to understand the market of Red bull and to know some of the opportunities and challenges that the product is facing in the competitive world of business. The scope of the report will be broader because it is aimed at analyzing the internal and external factors that might be affecting the product that has been focused on. Technology in the business world has come with advantages and disadvantages. One of the advantages is associated with the fact that the technology is used for the advanced production of goods. It is for this reason that the report will also look at some of the impacts that have been influenced by technology. External environment analysis will also be conducted with the aim of identifying the factors that are likely to affect Red bull in both negative and positive ways. The report will also focus on segmentation and market targeting with the aim of identifying the competitive edge of the company as well as how the company operates in the market. In overall, the report is aimed at highlighting the performance of Red Bull, the way the product is placed in the market, and the factors that are affecting the product in the market.
Red Bull is a global organization that has been operational for many years. Like many other organizations, the company has its mission statement (Cnossen et al. 2017). The mission statement emphasizes the need for Red Bull to uphold its quality standards, maintain the leadership position in the industry, deliver quality services to the customers and enhance efficiency to increase profits and customer satisfaction. Even though Red Bull is an established organization, it does not have a vision statement or core values that it shares with the public. Red Bull deals explicitly with Red Bull energy drinks. The product is non-alcoholic which is aimed at producing energy to people who need it (Cnossen et al. 2017). Most of the persons that are attracted to the drink are the sportspersons, and this is because they are in dire need of energy to perform effectively. The products of Red Bull are packaged in attractive cans, and this is one of the reasons why they are attractive as compared to other energy drinks that introduce their products in plastic bottles.
Red Bull is a product that leaves one with various benefits. One of the benefits is empowering a person physically. The product is an energy drink, and that means that it helps one to gain energy when engaging in activities that need physical engagements. The second benefit is hydration. Red Bull is not only a product that helps the consumers to gain energy, but it is also a product that leaves the body of a person hydrated. For many years, Red Bull has depicted its product as a health-friendly product that makes sure that one’s energy is retrieved. The position of Red Bull as an excellent non-alcoholic product has won the hearts of many customers, and despite the emergence of other energy drinks, Red Bull is still the most trusted energy drink manufacturer in New Zealand and other parts of the world.
The current situation of Red Bull in the marketplace can be dictated by the popularity of the energy drink and the engagement of the company in different activities. When it comes to popularity, Red Bull is the most known energy drink in the country. Therefore, it means that the company is still dominating the energy drink industry (Dolnicar et al. 2014). The activities that an organization engages in are likely to help in understanding the situation of the company. For example, when an organization is dedicated to sponsoring the programs of the members of the community, it is evident that the company is doing well in the market and that is why it can fund the activities of the community members. When it comes to the case of Red Bull, there is one thing that is evident, and it is associated with the activities that the company engages in. Most of the sports in the country that many organizations have failed to sponsor are sponsored by Red Bull. It is apparent that if Red Bull were not performing well in the market, it would not have the financial might to sponsor numerous sports at one given time.
The competency of Red Bull lies in the quality of its products. Without exaggeration, Red Bull is one of the organizations that deliver the quality of the products that it has promised the customers (Teigeler and Hahne, 2014). At the same time, the honesty when it comes to the ingredients of the product has placed the company in a better position. The principal competitive advantage of Red Bull is in its products (Heinemann, 2016). The drinks are of higher quality, and that has given the organization a competitive advantage. Engagement in sports and other activities that benefit the members of the society has also given Red Bull a competitive edge. The company has also invested heavily in technology, and this has made the company to reach many customers all over the world (Piercy and Evans, 2014). The branding of sports has also given the organization a competitive edge. The branding of Red Bull products is also another aspect that gives the company a competitive edge. The company packages its products in cans which are recyclable and easy to carry thus attracting more customers and having value for the environment.
Political
Political decisions that are made in New Zealand are likely to affect Red Bull negatively or positively. The decisions that touch on the regulations may affect the company and products. For example, the introduction of a new percentage of tax is likely to affect the company negatively. The tax that is charged to organizations comes from the finances of the organization. Therefore, when the tax is increased, the organization is likely to suffer negatively (Huerta-Muñoz et al. 2017). However, when the tax is reduced, it is likely to affect the company positively. Legal issues like labor laws might also come to affect Red Bull. The political wing of the country is responsible for making laws that govern the country (Teigeler and Hahne, 2014). The lawmakers might introduce labor laws that force organizations to increase salaries or benefits of the employees. Such an action would lead to the company digging deeper into its finances. As a result, the financial plans of the company might be disrupted leaving the company in an unfavorable position financially.
Economic
Economic issues are likely to have different effects on Red Bull. When the economy of a country is stable, organizations benefit because the purchasing power of the consumers is boosted. When the purchasing power is high, the sales of organizations increase, and that ends up increasing the profits of the company (Amuna et al. 2017). Red Bull is a company that sells a product that is considered to be a luxury. During the economic hard times, customers would choose to purchase the basic necessities like milk instead of Red Bull drinks. Therefore, it is evident that the instability of the economy in New Zealand is likely to affect the sales and profits of Red Bull negatively.
Social-cultural
The change in lifestyle of the people of New Zealand is likely to have different effects on Red Bull. The healthcare practitioners have been advocating for healthy living. In their campaigns, they have been emphasizing the need to consume a lot of water, take fruits, and avoid drinks with additives. Red Bull is a company that manufactures drinks which are supposed to stay for a more extended period, and that means that additives come in handy (Crane and Matten, 2016). Therefore, if the consumers are to follow what they have been advised to do, they are likely to abandon Red Bull products, and that is likely to affect the company negatively. The emphasis on water consumption instead of energy drinks is likely to affect the company negatively as well. However, the adoption of a lifestyle that promotes a high intake of energy drinks is likely to affect the business of Red Bull positively.
The elements that are likely to affect Red Bull as far as the natural environment is concerned are weather and the climate. The consumption of beverages is profoundly affected by the weather. Red Bull is an energy drink that most people prefer to take when they are engaging in physical activities (Amuna et al. 2017). Physical activities are affected by weather and climate in one way or another. For example, when it is raining, people choose to postpone their activities. The aspect of postponing the activities results in the reduction of sales and that affects the profits of the company negatively. However, when it comes to favorable weather that encourages people to be engaged in different physical activities, the demand for the consumption of Red Bull increases and as a result, the company’s sales are affected positively.
The competitive environment and the role of social responsibility and ethics in the business
The energy drinks industry is highly competitive. However, Red Bull has dominated the industry for many years because the management of the company is visionary and strategic. Red Bull is still one of the organizations to beat in the beverages industry (Ferrell and Fraedrich, 2015). Social responsibility and ethics are the two aspects that have contributed to the domination of Red Bull in the energy drinks industry. When it comes to the aspect of ethics, Red Bull has tried as much as possible to stay away from negative attention. The company has so by making sure that it observes and submits to all the laws that govern businesses (Ridley-Duff and Bull, 2015). Social responsibility is one of the areas that Red Bull has heavily invested in and not only in New Zealand but all over the world. Red Bull is widely known for the role that it has been playing when it comes to sponsoring sports (Kunz et al. 2016). The company sponsors a lot of sports, and that has made the company famous for giving back to the society and establishing a bond between the sports fraternity and the company. At the same time, the company has been sponsoring sports that give rise to new talents, and that has created a positive image for the company. With respect to the case of Red Bull, ethics and social responsibility create a good image for the company thus affecting the company positively.
The emerging technologies have benefited Red Bull a more significant way. Red Bull has advanced from an organization that depended on other agencies to market its goods to a company that is utilizing technology to meet a bigger audience than ever before (Buchanan et al. 2017). Two good examples can be seen in the case of the Facebook page that is owned by Red Bull and Red Bull TV. The company is working in tandem with the advancements of technology to reach a more significant number of customers (Hettche et al. 2017). In the case of the TV, the company is reaching a lot of consumers and in the case of the Facebook page; the company has more than 48 million likes. Consumer-generated information plays a significant role in helping an organization to know the most effective ways to reach the customers (Tang, 2016). The presence of Red Bull on the social media platforms and mass media has helped the company to interact with the consumers thus understanding their needs.
Segmentation Bases
Geographic segmentation
Geographic segmentation is the aspect of an organization dividing the market into different geographic divisions (Weinstein and Cahill, 2014). The suitability of a geographic region in terms of weather, population, and infrastructure dictates the type of geographic location that an organization is likely to have. Therefore, they become variables because they affect changes that are made in organizations in terms of choosing the location.
Demographic segmentation
Demographic segmentation is dividing the market based on the population distribution (Venter et al. 2015). The primary variable in this type of segmentation is the population. The sub-variables are the tastes and preferences of the population.
Psychographic segmentation
Psychographic segmentation is dividing the market based on the psychological characteristics of the consumers (Alt and Iversen, 2017). The primary variable in this segmentation is the psychology of the consumers while the sub-variable is the lifestyle of the consumers (Weinstein and Cahill, 2014).
Behavioral segmentation
Behavioral segmentation is the aspect of dividing the market based on the behaviors of the consumers (Heinemann, 2016). The variable in this segmentation is the consumer behaviors while the sub-variables are the purchasing powers of the consumers.
|
Serious market segment |
Shifting market segment |
|
|
Key Measures Segment size measure |
Estimated 1,000,000 consumers around the country |
Estimated 700,000 customers across the country |
|
Segment growth rate |
At least 10% |
Estimated 12% |
|
The proportion of the overall market |
12% of the consumers |
15% of the consumers |
|
Consumer behavior Main consumer needs |
Want to get a product that is effective and responds quickly |
Want to have a product that is cheap and of high quality |
|
Usage level |
High level |
Medium level |
|
Level of brand loyalty |
High level |
Low level |
|
Price sensitivity |
Not very sensitive to the price |
Very sensitive to the price of the product |
|
Product involvement levels |
High level of involvement |
Low level of involvement |
|
Retailer preferences |
Retailers like the availability of the product to be enhanced |
The retailers are not very concerned with the availability of the product in the market |
Alt, J., and Iversen, T., 2017. Inequality, labor market segmentation, and preferences for redistribution. American Journal of Political Science, 61(1), pp.21-36.
Amuna, Y.M.A., Al Shobaki, M.J. and Naser, S.S.A., 2017. Strategic Environmental Scanning: an Approach for Crises Management. International Journal of Information Technology and Electrical Engineering, 6(3), pp.28-34.
Buchanan, L., Kelly, B., and Yeatman, H., 2017. Exposure to digital marketing enhances young adults’ interest in energy drinks: An exploratory investigation. PloS one, 12(2), p.e0171226.
Cnossen, C., Li, Y., Sampath, N., Taylor-Maisano, W. and Tsonev, V., 2017. What gives Red Bull wings: Creating a successful market-oriented organization.
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Kunz, R., Elsässer, F. and Santomier, J., 2016. Sport-related branded entertainment: the Red Bull phenomenon. Sport, Business, and Management: An International Journal, 6(5), pp.520-541.
Ferrell, O.C., and Fraedrich, J., 2015. Business ethics: Ethical decision making & cases. Nelson Education.
Huerta-Muñoz, D.L., Ríos-Mercado, R.Z. and Ruiz, R., 2017. An iterated greedy heuristic for a market segmentation problem with multiple attributes. European Journal of Operational Research, 261(1), pp.75-87.
Heinemann, M., 2016. Leveraging Data Mining and Market Segmentation to Gain Conservation Opportunity Intelligence.
Hettche, M., Tupper, C. and Rooney, C., 2017. Using a Social Machine for Promotional Marketing on Campus: A Case Study.
Piercy, N. and Evans, M., 2014. Managing marketing information (rle marketing). Routledge.
Ridley-Duff, R. and Bull, M., 2015. Understanding social enterprise: Theory and practice. Sage.
Tang, T.W., 2016. Making innovation happen through building social capital and scanning environment. International Journal of Hospitality Management, 56, pp.56-65.
Teigeler, J. and Hahne, A.K., 2014. Product and Price Analysis of Red Bull in Central Europe: Marketing Mix. GRIN Verlag.
Venter, P., Wright, A. and Dibb, S., 2015. Performing market segmentation: a performative perspective. Journal of Marketing Management, 31(1-2), pp.62-83.
Weinstein, A. and Cahill, D.J., 2014. Lifestyle market segmentation. Routledge.
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