Specification of the Target Market
Development in the contemporary world of business has been marked by rather rapid and complex changes (Cavusgil, Knight, Riesenberger, Rammal & Rose, 2014, pp. 13). The highly dynamic and ever changing business environment calls for constant responses and adjustments by a company in order to survive in the highly competitive global market. Such extensive processes and adjustments helps a company to gain a competitive advantage over its rivals in the market (West, Ford & Ibrahim, 2015, pp. 135). The manufacturers of fast moving consumer products such as Redbull have seen the need to establish strong brands for their loyal customers for the purpose of maintain the leading role in the competitive global market. A company like Redbull has over years strived to build a brand that is characterized by a unique name, shape and symbol (Upamannyu, Gulati & MATHUR 2014, pp. 84). The combination of such all those elements has been used to distinguish the company’s product from a group of products by other rival companies. Apart from the above mentioned external features, the company has also struggled to factor in the needs of the target consumers in order to attract them and within their loyalty (Nijssen & Frambach, 2013, pp. 130). Thus, the purchasing power of consumers towards a certain brand is high since they understand the benefits they derive from a certain product from a certain company. Moreover, a well-established a string brand has emotional benefits to a consumer on top of the functional benefits (Wijaya, 2013, pp. 6).
Hence, most companies in the corporate world have realized and understood clearly the role of brand extension as part of succeeding the competitive global market (Matarid, Youssef & Alsoud, 2014, pp. 158). Thus, the element of brand equity plays a key role in helping a company to succeed in their brand extension strategy. Despite the stiff competition they face from other brands like Monster, Full Throttle and Rockstar, “Red Bull’s market dominance seems assured. No other competitors have either the distribution channels or, more importantly, the posture of rebellious infamy to be considered real threats” (MacInnis, Park & Priester, 2014, pp. 40). Therefore, the company has used their well established and reputable brand to develop a product and market a product known as Redorade. Thus, the report seeks to analyze the brand plan of the newly launched product and how Redbull will use their brand equity and name to market the new product.
When dealing with the issue of target market, there are three key steps that are followed.
Redbull as a brand has a specific and unique strategy of segmenting its target market which aims at dividing the market according to demographics (gender, religion and age), geographic (locations), psychographics (activities, interests and opinions) as well as behavior patterns of people (status, income and benefits). The most important factors that the company considers are the demographics and income (Weinstein, 2013, pp. 150). Just like Redbull, Redorade is produced to target a generation within the age of 17-23 years as the company believes that people within this age bracket are strongly driven and full of life. The income is also essential because just like redbull, the brand has premium prices and it is more expensive compared to other products form the rival companies. The company also strives to understand the behaviors of their consumers since they have vibrant and dynamic personalities, their nature of engaging in hard games and the exciting lifestyles (Alfred, 2013, pp. 185). Thus, the product takes into considerations the consumers’ rate of buying the product as well as the expected benefits which must be factored in the production of the newly launched drink. By doing so, the company can be able to satisfy the needs of the target clients.
Segmentation
The company has a very different way of approaching their target audience and the way it positions itself in the market. Redorade has been developed to offer satisfaction to a wide range of consumer groups. The brand targets party goers, people working for long hours, sports people and long distance drivers. The company also strives to make sure that every client relates himself or herself with the product. Redbull has positioned itself in the market by associating itself with the minds of the target market in terms of consumers’ perceptions. Hence, the product is developed to satisfy the customer expectations, needs and desires (Kotabe & Helsen, 2014, pp. 107).
The brand extension strategy by Redbull involves launching of new energy drink called Redorade which seems to bring more competition in the industry. The soft drink industry is deemed to be one of the most competitive sector. This has been attributed to the consumer’s increased demand due to time stress and the need to balance between the work-life and private-life (Baker & Saren, 2016, pp. 104).
Despite Redbull’s market dominance, the company is no longer the only key player and it has faced stiff competition from those key players that offer the same products in the market. The stiff competition has been as a result of products such as Monster Energy Drink, Rockstar Energy Drink and Full Throttle Energy Drink. These drinks seems to pose a challenge the company’s efforts to market their new drink Redorade.
Monster Energy Drink: The drink has strived to the same and Redbull’s Redorade sports drink. Monster Energy Drink has similar taste to Redbull with the same ingredients and it targets the male people within the age bracket of 18-25 years. The only difference is the quantity of Redorade that come in 8.3 oz. can while those of Monster come in 16 oz. can. Thus, though the product is the same, Monster is offering twice the amount of Redorade at the same price.
Rockstar Energy Drink: This is a brand that is targeted at younger customers who have partying behaviors and can dance the whole night. The Rockstar drink has various flavors such as cola, juiced and energy drink. The product has its motto which is “Party like a Rockstar” to attact the attention of the target audience who are moistly deemed to be party lovers. The energy drink brand has the same taste to other drinks like Redorade and Monster. The company is also known to package their products in 16 oz. can as opposed to Redbull’s products like Redorade.
Full Throttle: The energy drink is produced and owned by Coca Cola Company limited. Full Throttle energy drink is marketed as a rebellious drink, with erupting flames on the can. The drink comes in a 16 oz. can and has 110 calories and 29g of sugar. It has a lot of caffeine and ginseng extract to keep somebody active. The product is the same as Redbull since it contains Taurine. The product targets men aged 20-30 years old.
Target Group and Market Positioning
When a company plans to launch a new product into the market, it is vital and highly important to fully understand the nature of the business environment and the challenges their newly launched product will face in trying to establish itself in the competitive market (Nijssen & Frambach, 2013, pp. 131). The product must be unique and different from others in the market in order to attract the customers to buy that product. Points of parity (POP) are those aspects of a company’s newly launched product that serve the same purpose as those of the rival or alternative product (Morschett, Schramm-Klein & Zentes, 2015, pp. 985). For instance, the Redorade brand by Redbull is similar to other rival products like Monster, Rockstar and Full Throttle since they have similar ingredients and serve the same purpose of energizing people.
However, when launching a new product to the market, a company must be able to differentiate itself from a group of competitors in the market and must consider point of difference in its value proposition (Kumar & Reinartz, 2018, pp. 66). The manufacturer of the new product must understand the point of difference in order to produce a product that is unique from its competitors. The point of difference can make a product either superior or inferior. For instance, the point of difference in between Redbull’s Redorade and other competing products are:
- Redorade comes in an 8.3 oz. can while others come in a 16 oz. can.
- The price is also different since the price of Redorade is double that of Monster and Full Throttle.
- Full Throttle serves men aged 20-30 years, Monster serves only men aged 18-25 years and Rockstar serves generally young people with no specific age bracket while Redorade serves both men and women aged between 17-23 years.
- Redorade serves specifically sports people and people work for long hours while others do not target a specific people with a specific occupation.
Thus, when launching a new product, a company must understand both points of parity and difference in order to produce a product that is unique that offers a competitive advantage in the market (Foxall, 2014, pp. 110).
According to Aaker (2013), there are two elements of brand awareness namely brand recognition and recall. Therefore, brand awareness is directly linked to the consumer’s ability to recognize and recall a certain product from a group of similar products from different companies. For instance, Redbull has decided to continue packaging their products in an 8.3 oz. can as opposed to 16 oz. can to help the company differentiate their products like Redorade from a group of other products like Monster and Rockstar. Also, the company has strived to offer their consumers withy unique products that link with their desires and expectations. Thus, it is important to understand that the level of brand awareness can enable the company to sell more products than the rival companies since their products are unique and easy to identify from a group of similar products. Thus, brand awareness helps in building a product’s brand equity since the clients will be able to recognize the product easily rom a group of similar rival products (Aaker & Biel, 2013, pp. 91).
According to Keller, the only strategy to build brand associations is being to “link strong, favorable and unique associations to the brand in memory.” The scholar maintains that consumer’s direct experiences with the product creates high brand association. Product consistency and brand loyalty are the two aspects that boost brand association (LOYALTY, 2013, pp. 5). Consistency is the capability for a company to maintain the product in their outlets for a long time so ensure its availability for consumers. Brand loyalty is the attachment that a customer feels towards a product. Once the product is consistent in the market, then it will have high levels of brand association with its clients. Thus, a product like Redbull has a high brand association with its clients which has maintained high brand loyalty. That will make it easily to market their new product (Cooper, 2013, pp. 20). Thus, with a strong brand association, the company has a high brand equity which helps in marketing the Redbull’s Redorade product.
Competitor Analysis
Redbull has unique image with symbols, name and logo that differentiate it from others. Even their new product Redorade has a unique packaging in an 8.3 oz. can that enable the company to be unique. When a product has totally a different image, consumers can easily identify it from a group of other competing energy drinks thus increasing the company’s brand equity (Upamannyu, Gulati & MATHUR, 2014, pp. 86).
Marketing program involves a strategy that allows the company to use its resources to achieve huge opportunities for increasing sales and a higher competitive advantage (Andreti, Zhafira, Akmal & Kumar, 2013, pp. 75). The marketing strategy is based on the consumer satisfaction to increase sales. A good marketing strategy or program establishes a good marketing mix with pricing, promotion, place and product being at the center of improving the company’s image in the market thus driving sales (Proctor, 2014, pp. 106).
Redbull has been able to use marketing mix as strategy of marketing their newly launched product to boost sales and counter the competition from rival products.
Product: The Company’s brand name shows the strength of the new brand. The new product is marketed under Redbull and people have a great experience and brand association with the mother product. Hence, marketing Redorade will be easier.
Place: The Company has a well-established distribution channel with most of sale points being places where their target consumers are. For instance, the company has their points at petrol stations where long distance drivers go to fuel while on transit.
Price: The Company has a good pricing strategy according to various regions. The pricing of the commodities vary with the economy and the needs of the customer. The company sets its price that is affordable to its consumers in order to increase sales.
Promotional: The Company has a lot of promotional activities including sponsoring various events, media advertising and personal selling. That will indeed improve their chances of marketing their new product through their marketing strategies and techniques.
Brand equity for Redbull can be measured using the following approaches:
Leadership Measure: The Company here will strive to measure how their product is perceived by the consumers in the market. That can be done through face to face interaction between the company and its potential/target consumers (Aaker, & Biel, 2013, pp. 96).
Brand association and differentiation: This can be achieved through the analysis of how the product is unique and different from the competing products-the aspect that improves the consumer loyalty.
Awareness Measure: Here, the relevant company will conduct a research in the market to establish who whether people are aware of their product in the market by interviewing various people within their target market.
Market behavior Measure: This involves a company striving to measure the distribution indices and their market share. That involves comparing their sales to the total number of the sales from the rival companies (Schivinski & D?browski, 2013, pp. 11).
Loyalty measure: That means that a company will strive to ensure that whether consumers are being satisfied by the products of the company. That can be measured by the level of a consumers repetitive buying which means they have loyalty for the product.
From the analysis of Redbull’s competitors, it is important to that there were several points of difference that makes the Redorade brand inferior to the alternatives as compared to the rival products. These points include: price, quantity and diversity. Thus, Redbull is recommended to:
- Reduce the prices for their products in order to be affordable to its customers since the product is new so as to attract more consumers
- The company should also increase the quantity of their products by ensuring that they start packaging their products in 16 oz. can in order to counter the competition min the market.
- The company should also strive to develop a strong campaign differently from that of the mother product in order to create a strong consumer base for the new product though it is under Redbull.
- Redbull as a company should strive to create more products and compete with other main competitors like Coca Cola who have a wide range of products in the market.
References
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