Introduction
Red Bull is a sugary energy drink popular among young adults and teenagers. The company producing the energy drink has employed many strategies in the field of marketing and distribution, which made it well-recognized in the public eye and led to economic success. This essay aims to explore these strategies, more specifically the place strategy of distribution, the companys distribution channels, and potential avenues for the company to expand its reach with a new type of product.
Distribution to the Market
Currently, Red Bull energy drinks are sold in different places of public interest, including convenience stores, supermarkets, and gas stations. They are popular with young people and they are available to buy in nightclubs, where they can be combined with alcoholic beverages. Various entertainment establishments, such as movie theaters, computer clubs, and amusement parks sell energy drinks. At the moment, the current distribution channels include gas stations and retail stores along with supermarkets. The company delivers its product to the market via truck transportation. According to Sugai (2020), Red Bull understood that using the same distribution channels as other brands would mean they would not reach success because of high levels of competitiveness. Red Bull executives understand their target audience and provide them with the product at their convenience. As a result, among the competitive advantages of Red Bull
The strategy used by Red Bull is called the place strategy of distribution, making sure that the product is available for consumption in the places most fit for the target market. It is heavily customer-oriented while setting them apart from other brands, giving them a competitive advantage. The place strategy positively impacts Red Bulls profitability because not only does it provide the customers with the product at their convenience, it also gives negotiation power to the company. Furthermore, the new Red Bull coffee-flavored energy drink could be sold in places visited by young people. One of the most well-known worldwide distributors of caffeinated beverages is Starbucks. Red Bull could engage in a commercial relationship with Starbucks to promote their new product. It would open a new avenue for Red Bull to expand their promotion and increase sales.
Place Strategy
Place strategy is organized around the marketing mix of a company. The marketing mix revolves around the four Ps of marketing: product, promotion, place, and price. The four Ps must be interconnected for a concise message. In the case of Red Bull, the product is a sugary energy drink that appeals to young people for its taste and chemical contents. These places include but are not limited to movie theaters, nightclubs, and others. The price aspect is negotiated, which means it depends on the other competitors and the bargaining ability of the consumers. The promotional aspect of Red Bulls marketing is heavily documented and effective on the target audience.
As for Red Bull’s place strategy’s impact, it has an immense effect on the firm’s profitability. As has been mentioned, Red Bull is often in high demand in places frequented by young adults. Consequently, the place strategy of Red Bull is to permeate the locations mostly visited by representatives of young generations to boost sales. Thus, the effect of the place strategy on the overall success of the company directly results from the attraction of particular customers.
Promotion of Energy Drinks
Red Bulls marketing throughout the years has been successful in attracting the attention of young people. Marketing and promotion involve not only the advertisements but also the companys social media presence, collaborations, and sponsorships. A study by Buchanan et al. (2017) explained that brands social media material influenced young peoples views on the product. They uncovered that Red Bulls community involvement and recycling campaign positively affected the participants perception of the company, along with the openness about ingredients in the product.
Along with those marketing strategies, the company has branded its energy drink as vital for productivity and entertainment, making it more appealing to young people. Many said they drank energy beverages to stay awake and alert, “such as for stamina for assignments, computer games, shift work and parties” (Buchanan et al., 2017, p. 11). Rambe and Jafeta (2017) also assert that “in the marketing of energy drinks such as Red Bull, marketing claims of performance-enhancing effect, concentration, reaction speed, and boosting metabolism are made” (p. 659). This strategy of marketing directly correlates with place distribution, which supplies the desired product to the customer base. The outcome is expediential growth in profits and uncontested popularity.
Red Bull has been expanding its reach on the population through hyper leveraging. Through their partnership with the company producing GoPro micro cameras, they managed to achieve massive success. According to Goobich (2020), Red Bull leveraged PR and social media in sponsoring the streaming of the GoPro view of freefall. They because synonymous with extreme sports and outdoor activities while attracting large audiences of sports lovers and daredevils. The product sold across both GoPro’s and Red Bull’s digital distribution networks – the GoPro Channel, Red Bull TV, and Red Bull,com (Goobich, 2020). This partnership was successful in its marketing, providing a new avenue for expansion into the sports field and out-competing other energy drink brands.
Indirect Distribution and Recommendations
Red Bull relies on indirect distribution, which means they supply their products to stores and markets, which later sell them to the end customer. The company regularly ships the products in a set quantity, meaning the storage and stock of the company have to be quite sizable for wide distribution. Besides that, companies must tailor the product for commercial usage, passing certain quality checks in different production phases, from manufacturing to shipment. Red Bull can only advertise their products online or directly at the store by putting its brand name on store equipment, such as vending machines and refrigerators. In Red Bull’s case, their energy drinks are available in convenience stores worldwide. Prices range depending on the country, consumer bargaining power, and shipment costs.
In regards to the new coffee-flavored energy drink, the four Ps of marketing mix will change to ensure the company’s success in this endeavor. The product must be similar enough to the original energy drink that loyal customers recognize the flavor to avoid alienating them from the new taste. The price range may fluctuate depending on the materials needed to produce the energy drink. When it comes to recommendations in terms of distribution decisions, they involve international expansion to the Asian regions. In this situation, the company might consider increasing the presence in Chinese market. As a result, they might lower expenses on ingredients since the majority of them is produced in this country. Furthemore, Chinese market can be lucrative for the firm due to high consumption of energy beverages.
Conclusion
In conclusion, this paper analyzed Red Bull’s distribution channels, which are primarily oriented toward the target demographic – young people and teenagers. The place strategy the company is using has brought them success and infamy through bringing their product directly to the places where their target demographic is located. Red Bull’s marketing strategy, which includes its social media presence and successful collaborations, established a loyal audience of young people and sportsmen. Regarding Red Bull’s latest coffee-flavored beverage, the four P’s of the marketing mix would be influenced. The distribution channels and methods of promotion would need to change. A cooperation with Starbucks and other coffee shops would be appropriate to boost the company’s success.
References
Buchanan, L., Kelly, B., & Yeatman, H. (2017). Exposure to digital marketing enhances young adults’ interest in energy drinks: An exploratory investigation. PloS one, 12(2), 1-16.
Goobich, J. (2020). HyperLeverage: Do More With What You Have For Exceptional Results. In black Bublish, Inc.
Rambe, P., & Jafeta, R. J. (2017). Impact of social media advertising on high energy drink preferences and consumption. Journal of Applied Business Research, 33(4), 653–668.
Sugai, P. (2020). Building Value through Marketing: A Step-by-Step Guide. Routledge.