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Created with Fabric.js 1.4.5 Red - Case study - Profil and segmentation 5 PORTER forces: Psychographic Segmentation: Lifestyle: Business class, working class executives, studentsPersonality: ambitious, open to experience.Occasions: Regular, special.Benefits: Quality,User status: regular userUsage rate: mediumLoyalty status: medium LoyalReadiness stage: intending to buyAttitude toward product: enthusiastic Geographic Segmentation: Area: Red bull limits itself to semi urban and urban India as that is their major consumer baseCity: Class-A and Class-B cities i.e. metro politician citiesRegion: Distribution of redbull is constant across regions in India Socioeconomic Classification:High job profile with efficient communication knowledge. Industry Leadership: Red Bull is the leader in the energy drinks market (2013 turnover: $5 billons through 166 countries)Marketing capabilities: Red Bull has been differentiating its products by sponsoring extreme sports (Formula 1 driving, free skiing, BMX biking, Red Bull Air Race, in 2013: the highest jump of the world from space -> Baumgartner)Strong geographic presence all around the world which leads to a positive long term growthAlliance with major distributors has helped to expand the market: Cadbury SchweppesValue Chain: at Red Bull, logistical issues are very important (visibility on the supply chain, flexible warehouse, strong information technology)Wall to wall production: save resources by manufacturing and filling cans on the place + 100% recycling cans STRENGHTS OPPORTUNITIES Lack of innovation: Red Bull has a limited product portfolio in comparison with the rising number of competitorsPrice: products are above the energy drinks average priceCopy problematic: lack of patent from Red Bull encourages competitors to copy the firm WEAKNESSES Public health concerns: these product are considered a harmful drink(excess use of Red Bull is a real risk: negative publicity)Competition: Monster is the biggest threat on the energetic soft drink marketHigh marketing costs: competition on advertising campaigns results in a smaller return for Red Bull New markets: India and China where the middle class is growingMore and more people develop an interest for extreme sports (base jumping, sky diving) The probability of new competitors entry into the market is very lowGood international consumer loyalty: current consumers of Red Bull will remainProduct line extension: Red Bull could manufacture products which provide health and wellness benefits. Indeed, consumers pay more and more attention to what they drink. THREATS Industry Competitors:-brand familiarity which give a key source of competitive advantage-differenciation -Red Bull has secured distribution channel-regular buy for people all around the world-very loyal customer base; 40% of them would go to an other store to find Red Bull if a store did not carry the productThreat of substitute:-brand power and customer loyalty have created a low situation of product substitution-high price for high quality, thus identical substitute at lower price don't really affect the Red Bull market-all others stimulant substitutes have trade off with stimulation durationBargaining power of suppliers:-Red Bull has a short supply chain -suppliers have not much power because there are low input costsThreats of new entrants: -specific market which stand out from the soft drink-to compete with Red Bull marketing is a huge barrier to entry-Red Bull 's brand power would make it hard to tap into the market for every new companyBargaining power of buyers :-strong market with strong customer loyalty-customers have a very low bargaining power Energy drink market Social : Unemployment (workplace is one of the most important place where people consume energy drinks)Ageing population in EuropeHealth concerns of consumersThe fashionable dimension of energy drinksEcological environment:Consumer is need of natural ingredients More and more people want to consume natural food. This ecological trend can affect the energy drinks market Economic environment:Recession, loss of purchasing powerRelative high price of energy drinksMarket maturity for carbonated soft drinks (soda)Legal and political environment:Pressure on caffeine and taurine ratesHealth concerns of governmentsImplementation of restrictive laws SWOT Customers profile: 15/35 years in search of adrenaline : ravers, students during review period, Traders, athletes, etc... Segmentation: Demographic Segmentation: Market divided into groups on the basis of variables such as age, gender, income,occupation etc ...Age:- 16 to 30 years they account for the major share of the customer base- Below 16 They account for most of the sales of their other line of products of red bull soda.- Middle age and elderly red bull launched zero calorie and special edition (cool breeze) for the elderly tastes.Gender: They mainly target males, although females are a part of their customer base Income:Red bull >>> Luxury Image :Segment that is well off in terms of income.Occupation:Students, working professionals, sports enthusiasts, athletes Bull Market Analysis Main market : - energy drinks - sport drinksSurrounding market- vitamins- energetic bars- energetic drinks- coffee, tea, soft drinksComplementary market- none, no need of a specific environment to drink Red Bull or other energy drinksGeneric market- non-alcoholic beveragesMeta-market- events creation and organisation- wide sponsoring policies- sports reappropriation Absolute non-consumers:People subjects to heart diseases, diabetes and hypertension24,949.230 people in Canada for exampleRelative non consumers:Retired people, babies, pregnant women Current market:8,54 billion cans sold in 2013 for 112 million euros, 5,3 billions sold by Red Bull : market rate amounts 62%Potential market:Soft drink industry is predicted to hit almost $310 billion in 2015. US soft drinks market is predicted to exceed $127 billion in 2015 Using the figures above : Penetration rate in the soft drinks market for energy drinks : 2,75%Red Bulls market is growing in any country the company is selling on, with a global growth of 3,1% in 2013 compared to 2012. Profits are also growing fast as Red Bull events generate huge added value and consumer entertainment. As a result Red Bull is ranked third in the most popular brands on Facebook in 2014, behind Coca Cola and MacDonalds ( with 45,346,681 fans.Competition on the market is very high in developed countries such as France, competitors are : Monster, RockStar, Powered, distributors brands etcAlthough Red Bull has the highest price and the most important brand strength compared to its customers so competition is not an issue for Red Bull so far. Maybe in a few years Sources: RedBull Team: Axel Waeckerlé, Stanislas Prunier, Benjamin Barthélémy, Jules Audemard, Arthur Pascal ans Benoît de Lescure
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