This seems to cover the major problems that I encountered while conducting my SWOT analysis. It covers the problem that other energy drink companies have more to offer than Red Bull and also that if the energy drink sector where to take a hit (govt regulations, health concerns ect. ) than Red Bull would not automatically fail. There is a high cost associated with creating new flavors and product lines, but if it is executed correctly they should be able to lower the threat of changes in the external environment while also making more money.
The one thing that Red Bull would really need to watch out for is tarnishing the good name that they currently have by coming out with a new product that people do not like. My recommendation to this would be to possibly give the new products a different name and make it separate from Red Bull Start marketing more heavily to different types of consumers Red Bull could start running more T. V. advertisements and reach people who may not be into extreme sports or nightlife. They could run ads that show people in the workplace using Red Bull or someone who is simply just in the need of a “pick me up”
Pluses Ability to reach a larger demographic Minuses May not be a good conceptual fit with Red Bull’s brand image High cost of running television advertisements Analysis: Red Bull has a good marketing strategy in place right now, but they may not be reaching their full potential on the amount of people that they could Market to. Right now Red Bull is only reaching people who are into extreme sports or night life. They are almost completely missing people who are in the working world and may need something to get them through the workday.
Recommendation My recommendation is to go with the line and brand extension. When going over my situational analysis it seems to cover the major problems that I see wrong with what Red Bull is doing currently. I found the major problem to be that Red Bull has no diversification and focuses solely on 1 product. With the external environment playing a huge role in the success of businesses I think that it is necessary for companies to diversify themselves because they cannot control what the external environment is going to bring.
Alt (Do nothing)- Although Red Bull is a very successful company and is the leader in the market, they are doing nothing to protect themselves if the energy drink sector were to take a hit. With this being the main problem that I have found, I do not think that staying with the same plan is the smartest idea. (Line and brand extension)-With a Brand extension it would give Red Bull some protection if the energy drink sector were to take a hit. Alt (Market more heavily to different type of consumers)- once again, this is not helping much at all if the energy drink sector were to tank
Another major problem is that other energy drink companies are starting to break into the market and take away Red Bull’s share in the market. These new energy drinks also have more to offer than Red Bull with more oz. per dollar and a variety of different flavors. -Alt #1 (Do nothing)- it is inevitable that Red Bull will lose some of the market due to competitors. People now see that the energy drink market is a very profitable market so they are going to move in. although it is inevitable, doing nothing does nothing to slow it.
-Alt #2(Line and brand extension)- By coming out with more flavors of the current Red Bull beverage, people may be more willing to try the new Red Bull than a new competitor. (Market more heavily to different type of consumers)- This may keep Red Bull in the mind of the consumers when they go to buy an energy drink, which will keep them more likely keep buying Red Bull When looking at the problems that Red Bull is now facing and what they could currently face in the future, it seems that the smartest decision would be to go with a line and brand extension.
The other alternatives cover some of the problems, but not as well as coming out with a extensions. Marketing technique Red Bull has a strong marketing strategy in place can stick with the same strategy because it has worked and has a good conceptual fit with the drink. Only minor changes will need to be made in order to let people know that Red Bull is now more than just the energy drink that everyone has come to know and love. During the sporting events that Red Bull is sponsoring they can give out free samples and make it known that Red Bull is more than just an energy drink now.
They can also have their reps and distributors set up displays in the stores that sell Red Bull. Some of my suggestions would be to come out with an every day soda that people drink for pleasure, sports drinks consumed after an event (like Gatorade). I think that both of these products would go well with Red Bull because the current product is similar to a soda and it is also a performance drink. For the product extension they would come out with a few flavors that go well all year round and then also have seasonal flavors. New flavors may also entice the “stay up all night partying” user to mix it with their drink of choice.
With this strategy we can also use parts of alternative number three which is to start marketing more heavily to different types of consumers. Especially if Red bull starts making an every day drink that is consumed for pleasure and not performance, they can start running some television ads similar to that of Coke and Pepsi. In the end I would say that Red Bull should use a little bit from all of the alternatives that I have put into place, but I feel that alternative number two would help to eliminate the largest problem at hand.