PRINCIPLES OF MARKETING ASSIGNMENT SAMPLE

Introduction

Marketing is an essential skill that all develops in daily lives. An organisation or an individual evaluate and select solutions elucidating marketing as a facilitating exchange. This report discusses on the principles of marketing formulating a market research and evaluation on an innovative product launch. The organisation chosen for the research is the beverage or drink based company popularly known as Red Bull. The company is widely known for its energy drink and its participation in the Formula1 sports. However, the organisation has presently observed PRINCIPLES OF MARKETING ASSIGNMENT SAMPLE several market trends and categorically innovated to launch a probiotic drink. 

Key Market Trends

In recent times, the beverage or drink industry on the whole is experiencing dynamic and notable shifts. These shifts are primarily the result of technological developments, changing consumer preferences, and regulatory changes. One of the most common trends noticed in the beverage/drink market is the growing demand for sustainable and healthy drinking options (mintel.com, 2024). Consumers are now more selective about their diet and dietary inclusions and, as a result, there is a notable surge in the demand and consumption of healthy drink products, especially those that are sourced locally. One such prominent development by Red Bull is its Probiotic drink. This cow based probiotic drink consists of all essential nutrients such as proteins, minerals, vitamins, lacto baccilus and other good gut cleaning elements. It essentially contains prebiotic fibres, which are known to have 15% lower calories and lactose. Proprietary technologies and special enzymes are used to reduce lactose content and generate these fibres, which, clinical studies have found, promotes about 3x growth of different forms of bifidobacteria. This helps in producing microbiome in adult guts. The growth of a beverage/drink manufacturing company, expected to be at 5.56% CAGR annually in the following years typically depends on new products and their success (statista.com, 2024). It is hard to achieve without proper marketing based on the rapid changing market and consumer preferences and competition.

Figure 1: Revenue details of RedBull 2011-2023

Source: https://www.statista.com/statistics/275169/red-bulls-company-sales-worldwide/

In reference to Guiné (2020), to develop appropriate marketing strategies for New Product Development (NPD) needs focusing on the benefits, performance and other drivers for a practical Product Life-Cycle (PLC). Typically, the methodology includes considering vital aspects, such as:

• Role of the consumers
• Product acceptance
• Innovations
• The market and 
• Consumer willingness to pay for NPD.

Key competitors and their positions

Beverage/drink industry is highly competitive due to the existence of large number of key players and everyone view for market dominance. In such a scenario, strategic approach is needed to gain a high position in the competitors’ list and cater to the diverse needs and preferences of the consumers.

Red Bull, too faces stiff competition from private and public companies. Some of the most significant ones are MIIND, VEZLON, FIZIX and others with a revenue valuation of more than 90 billion dollars. Pepsico has also started to popularise its probiotic drinks that could cater to reflect a tough competition with Red Bull. Monster with a valuation of more than 30 billion dollars and other similar companies like Unilever, Mars, and more are significant competitors playing a strong position in the market (statista.com, 2024). According to a list published in the Forbes Global 2020, Red Bull stands second among all beverage/drink and beverage companies worldwide, displaced by Anheuser-Busch InBev Company from the top, followed by PepsiCo (forbes.com, 2024).

Strong marketing strategies has helped the company to outshine its competitors. Maintaining a strong brand presence and identity, wide distribution networks, and most importantly, innovative product offerings are the key to its success and growth. Over the years, Red Bull has come up with dozens of new products added to its existing list of hundreds, thereby helping it expand its market presence. Precise marketing concepts and strategies along with a strong distribution network have helped the company to become the leader in the beverage/drink and beverage industry. It implies, the marketing strategies have ensured success of all of their NPDs. It is basically attributed to the better understanding of needs and preferences of the consumers by the company, which, in turn, affects product pricing and company profits.

Current customer attitudes/behaviours in this market

Tuten (2020) suggests customer attitudes and behaviours play a significant role in notable shifts in the beverage/drink landscape. It is typically influenced by a wide range of factors including demand for sustainability, concerns over health, technology adoption, and convenience.

People today look for healthier options due to their growing health-conscious and desire to align the beverage/drink products included in their diet with their wellness goals and dietary limitations and preferences. As a result, there is a shift towards plant-based or organic beverage/drink products, or more importantly, clean-label beverage/drink items, such as Probiotic drink. This typically helps them maintain their priority for nutritious and transparent beverage/drink choices.

In view of Şanlıer and Sezgin, (2020), consumers today are more aware than before regarding impacts of beverage/drink production on the environment, especially on plants. As a result, they have shifted to consuming ethically sourced and eco-friendly products. Today, their buying decisions are influenced by sustainable practices of companies and support towards reduction of beverage/drink waste. Most importantly, convenience has been the most notable aspect of consumer behaviour today. They look for better packed beverage/drink products to maintain a busy lifestyle with evolving work patterns, which is facilitated by the rise of ecommerce and beverage/drink delivery services 

Main issues / opportunities 

A lot of issues plague the beverage/drink market but there are lots of opportunities offered as well. Strategic marketing will help tap the potential of this dynamic landscape. One significant issue is beverage/drink waste. The 2021 Beverage/drink Waste Index of the United Nations Environment Programme suggests 931 million tonnes of beverage/drink is wasted every year. Out of which 569 tonnes is from households (statista.com, 2024).

However, despite these challenges, the industry offers a lot of opportunities for growth and innovations. Red Bull grabs these opportunities with both hands and come up with innovative products like Probiotic drink and other plant-based beverage/drink items. This helps them offer ethical and sustainable beverage/drink option to the consumers with varying preferences ((Redbull.com, 2024). Additionally, supply chain efficiency is also improved due to innovative technologies like AI and blockchain, which has enhanced traceability and transparency, beverage/drink safety, and consumer loyalty.

Product/service description

Probiotic drink is a revolutionary contribution from Red Bull. It has all the features necessary to meet the growing need for a more sustainable, eco-friendly, and healthy beverage/drink option by the consumers. In reference to Shroff (2020), it aligns with the three basic levels of product model and offers the core benefits namely improved features and sustainability.

At its core, this probiotic drink product is the example of sustainability, corroborating the best practices of Red Bull in terms of procurement, packaging, and environmental commitment. These core values of the company echo the environmental consciousness of consumers looking for products will little or no ecological footprints. In view of Tuten (2020), the nutrition and quality aspect of probiotic drink is beyond compare, having been processed with innovative filtration technology. It ensures purity, nutrient-richness, and taste while addressing consumer preferences for healthier beverage/drink options. It is further augmented by traceability and transparency aspect of probiotic drink supply chain. This build customer trustworthiness and fosters confidence being able to track the journey of the product from the farm to the packets. In core, probiotic drink signifies Red Bull’s tactical answer to market analysis and deliver product that comes with unmatched value (Redbull.com, 2024). 

This product fits in perfectly with their triple layer business model comprising, economic, social, and environmental perspectives. It creates more value and help follow the path to sustainability. In their model, the economic aspect is the primary role while the other two are secondary, and together all three helps create a perfect harmony and exploits the benefits. García-Muiña et al. (2020) analyses that the triple-bottom-line perspective helps Red Bull to represent the value of the product more comprehensively and support their social and environmental point of view. 

Segmentation, targeting and positioning (STP) strategy

STP or Segmentation, Targeting, and Positioning strategy plays a vital role in identifying particular audience segments and within the market landscape and catering to their specific needs. Red Bull too employs a comprehensive and effective STP approach for marketing their new improved probiotic drink. This ensures optimal resonance with the target consumer segment.

Segmentation

There are different bases used in segmenting the market for probiotic drink. This helps in identifying the discrete group of customers. These bases include demographic, behavioural, and psychographic factors.

For demographic segmentation, distinguishing factor like age, household size, and income are considered. This helps in understanding diverse preferences and needs of consumers belonging to separate demographic groups.

Psychographic Segmentation delve into consumers’ lifestyles, values, and attitudes toward sustainability and health to identify segments with similar psychographic profiles.

For behavioural segmentation, factors like consumption patterns and purchasing behaviour are analysed. This helps in distinguishing the consumers based on different set parameters such as brand loyalty, usage frequency and occasions, and, most importantly, the willingness of the consumers to pay higher price for sustainability and high quality.

Targeting

This phase is achieved with the help of the analytical findings of segmentation. In this stage, a specific segment of the market is targeted which is believed to align with the value proposition of probiotic drink most closely and comprehensively. 

It helps in targeting specific market profile, for example, the environmentally aware customers between the age group of 25 years to 45 years with above-average income levels (mintel.com, 2024). This helps in having an image of the persona of the target consumer section and the market. Based on the above demographics and parameters, it will be ones who are keen with their health, value environmentally friendly choices, prioritize nutrition, values authenticity of products, look for transparency, and prefer brands and products that align with their values and offer concrete benefits for them as well as the planet.

Value proposition is the key and that is what probiotic drink assures. When consumers buy this product, they get the guarantee of their purchase supports sustainable product that is ethically sourced and made with sustainable practices. 

Moreover, the advanced filtration technology used in producing probiotic drink guarantees purity and nutrition to further support the wellbeing of the consumers, their lifestyle, and values.

Positioning

In reference to Amira and Fitriasari, (2021), positioning plays a crucial role in this dynamic and competitive landscape. Probiotic drink has all those features and traits that will position it higher in the list and in a quadrant in the perceptual map that signifies sustainability, quality, and health. This distinguishes it from its competitors such as the traditional probiotic drink brand and products that fall under generic organic choices. 

This specific positioning makes stand out from its competitors and create a distinct niche in the market. It makes probiotic drink and ideal choice for specific set of customers looking for healthy, premium, and environmentally-friendly beverage/drink  options. Oon the other hand, from the company’s perspective it helps in boosting sales and market reputation. Ideally, this customer-centric marketing strategies help Red Bull become then market leader offering distinct competitive advantage. 

Such effort from Red Bull has helped it to create a better impression about probiotic drink in the minds of the consumers. Consumers will think about Red Bull at first when they buy probiotic drink and use the brand name as comparison parameter while contemplating a different brand (redbull.com, 2024). In short, STP allows Red Bull to influence the buying decisions of the consumers. It also helps in designing products that may help reduce widespread health issues like blood pressure and diabetes. 

Typically, most companies do not target consumers the way Red Bull does mainly due to higher cost. However, Red Bull can easily penetrate specific market segments with specific products and increase profit margins.

For example, it can design products that taste sweet but will not affect the health of a diabetic patient who, typically, loves to eat sweet beverage/drink s. This way, Red Bull will allow diabetes patients to eat what they like without compromising their health.

Recommended Marketing Mix Strategy

Figure 4: Product marketing cycle

Source: Varadarajan (2020)

Product Strategy

In line with the analysis and target consumer preferences and market, product marketing is the most crucial part. It needs addition focus on packaging and branding. Both has to be optimal for their respective benefits. In reference to Varadarajan (2020), branding will typically emphasise different traits of the product, such as sustainability, premium quality, health benefits, and even align with environmental commitment of the company and resonate with that of the consumers. On the other hand, packaging should essentially show case the eco-friendly practices and underscore the commitment to safety of product, sustainability, and appeal. However, everything should align with the ethical consumption needs of the consumers.

In addition, including features such as NFC tags and QR codes on packaging facilitate traceability information that will eventually build trust among the consumers regarding the product and also enhance transparency.

Pricing Strategy

Red Bull is a renowned brand for sustainable and top-quality products. Therefore, premium pricing strategy will be more effective than traditional penetration pricing strategy. 

Figure 5: Pricing Strategy

Source: Darmawan and Grenier (2021)

In the views of Darmawan and Grenier (2021), the primary aim of penetration pricing strategy is to capture market share with low-priced products, it is not as effective as premium pricing strategy to showcase a new product as high-end.  On the contrary, premium pricing policy will distinctly and characteristically emphasise exclusivity and quality of the product, which will eventually help in maximising profits. Typically, discerning consumers are more inclined towards products that come at a premium.

Promotional Strategy including Digital Media

Promotional strategy should be designed considering both the traditional form as well as digital marketing, with additional focus on the latter. In this digital business landscape, promoting a product through social and other digital media is much easier than other conventional approaches.  As analysed by Vrontis et al. (2021), the message will reach the target audience quickly and more effectively along with print ads in magazines and hoardings, event sponsorships, and collaboration with influencers. It will help significantly in building brand credibility, awareness, and presence. Most importantly, since most people use the internet to search for information on products and services, digital marketing will pay higher dividends. This is attributed to the targeted campaigns such as PPC (Pay-Per-Click) ads or tailored email or messaging to interested consumers knowing their behaviour.

Distribution Strategy

Distribution strategy should involve both offline and online channels. This will help enhance accessibility and offer more convenience. In reference to Melkonyan et al. (2020), partnering with premium health beverage/drink or grocery stores, speciality shops, supermarkets and hypermarkets will ensure the product is available in a large number of physical locations where targeted consumers visit frequently.

Furthermore, Purchase and Volery (2020) suggests that an online presence on e-commerce platform and partnering with leading online marketplaces and retailers will also help reach more consumers who prefer shopping from the convenience of their homes. Direct-to-consumer channels may also be explored to offer a better shopping experience to the target consumers by engaging directly with them.

Reflective account

I found it to be an insightful experience presenting marketing analysis facts and finds together with the Formative Mintel analysis group. I learned a lot about market research and collaborating different aspects of it. The best part, according to me, is the analysis of consumer behaviour with reference to the market, apart from the actual market research and analysis. Valuable and reputable resources like Mintel and its likes helped a lot in supporting different insights with accurate data and statistical figures. Overall, the entire process helped to gain a complete understanding of the dynamic beverage/drink industry landscape as well as identify the challenges and opportunities for promoting Red Bull Probiotic Drink.  Apart from that, the Segmentation, Targeting, and Positioning (STP) strategy is also very effective for product promotion and helped aligning with the needs and preferences of the target consumers. This offered a more customized approach to marketing the drink. Overall, the effort offered me an opportunity to apply effective marketing principles in a real-world scenario, which helped in refining my analytical skills.

References

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