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Shoes for Moos Case Study

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Cases in marketing strategy

MacDara Hosty

Module MK8102

Assignment 2: Red Bull ‘The Anti-Brand’

[pic 1]

Signed Statement:

We have read the University’s code of practice on plagiarism. We hereby certify this material, which we submit for assessment on the programme of study leading to the award of Bachelor of Commerce, is entirely our own work. It has not been taken from the work of others, except to the extent that such work has been cited and acknowledged within the text of our work.

Date: 14th February 2019

Students:

Mark Rowland (14103583)

Oliver Hester (14100138)

Seosaimh O’Fatharta (14101588)

Stephanie Behringer (10101013)

Signature: Mark Rowland, Oliver Hester, Seosaimh O’Fatharta, Stephanie Behringer

Table of Contents

1.        Strategic issues and problems        3

2.        Analysis and Evaluation        3

2.1.        Organisation        3

2.2.        Alternatives        4

2.3.        Analyze the Alternatives        4

2.3.1.        Target Market        4

2.3.2.        Product Strategy        4

2.3.3.        Distribution Strategy        5

2.3.4.        Brand Positioning and Brand Equity        5

2.3.5.        Promotion Strategy        6

3.        Recommendation        6

4.        Plan of Action        6

5.        Contingency Plan        6

6.        Reference List        7


  1. Strategic issues and problems

Red Bull is a medicinal tasting portrayed energy drink aimed at the 18 to 30 age group and had 70% of the $2.5billion energy drink market as of 2004, a figure that was down from its best position.

How can Red Bull grow in the future given the challenges of a maturing category? 

Does it have the capabilities to compete with the mainstream brands, considering its resources? 

In which segments are the greatest growth opportunities?

  1. Analysis and Evaluation

  1. Organisation

Strengths:

Brand Equity

Unique Medicinal taste

Extensive placement footprint worldwide

Popular extreme sports sponsorship

Quirky marketing program. Same voice consistently (Andrews and Scrimp, 2016).

Branded Packaging

Weaknesses:

Controversial Product

Threat of substitutes (Porter, 1951)

Ease of new entrants from the big companies (Pepsi, Coke etc). (Porter, 1951)

Maturing Market

Opportunities:

Large untapped markets available

New Extreme sports sponsorship opportunities

New products opportunities

Threats:

Product development complacency

Brand Extension threatens image.

Competitors

Regulations


  1. Alternatives

  • Complete market research to counteract and address the challenges of the maturing market. (Identify potential new gaps, new products, new target market).
  • Analyze resources and brand equity/awareness to determine the strength and capability of Red Bulls brand.
  1. Analyze the Alternatives
  1. Target Market

Red Bulls target market are the young population from 18 – 30. It would be advised not to be restricted to one segment and attempt to branch out. This could be done by introducing new products, targeting an older generation or female consumers. Examples may be to formulate a new recipe with less sugar and caffeine or to add new flavors. The Red Bull drink is also banned in France and Denmark due to health concerns. These are substantial markets in Europe and a new product introduced to the market, given the brand awareness would substantially increase global market share.

  1. Product Strategy

Unfortunately, sustainable competitive advantage, diminishes in a maturing market, albeit slowly, with alternative energy products entering the market at a rapid rate (McDaniel, Lamb & Hair, 2013). This cannot be stopped or halted.

Red Bull should adopt a strategy to maintain their market share focusing on research to extend their product line or add new ones. Extending the product line provides economies of scale in advertising, Red Bull will give people wings, no matter which Red Bull they choose. It is important to ensure a common look of the product line and to use standardized components, such as the can size, keeping inventory and manufacturing costs low (Lamb, Hair & McDaniel, 2009). Adding a new product line would help to reduce dependence and risk (Lamb, Hair & McDaniel, 2009).

  1. Distribution Strategy

To allow growth and increase consumption levels the distribution network of Red Bull could be expanded. This was successful in Australia with an increase of 40% in sales in one year. To keep in line with the exclusive brand image, the level of distribution should remain selective, only adding a few new intermediaries to increase the distribution mix (Lamb, Hair & McDaniel, 2009). Extensive distribution to maximize market coverage might damage the ‘mystique’ that surrounds Red Bull.

  1. Brand Positioning and Brand Equity

‘83% of companies that overperform on revenue growth link everything they do to brand purpose, as opposed to only 31% of under performers’ (Best Global Brands, 2017).

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