Red Bull conducted a PESTEL analysis of the Czech market which found it favorable for expansion. The energy drinks category was growing 5% annually in the Czech Republic. Red Bull has 43% market share but faces restrictions from some politicians. Red Bull's marketing focuses on extreme sports sponsorships and events. Its target market includes students and young professionals aged 16-30. Red Bull prices its products at a premium but sees low threats of substitution or new entrants given its strong brand. It aims to leverage universities to promote the message that Red Bull can help achieve both academic and fun results.

1. PESTEL and porter
analysis of Czech
market for
Red Bull GmbH
CULS FEM 2015
Marketing management
Presentation by:
Daniel Jones

2. P.E.S.T.E.L

3. POLITICAL FACTORS
• Incidents where Red Bull has led to deaths
• The energy drinks industry is under scrutiny
The shock of rare cases, such as these have caused legislators to
react who are now beginning to look at restricting its sale. As most
of the political matters that affect Red Bull are based on restrictive
legislation, we shall talk about this in the Legal section.
Source: Prague Post

4. ECONOMIC CONDITIONS
Energy drinks was one of the fastest-
growing soft drinks categories in the
Czech Republic in 2014. Total
consumption of energy drinks
increased by 5% to reach 30 million
liters in 2014. The good growth was
underpinned by strong marketing
support.
Source: euromonitor.com
0
5
10
15
20
25
30
35
2010 2011 2012 2013 2014
ENERGY DRINKS
CONSUMPTION IN
MILLION LITERS

5. SOCIOCULTURAL FORCES
• Energy drinks companies are very active on social media
sites such as Twitter & Facebook
• Socially the energy drinks brands are seen as cool due to the
extreme sports image & team sponsorships
• Criticism via new digital media such as blogs
• Energy drinks companies are also being swept up in the
general wellness trend which has existed for the past few
years, & has resulted in the release of low carb & sugar free
options.

6. TECNOLOGICAL FACTORS
• Technological forces effecting the environment of the energy
drinks companies
• Innovation in industry tends to come from product
segmentation
• The most important Technological factor in the Energy
Drinks Industry is the Internet

7. ENVIROMENTAL FACTORES
While this could have come under the social
section, we decided to keep this separate to
highlight its importance to the modern
consumer. While there is certain pollutions
cause by the manufacturing of energy drinks the
Industry is very focused on package recycling.
The most common form of packaging is the
aluminium can which is 100% recyclable. Some
of the cheapest brands do use plastic packaging
for their larger products such as 1 litre bottles
but these again are recyclable & are a relatively
small percentage of sales.

8. LEGALREGULATORY CONDITIONS
• Measures against all unhealthy products such as soft drinks
• Prohibition in advertising at children
• Legal regulators are looking at idea’s such as sugar taxes to help
reduce consumption of these products

9. PESTEL Conclusion
The situation to us seems to be favorable for
further expansion in the Czech market. Most at
risk are possible changes in legislation, despite
the relevant trends, this scenario seems still very
unlikely. Positive trends we want to mention the
growth consumption in this segment and a
supportive social environment, as well as
sufficient technological level of development of
the region.

10. Porter’s Five Forces Analses

11. Industry Competitors and Extent of Rivalry: Low
• Red Bull has turned their niche market into a mass market
and a regular buy for people around the world.
• Its brand familiarity has given them a key source of
competitive advantage.
• Differentiation by Lucozade (another popular energy drink
that is trying to enter the market) is a strategy being used.
They are becoming direct competition adding caffeine into
their drink making it a stimulation drink.
• Red Bull has secured distribution channels that make it hard
for competitors to enter the market.
• Red Bull has a very loyal customer base, and it’s own
research shows that 40% of it’s customers would go to
another store to find Red Bull if a store didn’t carry their
product.

12. Threat of New Entrants: Medium
• Red Bull equates in the stimulant drink
industry to Coca Cola or Pepsi in the soft
drink industry.
• Supermarket stimulant drinks dominate the
budget end of stimulant drinks, but mid
range drinks don’t have many suppliers and
attempts to compete with Red Bull’s
marketing it a huge barrier to entry.
• Red Bull’s brand power alone would make it
hard for anyone to successfully enter the
market.

13. Threat of Substitutes: Low
• Price sensitivity is low within Red Bull’s target segments, and
because Red Bull is a spur of the moment purchased
commodity, convenience is a standard purchase criteria for the
drink. Brand power and customer loyalty have created a low
situation for product substitution.
• Red Bull’s High prices are linked to their high quality, thus
identical substitutes at lower prices don’t really affect the Red
Bull market.
• Other stimulant substitutes such as coffee, Five Hour energy, or
energy smoothies, all have trade offs with stimulation duration,
caloric intake, and convenience, giving Red Bull its own niche in
the stimulant market.

14. Bargaining Power of Buyers: Low
• Being a small market with strong customer loyalty, it’s possible for
the company to have all of the pricing power and for the customers
to have very low bargaining power.
• There is a pull in the market or a derived demand giving retailers
not much bargaining power.

15. Bargaining Power of Suppliers: Low
• Red Bull has a short supply chain meaning
high profit at each stage of the chain.
• The production process for Red Bull is
uncomplicated, leaving the suppliers with
not much power because there are low
input costs.

16. Product

17. Price
• Premium pricing
• min. 10% above its competitors price
• On czech market depending on size
(0,25/0,33/0,35/0,47 L) and place price differs from
approx. 32-70 Kč
• Not often seen on sale

18. Placement
• Red Bull places its product where it is convenient and easy to
purchase. This includes not only grocery and convenience stores,
but also night clubs, sport events, gas stations or casinos…
• Part of Red Bull‘s marketing budget goes to retail stores to place
Red Bull on easy to spot places
• Visibility is vital aspect for Red Bull‘s marketing plan
• As a result Red Bull has 43% market share in energy drinks

19. Promotion
• Athlete endosment
• Host major sponsor
events
• Sampling,
environmental
promotion
• RedBull Media House
• Concerts, Clubs,
Sport events
• Word of Mouth –
„The Buzz“
● 44,5 million “likes” on Facebook
● Simillar pattern on Twitter
● Over 50 million views for their project stratos video.
● Red Bull shares videos of sponsored athletes from
around the world in many different sports, with millions
of viewers
● Viral marketing
● 5,4 billions can sold in 2014

20. • 5,39 billion cans sold in 2014
• Sell in 166 countries
• Revenues 5,04 € billion in 2014
• Viral marketing, social media, WoM
• Sport events (extreme sports)
• Focuses on younger generation
• Premium price (10%+ more)
• 1,9 billion global servings per day
• Sell in more then 200 countries
• Revenues 46,70 $ billion in 2014 (0,74 $ / € in 2013)
• Family, association of Coca-Cola with happy
moments
• Sport events (traditional sports)
Volume
Variety
Variation
Visibility
Low
High
High
High
High
Low
Low
Low
Coca-ColaRedBull

21. S W
O T
Strengths
• Category leader – Red Bull has
established a strong, consistent brand
image globally. Red Bull is
synonymous with energy drinks in
many countries.
• Marketing strategy – The promotional
activities engaged by Red Bull
through extreme sports sponsorships
have helped the brand to build a
strong identity and to increase
consumer awareness/loyalty.
• Broad geographic presence – Red Bull
has a broad geographic presence,
which should ensure positive long-
term growth even if certain markets
reach maturity.
SWOT analysis

22. S W
O T
Weaknesses
• Category limitations – In overall soft
drinks, Red Bull has a limited product
portfolio compared to the rising number
of competitors bringing many other flavor
variants and categories.
• Pricing – Red Bull products are above the
energy drinks average price. Consumers
tend to think twice at the time of
purchase.
• Controversial – The relatively high
caffeine and taurine content of Red Bull
makes the brand highly vulnerable to
regulatory controls.
SWOT analysis

23. S W
O T
Opportunities
• Emerging markets – Emerging markets
represent newer geographies for Red
Bull’s expansion. Accelerating the
marketing and sponsorships in these
markets is a wise move.
• New production – Red Bull’s new
production facilities in emerging countries
are likely to make its retail price more
competitive. The brand should also
consider building production sites in Asia.
• Product line extension – Offering new
flavors and formats should help Red Bull to
keep/improve its market shares.
SWOT analysis

24. S W
O T
Threats
• Competition – Monster represents the
biggest threat as it contains natural
ingredients, which seems more desirable
than Red Bull for some consumers.
Competition is becoming more and more
dangerous in term of marketing actions
(copying Red Bull).
• High marketing costs – Maturity in developed
markets makes promotion harder than in the
past, inducing higher marketing costs.
• Negative publicity – Media worldwide report
Red Bull as harmful for health. Parents also
state that some components can be
dangerous if consumed by their teenagers
(who are the product’s target audience).
SWOT analysis

25. Target group, segmentation
• Geographic: Czech Republic, big and medium size cities as Prague,
Brno, Olomouc, Ostrava, Plzen, Liberec, Pardubice etc.
• Demographic: 16 to 30 years, males, “well off” income, students,
working professionals, sports enthusiasts, athlete
• Psychographic: Lifestyle: Business class, working class executives,
students; Personality: ambitious, open to experience;
• Behavioral: Occasions: Regular, special; Benefits: Quality; User
status: regular user; Usage rate: medium; Loyalty status: medium
Loyal; Readiness stage: intending to buy; Attitude toward product:
enthusiastic

26. Primary target group
Their main target is people who attracted by
extreme sports and who work hard in same time.
This could be anyone who has to work hard such
as a manager or a street worker or ether to study
hard in university. Anyone who wants to get
pushed up and would rather like to have a Red
Bull than a coffee. They are 16 to 32 years, can also
called as working professional. In psychographic
segmentation they targeted a2, b1 and b2 socio-
economic classes. In behavioral segmentation it
was found that they were targeting the first time
users and also their regular users. They target
super markets, movie halls and even bars and
restaurants to improve their visibility.

27. Secondary target group
The Clubber. This category is fairly new, in
recent years the people found out that Red Bull
can be used as a very good mixer with alcohol.
Red Bull sells now 34% of its units on premise.
This category typical Red Bull drinker is
dynamic and active, the gender does not play
any role at all. But it is more likely that more
less younger people who really like to go out
fall for Red Bull. Research (PHT, 11/97 Smith
Kline Beecham Energy & Sports Drinks Report)
has shown that 53% of the people who drink
energy/ sports drinks are within the age
between 14-34 years. Moreover they found out
that the main reason for purchasing
energy/sports drinks were to quench thirst and
give boost.

28. Communication Mix
• Slogan „Red Bull gives you wings“ (European and US markets) or
„Drink Red Bull when you feel sleepy or tired“ (Chinese market)
in order to address the cultural differences associated with the local
consumers
• RedBull communication mix focuses on 4 main dimensions:
1. Event Marketing program
2. Opinion leaders program
3. Communication
4. Sampling

29. Events and experience
• Sports, Culture and Art
• Controlling all aspects of the event
• Reinforcing the brand position
• Enhancing brand visibility
• Unique events are attracting
media coverage

30. • Air Races
• X-Fighters
• RedBull Crashed Ice
• Red Bull Paper Wings
• Art of can
• Breakdance events
• Ski and snowboarding
events
• Spacediving
• Motorsports
• …

31. Sales promotion
• Sponsorship of Athletes, Sport
teams and Artists
• Athletes use RedBull – creating
awareness among audience
• Marketing strategy is to search for
young talented people and
gradually establish long-term
sponsorship and cooperation
• Enhancing brand visibility

32. • F1, Rallye, Football , Sailing,
Video games…
• Every imaginable xtreme sport
• Eva Samková and Šárka
Pančochová (Snowboarding)
• Tomáš Kraus (Skicross)
• Jan Kubíček (Biker)
• Martin Šonka (AirRace)
• Maxim Hrabanec
(Skateboarding)
3.4.15

33. Advertising / PR
• Red Bull Media House (Replacment
for PR)
 Movies
 Viral Marketing
 Red Bulettin
 Red Bull TV
 Radio
 Mobile app
 TV spots
 Web page
 Social Media
• Word of Mouth – creating a „Buzz“

34. Direct marketing / Personal selling
• Targeting places where people need
energy boost
• Concerts, Parties, Festivals, Sport events,
Campuses..
• Red Bull vehicles
• Students becoming Red Bull band
managers
• In the Czech Republic are currently
operating 53 students defending silver
blue can on campuses.

35. Online and Social media marketing / Mobile
marketing
● 44,5 million “likes” on Facebook
● Simillar pattern on Twitter
● Over 50 million views for their project stratos video.
● Red Bull shares videos of sponsored athletes from
around the world in many different sports, with millions
of viewers
● Viral marketing

36. Competition analysis (PRODUCT)
1. Monster is similar to Red bull in taste, but only targets males. It has two
advantages over RB in price and quantity which is double size of RB.
2. Rockstar is double the size and Price as it is around 40czk so it is
cheaper than red bull as compared to size as well.
3. Full Throttle has the same taste and ingredients as RB, but it has
advantage of quantity and price
4. Big Shock- Formulated with the highest possible amount of caffeine,
taurine and vitamins is a series of several years just adds the right
amount of energy. Local brand of Czech Republic
5. Fakeer energy drink is made purely from natural ingredients without
chemicals and preservatives. Price is similar to red bull but more
Quantity
6. Semtex is from Czech Republic with cheaper price than red bull and a
different taste than it.

37. Market share of Energy Drink

38. Communication message
• “Learn with red bull is as well as party with red
bull” or “Red Bull. Great from all sides”
• Keep stay in the same segment, but cover it a bit
wider.
• All our promotion campaign will be
concentrated around universities and students.
• We’d like present our product our company not
only as great event maker and synonym of
“cool” but also to show students that we are
social responsible. And our drink can help to
achieve academic results as well as good fun.
academic results as well as good fun

39. Communication tools
• Students are perfect segment – they study, sport and drink
1. Social media and Viral marketing – enhancing visibility
2. Organising sport events/trips and contest among students and universities
(RedBull student challenge) – using videos from events for promotion
3. Special vending machines for RedBull only at universities
4. Organising concerts and parties at campuses with special offers for RedBull
5. Organising lectures with RedBull managers, offer trips to RedBull facilities
6. Search for promising students from different fields of study and different talents by
offering RedBull scholarships (Study + sport)
7. Sponsor student‘s sport teams
8. Create special mobile app – „RedBull student“ with all the features
9. Establish RedBull student magazine / radio, publish RedBull banners among
universities