Red Bull, a world-renowned beverage company which has a history of almost fifty years, produces functional drinks. Meanwhile, the beverage industry is one of the fastest growing industries in China. According to the China Economic Information Network（2009），the beverage industry annual output has grown by nearly 20% per year since 2004；moreover，Chinese beverage industry output reached 81 million tons in 2009. For the functional drinks market，its sales increased from 0.84 billion RMB in 2000 to 3 billion in 2005. Therefore, China is a big potential growth market for Red Bull. What is more, red is a symbol of good luck in China，and bulls mean victory in Chinese culture. So Chinese have a natural fondness for Red Bull. For above reasons，as a consultant，I suggest that Mr.Mateschiz should put more efforts into the Chinese market.
With Globalization，Red Bull products also went to the world. Although Red Bull drinks come from the same company，in different countries, they are not the same in component. To be specific，in the USA, the beverage contains carbonate；however，in other areas, it does not contain carbonate. In spite of different products in different countries, Red Bull has implemented the same global brand strategy. Its slogan is “Red Bull Gives You Wings”all over the world. Admittedly，the advantage of using only one slogan for company is to reduce the cost of developing new strategy, and it can copy the successful experience of the past. However，its shortcoming which is lacking in incentives to innovate is also very obvious. Different products have implemented exactly the same marketing strategy, and it is obviously wrong. Therefore，in order to improve the Red Bull sales in China, Red Bull needs a brand new market positioning. For example，its sales performance in the UK was a failure. Overall，the drawback is that because of geographical culture, Red Bull just has only a sale strategy which may not agree with climate of a new place. Additionally, since 1996 when Red Bull entered the Chinese market, its products have sold only moderately well in China. Generally, Red Bull single advertising strategy and false advertising are possible reasons which lead to poor sales performance in China.
Solutions
Various Communications Media
In China, Red Bull chose to promote their products through sponsoring sports events which coincides with its function of energy supplements, and this kind of advertising has gained success but the effects has gradually been reduced with the development of social media.
First, Red Bull should make brand-repositioning decision, find its new target and location in function beverage market. For example, it can target its customers at young students who should maintain their brainpower and stressed employees who need to relax instead of its original target of only sportsman.
Secondly, Red Bull should have an entire set of advertisement planning. Its advertisement planning should be designed separately based on its all kinds of target customers. And its slogan should show the function of the beverage and show the needs of target customers.
Last, choose all-round and effective advertisement. With the coming of Internet age, it should advertise through all kinds of channels and make full use of Internet. The old way of just sponsoring sports events should be improved.
Various Product Strategies
The biggest problem for Red Bull is the product positioning, and the goal customer is anchored. Red Bull has two segments，one is sports and energy beverage，the other is functional drinks. In Chinese beverage market, Red Bull should make their product positioning in functional drinks. As a functional drinks company, Red Bull should focus its advertisement on its functions. So its slogan could be something like“Are you tired? Drink Red Bull.”
China is a relatively traditional country, and it is not a long time for functional drinks to have access to its market, so Chinese have no full understanding of what functional beverage is. In other words, they have not formed the habit of drinking functional drinks in this country. Therefore, Red Bull should vigorously promote the efficacy of its products. To be specific，advertising should try to popularize the efficacy of functional beverages. The main components of Red Bull are caffeine, sugar and taurine. Caffeine can help people enhance their attention span in a short period of time；moreover，it can make their reaction become faster, and their memory ability become stronger. Taurine can promote the absorption of sugar metabolism, while sugar can provide more energy for the brain. The proper intake of these substances is good for the body. Furthermore, this product is beneficial for those customers who want to stay up late.
China is a highly competitive country. Chinese still have to work hard to make a living, so they often need to stay up , and often feel great pressure. According to China statistical network (2014) Seventy-eight percent of the Chinese feel the pressure of life; what is more, Chinese average sleep time is less than eight hours. If a product could make Chinese more alert and focused, this product would be very popular in China.
However, at this time, Chinese hasn't realized functional drinks utilities, and they do not have the habit to drink them.
Furthermore, since reform and opening-up (1978), Chinese living standards have improved significantly. With the Chinese people improving the quality of life, those cheaper carbonated drinks’ sale will gradually decline. Moreover, People are aware that carbonated drinks are not good for their health, so they will choose the carbonated beverage alternatives. The high-end produc such as Red Bull will have a strong competitiveness in China.
Admittedly, there exist some risks for Red Bull to posit its brand image in the functional beverage. In the minds of consumers, if the function of a product is too strong, the product must have some certain degree of negative impacts. They will worry about their health, so the company should try to eliminate the psychological barriers of consumers.
Summary(Conclusion)
Red Bull has confronted with great challenges owing to the increasing competition in the market, and external threats as well as internal problems have resulted in its sales slides. The only way that Red Bull can regain its position in China is always being innovative and creative which is the core competence in the modern enterprise.
References
Chinese beverage industry survey. (2009) Retrieved from China economic information network.
Happiness index tsurvey. (2014). Retrieved from China statistical network.
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