Market Shifts and Strategic Responses

Introduction

Lucozade and Red Bull are one of the leading energy drink brands across the globe. With the effectiveness of the marketing strategies and marketing mix Lucozade lost its market as the biggest energy drink brand in Britain. It is vital to state that the company lost about £62.6m in value in one year, which is regarded as one of the largest losses in the soft drink category. The issues relating to energy drinks were increasing, and the energy’s value sales were decreasing by 18.6% to £273.6m, and the volumes also fell. Conversely, Red Bull, the main rival, increased its sales by adding £20.5 m to its standard variant, thus increasing the value to £279.6m (William Reed Business Media Ltd, 202). Red bull is thus the leading seller of energy drink in Britain as per the year 2018. The demand for the Red Bull was increasing due to the effective use of the 4P’s of marketing. The objective is to analyse the target market and marketing mix strategies to analyse the leading brand's demand.

Marketing Mix Strategies (4Ps) for Lucozade and Red Bull

The marketing mix is defined as a set of tactics that are used by the business organization to promote its product in the target market to increase the share in the market. The distinctive marketing mix comprises of 4P’s, which include products, promotion, place, and price. For the success of the brand, it is important to ensure promotion through effective ways. The place is vital to attract customers and set a target market for selling the brand. The product is about the item that is to be sold with the price that creates value (Alder, 2001). In this Red bull and Lucozade are the products that are witnessing a change in demand and income with the use of the marketing mix. Marketing strategies are important to attain business goals along with objectives so that the market is augmented.

Product

The product strategy of the Red bull is unique, thus increasing the demand. Red bull is an energy drink that is a noncarbonated energy drink that originated in Thailand. The idea for such a product came into mind from Krating Daeng, and the product contained added tastes to meet the demand for the people. The product mix of Red bull is simple, and to ensure better variation in the flavours were introduced. The flavours that were offered in the energy drink include cranberry, coconut, tropical fruits, Kiwi, and blueberry. It is important to state that the product mix of Red bull includes caffeine, taurine, vitamins B, which are required mainly by workaholics so that the energy is boosted. The growing segment mainly consumes the product; therefore, in place of glucose aspartame and acesulfame K were being used. The packaging of the product is unique and attractive as it is available in a tall blue silver can with the label of Red bull (HT Media Limited, 2019). The decreasing demand for carbonated drinks was reflecting growing shifts towards the drinks, which offers energy. It was popular with the youngsters as it was a noncarbonated drink.

On the other hand, Lucozade, which was losing its market, was a glucose carbonated drink. The drink is highly concentrated on providing energy into the bloodstreams. The drink is easily digested, and the product has changed its forms since it was launched. The product has various lines, which include Lucozade Energy, sports, and Alert. The product mix usually focuses on offering satisfaction to consumers, and Lucozade offers energy drinks and glucose tablets as well.

Pricing Strategy

The energy drink industry has competitors, and Red bull is taking measures to become the market leader. To become the leader in the market pricing strategy is effective as the idea is to offer energy drinks at a reasonable price so that the target market can attain the quality drinks. Red bull pricing strategy is of importance as it charges a premium for its products, and at the same time, customers are willing to pay for the quality ensured. It is important to note that the Red bull is gaining market as it is priced in premium, but it is cheaper when bought in bulk, and the demand for the drink is increasing (Chernatony, L.D. & et al., 2011). The consumers are purchasing it for its quality and no compromise in pricing.

On the other hand, Lucozade is an experienced company, and it focuses on reducing the costs and hence is cheaper. The price of the bottle is less high than the Red Bull energy drink. The price of this product is not fixed as is based upon the sellers, and the value of the bottle is less than the Red bull, but the value offered is not the same. The purchase is less because of the quality of the product and the value offered.

Place and the Distribution Strategy

In the year 2018, it is noted that Red Bull managed to make sales of 61billion, which is a vast distribution. The distribution strategy is such that Red bull is readily available in several places such as supermarkets, convenience stores, and retail outlets; therefore, it was easier for people to buy this product rather than Lucozade. Another aspect is that the energy drink Red Bull is stored in exclusive refrigerators, thus grabbing the attention of customers, thus increasing its sales. The demand to increase the distribution is vital; therefore, the availability of the Red bull online also made it easier for customers to buy. The place is thus of relevance to increase the demand and sales (Bloomberg, 2020).

On the other hand, the place is a vital marketing strategy that helps to increase the access of customers and provide better convenience to consumers. Lucozade was being sold in every store major and minors to increase sales. It was also available online, but the packaging of this product was not as attractive as the other in the market. The products were being distributed through the peer to peer channels as well to reach a wider customer base.

Promotion

For the business and brand to be successful, one of the most vital aspects is to promote the product and advertise the same. Red bull is one energy drink, and it targets the people in sports. The tagline of the product is “Red bull gives you wings,” and as a promotional strategy, several sports events are being sponsored. To target the growing segment, the promotional strategy was to be more inclined towards promoting sports events such as surfing. Formula 1 and more. Advertising the products and using the brand to promote events gave rise to public relations activities (50MINUTES, 2015). Red bull marketing strategy is also towards merchandising stores online so that the customer base is increased.

It is noted that the marketing strategy of Lucozade is effective. Still, it lacks several factors that are decreasing the demand for the drink and increasing the position of Red bull. The promotional activities are done to increase the base of customers, and Lucozade used billboards to promote the products and gain a better market. It is important to promote products so that people are aware of the tastes and their product lines. Lucozade intends to attract new segments the teenagers and therefore promoted the video games so that the target is aware of the products.

Target Segmentations

From the marketing mix and comparison, it is noted that the market of Red bull is more. Red bull is taking measures to meet the changing needs of customers effectively. The soft drink market was decreasing because people were getting health conscious. Thus, the market of the energy drink was increasing, and the main target segment was people between the age group of 18 to 34 years. The main factor for Red bull is to maintain the position as a leader by delivering valued services to customers. Targeting a segment is vital so that the strategic measures are effective, and market shares are augmented (50MINUTES, 2015). The main intention is to attract young people and segments, having the intention to play sports and energy activities. Red bull has significant tactics to attract the young target customer through publishing awesome content and sponsoring events so that the marketing power is effective.

Disposable Income

It is noted that the global energy drink market is to grow by about 3.5% by the year 2020. The disposable income for the red bull is low to moderate, impacting the business and minds of people (Delloite, 2019). The net income increase by about 36% to 742.2 million euros for Red bull, thus impacting its income and market. On the other hand, Lucozade has also improved its market from 2018 to 2019 (HT Media Limited, 2019). Red bull sold 7.5 bn cans in 2019, and income increased to 6.1 billion euros in 2019 (excel).

Conclusion

Both the brands are trying to improve the market share and the strategies implemented are effective. The sales for Lucozade decreased with the increase in Red bull, but the profit and loss reflects a benefit with 4Ps strategies. The aim is to improve marketing strategies so that the products attain a better market.

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References

Alder, H., 2001. Mind to Mind Marketing: Communicating with 21st-century Customers Kogan Page Publishers.

Chernatony, L.D. & et. al., 2011. Creating Powerful Brands. Routledge.

Delloite, 2019. Suntory Holdings Limited and Its Subsidiaries. Financial Statements, pp. 1-64.

50MINUTES, 2015. The Marketing Mix: Master the 4 Ps of marketing. 50 Minutes.