Economics Assignment

Running head: ECONOMICS ASSIGNMENT 1
Economics Assignment
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ECONOMICS ASSIGNMENT 2
To fathom the industry for energy drinks, it is essential to understand what an energy
drink is and an energy drink is a carbonated beverage that has caffeine as the primary ingredient.
However, it may contain other components such as Taurine and Ginseng intended to raise the
consumer's energy levels. It has been archived that the production of mass-energy drinks began
in 1904 (Deegan, 2016). That energy drink turned out to be one of the most popular brands on
earth, Coca Cola. At that time, Coca Cola was the first drink that was advertised as an energy
booster, and one of its primary ingredients was cocaine. Before the launch of Coca-Cola, the
only stimulant drinks that were available were tea and coffee. However, over time the market for
energy drinks has changed dramatically, it is in 1987 that the first modern energy drink was
introduced in the market and until today, its manufacturer has continued dominating the market,
Red Bull.
New product-Red Bull Vito
Red Bull has been launching new products in the past decade and is yet to innovate new
flavors. Red Bull Vito is the new product line within their brand. One of the marketing objectives
is to recognize Red Bull Vito as a unique flavor with stevia syrup and has extra energy. This
brand also comes with several tastes, for instance, mango, lemon, apple, and citrus. This is to
cater to the tastes and preferences of different people; thus, it will assist the company serves a
broad market based on different flavors that it will serve. The primary objective is to encourage
the purchase of Red bull products. Thus, the launch of Red Bull Vito will increase brand loyalty
among the existing buyers who prefer consuming energy drinks and also among the upcoming
clients hence ensuring a lifetime product value. Red Bull Vito will be strategic in increasing the
number of consumers and make it an alternative beverage to regular products, thus drawing
consumers’ attention increasing the company’s share of the market.

ECONOMICS ASSIGNMENT 3
Red bull’s product diversification
Red bull compared to its competitors has a limited variety of products. This has turned
out to be a grave challenge due to the declining market share of the initial flavor energy drinks in
the market. Thus, Red Bull strategized and produced a limited product variety in the U.S. that
entailed three different flavors that is Red-cranberry, silver-lime, and blue-blueberry. Such new
products are still fresh in the market to assess their success as the launching of new products did
not go well in the past as a brand such as Red Bull Cola got discontinued.
PESTLE
Political
The industry for energy drinks has been under tight regulations and scrutiny following
incidents where Red Bull or other energy drinks have led to the loss of lives usually coupled with
consumption of alcohol (Dudovskiy, 2016). While such deaths are few and within acceptable
limits, they have gone further drawing attention from the media. It is the occurrence of such rare
incidences that have led to legislators to react by starting to restrict the sale of such drinks. Since
most of Red Bull’s political matters are embedded in the restrictive legislation, it would be
prudent to look at from the legal perspective.
Economic
The market for energy drinks has continued to expand and grow at two-digit figure pace
in the past decade. Such growth, however, remains unshaken by downturns and has gone a mile
further to outperform other comparable industries (Haseeb, 2017). Thus, this a great testimony
to the popularity of energy drinks mainly as they tend to be exorbitant compared to other
substitutes such as coffee and mineral beverages. The fascinating thing is that it would be
anticipated that due to the declining individual expenditure globally as a result of the 2008

ECONOMICS ASSIGNMENT 4
financial crash, the market for such energy drinks would decline, but that was not the case. It is a
fact that global figures seem to be impeding the growth of sales in developed economies that are
now way below the 10% mark, such statistics are high, and real growth for a product such as Red
Bull Vito in BRICS and the Middle East will be high.
Social
Companies in the energy drinks industry have an active role and platform where they are
super active on social media platforms such as Twitter and Facebook. Red Bulls, in particular, is
always mentioned in almost half of all energy drink associated tweets. Looking at this from the
social side perspective, energy drinks such as Red Bull Vito will perceived as cool based on the
extreme sports image and team sponsorships, they are seen taking part in across the globe
(Shakarishvili, 2016). It is such cool images that have helped companies such as Red Bull
become popular among clubbers, drivers and even students. However, energy drinks receive
criticisms through digital media such as blogs, particularly with regards to the deaths arising
from excessive consumption of energy drink combined with the spirits. As for students and
clubbers, the use of both alcohol and energy drink is a common practice aimed at generating
energy boost. Thus, such a practice is a double-edged sword for companies in the energy drinks
industry. Energy drink enterprises are also being affected by the ongoing general wellness trend
that has been gaining momentum for decades, and this has led to the launch of low carbonation
and sugar-free choices for instance Red Bull Vito.
Technological
The advent of technology has led to technological forces that impact on such an
environment and within the limits of improved manufacturing and transport abilities. Innovation
in the energy industry stems from product segmentation (Shakarishvili, 2016). However, the