Marketing and Management: Red Bull Herbal - PESTLE Analysis, STP, and Marketing Mix

This report analyzes the PESTLE analysis of Red Bull Herbal in the UK market, discusses the targeting and segmentation strategies, and explores the marketing mix of the product. It examines the political, economic, social, technological, legal, and environmental factors that affect Red Bull's operations in the UK. The report also highlights the target market and segmentation strategies used by Red Bull and discusses the positioning strategy adopted by the company. Additionally, it delves into the marketing mix of Red Bull Herbal, including product, place, promotion, and price.

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MARKETING AND MANAGEMENT
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Contents
1.0 Introduction...........................................................................................................................................3
2.0 About the new product..........................................................................................................................3
3.0 PESTLE analysis...................................................................................................................................4
3.1 Political factors..................................................................................................................................5
3.2 Economic environment......................................................................................................................5
3.3 Social environment............................................................................................................................5
3.4 Technological....................................................................................................................................6
3.5 Legal factors......................................................................................................................................6
3.6 Environmental factors........................................................................................................................7
4.0 STP........................................................................................................................................................7
4.1 Targeting...........................................................................................................................................7
4.2 Segmentation.....................................................................................................................................7
4.3 Positioning.........................................................................................................................................8
5.0 Marketing mix.......................................................................................................................................9
5.1 Product..............................................................................................................................................9
5.2 Place................................................................................................................................................10
5.3 Promotion........................................................................................................................................10
5.4 Price.................................................................................................................................................11
6.0 Conclusion...........................................................................................................................................11
References.................................................................................................................................................12

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1.0 Introduction
Dietrich Mateschitz, an Austrian entrepreneur, founded Red Bull Energy drink in 1980
and at the time was in partnership with Chaleo Yoovidhya. Red Bull sprung out of an inspiration
from an existing drink known as Krating Daeng that had been introduced in Thailand by Chaleo
Yoovidhya. However, Dietrich went further to modify the ingredients used in manufacturing the
energy drink, and the first Red Bull was sold in 1987 in Austria (Deegan, 2016). Currently, Red
Bull has a presence in more than 160 countries with more than 5 billion cans sold in 2015 across
the world (Shakarishvili, 2016). Red Bull has grown expanding to become the leading seller of
energy drink across the globe. Red Bull began as an energy drink that was consumed by Thai
truck drivers and workers and now is famous as the most preferred energy drink across the world
drawing customers ranging from sportsmen, youth, workaholics and now women and children
with the introduction of Red Bull Herbal. Initially, Red Bull was manufactured to target sports
people. However, due to the increasing demand, the company has invariably segmented its
market so that the drink can serve different groups. The report will analyze PESTLE analysis in
the UK market to ascertain the suitability of the UK energy drink market. Then, the report will
address the 4Ps used by Red Bull in connection to the new product, Red Bull Herbal and lastly
the conclusion that recommends the suitability of the new product in the UK market.
2.0 About the new product
The growing demand and concerns by the public on the need to have health conscious
products have led to a decline in the sales of energy drinks. Also, with regulations that ban the
use of caffeine in energy drinks has impacted negatively on the sale of Red Bull products.
However, following the launch of Red Bull herbal, all such concerns will be addressed amicably.
First and foremost, Red Bull Herbal is made using natural herbs blended with glucose, almond,
and citrus to give it desired taste. This drink lacks caffeine that has been banned initially in the

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UK market and even serves a large market that is women and children who have been previously
underrepresented in the past with regards to product suiting their tastes. However, with the
introduction of Red Bull Herbal, both women and children can comfortably consume such a
drink as it free from caffeine and is a zero-sugar drink. Such changes are due to the ongoing
regulations of the energy drink industry making it difficult for companies that fail to adhere to
such rules to operate efficiently.
The slogan adopted by Red Bull that it is, “the drink that gives you wings” is Red Bull.
Red Bull has continued using this slogan globally in promoting its energy drinks (Deegan, 2016).
The introduction of Red Bull herbal will make the brand not only among men who have been the
most significant group consuming the drink but also women and children will be part of the
consumers. This is because of health benefits associated with the energy drink as consumers will
now link Red Bull to health benefits. Red Bull herbal will be aiming to change the perceived
marketing to only opinion leaders and high-income individuals that have great lifestyles. Instead,
Red Bull Herbal will be for all irrespective of occupation, age or income (Deegan, 2016).
However, Red Bull will be the same as other Red Bull products that is it will come in two where
consumers will choose one with sugar or non-sugar. This is to support the company’s marketing
objectives that state that consumers are brought to the product as opposed to bringing the product
to the people. Red Bull Herbal will maintain the historical product mystique where consumers
will be made to feel special. The consumers will relate their experience with consuming Red Bull
herbal and adapt the values to the traits of Red Bull Herbal.
3.0 PESTLE analysis
The analysis of the UK using PESTLE tool seeks to address some factors that affect the
operation of a business in a country such as the UK. Some of these factors include political,
economic, social, technological and environmental aspects of the UK.

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3.1 Political factors
The political factors of a particular country have an immediate effect from the business
perspective over companies having operations in a country. In this context, the political stability
of a country such as the UK will have a direct effect on Red Bull’s operation (David, 2018).
Regulations regarding food and beverage adhere strictly in the UK and consumers in the UK are
aware of health aspects involved. For instance, the use of caffeine by companies as one of their
ingredients used in the production of energy drinks has been banned by the UK government. For
many years the government has been at the center of controlling the sales of energy drinks by
engaging in monitoring the utilization of some of what is considered as harmful ingredients in
the production of energy drinks (Dudovskiy, 2016). Hence, in a country such as the UK, the
political environment is stringent to ensure that the companies involved operate on legal grounds
and adhere to the safety and health standards already in place.
3.2 Economic environment
The world soft drink industry has been hailed for its significant contribution to the
development of energy drink companies which has led to the economic growth in the UK. For
instance, in the year 2009-2010, the economic growth rate of the UK was 7%, and this was
strategically important for Red Bull as it earned annual profits of about US$30 billion
(Dudovskiy, 2016). Red Bull is also ranked as the leading player in the UK market based on the
significant market share it holds in the energy drink industry. In 2012, Red Bull was the leading
company with regards to the growth of sales in the UK market as Red Bull recorded £214.5
billion. Thus, the economic conditions of a global market are vital for a company that wants to
maintain its sustainable place in the world energy drink industry.
3.3 Social environment
Several social elements are prioritized as being crucial for the success and operation of a
company (Gorse, 2010). With this regard in Red Bull’s case, as of today, consumers have

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conscious about their health awareness and the perceived social prestige. Energy drinks are
viewed as having positive and high esteemed social values. Red Bull products are recognized as
products of social prestige and are held in high esteem (Dudovskiy, 2016). Thus, in this angle,
people’s positive social perspective, particularly for energy products, has developed an
acceptable and opportunistic business environment enabling Red Bull to thrive in the long-run.
Luckily, the increasing worry by the consumers on health issues has created pressure over Red
Bull to initiate changes and product modification in its product offerings and is the reason for
Red Bull Herbal which is considered a health-conscious product.
3.4 Technological
It is a prerequisite that energy drink companies that aim at maintaining their sustainable
position in this market; they have to adopt new and emerging technologies perceived as
advanced technologies. (David, 2018) Red Bull in a bid to improve the efficiency of its
production facilities, has gone further to adopt highly advanced technologies enabling it to
remain as the dominant player in the market amidst other competitors in the market. For
instance, Red Bull uses the ‘wall to wall’ technology in its production in developing and
manufacturing the frozen bottle.
3.5 Legal factors
Several legal implications are critical that have led to the energy industry is more
regulated in the current period. In the UK, there are particular legal and ethical frameworks
established to ensure that the constituents involved in the whole process of manufacturing energy
drinks are healthy for consumers (Dudovskiy, 2016). Both the legal and regulatory authorities in
the UK have directly banned some of the essential ingredients such as caffeine and Taurin that
are crucial in the manufacturing of energy drinks. Also, from an environmental safety

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perspective, there are some laws and legal frameworks that impact Red Bull’s manufacturing,
packaging and distribution channels.
3.6 Environmental factors
Environmental concerns by people along with other macro business environmental
elements are listed as some of the vital business factors that impact the operations of a company
effectively (Haseeb, 2017). The increased concerns by people regarding safety among consumers
have led to companies such as Red Bull adopting the green production process. Some of the
changes can be seen by the consumer such as packaging of the product which reflects changes in
the company’s operation process. For instance, Red Bull utilizes recyclable cans and packaging
materials making their products environmentally friendly.
4.0 STP
4.1 Targeting
It is imperative for companies to target buyers and segment the market before deciding on
a particular positional strategy (Khakhaar, 2016). For instance, Red Bull defines its target
consumers by looking at the activities that entail consumption. The proper definition of what the
drink can provide with regards to benefits enables the brand to target consumers who identify
with the brand based on the benefits they perceive they can get from the drink. For instance, with
the Red Bull herbal, the consumers will relate the drink with the health benefits. Increased
concentration and more energy making it appeal to a wide audience of consumers compared to
the other brands. Red Bull herbal cuts across different genres are making it ideal particularly
with the ongoing health campaigns promoting healthy eating and lifestyle.
4.2 Segmentation
Understanding that all consumers are not identical, and the fact that the market is not
homogenous translates to successful segmentation of the market where consumers are divided
into clusters with an identical level of interest or group of needs (Arif, 2015). One of the clusters

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used to segment consumers is the lifestyle and forms the foundation of targeting Red Bull’s
consumers. Red Bull uses psychographic segmentation and is one of the most vital segmentation
strategies used by Red Bull. Most of the people who consume Red Bull are the young generation
particularly the youths aged between eighteen to above twenty. In many campaigns adopted by
Red Bull also target the youth. Students from higher institutions of learning mainly university get
involved continuously in events and activities by Red Bull aiming to create awareness of the
brand.
Based on Red Bull’s perspective, students are prioritized to be entry point consumers as
they are ones that become potential customers in the future. For instance, the student brand
manager and wing team member programs are projects utilized by Red Bull to encourage brand
promotion through the use of entry point consumers (Khakhaar, 2016). With the launch of Red
Bull Herbal, the company will be better positioned to segment the product to health-conscious
consumers. Sugar-free and zero caffeine customers echo such marketing efforts. Such strategic
marketing plans have enabled Red Bull to position its brands uniquely in a bid to win customers
trust and heart (Dudovskiy, 2016). With the entry of competitors such as Monster and Cloud 9 in
the market has not impacted the growth of Red Bull brands in any way. Red Bull continues to
dominate the market and is anticipated to keep doing so in the future.
4.3 Positioning
The positioning strategy adopted by Red Bull is primarily embedded in the company’s
image and product differentiation (Deegan, 2016). It has been identified that Red Bull’s brand
image is perhaps one of the best competitive advantages that the company has in place so far.
Through sponsoring sporting and racing events, Red Bull’s brand has strongly been linked to
mental and physical performance. The use of media through advertising sends a reminder
message to both existing and potential consumers that Red Bull vitalizes both the body and the

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mind. For decades, Red Bull has managed to develop a brand image associated with coolness
and being a favorite drink needed in today’s busy and active lifestyle. It is through building the
right images that Red Bull has managed to communicate the benefits attached to its products,
thus enabling it to establish product differentiation as a premium beverage with premium pricing.
It is crucial to acknowledge that a premium product commands a premium service and
distribution channel (Deegan, 2016). Red Bull has made it convenient for its customers not only
in supermarkets and vending machine but can also obtain products from sponsored sports events,
nightclub, and bars. Close to none of the competitors offer customers their products in Red
Bull’s prime locations. University students recruited in Red Bull events serving in positions such
as brand managers are provided with free drinks to distribute during parties and social events.
This has not only helped Red Bull differentiate its brand on a personal level but also as a cheap
and effective method for Red Bull to conduct its market research.
5.0 Marketing mix
5.1 Product
` The idea for Red Bull sprung from Krating Daeng a non-carbonated energy drink that has
its origins in Thailand (Mbaskool, 2011). Red Bull Herbal has some ingredients that are directly
obtained from natural plants and others similar to Red Bull’s other products to accommodate
Western tastes. The product mix of Red bull Herbal entails vitamin Calcium, sucrose, glucose,
almonds and natural herbs mainly needed by workaholics, sports people, youth, women, and
children. Red Bull herbal also comes with sugar free brand based on a recent trend where the
young people segment wants sugar free drinks, and this brand comes with aspartame and
acesulfame K replacing sucrose and glucose. Red Bull Herbal comes with a tall-green with two
red bulls on the front phase.

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5.2 Place
In 2015, it was reported that Red Bull had been successful in selling more than 5 billion
cans globally and this was attributed to the wide distribution channel globally. The availability of
red bull in convenient places such as supermarkets, hypermarkets, retail outlets, bars, night clubs,
and restaurants has made it a favorite brand among consumers (Mbaskool, 2011). Red Bull also
has exclusive refrigerators that are strategically located in grocery shopping centers and bars, and
this attracts customers to purchase an energy drink when they visit such places. The primary
motive of selling Red Bull at night clubs and bars is mainly because people prefer mixing it with
it liquor to add some flavor or perhaps it will help them stimulated all through the night as they
party late into the night. However, in places such as supermarkets and convenience stores, Red
Bull is placed along other competitive energy drinks giving the buyers a wide array of products
to choose from.
5.3 Promotion
The tag ‘Red Bull gives you wings’ has enabled Red Bull to associate its brand and target
sports people with such a tagline. With the launch Red Bull Herbal, more people are going to be
drawn on board as such a drink now goes further to reaching an audience that was not served and
well represented the women and children. Also, due to the large customer base, Red Bull can
organize many sports events sponsoring both teams and events. Some of the sponsored events
include mountain biking, windsurfing, skating, formula one races and Red Bull Foxhunt among
others. Red Bull also endorses some sports athletes and celebrities (Mbaskool, 2011). Apart from
sports, Red Bull have Red Bull House of Art that promotes and motivates artists to exhibit their
art for three months in their exhibitions. Red Bull also has a broadcasting channel, that is Red
Bull Television which is available on tablets, PCs, smartphones and gaming consoles that airs
different music festivals, films, videos, and performances. The company has gone further to own

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and run an online merchandise store and magazines featuring outstanding sportspersons. It is
through such promotional activities that Red Bull targets consumers as it wants customers to
remember their brand anytime, they see or hear Red Bull, and this has been effective in
increasing Red Bull’s customer base. Thus, this covers the marketing mix used by Red Bull.
5.4 Price
Considering the price of Red Bull and other energy drinks such as monster, whereas Red
Bull is retailing at £4 for 250ml, monster retails at £ 1.25 for 100ml. Red Bull is twice as much
higher than Monster, yet both are energy drinks. Also comparing Red Bull to Lucozade,
Lucozade 350 ml retails at £ 2 (Mbaskool, 2011). The reason behind such high prices for Red
bull is because Red Bull employs the premium pricing strategy. The premium pricing strategy
maintains the price of a product artificially high promoting favorable perceptions among
consumers using price as the only parameter to portray exclusivity and premium standards. Red
Bull uses this strategy to develop a premium brand and represent the uniqueness of its brand.
With the introduction of Red Bull Herbal, the company will be better positioned to position this
brand as part of individuals’ lifestyle that involves daily activities, for instance, sports, study, and
leisure.
6.0 Conclusion
It is evident that the UK market still has opportunities for the growth of the energy drink
industry based on health-conscious awareness. The launch of Red Bull Herbal will give Red bull
a competitive edge over its competitor as consumers will attach the health benefits associated
with such a drink. Also, Red Bull will be better positioned to attract the untapped market made
of women and children who feared to take the drink due to caffeine and other ingredients that
were thought to be unhealthy. However, with Red Bull Herbal both women and children will
have something to enjoy.

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References
Adamkasi, 2017. Porter Analysis of Red Bull. [Online]
Available at: https://www.porteranalysis.com/porter-five-forces-analysis-porter-analysis-of-red-
bull/
Arif, B., 2015. Segmentation of Red Bull. [Online]
Available at: https://www.slideshare.net/bilalarifchaudhary/segmentation-of-red-bull
[Accessed 3 April 2019].
David, J., 2018. PESTLE Analysis in the UK. [Online]
Available at: https://www.howandwhat.net/pestel-analysis-uk/
[Accessed 3 April 2019].
Deegan, S., 2016. Strategic Marketing:An analysis of Red Bull. [Online]
Available at: https://www.scribd.com/doc/224238148/A-Global-Strategic-Marketing-Analysis-
of-Red-Bull-the-Energy-Drinks-Industry
Dudovskiy, J., 2016. Red Bull PESTEL Analysis. [Online]
Available at: https://research-methodology.net/red-bull-pestel-analysis/
Dudovskiy, J., 2016. Red Bull Segmentation, Targeting and Positioning. [Online]
Available at: https://research-methodology.net/red-bull-segmentation-targeting-positioning/
[Accessed 3 April 2019].
Gorse, S., 2010. Entreprenuership through sports marketing. a case analysis of red bull in sports,
august, 3(4), pp. 348-347.

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Haseeb, 2017. PESTLE Analysis of Red Bull. [Online]
Available at: http://marketingdawn.com/pestle-analysis-of-red-bull/
Khakhaar, S., 2016. STP giving wings to Red Bull!. [Online]
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[Accessed 3 April 2019].
Lenst, 2013. Red Bull vs Burn. [Online]
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Available at: https://www.mbaskool.com/marketing-mix/products/16734-red-bull.html
[Accessed 6 December 2018].
Shakarishvili, S., 2016. Red Bull Analysis. [Online]
Available at: https://www.slideshare.net/ShotaShakarishvili/redbullanalysis419