International Marketing Research: Red Bull in South Africa

This report delves into Red Bull's marketing strategies within the South African market. It begins with an introduction to the macro-environmental factors influencing business operations, including tax regimes and rates on sugar-sweetened beverages, and government programs designed to attract foreign investment. The report then introduces Red Bull, detailing its origins and global presence, before analyzing its entry strategy into South Africa in 1997, focusing on its seeding program and early marketing efforts. A significant portion of the report is dedicated to examining Red Bull's marketing mix, including product variations (sugar-free, mixers), competitive pricing, extensive distribution strategies, and promotional tactics. The promotional mix includes an analysis of above-the-line, below-the-line, and digital marketing. The report emphasizes Red Bull’s sponsorship of events and point-of-purchase marketing, highlighting how these tactics contribute to brand awareness and market share growth. The report concludes with a summary of the key findings and implications of Red Bull's marketing approach in South Africa. The report provides a comprehensive overview of Red Bull's marketing strategies, including the marketing mix and its impact on the company's success.

International marketing research 0
International marketing research
Student’s Name
10/9/2019

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Contents
Introduction................................................................................................................................2
Tax Regimes and Rates..............................................................................................................2
Programmes to attract the foreign companies............................................................................3
Introduction of company............................................................................................................4
Entry of Red Bull in South Africa..............................................................................................5
Marketing Mix of Red Bull........................................................................................................7
Product Mix............................................................................................................................7
Price Mix................................................................................................................................7
Place Mix................................................................................................................................8
Promotion Mix........................................................................................................................8
Conclusion..................................................................................................................................9
References................................................................................................................................10

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Introduction
In order to manage the complexities in the business environment, it becomes imperative for
the companies to analyse the macro-environmental factors that majorly affects the
functioning of the company. These factors include tax rates and regimes and socio-cultural
factors. It also includes the restrictions and the policies designed by the government to
control the operations of the business. The additional paragraphs of the report will include the
tax rates and regimes in South Africa for the energy drink business and will also highlight the
programmes to attract foreign companies. It will also cover the marketing mix and current
operations of Red Bull in South Africa (Bosire et al, 2019).
Tax Regimes and Rates
It is recorded that South Africa suffers from a high rate of diseases which includes diabetes
and other non-communicable diseases. The population of South Africa suffers from obesity
and turning into a major concern. This, in turn, creates pressure on the government to lessen
the ingestion of sugary drinks and improve the health and wellbeing of the citizens. In
consideration of the above issue, the government has imposed 20 % on sugar-sweetened
beverages (Chutel, 2019).
This tax is imposed on the drinks that contain additional caloric sweeteners such as high
fructose corn syrup, sucrose or the fruit–juice essences. It includes fruit drinks, energy drinks,
sweetened ice tea, soft drinks and lemonade. The tax policy does not consider the beverages
that contain intrinsic sugars. A tax rate of 2.29 cents is imposed at per gram of sugar. It is
analysed that 20% price increase on sugar-sweetened beverages will directly impact the

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consumption and purchases and will decrease the obesity by 3.8% in men and 2.4% in
females (Republic of South Africa, 2018).
The imposition of the sugar-sweetened tax majorly affects the sales of the company because
it develops the need to increase the cost of the energy drinks and will also lead to a loss of
employees. The government will impose a higher tax rate on the producers who does not
apply nutritional labelling by assuming higher levels of sugar to move the producers towards
nutritional labelling (Arthur, 2018).
Programmes to attract foreign companies
In consideration of the beverage industry, South Africa is considered as a country that has
huge market potential due to the growing middle-class population and consists of the affluent
customer base. It is considered as a region’s main manufacturing centre and is a foremost
service destination. The country is well known for its world-class infrastructure and
accessibility (South Africa Investment Conference, 2018).
The government has focused on designing various programmes that help in delivering the
most promising emerging market that offers an exclusive amalgamation of developed
economic infrastructure and an emerging market economy. The country is gifted with the
progressive financial market structure which in turn creates the opportunity for the foreign
companies to invest in the countries that have a stable political environment and transparent
legal system. The country attracts foreign investors through its availability of vast natural
resources and also has the advantage of the large educated and relatively cheaper workforce.
The government imposes better trade policies that improve the business environment (DBSA,
2013).

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Considering the above, the county has implemented a national infrastructure plan in the year
2012 to transform the economic landscape and strengthen service delivery. The
administration has planned to capitalize R827 billion to build new infrastructure for faster
economic growth (South Africa Investment Conference, 2018).
The department of trade and industry offers a wide range of schemes ranging from tax
allowances to support innovative companies. Its 121 tax allowance is designed to provide the
capital investment and training to the industries that use unexploited manufacturing
possessions or advancements the current industrial projects. Another programme that is
developed is Agro-Processing Support Scheme that provides supports to the agri-business
enterprises to encourage the investment and the growth of the natural resources (Santander,
2019).
The government has also developed export marketing and investment assistance (EMIA)
scheme under which it grows the export market by partially compensating the exporters for
expenses acquired in concern of events meant at emerging export marketplace for South
African product and services and to recruit new foreign direct asset into South Africa. Such
programmes and schemes and the support from the government encourage the foreign
investors to capitalize in South Africa and attain the incentives for the growth of the business
(Nordea, 2016).
Introduction of company
Red Bull is an Austrian corporation that produces Red Bull energy drink in 171 countries. It
was originated by Dietrich Mateschitz in the year 1987. The headquarters of the company is
situated in Fuschl am See Austria. The corporation enjoys strong brand positioning and
majorly targets young urban professionals through the development of various sports and

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entertainment-based advertising promotions. The company currently employs 12, 239
employees, and is aiming the central market of Western Europe and the USA and has a
growth market in the Far East. The company has currently sold 6.8 billion cans. The revenue
earned by the company in the year 2017 $7.391 billion (RedBull, 2019).
The company mainly targets young urban professionals and uses viral marketing to increase
brand awareness. It sponsors a number of extreme sports events to make the motto apparent
that states “Red Bull Give You Wing” that reflects that amount of energy the beverage
provides. The company focuses on engaging the customers and makes them feel energetic. Its
strategy on aligning the extreme sports events with the selling of edgy products has enabled
the firm to become the market leader and develop strong positioning (RedBull, 2019).
The entry of Red Bull in South Africa
Red Bull entered South Africa in the year 1997. The company focused on entering into the
new market over its seeding program under which it micro-targeted the shops, stores, clubs to
enable cultural elite and then focused on influencing the decision of the customers. It also
targeted opinion leaders who influence the decisions of the customers. It targeted sports
athletes and entertainment celebrities to influence the buying behaviour of the target audience
(Darden Business Publishing. 2011).
Considering the limited availability of the resources, Red Bull focused on using word of
mouth promotion and also used pre-marketing under which it created events to increase brand
awareness among the South African millennials. Through sponsoring of the events the
company tapped the market and entered into South Africa. The seeding programme allowed
the company to create brand awareness by making the product available at the convenience

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and the grocery stores. This testing method helped the company in analysing the preferences
of the customers (E. Kunz, Elsasser and Santomier, 2016).
In order to increase its market share in South Africa, the company focused on making
strategic and marketing changes. It focused on shifting from word-of-mouth to leveraging of
largest beverage channels for selling the products. The company focused on developing the
new advertising strategies that concentrated on billboards rather than electronic media. To
increase the brand awareness the company created various sponsored events and shifted to
extensive distribution through distributing the products through online and providing the free
samples at the sports events to influence the buying behaviour of the customers. The
company created the sampling campaigns at the concerts, festivals and sports events to
capture the market share and boost the sales of the company (Red Bull Case, 2015).
The event and sport marketing played a major role in boosting the sales of the company. It
allowed engaging the customers and the company has sponsored the individual athletes to
drive the energy among the customers and helped in creating high brand recognition. It also
used point-of-purchase marketing by developing miniature glass refrigerators symbolised by
the logo of the brand. The company has place these refrigerators at bars, convince stores,
shops, office building for creating brand awareness and stimulate the behaviour of
consumers. To manage the fierce competition the company has managed to add the flavours
and provides sugar-free drinks considering the emerging trend among the millennials. Prior to
mid-1990s, the company has made various products and the marketing innovation for
providing a high-quality product and allowing the company to become the market leader. The
company has shifted towards buzz marketing strategy to capture the millennials of South
Africa (Red Bull Case, 2015).

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Marketing Mix of Red Bull
Product Mix
The notion of Red Bull came from krating Daeng which is a non-carbonated energy drink
that was originated in Thailand. This energy drink encloses glucose, sucrose, caffeine, B
Vitamins and Taurine. The company also provides sugar-free variation known as Red Bull
Sugar-Free which comprises aspartame and acesulfame to target the health-conscious
customers. The energy drink is famous and is served in blue-silver cans with two red bull
logo on the front of the can. The different flavours of Red Bull include blueberry, coconut,
kiwi, tropical fruits and cranberry. In order to serve the needs of the millennials in South
Africa, the company has offered Red Bull Mixers under which it dilutes the drinks and lowers
the volume of alcohol. This has allowed the company to shift the customer’s interest in the
energy drink and has helped in the growth of the company (Samson and Sheela, 2016).
Price Mix
The price mix is considered as an important element for the development of the market share.
In order to grow the market share the company competitive pricing strategy under which the
company sets the price in accordance with the competition. It is analysed that the main
competitors in South Africa include Monster and Rockstar. Apart from fierce competition the
company enjoys strong market positioning and enjoys premium prices for its products. The
consumers in South Africa prefer to buy the product in bulk at the premium prices which in
turn increases the market share of Red Bull (Sinha, J.I. and Foscht, 2016).
The company applies a premium pricing strategy because it delivers high-quality products
and creates events that increase awareness among the customers. This allows the company to
be the market leader and sustain its competitive advantage over its players. It is analysed that

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Red Bull has become the first choice for the customers due to its addition in flavours and
delivering a quality product (Sinha, J.I. and Foscht, 2016).
Place Mix
The company operates an extensive distribution strategy and makes the product available at
the supermarket chains, convince stores and retail outlets for the increased availability of the
products. In order to increase the sales, the company emphasize on selling it produces in the
sponsored events and also sells its product in casinos and night club bars. The undertaking of
sports events allows the company to distribute its product and creates high brand awareness
(Kunz, Elsasser and Santomier, 2016).
The company has developed exclusive refrigerators for storing the product at the grocery
stores and has also expanded its market share through online distribution. The consumers get
online availability in bulks or single making. Currently, the company is able to sell 6.8 billion
cans through the adoption of the extensive distribution strategy and increasing the availability
of the produce (Kunz, Elsasser and Santomier, 2016).
Promotion Mix
This mix is used for increasing brand awareness and majorly contributes towards the
increased market share. Red Bull emphasizes huge promotion and spent millions of dollars to
increase brand awareness. It uses above the line, below the line and the digital channels to
endorse the product. In order to capture the target audience, the company publishes awesome
content and also creates colossal publicity stunts to drive the energy among the audience and
influencing them towards the product (Asiedu, 2016).
It focuses on creating and sponsoring of events by associating the products with the things
that the audience loves. The sponsored events are considered as the major source of

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promotion of the brand. The company uses storytelling to capture the interest of the target
audience and also allows the company to maintain the loyalty of the customers. It creates
various sports events which include mountain biking, skating, Formula 1, Red Bull Stratos,
Red Bull Battle Grounds, Red Bull Cape Fear, Red Bull BC One, Red Bull Foxhunt, BMX,
motocross, windsurfing, surfing etc. The company also has Red Bull TV at laptops,
computers, tablets airing various performance videos, shows to engage the customers and
aids the company in attaining during brand recognition (Maota, 2011).
Conclusion
From the above discussion, it is crucial to note that the population of South Africa suffers
from the problem of obesity and various incommunicable diseases. Considering the above
fact, the government of South Africa has imposed 20 % tax on sugary beverages and has
developed the need for the companies to reduce the sugar levels and apply nutritional
labelling on the products. It is also recorded that the government of South Africa has
developed various incentives and programmes to attract foreign companies and encourage the
growth of the country.
It is analysed from the above that Red Bull has become the market leader in South Africa
through the adoption of extensive distribution and marketing strategies and providing a high-
quality product. It has allowed the company to charge premium prices and expand its market
share. The company organizes various sports events to drive energy and stimulate the buying
behaviour of the customers.

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References
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https://www.beveragedaily.com/Article/2018/04/03/South-Africa-introduces-sugar-tax
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Bosire, E.N., Stacey, N., Mukoma, G., Tugendhaft, A., Hofman, K. and Norris, S.A., (2019)
Attitudes and perceptions among urban South Africans towards sugar-sweetened beverages
and taxation. Public health nutrition, pp.1-10.
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E. Kunz, R., Elsasser, F. and Santomier, J., (2016) Sport-related branded entertainment: the
Red Bull phenomenon. Sport, Business and Management: An International Journal, 6(5),
pp.520-541.

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Kunz, R., Elsasser, F. and Santomier, J., (2016) Sport, Business and Management: An
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[Accessed 9/10/19].

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