Ans 2) The four dimensions of a product mix are: breath, length, depth, and consistency.

Red Bull is
currently dealing in three product lineups: Red Bull energy drinks, Red Bull Coca Cola, and Red Bull
shots. As far as breath is concerned, Red Bull has limited offering since it only deals in beverages or
drinks. In case of length, Red Bull is producing energy drinks, energy shots (amalgamation of energy and
sports drinks) and colas. This is still a small length compared to its competitors. In case of depth, Red
Bull has two different variants (sugar and sugar-free) within its shots and energy drink lineups. Lastly,
Red Bull has been quite successful in maintain the consistency of the product mix. All the products are
related to beverages, and two of these, energy drinks and energy shots, fall into the same niche
segment of functional drinks.

For existing product mix:

Firstly, consistency in the product lineup has been crucial for Red Bull. Since it has always marketed itself
to a niche market, instead of a mass one, and employed unconventional marketing techniques, the
consistency in its product line ups is justified for a myriad of reasons. Moreover, it has allowed the
company to maintain a certain market image and brand identity in the market. Its perceived value for
the customers has, therefore remained intact. It is seen as a premium brand for young, energetic
university and college students or young professionals who are seeking something in life. Red Bull has
tried complementing this image through all its different products, especially the shots and the energy
drinks. It has been this consistency that has ensured the position of Red Bull as a market leader in the
energy drinks segment. The brands is completely relatable to the market segment it serves; same cannot
be said of the other beverage companies that are serving a plethora of different market segments.
Furthermore, the smaller product mix has been easier to manage for Red Bull. It is because of this
reason that Red Bull carries a form of promotion that is consistent with all its products, for example,
sponsorship of extreme sports events or endorsement of athletes. The promotion and the product
lineups have collectively built a brand identity. Moreover, besides being easier to manage, the narrow
product lines are easier to introduce into new markets, especially as standardized products; this is
consistent with Red Bull’s expansionary plans.

Standardization of products, especially in case of Red Bull as it sells the same type of products in
different geographical markets, have a lot of different advantages. Firstly, it offers economies of scale.
Economies of scale translate into lower costs of production and marketing as a whole (Karter and Lee,
2010). Moreover, they also make up for a more efficient and leaner marketing structure. Secondly, they
also ensure quicker ROI because these are well established products entering newer markets.
Furthermore, due to the rich history and the inception of the product, the “made in” (2010) tag is
important in case of products like Red Bull’s. Overall, standardization is playing a certain role in Red
Bull’s expansionary plans, especially pertaining to its energy drinks segment.

Against existing Product mix:

The lack of longer length in case of Red Bull’s products had had begotten certain issues for the business
and its expansionary plans. While it has allowed Red Bull to maintain a certain distinct identity, it has
substantially hurt its opportunities for expansion. Red Bull had a ‘First Mover Advantage’ in case of
energy drinks, however, it delayed its entry in the cola beverages which was already occupied by strong,
well-established competitors like Coca Cola and Pepsi Co. Consequently, in case of colas, it was
considered a “me-too” follower product (Carter), which must have affected its overall distinct brand
identity. Moreover, similar situation has been created in the niche energy shots market which is
dominated by Coca Cola’s ‘Relentless’ brand. The Red Bull only released its amalgamation of energy
drink and sport drink in 2009. None of these reflect the same level of effectiveness, individuality and
competitiveness, as observed in the case of Red Bull’s core energy drinks. Furthermore, the shorter
length has consequently stalled its expansionary plans. Unfortunately, the existing product mix
contributes towards the 0.8% market share in the global soft drink market. Similarly, in the global
functional drinks market, Red Bull has 10.9% share since Red Bull has limited presence in segments
other than the energy drinks. It has failed to appeal to markets that use mass-produced drinks like Cola.
On the other hand, the company’s major competitors such as GlaxoSmithKline and Coca Cola, have a
large assortment of products. The diversification have allowed these companies to mitigate the overall
risks of entering new markets. They are, therefore, entering new markets and efficiently augmenting the
growth of their products. Red Bull’s reliance on a single core product line is also questionable. Its main
energy drinks are entering their maturity stage and in the absence of apt growth strategies, could lose
their existing worth. This has subsequently raised the risks for Red Bull and its expansionary strategy.

The arguments against the existing product mix are conspicuously stronger than the ones in its favor,
especially because Red Bull is now adopting an expansionary approach. In order to make up for low
market share in the Asian segments or the other product markets, Red Bull would have to diversify its
product line up. Its competitors have clearly been successful through diversification and Red Bull also
stands to gain profusely by innovatively entering newer markets and segments with broader and better-
planned marketing mix. However, it should do so in such a way that the consistency of its products and
brand identity remains intact.
Ans 3) Red Bull’s mode of entry into different markets have had mixed results. It successfully launched
its core energy drink products in North America and Western Europe; elsewhere, it might have not
received the same level of success. While it started in Austria, by 2006 it was selling drinks in almost 130
countries. It was not received well in France and Denmark due to their health concerns, related to
Taurine, and regulations. Unfortunately, Red Bull apparently did not analyze the rules and regulations
before expanding into the geographical European markets. Similarly, its Coke product was banned in
parts of Germany due to the presence of traces of cocaine in the drink. As of now, Red Bull uses the
same standardized products for all the markets which has its own set of problems concerning
international expansion. To reiterate, since standardization is being followed by Red Bull, it has not
considered the cultural or consumer differences between different geographical boundaries. Moreover,
the banning of Red Bull’s products in France and Denmark might also be attributed to the lack of
responsiveness to changes in local legislations, that comes with the lack of adaptation.

Its promotional techniques also remain same for all international markets. While promotional strategies,
like sponsoring extreme sports events, to establish a certain brand identity to which young people can
relate, it restricts the scope of the brand in an international arena. The target audience for Red Bull’s
products in North America might not be the same as the target audience in China. The audiences in
Asian or Arabian countries might not respond the same way to enabling of Hollywood celebrities, club
patrons or sponsoring of athletes. On a side note, Red Bull shells out a substantial portion of the
financial returns on promotion, way more than the portion of returns used by Coca Cola, a much bigger
competitor.

While these modes of entry have proven successful for Red Bull’s energy drinks segment, they have not
allowed it to expand with other product lineups as efficiently. For future recommendations, Red Bull
needs to be cognizant of the intricacies of international expansion. It needs to understand that for
successful global expansion, the brand needs to conduct scrupulous analysis of the markets it needs to
enter on an international scale. For example, a complete study of the macroenvironment and
microenvironment factors is crucial for the success of the business’s entrance. For example, Porter’s five
forces analysis can be a good indicator or selector of its mode of entry into the market. In case of Japan
being the firm’s strategic plan, from Porter’s five forces analysis, we can find out the threat of new
entrants into the market, bargaining power of suppliers, threat of substitute products, bargaining power
of buyers, and rivalry among existing competitors. All these factors would help in determining the right
type of growth strategy or market penetration strategy that Red Bull should adopt in case of Japan.
Other factors indispensable for the organization’s success are socio-economic, technological, legal,
political, competitive and ethical. Red Bull should consider all of these while entering newer markets.
Socio-economic factors hint at the consumer interests and their economic conditions. For example,
those markets which are more health conscious and self-aware would appreciate Red Bull’s decision of
displaying its ingredients on the cans. The economic factors also play an important role in strategic
decision making, especially pertaining to growth. For example, the per capita income can determine the
sales the brand would make or the pricing it would have to adopt in order to sell its products. Per capital
figure of energy drink consumption can also be good indicators in this regard. This shows how important
these markets would be for premium priced energy drinks. Red Bull has had the experience of
misreading the legal precautions in the past. The ban on company’s products in France and Denmark
reflect its failure to address the concerns of the local bodies or comply with the standards of these
countries. Similarly, the ban because of cocaine traces was due to disregard for ethical considerations.
Lastly, Red Bull should tweak its marketing mix to cater to the demands of the parochial markets. It
cannot expect the same formula to work for every market, especially when entering with new product
lineups (other than its core products). The pre-launch promotion might have to be carried out while
entering the markets where Red Bull does not have considerable presence. Moreover, bigger
distribution channels might have to be reached out in order to mass-sell the products, especially the
ones that have mass-markets e.g. Cola. Even the Market analysis reveals that “globally, supermarkets
and hypermarkets are the most significant distribution channel for functional drinks, with about 42% of
the market volume” (Carter). Therefore, they should be used by Red Bull to mass sell its products and
successfully enter the competitive markets. The competition’s standings and its mode of distribution
and marketing should be considered closely in case of Red Bull.