Comparative Analysis of the Promotional Strategies for Red Bull and Coca-Cola Proposal

Introduction

Organisations deploy promotion as a technique of moving their products and services into the market. Technically, promotion refers to “the advancement of a product, idea, or point of view through publicity and or advertising” (Kurtz 2010, p.13). It has the repercussion of increasing demand of the products and hence the sale volume (Slater & Olson 2001, p.1055: Narasimhan 1990, p.243).

This paper proposes a project entangling conducting a comparative analysis of the promotional techniques that are deployed by Coca-Cola and Red Bull to promote their energy drinks. The choice of this area of research is influenced by the revelation that both companies are ideally engaging in competitive promotional techniques.

For instance, Coca Cola has resulted to creating awareness of its large pool of products through sports promotions such as the sponsoring of Olympics games. Much similar to this strategy, Red Bull considers and has committed a large portion of its profits in the past in sponsoring sporting activities that cause hefty amusements such as acrobatic and street skateboarding shows and others. Red bull is also a leading sponsor of formula 1 competition while Coca-Cola is also considering sponsoring the same competitions (Sylt 2012, Para. 3).

With this competition in promotional techniques deployed by both companies to push their energy drinks into the market in mind, the main question to be answered by the proposed research project is how effective these techniques are in terms of enabling both companies to capture and retain their market shares for their energy drinks.

Aims and objectives

The objectives of the research are to

1. Analyze comparatively the promotional techniques that are deployed by both Red Bull and Coca-Cola to win markets share for their energy drinks globally.
2. Use the information acquired from the analysis to explain the success of both Red Bull and Coca-Cola in placing and positioning their energy drinks products in a manner that out powers their competitors.
3. However, the main aim of the project is to recommend stronger promotional strategic idea to Coca Cola’s ‘Relentless’ as a good competitor in the market, as Relentless is far away from Red Bull’s promotional strategies

Literature Review

Various forms of competition have prompted myriads of organisations that are aiming at being globally competitive to seek new methods of marketing their products (Freimer & Horsky 2008, p.799). “Competitive advantage is secured through an intelligent identification and satisfaction of customers’ needs better than competitors and sustenance of customers’ satisfaction through better customer service tools” (Obasan & Soyebo 2012, p.1).

In the attempt to acquire requisite responses from the potential customers, marketers deploy a myriad of tools. These tools are termed as marketing mix. McCarthy (1999) coined and used P’s to describe these marketing mixes in which he argues that the umbrella of the marketing mix comprises the price, promotion, and product, and place (p.24).

With the appropriate combination of these elements, an organisation can develop a strategy that will enable it reach large numbers of people within the target segments (Shannon1996, p.57). However, in the determination of these mixes, the time through which changes can be effected is crucial.

In this end, Obasan and Soyebo (2012) assert, “Typically, a firm can change its price, sales-force size, and advertising expenditures in the short run” (p.2). On the other hand, an organisation will have to take a lot of time to create new products. Consistent with this argument, Obasan and Soyebo (2012) reckon, “firms typically make fewer period-to-period marketing-mix changes in the short run than the number of marketing-mix decision variables might suggest” (p.2).

Among the four 4P’s, promotion (communication) is the element of the marketing mix principally aimed at helping to win a market share for a company. Products can be promoted in valid ways, which are realised through a variety of media options. With regard to Kurtz (2010), “promoters use the internet advertisement, special events, endorsements, and newspapers to advertise their products” (p.67).

Tantamount to this claim, both Coca-Cola and Red Bull have embraced various media to promote their energy drinks. For instance, “from localised marketed adaptation, Red Bull looks to standardise its marketing strategies, advertising, and image through communication in extreme sports, as this is consistent worldwide” (Louvet 2011, Para.16).

This strategy could be incredibly effective in enabling the company to hike its sales for Red bull’s energy drink. In most instances, the sporting games are normally watched across the globe. According to Louvet’s (2011) insight, “Red Bull’s innovative communication strategy aims to invest massively (15% of its turnover every year) in sponsoring athletes and even entire teams in specific sports, which offer dramatic shows, which are watched all over the planet” (Para.17).

This will consume an enormous portion of Red Bull’s profits. Therefore, the proposed research will focus on evaluating whether such a strategy is worthy. In case of the Coca-Cola Company, the research will investigate the strategies put in place by the company to sponsoring sports as a mechanism of ensuring that its marketing campaigns for her energy drinks, particularly ‘Relentless’, reach an incredibly large number of people.

This quest is arrived at through consideration of Malcolm‘s argument that Coca-Cola utilises the Olympics games and other sporting events to ruthlessly promote her energy products. Additionally, Coca-Cola Company argues, “As one of the longest continuous sponsors of the Olympic Movement, we are proud that we are able to use our sponsorship to enable millions of people to experience the Games…we have a valid role to play” (Malcolm 2012, Para.8).

In the same light, it is also widely conceivable that, without sponsorships, it becomes immensely hard for sportsmen and sports women to display their talents in the international games. Indeed, this stands out as the trick behind Red Bull’s strategic promotion decisions to capitalise on sponsoring sporting activities that cause amusements, which attract large number consumers for her Red bull energy drink (Gerhard 2004, p.8).

Now, it will be paramount to evaluate whether Coca Cola’s ‘Relentless’ strategy and Red Bull’s promotional tactics rest on platforms of marketing by conducting an intensive research on the mechanisms deployed by both companies to push ‘Relentless’ and Red bull to the market.

The discussions above establish similarities between the promotional techniques of both Red Bull and Coca-Cola as the basis for conducting a research on the effectiveness of the marketing/promotional techniques by both companies. One of the phenomena and iconic marketing strategies of the Red Bull that distinguishes it from the ‘Relentless’ promotional techniques adopted by Coca-Cola is the street promotional strategy.

As Louvet (2011) reckons, this is a promotional strategy aimed at ensuring that the company remains close to the consumers as much as possible (Para. 4). Essentially, the promotional strategy involves advertising through a ‘wings team’ whose main objective is to create close relationships with the consumers so that they can discover Red Bull’s product.

The ‘wings team’ also “talks with consumers about this controversial product conveying the information from consumers to the company about their appreciation or dissatisfaction with the product” (Louvet 2011, Para.6). In the context of this research, the question will be how effective the technique is in out powering competing products such as those of the Coca-Cola Company. More often than not, the ‘wings team’ comprises beautiful women.

However, as argued before, Red Bull is a globalising company much like Coca-Cola. Consequently, in its street promotional strategy, how does Red Bull counter cultural conflicts especially in nations like those located in the Middle East, which are opposed to portrayal of beautiful women as representation of products quality?

Opposed to Coca-Cola’s ‘Relentless’ promotional strategies, Red Bull argues that the most substantive methodology of making sure that her Red bull energy drink product is close to consumers is by hiring consumers to execute promotional campaigns. Consequently, the company appoints students as brand managers in colleges and universities.

According to Louvet (2011), the main roles of the students’ brands managers are “to ensure that Red Bull is present at every strategic moment in the students’ social calendar: integration week-end, sportive events, and big parties” (Para.9). However, both companies spend incredible amounts of their money in social media, TV, and other means of advertisements.

CSR is also an enormous mechanism that is used to bring the products of both Red bull and Coca Cola closer to the consumers. For instance, Kumar (2011) reckons, “the current promotions through CSR include “Support my school” campaign with NDTV” (p.347).

The question whose response is sought by the proposal with regard to these arguments by conducting a research on the promotional techniques for Red bull and Coca Cola is how both companies quantify the magnitudes of financial commitment in any of the above cited valid approaches used to promote Red bull and Coca Cola.

Research Methodology

This project utilises two approaches to garner data. The first approach entangles secondary research while the second approach encompasses conducting a primary research. For the first approach, a literature review is completed on the manner in which both Red Bull and Coca-Cola have been promoting i.e. branding, messaging, and positioning Red bull and Coca Cola.

The effectiveness of these approaches in increasing sales volumes of the organisations’ products (Red bull and Coca Cola) is evaluated in the context of the existing body of knowledge on effectiveness of various promotional techniques. In the second instance, the research paper interviews sales managers of both companies in various different outlets for each company’s cited products above.

The interview questions focus on areas such as how both companies carry out their market segmentation, how they combine their 4Ps to realise an effective marketing strategy, and methods of marketing communication they deploy. The methods reflected in the interview questions include advertising i.e. Sport Marketing and TV/Cinema.

They also include sales promotion such as loyalty and incentives besides public relations such as events, sponsorships, sports-clothes, relationships, and personal selling. Further, they include experimental marketing such as exhibitions. Direct Marketing techniques such as packaging design and sampling are also considered.

Pricing strategies are also incorporated together with digital marketing techniques, which include company websites, social media such as Facebook, twitter and YouTube. To back up the information garnered from the interview questions, an analysis of the sales of Red bull and Coca Cola is conducted.

How to gain access to stakeholders

To gain access to the necessary stakeholders of the organisations to interview them, calls will be made to book for an interview with them. Since the research must be done in the context of the time frameworks of both organisations, the researcher will fix interview times that are consistent with the time programs of the person to be interviewed.

Problems: likely problems, limitations, and methods of resolution

Every research method has its advantage sand disadvantages (Wilson 2010, p.56: Bryman & Bell 2007, p.31). From one end, this research garners data using secondary means of data collection. This introduces a major problem articulated to the reliability of the data in terms of the data’s ability to reflect an up-to-date situation of the companies under scrutiny.

However, this problem is mitigated by deploying primary means of data collection to ensure that up-to-date information is acquired. For this purpose, direct interviews are used to collect the primary data. Unfortunately, problems associated with direct interviews are introduced.

One of the major challenges is the unwillingness and the ability of the interviewee to cooperate fully with the study. Since the major problems caused by lack of cooperation in many interviews are related to the perception that the interviewer consumes the interviewees’ time meant to carry out organisational work (Wilson 2010, p.91), conducting research as per prior arrangements with the interviewees helps to mitigate the problem.

Project Plan

In any project, time is required to prepare for the interviews and or for arranging on how the data will be analysed among other activities. This research will be completed within three months. The table below shows an exclusive plan for all the activities of the research.

Time schedule for the research

Conclusion

This paper is a proposal that seeks to comparatively analyse the promotion techniques that are deployed by Red Bull and Coca-Cola Company to promote their energy drinks into the market. Many organisations consider introducing new products as ample mechanisms of improving the competitiveness of the organisations.

However, drawing from the literature review, this is not always the case. While Coca-Cola Company has introduced many energy drinks products to meet the needs of its customers, Red Bull on the other hand has managed to secure an ample share of the energy drinks’ market through only one product (Red bull).

One of the critical similarities is that the companies promote sporting activities for instance Olympics for the case of Coca Cola and street skateboarding, ski and formula 1 for the case of Red Bull, as some of the strategies for displaying their products (Red bull and Coca Cola) to the entire world.

In the paper, a research is proposed to comparatively analyse the promotional strategies for Red bull and Coca Cola coupled with effectiveness of each of the strategies. The main aim was to to recommend a strong promotion strategic idea to Coca Cola’s Relentless to be a good competitor in the market, as it is currently far away from Red Bull’s strategies.

References

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Sylt, C 2012, Formula 1 – Business: Coca-Cola favors energy drinks brand for sponsorship. Web.

Wilson, J 2010, Essentials of Business Research: A Guide to doing your Research Project, Sage, Thousand Oaks, CA.