Product Market Potential and Diversification
A product line extension is an effective way to ensure brand competitiveness. Red Bull has been successful in the energy drink market, which can play a significant role in extending its product line. Newly introduced products under the Red Bull brand will likely penetrate the market easily, given Red Bull’s established reputation in the market (Khan et al., 2018). For a product line extension to be effective, a detailed understanding of the target market and its characteristics is essential, as well as understanding how to leverage the brand’s influence to penetrate the market.
Introducing coffee drinks will expand Red Bull’s product line to include energy and coffee-based offerings. Coffee has often been perceived as a natural energy drink and has given stiff competition to energy drinks. Coffee consumers often prefer the drink because it provides more energy than energy drinks (Samoggia & Riedel, 2019).
Therefore, there is already an existing market for coffee drinks, which will likely make it easier for the product to penetrate the market. The primary target market for the new coffee energy drink will be the consumers of Red Bull’s energy drink. Since coffee is often regarded as a substitute for energy drinks, many Red Bull competitors have little interest in diversifying their products to include coffee energy drinks. Therefore, this characteristic provides a thriving niche market for Red Bull’s energy drink.
By diversifying its product offerings to include different flavors of coffee, such as Cinnamon Latte, Café Mocha, and Blonde Roast Light, the company is expanding its target market to cater to various coffee consumers. The target market characteristics of these products include teens and adults aged 18 to 40 years. Most coffee consumers are college students and young adults who need to sustain their energy and stay alert to meet their daily operations (Samoggia & Riedel, 2019). Additionally, athletes and participants of other recreational activities are a significant potential market target for these products because they need to gain and sustain their energy. Therefore, a broader market for coffee energy drinks already exists, creating a foundation for the product’s success.
Branding and Product Positioning
Branding is one of the vital factors that determine a product’s success in the market. Since these coffee products are being introduced under Red Bull’s product line, they have a higher chance of penetrating the market easily due to the foundation established under the Red Bull brand. Teens and young adults form the primary audience of these products.
Young adults are significant consumers of energy drinks and coffee, making them the ideal target audience for the new Red Bull products. For branding to be effective, there must be a clear objective regarding introducing the new products in the market (Boisvert & Ashill, 2018). To convince the intended consumers to buy the product, the focus must be on the new benefits these products bring to the market. This is why product position is essential when branding coffee products.
Product positioning enables customers to perceive the product as their preferred choice. Product positioning is often influenced by the price of the product, its quality, and the benefits that make the product outstanding (Jeong & Maruyama, 2018). Therefore, Red Bull must consider the price of its new products to make them more affordable than those of other coffee brands.
Additionally, the company should ensure it outlines the benefits of using the new coffee energy drinks that other energy drinks or ordinary coffee drinks do not offer. Some benefits that should be explained include offering more energy than other drinks, sustaining energy for longer periods, and being suitable for consumption during both warm and cold weather conditions. Concerning the quality of the products, Red Bull should convince its intended audience that the product is made of more natural ingredients compared to its competitors.
Red Bull energy drinks’ success will likely significantly influence the branding of the new coffee drinks. Red Bull should capitalize on this success to convince its intended audience that the quality of its energy drinks will be replicated in its coffee drinks, offering the same experience. The Red Bull brand serves as a platform for the company to introduce its new products to potential customers. The company, therefore, enjoys significant leverage based on the positioning of its energy drink products.
Packaging Design and Sustainability
The deal packaging for the coffee energy drinks should consist of compostable materials to appeal to all consumers, including eco-conscious customers. This is essential to address environmental concerns that can negatively impact the product, potentially leading to lost customers (de Sousa et al., 2020). Therefore, the material should be biolistic and covered with cardboard to prevent the container from being weakened by the drink when it is incredibly hot. Additionally, coating the container with cardboard is essential to provide adequate insulation, reducing heat loss, and protecting the container holder from heat. The container should be the size of an ordinary cup to make it easier for consumers to carry around.
The outer cover of the container should bear the Red Bull brand with the iconic red and yellow logo. However, the remaining container should be covered in a dark blue color to make it appealing to the consumers. The dark color will also reduce heat loss, ensuring the drink stays hot for longer. The drink lid should be silver to complement the iconic colors of blue and silver associated with the Red Bull energy drink, making the whole container appear cohesive. Designing the containers in these colors will make the products more identifiable and differentiate them from other coffee drinks.
Market Strategies and Competitive Advantage
Red Bull should employ two primary strategies to achieve market success. Firstly, the company should focus on the differentiation strategy, which involves producing unique products that stand out in the market. It is often difficult to duplicate unique products, which can result in a company enjoying little competition and establishing itself as the leading brand in selling the product (Salazar-Ordóñez et al., 2018). Introducing coffee energy drinks with different flavors is ideal for differentiation since most Red Bull competitors have not ventured into producing such products. Therefore, the company should make the product as unique as possible to reduce the rate of duplication.
The second approach is the segmentation strategy. This plan involves serving the needs of different people with the same product (Zhao, 2020). Red Bull’s plan to introduce coffee energy drinks aims to cater to the needs of different consumers simultaneously. For instance, the coffee drinks will cater to the needs of both coffee and energy drink consumers. Some people enjoy coffee for its flavor, while others consume it for its health benefits. Producing such a product serves the needs of the two intended consumers.
These strategies will succeed because they align with the company’s objectives. Additionally, the strategies are easily implementable and aim to portray the company uniquely, making it stand out in the market. Furthermore, the strategies aim to bring the company closer to its consumers by enabling it to create products that appeal to the diverse needs of different consumer segments. To ensure the long-term success of the introduced products, Red Bull’s management should make the product as unique as possible to reduce competition from rivals who may want to duplicate it. The uniqueness of the product should align with the target consumers’ preferences, making it their preferred choice.
References
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Salazar-Ordóñez, M., Rodríguez-Entrena, M., Cabrera, E. R., & Henseler, J. (2018). Understanding product differentiation failures: The role of product knowledge and brand credence in olive oil markets. Food quality and preference, 68, 146-155. Web.
Samoggia, A., & Riedel, B. (2019). Consumers’ perceptions of coffee health benefits and motives for coffee consumption and purchasing. Nutrients, 11(3), 653. Web.
Zhao, X. (2020). Marketing Segmentation in the Consumer Product Industry. In E3S Web of Conferences (Vol. 218, p. 01027). EDP Sciences. Web.