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1 Marketing Proposal C212 Western Governors University January 23, 2024

2 A1: New Products and/or Services Red Bull is one of the greatest beverage companies in the world. Its iconic blue and silver can has become a symbol of vitality and energy. The catchy phrase “Red Bull gives you wings!” is a perfect image of what the company wants you to believe it can do for you – so much energy you can fly. Red Bull was established in 1984 and launched its first energy drink in 987, making it a pioneer in the global energy drink market. The two new products will be a pre-workout energy drink and non-alcoholic mixers for alcoholic or non-alcoholic drinks. Red Bull is headquartered in a small Austrian village, Fuschi am See, near Salzburg. Operating in over 175 countries, Red Bull is currently selling over 11.5 billion cans of its energy drink annually. At its headquarters, Red Bull employs over 2,000 people, from over 60 different countries. Red Bull is known for its innovative and successful marketing strategies. These strategies are based on what’s known as the 4 P’s: product, price, place, and promotion. While caffeinated and non-caffeinated pre-workout drinks are not new to the global market, we are offering superior products, produced with premium ingredients in two versions: caffeinated and noncaffeinated (non-stimulant). Many consumers currently consume the original Red Bull for a quick energy boost before working out, however, the pre-workout is designed to give a more sustainable boost and increase energy longevity. The idea of a caffeine and caffeine- free pre-workout while not new for the industry will be a first for us, and our introduction to the global market for workout drinks. A1a: Methods Method one: Our first method was to initiate on-site customer surveys over a twelve- month period asking all customers in the target region who purchased any brand of canned or powdered pre-workout to participate either in our online survey or the preprinted paper survey. With our ten-question online survey, we experienced an 86 % response rate, and with our paper

3 survey where we experienced a 69% percent response rate. With these results in hand, we were able to conclude that there is indeed a market for both the pre-workout caffeinated and non- caffeinated pre-workouts in the United States and perhaps later in the global market. Method Two: The next method was to contract with an independent market research company that specializes in the health and wellness industry. The company is called Olinger Group which performs qualitative and quantitative studies to examine this industry while providing industry expertise, comprehensive data collection, and customizable insights. They also examine implemented strategy methods. This report indicated the need for high-quality and innovatively flavored pre-workout drinks, qualitative measures concluded that customers were interested in clean and premium ingredients; and companies that focus on sustainability. The data collected provided us with indicators resulting in our decision that there was undeniably a market for both the pre-workout and the pre-made non-alcoholic mixers. In addition, we were able to conclude from the data received by both methods that the demographic age range for the products is consistent with our current energy drink market range which is between the ages of 22 - 48 years of age. Method Three : We engaged in direct observation of our potential customers by attending all major fitness events along with four major health and wellness conventions in the target markets over a year period, which included local running events and marathons, bicycle rallies, skateboarding, race car competitions as well as major health and fitness conferences, where we handed out samples of both products in multiple flavors and conducted a brief on the spot survey with five questions. This data was used to test flavors that were winners and losers as well as help us determine the launch flavor. A1b. Competitive Advantage Since we are already a globally recognized brand with operations in over 175 countries, selling over 11.5 million cans annually, we start this endeavor with a competitive advantage over

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4 our competition. We have been in the energy drink business since 1987 and currently hold 44% market share (Morgan Presson, 2022) Although we will not be the first to offer these types of beverages, we will utilize our dominance in the energy drink market to help stabilize our entry into this new market. A1c. Inherent Risks Risk is always going to be inherent in any new venture, one of the major risks in our new venture would be that our product fails to meet the needs or expectations of our customers. This may result. in low sales during the initial market period, and we may fall below our forecasted sales, resulting in a negative ROI for the company. To mitigate this risk, we have designed an extensive streaming advertisement and social media campaign that includes posts on Twitter, Instagram, TikTok, and internet and streaming tv ads (Google, YouTube, HULU, Amazon Prime, Tubi) to send out a blast campaign starting 30 days before the go-live date to everyone in the market area who filled out or participated in one of our many marketing surveys and specific influencers on Instagram and TikTok. In addition, we will also offer free pre-workout drinks in our partner gyms on launch day. Another risk would be competition since we are not producing a completely new product on a global scale. Other companies have already built a reputation in the pre-workout arena, to mitigate this, we will rely heavily on our outstanding reputation as a knowledgeable and successful energy drink producer. After the initial 30-day go-live marketing timeline, we will likely continue to offer periodic deals via the same touch campaigns. All of this will be in concurrence with an extensive local and social media campaign that offers coupons for a free pre-workout drink to the first 10 customers at various health facilities and Red Bull-sponsored events. A2. Customer Relationship Management Software

5 The CRM software utilized by Red Bull is the Salesforce Customer Success Platform. Salesforce Marketing Cloud. uses large amounts of data to track trends and insights of customers and their interaction with the market to improve efficiency, save time, and meet customers on their preferred channels – email, social, mobile, ads, web, or any combination. Salesforce is the world’s #1 CRM company and is an obvious choice for us to partner with. A few major attributes of this specific CRM software are that it combines all aspects of customer engagement and data into one place making it easier for that data to be analyzed to benefit the company at the highest level. Salesforce also has an AI (artificial intelligence) for marketing insights which can dynamically generate personalized content to engage customers and prospects on their preferred channel. With this software, we can deliver our message, at the right time and through the correct channel. This enables to company to keep an “ear to the ground” and to correct problems that are mentioned and steer products in directions based on these conversations. A2a. CRM Information The information generated by the Sales Force Marketing tool will be used in conjunction with the Sales Cloud to automate and scale all sales processes and forecasts, then connect all with customer touchpoints to improve the buying experience. As previously noted, the information gathered and analyzed by Salesforce will allow us to personalize our users’ experiences by utilizing real-time insights and recommendations. This would be especially beneficial to our new pre-workout items as we could see which locations and customers aim towards workout prep and thus, we could spend less time on busy work and more focus on those stores and individuals for marketing purposes. If sales are satisfactory, we could eventually introduce multiple pre-work out drinks to the locations with the highest sales. Tracking

6 consumer feedback will help us navigate the introduction of new items to an existing market, largely thanks to the Salesforce Customer Success Platform. A3. Distribution Channels We will utilize both the direct and indirect distribution models for this market area. The products being offered are currently manufactured in Glendale, Arizona for the United States. Currently, we operate on a combination distribution model of direct and indirect channels. Direct distribution works very well for controlling our supply chain in the US. We also use indirect distribution channels, where we partner with distributors, wholesalers, and retailers, including supermarkets, convenience stores, and gas stations. A3a. Key Considerations One of the key considerations of any company in the global market is breaking into a new region. Red Bull already has a great reputation in the US as the company with the largest market share of energy drinks in the country. Since Red Bull has already established itself in the US, since 1996, many legal barriers that a new company would have, have been eliminated and all efforts can be dedicated to marketing the new pre-workout beverages. The next major consideration would be competition since there are already companies providing similar products in the US. Red Bull will rely on its stellar reputation for using quality prime ingredients and consistent taste in its products across the globe. Red Bull currently produces and delivers its energy drinks in response to customer demand, following a just-in-time manufacturing approach. The goal of this strategy is to minimize holding inventory, which

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7 would lead to higher costs and eliminate the risk of obsolete products. The company would also instill this type of efficiency with the pre-workout products. Many of the production and supply channels that already exist for energy drinks can be used for the pre-workout product. The company can focus on these channels and maximize its efforts in marketing. If the product is well received, state-of-the-art technology in its production facilities can be utilized to quickly respond to market fluctuations and maintain a high level of efficiency. A3b. Global Supply Chain We do not anticipate any catastrophic interruption in the supply chain, however, we do reflect on supply chain issues that occurred during the unprecedented COVID pandemic. Red Bull maintains tight control over its supply chain through direct distribution, strong supplier relationships, and efficient production facilities. Therefore, we have mandated that our suppliers keep a 3 month supply of key ingredients. Most of the key ingredients have a shelf life of 2 plus years and our pre-workout will have a similar life span before any quality deterioration. A brief interruption in our supply chain would have a negligible effect on sales and customer satisfaction, however, a long-term interruption could cause the failure of this new product marketing plan. Although any failure would be damaging, we do not anticipate that the failure of this new product would affect the company’s overall image or profit margins due to our worldwide customer loyalty and brand awareness. A4. Major Pricing Strategy A relevant pricing strategy will be critical to ensuring our business makes a profit off our new product and sells enough of the new products to justify its place in our product line. For our new pre-workout and mixer offerings, we will utilize the Premium Pricing strategy. The

8 purpose of pricing your product at a premium is to cultivate the idea that our product is just that bit higher in quality than the rest of the products on the market, therefore p remium pricing is a strategy that involves pricing your company’s product higher than your immediate competition. We will utilize this pricing strategy alongside our marketing strategy which is designed to enhance that perception. This makes the most sense for us as we have built a loyal following. Our company enjoys brand loyalty, and we have a correspondingly strong customer base, which means we can afford to price at a premium, knowing we have an assured set of buyers. If a customer wants a superior product, they must purchase it from us and thus may be willing to pay a slightly higher price than they normally would for a standard pre-workout with caffeine and without. The caffeine version will be sold at $25.99 and the caffeine-free at $37.99 A4a. Cost Associated with Development and Launch There are multiple costs in developing any new product mainly, production, manufacturing, and marketing. Red Bull will utilize a portion of its current 700k square foot production plant in Glendale, Arizona to allow for onsite manufacturing and production of the pre-workout. The pre-workout will cost around $.12 (per can) to manufacture, there are several fixed costs for pre-workout products. wages, insurance, facility utilities, property and maintenance, property taxes, and depreciation. It costs approximately $.06 for the can itself including labels, and $.03 for ingredients and raw materials, variable costs are approximately $.03 per can. Variable costs are associated with shipping, marketing, and storage.

9 Development costs of both versions of the pre-workout did not place an undue hardship as many new ingredients were not required, for example, both contain similar ingredients such as caffeine, amino acids, creatine, and B vitamins. New ingredients were few like Beetroot extract. Some ingredients were removed from pre-workout drinks such as caffeine (caffeine-free version), sugar, and taurine which both boost energy temporarily. Red Bull's advertisements are known for being extremely bold and creative, capturing the excitement associated with its brand. To align itself with its target audience, the company often highlights high-adrenaline activities and extreme sports, emphasizing a sense of adventure. During the launch phase, Red Bull will utilize its $35,000.000 budget for advertising and promotional costs, to cover streaming TV, Radio, Print advertisements, and Social Media blasts on Twitter, Facebook, YouTube, TikTok, and Instagram. A4b. Consumer Acceptance of Price. Customers were asked during our survey and direct observation trials, what price they would expect to pay for these types of pre-workout beverages, and while 60% indicated they would expect to pay the same as the currently priced cans of energy drinks, 70% offered that they would pay more for more natural and premium ingredients. We decided based on a premium pricing strategy pricing with our superior ingredients that we would charge more than our competitors. We realize that this may cut into some of our market share, but our profit margin will remain strong. A4c. Competitors Pricing. Pre-workout is sold in quantities of a dozen cans (12), the average price is around $25.99 for the caffeinated form and $31.99 for the caffeine-free versions. Our top competitor in the

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10 caffeinated category, Onnit Alpha Brain, prices their drinks at $23.99 and our top competitor for the non-caffeinated is Legion Pulse Stim Free No Caffeine and they sell it at $34.99. A5. Promotional Strategy Red Bull is known for its extensive, creative, and successful advertising. We will be promoting these two new products through various channels in the desired markets with a Pull strategy, focusing on our loyal consumer base. As well as incorporating Instagram and TikTok fitness influencers, furthermore we will utilize our racing team, Red Bull Racing to promote as well. We will concurrently be blasting out reminders via YouTube, Twitter, Facebook, Tik Tok, and Instagram daily updates, reminders as well as using our fitness influencers with products to provide in-depth reviews reviews through go live and beyond as a secondary promo tour. A5a. Mass and Social Media Channels We will be utilizing both streaming radio and television advertisements to promote the new products in the target markets of the United States In the US, television is still the number one medium for reaching consumers, followed by social media, and then video portals. We will be utilizing Twitter, Facebook, Facebook, TikTok and YouTube to reach our loyal customer base. We will conduct a campaign that will send out via social media, daily reminders along with coupons they can use to receive free or discounted pre-workout for a limited time. Using these Social media platforms, we expect to reach a large demographic (18- 60) region based on research and according to Stastia.com, 44% of ads watched were on these platforms.

11 A5ai. Justification for Media Channels Based on our target demographic and the use of media from our target audience, we selected the media channels we believe fit best to facilitate our marketing strategy based on the demographics and media utilization numbers as shown in paragraph A5a. With most people boldly embracing social and streaming services it is the only logical format to use to target our market area. A5b. Sales Promotion Activities. Red Bull is known as a visionary and trendsetter in the advertising world. They are known for associating with high-octane sports including race car driving, snowboarding, and mountain biking. This energy drink leader has revolutionized marketing and led an extremely competitive beverage business. Knowing that sales promotion is indeed a valuable necessity to get people talking and excited about Red Bull’s new offerings. Our first promotion would be offering free samples in gyms, supermarkets, and health food stores, including at least one campaign featuring a professional athlete to sponsor the pre-workout drinks. Additionally, we plan to lean heavily into television and social media to promote the new product and to advertise free giveaways through influencers and our own social media pages on TikTok, Twitter, and Instagram

References Pre-workout Supplements Market Size, Share & Trends Analysis Report By Form (Powder, Capsule, Ready To Drink), By Distribution Channel (Online, Offline), By Region, And Segment Forecasts, 2020 - 2027 . (2020, March 26). https://www.grandviewresearch.com/industry-analysis/pre-workout-supplements-market Red Bull’s Top 5 marketing campaigns: Then and Now | Brand Vision . (n.d.). https://www.brandvm.com/post/red-bulls-top-marketing Buchholz, K. (2023, October 19). TV still the top medium for ads in the U.S. Statista Daily Data . https://www.statista.com/chart/22966/most-seen-types-of-ads-us/ The Best Pre-workout 2024 . Sports Illustrated. The best Pre-Workout of 2024 - Sports illustrated. (2024, January 1). Sports Illustrated . https://health.si.com/best-pre-workout/? campaignid=20455305506&adgroupid=155987474081&adid=669804285292&gclid=Cj wKCAiAzc2tBhA6EiwArv-i6V4mhxc1afq26T7p9pi5dzlG- KYekGQPuJ90ARc8T_p57t0L1L8kthoCScUQAvD_BwE Pre-Workout Supplements Market Insights . (n.d.). https://www.mordorintelligence.com/industry- reports/pre-workout-supplements-market Presson, M. (2022, November 21). U.S. Energy Drink Industry Report - University of Oregon . Lundquist College of Business. https://business.uoregon.edu/sites/default/files/media/energy-drink-industry-report.pdf

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