Red Bull

Why is the cost so high?


The reasons of “İnflated cost” of “Red Bull” in comparison with other energetic drinks 


      There was lack of choice of energetic drinks in the Azerbaijan market a few years ago. Only “Red Bull” was as the main and famous energetic drink. Some of consumers could not even purchase it because of its high price. Considering the tendency of the recent years the number of energetic drinks in Azerbaijan market is increasing. In terms of price local products are much cheaper (50%) than “Red Bull”. It is a little doubtful that all energetic drinks have identical ingredients, but are offered at different prices. This leads to one question: Do our local products have a low quality or “Red Bull” has an “inflated price”? When we examined this case, some interesting facts were found.

      When Red Bull Energy was first introduced into the American and European markets it has encountered a number of challenges. It was very difficult to compete with Coca-Cola, Pepsi, Labatt and Molson. Dietrich Mateschitz (co-founder of Red Bull energy Drink Company) offered to increase the price of products twice with regard to rivals’ prices. Then the product should have been placed in different departments of stores such as in alcoholic drinks, sausage and even confectionery departments. The last step was the distribution of free “Red Bull” samples in order to show subliminally its importance for users. Afterwards, by realizing these activities, “Red Bull” became a very popular brand.

      To put the numbers into perspective, as per ERA's TGI data (exclusive internationally licensed research model TGI - Target Group Index) from January 2016, 432 persons were energetic drinks’ users among 1490 people. 265 people were men, while 167 were women.


Usage of energetic drinks in the P6 months

TGİ_2016 1st Wave

Man

Woman

%

%

Regular users

37,5

27,5

Medium users

41,2

37,4

Not frequent users

21,3

35,1

Total

100% 

(apprx. 375 000 people)

100% 

(apprx. 225 000 people)



      The table shows three types of energetic drink consumers. The first group is “Regular users” – 10 and more drinks per month, “Medium users” – 4-10 drinks per month and “Not frequent users” – less than 3 drinks per month. In average one male uses 2.1 energetic drinks per week, while female consumes 1.4 drinks per week.

      According to TGI data, TOP 3 most consumed brands are “Red bull” “Hell” and “Jaguar”, while Burn, Trojka, XL, Bizon, Pitbull and Monster are less consumed brands.

 



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