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Market Audit
Sports and Energy Drinks UK Market
Focussing on the Microenvironment of Red Bull

William Hanrahan
Student Number: 060953199
Stage 2 Marketing: ACE2002
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Contents
1.0 Executive Summary………………………………………………………………......3
2.0 Introduction……………………………………………………………………….........4
3.0 Industry Analysis……………………………………………………………………….5
3.1 Market Analysis………………………………………………………………..53.2 Growth…………………………………………………………………………...7
3.3 Brands and Market Segments………………………………………………9
3.4 Pest Analysis…………………………………………………………………..11
3.5 Strengths and Weaknesses of the Market………………………………12
4.0 Market Focus: Red Bull……………………………………………………………...13
4.1 Red Bull’s Strategy…………………………………………………………...13
4.2 Porter’s 5 Forces……………………………………………………………...13

5.0 Conclusions…………………………….…………………………………………….18

6.0 Portfolio of Information Sources……………………….………………..…….......19
6.1 Primary Sources………………………………………………………………19
6.2 Secondary Sources……………………………………………………….…19

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1.0 Executive Summary
Red Bull’s strength seems to be based on their strategy of concentrating on its
1 Main product; the company seeks to develop a strong brand image
through sponsorship of important events while focusing on its corecompetences of Red Bull drinkand its sugar free variant. The use of such a
strong international brand means that the company’s products have
powerful recognition before they are even introduced to new international
markets. Young people nationwide have developed a natural affinity with
the brand, finding great utility in the core benefits of the product. Careful
selection of appropriate distribution channels and thecreation of a brand
image created around extreme events and high profile sports have helped
quickly establish a premium position within the market.
Energy and Stimulant drinks have settled themselves as a fixture in the non
alcoholic drinks market, the continued popularity has boosted the market’s
value and despite increasing sales and increased competition, prices are still
at a premium. Thissector is lucrative as consumers appear to be prepared to
pay a relatively high price per litre for single-serve units of the convenient
energy boosting drinks. Increasing numbers of ‘Cash Rich – Time Poor’
individuals has resulted in functionality becoming a key factor, new flavours,
sugar free variants and bottle changes have all been attempted by the
leaders in the market. Red Bull and GSK(Lucozade) account for a large
percentage of sales in the energy market and these two have created
barriers to entry which limit the other firms in competition.
The Energy drink market are not just competing with each other but also the
whole non alcoholic beverage market as consumers are drinking them for
not only sport reasons. Many external factors have influenced the demand
for thismarket, especially those related to the increasing popularity of fitness
lifestyles and gym membership.
Possibilities for future development of the brand include diversification,
changes in flavour, special editions, more/less caffeine versions could be
created. The final suggestion is for the targeting of potentially lucrative social
groups such as older adults and those looking forrejuvenating and
stimulating properties from a drink, however this would involve alternative
advertising as currently most stimulant drinks are aimed at the 18 – 25 year old
market.

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2.0 Introduction
The market which I shall be investigating is the sports and energy drinks
market in the UK, although I think it’s important that I consider the whole
market including soft drinks. This is becauseSports and Energy drinks are
competing with other soft drinks and sports and energy drinks are no longer
only used for sports but play an important role as an alcoholic mixer and
simply as a soft drink.
This report will focus on a product part of this market and I have chosen the
market leader for stimulant drinks, Red Bull. I shall be...