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SC Beverage Man
09-04-2003, 04:47 PM
In South Carolina both Pepsi and Bud have dropped the wholesale price of their energy drinks by $5.00 ( $27.00 )to fight Red Bull.

Will this tactic work or is it a desperate ploy to slow down Red Bull ?

Coco Rico
09-04-2003, 05:44 PM
It seems like a desperate and unfortunately ineffective manuever to under-cut Red Bull. Lowering the cost only cheapens their brand image and further reinforces Red Bull's premium image. They are hoping to spike lagging sales that haven't quite hit the expected mark. These companies had high expectations for their energy drink offerings but the concept remained outside of their realm of understanding. I read an internal report at Coke that anticipated KMX as the #2 energy drink within a year of it's launch, and as the #1 energy drink after 2 years. Where are they now? Once Anheiser-Busch dropped national support of 180, Bud houses all over the country lost interest and have stopped pushing it. Only in a few markets where Bud has an overly dominant market share in beer do they still stubbornly push it. They couldn't even stop Red Bull in their own backyard, St. Louis. And Pepsi, much like most of the large companies, can't grasp the entrepreneurial spirit and subversive culture needed to make a product like Red Bull successful. Brand Sobe's biggest mistake was selling out to Pepsi. I truly thought they had a unique brand and a great corporate culture which was lost with the aquisition.

Bottom line, as long as competitors remain focused on competing with Red Bull on the basis of taste, size, packaging, and pricing - and not on what really matters - Red Bull will remain the category leader.

Ron Swedelson
09-04-2003, 07:47 PM
I don't think it will cheapen the brands. Chances are the stores will not sell the brands for any less. Secondly, most of the drinks are bought on buy x get y free, so they are more just doing a cost avg. by lowering the price. Besides, the customer doesn't know what the store pays.

SURGE
09-08-2003, 12:48 PM
Coco Rico is right on about the SoBe acquesition. Pepsi has mismanaged that great brand into the ground. And has done it all in a very short time.

loveinnovation
09-15-2003, 01:32 AM
Take a lesson from Nokia--price matters!

Price matters, but the problem is, it has to be passed down to the end-user to a degree that they will get off their ass and try the drink. if the customer experience is not there, then it's over.

Xtrem
09-15-2003, 05:57 AM
The problem I see for all the brands that want to be number one is, they try so hard that they forget about the customer. Yes it must be a nice feeling to know that you are at the top of the pyramid but once your there next thing you do is try never to be taken off. In most cases its all about availability, it doesn't matter how nice or how good your drink is, if you cant buy it you wont drink it.

scully
10-01-2003, 07:49 PM
Thats interesting you say this...Since I can't seem to find or buy your drink. I guess your not at the top of the pyrimad. :cool:

Xtrem
10-02-2003, 03:40 AM
At the top of the pyramid is my point exactly. We are not a numbers game drink. Yes it would be nice to sell millions of cans per week. We would prefer people to buy our drink because they like it not because its the only one in that store. Then if it just so happens that we are selling millions all the better for us and the consumer.

Coco Rico
10-02-2003, 05:21 PM
The problem is that most newcomers in the energy drink category look to the the top and try to imitate what Red Bull is doing now after having been successful for over 16 years. What they don't see and try to imitate are the activities and strategies that Red Bull engaged in at their inception that got them to where they are now.

scully
10-02-2003, 09:24 PM
Buying the market as "Red Bull" has, is not a novel concept. They started their strategies with grass roots marketing and failed...Then bought their way into the market like Pepsi and Coke... Intimidating the local retailer, signing excluses with the retail and demanding that they only sell their product..I don't find this practice moral....But then again in this business what is???? It is very cut throat from what I see.

Coco Rico
10-03-2003, 02:09 AM
Scully,

You are completly wrong. How could a private start up like Red Bull even have the capital to "buy the market" if their grass roots initiatives truly failed. Where could they have possibly generated the revenue from? Actually their grass roots approach worked so well that now there are hundreds of energy drinks attempting to cash in on the niche they created. The only reason Red Bull is "buying" anything is to protect themselves from predatory brands (i.e. Roaring Lion) that are attempting to pass themselves off as Red Bull and trick the consumer, and this is predominantly in the on-premise business. In the off-premise channels there is an over-abundance of energy drinks and Red Bull still remains at the top. This means when people have a choice, they choose Red Bull. You can't "buy" consumer loyalty like that. If you could, KMX (Coke), 180 (Bud), Sobe and Amp (Pepsi) would be at the top of the pyramid instead of Red Bull.

CR

[ 10-03-2003, 02:20 AM: Message edited by: Coco Rico ]

RunWithDaLilGuy
10-03-2003, 08:23 AM
nicely put.