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  1. #1
    Join Date
    Jun 2003
    Location
    Columbia, SC
    Posts
    11

    Post

    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 ?

  2. #2
    Join Date
    Jun 2003
    Posts
    221

    Post

    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.

  3. #3
    Join Date
    Jun 2000
    Location
    San Ramon, Ca, USA
    Posts
    1,549

    Post

    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.

  4. #4
    Join Date
    Apr 2000
    Location
    Twin Cities/Kalamazoo MN/MI
    Posts
    706

    Post

    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.
    <b>Hey Pepsi, Shasta called, they want their lemon-lime back.</b>

  5. #5
    Join Date
    Sep 2003
    Location
    Dallas, Texas
    Posts
    1

    Post

    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.

  6. #6
    Join Date
    Sep 2003
    Location
    Spain
    Posts
    69

    Post

    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.

  7. #7
    Join Date
    Sep 2003
    Location
    Michigan
    Posts
    6

    Post

    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.

  8. #8
    Join Date
    Sep 2003
    Location
    Spain
    Posts
    69

    Post

    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.

  9. #9
    Join Date
    Jun 2003
    Posts
    221

    Post

    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.

  10. #10
    Join Date
    Sep 2003
    Location
    Michigan
    Posts
    6

    Post

    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.

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