retailing101

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How Red Bull has seen Success by Marketing their Brand as a Lifestyle

Almost everyone today in the United States is familiar with the popular energy drink Red Bull, created in 1987 by Austrian businessman Dietrich Mateschitz. Most of the company's success and growth can be attributed to their marketing strategies. Red Bull chooses to promote itself as a lifestyle brand rather than the actual drink itself in advertisements. Their famous slogan “Red Bull Gives You Wings” resonates with a lot of people who have an extreme personality or risk taker mentality.

Red Bull’s guerrilla marketing tactics have been known to capture an audience’s attention through their boldness. They have vehicles designed specifically for their brand with their logo, colors, and even an energy drink can on top, a car like this is designed to turn heads, which is exactly what it does. Along with this they have many event sponsorships for extreme sports such as race car driving, motorcycle racing, cliff jumping, windsurfing, and much more. Showing up to these types of events allows red bull to connect with their target market of males within the age range of 18-34 who are interested in sports or an extremist lifestyle. Red Bull sponsors popular athletes from all over the globe such as Neymar, Blake Griffin, Kris Bryant, along with 500 others. They feel that these athletes best represent their brand name and the lifestyle they are trying to portray, hoping that they will appeal to their ideal target market and spread brand awareness. Red Bull is in the growth stage of the product life cycle because of the significant sales increase and revenue growth of 1.32 billion dollars they have seen over the past year. Red bull controls the largest percentage of their market share in the energy drink industry at 43% as of 2020.

Something interesting about Red Bull that I never realized about them before doing research, is that they only sell one product, in limited sizes, with only one flavor. Most companies especially in the beverage industry are always trying to expand their product lines to offer more of a variety, but Red Bull has stuck to just producing their one very popular drink. This surprised me because a large company like Red Bull can definitely afford to test out new products, but they choose not too so that they can devote all their time and energy on promoting their sole product. This is known as a market development strategy when a company uses its existing product to expand into new markets. Red Bull is a global company whose product is sold in 167 countries. It is the most popular within Europe and the United States. The brand’s authenticity and consistency when it comes to their marketing and packaging is one of the reasons that the brand is so widely known. Their customers have a strong sense of brand loyalty because they keep coming back for more! Their customer retention rate increased 5.2% in 2020. The brand never strayed from their original values, they only kept growing and improving. People associated with the brand or who drink it on a regular basis, consider themselves as a part of the Red Bull community, it’s not just an energy drink to people, it’s a lifestyle choice.

I am personally a fan of Red Bull but I do not drink it often because energy drinks are bad for your overall health. However, if I were to purchase an energy drink I would choose Red Bull over any other brand due to the light refreshing taste and the way they market their brand. My question for Red Bull would be if in the future they would ever expand their product line or develop new flavors of energy drinks for consumers? Especially if one day their current product started to see a decrease in sales. It might be a good idea for them to expand their product line one day, but their current strategy seems to be working great for them right now.

Sources:

https://econsultancy.com/three-hallmarks-of-red-bulls-social-media-content-strategy/

https://www.nytimes.com/2013/05/25/sports/autoracing/25iht-srf1prix25.html

https://medium.com/@edcbitmesra/red-bull-and-their-marketing-strategy-6015ac99da3b

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T-Mobile takes AT&T’s spot as the Second Largest Wireless Provider through the use of their Clever Marketing Strategies

T-Mobile was once an underdog in the telecommunications industry, but has since rebranded itself and is now the second largest wireless provider in the United States surpassing AT&T this year. They expect to see more customer growth and profitability over time and they are hoping to eventually take over Verizon’s number one spot. As of now they control the second largest portion of their market share at around 29%. T-Mobile has been doing so well recently due to their wireless innovations, marketing strategies and recent merger with Sprint. T-Mobile’s merger with Sprint allowed them to expand their customer base, coverage, and increase their network speed.

Consumers are choosing T-Mobile over its competitors mainly because they provide the most extensive nationwide 5G coverage for a reasonable price. My family and I personally switched from Verizon to T-Mobile for this reason. T-Mobile is currently in the growth phase of the product life cycle, if you look at the chart above you can see that they have seen a significant surge of new customers in 2020 compared to 2019. Their main sustainable competitive advantage is that they are the only wireless carrier able to provide 5G coverage across the U.S. with a 600MHz band. T-Mobile makes this known in their commercials where they show consumers how much wireless coverage they provide compared to other wireless carriers. This is not an easy strategy for their competitors to copy and is a great selling point for T-Mobile to capitalize on.

T-Mobile has not been afraid of taking risks when it comes to their marketing strategies. They have continuously pointed out the flaws in their competitors business models and promoted ways they can improve in areas that they lack. T-Mobile has been capitalizing on the consumer trend of convenience, by offering unlimited plans for everyone with no annual contract, unlike AT&T and Verizon where they make you renew your contracts every few years. T-Mobile is target marketing towards Gen Z and millennials through the use of their unlimited family plans and influencer marketing. They have had popular stars and athletes in their commercials like Gwen Stefani, Blake Shelton, Adam Levine, these celebrities appeal to younger demographics. Below is a video of T-Mobile’s popular Super Bowl 2021 commercial.

The biggest question for T-Mobile in the next few years is if they will be able to remain the second largest wireless provider in the United States with their current strategy or if they will find new ways to be innovative and take Verizon’s number one spot? The threat of new entrants for the telecommunications industry are low due to the high barriers of entry of the cost, technology and regulations. Meaning that T-Mobile will most likely not see any new serious competition unless it's within their existing competitors. This is good news for companies in the telecommunications industry because they will most likely only be facing their existing competitors.

Sources:

https://investor.t-mobile.com/news-and-events/t-mobile-us-press-releases/press-release-details/2021/T-Mobile-Caps-Best-Year-Ever-in-2020-with-Strong-Q4-Results-Is-the-Only-National-Wireless-Provider-to-Beat-Expectations-on-BOTH-Customer-Growth-and-Profitability/default.aspx

https://www.forbes.com/sites/moorinsights/2020/08/10/the-many-moves-that-pushed-t-mobile-over-att/?sh=7117d5be1e33

https://www.t-mobile.com/news/business/t-mobile-analyst-day-2021

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The Importance of Creating Personal Connections with Consumers in 2021

Implementing a good marketing strategy is essential for your business to be successful in the long-term and to gain a competitive advantage over companies in your industry. A good marketing strategy should make people perceive your brand positively, while allowing you to build meaningful relationships with your customers. Many successful marketing strategies are designed to be consumer centric, meaning that companies are prioritizing the customers needs and taking the time to understand them. It shows people that you are not just after their dollars but that you genuinely care for them and are thankful for their business. As companies continue to innovate their businesses models, consumer expectations continue to rise. People are not satisfied shopping with your brand unless you give them an experience that was better than their last.

Creating personal connections with consumers is more critical than ever now, as we are all navigating this challenging time through the COVID-19 pandemic together. People want to feel that their voices are being heard and that their needs are being met. They want to be able to trust the brands that they choose to shop with and develop a sense of brand loyalty. Companies need to be able to predict consumer trends and implement them before they happen in order to keep customers coming back for more. Consumers hold all the buying power, and with so many substitutes readily available companies need to ensure that they are differentiating themselves from their competitors. The goal is no longer to fit in with your competitors, it's to stand out from them and by offering something to consumers that the competition cannot provide to them. This may involve you taking a risk with your marketing strategy, but if it works it will allow you to have a sustainable competitive advantage.

It's evident that it is necessary for businesses to build personal relationships with their customers through marketing tactics. However, one question that still remains unknown for now is if marketing will shift mainly to digital channels over the next decade or if direct marketing methods are still essential for businesses to form personal connections with consumers? Digital marketing has proven to be much less expensive and more effective than traditional marketing methods. They give businesses a greater reach, access to their target markets through algorithms, and a larger platform to promote their brand. With traditional marketing methods like TV commercials, billboards, radio, mail and newspapers, it can be hard to reach your target market directly through mass communication, and can end up costing you money in the long run. The benefit is that it does provide a large reach and can access people who do not use social media or the internet. As Generation Z grows up, social media marketing and internet marketing have become more prevalent in our lives. I think that there will always be a need for direct marketing, but it will not be necessary for companies who have a strong digital marketing strategy in place to stay in business.

Sources:

https://fortune.com/2020/06/19/coronavirus-marketing-strategy-relationship-building/

https://hbr.org/2021/03/10-truths-about-marketing-after-the-pandemic

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Gap Changes Their Holiday Campaign Approach To Appear More Sentimental

The Gap is launching a digital campaign this holiday season that is very different from their previous Christmas advertisements because it includes a more personalized touch. They choose to do a new approach this year since their sales have been falling and because consumers have been lacking interest in their brand. The holiday season is a crucial period for them to make money and separate themselves from their competitor, Old Navy, by outperforming them. Gap’s new advertisement shows a mom raising her son over the years and in each scene of him growing up he is wearing the same Gap sweatshirt. It is intended for viewers to be able to relate to it, feel sentimental watching it, and motivate them to buy from Gap. Along with the advertisements, they are also attaching sweet notes to their packages as a bonus for their campaign.Their previous holiday commercials were focused on featuring popular music, dance moves, and even celebrities. Unfortunately, these pervious commercials did not bring enough consumers in the stores during the holiday season for prior years. Shoppers have been criticizing retailers in recent years for focusing on promoting their brands over the true meaning of Christmas. I think Gap is trying to get away from that image of being too flashy and materialistic by launching this campaign.

It is a smart move for Gap to change their advertising approach if their previous strategies have not been working for them. The advertisement is not just another commercial featuring Santa singing a song, it has a deeper meaning to it which attracts viewers' attention. It is a good way for Gap to stand out from other retailers who make different versions of the same commercial each year. However, I am not sure the campaign alone will drive many more consumers to purchase clothes from them. Consumers around the holiday season are looking for retailers with the best sales, so that can get the most value for their money. Between Black Friday and Christmas many retailers offer consumers incentives to go to their store because they know a lot of people are shopping for gifts around the holidays. Consumers will shop at the stores who are offering what they want for the best quality and the lowest price. If Gap cannot provide this to their consumers than I do not think they will stand a chance against their competitors no matter what their campaign happens to be. 

Source: https://www.marketingdive.com/news/gap-adopts-sentimental-tone-for-digital-focused-holiday-campaign/565940/

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How Bath And Body Works Continues to Flourish in Retailing

Bath and Body Works is known for having great smelling fragrances that people love to buy. It is rated No. 1 in the home and fragrance category. Much of their success is due to their location in malls because they attract a lot of traffic from shoppers. Their competitors such as Lush and The Body Shop cannot compete with them, because their prices are a lot higher compared to Bath and Body Works. Lush and The Body Shop emphasize their lack of parabens and chemicals that are in their products to attract environmentally friendly consumers. They are also more innovational in coming up with new products which does attract new customers. However, the more traditional Bath and Body Works continues to lead in sales because consumers enjoy their lower priced products, they are well established, and consumers know what to expect from them. They are always coming up with new scents, but their products typically stay in the same form of lotions, body washes, and perfumes. Consumers like to buy different scents but in these same few forms. Another edge that they have over their competitors is their sub-brand, White Barn, that sells scented candles. This generates a large percentage of the company’s revenue and brings people into the store.

Bath and Body Works is successful due to the nature of their business and emphasis on a fun experience. Consumers prefer to try scents on in store rather than online, because they are not able to tell how something smells without visiting a store. They encourage shoppers to try on scents and their sales associates often make recommendations of popular products. Their stores are laid out so that it is easy for consumers to maneuver around and reach all the items on display. The colorful atmosphere of the store adds a young and playful element to it. On top of their low prices they frequently offer promotional deals where if you buy a certain amount you can get something for free or at a discount. This is a good strategy because it is likely that consumers will want more than one scent and prompt them to buy more. If consumers like a scent they are also more likely to buy the product with that scent in multiple forms. Bath and Body Work’s seasonal fragrances attract many customers because it makes for a great gift that customers can resonate with.  

The particular scents and their titles were carefully chosen so that shoppers would be able to recognize their aroma. They have a large target market of females of all ages who like fragrances and beauty products. Having a broad target market allows them to sell their products to a lot of women and doesn’t limit them. They have created a wide range of scents and products based off of consumer preferences. Bath and Body Works core business structure has been working for them. Even though they are not considered the most innovational brand in the beauty industry, their traditional retailing practices are working for them. Consumers look forward to repurchasing the same seasonal scents each year, proving that change in a retailing model is not always necessary.

https://www.businessoffashion.com/articles/news-analysis/bath-body-works-enduring-formula-for-success

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J.C. Penney Aiming to be More than Just Your Average Department Store

The once popular J.C. Penney’s revenue and sales have been falling in recent years. They admit that they have not been taking into consideration what the consumers wants and a result have been losing sales to their competitors. Their stores have an abundance of clothing on display that make it look disorganized and cluttered. Their apparel costs more than their competitors, so it does not make sense for consumers to shop their anymore. They incurred a massive amount of debt in the process of trying to remodel stores in the past, which ultimately did not have a big impact on attracting consumers. Since they are not operating with a profit it is hard for J.C. Penney to compete with stores like Macy’s who can afford to constantly improve their stores. Under new management J.C. Penney is going to try to dig itself out of this hole by providing their customers with a better experience.

A J.C. Penney in Hurst, Texas is the first location that the company is testing a new interactive experience with customers. They are getting rid of some of their merchandise and the appliance category altogether because they haven’t been selling. They are adding yoga classes, cooking demonstrations, makeup/hair consultants, lounging space, and a play area for children to make the shopping experience more pleasurable for the customer. In the dressing rooms they have touch screen mirrors that notify the dressing room attendant to get them a new size or color in an item. They are also organizing their apparel by lifestyle rather than the standard men and women’s section. J.C. Penney really hopes these changes will drawn in more consumers to generate more revenue and so they can compete with other retailers again.

I could see J.C. Penney making more in-store sales from these changes, but I am not sure that it will have a huge impact on their overall revenue. They are only basing their success off of this one store, which could generate a decent profit. However, it is a possibility they could incorporate this idea into all stores and end up losing money in the long run, because of the cost of remodeling and still not being able to attract enough customers. J.C. Penney is also not doing anything to improve it’s product brand or price which are also very important to shoppers. My fear is that the experience factor will not be enough to keep customers coming back overtime and that they should also be focusing on improving other factors that many have contributed to their decline in sales, as well as the experience. The ideas that they came up with for this store are entertaining, but only time will tell if it is enough to keep them in the retailing industry.

Source: https://www.wsj.com/articles/j-c-penney-plots-a-comeback-less-clutter-more-yoga-classes-11572535484

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Is October too soon for Retailers to promote Christmas?

It’s no secret that retailers have started promoting Christmas gifts earlier and earlier each year. This year Walmart has started putting Christmas items, toys, and technology on sale earlier than they ever have before. This is because the much-anticipated holiday for shoppers, Black Friday, is six days late this year. This means that consumers who start their shopping on Black Friday will have less days to finish their shopping before Christmas. Walmart is taking advantage of the late holiday this year by offering deals on gift items to encourage consumers to start shopping sooner. The promotion of Halloween is often undermined compared to the hype of Christmas, especially this year.

Walmart is planning to take down their Halloween decorations as soon as that holiday is over, so that they can make room for their Christmas decor. Along with this Walmart is also incorporating more technology into the Christmas shopping experience. They are going to be giving people gift suggestions online and all the shopper has to do is put in general information about the recipient of the gift. This is a good idea for consumers who struggle over the issue of what to buy for their family and friends. Christmas shoppers will be able to scan items in toy catalogs on their phones and there will be more emphasis placed on directing consumers to the self-check out lines to avoid standing in line. This will help Walmart in the frictionless component of their business model by allowing consumers to shop and check out faster.

Other retailers will follow this trend when they see big names brands like Walmart selling and promoting Christmas items in October in order to compete with them. If most of the retailers are promoting Christmas in October than that will eventually become within America’s social norms. Although many consumers still feel that celebrating Christmas too early takes away from the other holidays like Halloween and Thanksgiving. The way retailers conduct their businesses will have an effect on society at large and determine when consumers start their Christmas shopping.

Source: https://finance.yahoo.com/news/walmart-to-start-online-holiday-shopping-deals-before-halloween-174253398.html?soc_src=social-sh&soc_trk=tw