Analysis of Red Bull Distribution Channel

1689 words 7 pages
Comparative analysis of the distribution channels between Red Bull energy drink and major carbonated beverages
Issues, recommendations and their implications

SDM Section A
Anshul Sehgal – 10P010 Kayarat Ajit Krishnan – 10P023 Esha Sharma – 10P075 Jayant Bahel – 10P081 Mohit Ahuja – 10P090

Issue: Price volatility in Red Bull products being sold to retailers and wholesellers

Till 2009 Red Bull refrained from selling to wholesellers and used to sell the product to retailers at a single price. They relied heavily on store executions to get the necessary retail push. Since 2009, Red Bull has begun selling to wholesellers and began the practice of price cutting. The reasons for these changes in strategy was that the competition in the energy
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Red Bull India expects high quality point-of-purchase executions from Narang Hospitality Services as Red Bull is the highest selling product in Narang’s portfolio. Red Bull India has low control over the quality of the executions and also does not have sufficient resources to monitor the quality of the executions of below the line promotions. The major issue here is that managerial focus on below the line promotions by Narang Hospitality Services fluctuates heavily and this has historically been a source of conflict between Narang Hospitality Services and Red Bull India.

Recommendation
Red Bull India can perform audits of the below the line executions by Narang Hospitality Services. Audits of these kinds are generally performed by external agencies on a contract basis. The audit is generally performed on a pre-decided list of stores which Narang Hospitality Services will generate. Each store will be scored based on a pre-decided set of parameters to be measured. There are two ways Red Bull India could reward below the line executions: 1. Reward sales people who receive a high score in the audits 2. Reward the organization for overall execution

Implications:
If Red Bull India decides to audit the below the line promotions of Narang Hospitality Services there could would be multiple costs involved, the major one being the costs of hiring an external agency

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