Red Bull Marketing Essay

From 1987, Red Bull was launched in Austria with the tag line â€Å"Red Bull verleiht Fluuugel† (Red Bull Gives You Wiiings). It wasn’t until 1992 that Red Bull began to roll out in other European countries. â€Å"Part of the growth strategy was to enter new markets slowly and methodically in order to maximise buzz and build anticipation† Keller, K. L (2008 *A) By 1997, Red Bull was available in 25 markets globally, including Western and Eastern Europe, New Zealand and South Africa. Over the decade since its inception Red Bulls sales by 200%, from 1. million units to over 200 million units, and by 2004 the company had worldwide annual sales of nearly 2 billion cans in 120 countries. The Marketing Strategy used by Red Bull was not to pound the market with their presence but to be seen as an exclusivity, and to be perceived as the drink for all occasions when needed. In this way, marketers left empty cans in nightclubs, placed samples and dispensers in universities and allowed the value of Red Bull to spread via word of mouth. Red Bull marketed the following properties: * Improves Physical Endurance Stimulates Metabolism and Eliminates Waste Substances * Improves Overall Feeling of Well-being * Improves Reaction Speed and Concentration * Increases Mental Alertness These characteristics of the Red Bull product opened itself up to a whole range of potential consumers and marketing situations. Because of its properties, Red Bull used the slogan â€Å"Revitalizes Mind and Body†, and positioned the drink using a premium pricing strategy, marking the price up by at least 10% on the most expensive competitors product. Norbert Krailhamer explains: We are much more expensive that [cola]. This is OK because ours is an efficiency product, so we can charge this price premium, which is the secret of its success†¦ Due to the respect for a price premium brand†¦ we can charge what is fair for the benefit† Keller, K. L (2008 *A) A large portion of Red Bull’s success has to do with the use of the distinctive Red Bulls and Rising Sun logo and slender 250mL can as seen on their sponsorship sign writing and general advertising. It is debatable whether or not Red Bull would be as popular and successful without this insignia. Evidence of this can be traced to the introduction of Red Bull in Germany , where the demand was so great that they sold out of canned stock and had to switch to glass bottles to keep up with the demand. As soon as the bottles were introduced the demand dropped. The success of Red Bulls marketing strategy can be highlighted with the bungled entry of Red Bull into the United Kingdom in 1995. The marketers believed that the United Kingdom was too different from the Austrian market, so altered the marketing plan. The changes occurred in three distinct ways: â€Å"Extract: 1) the company marketed Red Bull as a sports drink, not a stimulation drink; 2) it did not pursue a word-of-mouth strategy, choosing instead to sell via the largest beverage channels; and 3) it created new advertising and focused on billboards rather than electronic media. As a result, Red Bull was considered a failure in the United Kingdomafter losing more than $10 million during the first 18 months in that market. † Keller, K. L (2008 *A) 1. Introduction: Red Bull GmbH, the Austrian based energy drink manufacturer is a remarkable brand that has grown to surpass some of the worlds most established brands. After founder Dietrich Mateschitz returned from Asia with the rights to patent Red Bull and alter it to suit the Western market, he had a defined idea in his mind as to what he wanted to achieve with the energy drink. After trialing more than 200 designs and finally cementing the right combination of caffeine, taurine, carbonation and flavoring the â€Å"original† Red Bull flavor was established. What follows is the amazing story of how Red Bull was marketed in Austria and then from 1992 onwards into the rest of Europe, the Americas, Asia-Pacific and the United Kingdom. Some of the key stones in the Red Bull brand marketing triumph has been the simplicity of their marketing approach through application, the positioning of the product and the clever ways in which they have side stepped traditional channels when bringing the product to the market and building the buzz and anticipation of Red Bull rather than just solely relying on the decision making derived from traditional advertising methods. The diversity of the Red Bull brand has allowed itself to move with the market and remain the worlds most popular energy drink. Looking at the brands tangible flexibility can even be posed at the move in the market to sugar free beverages and the quick and succinct way that Red Bull acted in order to uphold its position and remain creditable at the same time. As of the 2009 financial year, Red Bull GmbH had net sales report of 3. 3billion dollars and now has 3900 employees worldwide. Source: BNET – Resources 2. Brand Positioning and Values From the day of inception, Dietrich Mateschitz had a clear plan for how he wanted to establish Red Bull. The current positioning has left Red Bull in a very strong position among the market place and the values that it represents are continually being lived up to through its corporate presence in our daily lives. The position of Red Bull is: â€Å"Revitalizes Mind and Body† this tangible benefit, direct from Red Bull endorses the product to satisfy consumer needs before they have even made a purchase. Red Bull has also positioned themselves as the â€Å"Premium Energy Drink† above all other energy drinks in the market. The key word in this phrase being ‘premium’ as Red Bull has an exclusive appeal and a higher market price than its competitors; factors that have been thought through very thoroughly by the Red Bull marketing team. The â€Å"Premium Pricing Strategy† that Red Bull has incorporated, dictates that Red Bull will be priced at a rate 10% higher than the most expensive competitors price to ensure the class standard of the Red Bull name and set the standard for all of the rest of the competitors. In addition to the Premium Pricing Strategy, Red Bull introduced the Seeding Program, whereby initially Red Bull would only be stocked in the best and most classy establishments, whether this be exclusive clubs, nightclubs, bars, sporting events and related events to build the necessary hype or buzz about Red Bull, and to enable the word of mouth from the social elite to filter down into the working class. Once the market place was saturated with Red Bull buzz, the general market received the product too. In addition to the Word of Mouth strategy, Red Bull would supplement this with event sponsorship, athlete endorsements, sampling, point of purchase marketing and select electronic advertising. This allowed Red Bull to cover the necessary avenues which potential consumers were likely to come into contact with the brand and go on to purchase the drink. The values of the Red Bull brand are derived from the benefits of the drink itself: * Improves Physical Endurance * Stimulates Metabolism and Eliminates Waste Substances. Improves Overall Feeling of Well-being Improves Reaction Speed and Concentration * Increases Mental Alertness The Red Bull brand encourages the consumer to go to their potential and offers an aid in doing so. But offering these benefits in their product, Red Bull values the extension of horizons and energetic approaches to life. This can be summed up through their corporate sponsorship of Extreme Sporting events, individual athletes, the creation of events or the sponsorship of teams. The reasoning behind this is that these events are fast paced, high energy, thrilling and require exactly what Red Bull has to offer. By encouraging these types of events and endorsing the elimination of comfort zones, Red Bull is positioning itself as a goal, a motivation and a stimulant that can be harnessed to achieve any goal. Red Bulls success can be likened to the single-minded approach they have used n order to connect with their target market; 14 – 19yr olds and then the next highest penetration 20 – 29yr olds. Red Bull is an active product in today’s trendy lifestyle habits and is being reflected through their values and displays encouragement of abnormal sporting activities. . The Red Bull Air Races† in Perth Australia; and sponsorship of Mark Webber and Formula One. From a nationality point of view, Red Bull chooses the idols of sport and eye catching events to promote itself as well as support the people in question. This is seen all around the world and has been a strong driver in the popularity of Red Bull in certain areas of the world. Because Red Bull is a stimulant drink, it makes sense to market to the whole variety of consumers in the market place. In its 23 years of operations, the initial people who would have used Red Bull for â€Å"party energy† at nightclubs and parties will now be moving through to the quieter portion of their lives, however this does not mean they will no longer need Red Bull. Working long or irregular hours, studying and going the added distance is still important; therefore Red Bull has applied its benefit across several generations and the cycle continues. 3. Brand Characteristics Red Bull is now a very distinctive product in the market place and can be recognized based on some key points. Two Red Bulls and Rising Sun Logo * Slender Silver 250mL can (with silver and blue pattern) The name Red Bull * Endorsed Events or Persons i. e. Mark Webber As opposed to other energy drinks on the market it is the most represented and advertised product on supermarket shelving in Australia, (per unit) and is represented by an 80:20 spread of cans to bottles in the standard 250mL variety(1). Dominant characteristics of Red Bull include its involvement in Extreme Sports, high-energy events and the encouragement of athletes and the involvement within comfort breaking activities. It is important to note that the Red Bull marketing strategy encourages the promotion of the brand through non-traditional channels and is not seen in the same context as traditional carbonated drinks, or energy drinks. This fact makes adds to the characteristics of the brand. People recognize Red Bull based on its involvement and support in events and occasions. Rather than times, controversies or lengthy advertising campaigns which try to deliver a message over a long period of time. The marketing message for Red Bull has remained consistent throughout the 23-year reign it has had in the marketplace; adding to the resilience of Red Bulls brand characteristics. The Red Bull Australia website promotes Red Bull as: â€Å"Red Bull  ® Energy Drink has always been and always will be more than just a hot secret for the night owl and the non-stop party-animal. It is appreciated by a wide range of people, such as the overworked taxi driver, the stressed manager, the exam-anxious student and the pressured journalist†¦. It is used by surfers in the summer and snowboarders in the winter. For day or night, for job or fun. People who need more energy learn to value Red Bull ® Energy Drink. And the number of people who do is increasing all the time. † Red Bull Australia 2010 The Red Bull Australia website explains, through a marketing set spiel the characteristics of the brand and the direct benefiters. The exert highlights very clearly the intentions of the brand and the way in which it is appreciated. 4. Product Benefits and Consumer Satisfaction Red Bull markets itself on the two phrases â€Å"Gives You Wings† and â€Å"Revitalizes Mind and Body†. This can be demonstrated through its ingredients: Caffeine, Taurine, Sucrose Glucuronolactone, Glucose and B-Group Vitamins. These six ingredients all combine to give Red Bull the kick that consumers need. * Improves Physical Endurance * Stimulates Metabolism and Eliminates Waste Substances * Improves Overall Feeling of Well-being * Improves Reaction Speed and Concentration * Increases Mental Alertness As stated earlier the benefits listed by Red Bull allow themselves to be focused on a wide variety of people, whether they be office workers, truck drivers, athletes, students or partying. The given benefits of Red Bull provide the reasoning to buy and continue re-buying. Consumer satisfaction based on the product benefits is evident through the sales figures that Red Bull has been generating, with positive growth of 10% or more per annum. Performance the American Market shows the Market share of Red Bull compared to its competitors: Based on its 42. 6% share of the energy drink market sales in 2006, it is evident that Red Bull is a satisfying and enticing product. A large portion of Red Bulls ability to satisfy both physically and mentally comes from the consumption of the drink and seeing the performance of those around the consumer who are either consuming Red Bull or endorsed by Red Bull. This positive reinforcement from the elements encourages the consumer to drink more and to be brand loyal to Red Bull. 5. Brand Communities Red Bull’s mass sponsorship and consumer loyalty would work considerably well with a network of dedicated Red Bull Communities, rather than just the Red Bull sponsored, run and presented events. The basic criteria for the Red Bull Brand Community have already been met with the purchase of a Red Bull Product, as they have features and needs that are common to the other consumers who had purchased Red Bull previously. Ways that Red Bull could maximize on this could be through loyalty reward schemes, groups, emailing lists, gatherings, committees or clubs. While the idea of a Red Bull Brand community is appealing the practical application of one of these communities would be an expensive and difficult task to manage. The on paper, and metaphorical idea of a Brand community is a safer, more cost effective and ultimately simple Utopia when thought through. The Brand Community idea is one that should have been conceived during the introduction to the market or while the market was considerably smaller and more manageable. Red Bull uses the basic premise of Brand Communities already with their Red Bull Events and Sponsorships, in which it is then upon the individual to become a consumer and subscribe to these communities. The stress between the brand, the individual and the culture in which both exist is not under any amount of tension in the current marketplace and does not need to be altered at any point in the near future. The Brand Community, which Red Bull could potentially highlight, contains around 1 Billion people globally and would require large amounts of money to communicate to all of these people, let alone bring attention to it and get consumers to act upon it. 6. Brand Equities Red Bull has at its disposal a large set of Brand Equity that it uses to distinguish itself from other energy drinks and its competitors. These include its logo, its amber coloring, its taste, advertising, packaging, pricing and its reputation as a reliable and beneficial product for onsumers. In comparison to its competitors, Red Bull prides itself on being an al rounder energy drink that can be consumed anytime, in the right conditions, at the right place and the right time. Which has worked well for Red Bull as they have positioned the brand specifically to suit any occasion and to answer â€Å"Yes† to any of the Three Right questions. The development of these brand equities has been a continuous run through the development of Red Bull as a brand and its establishment in all the countries it now occupies space in. The Red Bull logo is a key device in the success of Red Bull and is possibly the strongest asset that they have in terms of Brand Equity. Many comparisons of competitor energy drinks such as Rockstar, Monster and Sobe No Fear yielded results that consumers could not differentiate between the Red Bull and its competitors while using unmarked cups and blindfold tests according to Helium Comparison Tests. In a real market perspective this fact is worrying that competitors are fabricating similar tasting products and that they are indistinguishable from one another. However this instance is found across all products in any category when basing comparisons without brand equities such as packaging, logos and distinctive colorings. Red Bulls marketing strategy has ensured that the strength on the product based on its merits receives the credit it deserves. The initial slow entry into markets, creating buzz and desired anticipation of the products has proven valuable for Red Bulls long term existence and has given merit to them too, in that they did ot let down the people who had tried the product based on hype and anticipation, creating return buyers and brand loyalties. Red Bull’s price premium is considered a winner with the market place as people believe that paying for benefit is better than paying for volume, as can be seen with competitors such as Rockstar who sell only the 500mL cans of energy drink and who deliver solely on their marketability rather than on product benefit such as Red Bull has done. The pricing premium has ensured that Red Bull be taken on its quality rather than on a commodity measurement ike quantity. This perceived value given to it and received by consumers tightens the consumer’s loyalty to the brand. Red Bull has seen a long run of marketing in sporting events and endorsing athletes to create awareness to potential consumers of its benefits in sporting activities, on and off the field. This spending on endorsements and events is evidence to the wider community that Red Bull is not just about profiteering, but supports the sporting world and provides entertainment and encouragement to those people who would like to strive to this level. However know where does Red Bull market itself to state that it will put you in this position. The clever marketing strategies which Red Bull have used remain honest and aim solely to promote Red Bull in a positive light whilst involving the consumers it is reaching out to. The Brand Equity that Red Bull keeps is a well-earned set of criteria that has been nursed from the beginning of the brand back in 1987 in Austria. The expansion of Red Bull into more than 120 countries is a sign of strength and highlights the diverse regions of differing brand equities among varying cultures. The underlying success of Red Bull remains in the marketing strategy that put it ahead of the competition in the first place. Without this, the basics of brand equities would not exist and Red Bull would follow the same course of one of its competitors. Because of this I believe that Red Bulls greatest brand equity is the brand itself and its history among the market over the past 23 years. Combining all of the elements discussed previously and essential make up of campaigns, strategies, advertising, targeted markets, successes and failures. This long history will benefit Red Bull in the long term, as it will become even more cemented into the grain of society and stay as the go to energy drink, rather than the fad competition products which have entered into the market in order to unseat the firmly held Red Bull. As for the continuing growth of Red Bulls Brand equity listings that is to be foreseen in the future, but there is little doubt that it will continue to build positively as the Red Bull product range changes to suit the coming changes to the current market. When it does I have no doubt that Red Bull GmbH will be ready for it. . Conclusion The Red Bull Branding Story follows a long timeline of success and obstacles that Red Bull GmbH has turned into triumphs. Red Bull have managed to turn a small Austrian drinks company into a global giant as one of the fastest growing brands and now staying true to one of the most popular of the 21st Century. Over the course of the 23 years that Red Bull has been manufactured, we can see a growing trend and the synthetic need created by Red Bull for energy stimulation drinks; and now the popularity of them to a point where we could no longer exist without them. Red Bull has become part of pop culture and every day slang and jargon, which intensifies its impact on the market and its sustainability in the consumers mind. As far as brands go, Red Bull has remained faithful to its consumers and to its own marketing goals, with little to no changes to the marketing strategy, the product packaging and flavoring, besides of course the Sugar Free Red Bull. This steadfast approach to marketing has clearly worked and a comparison of Red Bull and other Energy drinks shows that these brands lack the same commitment that Red Bull has.