A look at a key feature of Red Bull.docx

A look at a key feature of Red Bull.docx

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AlookatakeyfeatureofRedBull

MARKETINGCASESTUDY（UK）

REDBULL

AlookatakeyfeatureofRedBull'sbusiness

SomeobserverssaythatRedBull'sbrandingisrevolutionary,callingitan'anti-brand'strategy.ThecompanyfacedadditionalproblemsintheUKwheretherewasalreadyanestablisheddrinkthatwasspecificallytakenasapost-illnessbeverage.GenerationsofyoungBritonshaddrunkLucozadeastheyrecoveredfromcoldsorflu,soRedBullhadtopromoteitsbranddifferently.

Thefirmavoidedusualmethodsofmarketing,relyingmoreonwhatiscalled'buzzmarketing'orword-of-mouth.Abrandimagewascreatedandcultivatedwhichassociatedthedrinkwithyouthcultureandextremeandadventure-relatedsports,suchasmotorsports,mountainbiking,snowboardinganddancemusic.RedBull'stargetconsumersegmentbegantoadoptnicknamesfortheproductsuchas'liquidcocaine'or'speedinacan',thusspreadingits'left-field'appeal.

Image:

RedBullassociatesitsbrandwithyouthcultureandextremeandadventure-relatedsports-oneexampleofthisisitsDriverSearchprogramme.Theaimofthecompetitionis'tofind,testandsupportbuddingyoungAmericanracingtalent'.Copyright:

SuttonImages,reproducedbykindpermissionofRedBull

RedBullthenworkedtoensurethattheirbrandwasvisibleonthestreet:

∙Usingpick-uptrucksasmobiledisplays,paintedblueandsilverwithagiantcanofthedrinkmountedontopofthevehicle

∙Designedtobeeye-catching,thesedeviceswereaimedatpromotingtheredbullbrandasyouthfulandslightly'off-the-wall'

∙Cansofthedrinkwerealsogivenoutfreetopeopleonthestreetwhohadbeenidentifiedasbeinginneedofenergy

∙RedBullwasgiventoclubDJs,emptycanswouldalsobeleftontablesinhotspotssuchastrendybars,clubsandpubs

ThecompanyalsosetaboutpromotingtheRedBullbranddirectlytoGenerationY,theso-called'millennials':

peoplebornafter1981whowerebelievedtobecynicaloftraditionalmarketingstrategies.Partofthisideainvolvedrecruiting'studentbrandmanagers'whowouldbeusedtopromoteRedBullonuniversitycampuses.Thesestudentswouldbeencouragedtothrowparties（asifencouragementwasneeded!

）atwhichcasesofRedBullwouldbedistributed.Thebrandmanagerswouldthenreportbacktothecompany,givingthefirmalowcostformofmarketresearchdata.

Theuseofthiskindofmarketingstrategyhasbecomeknownas'viral'marketing.Itisasifacompanyseesnoneedfortraditionalinformativeorpersuasivecommunications,ratherinRedBull'scaseitusedtheyouth'underground'tospreadthepopularityofthedrink.Sothefirmwouldratherrestrictthedrink'ssupplyandnotadvertiseit,expectingthatgrowingnumbersoftargetconsumers'catchthebug'anditsreputationspreads.RedBullwasaspectacularlysuccessfulexampleofthestrategyworkingeventhoughasweseelater,itsbrandingwasaidedbystateinterventionincountrieslikeFranceandDenmark.

By2004,theworldwideenergydrinksmarketwasworthanestimated£1.6billion;RedBullhadachievedaclearmarketleadingposition,witha70%marketshare.Thelureoffast-growingprofitsinthismarketbroughtmanycompetitorsintothefunctionalfoodssector,wherehealthandenergydrinkshaveseensalesdoubleeveryyearsincetheirintroduction.Manycompetitorshavetriedtoemploysimilarmarketingstrategiesandtacticsinordertograbsalesfromthemarketleader.Notallhavebeensuccessful,ofcourse.

Whenafirmtriedtolaunchitsownenergydrinkin2002,ittriedtotarget16-24yearoldswithapostercampaignfeaturingbarelyclothedyoungpeopleexhibitingwoundstotheirbodies.Asthedrinkwascalled'Shark',therelevanceoftheinjuriesseemedclear.However,followingcomplaints,theAdvertisingStandardsAuthority（ASA）bannedtheposters,asthecampaignappearedtoendorsesexualviolence.MoreonthisdecisioncanbefoundontheASAWebsite.

TheproblemthatRedBullnowfacesishowtobuildonitsincrediblesalesgrowth,asithasbecomeamaturebrandwithinasaturatedmarket.AmongthechallengesthatRedBullfaces,thefollowingaresomeofthemostserious:

∙Thelossofitsoriginalconsumerbase,asthe'millennials'becomeworkingadults.Howshouldthefirmattractanewgroupof16yearoldconsumers?

∙Healthconcernsthathaveemergedinseveralcountriesoverproblemsassociatedwithhighintakeofcaffeine.RedBullwasbannedinFranceandDenmarkfollowingthepublicationoftheseconcerns.ItisclassifiedasamedicineinNorwayanduntilrecentlycouldonlybeboughtinpharmaciesinJapan.Asthehealthandenergysoftdrinksmarkethasreachedmaturity,RedBullisconcernedthatitisunabletotargetmassconsumptioninthesecountries.

∙Beingover-reliantonasinglebrand.Until2003,thecompanyonlyproducedoneversionofRedBull.Asugar-freeversionwasintroducedinthatyear.

∙Thematuremarketforenergydrinkshasattractedsomeoftheglobalfirms,suchasCocaCola,PepsiaswellasAsda/Wal-Mart,withtheirownbrandsseekingtogainacompetitiveadvantageoverthemarketleader

Howdoesthecompanyplantoprolongitsproduct'slifespan?

InNovember2004,itbecameclearhowMateschitzintendedtoextendthe'natural'lifecycleofhisgroundbreakingproduct.Foryears,thefirmhassponsoredsportsthatfitwellwithRedBull'simageasunconventionalandedgy:

windsurfingandhang-glidingbeingtwoexamples.SotherewasacertaincautionamongindustrywatcherswhenFordannouncedthatitwassellingitsJaguarFormulaOneteamtoRedBull.

Image:

DavidCoulthardFormulaOnetestingforRedBullinValencia,Spain,January2005.Copyright:

SuttonImages,reproducedbykindpermissionofRedBull

ThedangersofmotorsportseemstomatchRedBull'simage,justasitssponsorshipofextremesportssuchasrockclimbinghelpedtoenhancethefirm'sreputationamongitstargetconsumers.ButtherearehugesumsofmoneyinvolvedinrunninganF1teamandsomeintheindustryquestionedthewisdomofMateschitz'splan.

ItispossiblethatasRedBull'scoremarketmatures,thecompanyneedstobroadenitsappealtothesemid-20to30yearolds,whilstretainingitsappealamongst16-24s.VodkaandRedBullisstillthemostpopularalcoholicdrinkamongstyoungpeople,butwewillhavetowaittoseeifthefirm'sattemptstoreachouttomoreconsumersworks.

WhatsortofpeopleworkforRedBull?

Fromtimetotime,thecompanyrecruitsstudentbrandmanagerstopromoteitsproductamongyoungstudentgroups.

ThefirmisseekingtosetupEnergyTeamsinmorethantwentyUKuniversityregions.Clearly,asstudentgroupsprogressthroughtheirstudies,newteamsarerequiredtocontinuethispromotionalwork.

Atthetimeofwriting,thefirmisrecruitingforsalesexecutivestooverseemarketingtothe'offtrade'.

∙Offtradereferstoproductsthataresoldforconsumptionoffthepremises,eitherastake-homedrinksorfordrinkingatworkorschool.

∙Ontradeiswhereproducersoffertheirdrinksforsaletoconsumersinpubs,restaurants,barsandclubs.

RedBullisinterestedinrecruitingstaffwhoareyoung,intouchwithyouthculture,dynamicandinnovative.

WheredoesRedBullfitintotheUKsoftdrinksmarket?

RedBullispartofthefunctionaldrinksmarket.Thesearesparkling,stillanddilutableproducts,designedtohelp:

∙Replacelostminerals,sugars,traceelementsandfluidsafterexercise

∙Boostorreplacelostenergyfromillhealthorgeneralfeelingofweariness

∙Stimulateconcentrationorawareness

Thefunctionaldrinksmarketincludes:

∙Sportsdrinks

∙Energydrinks

∙Vitaminandmineral-enricheddrinks

∙ACEdrinks（fortifiedwithA,CorEantioxidantvitamins）

∙Wellnessdrinks

∙Nutraceuticaldrinks

∙Near-waterdrinks

∙Herbaldrinks

Image:

Aselectionofthenumeroussoftdrinksavailable.Copyright:

RobertAichinger,stock.xchng

Themainbrandsthatdominatethetake-homesectorofthemarketarelistedbelow.Notethatthislistincludesallsoftdrinkbrands,soproductsthatoccupysmallernichesofthemarketarenotlisted:

Image:

CocaColaisthemostconsumedsoftdrinkintheUKintermsofbothvalueandvolume.Copyright:

RosikaVoermans,stock.xchng

Top12Take-HomeUKBrandsbyValue2002

∙CocaCola

∙Robinsons

∙PepsiCola

∙Ribena

∙Lucozade

∙Fanta

∙TropicanaPurePremium

∙Schweppes

∙IrnBru

∙OceanSpray

∙RedBull

∙Tango

TopTake-HomeSoftDrinksSuppliersbyValue（£million）2002

∙CocaColaEnterprises-1312

∙BritvicSoftDrinks-557

∙GlaxoSmithKline-308

∙DanoneWater-122

∙TropicanaUK-120

∙AGBarr-113

∙GerberFoods-98

∙RedBull-65

∙ProctorandGamble-55

∙DelMonte-54

∙OwnLabel-997

TopTake-HomeSoftDrinksSuppliersbyVolume（litresm）2002

∙CocaColaEnterprises-1580

∙BritvicSoftDrinks-707

∙DanoneWater-222

∙GlaxoSmithKline-195

∙AGBarr-157

∙GerberFoods-103

∙TropicanaUK-68

∙ProctorandGamble-68

∙PrincesSoftDrinks-63

∙HighlandSpring-61

∙OwnLabel-2194

Datasource:

BritvicSoftDrinksCategoryReport2003[PDF,1.8MB]

NoticethatRedBulloccupiesaplaceinthetopsellingsoftdrinkssuppliersifyoumeasurethisbyvalue（intermsofsalesrevenue）,butifyoumeasureperformancebyvolume（intermsofquantityofproductsold）RedBulldoesnotputinanappearance.Whatdoesthistellyouaboutthesellingpriceandthequantityofdrinksoldineachunit?

Themarketforfunctionaldrinksandfoodsisgrowingasfoodanddrinkcompaniesseektobenefitfromthesocialtrendtowardspersonalwell-beingandhealthierlifestyles.This