Red Bull’s Innovative marketing

Case Presented by:

Vinu WilsonPrasidh PrasadJoshni AbrahamAshwin MenonNimisha Babu

Case Summary

0 The Red Bull energy drink was launched in Austria in 1987, by Dietrich Mateschitz

0 He claimed to have experienced the invigorating properties of a popular Thai energy drink, Krating Daeng, on a trip to Thailand

0 Realizing that a similar product could have good potential in Western markets, Mateschitz obtained the license to manufacture a carbonated version of Krating Daeng from its Thai owners.

Case Summary- Cont..

0 Obtaining permission to sell Red Bull in Europe was not easy, as it contained several ingredients whose effects on the human body were untested

0 However, permissions were eventually obtained, and Red Bull became exceptionally successful in all the markets in which it was launched

0 It was generally acknowledged that Red Bull's success was the product of the company's “innovative marketing efforts”

Problem Definition

0 “Is Red Bull a fad that would soon be forgotten by its consumers or an enduring brand with the strength for growth and survival?”0 The role of buzz marketing in establishing the product in new

mkts0 To examine the role of sports sponsorship in establishing brand

image0 To analyze the potential effects of a large number of

competitors on a powerful brand and the sources of differentiation in a crowded market.

0 The importance of brand extensions and pitfalls of being associated with a single product

Unique packaging- gives a feeling of “concentrated experience”

Follow a Premium pricing – satisfying the ego of affluent youngstersBeing privately owned- capable of taking risk in marketing the product the way the company feels

Widely available near gyms and collegesExclusive network of distributorsAggressive sales forceAssociation with sporting teams

Not a nutritional productTaste was not appealing to everyone

High sugar and caffeine – not popular among elderly customers

Available in only one sizeNo Variety in flavors

Food regulation authorities – banning the sale of the product

Used with alcohol as a mixer

Imitators- trying to enter the energy drink segmentsLow brand resilience Score

SWOT ANALYSIS

STRENGTH WEAKNESS

OPPORTUNITY THREATS

Analysis0 Role of buzz marketing in promoting Red Bull in new

markets0 recruiting 'student brand managers' who would be used to

promote Red Bull on university campuses0 Red Bull would be distributed in the parties hosted by these

student brand managers0 The use of this kind of marketing strategy has become known

as 'viral' marketing0 it used the youth 'underground' to spread the popularity of the

drink. So the firm would rather restrict the drink's supply and not advertise it, expecting that growing numbers of target consumers 'catch the bug' and its reputation spreads

Analysis Cont..0 Association with Youth and adventure sports help the brand

in gathering attention

A Still from Red bull sponsored Driver Search programmeThe aim of the competition is 'to find, test and support budding young

American racing talent‘

Analysis Cont..

0 Red Bull was given to club DJs, empty cans would also be left on tables in hot spots such as trendy bars, clubs and pubs0 A place frequently visited by affluent youths and professionals.

Analysis Cont….0 Potential effects of a large number of Competitors and a

source of Differentiation0 By 2004, the worldwide energy drinks market was worth an

estimated $ 200 million; Red Bull had achieved a clear market leading position, with a approx. 60% market share.(Source:Beverage Industry Tabloid, 2005)

0 The lure of fast-growing profits in this market brought many competitors like:Rockstar , AMP(Pepsico), Monster, KMX(Cocacola)…

Analysis Cont..0 Factors Challenging the market leader position of Red Bull

Aggressive competitors competitors offer multiple flavours & different pack sizes

Lack of product InnovationUntil 2003, the company only produced one version of RedBull. A sugar-free

version was introduced in that year

Growing health consciousness among usersThe ingredients are main source of concern, Red Bull was banned in France and

Denmark following the publication of these concerns. It is classified as a medicine in Norway and until recently could only be bought in pharmacies in Japan.

Availability of Red Bull in all retail outlets Dilution of its “coolness” and “Exclusivity” factors

Analysis Cont..

0 Importance of brand extensions & Pitfalls associated with a single product0 The market for functional drinks and foods is growing as

food and drink companies seek to benefit from the social trend towards personal well-being and healthier lifestyles. This is accompanied by the demographic reality of an ageing population; a greater proportion of the population is middle aged and elderly. These people are attracted to products that offer regenerative or rejuvenating properties……How can Red Bull retain its aging customers????

How Red bull can maintain its brand image

0 Implementing a Flank Defence strategyTo counter the threats from other energy drink manufacturers, Red bull should introduce a low priced brand, which is available in multiple flavours and packaged sizes. This would protect the original brand from the attack as the competitors would shift their focus to new low priced brand

0 Maintaining the “Exclusive” factorSelling the product only at premium pubs and discotheque and cafetaria’s of top IT companies.

0 Promoting the sugar free variant among affluent middle aged people0 Using multi flavors that tickle their taste buds

0 Intoduce non carbonate version to compete with powerade, Gatorade

Thank You