Brand Development and Marketing of Red Bull - Case Study Example

Question one Red Bull is a company that was founded by Mateschitz to produce excellent fizzy drink that provides power to an individual. Red Bull began selling its drink to the Austrian market in 1987 and five years to some countries in Europe like France, England, and Denmark. In 1986, a group of marketing professionals under the guidance of Mateschitz carried out a far-reaching market research with the aim of finding ways on how to find better ways of packaging and developing their drink to meet all that customers preferred. They identified four source of brand equity that they could use to make a distinction of their product from others in the market so as to gain the market edge. These are flavour, packaging, positioning, and price of the product. Most of the fundamental qualities of their drink include; improvements of material persistence and elevated psychological activity, fast response and hastened metabolism and waste elimination (Kapferer 44). The objective of using flavour as a source of brand equity was to create distinction of the drink and to illustrate to the public that it was a power-enhancing drink that is closely related to the syrupy fizzy cola. The taste of the drink was further enhanced by serving it when cold since majority of its users preferred its pleasurable taste in that condition. Other consumers commended the drink for its therapeutic savor and they used it further than just for the intention of refreshment (Parry 39). An additional basis of sourcing brand equity arose from how the commodity was packaged and it incorporated the utilization of shiny container of Japanese origin with the sole aim of showing the consumers that they were dissimilar in its contents from the other competing brands. In addition to this, two bulls colliding head on at the face a golden sun constituted the logo with the expressions “Energy drink” written under the container and this clearly brought out the advantages of using the drink (Temporal 76).The consumers were supposed to buy single containers of the drink with equivalent cost charged for individual customers who may have purchased several containers of the drink. Consumers found the can more attractive over a chocolate glass manufactured afterwards. Positioning of the drink was the another technique used by the Red Bull as a source of brand equity with special emphasis on the utilization of the slogan, “Revitalizes body and mind” thus flexibly placed their drink in the market given that it did not explicitly point out the occasions in which the drink could be consumed and that it was not confined to certain occurrences like the competing drinks in the market (Aaker, et. al.82). This facilitated the growth and expansion of the drink to every section of the market and among the earliest consumers of the Red Bull were club-goers and dancers during their festivities making them possible to continue being fresh throughout the night. Other users were the motorist traveling at night and the learners given that the commodity made them to stay conscious and considerate. In terms of pricing of the drink, the company looked for distinct cost-effective approach in the form of charging an elevated price for their drink at least more than ten percent compared to the competitive beverage munchies. This was aimed at showing the customers that the drink was unique and would simply be persuaded by the difference in the cost of the drink from the cost of the other related drinks. The sources of brand equity used by the Red Bull company were different from country to country due to fact that market composition was not always constant. An example is the introduction of alternative containers in Germany which resulted in higher shortage of the drinks than could be supplied forcing the company to sell out some of the new containers when it ran out of the usual containers. This points out clearly that it was possible for the company to incur losses if the new containers were to be continuously used for packaging the drink. This sharp alteration could be possibly linked to the adventurous and curios nature of customers outside Austria forcing the company to act fast by creating a false impression of recognition to attract many consumers (Aaker, et. al. 82). Regarding the flavour, the difference in branding strategy came in such a way that the company was required to weaken the concentration of the drink and was it was a requirement by the neighbouring countries that it was supposed to embark on a research that indicated that the contents of their product and the influence that manifested on the users. The users of the drink who resided outside Austria were yet to come practically to the exclusive ways used to popularize the drink and even scores of them believed that it was an alcoholic drink. . Some unconstructive gossip about the drink but this did not harm the reputation of the company but it made it to be admired even more. The company later engaged in the out-sourcing of brand equity with sole aim of reaching all the possible points in which the drink was likely to be purchased in plenty by enhancing the popularity among the consumers. The objective of this was to make the drink to be used by influential people who would later affect positively the way other users consumed it. The consumers outside Austria were drastically contrasted with those within owing to the fact that they were not responsive to the price of the product. In this scenario, personal conversations and testimonies were used to influence them (Parry 25). The company later undertook a market study to identify prime markets where the product had not reached. The aim of doing this was to develop consciousness to the would-be users through participation in various events like skiing in countries like France. The company was able to introduce the product to the users in style through their television ads and taking the responsibility of covering the cost of events. The firm registered poor sales when they abandoned the verbal mode of advertising. Question Two. The company used various marketing programs with the aim of making the drink more popular among the users compared to other competing brands. These methods include advertising, the use of sampling, event marketing, sports marketing, and point-of purchase marketing whose intention was to reach out to the individuals who were all-round fatigued. The firm registered a sharp increase in revenue earning when the market programs were used as outlined here. It is important to point out that the drink was used by all categories of people ranging from learners to scholars and drivers and this expanded the market scope of product. Advertising as a method of enhancing products popularity and marketing program involved the use of radio and television. For the radio advert, a conversation was created to involve two characters where one would be groaning mildly due to lack of energy. The other character being healthy and realizing the dilemma of his colleague would propose the drink a solution. Sounds of him taking the drink would be heard and later he would shout with vigor due to the effect the drink he had just taken. The company did not however did not stress the flavour of their drink and this distinctively showed how far the marketing programs of the competing companies differed (Kotler and Armstrong 135). Product promotion is credited for being clear and accurate in illustrating the benefits of the commodity being advertised, the pictures used inmost cases are tempting to agree with reaches out to all the market diversities. The method is however disadvantageous because it is expensive, inflexible some of the messages in the television ads are not easily understood. The company also used sampling method and this was done with the aim of expanding the market base of the by reaching to all people in the economy especially festivals (Crawford 40). In this method the company used vehicles which had their brand name and logo inscribed in them. The vehicles were carrying enough cold drinks for the occasion keeping in mind that most consumers preferred it that way. Those who had been employed by the company to help in the realization of the full potential of this method assisted the consumers of the drink by telling them the importance of using the drink. In addition, they would encourage the consumers to take as much as possible if they really wanted to feel the full-blown benefits. Energetic university students were employed to form part of this team and this would physically convince a greater number of consumers. It important to note that this method is merited due to the fact that the stakeholder of the company can be able instant response from customers it reaches out to the intended market, it is cost-efficient, and feasible. The method is however disadvantageous because it does no cover a wider market, costly, prejudiced, and requires full dedication by the managers and employees. Red Bull also used the event marketing program where a wide variety of networked events involving the brand were held by creating and commanding all aspects and groupings of the events varying from name, symbol and exposure. For instance the Red Bull Race competition where those involved were expected to make imitations of airplanes and tried to fly in them. In this scenario, those involved in the race exhibited the true sportsmanship that the company was looking for since it involved creativity and strength. (Aaker, D. A. 86). The technique is advantageous because it made the company to be known more and showed the beverage as revitalizing since the hidden talents of the participants were exposed. The program is however expensive and reaches a limited number of consumers compared to the adverts. The method also takes the most valuable time of the company and also makes the participants to engage in life threatening activities. Apart from the sponsoring the sporting events, participants like athletes were also supported so that they could help create confidence and acceptance among the leaders who were participating in the events with the involvement in activities participation in activities like skiing, scuba diving. Those engaging in such activities exclusively elicited the characteristics needed by the company to clearly illustrate the benefits of using the drink. Some of the characteristics include joviality, creativity and unpredictability in addition to being altruistic. The presence of the company in such events would be clearly noticed by the existence of their drinks in the competition and were used by participants who would later end up using it again and again. By doing this, the company recorded a level-high revenue margin while the consumers on the other hand improved in terms of health. . This method clearly points out that such competition played a vital in enabling the company to gain global acknowledgement and the participants supported in the events brightened the image of the company in the global arena. It also enabled the company to purchase Jaguar and created other competitions like racing. The method may lack popularity however because it attends to few customers and the hazards involves in such events may place the life and health at a greater risk besides being costly The last method used by the company to enhance the popularity of their product was point-of purchase marketing and it entailed the use of fridges bearing the name of the company placed in certain locations. The symbol of the company was clearly encrypted in the fridges and they were placed in locations like large retail outlets, supermarkets and offices where customers could easily access the drink and purchase it. The company could also rent space whenever necessary especially in areas where is competitors had established themselves squarely. The fridges were regularly replenished by a team dealers and this ensured that there is no shortage of the commodity. The fridges also were made to be discrete from the rest through the use of shiny aluminum wrapper. The method has a number of merits and this includes the closeness it tries to reach consumers who may not have they benefit of participating in the other events sponsored be the company. The shiny wrappers used will in creating the distinction of the drink from the rest and this may be appealing to good number of customers. The hired dealers also ensure that the product is always available to consumers when they need it and this reduces a lot of inconveniences caused by shortages. The wrapper may however be costly and this reduces the profits that the company may earn and the dealers employed are additional cost to the company and will at all time be reducing the revenue of the company. One may therefore conclude that the popularity programs used by this company enhanced its global market and this enabled it to make profits and grow (Ronald and Drake 74). Question Three. The company can sustain its global growth by widening their global market, employing qualified experienced personnel, increase their investment in their production sites, diversification of products, expanding to markets in countries of high population and being always ready to answer any question put across by the consumers. The main reason carrying out the activities above is for it to continue dominating the market of beverages and gain a mileage as a global principal in the manufacture and supply of non-alcoholic drinks over the other companies dealing with the same products. This is only possible when careful planning and dedication for it to attain long term benefits that positively influences the growth of the firm. The services of skilled and knowledgeable managers is always necessary for a company that is growth-oriented and for it to prolong its consumer dominance, they have to act rapidly in the identification of viable market gaps. When the firm widened the global market through investments to prime markets the firm boosts its sales and enhances marginal revenue through expansion of consumer base. This ensure that the firms’ growth momentum is sustained and the performance always at the highest level than its competitors. The company should try its entire best o meet the growing demand of consumers for its product. This is only possible if the company manufactures enough stock made possible by building large construction plant to enable them do so. This is possibly attained by expanding the production major plants in major cities of the world like that in New York and London. By doing these consumers will be assured of constant supply of the product that meets their needs and preferences thus facilitating the growth of this company to become a leader in the production of a non-alcoholic drink. The company should also consider opening and expanding operations in regions where there is a large population. This includes countries like India where a short-distance transport of goods will have covered a very large market and this minimizes the operational costs and raises profit gain. Question Four A customer who has tasted and enjoys using a certain product would wish to see the producer of that company expanding it operations to see to it that other people who have not tasted the product can get the opportunity and enjoy its benefit. This is not always an overnight achievement keeping in mind the ever changing customers’ tastes and preferences. This shows that customers will always be having questions that they would like to know about their product on among other things the ingredients and the way it can be usefully consumed. The managers of a company that is serious of retaining customers should therefore be able at all times to answer any queries regarding their commodity (Reese 137). The company could further engage itself in various sports like the world cup and Olympic Games rather than just confining itself to the car racing. By doing this they ca be sure that there will be an increase in the popularity of their product The company should always use seeding programs that work successfully in a particular market and try to use them in any new markets that they go and establish themselves in. this will minimize the cost of feasibility studies that the company may decided to undertake. The company should also consider in product diversification so that the sources o earning revenue is enhanced and this will ensure that the company makes profit even if one product is failing. Works cited: Aaker, D. A & Biel, A. L. Brand Equity and Advertising. Routledge. New York.1993 (2) 73- 96 Aaker, D. A. Building Strong Brands. The Free Press. New York. 1996 (3) 73-100 Batra. Advertising management. Pearson Education India. Bombay 2006 (3) 24-87 Crawford, I M. “Marketing Research”. Center and Network for Marketing in Eastern and Southern Africa, Harare. 1990 (1) 36-48. Elliot, R. and Percy, L. Strategic Brand management. Oxford university press. Oxford. 2007 (2) 5-67 Ferrell, O. C. Michael D. Marketing Strategy. Cengage Learning. New York. 2008 (4) 47-63 Kapferer, J. Strategic Brand Management. Kogan Page Publishers. London. 1997 (7) 36-160 Kapferer, J. The New Strategic Brand Management. Kogan Page Publishers. London. 2008 (3) Keller, K.L Strategic Brand Management. 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