Brand Marketing of Red Bull - Case Study Example

Report on brand marketing Analysis for Red Bull Executive Summary Red Bull Company was officially launched in Austria, the year 1987 by Dietrich Mateschitz as the founder. He had been employed as a marketing executive for many other companies dealing in tooth paste and cosmetics. He made extensive research and created Red Bull, a carbonated and modified version of an energy drink he had come across in Thailand. The company was established in Austria for five years before making entry to the international market. The significant growth of the Red Bull brand is generally accredited to the skilful marketing strategies put in place by the company’s management, its uniqueness, proper strategic planning and innovativeness. These aspects led to the success of Red Bull Company and enabled marketing of the brand to a high quality product. Red Bull has since then enjoyed a stable market share in the category of energy drinks despite competition from other well established beverage companies. Table of Contents 2.0. INTRODUCTION iii 3.0. Brand Exploration iii a)Brand positioning iv b)Brand Flavour iv c)Brand pricing iv d)Brand packaging iv 3.1 Brand Equity vi 4.0. MARKETING vi 5.0. MARKETING STRATEGY vii 5.1 Extension of red bull brand viii 5.2 Red bull differentiation strategy ix 5.6. Red bull advertising x 6.0. CONCLUSION x 7.0. Bibliography xi 2.0. INTRODUCTION This report is an assessment of a critical range of areas involved in the brand marketing of Red Bull. Red Bull has undergone transition making the brand an acceptable energy drink product. This was achieved by the strategic entry into the market which created more expectations for the consumers. Despite the fact that Red bull was new in the energy drinks industry, its marketing strategy chiefly attributed to its success. This engrossed a small number of employees despite its growth and inclination of marketing strategy towards simple commercials on television. In this sense, the enormous growth of Red bull in the US and most European countries is used in this report to demonstrate the important aspects of brand marketing. 3.0. Brand Exploration Red bull was discovered in the European market as an energy drink. The brand has been associated with a unique name eliciting feelings of being energized. Red bull slogan and packaging design uniquely distinguished the drink creating lasting memories in the minds of the consumers. Red bull logo is one of the strong elements of the brand that has enabled the distinction of the brand from other drinks and also it has enabled easy communication of the energy drink concept (Cui, 2003). Performance of Red bull brand has been associated with the following factors; a) Brand positioning First and foremost, the marketing research contributed to the success of Red bull as a brand. Brand positioning was one of the main concepts considered when carrying out marketing of Red bull brand. Red bull was positioned as a rejuvenation drink which could be drunk at any time of the day. It was given a brand position phrase “Revitalizes body and mind” which portrayed it as a drink for any occasion and activity. The association of the drink with physical endurance, feeling of well being and stimulation positioned the drink as a source of energy for everybody in the community (Hart, 1999). b) Brand Flavour The taste of Red bull totally varied from other refreshment drinks in the market. The main idea was to introduce it as an efficient drink for energy. Since Red bull had a stronger flavour than other drinks, it gave the consumers a nutritional perception. This pleasant taste attracted more consumers hence its growth. c) Brand pricing Since Red bull was a purposeful energy drink, the company priced the product at a cost higher than most of the ordinary soft drinks in the market. This was to influence the consumers that the drink was indeed different and was produced for energy boosting functions. This uniqueness of Red bull in the market largely contributed to its growth and success all over the world. d) Brand packaging Packaging was considered in production of Red bull energy drink. The beverage came in slim distinct packages. This indicated to the users that the substance in the drink was quite different from other traditional beverages. It further raised the anxiety to the people who had not come across the drink. Red bull sold their products in single cans different from other beverage companies. Brand Imagery Red bull brand has been perceived as a unique drink that revitalizes and rejuvenates energy irrespective of the season and demographic trends. The brand in the eyes of the consumers is viewed as a quality and reliable energy drink and associated with all classes of the society (Stole, 2007). The following are the attributes that have been associated with red bull brand; High quality energy drink All season drink Functional drink Revitalising the body and mind Enables physical endurance Unique name Great package design 3.1 Brand Equity Despite the challenges, Red bull was able to enjoy and control the market share in the energy drinks category and still controls it up to date. Red bull brand has and its strengths mainly from the following areas; Strategic marketing which positioned the brand as an all round drink with energy, medicinal and revitalizing attributes. The drink also has no demographic alignments. The total product concept has been fully leveraged in the marketing of Red bull and this has ensured that the drink has a good relationship with the users (Temporal, 2002). Innovation. The foundational philosophy behind red bull is creativity where a simple drink is grown through innovative production and marketing. The strategic expansion into the sugar free drinks market is an example of innovation (Carlson, 2008). 4.0. MARKETING Red bull has been involved in several marketing activities to ensure the success of the brand as high selling product. These activities entailed advertisements on radios and television, marketing in entertainment and sporting occasions, point of purchase marketing and sampling. The marketing strategy used by red bull enabled the achievement of the great brand equity enjoyed by the brand as from the brand exploration. Marketing function was very critical in the building of the red bull brand equity which the brand still enjoys to date. Red bull marketing strategy enhanced the brand equity of the drink by; Building the customer awareness required in order to build relationship with customers (La Roche, 2005). Word of mouth marketing and sponsorship of various sporting events brought red bull to the attention of the customers (Berthon, 2008). Positioning the brand right in the customers mind. This was facilitated through the different sponsorship with relevant slogans related to brand (Cui, 2003). Marketing strategy ensured that the brand was satisfying the customers feeling required from the brand by providing the right emotions and slogans (Moore, 1999). 5.0. MARKETING STRATEGY Red bull’s penetration into the market was not an easy task. The company’s management had to plan for proper marketing strategies to enable its success. The best means employed to catch the eyes of consumers was using the word of mouth strategy. This was the best strategy since the brand established the first level customer relationship and satisfaction in the product (Provost, 2007).This was aimed at selling the brand to particular groups that could spread word about the new product hence creating its popularity in the market. Subsequently, Red bull implemented other strategies such as funding of sporting events, supporting athletes and the point-of-purchase marketing programs (Bagozzi, 1993). Gradually, Red bull penetrated in the market as the number of consumers went on the rise. The various market strategies applied as follows; a) Uniqueness and newness in the market b) Seeding programs c) Marketing targeting and segmentation d) Expansion to international market 5.1 Extension of red bull brand Red bull brand still experiences challenges from substitute products. This make extension and diversification of the brand a necessary option as a means of market risk management. Red bull extension strategy should be that of a line extension since it will not only reduce the distribution costs and consumer product resistance but also promote the parent brand. Different marketing strategies shall be applied in case of brand leverage and extension since the market is already aware of the brand (Loibl, 2009). According to Libman (2006), the extension of the brand to include the sugar free red bull drink has been successful since it is capitalising on the existing supply chain and brand goodwill. Red bull brand equity, created through marketing strategies which have facilitated brand awareness and knowledge, is an important asset in the extension of the brand. 5.2 Red bull differentiation strategy Red bull has to maintain the market leadership as a product and as a brand therefore necessary differentiation is essential (Chen, 2006). As a new product, Red Bull Company faced several challenges in marketing and introduction of the brand to the international market. These challenges included competition from rival beverage companies and market penetration bottlenecks. Diversification of red bull in to herbal teas, food chains and magazines is a very strategic move with can facilitate the brand to maintain its market dominance. However, this kind of extension is away from the core brand line; category extension (Shama, 1993). The use of red bull brand in the category extension might dilute the original brand concept. The benefits of the extensions to Red bull brand are as follows; The brand superiority will be enhanced in the minds of the consumers as being a holistic solutions provider (Kahle, 2004). The brand competitors will be challenged since the brand will be taking a proactive strategy towards competition (Aaker, 1996). The credibility of the Red bull brand will be enhanced as a competent and innovative market leader (Maritz, 2008). This will create a feeling of likeability of the brand by the customers since it’s always brings out mystic. Pitfalls associated with the extensions Internal competition will be developed since the drinks will be a substitute of Red bull energy drink. Dilution of the original concept of energy drink producer may allow competitors an entry point into the market. 5.6. Red bull advertising Red bull advertising is one of the unique sources of brand equity that has seen the aggressive market dominance of the brand. The advertising helped great a positive brand image and customers’ awareness. The advertising depiction of red bull as a non demographic and all season drink had the following benefits High customer attachment and loyalty to red bull products Advertising created growth in customer numbers and consequently profit margins Effective customer communication enhanced the customer brand knowledge across the target markets. 6.0. CONCLUSION The introduction of Red Bull Company and its remarkable growth in the market demonstrates the importance of skilled brand marketing. Red bull was able to penetrate the energy drinks market in a short period of time despite many challenges and competition from rival companies. The corporation has been in a position to manage purposeful drinks market because of its ability to uphold growth in well-known markets and penetration into new markets with ideal strategies. The idea of brand marketing mainly relies on the research analysis and marketing strategies put in place by a particular company to ensure the brand ends up to be a high quality product. Red bull brand leveraged much on the total product concept consequently ensuring that customers satisfaction. 7.0. Bibliography Aaker, D, A. (1996). Building Strong Brands, Canberra: The Free Press. Bagozzi, P. R. & Yi, Y. (1993). Multitrait--Multimethod matrices in consumer research: Critique and new developments. Journal of Consumer Psychology, 2 (6), 22-23. Berthon, P., Ewing, M. T., & Napoli, J. (2008). Brand management in small to medium-sized enterprises. Journal of Small Business Management, 46, 33-36. Carlson, D., & Donavan, T. D. (2008). Concerning the effect of athlete endorsements on brand and team-related intentions. Sport Marketing Quarterly, 17 (3), 10. Chen, C. F., & Hu, H. (2006). The attitudes of university students to classical music concerts: A study in consumer behavior. International Journal of Management, 23 (11), 15. Cui, G., & Choudhury, P. (2003). Consumer interests and the ethical implications of marketing: A contingency framework. Journal of Consumer Affairs, 37 (11), 48. Hart, S., & Tzokas, N. (1999). The impact of marketing research activity on SME export performance: Evidence from the UK. Journal of Small Business Management, 31 (22), 13-14. Kahle, L. R., & Riley, C. (2004). Sports marketing and the psychology of marketing communication book, San Diego, CA: Lawrence Erlbaum Associates. La Roche, M. (2005). Cultural perspectives on marketing functional drinks. Journal of services marketing, 42 (7), 52. Lee C., & Chen, W. (2005). The effects of internal marketing and organizational culture on knowledge management in the information technology Industry. International Journal of Management, 22 (11), 25-27. Libman, A. (2006). Government-business relations and catching up reforms in the CIS. The European Journal of Comparative Economics, 3 (10), 38. Loibl, C., Diekmann, F., & Batte, T. M. (2009). Consumer self-confidence in searching for information. Journal of Consumer Affairs, 43 (2), 24. Maritz, A. (2008). Entrepreneurial services marketing initiatives facilitating small business growth. Journal of Small Business and Entrepreneurship, 21 (7), 5-6. Moore, V. (1999). Energy crisis DRINK magazine. Journal of Advertising Research, 128 (3), 32-33. Provost, C. (2007). Marketing: My Best Friend's iPod. Journal of Advertising Research, 136 (14), 44. Shama, A. (1993). Marketing strategies during recession: A comparison of small and large firms. Journal of Small Business Management, 31 (5), 46. Stole, I. L., & Livesay, R. (2007). Consumer activism, commercialism, and curriculum choices: Advertising in Schools. The Journal of American Culture, 30 (6), 45. Temporal, P. (2002). Advanced Brand Management, From Vision to Valuation, Sydney: John Wiley & Sons. Read More