Building Brand Equity for Red Bull - Coursework Example

Building brand Equity for Red bull Outline Introduction Sources of brand equity and adjustments in different markets Penetration in the international market Analysis of Red bulls strength and weaknesses Strengths Weaknesses How Red bull can maintain momentum in the market and recommendations on brand extensions Evaluation of Red bull’s move to herbal teas, fast food chains and magazines Effectiveness of Red bull in advertisements to different ages Conclusion Table of Contents Introduction 3 Sources of brand equity and adjustments in different market 3 Penetration in the international market 5 Analysis of Red bull’s strength and weaknesses 6 Strengths Analysis 6 Weaknesses 6 How Red bull can maintain momentum in the market and recommendations on brand extensions 7 Evaluation of Red bull’s move to herbal teas, fast food chains and magazines 8 Effectiveness of Red bull in advertisements to different ages 8 Conclusion 9 References 10 Introduction Brand marketing for Red bull has undergone a broad evolution to build the brand equity as an acceptable energy drink product. This aggressive growth was due to the company’s marketing strategy which was aimed at more customer satisfaction. Considering the fact that Red bull was new in the energy drinks industry, proper marketing strategies essentially attributed to its success. This was made possible by employing a small number of staff despite its growth and preference of marketing towards simple commercials on television. Therefore, the enormous growth of Red bull in Austria and the international community is used to demonstrate the important aspects in building brand equity. Sources of brand equity and adjustments in different market As a new brand, Red bull struggled to enter the market as a functional drink. Functional foods were not classified in the market and in order to enter the market, Red bull had to introduce well planned strategies for it to succeed in its market niche. The company was drawn in various marketing activities to make sure the brand came out as a high selling product. The major activities for Red bull’s marketing were geared towards ensuring the consumers had a complete idea of what the drink contained. They were in different forms but with the same motive of attaining the brand’s popularity. It is also noted that Red bull changed their marketing strategies in different markets according to consumer response. The first launch of red bull took place in Austria where it enjoyed the market for five years before expanding to Europe and other countries such as the United States of America. This was mainly because Red bull was the only functional drink in the Austrian market at that time. Several market strategies were put in place to ensure brand equity for red bull brand. The most common approach applied in Austria was using the word of mouth strategy. This strategy involved convincing particular groups of people especially the youths and after drinking the brand they could go around informing the people about Red bull. This source of brand marketing was effective for Red bull’s market brand entry in Austria. To add on this, Red bull applied other strategies including promotion of sporting activities, sponsorships of athletes and the point-of-purchase marketing programs. Steadily, this approaches enabled Red bull to penetrate in to the market from the notable increase in the number of consumers. Another important strategy applied in marketing Red bull was by point of purchase marketing. This strategy involved various activities such as allocation and supply of refrigerators in assorted wholesaling and retailing entities (Simovic, 2010). Supply of the refrigerators was to enhance easy supply and marketing of Red bull brand in the market. Furthermore, Red bull displayed the brands logo on these fridges to ensure it stood out among the rest in its category. This idea mainly contributed to the supremacy of Red bull in the functional drinks market. Red bull also used sampling as a major element of its marketing program. This involved trying out of the product in various markets and target groups. The approach of sampling was effective since it was mainly applied in specific occasions such as contests, live concerts, public places, restaurants and open air promotions in colleges and streets. The sampling process was done in appropriate places of the market so as to get in touch with the probable users of the drink. The customers were encouraged to buy the product while learning other benefits of the drink such as the nutritional and functional values. The most used group of people to carry out the sampling process were University students. This was effective since they had diverse locations where they could perform their marketing and bring back the results from the ground. Penetration in the international market Red bull gradually penetrated to the neighbouring European countries and the international community after establishment in Austrian market. When Red bull was introduced in the United Kingdom, it applied different marketing strategies from the ones used in Austria. The major differences in marketing of red bull in the United Kingdom included advertising of the brand as a sports drink other than marketing it as a functional drink. Secondly, the word of mouth strategy used effectively in the Austrian market was altered and not implemented in the United Kingdom. Instead, the company chose to supply the product in large supermarkets and wholesaling outlets. Lastly, Red bull changed the advertisement methods by shifting from electronic media ads and moving to billboards advertisements. On the contrary, the market in the United Kingdom was very challenging because of lucozade sports drink which was popular in the market. Despite the challenges, Red bull managed to market the brand and soon enjoyed the European market (Kahle, 2004). Red bull further extended its market to the United States of America in 1997. This was exactly ten years after its launch in Austria. The company also applied several changes to its marketing strategy in the US because it entirely concentrated on marketing in areas with great potential. Once the drink was popularised in one seed, the marketing agents moved to another area assumed to be a popular seed. This was done continuously until the brand found its basis in most parts of the country. The company further created a number of management units in the products strongholds for well-situated running of the company from strategic parts of the country. The company also used students as their main marketing agents and target group of sampling. With these strategies changed Red bull experienced a massive growth in the United State’s market surpassing the company’s profit expectation with just two years in the market. Analysis of Red bull’s strength and weaknesses The brand marketing of Red bull in market entry had various advantages and challenges. This is mainly because red bull was a new product in the market and not many consumers had ever heard of it. Therefore Red bull strategies in the market were not very smooth. Strengths Analysis Red bull had several advantages in its brand marketing strategies. Firstly, Red bull’s marketing gained from its mystique since it was a new brand and many people had never seen or tasted it. This led to the brand’s myth since most individuals consumed red bull in anxiety and for adventure purposes. People did not know whether Red bull was an alcoholic or just mere refreshment hence continued consumption of the drink. This increased the brand’s popularity due word of mouth evidence Another element that favoured Red bull was the fact that the company’s market target was on a wide range of groups. As stated by (Berthon (2008) this approach varied from other companies that mainly target the market in accordance to age and social characters. Red bull target varied from students, sportsmen, teenagers’ children, old people, drivers and even businessmen. This variety enabled Red bull to enjoy a diverse market. Weaknesses Brand marketing in Red bull underwent several challenges in its introduction to the market and maintenance of its high profile position in the market. These challenges comprise of competition from other companies and introduction of comparable energy drinks in the market. Red bull faced competition from rival companies which produced similar energy drinks in the market. The companies emulated the advertising methods implemented by Red bull and their packaging style so as to confuse the customer who were not well acquainted with the original brand (Maritz, 2008). Red bull also experienced challenges concerning health matters associated with consumption of the drink. This slightly hindered the growth of the brand into the market because of rumours from competing companies that the functional drink had health issues. However, few and rare occasions such as death occurred after consumption of red bull and participating in sport activities while the individuals had other illnesses (Moore, 1999). This meant that the company took responsibility of these cases. How Red bull can maintain momentum in the market and recommendations on brand extensions Red bull’s aggressiveness and smooth entry into the functional market category is an achievement that is normally hard to come by. However to ensure stable control of the market, the company needs to apply and advance on their laid down strategies. This can be achieved by Red bull involvement in sponsoring more sporting events and participants. Such approaches would have great influence in the brands equity in the market. Sponsorships of renowned events such as the formula one competition and prominent athletes could aid the maintenance of the company’s momentum in the market (La Roche, 2005). The expansion of Red bull in sporting sponsorships and participation should however be extended in terms of brand delivery and production of diverse products. Since red bull deals only with the production of Energy drinks, it is recommended that the company should try and diversify its commodity production to other drinks such as refreshments and soft drinks among others. As emphasised by Kapferer (2008) this would also fit in the market since Red bull has good reputation in the market. Evaluation of Red bull’s move to herbal teas, fast food chains and magazines Following notable steady growth of Red bull in the market, it is advisable that Red bulls enters different market and engage in the production of commodities such as herbal teas, fast foods and magazines. Since Red bull employ tactful marketing strategies, the involvement and participation in production of these goods would well suit the company’s ability in marketing(Carlson, 2008).. Production of herbal tea is an ideal idea for Red bull since it is a functional drink which works as a stimulant and hence the experience in the manufacture of stimulants. However, in case the company moves to production of these brands, it has to introduce better marketing strategies in order to enter the market. This is based on the fact that the markets are very competitive with well established companies controlling the market. Effectiveness of Red bull in advertisements to different ages Red bull took a dimension towards advertising different from most beverage companies which advertised their products based on flavour and picture representation. Red bull’s advertisements mainly used animation and put focus on passing the message for the profits associated with the product. As evident from Cui (2003) this was very efficient because the advertisements build a strong consumer foundation for the company which targeted a wide range of people from different cultures, ages in the market. Conclusion Red Bull energy drink was introduced into the market and experienced an outstanding growth in the functional drinks market. This tremendous growth shows the significance of skilled brand marketing. Red bull was able to enter the international market as a sole producer of energy drinks few years after its introduction despite many challenges and competition from other producers. The approach of building brand equity basically depends on proper marketing strategies put in place by companies to make sure the marketed brand gets in to the market and builds the brand equity of the product. References 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. Cui, G., & Choudhury, P. (2003). Consumer interests and the ethical implications of marketing: A contingency framework. Journal of Consumer Affairs, 37 (11), 48. Kahle, L. R., & Riley, C. (2004). Sports marketing and the psychology of marketing communication book, San Diego, CA: Lawrence Erlbaum Associates. Kapferer, J.(2008). The new strategic brand management: Creating and sustaining brand equity long term. Canberra: Kogan Page Publishers. La Roche, M. (2005). Cultural perspectives on marketing functional drinks. Journal of services marketing, 42 (7), 52. Libman, A. (2006). Government-business relations and catching up reforms in the CIS. The European Journal of Comparative Economics, 3 (10), 38. 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. Simovic, M. (2010). Brand Equity: Consumer Based Brand Equity in Practice. New York, NY: VDM Verlag. Read More