Brand Development of Red Bull - Case Study Example

Red Bull: A Case Study Introduction Brand has become a very important word in the marketing sector in the 21st century. There are a number of varying opinions in the market about what exactly branding is. Some believe it is the method through which companies are able to persuade people into doing what they want. Others still are of the belief that brand carries with it certain concepts and ideas which are associated uniquely with it. Brand is all of this. A brand can be defined as the image that the product possesses in the market and among the people (Heig M, 2006). This includes the brand experience, brand equity and the brand image. As of today a brand has become a culmination of several efforts that range from projecting it to the extent that it hits directly on the consumer’s mind, developing strategic marketing plans around it, and establishing what can be termed as a “brand behavior” with with consumer’s start identifying in terms of qualities and characteristics. Earlier on, companies would sell products, now they sell brands – each product having a powerful image of its own that gives it a competitive advantage of its won as against other available brands of the same segment. Summary This paper discusses brands with respect to a specific company – Red Bull, a fast moving consumer goods company, which, in the marketing parlance is said to be extremely popular for “buzz marketing.” Red Bull, as a result, is considered to be founded on a strong base of consumer loyalty, comfortable market share backed by s firm market image. In this light this paper further evaluates Red Bull’s impeccable strength that it has derived from its several sources of energy, and the brand equity it has created from its marketing programs. It further evaluates the company’s transition into a segment that was relatively unrelated to its image i.e., food chains, magazines and herbal teas. The paper explains pros and cons of this move apart from giving out an opinion on how it could keep up with the momentum. It has been observed that the overall growth in the brand equity of the product and the company in the world economy have been high, and it has been able to establish itself as a leading producer for energy drinks. The policies that the company has adopted in various markets have been similar, although it has varied in cases such as that of UK and even the USA to a certain extent. As a conclusive result, it has been observed that the overall brand equity of the product has been different in different countries, where it has been very significantly successful in some such as Austria and Germany, while having failed in others such as the market of UK (Gitman, Lawrence J.; Carl D. McDaniel, 2005), where it failed to establish itself due to lack of effective and strategic implementation of marketing policies. Also the perceptions of the consumers alters with the changing trends in society and the culture of the area, thus the overall brand equity of Red Bull is seen to be different in different countries. Branding today is simply not limited to the brand image of the product in the market but it also looks into various other methods to ensure creation of awareness about the product as well as the company in the eyes of the consumers and maintain its image in the market. This can be done through various methods like the establishment of the brand imaging, Brand personality, etc. Red bull has tried to ensure that its brand image is seen as sporty and effectively marketed. Marketing is an important concept of the production process and there have been gradual shifts in the marketing strategies of companies. Marketing helps a company ensure that there is exposure of its products in the market, so as to create awareness and demand of the product among the consumers. It has seen a number of changes with the changes in the economic structure and social developments over the years. With the changing demands and needs of the market there has been seen that most of the organizations in the world have changed their management and strategic policies to ensure that greater awareness can be created in the market. This has been seen to have reaped fruits for almost all the companies around the globe. But on the other hand there has to be realised that there have been certain companies and organizations which have emerged as global leaders in their field and sphere of influence but have not changed their policies or strategic management a great deal but have employed a persistent policy of organization and functioning (Kai H. L., Choon, L. S., Matthew, K. O. L., & Izak, B, 2006). Red Bull as a company is one which has adopted an aggressive marketing policy when starting in Austria, which it abandoned in UK. It starts small, through creating a niche within the exclusive class in society where it targets the bars and the clubs. Following this, once the company has been able to ensure that there is a certain amount of mystic and awareness present in the market it introduces the product to other centers allowing for greater amount of sale. Through the adoption of various advertisement schemes, it continues to ensure that there is greater amount of awareness achieved, and a loyal customer base is prepared based on which the brand equity develops. It has also tried to ensure that it has a high visibility factor, where clear glass fridges are provided to the distributors in the markets, ensuring that an effective availability is realised. Also the company has been known to use brand personalities such as Formula 1 racers and other sports celebrities to endorse the product which is in keeping with the image of the product. The use of Brand personality and branding has thus helped Red Bull in ensuring: Delivery of a clear message that reflects the image and effect of the product. That there is credibility and confirms integrity and authority of the organization; and It also helps ensure that the target audience is approached in not only a professional manner but also at an emotional and social level (Moorman, C. and R.T. Rust, 1999). The company also organizes events such as skiing in Aspen and others as a promotional method through which it reaches its target audience.  In such a setting there is usually seen the presence of a large number of media personnel for promotion. There are also other incentives that are handed out to ensure that the participation is high like catering, etc (Kang, H., Hahn, M., Fortin, D. R., Hyun, Y. J., & Eom, Y, 2006). This method of marketing for promotional purposes has become very popular in the recent times, and has proved highly effective for Red Bull over the years. Selective marketing to the main target audience through setting up stalls outside libraries and work places have allowed for greater capturing of the markets. Yet it has to be realized that there are a number of weaknesses that are present in the current scheme of affairs. The first and the most significant weakness is the lack of organizational information on a market before the product is launched, which was seen to be the main factor that led to the failure of capturing of the markets in the UK. Also it has been observed that the overall target audience of the advertisement is a very small group in the population (Karger, D. W., & Malik, Z. A, 1975). The company and its product has a very vast and extensive potential in the market that it is yet to explore, and many believe that it is only when the managers in the company seek to explore these options that the true potential of the brand equity of the product and the company be truly achieved. Also the health risk that many believe it posses takes away from a certain amount of its clientele, and it is important that the company is able to overcome this through effective strategic implantation to ensure better results in its brand equity in the market. It is important that since the company has been able to establish itself as a brand in the market with a single product that is mostly recognized by its entire consumer base, that it develops a line, which is able to take advantage of this position in the market and spread into other products provision also. The most significant strategy that the company has to adopt is ensure that it is able to maintain its market share, and this can be done through ensuring that it maintains its customer loyalty (Gray, James G., Jr, 1986). This can be done through carrying out of events, and ensuring that it is able to take into account the various cultural differences in different countries, and adopting to them For example, the sport of football is highly appreciated in Europe and would ensure that the company is able to sell high, but the same brand personality cannot be used in another country, say a country like US, where the brand personality would have be someone who the customers can relate to. Also, it can use brand extensions, and ensure that it is able to cash in on its brand name (Reinartz, W.J. and V. Kumar, 2000). There are certain products that the company can launch including, aerated drinks, Coca Cola is one of its biggest competitors in the market and is a huge producer of aerated drinks. There are also other options open to the company including development of health drinks that is in high demand in the society, given the increased social and health consciousness among the youth. The company has moved in a number of brand extensions including that of herbal tea, magazines and fast food chains. It is a highly effective move, as it is able to cash in on its brand.  A brand is a comprehensive concept that has evolved over the years and it helps in interpretation of the brand in a more detailed manner. It includes all the tangible and intangible traits in a brand such as way of life, ethics, ideals, prejudices, features, interests and other such characteristics (Pinsdorf, Marion, 1986). The brand is what helps ensure that the product has its unique identity. It has provided as a valuable asset in the increasing the brand’s market engagement and attachment in the market with the people. When the company ventures into other products, the customers will associate it with the same and the main markets for these products are those which are already established by the company. Thus, it is a natural assumption that the customers who are loyal will also become customers for the new products, as these are ideally suited for the same group. They will relate the same quality and characteristics to the products as they do to the drink by Red Bill. Here the company can use its brand name for better and more holistic growth. This includes the brand experience and the brand image. Brand experience is the sum of all points of contact with the brand, while the physiological aspect which is related to the symbolic concept which is present in the minds of the masses. A brand thus consists of both the normative as well as the realistic aspects of the product (Richardson, Dick, Jain, 1994). This will allow for generation of greater income from the region while the company establishes itself in the region (Verlag R H, 2009). The company will collaborate with the regional suppliers to ensure that its entry is secured, and the products are marketed in a knowledgeable manner, and within two years, once the traditional market strategies are better comprehended the company will look at venturing on its own. Conclusion In conclusion it can be said that Red Bull has been able to succeed on account of its innovative marketing which could be termed off the beaten path since most of the other companies in the same segment rely more on advertising than anything else. Since the company Since the company used “managers from the masses”, which, chiefly comprised of student brand managers from campuses considered to be opinion leaders and trend setters, the long-term customer base of the company’s products, as a consequence, came very much from the population. However, certain things remain as skeptical about the company’s products. Despite having gained popularity among the masses, a majority of consumers – who may or may not be using these products – haven’t been able to understand why Red Bull products are generally available in pubs and bars than over-the-shelves? It is probably here where a bit of more positive marketing is required. References Gitman, Lawrence J.; Carl D. McDaniel (2005), The Future of Business: The Essentials. Mason, Ohio: South-Western, pp 115-130 Gray, James G., Jr (1986), Managing the Corporate Image: The Key To Public Trust. Greenwood 1986, pp 98-102. Heig M, (2006); Brand Royalty; How the World's Top 100 Brands Thrive and Survive, Cambridge Publication; pp.216 Kai H. L., Choon, L. S., Matthew, K. O. L., & Izak, B. (2006). Do I trust you online, and if so, will I buy? An empirical study of two trust-building strategies. Journal of Management Information Systems (23) pp. 233-26 Kang, H., Hahn, M., Fortin, D. R., Hyun, Y. J., & Eom, Y. (2006). Effects of perceived behavioral control on the consumer usage intention of e-coupons, Psychology & Marketing (23) pp.841-864. Karger, D. W., & Malik, Z. A. (1975): Long-range planning and organizational performance. Long Range Planning, 8(6): 60-64 Moorman, C. and R.T. Rust (1999), “The Role of Marketing”, Journal of Marketing, JM/MSI Special Issue on Fundamental Issues in Marketing, 63 (Special Issue), 180-197 Richardson P S, Dick A S, Jain AK, (1994): "Extrinsic and Intrinsic Cue Effects on Perceptions of Store Brand Quality", Journal of Marketing October 1994 pp. 28-36 Pinsdorf, Marion, (1986), Communicating When Your Company Is Under Siege: Surviving Public Crisis. Free Press 1986. Reinartz, W.J. and V. Kumar (2000), “On the profitability of long-life customers in a noncontractual setting: an empirical investigation and implications for marketing”, Journal of Marketing, 64 (October), 17-35. Read More