Brand Development and Marketing: of Red Bull - Case Study Example

Brand Development and Marketing Executive Summary The purpose of this study was to explore the various aspects of branding and in particular brand equity in reference to Red Bull. This study was also aimed at discussing the various sources of equity for Red Bull, its marketing programs that add into its brand equity and finally, the evaluation of Red Bull to venture into other product such as herbal teas, fast-food and magazines. First and foremost, it has been established that Red Bull has got two major sources of brand equity namely brand awareness and brand image. In brand awareness, Red Bull using a very distinct and very unique and slim can has been very instrumental in creating brand awareness with the intention of creating a very distinct and eye-attracting logo. On the other hand, brand image as a source of brand equity for Red Bull is facilitated by youth culture and other extreme and most adventurers related sporting activities like the motor sports, snowboarding, dance music and mountain biking. Further, unconventional marketing programs are being used by Red Bull to support its brand awareness and image. Finally, because of the change in the market where Red Bull is well recognized, it has been recommended that the introduction of other drinks that can be sold under the Red Bull be introduced to ensure continuity in revenue generation when the brand reaches its maturity. Table of Contents Executive Summary 1 1.0 Background 3 2.0 Red Bull’s sources of brand equity 3 2.1 Brand awareness 3 2.2 Brand image 5 3.0 Analysis of Red Bull’s Marketing Program 5 4.0 Evaluating Red Bull’s move into herbal teas, fast-food and magazines 7 4.1 Herbal tea 7 4.2 Fast Food Chain 7 4.3 Magazines 7 4.4 Benefits of this move 7 4.5 Dangers 8 5.0 Recommendation 8 References 9 1.0 Background According to Keller (2003, p 54), brand equity refers to the strong and favorable as well as unique brand combinations that are created in the memory of the customers by the product supplier based on different ways of presenting the product or service to the market. Brand equity is especially preferred since it can be used to add value to the product when it is recognized and can have positive associations in the mind of the customer. 2.0 Red Bull’s sources of brand equity Red Bull as based on the company case study has two main sources of brand equity which are brand awareness and brand image and both of which are major marketing issues. The company has very elaborate tactics which it has continued over years in order to try and make these sources successful. 2.1 Brand awareness According to Keller, there are two major elements of brand awareness and they include recognition and recall. Keller further notices that that if a purchase decision has to be made at a particular point of purchase, then the brand name and the logo as well as packaging and all other elements of brand recognition, are very important factors. On the other hand, if the purchase decision is made before one arrives at a point of sale, then it implies that recall is particularly important. According to (Aaker & Joachimsthaler 2000), low-involvement purchase normally is done when the products being purchased are relatively cheap and are frequently bought and at the same time are of low risk. In such circumstances, using traditional advertising and numerous frequency drills would prove to be very productive for the company at the marketplace and amid very stiff competition. This is what exactly being done by Red Bull. In the company, it is provided that using a very distinct and very unique and slim can has been very instrumental in creating brand awareness. The purpose of using this can is to create a very distinct and eye-attracting logo which is presented in two bulls alongside a yellow sun. Further, the wording package communicates it all about the benefits that the product accrues and above all being an energy drink. The packaging style of a product is a very important aspect of branding and more especially in low-involving products as is the case of Red Bull. Further, for brand awareness, Red Bull has got very high brand recognition. Most customers can identify it very easily while in the store. Brand recall in this case will mean that when the customers will be thinking about the energy drinks, they will easily think about Red Bull most probably. Brand recognition is especially important in when the supplier wants to win those consumers that are likely to make purchase decisions at a point of sale (Lynch & de Chernatony 2004),. It is with this regard that branding, the logo and packaging have been very instrumental for Red Bull in differentiating them from the rest in terms of size, color and its logo and its slogan that “Red Bull gives you wiiings.” In general, Red Bull has made very numerous strides towards creating brand awareness through sponsorships, event advertising and promotions and consequently having great impact on brand equity. 2.2 Brand image For over years, Red Bull has managed to create a very strong global image accompanied with very strong associations that have been characterized by the incorporation of the youth culture and other extreme and most adventurers related sporting activities like the motor sports, snowboarding, dance music and mountain biking. With these events and associations, Red Bull has managed to create favorable brand associations by convincing the consumers that the product they offer has the most relevant attributes and the benefits that will always satisfy their needs. This way, Red Bull is able to create favorable associations through which it can convey message on how the drink is full of energy, power, confidence and alertness as well as concentration (Vargo & Lusch 2004). All these are very strong and favorable as well as unique brand associations that are being used by Red Bull. 3.0 Analysis of Red Bull’s Marketing Program Different marketing programs are being used by Red Bull in order to build on its brand equity. The commonly used marketing programs at Red Bull are unconventional. This is perhaps to take into account the large expenses incurred by the business in trying to establish its products in the market. This can be denoted from the company’s move to positioning itself in the beverage industry. With unique positioning, the company is now able to attract different market segments where it has penetrated. Even though, the company’s performance financially has not been given, it can easily be argued that the company must be very profitable given on the ways in which it is doing its marketing. This is only possible with a business that is experiencing market share and revenue growth. From the business perspective it is very possible to say that whatever marketing strategies that the company is using are successful even though its sustainability into the future cannot be ascertained especially with the changing business environment and business tastes (Campbell 2002). Red Bull is positioning itself into different market segments such as a students, club goers and athletes with the intention of building brand equity. Further, Red Bull is also using local marketing approach in order to help put more emphasis on the drink as the coolest and the one that is preferred among the youth. The company’s continued use of word of mouth and which can be categorized vague, has continued to stir some mixed ideas about the products provided by Red Bull. This is because the company market strategy does not real expose everything that it feels and thinks about by the product’s strengths. At the marketplace, this has continued create positive rumors about the product something that has continued to impact positively on the perception that the market has about the product value and consequently directly impacting on building the brand’s equity (Brodie et al, 2002). Most recognizable is that even though, Red Bull does not have actively participate in its marketing except in its energy drink. Further, the company is known to provide free the energy drink to certain market segments like students in the process of sponsoring their parties and social events. All these events are unconventional and have proofed very influential in brand equity. However, lack of very vital information about the product and the manufacturing company pose uncertainties about the brand equity since there is likely to be debate about the contents of the brand. This can be well demonstrated by the case of France and Canada where the public health officials have declined to approve it for use since there are unsubstantiated claims that to some extent it can be very harmful when consumed with other alcohol drinks. 4.0 Evaluating Red Bull’s move into herbal teas, fast-food and magazines The move by Red Bull to producing herbal teas, fast-food and magazines is very important when it comes into product diversification and trying to meet new market demands. This is because the market will have a variety to choose from in terms of product base. 4.1 Herbal tea The Red Bull is being associated with the energy nocturnal which is an extreme adventure of the Herbal Tea Stimulant and relaxant. However, lot of them in the market for Red Bull has no POD and no identifiable mystique factor. 4.2 Fast Food Chain The fast food chain is actually perceived as an unhealthy Red Bull’s association in the energy adventure that seems to be a little outside the company’s current product range. This is because it will be more meals as opposed to drinks. 4.3 Magazines The company magazine has been the Red Bulletin and has been in operation since 2007 and which has continued to feature Formula 1 Night life Classic aircrafts of Flying Bulls. 4.4 Benefits of this move The benefits of the move to introduce herbal tea, fast-food chain and magazines is an important aspect of the business especially in leveraging the brand equity and save money alongside increasing its brand stature which in the long-run will cause reinforcement of brand association and consumer knowledge as well as trust (Webster & Keller 2004). 4.5 Dangers The danger that is associated with this move is the likelihood that it will make the company lose focus on core products and thus easily eroding the existing brand image by impacting negatively on the perception that the market has about the Red Bull Energy drink (Vargo & Lusch 2004). 5.0 Recommendation The Red Brand is globally recognized. However, since this brand is headed for maturity in terms of growth and reaching virtually almost every part of the world, the manufacturer is faced with a big challenge with regard to keeping its performance at the top. With this in mind therefore, it is recommended that other products especially drinks that can be sold under the Red Bull brand be launched. This is to supplement the Red Bull brand and ensure it is remains stable for long-term. References Aaker, D & Joachimsthaler, E 2000, Brand leadership, Free Press, New York. Brodie, R., Glynn, M & Durme, J 2002, Towards a theory of marketplace equity: Integrating branding and relationship thinking with financial thinking, Marketing Theory, Vol. 2, No. 1, pp. 5-28. Campbell, M 2002, Building brand equity, International Journal of Medical Marketing, Vol. 2, pp. 545-552. Keller, K 2003, Strategic brand management: Building, measuring and managing brand equity, Pearson Education, Upper Saddle River. Lynch, J & de Chernatony, L 2004, The power of emotion: Brand communication in business- to business markets, Journal of Brand Management, Vol. 11, No. 5, pp. 403-419. Vargo, S & Lusch, R 2004, Evolving to a new dominant logic for marketing, Journal of Marketing, Vol. 68, No. 1, pp. 1-17. Webster, F Jr. & Keller K 2004, A roadmap for branding in industrial markets, Journal of Brand Management, Vol. 11, No. 5, pp. 388-402. Read More