Red Bull Research Paper

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How Did Red Bull Become Popular?

Red Bull, the energy drink produced by Dietrich Mateschitz, has been a major player in the beverage industry since 28 years ago, according to its company website, Energydrink-us.redbull.com. In 1987, the product was first introduced in the market despite its being radically different from other beverages (Kotler, 2013). In fact, Mateschitz created a new product category for Red Bull and implemented a different marketing strategy for his concoction. As most beverages were then marketed as soda, coffee and beer, Red Bull’s founder tried another approach by selling it to athletes and sports enthusiasts, thus making the product synonymous with giving an energy boost as its tagline suggests: “Red Bull gives you wings” (Solomon, 2012). Today, the official website of Red Bull states that “…Red Bull is available in more than 169 countries and around 60 billion cans of Red Bull have been consumed so far.”

Red Bull’s popularity can be attributed to its marketing strategy of opening a new market for it and uses guerrilla marketing to achieve company goals. As defined in Entrepreneur.com, guerrilla marketing is defined as an “unconventional way of performing marketing activities on a very low budget.” What the founder of Red Bull did was simply produce a product that the market may buy and market it at a low cost despite competition from the big players in the industry. Red Bull targeted students and bars at first, allowing the product to become famous with the youth, until it associated itself with extreme sports that began the coining of the words “energy drink.” Other companies that adopted this marketing strategy include Gold’s Gym, Duracell Batteries and Folgers Coffee (Kotler, 2013).

References

Guerrilla Marketing. In Entrepreneur.com. Retrieved from: https://www.entrepreneur.com/encyclopedia/guerrilla-marketing

Kotler, P. (2013). Principles of Marketing.  15th Edition. Prentice Hall, New Jersey.

Solomon, B. (2012, Oct. 15). Meet the Billionaire behind Red Bull’s Death-Defying Corporate Culture. Retrieved from: http://www.forbes.com/sites/briansolomon/2012/10/15/meet-the-billionaire-behind-red-bulls-death-defying-corporate-culture/#6aa7b6bf64f7

Red Bull Energy Drink

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Red Bull Energy Drink

The product chosen by the group was the energy sports drink Red Bull. Initially from first glance the marketing mix of this product was thought customary, however as it will be shown the marketing of Red Bull is anything but standard. Red Bull was founded by Dietrich Mateschitz in Austria in 1984 and is now available in over 80 countries worldwide, including Trinidad and Tobago. With global sales surpassing 1.5 billion cans, its annual revenue exceeds $ 300 million.1Red Bull is a disruptive product that is, a product that eventually overturns the existing dominant technology or product in the market2. It established a new category in the market, finally serving the need for a legal yet ‘hip' stimulant. Its taste is slightly unappealing (it gets a D plus from BevNet4) and was a first in a broader soft drink category to place no importance on taste. It even created an ultra-premium price point (the retail price of a product, usually when viewed as one of a series of possible competitive prices) about 8 times higher than Coke without any third party efficacy endorsement to justify the steep margin.

Promotion

Red Bull belongs in the marketing hall of fame for its enigmatic miracles as they threw over board conventional marketing wisdom and developed a new powerful go-to-
market template.

The promotion of Red Bull throughout Trinidad and Tobago, has contributed to its popularity as an efficient energy drink within the party and working environment. They target mainly young adults (18-30 years old). This is shown by the strong promotion of the product on the University of the West Indies campus.

By offering sponsorships and giveaways the product's popularity and sales has risen. Within this year (2006) alone Red Bull has hosted two competitions on the University of the West Indies campus, one being the Red Bull Paperwings competition (for the longest flying paper airplane) and the Red Bull tricycle race.

It provides sponsorship for numerous parties and social events, where they supply free and discounted Red Bull as a quick energy revitalizer and smooth chaser for alcoholic drinks (vodka or Guinness) using attractive women and sex appeal to encourage sales.

The use of a Volkswagen painted with the product's logo is also a means of public advertisement. Promotional skills were once more displayed when the Red Bull Music Academy occurred in Trinidad on 17th May 2006, giving upcoming Djs and musicians the opportunity to showcase their skills.

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Once they realized that advertising's overarching purpose was to build awareness and likeability and not to establish and increase understanding and acceptance of the energy drink segment the job became easier for creativeness. In an infamous last ditch effort, Kastner's team came up with the "Red Bull gives you wiiiings!!" ad campaign. Advertising was used to reinforce, not introduce, the brand experience. Red Bull only aired ads after the launch phase, and they remain a small part of the overall marketing mix. The company is also clever about the more subtle aspects of media planning. For instance, the brand stays off-air during the peak summer months, when share of voice would sink significantly anyway. Also, Red Bull doesn't use print media to convey its brand message. The flatness of the medium doesn't connote energy, which is the key Red Bull message

Newspaper advertisements are rarely used compared to the Internet medium. Through this source, Red Bull has used popular Trinidadian party sites (www.triniscene.com) to advertise upcoming sponsored events or past event pictures.

Their marketing training encourages employees to sell a concept (not a product).They attempt to communicate a personality and build mystique to link consumers emotionally to a concept. So important is the focus on concept and experience that Red Bull samples could never be served in cups, but only handed out as unopened cans so that consumers could decide when and how to drink it.

Also Red Bull rather than use heavy celebrity endorsements, cleverly pursued those celebrities that are fans of Red Bull already and expedited ‘voluntary' promotions from them. Madonna has had free Red Bull on stage at quite a few concerts, but the company has never paid an endorsement fee for it!


Place and Distribution

With the mindset on social integration, rather than set up their own factory and distribution, Red bull simply utilized an already established local company to do their marketing and distribution. For instance the company, A. S. Brydens Ltd is used to distribute their product to pharmacies, groceries and bars.

They aim at finding consumers at the right time at the right place in the right situation. They achieve this by a three step method:
1. Awareness (know the brand) Know
2. Trial (experience it)
3. Credibility ( believe in it )
LOVE

Try Believe



They focused heavily on sampling especially areas where an energy boost is needed. They don't necessarily go for volume, but seek out the like of parties, large corporation's family days and university campuses where people are in need of a real (legal) boost. Red Bull believes consumption is driven by situations, not socio-demographics. Their target focus is different situations such as sports, driving, studying and tax preparation all- nighters.

Red Bull's strongest asset is its cult-like following by its consumers, bar staff and other stakeholders by participative marketing. Initially by simply not having the investment to spend heavily in marketing they let their market participate in its marketing.

One major seduction tactic they employ is exclusivity. When Red Bull came to Trinidad and Tobago they selected a handful of outlets that can sell the brand as oppose to price-offs, flooding aggressively and the ubiquity so often practiced in the beverage industry. Also Red Bull only gives out merchandising (like wearables) to their sponsored athletes who are more or less considered opinion leaders. They believe branded merchandising does not mean anything if you just give it away to the masses.

Their entry strategy is more based on exclusivity, an offspring of Maslow's hierarchy of needs. For example, when Red Bull initially came to the U.S. it focused its pre-seeding efforts on New York City, where the brand was already hyped by the city's large European influence. Initially the company made the product available- under the radar- to bar staff of hip on-premise accounts. They let them experience the energy boost on the job and basically treated them preferably to consumers.3 The product was notably launched just as all-night raves and Ecstasy consumption were entering mainstream awareness. Red Bull was well stocked in clubs, where it became the drink of choice for ‘ravers' looking for non-alcoholic fuel. The company's marketers even went as far as tossing empty Red Bull cans onto the floors of club bathrooms. They cleverly realized that drug culture cachet combined with parental meddling was an instant recipe for ‘cool'.

The same tactic was employed in Trinidad by targeting the entertainment sector. They help sponsored many upscale parties and made good relations with the owners of Anchorage, Pier One and Zen night club. Presently it is a well established chaser and one of the few exclusive non-alcoholic drinks sold at these venues.

Price
Oddly Red Bull does not participate in the price-off regularly seen in a flooded beverage industry. At a standard price of $13 to 14.00 that has not reduced since the company targeted Trinidad and Tobago, it stays strong to the mystic and exclusivity idea about its product.

Product

Red Bull is purported to improve performance, concentration, reaction speed and vigilance. Red bull achieves it noted effects through mostly Taurine and glucuronolactone, naturally occurring antioxidants and carbohydrates respectively, that help to detoxify the body. The beverage also helps to ‘revitalize' the body through the use of caffeine and B-group vitamins which help to boost energy levels and metabolism.

Its distinct gummy bear –cough syrup is definitely an acquired taste. "The taste doesn't matter" defends Mateschitz. "Red Bull isn't a drink; it's a way of life."

Now, Red bull is marketed as a product for all types/walks of life as its manufacturers even have the drink ratified according to the dietary restrictions of many religious groups like Judaism and Islam, where the drink has been approved to be both ‘Kosher' and ‘Halal' for both parties respectively. Red bull also appeals to the vegetarian and animal activist as the manufacturers include in the customer questions segment of their website that no animals are used in the production of the drink or its components. Red bull even attempted limited diversification to the health conscious market by starting a new line of sugar free Red bull drinks.

Conclusion

Understandably, Red Bull is hushed about its marketing strategies. It has never entered industry awards like the prestigious IPA effectiveness Award that require a thorough description of its efforts. Such tactics allow them to control roughly 50 % of the $1 billion energy drink market in the United States alone4.



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