Analytical Essay on Brand Management of Red Bull

Industry Overview:

Red Bull is a premium brand of energy drinks with a niche market sector, however, it falls under beverages industry.It is an industry that consist of a wide range including packed water, milk, tea, coffee, soft drinks, alcoholic drinks etc. Red Bull comes under the umbrella of Non-alcoholic carbonated drinks.

The market of energy drink is very small in this industry need category it serves is SEC A and B+ but this is where the company sees a chance to grow and they have high potential for growth. Factually this is only 0.6% of the total industry but the brand is a premium brand and the market is niche.

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Company History and Overview:

The Can Explained:

When Dietrich Mateschitz was attempting to launch Red Bull, it was clear that this unique product would require unique packaging.

The bulls & sun

It was clear from the beginning that the two bulls fighting in front of the sun would be the logo. They represent power, vigor and energy. The red color also stands for energy, power, and passion.

“Red bull”

The Red Bulls reflect the power and energy represented by the bulls and the sun, and to better position ourselves globally, we chose the English name “Red Bull”

“Energy drink”

The western world had never seen a product like ours! Hence, we were the very first to use the designation “energy drink”.

An entirely new product category was born

The blue rhombus

To reinforce the bold look, we avoided soft lines in the can’s design, opting instead for the edgy lines of blue. The blue shape itself also projects a dynamic look symbolizing speed and progression.

The can’s blue and silver color combination completed the masculine appeal.

“Vitalizes body and mind.”

Red Bull works! On the front of every can we clearly communicate this product promise.

The Can Explained:

Today, the Red Bull can is instantly recognized by consumers all over the world. Amazingly, it hasn’t changed from its original iconic design.

Brief History:

Dietrich Mateschitz establishes a company called Red Bull in Austria. The rest, as they say, is history. Working with his friend Johannes Kastner, Dietrich Mateschitz approves the official brand positioning of Red Bull: “Red Bull verleiht Flüüügel”—Red Bull Gives You Wings! The product was finally ready for market. In 1998 the Red Bull Music Academy starts in Berlin as the first real music initiative from Red Bull. The Academy is a world-travelling series of music workshops and festivals, a platform for those who make a difference in today’s music, by bringing together upcoming and aspiring artists with music icons and legends. In 2001, for the first time, Red Bull surpassed 1 billion cans sold in one year. Since 2001, Red Bull now sold over 40 billion cans. When a consumer buys a Red Bull, they’re not just buying our product—they’re buying into our brand. The product and its functionality is the foundation of Red Bull. People drink Red Bull because they expect and have experienced that it works!

Mission:

The mission of Red Bull is straight forward and short. They want to be the leading beverage and media brand around the globe and give wings to ideas and people. By giving wings they mean increasing the consumption of Red Bull as they say Red Bull gives you wings. Also, they don’t want to restrict themselves by being a beverage brand they also want to establish themselves as a media brand which they are currently.

Red Bull-The Brand:

Product vs. Brand:

Red Bull believes that why sell only a product when you can offer a way of life. When a consumer buys a Red Bull, they’re not just buying our product—they’re buying into our brand. But what is a brand? And how does that differ from the product?

Product

Brand

Benefit: Functionality

Vitalizes body and mind.

Benefit: The subjective expectation of product efficacy

Gives you wings. In different moments of need–sports, work, study, driving, playing video games, going out–consumers expect different benefits.

Role:

Foundation

Our product and its functionality is the foundation of Red Bull. People drink Red Bull because they expect and have experienced that it works!

Role:

Associations

Our image creates associations–the desires and emotions that come into the consumer’s mind whenever they see a can of Red Bull. People also drink Red Bull because they identify with these associations!

Promise: PRODUCT

Positioning

Promise: BRAND

Reason Why

Brand Personality Traits:

If Red Bull was a person, what personality would he have? As a new employee, it’s important to know the brand traits as they are reflected in pretty much everything we do.

1. Innovative: He likes to invent new things and is always one step ahead.
2. Self-confident: She knows what she is good at and doesn’t show off.
3. Non-conformist: He is rebellious and doesn’t follow society’s conventions. He isn’t always politically correct!
4. Anti-authoritarian: He challenges the status quo and does not always obey rules to the letter.
5. Self-ironic: Because he is self-confident he can laugh about himself and doesn’t take himself too seriously.
6. Professional: He strives for 100% perfection and refuses to compromise on quality. He never settles on the second best option.
7. Ingenious: He has an intelligent humor, never at other people’s expense. He is not a clown—his humor has style.
8. Polarizing: Either you love him or you hate him.
9. Mystic: He always keeps a secret. Nobody can fully grasp him, which is the key to becoming a myth.
10. Genuine: People like him for what he is; Straightforward and a real friend.
11. Relaxed: He is laid-back and never pushy.
12. Creative: He does things differently and has unexpected approaches.
13. Loves life: He enjoys life to its fullest and likes to have fun.He enjoys sport, music and art as long as it’s top-quality.
14. Unpredictable: He is full of surprises. He is interesting, exciting and spontaneous.
15. Individual: We celebrate and embrace individuality, always having in mind 'I do it my way'.

Brand Pyramid:

The Red Bull Logo: The Face Of The Brand

Red Bull’s approach to using the logo is truly unique compared to other brands. Because we’re a premium brand, we are restrictive and very selective on how the logo is used. We never “over-brand”—we always use the logo with purpose, connected to one of our projects or initiatives. This makes our brand appear more desirable, credible and premium.

Red Bull Branding:

How We Use Our Logo: the can

The can always remains our most important branding tool, authentic integration with opinion leaders or in a specific environment is key (e.g. can in hand, on a DJ desk, drinking scene, etc.).

The Product:

Red Bull Energy Drink

Red Bull Energy Drink is a functional beverage that provides various benefits, especially in times of increased performance.

Red Bull Gives You Wings-Red Bull Energy Drink is appreciated worldwide by top athletes, students, and in highly demanding professions as well as during long drives.

Ingredients

The formula of Red Bull Energy Drink contains a special combination of high quality ingredients.

• Caffeine: Caffeine has already been known for its stimulating effects on the human body by ancient civilisations who consumed it from natural sources like tea, coffee, cacao beans & cola nuts.

To this day caffeine is naturally present in more than 60 plants and contained in many foodstuffs such as coffee, tea and chocolate. In fact, the caffeine in Red Bull and the caffeine in coffee has an identical chemical structure. So, your body processes the ingredient the exact same way.

One of caffeine’s primary sites of action in the human body is its stimulating effect on cognitive functions. Caffeine helps to improve concentration and increase alertness.

One 250ml (8.4 oz) can of Red Bull Energy Drink contains 80 mg of caffeine—about the same amount of caffeine as a cup of coffee!

• Taurine: Taurine is an amino acid, naturally occurring in the human body and present in the daily diet. It is involved in a wide range of biological processes.

Taurine is found in high concentrations in muscle, brain, heart and blood.

Taurine is also contained in different foodstuffs like scallops, fish, poultry and most infant formulas.

• B-Group Vitamins: Vitamins are essential micronutrients that are required for maintaining normal body functions.

There are two types of vitamins: fat soluble and water soluble. Red Bull contains water-soluble vitamins. Water-soluble vitamins do not get stored as much in the body as fat soluble vitamins. Instead they circulate through the blood plasma, whatever the body does not use will be released. Water soluble vitamins include the group of B vitamins, e.g. niacinamide (vitamin B3), pantothenic acid (vitamin B5), vitamin B6 and vitamin B12, which are contained in Red Bull.

These B-group vitamins contribute to normal energy-yielding metabolism, such as the build-up and break-down of carbohydrates and proteins and contribute to normal mental performance (B5) and the reduction of tiredness and fatigue (B3, B5, B6, B12).

Moreover, B-group vitamins play a central role in the brain; they contribute to the normal functioning of the nervous system.

B-group vitamins in Red Bull

• Sugars: Red Bull Energy Drink contains 11g/100ml of sugars. This total amount of sugars is comparable to the sugar level in an equivalent amount of apple or orange juice.
• Alpine Water: The water used for Red Bull is fresh Alpine water of the highest quality, which comes from springs nearby the production sites in Austria and Switzerland. This region, the Alps, is known as one of the world’s biggest fresh water reservoirs, where water is available in abundance and is constantly replenished.

Red Bull Sugarfree

Red Bull Sugarfree is Red Bull Energy Drink without sugar. It is a functional beverage with only 3 calories per 100 ml

When to drink

Red Bull is a functional beverage that provides various benefits, especially in times of increased performance.

1. On the road: Every driver knows that the most important factor for a safe journey is an alert state of body and mind. Red Bull is the ideal fuel for those who cover many kilometers. Whether it’s a stressful business trip, a spontaneous excursion or while on vacation, take a break and reach out for a cold can of Red Bull.
2. During lectures & study sessions: For university students all over the world, the blue and silver can is as important to their lectures and study sessions as pencil and paper. They appreciate Red Bull Energy Drink after a challenging day between the auditorium and study, or in leisure time with their fellow students and friends.
3. At work: The world is spinning at great speed, so professional life is certainly a daily challenge. For all those who have to fully focus on their jobs, a chilled Red Bull gives additional support. Whether it’s during intense meetings, conference calls or creative brainstorming sessions.
4. While doing sports: Whenever athletes are in need of wings they turn to Red Bull. Red Bull Energy Drink is appreciated by sports enthusiasts and top athletes all over the world.
5. While playing video games: Good skills and constant training are half the battle. If you want to keep the pace up with your teammates or competitors make sure you have a can of Red Bull at your side to take your game to a higher level.
6. While going out day and night: Red Bull is a self-evident guest at every party, club session, festival and concert. Like many djs, B-boys and other artists you can benefit from Red Bull to ensure you get the most out of your days and nights.

The can lifecycle:

A big company doesn’t have to have a big carbon footprint. We’re always looking for ways to reduce our environmental impact. Learn more about what we’re doing by checking out our Can Lifecycle.

Fact: 80% of the energy used it the production processes of Red Bull comes from renewable resources.

Other things to know:

• Red Bull does not cause dehydration. Red Bull Energy Drink cannot lead to dehydration (and nothing within Red Bull Energy Drink has a dehydrating effect).
• Red Bull Energy Drink is a functional beverage and not a sports drink for rehydration.
• Although normal consumption of Red Bull Energy Drink also provides water to the body, it has not been formulated to deliver rehydrati, therefore,refore encourage people who engage in sports also to drink lots of water during intense exercise.
• Red Bull has never been banned in any country. There are, however, places where it has not been authorized yet. No authority in the world has ever discovered or proven an unhealthy effect in or from Red Bull.
• Red Bull is not addictive. Red Bull is not addictive and does not contain any addictive substances. Ingredients such as taurine are natural constituents of the human body and present in foods such as scallops. Caffeine is an ingredient in common foods such as coffee, tea or chocolate, and there is scientific consensus that caffeine is not addictive.
• Red Bull is vegan-friendly, gluten-free, wheat and dairy-free, kosher and halal. Red Bull does not contain any animal by-products and is certified as kosher and halal.

Marketing Mix:

Red Bull’s unique approach to marketing begins with the Marketing Mix. It features six pillars –each with a different objective, each equally important.

1. On-Premise (Push): Refers to outlets where Red Bull is consumed at the place it’s purchased (e.g. clubs, bars, restaurants, etc.). Is crucial for establishing an aspirational brand image. In addition, it is the first place of contact for many consumers.
2. Off-Premise (Pull): Comprised of grocery stores, convenience stores, gas stations and more. It is where consumers pick up a Red Bull for later. A strong in-store presence, the right pricing and adequate promotion support are crucial.
3. Event Marketing: To bring the brand world to life and create content others talk about.
4. Communication: To position the brand, create awareness and image.
5. Consu mer Collecting: To win new consumers and introduce different consumption occasions (eg. working, studying, driving, sports, party) but also to increase brand loyalty amongst students.
6. Opinion Leader Programmes: To reinforce the credibility of the product effectiveness and build the brand image.
7. WOM: A combination of all activities in the marketing mix produces word of mouth, the most credible and convincing form of marketing.

Business Strategy:

Red Bull’s business strategy is product differentiation and focus mainly. They are not towards cost leadership because the brand itself is a premium brand and they do not need cost leadership currently. However, their product is totally different, valuable, rare, and non-imitable and created its own culture. Western world never saw anything as an energy drink when Red Bull was launched. It was a unique formula to Vitalize mind and body and it became successful. Now the mixture of its ingredients is a secret and this is only produced in Austria and then it’s distributed globally. Moreover, Red Bull created a culture of adventure and sports so now when you see or think about adventure and sports, you think about Red Bull due to its heavy engagements.

Points of Parity & Points of Difference:

Points of Parity

Points of Difference

• Sweet and carbonated taste like cola
• Energy Drink-it was initially a POD of Red Bull; however it has been negated by competitiors
• Functional Drink
• Credible brand history
• Medicinal taste
• Premium price
• Exclusive imagery

Situation Analysis:

Strengths:

• Category leader – Red Bull has established a strong, consistent brand image globally. Red Bull is synonymous with energy drinks in many countries.
• Marketing strategy – The promotional activities engaged by Red Bull throught extreme sports sponsorships have helped the brand to build a strong identity and to increase consumer awareness/loyalty.
• Broad geographic presence – Red Bull has a broad geographic presence, which should ensure positive long-term growth even if certain markets reach maturity

Weaknesses:

• Category limitations – In overall soft drinks, Red Bull has a limited product portfolio compared to the rising number of competitors bringing many other flavour variants and categories.
• Pricing – Red Bull products are above the energy drinks average price. Consumers tend to think twice at the time of purchase.
• Copy problematic – Red Bull’s recipe is subject to copy be cause of a lack of patent.
• Controversial – The relatively high caffeine and taurine content of Red Bull makes the brand highly vulnerable to regulatory controls.
• Local relevance

Opportunities:

• 0.6% share in Global beverage market which means high potential of growth
• 9% growth in value where coke and Pepsi are in negative
• Emerging markets – Emerging markets represent newer geographies for Red Bull’s expansion. Accelerating the marketing and sponsorships in these markets is a wise move.
• New production – Red Bull’s new production facilities in emerging countries are likely to make its retail price more competitive. The brand should also consider building production sites in Asia.
• ·Product line extension – Offering new flavours and formats should help Red Bull to keep/improve its market shares.

Threats:

• Competition – Monster represents the biggest threat as it contains natural ingredients, which seems more desirable than Red Bull for some consumers. Competition is becoming more and more dangerous in term of marketing actions (copying Red Bull).
• High marketing costs – Maturity in developed markets makes promotion harder than in the past, inducing higher marketing costs.
• Negative publicity – Media worldwide report Red Bull as harmful for health. Parents also state that some components can be dangerous if consumed by their teenagers (who are the product’s target audience).

SMART Objectives:

Red Bull uses the acronym SMART to set objectives for their strategies and plans. The SMART objectives are: Specific, Measurable, Achievable, Realistic, and Time based.

• Specific

Red Bull sets its objectives in precise numerical terms such as numbers, percentages, or even frequencies.

• Measurable

Red Bull monitors and records the data based on behaviours and actions. It measures the effectiveness of the objectives by evaluating consumers’ response.

• Achievable

Red Bull managers invest a reasonable amount of effort and application into achieving their main objective.

• Realistic

Red Bull sets its objectives based on the inputs they have in order to be realistic to reach their goals.

• Time-Based

When planning a Red Bull campaign, the company sets specific dates and times for when the implantation, process and evaluation will take place.

Macro (pastel) and microenvironment

Political

Red Bull dominates the energy drinks market. Due to this, they will be continuously watched and monitored to ensure that they are meeting the required legal standards. The company has many different departments within their organization that specialize in certain aspects, combined, their efforts keep the business running smoothly. To avoid complexities, each department will ensure they are carrying out their own procedures legally.

Environmental

There is a environmental factor that can affect the image of Red Bull, which is pollution. In 2009, there was an environmental agency published a list which about the top ten of companies awarded the biggest fines for waste activity and Red Bull was one of them. Red Bull realized their responsibility and improved their recycling system in recent years.

Social

The drink itself has been questioned multiple times. It has been well documented that the energy drink is high in caffeine, with many critics suggesting it shouldn’t be consumed, something that France, Norway and Denmark have all taken into consideration. The social implications of this are obvious, giving the company a bad name for continuing to produce their drink with the given recipe.

To ensure they are reaching out to a wider market, Red Bull produced the sugar free version of their energy drink. This would appeal to people that are more conscious of the health issues, which is something that Red Bull recognised and acted on to prevent the loss of custom. The taste in this product, as well as the original, is another important social factor that Red Bull need to control.

Technology

With Red Bulls marketing techniques being recognised as highly controversial and unique, they are required to pay out large amounts of money to their stunt men/women due to the dangers they face. This being the case, the internet is something that Red Bull heavily rely on in order to promote their product. Websites such as YouTube, as well as social networking sites such as Facebook and Twitter will play an important role in helping their adverts become recognised. Not only is this a free way of advertising, it is also perfect for their target audience of active sports persons between 15-30, something that matches Facebook’s target market of active mobile phone users.

Economic

The first economic problem is inflation will be happening when there is too high supply of money in the economy, and it is not appeared by the goods and services. As a result of inflation, Red Bull might increase the price to sustain the business, also the costs of raw materials which for production will be increased as well. The interest rates that are provided by banks will affect Red Bull’s loans should they need one. Should the current economic situation continue to get worse, interest rates will rise.

Legal

To ensure their product can be sold in stores, the Red Bull energy drink will need to meet legal requirements applicable to the countries the product is available in, in order for trading to commence. The drink needs to be safe for humans to consume, meaning the customer doesn’t receive any adverse side effects, i.e. vomiting. In conjunction with this, the ingredients, along with the quantities they use, need to be clearly stated on each can or pack. This is a legal requirement to avoid consumers having a reaction, potentially leading to them filing a law suit generating bad press.

Micro

There are different factors that effect Red Bull from the micro environment, such as the suppliers, the customers, competitors and other substitute products. Red Bull will have an agreement in place in which their regular and trusted suppliers will provide their ingredients needed to create the products. The customers, most of which Red Bull will have specifically targeted, are the ones that the product is obviously designed for. They are, effectively, in charge of the success or failure of the product. The competitors in the market, which are all currently behind Red Bull in market share, will effect them via pricing differences, content differences and taste difference. These are some of the things Red Bull are required to consider when manufacturing, marketing and pricing their drink. Any substitute products that are on the market will need to be recognized and acted on. Cheaper drinks, such as supermarket branded energy drinks, are often packaged in a dull and less appealing way, giving Red Bull the advantage here.

Conclusion: Market Overview

Red Bull is the strongest brand in non-alcoholic beverages behind Coca-Cola and Pepsi, and is growing faster than them. Our brand value has also skyrocketed—in 2010 research company Millward Brown, calculated Red Bull’s brand value at $10.4 billion. After Red Bull Stratos, they valued it at $15 billion.

Red Bull is ready to compete with Coke and Pepsi all over the world.

But how?

Red Bull’s use of unconventional marketing tactics has enabled the company to uniquely position itself in the functional beverage industry. Although the company’s financial information is not released to thepublic; it appears that Red Bull’s unique positioning and marketing strategies have been successful in terms of market share, units sold, and revenue. We believe that these tactics will continue to prove successful in future.