Progressive Marketing Strategy

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Requirement

Client Brief:
Red Bull is an energy drink sold by Austrian company Red Bull GmbH, created in 1987. In terms of market share, Red Bull is the highest selling energy drink in the world, with 5.387 billion cans sold in 2013. The Red Bull company slogan is "Red Bull gives you wings” and the product is marketed through advertising, events (Red Bull Air Race, Red Bull Crashed Ice, etc), sports team ownerships (RB Leipzig, FC Red Bull Salzburg, Red Bull Brazil, New York Red Bulls, Red Bull Racing, Scuderia Toro Rosso), celebrity endorsements, and music, through its record label Red Bull Records.
Red Bull has a distinctive approach to marketing. It uses a progressive marketing strategy which aims to constantly evolve and develop the brand. This approach allows Red Bull to engage with consumers using new and exciting channels of communication.
A written 1500 word report which should include:
• Summarise Red Bull background and history, turnover, management structure, current corporate goals and targets, and markets. Your summary should use material from the Red Bull web site, and other relevant online sources (approx. 250 words).
• Develop a SWOT analysis to identify Red Bull GmbH’s current situation in relation to its main competitors. You should identify a minimum of three/four/five strengths, weaknesses, opportunities and threats. Your model should be developed referencing core marketing texts with content developed from articles and web sites (approx. 250 words).
• Describe the marketing mix and its role in marketing, referencing two relevant theories and concepts (200 words).
• Explain how Red Bull use the different elements of the marketing mix to promote their brand. Your explanation should be illustrated with specific examples of Red Bull events, promotional activities and target audiences (300 words).
• Create a diagram explaining how special events are defined and classified. Your diagram should draw upon relevant core texts (150 words).
• Classify at least four Red Bull events using the model you have provided (150 words).
• Evaluate the impact of Red Bull’s marketing and events strategy (200 words)

Solution

INTRODUCTION

Setup details- 

Red bull GmbH is a conglomerate industry that deals in making drinks. Dietrich Mateschitz and Chaleo Yoovidhya founded it 32 years ago in year 1984. The company has its headquarters in Fuschl am See in Salzburg, Austria. Company has its serving worldwide and the main products that are marketed by the company are red bull and energy drinks. It is the Austrian company with almost 10,410 employees and involved in the sponsorship of many sporting teams and event (Carpenter & Lehmann, 2005).

History of the company-

The founders of red bull founded it in 1984 Austria itself. In 1982, Mateschitz got a chance to travel Thailand and there he met Chaleo, who was the owner of TC pharmaceutical. There he found that the drink found by Chaleo’s company that helped in easing his jet lag. This way both of them focussed on increasing the market of drinks and came up together to invent a new drink that came into market and was liked by public thus increasing company’s value worldwide. 

Distribution by red bull-

The company is also involved in marketing a number of other drinks like, simply cola and carpe diem range of beverages etc. The company won legal battle with bulldog in 2010 that was a chain of coffee shops. Bulldog was ordered to stop production of its own brand drink. 
The sales of company have increased every year since 2011. In 2011, the company had sales of 4.25 billion euros. In 2012, it increased to 4.93 billion euros and 5.04 billion euros in 2013. As measured recently in 2014, the sales were recorded 5.11 billion euros. (Information from Statista) (Carpenter & Lehmann, 2005).

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BODY

Marketing of red bull-

The company red bull does not only market its product to the public but also lets customers explore and discover its first and then moves on to the marketing strategies. The importance given to its customers by the company has always proved useful. Red bull is engaged in advertising and marketing activities like- television, event marketing in events and sports, print media and radio, purchase promotion and sampling. As we all have seen, the advertisements related to red bull are- ‘the adult cartoon created by red bull for attracting more and more public’, animated advertisements like Dracula, eve and Adam, Frankenstein and the devil. It targets the adults by their advertisements which had a lot of sense of humour. This way, company made a good base of permanent consumers by hitting public of certain age (Stein, 2015).

SWOT ANALYSIS OF THE COMPANY

S for STRENGTH

Red bull has built a strong and consistent image of its brand globally (Carpenter & Lehmann, 2005). It is synonymous with other energy drinks in most of the countries. The main strengths are-

  • Market strategies- Red bull is always involved in various promotional activities through sports sponsorships. This has helped it in building strong identity and increasing consumer loyalty cum awareness (J.P., 2013).

  • Large geographic area- The Company has a big geographic authority that ensures a long-term position and growth. Maturity of market will not easily affect prosperity of red bull company.

W for weakness

There is a limitation in category when it comes to Red Bull. The company has a limited portfolio of its products as compared to the other rising companies that are bringing new flavours in drinks and rising for a good competition. 
The main weaknesses are-

  • Price- Red Bull’s energy drinks are more than the average rate. Buyers always have to think twice while buying them. As a result of loss of patent; the recipe of red bull can be copied and faked.

  • Controversial- The high rate of caffeine content and taurine in red bull makes it vulnerable to controls and regulations (J.P., 2013).    

O for opportunities

  • Red bull is working hard for improving and increasing their sponsorships programs and widening the market. This is good move for them. They must also focus on new productions of its buildings in Asia. Red bull must focus on making new flavours to its products.

T for THREATS

Some companies like Monster can be a great threat to red bull because of its natural ingredients. The high cost of marketing makes promotion slow and harder. In addition, media as well as parents of teenagers report the drink to be dangerous and this can cause them a big loss, as teenagers are its main audience (Stein, 2015).

PEST ANALYSIS

PEST describes political, economic, social and technological analysis of a company in the market .The social as well as ecological environment has a high impact on the company. These are categorised as-

SOCIAL-

  • a)    Unemployment is a big issue if we see in a social environment. This is because workplace is the main place for consumption of red bull (Lenst, 2013).

  • b)    The ageing crowd increasing in Europe demography.

  • c)    People are concerned of health and they doubt the energy drinks.

  • d)    Consuming energy drinks is a fashion.

ECOLOGICAL

  • a)    The increasing need of natural ingredients in packed drinks is increasing rapidly in market. This is a threat for industry (Lenst, 2013).

ECONOMIC

  • a)    Recession period can cause a loss to industry

  • b)    If compared to traditional beverages, the cost of drink is high.

  • c)    Carbonated drinks like soda are out of scene because of market maturity and this is why red bull is working well.

  • d)    In case the demand of alternative beverage increases.

POLITICAL & LEGAL

  • a)    The increasing pressure on caffeine products and taurine can be a threat.

  • b)    Government actions due to health concerns of public

  • c)    If restrictive laws are implemented by the government (Lenst, 2013).

TECHNOLOGICAL

  • a)    The new era of internet and social media can be bit effective.

  • b)    Technological improvements can make changes in distribution and the production.

MARKETING MIX IN THE COMPANY

  • PRODUCT- Red Bull was the first drink introduced by the company, afterwards red bull cola, sugar free, and shots increased the product line. The wide range of products has been increased by the company (Frey, 2004).

  • PRICE- Red Bull’s price is higher than its competitors. The two company’s monsters and burn are low priced and is liked by the public. Price of red bull is different in different countries (Frey, 2004).

  • PLACE- the Company distributes red bull in almost all the countries of the world. Its market is placed in 162 countries. Red bull has increased its value by standing for sponsorships in nights’ clubs, famous sport shows, companies and various bars. 

  • PROMOTION-Red Bull has been a great player in the market of energy drinks. the company has always used aggressive ways to promote their product. The main tools behind promotion of red bull are sponsorships and animated advertisements. It is always interesting to watch cartoon adult ads that increase its consumer circle (Frey, 2004).

EXAMPLES OF PROMOTIONAL ACTIVITIES BY RED BULL

  • Target audience- the target audience of red bull has been teenagers and the adults. They refer this energy drink to all the people who are 16 and above (Frey, 2004). The main consumers of red bull are mostly in this age group only.

  • Promotional ways- sponsorship programs in car racing, bike racing as well as many other sports that are viral amongst the teens and middle age. Extensive advertising of product on television with interesting taglines that boosts ego of consumers is promotional strategy. Some events of sponsorships are- ‘catcher car- an adventure sport event’, ‘UCI MTB world cup’, ‘red bull air race’ and many more. These events are famous among its audience and help in creating consumers for the company (Prophet, 2016).

DETAILS ON EVENT MARKETING

As we all know, red bull is extensively involved in sponsorship programs and event management and this proves to be beneficial for the sale and consumer ship of red bull. There are numerous programs where red bull leads and participates. This active participation has created a good brand value of the company (Stein, 2015).
Red bull has been a brand builder as it is largely involved and connected with very famous range of people, teams as well as events. It has a belief in owning the team or the event instead of being a part of sponsor board. The company has turned themselves into some profit centre just by their ownership model. The on brand things have created two unmatched personalities of red bull (Prophet, 2016).

Examples of events- mix of wakeboarding, music events, motorcycle racing, Sponsor of motorbike racer, Ashley fiolek, Own New York red bull soccer team. Entertainment features on their website like- red bull soapbox racer video, weekly music event reports (Prophet, 2016).

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SUMMARY

Red bull is an Austrian company that has reached heights in a very short span of time. They have the ability to attract public in a large scale. The company sets a world record of selling its energy drink successfully all over the world (Frey, 2004). Their market strategies and promotional style has been very different from other companies in the row. The extensive sponsorship in sport and participation in events have created a base of loyalty amongst public and has increased demand of their products on a high scale. The target market of red bull has been teenagers and middle-aged man. Only risks that can be seen forthcoming for this company are- high price as compared to competitors and use of natural ingredients for health that are a cause of concern among consumers.
The company has a different approach in dealing with the market and consumers. Their build up is strong and flexible. The modern techniques of promotion have always helped them in growing. 

REFERENCES

  • 1.    Carpenter, G.S. & Lehmann, 2005. A model of marketing mix, brand switching, and competition. Journal of Marketing Research.

  • 2.    Frey, A.W., 2004. Effective Marketing Mix. New Hamphshire.

  • 3.    J.P., 2013. Red bull’s SWOT analysis. [Online] Available at: https://abullburnedbymonsters.wordpress.com/2013/11/02/red-bulls-swot-analysis/ [Accessed 22 April 2016].

  • 4.    Lenst, 2013. A PEST analysis of the market. [Online] Available at: https://redbullvsburn.wordpress.com/2013/11/11/a-pest-analysis-of-the-market/ [Accessed 22 April 2016].

  • 5.    Prophet, 2016. Red bull: The ultimate brand builder. [Online] Available at: https://www.prophet.com/blog/aakeronbrands/140-red-bull [Accessed 22 April 2016].

  • 6.    Stein, N., 2015. Side effects of red bull energy drink. [Online] Available at: http://www.livestrong.com/article/288122-side-effects-of-red-bull-energy-drink/ [Accessed 22 April 2016].

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