Red Bull is the most popular energy drink in the world, selling over three billion cans annually. Started in 1987 by Austrian entrepreneur Dietrich Mateschitz, Red Bull pursued an aggressive yet different marketing strategy to grow their brand globally. Red Bull met an untapped need within the beverage consumer market and the strength of their carefully cultivated brand provided them leverage to market themselves in a non-traditional manner. What were the key Brand elements for Red Bull?
A brand element is trademarkable device intended to identify unique goods or services and differentiate themselves from their competition.
Brand elements are designed to enhance brand awareness by cultivating brand associations that are memorable, meaningful, and likeable. Red Bull possesses three key brand elements that helped create points of differentiation (POD) for the Red Bull brand; therefore positioning Red Bull as the world’s dominant functional energy drink. Brand Name – “Red Bull” – Red Bull is an energy drink that promises to “revitalize body and mind”.
Recognizing that Red Bull does not have a distinct target demographic, Red Bull concluded that all people need energy and promoted Red Bull as consumption for energy and health, not for enjoyment. Red Bull Mystique – By positioning Red Bull with influential people and places, ccurious and adventurous customers tried the brand and spread the word.
Red Bull promoted a “cool” public image to raise their brand power and used a slender container to suggest a “sexier” image than their competitors. A mysterious position created a sense of need and urgency to the everyday consumer. Slogan – “Red Bull gives you wiiings!!” – Red Bull is marketed as a product that can refuel a person and create sharper minds. The combination of six different ingredients (taurine, glucuronolactone, caffeine, B-group vitamins, sucrose, and glucose) enables Red Bull drinks to contain more energy than any beverage in the marketplace. Red Bull also used humorous animated cartoon characters to demonstrate the safety and fun-loving virtues their energy drink. This slogan helped create worldwide brand recognition. How did Red Bull’s marketing activities contribute to Brand equity? Brand equity is defined as achieving a different outcome resulting from the marketing of a product or service because of its brand name, compared to the same product or service without the brand name.
Red Bull built their brand equity through strategic marketing initiatives involving the product, price, placement, packaging, and promotion of the Red Bull functional energy drink. Product – Red Bull was designed to improve physical endurance, stimulate metabolism, improve overall well-being, improve speed and concentration, and increase mental alertness. The flavor, color, texture, and ingredients of the drink were markedly different from a traditional carbonated beverage. The energy drink beverage category did not exist – Red Bull created it and was able to generate tremendous brand equity by marketing the product in shroud of mystery. Consumer felt they HAD to try a Red Bull. Price – Red Bull pursued a premium priced beverage strategy from the beginning. By adding 10% to the most expensive competitor’s price, Red Bull tried to position itself as a best in class product because of the added energy-enhancing functionality.
Pricing above the competition, Red Bull positioned their brand to be unique, one of the tenets needed for creating strong brand equity. Placement – Red Bull used product placement to build brand equity by containing their distribution and selectively choosing the events, venues, and advertising medium to display their product. By limiting the amount of product available at hand-picked locations, an aura of exclusivity was engineered. The “cell” philosophy of expansion and growth by dividing key markets into targeted geographic segments allowed Red Bull to strengthen their brand from bottom up, fostering strong brand equity. Packaging – Red Bull used a thinner and more slender looking can, signaling that the product was different than a traditional soda beverage. Also, Red Bull would not extend bulk packaging or unit bundling so each can had to be individually sold by the retailer AND purchased by the consumer.
The sleek look and steadfast packaging requirement grew the value of the Red Bull brand Promotion – Red Bull used aggressive media campaigns to grow their brand but only promoted events, venues, and/or personalities that coincided with their brand strategy. They performed very little traditional product promotion, rather focusing on promoting fringe athletic events like extreme sports and relying on the consumer’s self-promotion. Positive consumer testimonials are better than some of the best promotional material money can buy. Peer pressure helped Red Bull’s brand equity to grow exponentially. How did Red Bull’s marketing programs differ from those of conventional soft drinks? Red Bull used advertising, event sponsorship, and sports marketing to promote their product as a functional energy drink. Red Bull aimed to make their marketing programs innovative, individual, non-conformist, unpredictable, and humorous. Rather than pursue conventional marketing methods, Dietrich Mateschitz felt that the best method for Red Bull to attract customers would be through peer testimonials – or word-of-mouth marketing.
More importantly, Mateschitz and team were intent on creating a mystique for Red Bull. Through seeding programs designed to micro-target “it” shops, clubs, bars, and stores, cultural leaders were the first to discover Red Bull and spread the word to their sphere of influence. By seeking out opinion leaders who represented the Red Bull brand (athletes or entertainment celebrities) and creating limited availability of the product, Red Bull was able to maximize their awareness while focusing on their consumer base building. Pre-marketing, creating awareness in markets where the product wasn’t sold, was another program that Red Bull used to become recognized as the pre-eminent brand of energy drinks. Red Bull expended tremendous effort around product trialing and sampling.
The bulk of Red Bull’s marketing activity encourages product trials with sampling, word of mouth, and point of purchase efforts. Red Bull sought to reach consumers in ideal usage situations (concerts, parties, sporting events, highway rest areas, on campus) and wanted to control the amount of consumers that sampled the product. Red Bull deployed energetic and believable brand managers who evangelized the product through explanation and consumption. This controlled product distribution allowed the consumer to see the dedication and focus of each brand manager but did not permit for maximum product reach. Traditional beverage marketers usually try to maximize the number of consumers their product reaches so Red Bull’s strategy flew in the face of the industry standard. What rules were broken during the initial unsuccessful launch of Red Bull UK, per the CBBE model? The Customer-Based Brand Equity Model (CBBE) recognizes that the customer is aware of and familiar with a specific brand and holds a strong, favorable, and unique brand associations in memory, i.e. brand image.
Brand associations can be strengthened by personal relevance and/or consistent delivery. Historically, direct product experience creates the strongest brand attributes and benefit associations for consumers. After multiple setbacks trying to enter the United Kingdom, Red Bull found an entry point into Scotland but varied their traditional market entry strategy. Red Bull made three strategic mistakes upon entering the United Kingdom: 1) Altered their marketing formula by classifying their product as a sports drink and not a stimulation drink By marketing Red Bull as a sports drink and not an energy drink, Red Bull UK took a strong brand name that was successfully associated with energy drinks and changed the unique favorable links that Red Bull created with consumers in other EU nations.
2) Departed from their proven “word-of-mouth” marketing strategy The Red Bull brand was created by grassroots, bottoms-up word-of mouth marketing. In the UK, brand managers worked directly with the largest supermarkets and convenience outlets. This is a deviation from the strategy that fueled Red Bull’s growth in other markets and deteriorated consumer’s brand association with Red Bull. 3) Overhauled the Red Bull advertising strategy by eschewing electronic media for traditional billboards By changing their advertising strategy, the creativity and simplicity of the animated Red Bull ads and precisely worded slogans lost much of their meaning. How can Red Bull maintain its growth momentum in the future? Red Bull continues to be the global leader in the functional energy beverage category. However, the marketplace has become saturated with competition from hundreds of companies, both small and large, in many different markets around the world. In order to maintain their dominant position in the market, Red Bull continued to innovate. They began offering a sugar-free product and recognized that their product’s consumption reason changed as more consumers are using Red Bull as a mixer or supplement.
Red Bull also contemplated venturing into herbal tea products, a quarterly magazine, and fast food restaurants. In contemplating how Red Bull can continue to grow their brand’s momentum in an increasingly competitive marketplace, I thought of three ideas – two suggestions for product diversification and one concept for increasing brand exclusivity. Red Bull Gum – An edgy gum would help grow the value of the brand and expand the Red Bull mystique. Red Bull does not have a target demographic but they market their energy drinks to consumers who are innovative, individualistic, non-conformist, unpredictable, and humorous. Creating Red Bull gum would serve as a natural complement to their suite of energy drinks.
The gum could be shaped in a solid round shape and contain a small drop of Red Bull energy juice inside, similar in texture and fill to the popular Trident or Dentyne brands. The pricing strategy for the gum would be consistent with the pricing strategy for the energy drink (10% above the nearest competitor) but I would recommend giving away the initial product as a sampling practice during Red Bull sponsored events to create interest and raise brand awareness. Red Bull gum should be offered in convenience, drug, and grocery stores. Offering the gum at bars and night clubs would not be ideal. The packaging for Red Bull gum could look like miniature Red Bull can – long, slender and cylindrical.
I would use aluminum foil wrapper rather than an actual miniature can but the design should be identical to the energy drink can. To promote Red Bull gum, I would have Red Bull’s top athletes and entertainers create spots (either over the internet or on traditional TV and radio mediums) that should how Red Bull gum provided the same benefit as the energy drink. I would also conduct extensive sampling at universities and trendy public urban settings; to help raise the “coolness” quotient. Finally, Red Bull gum could be produced with sugar or sugar-free, tying in nicely to the brand extension of the energy drink and helping to raise the overall brand equity.
Red Bull Heart Monitors – Red Bull has received criticism over the years causing certain aliments, specifically related to the heart and circulatory system. Although it has never been scientifically proven that Red Bull causes any negative side effects, Red Bull has received numerous public accusations claiming problems from repeated use of the energy drink. As a consumer of Red Bull for years, I have personally felt the aftereffects of consuming too much Red Bull in one evening. I never felt that my health was in danger but I know that my circulatory system was acting abnormally. Since Red Bull brands itself as an energy drink that promotes an active and healthy lifestyle, creating a wristwatch heart monitor would help send the message that Red Bull heard the criticism and is actively working to educate consumers about any risks associated with Red Bull.
The wristwatch heart monitor can be plastic and have a digital readout of your heart rate. The price would be between $30-50 in the US (or its equivalent in other markets). I would design the watch to match the Red Bull color scheme and would also offer it three standard mono-chromatic colors (black, white, silver). I would suggest the product be sold at big box retailers/sporting goods stores after the watch has been sampled at niche extreme/outdoor stores. I would consider offering it to online retailers and medical supply organizations.
However, I would want to keep the focus on athletics and healthy living so I would see how market adoption occurred at the niche stores before expanding my distribution channels. Promotional displays could be set up in the niche stores as well as energy drink retailers, select physical therapy offices, gyms, fitness centers, and Red Bull sponsored extreme athletic events. As a doctor, my brother constantly warns me about the risks of ingesting too much Red Bull. Offering consumers a branded opportunity to self-regulate their health and alleviate their concerns would be another method for Red Bull to increase brand equity.
Red Bull Fraternity – Red Bull provides an energy drink that gives consumers “wiiings”. As previously mentioned, Red Bull does not believe that they have a target demographic. However, Red Bull does promote the athletic and thrill-seeking adventure type. If Red Bull were to create a Red Bull fraternity (ΓΒΦ) that would allow consumers to become members by completing a series of Red Bull sponsored challenges and events, the possibility for brand strengthening would be endless. The goal of the fraternity would be to continually promote the Red Bull lifestyle through exclusivity and activity. A Greek organization inherently contains an air of mystery, which coincides with Red Bull’s market entry and expansion strategies. Greek life would be extremely familiar to the university crowd, where Red Bull performs a large percentage of their sampling, and Red Bull could draw large crowds of passionate users to the “pledging” events.
Once the “pledge” period ended, members of ΓΒΦ would have closer access to all things Red Bull – sponsored parties, athletes, entertainers, new product offerings, priority status at high-profile events, discounts on products and merchandise, etc. I would charge a one-time fee to “pledge” the fraternity. There would also be annual fees –“dues” – and not all activities open to the fraternity members would be free but being a member would provide strong discounts and incentives that would not be available to non-members. A fraternity, by definition, is an all-male institution; I would permit men and women of all ages to join – remember Red Bull does not have a target demographic!