Mary Frances Therese

Achurra
Aishwarya dela Pena
Kimberly Dollete
Paula Joy Nugpo
Joahnnah Marie Teves

Red Bull
1) How does Red Bull position its brand and what are its sources of brand equity? Do these
sources change depending on the market or country?
Brand equity is the value premium that a company realizes from a product with a
recognizable name as compared to its generic equivalent. Companies can create brand equity
for their products by making them memorable, easily recognizable and superior in quality and
reliability. Marketing campaigns can also help to create brand equity.

In 1997 Red Bull was launched in Austria and was made available in 25 different markets
globally, including Western and Eastern Europe, New Zealand, and South Africa. This
indicates the extent of global awareness of Red Bull. Initially Red Bulls slogan was Red Bull
gives you wings. Later on, as the taste changed with the change of its ingredients, it was an
introduced as an energy drink and later on as a functional energy drink. Mateschitz devised
the brand positioning as something coming out of the product benefits: Red Bull vitalizes
body and mind. This then became the basis for the unique brand personality of Red Bull:
Innovative, Self Ironic, Intelligent, Nonconformist, Self-confidence, Witty, Charming, Polarising,
and Unpredictable.

Red Bull has been using non-traditional ways and unique approaches to achieve its goals
and to create brand equity. Right from the beginning, the company has been emphasizing to
all its existing and potential customers the message of its product functionality. Red Bulls real
product benefits justified a premium price. It is by far the most expensive non-alcoholic drink
on the market. Its pricing strategy was to place the product above 10% of the upper segment
of the competition in order to be consistent with its image as a premium brand. Red Bull is 3 to
6 times more expensive than Coke. Unlike other beverage companies, Red Bull doesnt give
away samples of their product. Also, the company has been using word-of-mouth marketing in
creating brand awareness. Once brand awareness is already established, television ads and
other promotional strategies were integrated in the marketing mix as a follow through.

In order to build brand equity, the company also began participating and sponsoring events
even before the product is made available in the market. In addition, the company entered the
market strategically by focusing on a niche audience and trying to influence them first rather
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than immediately spreading out to the entire target customers. Indeed, the company tried
different ways of market penetration and different kinds of brand equity management
strategies with different markets before being able to establish themselves on where they are
right now.

The sources, in general, remain the same regardless of the country or market which Red
Bull is serving. They may differ in the specific approaches and marketing programs designed,
however. Due to some geographic and demographic differences among these markets,
several adjustments are done. For example, the type of events being sponsored may vary
from country to country, depending on which type of event may be relevant to that specific
market.
2) Analyze Red Bulls marketing strategy in terms of how it contributes to the brands equity.
Discuss its strengths and weaknesses.
Red Bull has successfully established a positive and favorable brand equity in the
market of energy drinks. The company was able to generate billions around the world, through
strategic marketing strategies. Since the beginning, founder Dietrich Mateschitz has intricately
analyzed the brand image that Red Bull will be conveying to their consumers. From the brand
name, slogan, design, logo and pricing strategy, Red Bull was able to capture a highly favorable
response from the market.
Since Red Bull is an energy drink that has an equivalent amount of caffeine as to that
with a cup of coffee, they wanted their customers to be awake and energized throughout the
day (or night), so they could enjoy the activities that they are engaged in. They wanted Red Bull
to have a macho image, in which their consumers will feel capable of doing extraordinary
activities when they drink the product. That is why Mateschitz hired product designers in Austria
to make the logo and the packaging of the product. They came up with two strong bulls
colliding, in which customers can associate to strength. Moreover, after countless trials of
finding the right slogan, they finally came up with, Red Bull gives you wings. The slogan
does not only elicit a positive and energetic vibe, but it also relates to the soaring success that
the product sales is experiencing. The price of a red bull is priced higher than their market
competitors like Coca-Cola and a cup of coffee. These products all have caffeine and can keep
their consumers awake. However with the price premium, consumers can perceive Red Bull as
a superior product, and people willingly spend that extra money just to gain the benefits from the
energy drink.
The marketing strategies that Red Bull practices are Word-of-Mouth, Sampling, Event
Marketing, and Point of Purchase. These strategies were able to effectively convey the
message to their target market.
Word-of-Mouth and Sampling. With the use of opinion leaders, Mateschitz hired
prominent students from universities in England to drive a van with a giant Red Bull can on top.
Then they distributed the products in parties and around the campus. This created a buzz,
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which encouraged students to buy the product, since they need caffeine to keep them up for
studying sessions at night or they needed the energy to party with their friends. When opinion
leaders liked the product, they can easily encourage their friends and classmates to buy Red
Bull. This strategy was able to contribute increasingly to brand equity, with less cost compared
to the traditional marketing communication activities. However, this strategy can also elicit
negative perceptions from the consumers. The company do not have much control with the
impression that the opinion leaders have to say about the product.
Event Marketing. Red Bull has managed to create or sponsor events, especially those
that relate to extreme sports activities, to enhance brand image and build brand equity. In the
event, logos and posters of Red Bull is very prominent and you would see those images all the
time. One event was the snowboarding competition, where they align the brand to successful
snowboarders. The extreme sport elicit impressions of strength with the brand, which reinforces
the brand equity of Red Bull. However, this strategy can be costly, since the event will have to
gather sufficient audiences and use excellent facilities. And the ads that are shown in the event
are limited to the participants within the event or the fans of athletes. This strategy could not
reach much audience, since they would only see the logo and pictures but not the specific
attributes of the drink.
Point of Purchase. In convenient stores and supermarkets, consumers would notice the
red and blue covered refrigerators filled with red bull drinks. This way, consumers would
perceive the brand to be readily available anywhere and anytime. So, whenever they feel tired
or sleepy, they can easily buy the energy drink without much hassle. This strategy strongly
contributes to the brand equity of Red Bull, as an energy drink that is always there to keep their
consumers awake. However, the refrigerators will have to compete for space in the stores. With
the limited space available and numerous branded refrigerators, consumers would often see
clutter of ads in the stores.
3) Assess the pros and cons of the Red Bull Cola and Red Bull Energy Shot extension. Whats
next for the company in terms of brand extensions? Explain.
Brand extension or brand stretching is a marketing strategy in which a firm marketing a
product with a well-developed image uses the same brand name in a different product
category. (Wikipedia) It is basically using the equity of the established brand when launching a
new product to save time and resources that could be incurred in creating and marketing a new
brands. Consumer attitude towards a brand extension will more likely be positive if they see a fit
between the new and original product or if the new products supports the original products
brand image.
Red Bull has a very limited product portfolio in the beverage product line. After the
launching of the original red bull energy drink, it took the company 25 years to launch Red Bull
Simply Cola and another five years to add new products in its energy drinks range which are the
Red Bull Editions.
Red Bull Simply Cola

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Other than the Sugar Free version of Red Bull, Simply Cola, launched in 2008, is a new
brand extension that does belong to its energy drink product line. It is marketed as a stimulating
refreshment from 100% natural ingredients. It's packaged in the standard 8.4 oz. can associated
with regular Red Bull, but features a more-pronounced red/silver/blue color scheme, with the
colors and name aligned at angles. A callout at the top of the can refers to this as "Natural
Cola", while the bottom denotes "Strong & Natural". Despite being a launched as brand in the
Red Bulls brand, it did not became as successful as the original Red Bull energy drink because
of the limited resources for its marketing, distribution and other factors. These are some of the
advantages and disadvantages of the Red Bulls Cola brand extension.
Advantages
Natural Ingredients. It contains natural caffeine from coffee beans; no phosphoric acid
and no artificial flavors. This natural ingredient positioning differentiated Red Bull Simply Cola
from major competitors like Coca-Cola and Pepsi Co. It is the only cola that contains both coca
leaf extract and kola nut.
Less Caffeine. Red Bull Simply Cola contains 3.8 mg/oz. of caffeine, which is only
slightly higher than Coca-Cola Classic (2.9 mg/oz.) and Pepsi (3.2 mg/oz.). By comparison,
regular Red Bull has 9.64 mg/oz. of caffeine, while other citrus-flavored soft drinks like Mountain
Dew (4.5 mg/oz.) and Vault (5.83 mg/oz.) have substantially higher amounts. Considering that
Red Bull has repeatedly been tied with issues and government regulations regarding the
amount of caffeine in the original Red Bull energy drink, this could be a good strategy.
Targets New Market Segment. Recent trends in consumer behavior and attitudes is the
increasing importance they give to their health. Moreover, with the consumers hectic lifestyles,
they will need a convenient and healthy way of refreshing and to lessen the stress. These are
the kinds of consumers that Red Bull Simply Cola targets. With this new product, they were able
to target a new segment, the health conscious segment, an addition to their current target
market which are the consumerswho havedrive, areactiveand dynamic consumers whowantto
bephysicallyandmentallyfit andwideawake.Wider Product Portfolio. Red Bull only offers few
products to its consumers. Currently, Red Bull has only rolled out six versions of the original
Red Bull formula including Red Bull Sugar Free, Red Bull Zero Calorie, Red Bull Cola, Red Bull
Red Edition red bull plus sweet cranberry, Red Bull Silver Edition red bull plus refreshing
lime, and Red Bull Blue Edition Red Bull plus blueberry. The Red Bull editions was only sold
five years after the Red Bull Simply Cola. In todays consumer environment where consumers
have more power of information and wants more choices, it is recommended for red bull to
develop additional brand extensions.
Good Taste. According to one consumer, Red Bull Simply Cola is Not very syrupy, more
textured, with sort of a nutty, woody experience. You won't mistake it for a standard Red Bull
this one's definitely a cola. There are some unique flavors present which can probably be
attributed to the previously-mentioned "natural" ingredients, but you'd have a hard time
pinpointing exactly what you were tasting. Many also said that its taste is closer to Coca-Cola
than Pepsi which is preferred by most of the Cola market. Over all, consumers like how Red Bull
Cola tastes which could really work to their advantage, Consumers will be more willing and
motivated to buy the drink if they like how it tastes.
Supports the Premium Price. Natural is healthy. Red Bull has created ta perception that
the benefits one could get from consuming Red Bull Simply Cola outweighs the premium price.
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Disadvantages
Direct Competition with Big Cola and Soft drinks companies. Companies like Coca-Cola
and Pepsi Co. is well established in the Cola industry. Loyalists will not even try Red Bull Cola,
and these established companies have quite a large share of loyal consumers. Rred Bull would
need large amount of resources and efforts to market the products and try to increase its market
shares.
More expensive than other brands. Red Bull has a premium price tag and not everyone
could afford or buy it frequently. A significant number of consumers belong to the middle and
lower than in the higher classes. These consumer would rather buy less expensive products
who just basically taste the same with the premium one. Red Bull would need to effectively
communicate the natural and healthy positioning and make the consumers realize that they
need these health benefits in their lives.
Cocaine found in red bull. In May 2009, food regulators from Germany discovered trace
amounts of cocaine from coca leaf extracts in Red Bull Cola, Pepsi One, and Diet Coke. Red
Bull GmbH responded by insisting that only de-cocainised coca leaf extracts are used the
production of Red Bull Cola. After further inspection and testing, it was proved that Red Bull
Simply Cola is safe however the issue has already created a blemish in the consumers
perception of the products.
Will not give you wings. Some consumers are conflicted with the purpose of the
product. Their perception of Red Bull is that it will give them wings or make them more active.
The natural ingredients however, could not make them fly according to one consumer.

Red Bull Edition

Red Bull launched the Red Bull Edition range in 2013 in select city markets in the US. It
launched cranberry and blueberry in 2013, and now it's releasing a tropical flavor that
was tested for a limited time last summer. It's also adding zero-calorie editions in orange and
cherry to appeal to health-minded millennials. Moreover, the benefits on could get from this
versions of Red Bull is the same with the original, only that it has different flavors.

Advantages
Invigorate Consumer Interest. As said in the previous paragraphs, consumers nowadays
wants more options or choices. They want to try new things and products. The Red Bull Edition
helps Red Bull invigorate consumer interest in key markets such as the UK and the US where
the range of energy drinks options has increased considerably.
Functional Benefits. Red Bull is a functional product developed especially for periods of
increased mental and physical exertion. It can be consumed at virtually any time: during sports
or work, or while studying, driving, or socializing. Red Bull promises to improve performance
during times of increased stress or strain, increase concentration and improve reaction speed,

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and to stimulate ones metabolism. Essentially, Red Bull vitalizes the body and mind. It could
also be mixed with vodka making it a suitable drink in bars.

Disadvantages
Higher priced. It is also priced premium.
High caffeine content. Like the original Red Bull, Edition also have high caffeine content
making it susceptible to health critics and increased government intervention.

Base on the current problems faced by the company (limited products, limited
distribution, etc.) and opportunities in the market these are some of the possible actions that the
company would take.
Healthier energy drinks. Seeing as to how consumers increasingly value the importance
of a healthy lifestyle, Red Bull can extend its product line to include energy drinks which provide
health and wellness benefits. Coupled with hectic lifestyles, this has led to consumers requiring
a convenient one-stop solution - drinks that enhance performance and provide health benefits at
the same time. Red Bull can launch an energy drink product line that uses natural ingredients
and nutritional supplements such as vitamin C, which can provide energy as well as other
functional benefits such as increased memory, stress relief, and boosting immunity among other
numerous benefits. This new energy drink product line should also be formulated with dietary
supplements like ginseng and glucosamine that appeals to older and more health-conscious
consumers. Such a product line would help Red Bull meet the changing demands of consumers
and remain competitive in the energy drink market. Also, it would allow Red Bull to promote a
healthy lifestyle and address the various health issues
Female drink. Currently, Red Bull has an energy drink for females which is Red Bull Red.
However, it is only sold to limited markets. It is possible that Red Bull would also market the
products in other countries and in Asia since more and more females are becoming highly
image-conscious and seek drinks that improve their inner well-being.
Maintain premium positioning. Red Bull can still continue to position itself as premium
and maintain a price premium but in order to gain better traction among younger consumers and
access to a wider demographic the company should focus on driving volume growth particularly
in emerging markets. Moreover, through good marketing, they could charge higher price than
competitors because consumers will believe that Red Bull is really beneficial to their lives.
Diversifying Offers. The soft drink industry includes the energy drinks segment and is
lead by Coca-Cola and PepsiCo. Ranked seventh in terms of world value, and unranked in
volume sales, it is unlikely that Red Bull will be able to break into the top five of soft drink
companies unless it expands its portfolio. Moreover, by diversifying its offers and products, it
could reach different markets and would give the consumers more choices. . In addition to
expanding the amount of products it has to offer, it is important that Red Bull effectively
manages its marketing among its products.

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4) How effective is Red Bull at communicating to various consumer groups? Are they wellpositioned for the long-run? How can Red Bull maintain its marketing momentum?
Though here in the country Red Bull wasnt able to gain much fame, in North America
where it was first launched it has been the leading player for non-alcoholic beverage industry.
Red Bulls success in the energy drink niche(which comprised 43% of the market) can be
attributed not only to the product which quality is well-represented by its premium price but also
to its integrated marketing communications campaigns and activities that was able to convey
what the brand has and what it provides for the consumers. Red Bulls target market is not
segmented using demographic but rather it has been determined by using the consumers state
of mind as basis. Specifically, this brand primarily targets young urban males with ages ranging
from 16 to 29 years old who have drive, are active, and dynamic with constantly adventurous,
exciting, and exerting lifestyle wanting to be physically and mentally fit and wide awake.
However, it also has served other sub-segments such as online gamers, students, and older
people with ages 25-45 from all walks of life and social classes. Despite the variety of its
targeted consumers, Red Bull still managed to effectively position their brand as a healthy
energy drink that uplifts performance, concentration, and vigilance. And make the consumers
exactly think in such the same way Red Bull marketers want them to perceive the product
through these following IMC strategies.
Advertising and Promotion
Its advertising efforts with the aim to build awareness and imagery, emphasize Red Bull
being a product only secondary to the activities that consumers engages in and cherishes. In
their promotional ads, Red Bull logo is rarely seen or the brand name rarely mentioned rather
human adventurous activities are more frequently presented. Red Bull made use of its abovethe-line marketing with the famous tagline, Red Bull gives you wings which aimed not to
market what the product can actually do but to reflect what personality the brand provides for its
user. This approach creates a belief in the consumers mind that the brand is not after the profit
but with the result and sense of vigor the users will get after drinking the product. This has
effectively captures both the rational and emotional aspects necessary for the purchase and
brand preference decisions of consumers. So instead of trying to market its product to these
customers (which would be a turnoff to them), Red Bull focuses its ad content on the activities
that their consumers love. To make them draw closer to the brand. Different ads with different
sports activities were made to appeal to different consumer groups. Also, rather than spend its
budget on traditional beverage industry media like TV or outdoor advertising, Red Bull went
guerilla to put its brand and cans in the eyes and hands of its most likely drinkers.
Red Bull has effectively endorsed the product through word-of-mouth marketing and
utilization of buzz marketing by having opinion leaders especially in the sports and cultural
areas and brand ambassadors. With famous celebrities such as Brad Pitt and through target
consumers families and relatives recommendation of the brand, it has been easier for Red Bull
to justify their product. These people have even supported the credibility of both the product and
the brand resulting for positive customer response. And to further convince customers and
provide them a bit of experience they have conducted wide-scoped sampling of the product.
Therefore, viral videos depicting feats of athleticism and bravery evoked the rush people seek
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from drinking the product and have attained a widespread brand recognition and loyalty first
among a core demographic, then carefully building a credible bridge to achieve it in another
group.
Online Marketing (Interactive Marketing)
The brand also have been updated with the current marketing trends such as engaging
in social networking sites and social media accounts to further tap and interact with various
consumers. They have established pages and groups in Facebook, Twitter, Instagram, and
Youtube. Due to this, Red Bull was able to monitor customers responses with the brand which
are useful factors to consider in further maintaining and improving its market offer. This has
further aided brand recognition through further logo saturation.
Events and Experiences
Red Bull has been different with other brands for it does not sponsor an event it wanted
to hold but on the other hand it establishes and organizes its own event or activity. These events
were organized for reasons to differentiate and engage more people since it believes that it is
able to generate an effect to the consumers that really It wanted to personally be a part of
peoples life. All activities support the Red Bull tagline of "Red Bull gives you wings." With
sponsorships from partnering with top people on different areas such as in sports, the brand
establishes ties and bonds with these people that help with its buzz marketing strategies and
hasten the effect of word-of-mouth to consumers. Also, through these events Red Bull
integrates consumer engagement through sportsmanship, heroism and ideals. Thus, whether
rolling in a Red Bull car handing out branded freebies at an extreme event, or riding on a BMX
through Scotland, the brand marketing strategy of Red Bull translates to We are with you and
one of you, rather than Buy this because its awesome. This has been the brands other way to
look more closely with its consumer groups and building stronger relationships with them to
know their whims and feedbacks with the product.
With these marketing communications programs of Red Bull they have effectively
conveyed the brands value and message to its targeted people. Innovative and above-the-line
marketing efforts have made them advance in the business and stabilize their market position in
the long-run. By maintaining the updating these campaigns, Red Bull will continue to be the
number one in the energy drink sector.
By creating a product that is one of its kind, Red Bull has made their name synonymous
with the word energy drink. It has a 43% market share and the brands recognition has made
possible for Red Bull to hold their ground and fend of larger beverage companies like CocaCola. The drink is off to a good start with its aggressive marketing strategies and frequent
appearances in media and sporting events despite its equally matched competitors. At its
current pace, it has positioned itself for current and future success however as mentioned
before extending the brand with new products can help stimulate further exponential growth.
Although it is not as prominent in Asian countries, Westerners adore and integrate the
drink in their daily activities. However it may seem that it is spending too much on the
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promotional area, the advertising strategy in fact its point of difference among its competitors. It
needs to maintain its leading position and develop new markets by further exploring its target
market and potential culture changes.
The brand should take note of consumer responses from future marketing activities to
increase sales and awareness by word of mouth while maintaining present activities and focus
on improving brand knowledge by being the best in that category (maintaining the image of an
energy drink) thus reinforcing the same image for maintained consistency. Moreover future
activities can be planned out if the brand can identify evolving consumer needs. Red Bull can
maintain marketing momentum by:

Consumer response must be well integrated in past, present and future marketing
activities. The brand can learn from the past so that lesser complaints and cost for
improvement is incurred and also so that future marketing activities can be effectively
promulgated.
Increase awareness by word of mouth to increase sales. Word of mouth will often
occur if the product maintains its quality and points of party and points of difference
among other beverages especially in the energy drink category. Moreover, online
advertising like Facebook banners or coupons on websites are recommended for lesser
cost.
Gauge brand knowledge and manipulate it in a way that creates consistency and
innovativeness. The brand can have a consistent packaging and having a clear and
well-defined positioning strategy hence consumers will have the right knowledge about
the brand even as the brand is constantly evolving to match changes in consumer
needs.
Sustaining brand equity and protecting its sources. This again is related to having a
consistent image in terms of the logo, slogan, positioning and patenting and have rights
to brand elements.
Promoting purchases from primary to secondary target markets and encouraging
distributors to continue selling Red Bull. Trade allowances can be paid to distributors
for larger orders; purchase allowances to have in-store displays of new advertisements
and free samples.
Analyzing the impact of different campaigns for promotions to remain effective. By
having targets for sales in promotional activities, an evaluation of the amount coverage
received by the media, a knowledge on the amount of blogs related to Red Bull and its
frequency especially the influence of activities in social media and conducting annual
audits or surveys with consumers to ensure its equity.

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References:
o
o
o

http://redbull-brand.blogspot.com/2011/11/red-bull-brand-strategy-product-line.html
http://www.sfu.ca/~sheppard/478/syn/1131/Group_4.pdf
http://wps.prenhall.com/wps/media/objects/3357/3438371/chapter

%20cases/tuckwell_case04.pdf
http://www.euromonitor.com/medialibrary/PDF/RedBull-Company-Profile-SWOT-

Analysis.pdf
https://jennambeach.files.wordpress.com/2014/04/jbeach_613_w2.pdf

o http://www.mintinnovation.com/links/docs/Marketing/Red%20Bull
%20Success%20story.pdf
o http://www.dragonflyeffect.com/blog/puttin-your-brand-on-the-frontpage-lessons-from-red-bull/
o http://mackcollier.com/red-bull-content-marketing/
o http://www.millwardbrown.com/global-navigation/blogs/post/mbblog/2007/06/13/The-Red-Bull-case-study-branding-not-marketing.aspx
o http://www.sellingpower.com/content/article/index.php?a=9437/thepowerful-sales-strategy-behind-red-bull&page=2

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