RED BULL:

BUILDING BRAND EQUITY IN NON-TRADITIONAL WAYS

1. Describe Red Bull’s sources of brand equity. Do these sources change depending on the
market or country?

Redbull has a different way of approach to create the brand equity and uses relatively non-traditional
ways to achieve its target. The company communicates one direct message to its customers and
potential customers related to product’s functionality in a clear way. Related to the pricing of the
product company positions the product above 10% of the upper-segment of the competition in order to
create the mindset of the premium brand and also influencing people by not letting them buying a
simple beverage drink. Also with this approach company creates the energy drink positioning within
the beverage market and takes the unique place within the market. The company tends to be unique in
other related brand equity functions such as the marketing is mostly related to word ouf mouth
marketing and creating the brand awareness by this way. Having the reverse way of branding company
then afterwards places the ads within the TV and other related media channels. The company also tries
to create the mystique by participating and sponsoring events within the market even before the
product is not available within the market. Also the company plays the market enterance relatively
strategically by targeting a niche audience and trying to influence them first rather than spreading out
to the whole target of consumers. Indeed the company tried different ways of market enterances and
different kind of brand equity management within different market however most of the cases this
stragety failed as it is stated within the case as the U.K. case. Overall the company tries to play the cell
strategy within markets like the USA, however this methodology is relatively same to other countries
but the difference is related to the geographical situation of the USA and relatively spreaded out
demographics within this market.

2. Analyze Red Bull’s marketing program in terms of how it contributes to the brand’s equity.
Discuss strengths and weaknesses.

In my opinion the Red Bull’s marketing program is quite successful in terms of brand equity.
Targeting a niche segment in the beginning and then spreading out to the whole target makes a lot of
sense. Because the marketing program was really focused at first as a segment of people it creates the
concentration and brings up the success. Related to the disadvantages of this methodology and also it
is started for the niche segment the product’s understanding for middle and upper aged people is quite
different. In my opinion thus these segment of people tend to stay away from the drink because of
having wrong perception of the brand. On the other hand sometimes the product is understood as a
mixed for the alcoholic drinks and you need time to break that perception as well. Nevertheless each
marketing strategy has its own ups and cons and related to Red Bull’s strategy the return on
investment is quite efficient thus we can evaluate the whole brand equity management as successful.

3. How can Red Bull maintain its marketing momentum? Would you recommend that Red Bull
develop any brand extensions? If so, what would they be? Would you use the same marketing
strategy?
Marketing momentum is being maintained by Red Bull as this popular energy drink has taken the
nation by storm and continues to maintain its stranglehold on the energy drink market – despite an
abundance of competitors. It seems like Red Bull is everywhere: all over TV, sponsoring every sport,
and utilizing every other major form of advertising. While it may seem like Red Bull is flooding every
advertising arena, in fact it does not. Red Bull has an advertising strategy that separates them from
competitors, and it has been paying dividends. Red Bull has to now concentrate on maintaining the
leading position in existing countries and develop new markets. Red Bull has always focused on
youngsters and used them as brand ambassadors by recruiting student brand managers. They should
continue doing it because these students tend to take the brand forward with their growth. Initially they
use Red Bull on its own, but over age they can use it as a mixer, which is generally done by working
adults. Related to the pricing, Red Bull should take this forward, as an image has already been created
for them based on its pricing. Related to the packaging I think Redbull should keep its packaging style
as the brand and the traditional can is becoming a classic day by day. Indeed refreshing the packaging
might be an idea but my opinion would keep the tradition related to this. Brand extension also should
remain as it is because there are quite big risks related to this as the brand image might be effected and
also the focus will be lost.

4. Evaluate Red Bull’s move into herbal teas, fast-food chains, and magazines. Does it make
sense for the company to expand into these areas? What are the potential benefits and dangers?

Indeed there might be some benefits to use the accepted brand as Redbull to initiate new areas of
investment but I think the dangers of these investment will be more than the benefits. My opinion is
related to the success of the brand until now keeping the focus and not trying to have the all eggs in
one basket. This might be the failure of other global brands such as coca-cola etc when entering the
energy beverage market. Still there might be some opportunities by entering the tea market in order to
grab the marketshare from mid and old aged potential customers. The reason for this is related to the
perception of the brand as the brand is perceived relatively more targeting the youth market. Also
people tend to stay away from chemical add-ons which might be negative effect related to the fast-
food chains.

5. Because product usage was not marketed as being limited to one or even a few occasions, Red
Bull users could continue to use the product even as their priorities shifted. The case states that,
“a Red Bull consumer first attracted to the product as a nightlife enhancer in his or her early
twenties might later use the drink as a morning pick-me-up or a revitalizer during a long day of
meetings.” How effective is Red Bull at advertising to these varied groups?

Related to the efficieny of the different age demographics I think the younger people at early or mid
twenties tend to drink the product relatively more compare to the businessman segmentation. I think
this is related to the market strategy and the perception of the product. Because the product is being
first launched at night clubs and so on the perception of the brand is a drink for younger people.
Related to the advertising campaigns redbull also tries to push the product to this segment as well. If
we think in the logical way of body needs it is obvious that someone at his/her late thirties indeed fell
exhausted more easily compare to somebody who is at twenties. Still the product is valid and accepted
by people and day by day there will be new fans of the product.