Discuss about the Understanding for Marketing and Events of Red Bull.
Red Bull was founded in the year 1987 by an Austrian Company Red Bull GmbH with Dietrich Mateschitz, the entrepreneur (Red Bull 2016). Originally, the beverage was based on a Thai drink, Krating Daeng, and Red Bull was created as a completely new “energy drink” category in the beverage market (Red Bull 2016). The famous company slogan is “Red Bull gives you wings” and it has been giving wings to people setting up milestones in culture and sports (Red Bull 2016). Over 5.9 billion cans were sold in 2015 representing an increase in the sale by 6.1% (Red Bull 2016). The company employed 10,997 people at the end of 2015 (Red Bull 2016), and the revenue was reported as 5.11 billion Euros worldwide in 2014 (Statista 2014). Currently, Red Bull is available in more than 169 countries with Turkey, India, South Africa and Russia as its top market (Forbes.com 2015). Evidently, Red Bull has been increasing its global presence, and the goal is to spread its wings across the world. The corporate culture of the company has an adventurous spirit helping it to build an enviable performance record. The company has various departments and functions to manage the organization (Forbes Asia 2013). The beverage is highly appreciated by the top athletes, students and other people in demanding professions. A few Red Bull events are Red Bull Crashed Ice, Red Bull Cliff Diving World Series, Red Bull Racing, Red Bull Flugtag (Red Bull 2016).
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Strengths · Red Bull has a unique marketing strategy that is considered a one of the core competencies. · The brand has a strong consumer base as it supplies products at sporting events, clubs, universities and other sites where the individuals are open to trying new things. · The brand has a large market share in comparison to competitors such as Monster, etc (Caffeineinformer.com 2016). |
Weaknesses · The product base of the brand is small. · The brand has a lack of effort to innovate new product variants. · The drinks are above the average price creating a dilemma in minds of consumers. · The competitor activities and brand extensions outperform Red Bull (Bailey 2015). |
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Opportunities · Red Bull can accelerate its growth in the emerging markets. · The product line can be extended by offering new flavours and formats to retain/improve market share. · New production facilities can make the retail price more competitive (Bailey 2015). |
Threats · The marketing costs lead to rising pricing and require significant financial backing. · Media reported that Red Bull is harmful to health due to high caffeine and taurine content. · Monster is the greatest threat as it contains natural ingredients (Mitchell 2015). |
Table 1: SWOT Analysis
A marketing mix is an integral tool for building an effective marketing strategy. There are two theories related to marketing mix: Seven Ps concept proposed by E. Jerome McCarthy and Seven C’s concept by Robert F. Lauterborn (Hajli 2015).
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Seven Ps |
Seven Cs |
Concepts |
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Product |
Consumer wants and needs |
Product is an item that satisfies consumer demands. A brand or company sells products as desired by the consumers. The marketers must study the consumer desires and needs for offering them products that they are willing to purchase. |
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Price |
Cost |
Price is the amount paid by the customer for purchasing the product. The cost of a product is affected by various factors but is not limited to customers cost to change. The companies also list prices based on competitive pricing. |
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Place |
Convenience |
Distribution strategy defines the ease or convenience to consumers for accessing products. The marketers must know how to make the products conveniently available to the consumers. In the era of internet, consumers need not go anywhere to purchase product as it can be delivered. |
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Promotion |
Communication |
Promotion is a combination of advertising, sales promotion, public relations and various other strategies for marketing the product. Methods of communication are used to convert desire of consumers into sales. |
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People |
Caring |
People strategy ensures that the organization cares for its employees. The employees must be provided with motivation for delivering quality products and services. |
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Process |
Co-ordination |
The process strategy involves efficient communication and coordination in an organization. The organization identifies customer needs and requirements. |
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Physical Evidence |
Confirmation |
Physical evidence acts as the proofs that can be witnessed by the consumers. The evidence is usually in a tangible form that justifies its presence in the market. |
Table 2: Concepts of Marketing Mix
Source: (Hajli 2015)
Product
Red Bull is a caffeinated, sweet drink aimed to give consumers the high energy kick. The taste of the beverage is unlike any other drink in the market. The ingredients contain B-vitamins and various others that act as functional element. The product is available in variants such as original, sugar-free, total zero and various other editions (Red Bull 2016).
Price
The price of product is premium across the world. The product is always priced more than its competitors following the premium pricing strategy (Hollensen 2015).
Place
Red Bull uses the tactic not to open its official shops; rather they sell their products in local markets for minimizing the sales cost. The product is easily available at any retail, food or drink outlets (Hollensen 2015).
Promotion
Red Bull uses the most suitable form of reaching its consumers. The products are promoted in the youth market and through lifestyle (Chionne and Scozzese 2014). Red Bull uses the above elements of marketing mix through various promotional activities and events. The brand markets its products through events such as Red Bull Cliff Diving World Series, Red Bull Crashed Ice and Red Bull Air Race where the participants need energy for navigating challenging obstacles. The brand also sponsors championship shows and races. These events attract large crowds and are broadcast taped and live in many countries. The target markets of the brand are students, extreme sports fans, clubbers, and careerists. The youth mainly participates and watch the show through which word-of-mouth marketing is also attained (Penna and Guenzi 2014).
People
Various departments are involved in the organization for production, marketing, operations and overall management. Red Bull cares for its employees to deliver quality outcomes and take the organization to a next level (Hollensen 2015).
Process
Red Bull covers many facets of the world. The event managers and partners capitalize opportunities available for Red Bull help the broadcasting and production. The process of communication drives loyalty and consumer engagement (Hollensen 2015).
Physical Evidence
There are various physical aesthetics provided by red Bull. The physical sites and location for constructing sport events act as physical evidence. The ambassadors who promote can also be considered as physical evidence. The cans and positioned stations are another feature (Hollensen 2015).
Figure 1: Event Categorization
Figure 2: Categorization of Events
Red Bull mainly conducts events and advertises through sponsorships.
Mega Events
Mega events largely affect the whole economy and are mainly conducted internationally.
Red Bull Crashed Ice is an extreme winter sporting event conducted for world championship. The competition is conducted for individuals, teams and women (Chionne and Scozzese 2014).
Red Bull Cliff Diving World Series is an annual international series in which the drivers jump from a height ranging 26–28 m. The competition is conducted in various nations for both men and women (Chionne and Scozzese 2014).
Major Events
Major events help in attracting significant visitors, media coverage and economic interests. The competition between individuals represents nations.
Red Bull Racing is an Austrian Formula One racing team where the team partners for more than just associates. The brand partners with Total, Tag Heuer and various others where the teams have passion for innovation (Red Bull Racing Formula One Team 2016).
Red Bull Flugtag is an event organized by Red Bull in which the participants attempt to fly homemade human powered flying machines. The competition was reward-based and was played internationally (Young 2014).
The above discussion and events clearly distils the remarkable success of Red Bull. The marketing strategy of Red Bull engages consumers through sportsmanship, ideals and heroics. The brand is recognized through logo saturation. The videos depict feats of bravery and athleticism thereby evoking rush among people to drink the beverage.
Positive Impacts
Red Bull has grown into a powerful beverage brand by using the buzz-marketing strategy (Bustin et al. 2015).
The event marketing increases brand equity due to the event attendance. Red Bull brings consumers to the product and not product to consumer (Bustin et al. 2015).
Negative Impacts
The event marketing of Red Bull also attracts the underage kids who are unfit to consume the beverage. There could be adverse health effects for them on consumption (Mitchell 2015).
Red Bull faces competition from other companies such as Monster, Pepsi, Coca-Cola and other soft-drink brands (Mitchell 2015).
Conclusion
The above report discusses the marketing strategy and success of Red Bull, an Austrian energy drink that is imprinting its footmarks across the globe. Red Bull owns the greatest market share in comparison with Monster, V, and various other brands as competitors. The company follows buzz marketing that focuses on maximizing word-of-mouth potential through campaigning. The brand attracts youth, athletes, students and other professionals who have the rush of innovation and adventure.
References
Bailey, S., 2015. Monster Beverage’s extensive line of energy drinks – Market Realist. [online] Marketrealist.com. Available at: <https://marketrealist.com/2015/01/monster-beverages-extensive-line-energy-drinks/> [Accessed 21 Mar. 2016].
Bustin, G., Jones, D., Hansenne, M. and Quoidbach, J., 2015. Who does Red Bull give wings to? Sensation seeking moderates sensitivity to subliminal advertisement. Frontiers in Psychology, 6.
Caffeineinformer.com, 2016. Top Selling Energy Drink Brands. [online] Caffeineinformer.com. Available at: <https://www.caffeineinformer.com/the-15-top-energy-drink-brands> [Accessed 21 Mar. 2016].
Chionne, R. and Scozzese, G., 2014. Some Evidence on Unconventional Marketing: Focus on Guerrilla Marketing. IBR, 7(12).
Forbes Asia, 2013. The Wind Behind Red Bull’s Wings. [online] Forbes.com. Available at: <https://www.forbes.com/sites/forbesasia/2013/06/24/the-wind-behind-red-bulls-wings/#6081f5833e6c> [Accessed 20 Mar. 2016].
Forbes.com, 2015. Red Bull on Forbes Lists. [online] Forbes.com. Available at: <https://www.forbes.com/companies/red-bull/> [Accessed 20 Mar. 2016].
Hajli, N., 2015. Handbook of research on integrating social media into strategic marketing. USA: IGI Global.
Hollensen, S., 2015. Marketing management. Harlow [u.a.]: Pearson.
Jackson, N., 2013. Promoting and marketing events. New York: Routledge.
Mitchell, L., 2015. What Red Bull does to your body will shock you. [online] Dailystar.co.uk. Available at: <https://www.dailystar.co.uk/diet-fitness/459086/Red-bull-bad-for-heart-calories-caffeine-energy-drinks> [Accessed 21 Mar. 2016].
Penna, D. and Guenzi, P., 2014. How to use a sponsorship platform to support an international master brand strategy: The UniCredit UEFA champions league sponsorship. J Brand Manag, 21(2), pp.133-149.
Red Bull Racing Formula One Team, 2016. Meet Our Team Partners | Red Bull Racing Formula One Team. [online] Red Bull Racing Formula One Team. Available at: <https://www.redbullracing.com/partners> [Accessed 21 Mar. 2016].
Red Bull, 2016. Red Bull Company profile – Origin, owner & founder :: Energy Drink :: Red Bull India. [online] Energydrink-in.redbull.com. Available at: <https://energydrink-in.redbull.com/the-company> [Accessed 20 Mar. 2016].
Statista, 2014. Red Bull’s company revenue worldwide, 2014 | Statistic. [online] Statista. Available at: <https://www.statista.com/statistics/275169/red-bulls-company-sales-worldwide/> [Accessed 20 Mar. 2016].
Young, A., 2014. Brand media strategy. New York: Palgrave Macmillan.
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