D1 Red Bull: A Trailblazer in Marketing Strategy
INSTRUCTIONS
When preparing for your discussion post on this case, it is recommended that you read through it several times.
Read through it the first time to familiarize yourself with the prompt.
On the second reading, consider your assigned role in the situation, and let that guide your perspective.
Look deeper at the details: facts, problems, organizational goals, objectives, policies, strategies.
Next, consider the concepts, theories, tools and research you need to use to address the issues presented.
Then, complete any research, analysis, calculations, or graphing to support your decisions and make recommendations.
BACKGROUND
Red Bull is an innovative company that created a new product category in high-energy drink. It has seen tremendous growth in brand awareness, market share and sales. Red Bull marketing efforts focus on their target audience using nontraditional marketing strategies such as sporting event sponsorship. Red Bull’s website plays a unique role, in that most of the content is dedicated to the sports sponsored by Red Bull and not the core product offering.
PROMPT
The head of your marketing department has tasked you with creating marketing strategies that will meet the target audience of your new product: a line of healthy snacks. Your manager would like to utilize the same marketing strategy as Red Bull. You are asked to read the Case Study: Red Bull: A Trailblazer in Marketing Strategy
(Links to an external site.)
and review the Red Bull website
(Links to an external site.)
. Read the module resources and answer the following questions. Make sure to support your answers with relevant scholarly resources.
Tasks:
In the discussion forum, answer the following:
In what other business contexts is a promotional strategy, such as that employed by Red Bull, effective in targeting a specific audience and why? From your research, identify promotional campaigns run by other successful brands and evaluate their effectiveness in terms of the markets within which they operate.In response to your peers, take on the role of the marketing manager. Is the marketing strategy that they developed best suited for your line of healthy snacks? Why or why not?
Support your answers using relevant, scholarly resources and citations in APA format.
Responses should comprise 200-600 words.
References
Marketline. (2012). Red Bull: A trailblazer in marketing strategy
(Links to an external site.)
. London, United Kingdom: Datamonitor.
Consult the Discussion Posting Guide for information about writing your discussion posts. It is recommended that you write your post in a document first. Check your work and correct any spelling or grammatical errors. When you are ready to make your initial post, click on the “Reply”. Then copy/paste the text into the message field, and click “Post Reply.”
To respond to a peer, click “Reply” beneath her or his post and continue as with an initial post.
Evaluation
This discussion will be graded using the discussion board rubric. Please review this rubric, located on the Rubrics page within the Start Here module of the course, prior to beginning your work to ensure your participation meets the criteria in place for this discussion. All discussions combined are worth 20% of your final course grade.
D1: Managing Project Teams
This activity will provide you with an opportunity to engage in discussion on a project management topic that was covered in this module. The class interaction will foster a learning environment in which you will learn from each other’s experiences and opinions. In addition to that, you will practice using the project management jargon and expressing your opinions in a professional manner. The options available in this discussion have ethical considerations that are important to consider as a project manager.
As we have learned in this module, managing project teams can be one of the most complicated and essential parts of managing a project. A project manager must be able to listen and understand the real issues when discussing problems with team members. Unfortunately, because of the diversity of cultures, personalities, and priorities of the individuals involved, misunderstandings and complications often arise.
A skilled project manager will not only help solve problems, but will inspire loyalty and dedication by valuing the uniqueness of each team member and the overall diversity within the team.
Discuss the following topics in your initial post about project team dynamics and the methods of communication best suited to each situation.
Consider a project that went successfully and a project that did not end successfully. It may be a project you worked on or read about in the news or have knowledge of. Consider the sorts of communication that would be necessary to complete that project.
Give an example of a situation where an individual or an organization had to communicate bad news, the method of communication used, and your opinion of how they communicated.
Consider a project team where you are the project manager. You have identified a team member, through personal observation and team member complaints, who has not been completing their fair share of the work; in essence, that person has been slacking. What methods of communication would you use and what message would you have for this individual? What information should be relayed to the rest of the team?
If communication is not effective or has caused inter-team conflicts, are there any techniques that can be used to repair the damage? How can a team regain trust in each member or the project manager once trust is lost?
In the module notes, you learn of an employee who has routinely padded his hours on his time sheet and justifies the practice by stating that all projects run over at the end and he is only making sure he is fairly paid. How would you handle this situation? What communication methods would you employ? Is this a situation that should be escalated? If so, when would that escalation be required and to whom would the escalation proceed?
Consult the Discussion Posting Guide for information about writing your discussion posts. It is recommended that you write your post in a document first. Check your work and correct any spelling or grammatical errors. When you are ready to make your initial post, click on the “Reply”. Then copy/paste the text into the message field, and click “Post Reply.”
To respond to a peer, click “Reply” beneath her or his post and continue as with an initial post.
Evaluation
This discussion will be graded using the discussion board rubric. Please review this rubric, located on the Rubrics page within the Start Here module of the course, prior to beginning your work to ensure your participation meets the criteria in place for this discussion. All discussions combined are worth 15% of your final course grade.
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MarketLine Case Study�
Red Bull
A trailblazer in marketing strategy�
Reference Code: ML00007-012
Publication Date: July 2012
WWW.MARKETLINE.COM
MARKETLINE. THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED
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OVERVIEW
Catalyst
Red Bull has essentially spared no expense in pursuit of its own path to market domination. The company’s philosophy
has been to ignore traditional media advertising and marketing (bar its own unique set of comical cartoon adverts),
instead channeling money into sporting, music, and cultural events. Its efforts have been so extensive that the number of
sportspeople and events sponsored total in the hundreds. In some areas the company has even popularized brand new
sports. This is of course not an entirely new method of gaining recognition – indeed companies have been sponsoring
events for many years to become synonymous with a positive type of event – but Red Bull has taken this to a new level
by wrapping itself in such a network of projects that its intended image is without question. This method of recognition
has been hugely successful, with a recent study estimating that spending money on traditional advertising methods to
gain the same amount of recognition would cost around double what Red Bull currently invests, and so despite the
enormous amount of money dedicated to this type of marketing it remains economical. Another key indicator of Red
Bull’s dedication to its brand image is that its own website is dominated by the sports and events it runs, and information
about its own products takes on an almost secondary role. One developing challenge for the company is that competitors
in the energy drinks sector have adopted a similar method of brand recognition and are having some success.
Summary
• Red Bull was founded as an attempt to bring to the West a traditional Asian tonic drink and develop it for the
Western market. It first gained access to the Austrian market in 1987, then spread through Europe and now
trades worldwide, being one of the most well-recognized brands in any sector.
• Red Bull has forged an entirely new market segment with its unique product, and today is the number one
worldwide energy drinks company. Its current sales volume exceeds 4 billion cans sold and it operates in 160
countries.
• Red Bull’s way of showing off its products and becoming recognized by its target audience is unusual but hugely
successful, and despite its extensive investment is actually more economical than traditional advertising
methods. Being a private company allows Red Bull the freedom to invest in marketing events, as it has fewer
concerns over maintaining shareholder profits, which some of its competitors have to deal with.
• The brand has been so extensively linked with the positive events that it invests in that its products have not
needed to be hard sold or heavily discounted, and so the company remains the premium brand in the sector
despite recording higher sale volumes than its competitors.
• The company may face some tough challenges from its competitors in the future, however, as they are now
using similar techniques to get their own products recognized, which may negate Red Bull’s current advantage.
Some of Red Bull’s main competitors are well-funded and operated by multinational corporations.
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TABLE OF CONTENTS
Overview ……………………………………………………………………………………………………………………………………………………….. 2�
Catalyst ………………………………………………………………………………………………………………………………………………………. 2�
Summary ……………………………………………………………………………………………………………………………………………………. 2�
Analysis …………………………………………………………………………………………………………………………………………………………. 5�
How it all started ………………………………………………………………………………………………………………………………………….. 5�
The origins ………………………………………………………………………………………………………………………………………………. 5�
A gap in the market …………………………………………………………………………………………………………………………………… 6�
The road to success ………………………………………………………………………………………………………………………………….. 6�
Red Bull’s current position …………………………………………………………………………………………………………………………….. 6�
The numbers ……………………………………………………………………………………………………………………………………………. 7�
The product takes on a secondary role ………………………………………………………………………………………………………… 8�
Unique marketing ………………………………………………………………………………………………………………………………………… 9�
Traditional methods of advertising ………………………………………………………………………………………………………………. 9�
The Red Bull way ……………………………………………………………………………………………………………………………………. 10�
Non-product-related acquisitions ………………………………………………………………………………………………………………. 11�
Results of the efforts …………………………………………………………………………………………………………………………………… 13�
Economical ……………………………………………………………………………………………………………………………………………. 13�
Goodwill ………………………………………………………………………………………………………………………………………………… 13�
Becoming cool ……………………………………………………………………………………………………………………………………….. 14�
Potential pitfalls …………………………………………………………………………………………………………………………………………. 14�
Competitors ……………………………………………………………………………………………………………………………………………. 14�
Health concerns ……………………………………………………………………………………………………………………………………… 15�
Access to new markets ……………………………………………………………………………………………………………………………. 15�
Counterfeit products ………………………………………………………………………………………………………………………………… 15�
Risk ………………………………………………………………………………………………………………………………………………………. 15�
Conclusions ………………………………………………………………………………………………………………………………………………….. 17�
The future …………………………………………………………………………………………………………………………………………………. 17�
Appendix ……………………………………………………………………………………………………………………………………………………… 18�
Sources ……………………………………………………………………………………………………………………………………………………. 18�
Further Reading …………………………………………………………………………………………………………………………………………. 18�
Ask the analyst ………………………………………………………………………………………………………………………………………….. 18�
About MarketLine ………………………………………………………………………………………………………………………………………. 18�
Disclaimer …………………………………………………………………………………………………………………………………………………. 19�
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TABLE OF FIGURES
Figure 1: Krating Daeng can …………………………………………………………………………………………………………………………….. 5�
Figure 2: Red Bull can ……………………………………………………………………………………………………………………………………… 6�
Figure 3: Red Bull revenues ……………………………………………………………………………………………………………………………… 7�
Figure 4: Red Bull and Monster revenues …………………………………………………………………………………………………………… 7�
Figure 5: Leading energy drinks players’ market shares ……………………………………………………………………………………….. 8�
Figure 6: Red Bull website contents …………………………………………………………………………………………………………………… 9�
Figure 7: Red Bull cartoon advert …………………………………………………………………………………………………………………….. 10�
Figure 8: Red Bull Racing Formula 1 car ………………………………………………………………………………………………………….. 11�
Figure 9: Red Bell New York …………………………………………………………………………………………………………………………… 12�
Figure 10: A Red Bull snowboarding helicopter …………………………………………………………………………………………………. 13�
Figure 11: Valentino Rossi sporting the Monster logo …………………………………………………………………………………………. 15�
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ANALYSIS
How it all started
Red Bull is a formulation between Western product development and marketing and a traditional Asian tonic drink. The
company was well-placed to exploit a gap in the Western market, and with its introduction to the drinks market in Europe
in 1987 created an entirely new product category. The result was that the company now dominates the international
energy drinks market.
The origins
Red Bull is a carbonated drink containing sucrose, caffeine, and taurine designed to give the user a burst of energy or, as
the advertising slogan says, “gives you wings.” The drink was based on an energy drink found in Thailand and first sold
by Chaleo Yoovidhya under the name of Krating Daeng as a “tonic drink.” As shown in Figure 1, it was presented
differently, and to the present day is sold as a separate product and distributed from a separate company in some
regions. Krating Daeng was originally sold as an aid for lorry drivers, construction workers, and night staff, helping to
keep them awake and alert during long shifts. There is some early evidence of the marketing techniques that Red Bull
would eventually adopt as Krating Daeng sponsored boxing events, a sport popular with its target audience, and the
product bares the logo of two wild gaurs (a type of Asian bison) charging at each other.
Figure 1: Krating Daeng can
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A gap in the market
Red Bull was set up by the partnership of Dietrich Mateschitz and Chaleo Yoovidhya. Mateschitz (an Austrian marketing
executive) recognized that Krating Daeng had no Western equivalent, and so a potentially lucrative gap in the Western
drinks market had been identified. Mateschitz brought the drink to the West in partnership with Yoovidhya, and altered it
for Western tastes and remarketed it, first gaining access to Mateschitz’s native Austrian market in 1987 and then rapidly
expanding throughout Europe and the Americas. Red Bull evolved into the number one energy drinks company in the
world, and along the way created an entirely new product category, with large soft drinks companies such as PepsiCo,
Coca-Cola, and Hansen Natural slow to enter with their own energy drink products.
The road to success
As of 2012 the company is present in 160 countries and is still growing. From the beginning of the company’s
establishment in Austria, it began to sponsor sporting events, and in 1988 launched the Red Bull Dolomite Man, an
extreme endurance event involving alternative sports such as kayaking and paragliding. Four years later the company
started the Flug Tag, a fun event where competitors were encouraged to build flying machines. From the beginning the
company was willing to invest in unusual causes and strategies to get noticed in specific sections of society. This trend
has developed to such a point that today Red Bull’s association and backing is the primary reason behind certain sports’
popularity, whereas previously the reverse would be true, in that companies would want to become associated with a
popular sport for the positive connotations and ultimately the connected sales.
Red Bull’s current position
Red Bull is currently showing large growth year-on-year and has experienced better than expected growth in some
markets that are already developed. The strength of the company is evident in more than just the annual turnover,
however, as its brand strength, market share, and sales volumes are all high. Interestingly, the Red Bull product has
been allowed to take on a secondary role to the company’s other activities; for example, the sporting events it runs are
Figure 2: Red Bull can
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sometimes easier to access information on than its own products.
The numbers
As seen above, the company saw some fluctuation in year-on-year growth rates during the economic crash in 2008 and
2009, but the company has since returned to strong double digit growth. Red Bull’s closest competitor is Monster Energy,
which has been showing good revenue growth, but Red Bull’s annual growth is higher despite its already dominant
market share.
Strength within the market
Red Bull’s strengths extend beyond its annual turnover and include some unusual elements not commonly seen in other
companies.
Red Bull’s brand currently holds 80th position in Millward Brown’s Global brand value listings for the top 100 brands. This
is exceptionally high considering its products are limited to one specific niche market. Being a relatively new company,
the power of the brand and strength of its logo make it comparable to much larger corporations with larger advertising
Figure 3: Red Bull revenues
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Figure 4: Red Bull and Monster revenues
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budgets. For instance, BP and Nissan occupy 77th and 81st respectively. This brand strength allows Red Bull to punch
above its weight in terms of recognition.
Red Bull has achieved a very unique position in the global energy drinks market. Its current market share is estimated to
be 43%, while its nearest competitor holds a share estimated to be 16%. Due to its remarkable recognition strategy, the
company is able to hold off the advances of some of the largest drinks manufacturers and corporations in the world, such
as PepsiCo and Coca-Cola.
Figure 5: Leading energy drinks players’ market shares
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Red Bull as a product has become the primary name for the energy drinks sector; for instance, a popular alcoholic drink
in the UK is a measurement of vodka mixed with an energy drink, but the drink is referred to and advertised as Vodka
Red Bull even when a different energy drink brand is being used. The benefit of this is enormous, as the company is the
primary consideration when a consumer chooses an energy drink, in a similar way to Coca-Cola within the soft drinks
industry.
Red Bull achieved 4 billion can sales in 160 countries in 2011. In comparison with its major competitors, the Red Bull
serving is much smaller, yet the product is charged at the same price and sells in higher volumes. It is likely that Red Bull
is viewed by the consumer as a higher end product, and yet sells in the quantities of a lower end product. Red Bull can
also charge more than its competitors, despite the fact that the standard serving of Red Bull is a 250ml (8.3oz) can,
whereas all other competitors offer larger (often double the size) cans for the same price.
Red Bull’s product range is not huge, and currently consists of Red Bull Energy Drink, Red Bull Sugar Free, Red Bull
Energy Shot, and Red Bull Cola. The company has spread all over the world, and has achieved higher than expected
success in markets that are already well-developed, such as Japan and Turkey.
The company grew by roughly 700 employees in 2011 to reach 8,294 employees. This rate of growth shows the
confidence that consistently growing revenues have brought the company.
The product takes on a secondary role
Unusually, the Red Bull product is a secondary consideration on the company’s website, which is devoted to the myriad
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different events it runs and sponsors, rather than its own product.
Red Bull has begun to display elements of reduced involvement in its own products through comprehensive investment
and backing of sporting and cultural events. Red Bull the investor and sponsor is portrayed as the primary activity of the
company to the consumer. By associating itself in such depth with positive recreational activities, the company needs to
devote less time to promoting the actual product. An intriguing part of Red Bull’s own website is that the actual product
the company sells takes on a secondary role to its other activities. It is possible to view the product line, but this is placed
in a separate list much small than its other activities. It is as a result of having a specific business philosophy and culture
that Red Bull can avoid hard selling its products, which further increases consumer goodwill toward the company and
avoids the dangers of making consumers bored of the product.
Unique marketing
Apart from the unusual methods of advertising that Red Bull has adopted, which will be examined later, the company has
not shied away from traditional media, but with its own specific twist.
Traditional methods of advertising
Efforts from the company in traditional spheres of advertising have included television and radio advertisements, but in
typical Red Bull fashion they were unusual in their content and highly recognizable and stylized. In the UK, for example,
the adverts were based on a simple cartoon format, and almost all had a certain sense of levity, which was intended to
make the viewer laugh at the ridiculous nature of the situation faced by the characters, with the message that Red Bull
gives you wings (a common theme was that the characters grew wings and flew away after drinking the product). This
was a bold and successful strategy, and keeping the adverts amusing, ironic, and informal allowed Red Bull to build and
add to its youthful, energetic, almost irreverent image.
Figure 6: Red Bull website contents
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The Red Bull way
Despite these attempts in normal advertising spheres, from the beginning Red Bull was forging a new method of
recognition. The company drew on the relatively common methods of backing positive sporting and cultural events, which
many companies have used before, but also became involved in the actual running, development, and creation of these
events. Rather than paying for its name to be placed in a visible location during a game, Red Bull actually buys the team,
sets up its own managerial team (usually consisting of the best people available), and buys relevant assets such as
stadiums, arenas, and technical equipment. Examples of this are Red Bull’s ownership of two soccer teams, the New
York Red Bulls in the US and Red Bull Salzburg in Austria. These are not short-term publicity stunts, and the aim is
usually to remain in possession of these teams long term and ultimately to achieve success while in possession of them.
For example, the Red Bull racing team in Formula 1 quickly became one of the best funded teams, and dominated the
championship contest for two consecutive years in a sport that is notoriously expensive to operate and requires very high
levels of technical expertise.
Figure 7: Red Bull cartoon advert
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Non-product-related acquisitions
The company has acquired a large number of teams, events, and personnel to add to its already extensive profile.
The company owns two teams in Formula 1, under the names Red Bull Racing and Scuderia Toro Rosso. Red Bull
Racing has been hugely successful, with two overall championship wins from driver Sebastian Vettel in the 2010 and
2011 seasons and two constructors’ championship awards in the same years. Red Bull also runs extensive development
programs and a new drivers program, which trains talented drivers to be able to eventually break into the primary and
secondary teams, proving the company’s long-term dedication to the sport.
Figure 8: Red Bull Racing Formula 1 car
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In the World Rally Championship the company has applied its usual formula of gathering the best talent in the industry to
achieve success. Sebastian Loeb is the eight time winner of this event, and he appears with Red Bull livery, clothes and
car. The Red Bull soccer teams have allowed the company to enter more mainstream audience markets, and their
ownership of the stadiums allows the Red Bull logo to be displayed on buildings with a large footfall, where music events
and other sporting events are held. In the US, the New York Red Bulls have been successful, coming top of their league
in 2010 and fighting for top spot again in 2012. Similar to its other operations, Red Bull has also brought high profile stars
such as Thierry Henry to the club in order to increase both its success and fan base.
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By coming to the aid of ailing sporting teams, Red Bull attracts goodwill from fans of the sport, such as with its 2012
purchase of the bankrupt ice hockey team Red Bull Munchen. Apart from team sports, the company also sponsors
individual athletes, which allows it to access less popular sports and more niche target audiences. For instance Red Bull
sponsors large numbers of individual athletes, including surfers, skaters, mountain bikers, basketball players, American
football players, parkour athletes, snowboarders, base jumpers, and many others.
The purchase of equipment allows its teams and individuals to perform more “extreme” stunts and events in the most
remote locations; for example, the Red Bull snowboarding teams have helicopters to allow them to access unused
mountain …
Student 1
In what other business contexts is a promotional strategy, such as that employed by Red Bull, effective in targeting a specific audience and why? From your research, identify promotional campaigns run by other successful brands and evaluate their effectiveness in terms of the markets within which they operate.
Promotional marketing effectively raises awareness through fostering brand loyalty and informing the target audience of the relative advantages of the product or service over others. Red Bull has been a trailblazer in the marketing strategy that justifies its market domination through the use of unique cartoon adverts. The company prioritized sports sponsorship over traditional media marketing techniques, gaining recognition during cultural events, music, and sporting activities. The promotional strategy is effective in different businesses, including service delivery and merchandising (Santomier, 2008). The method focuses on winning the audience’s attention with loyalty programs for contributive clients and brand awareness during the events. The strategy is effective in competitive markets through increased visibility and broad target. The companies gain publicity and exposure as increasing their competitive advantage and a natural consequence on the media. Merchandizing businesses, including retailers and resellers such as Walmart, gain brand recognition with an expected increase in sales and market share. Similarly, businesses offering services such as airlines, insurance and healthcare will benefit from recognition by interested individuals.
AT&T is a successful conglomerate within the telecommunications industry with successes in providing telephone services. The company’s primary promotional campaigns are based on social media, an accurate targeting technique for its audience. The platforms break down the 4Ps (Promotion, Place, Price, and Product) through differentiation and collaboration with exclusive smartphones dealers such as Apple Corporation, making it easy to reach their target service consumers (Brázda, 2014). The collaboration with other companies enhances the loyalty of customers and increases brand awareness. The company remains effective in its operation market despite its dependence on traditional advertising techniques via print media, social media and TV. The target market is effectively reached through the platforms justifying their promotional techniques.
References
Brázda, M. (2014). A marketing strategies analysis of the Skype: Skype as a new mobile operator. Tomas Bata University.
Santomier, J. (2008). New Media, Branding
Student 2
Today’s generation enjoy the quick fixes of high energy and convenience. Red Bull fit that needs with the advertisements and attention of giving their customers wings once they consume the product. It seems as though the out of the box thinking from the marketing department knew the target audience they were going after with social media and who to sponsor for the high energy sports. Along the lines of the healthy snacks, this generation seem to want the sugar, high protein and low carbs. Red Bull I believe would be successful if they were to make an energy bar with almost the same ingredients as the drink. The marketing strategy would be about the same packaging as the can, blue and silver with the bull. If I were a marketing manager for a company, I would utilize the principles of getting that specific audience’s attention.
“The Monster and Rock Star brands from Hansen Natural and PepsiCo are developing and have adopted similar techniques for becoming recognized” (MarketLine, 2012, p. 114). We have all perhaps heard of the 5-hour energy drink that come in the little bottle. According to Robert Williams, he states that “Caffeine drink brand 5-hour energy boosted sales and short-term return on ad spend. The campaign drove a short-term ROAS of $6.11, more than six times higher than the $0.92 average of social media food campaigns” (Williams, 2019). With the label showing a person having the energy to walk up a mountain and having the endurance to do seems to draw the attention of energy seekers. Red Bull seems to have made their customers want the product, according to our text, “Moving from interest to desire means that a customer has to move past a need and begin to really want that specific product” (Marshall & Johnston, 2019, p. 349).
References:
MarketLine. (2012).
MarketLine Case Study: Red Bull: A trailblazer in marketin
g strategy.
Red Bull: A Trailblazer in Marketing Strategy. http://eds-s-ebscohost.com.vlib.excelsior.edu
(Links to an external site.)
Marshall, G. W. & Johnston, M. W. (2019). Marketing Management. (3rd ed.). McGraw Hill.
Williams, Robert. (2019).
5-Hour Energy pumps up influence marketing with 23M impressions on Instagram.
Marketing Dive. https://www.marketingdive.com/news/5-hour-energy-pumps-up-influencer-marketing-with-23m-impressions-on-instagr/
(Links to an external site.)
