Marketing_Management_and_Strategy_-_Case.pdf

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MSc Marketing Management

Marketing Management & Strategy

Tutor: Hazel Huang

Summative Report

Case Study: Red Bull

2000 words

Anonymous Code

Z0942865

January, 2014

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Table of Contents

Marketing issues for Red Bull 4

2. Marketing strategy 5

2.1. Marketing objectives 6

2.2. Creative Strategy 7

2.3. Marketing Communication 8

3. Contingency plan in case of changing attitude towards competitors 9

2.1. Analysis of competitors 9

2.2. Marketing strategy 10

4. Conclusion 11

5. References 12

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Table of Figures

Figure 1.Types of energy drinks used, by gender, May 2012

Figure 2.Brand shares in the UK take-home sports and energy drinks, 2011

Figure 3.Brand shares in the UK take-home sports and energy drinks,2012/13

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1. Marketing issues for Red Bull

From the Red Bull case study (Kumar at al., 2005), fourmarketing issues can be

addressed. Firstly, the Red Bull brand faces significant competition from large industry

companies including Pepsi and Coca-Cola, in addition to retailer brands such as Blue

Charge by Wal-Mart. Secondly, Red Bull has been criticised for its limited product

development, as there is (2005) only one other version of Red Bull, which is sugar-free.

Thirdly, the question of whether Red Bull should use more traditional ways of marketing

was raised in the case study (Kumar at al., 2005), but this could be linked to the final issue

- an increase of consumption by retaining ageing consumers as well attracting new ones

from a younger population.

Regarding competitors, it is true that these could take over some of Red Bull's share in the

market; however, the case study states that even though twenty-three new competitors

entered the market in 2000, they managed to overtake only 14% of the energy drinks

market (Kumar at al., 2005). Moreover, as showed by Dahlenet al(2010) in the case of

Pepsi competing with Coca-Cola: Pepsi tastes at least as goodas Coca-Cola but cannot

translate this factorinto brand sales and market share (p.27). This statement therefore

argues that despite the high number of competitors, Red Bull has something its

competitors do not a strong and consistent brand image (Euromonitor, 2013, p.6).

Simply stated, Red Bull's high brand equity means that consumers feel and think about the

brand much more strongly than they do about its competing brands. Red Bull is for many

consumers synonymous with energy drinks (Euromonitor, 2013), in a similar way as the

iPod is synonymous with MP3 players (Levy, 2006).

Slow or very limited product development in the case of Red Bull can be criticised as one

way of expanding sales in order to produce a new product. On the other hand, it can be

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argued that Red Bull as a brand is known for being energy drink focused; thus, expanding

into the soft-drink sector, for instance, could have a negative effect on the brand's image

(Heckman, 2010). Moreover, taking in account the development of different flavours, it

must be highlighted that consumers tend to stick to original products rather than

alternatives (Mintel, 2012). Therefore, product development is an option for Red Bull;

however, it is not the most important issue to be addressed for increasing sales.

Finally, as highlighted above, the brand's marketing strategy is highly dependent on its

target consumers; hence, the final and most important marketing issue concerns a

strategy for increasing the consumption of Red Bull. Ideally, this could be done by keeping

existing but ageing customers who stop or lower their consumption of energy drinks due to

their symbolic meaning (Levy and Rook, 1999) bound with youngster culture, craziness

and extremism, by alternating Red Bulls current image (Marketline, 2012).

2. Marketing strategy

Red Bull, as a successful and pioneering brand of the energy drink sector has developed a

coherent, dominant and persistent idea embedded in all its communication: Red Bull gives

you wings (Kumar at al., 2005, p.4). Moreover, it has been successful in attracting new

young consumers (Euromonitor, 2012) by linking its brand image with extremism, energy

and mystique. This tactic appeals strongly to youngsters; on the other hand, it has led to

the loss of Red Bulls ageing consumers, as the image of an employee with a can of Red

Bull is not widely acceptable due to the symbolism of the brand portraying such a person

as unprofessional and exhibiting childish behaviour (Brasel and Gips, 2011). Hence, in

order to keep those working professionals loyal while attracting a younger generation at

the same time, the Red Bull brand image should be altered (Levy and Rook, 1999). In

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accordance, Kjedgaard (2009) argues that partly, consumer express their identity through

the brands they use. Hence, the symbolic meaning of Red Bull is massively important in

sending its meaning to consumers. According to Kapferer (2000, p.56), products are mute:

the brand is what gives them meaning and purpose, telling us how a product should be

read. Thus, by creating an acceptable meaning that can be related to as many age groups

as possible, Red Bull may expand its original targeted group of 16-29-year-old males

(Euromonitor, 2012) and subsequently increase its sales.

2.1. Marketing objectives

Red Bull should expands its original targeted group of young active men (Euromonitor,

2012) to ordinary students, as even though this target group may not be as wildly social or

participate in adrenaline-fuelled sports, they nonetheless need to stay awake and

concentrate for long hours on end studying. Moreover, the ageing consumers from 25 to

45, who had in the past been moving away from Red Bull consumption (Kumar, 2005)

must also be targeted, as they can also benefit from Red Bull's positive effects (e.g.,

vitalises body and mind) (Reynolds, 2011). For example, an executive finishing an annual

report, a retailer conducting exhausting inventory checks or even a taxi driver during an

evening shift. In addition, the targeted consumer group should also be extended to

females, as in our post-modern and emancipated society (Raaij, 1993), women - though

not in the same numbers - purchase similar products and engage in similar activities as

men (Figure 1).

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Figure 1. Types of energy drinks used, by gender, May 2012 (Price, 2013)

2.2. Creative Strategy

In order to appeal to a broader market, the Red Bull image and symbolic meaning should

be altered to change Red Bull of being perceived as speed in a can, liquid cocaine or

even liquid viagra (Kumar at al., 2005). Moreover, the current Red Bull slogan gives you

wings may symbolise the light feeling, or even metaphorical feeling of flying linked to

drugs use and irresponsibility (Reynolds, 2011), which is strengthen by above mentioned

nicknames (Levy and Rook, 1999). Therefore, the slogan should be changed into one that

appeals to wider age group and is not associated with any extreme or illegal activity

(Dahlen at al., 2010). A suggested alternation is brake the limits as it can be used in

advertisements and fits a variety of situations, for example, the previously mentioned

executive trying to finish his/hers report. Two realities may be shown in a marketing

campaign using this slogan, where in one, he/she is falling asleep on a desk full of papers,

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while in the alternative reality he/she drinks Red Bull and finishes the report on time,

hence, breaks the limits.

2.3. Marketing Communication

Good marketing communication should be based on one simple message that is being

communicated though all media platforms (Light, 2004). Red Bulls marketing approach of

limited mass media advertising in favour of word of mouth and buzz promotion, supported

by event sponsoring, has had great success (Marketline, 2012). Moreover, this

promotional tactic is the reason for Red Bulls exclusivity and popularity; hence, it should

not be changed. However, due to the broadening of the brand's target groups, promotion

of Red Bull in places such as offices, hospitals and universities should be added. Red Bull

has been successful in placing branded fridges in bars and restaurants (Kumar at al.,

2005); therefore, their placement in office buildings and hospitals for use by executives,

office workers, doctors and medical attendants may indicate the product's suitability for

use in the workplace. Moreover, the creation of student Brand Managers has in the past

served as a successful approach by Red Bulls marketing department. However, this

approach mainly focused on university parties and the use of Red Bull as a mixer with

vodka (Kumar at al., 2005). Despite this strategy generating high sales (OBrian at al.,

2008), the consumption of Red Bull by diligent and/or religious students whose lifestyle

does not include regular participation in raves, but may also benefit from the effects of

Red Bull should also be considered. Finally, it will be suitable and highly beneficial to

establish new communities and events targeting older consumers, as well as those not

willing to participate in more extreme events that have been organised by Red Bull in the

past (Gorse at al., 2010).

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3. Contingency plan in case of changing attitude towards competitors

Currently, Red Bull is estimated to have 43% of the energy drinks market; therefore, there

is no major need for product development as a reaction to competition (Marketline, 2012).

Moreover, standard versions of energy drinks still dominate the market and the sales of

low-sugar or natural ingredients drinks are rising very slowly (Mintel, 2012). However, with

the increase in health consciousness consumers and an interest in leading healthy

lifestyles, it may soon happen that people decrease their Red Bull consumption due to the

product's unhealthy ingredients such as caffeine, glucuronolactone, sucrose and glucose

(Mintel, 2013). Moreover, the health risks connected to consumption of energy drinks

include insomnia, nervousness, headache, tachycardia (Clauson, 2008), but also the

threat-of-life, highlighted by cases of death after overdosing on Red Bull or alcohol mixers

containing Red Bull as an ingredient (Terlizzi at al., 2008; Herraldscotland, 2009; Alter,

2013). Indeed, these risks may trigger a discussion about the suitability of energy drinks

for day-to-day consumption, thereby causing a significant decrease in Red Bull sales in

favour of brands using more natural ingredients, or other soft drinks in general.

2.1. Analysis of competitors

For the purpose of this report, the competitor analyses will focus mainly on the UK

market . Currently, Red Bulls biggest competitor within the energy and sports drinks1

sector is Lucozade (Figure 4). However, Lucozade is considered more as a sport drink. As

such, Red Bull's main competitors from the energy drinks sector are Monster and

Relentless (Mintel, 2012). Additionally, the growth of the sports and energy drinks market

peaked in 2011, and since then it slowed slightly expanding by only 5% in volume from

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Variety of brands and their market share varies in different countries, however, RedBull holds in1

majority of countries as well as globally, second position in the segment of functional drinks (Marketline,2013) and either first or second position in sports and energy drinks markets (Marketline, 2012).


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2012 to 2013 (Mintel, 2013). However, it can be argued that even though Red Bull holds

second place in the UK market (Figure 3, 4), it has failed to react to the market's changing

focus towards more healthy drink varieties, therefore loosing on the total market share

despite the sports and energy drinks market growth (Mintel, 2013). Monster, on the other

hand, took advantage of the gap in this product line and introduced a variety of flavoured,

low-sugar, calorie-free and healthy alternatives to its regular sugar-and-caffeine-loaded

energy drink, which resulted in its market share growing by 3% in 2013 (Mintel, 2013).

Figure 3. Brand shares in the UK take-home sports and energy drinks, 2011

(Mintel, 2012)

Figure 4. Brand shares in the UK take-home sports and energy drinks, 2012/13

(Mintel, 2013)

2.2. Marketing strategy

In a reaction to increasing demand for more heathy, flavoured, low-sugar and calorie-free

drinks (Mintel, 2013), Red Bull should also place a bigger focus on its product

development. However, this should stay within the sport and energy drinks segment, as

Red Bulls meaning and assimilation with the word energy drink has a long history and is

greatly responsible for its success (Euromonitor, 2013). Moreover, alongside the previous

aim of targeting ageing consumers and women alongside its main targeted group, product

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varieties may focus on the specific preferences of the groups targeted. According to Price

(2012), women are more health conscious, preferring more natural ingredients such as

taurine, ginseng and guarana. Though some products in the market already contain these

additives, it has been researched that none of those products contain high enough

concentrations to deliver therapeutic or revitalising benefits (Clauson at al., 2008).

Therefore, Red Bull should take advantage of this gap in the energy drinks market and

develop an edition of functional drinks with sufficient concentrations of all natural

ingredients. Furthermore, ageing consumers using coffee instead of energy drinks may be

harder to target due to the lasting perception of energy drinks being used by youngsters.

As Red Bulls ageing consumers are substituting energy drinks for coffee, Red Bull has the

opportunity to expand by entering the $50.2 billion coffee market (Marketline, 2010). In this

way, Red Bull may appeal to the ageing segment of its consumers by developing a coffee

based functional drink.

4. Conclusion

In conclusion, Red Bull has been facing some challenges regarding stagnation in

consumption of its products and slight pressure from its competitors. The marketing

strategy addressing the former issue was suggested in this report; furthermore, the

possible environmental consciousness change in consumer perspectives may increase the

need for health and dietary products to be addressed. In this context, a marketing strategy

was introduced, taking into account the first issue of extending Red Bulls targeted

consumer groups and further improving product consumption by developing new products

targeting various age and gender groups.

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5. References

Alter, C. (2013). Red Bull Sued For $85 Million in Man's Death. Business Source Complete

[online]. Available at: [Accessed 22 January 2014].

Brasel, S.A. and Gips, J. (2011). Red Bull Gives You Wings for better or worse: A double-

edged impact of brand exposure on consumer performance. Journal of Consumer

Psychology, 21 (1) pp. 57-64.

Clauson, K.A., Shields, K.M, McQueen, C.E. and Persad, N. (2008) Safety issues

associated with commercially available energy drinks. Pharmacy Today, 14 (5), pp.

52-64. http://apha.imirus.com/pdf/2008/May_CE_exam.pdf

Euromonitor (2013). Red Bull GMBH in Soft Drinks (world). Euromonitor International


Gorse, S., Chadwick, S. and Burton, N. (2010). Entrepreneurship through sports

marketing: A case analysis of Red Bull in sport. Journal of Sponsorship, 3 (4), pp.

348-357.

Heckman, M.A., Sherry, K., and De Mejia E.G. (2010) Energy Drinks: An Assessment of

Their Market Size, Consumer Demographics, Ingredient Profile, Functionality, and

Regulations in the United States. Comprehensive Reviews in Food Science and

Food Safety, 9 (3), pp.303-317.

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Heraldscotland (2009). Red Bull caffeine drink 'may have helped cause' student's death.

The Herald, [online] (Last updated on 2 February 2009) Available at: [Accessed 20 January 2014].

Kumar, N., Tavassoli, N. and Coughlan, S.L. (2005). Red Bull: the Anti-Brand Brand.

London: London Business School.

Levy, S. (2006). The Perfect Thing: How the iPod Shuffles Commerce, Culture, and

Coolness. New York: Simon and Schuster.

Levy, S.J. and Rook, D.W. (1999). Brands, Consumers, Symbols, and Research. London:

Sage Publications.

Light, L. (2004). More knowledge can only lead to better ad creative. New Media Age,

Published 7 October 2004, p.19.

Marketline (2012). Red Bull: A trailblazer in marketing strategy. Marketline Case Study

[online].Available at: [Accessed 20 January 2014].

Marketline (2013). Global Functional Drinks. Marketline Industry Profile[online].Available

at: [Accessed 20 January 2014].

Mintel (2012). Sports and Energy Drinks. Mintel Executive Summary [online]. Available at:

[Accessed 18 January 2014].

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Mintel (2013). Sports and Energy Drinks: Mintel Executive Summary[online]. Available at:

[Accessed 18

January 2014].

Mintel (2013). Sports and Energy Drinks: Mintel Issues in the Market [online].Available at:

[Accessed 18

January 2014].

OBrian, M.C., McCoy, T.P., Rhodes, S.D., Wagoner, A. and Wolfson, M. (2008).

Caffeinated Cocktails: Energy Drink Consumption, High-risk Drinking, and Alcohol-

related Consequences among College Students.Academic Emergency Medicine,

15 (5), pp.452-460.

Price, A. (2013). Targeted marketing could demystify energy drinks for women. Mintel


Reynolds, R. (2011). Red Bull Gives You Wings: Patrolling the Boundaries of Drug Foods.

Federal Law Review, 39 (2), pp. 281-302.

Raaij, W.F. (1993). Postmodern consumption. Journal of Economic Psychology, 14 (1),

pp.541-563.

Terlizzi, R., Rocchi, C., Serra, M., Solieri, L. and Cortelli, P. (2008). Reversible postural

tachycardia syndrome due to inadvertent overuse of Red Bull. Clinical Autonomic

Research,18 (4), pp. 221223.

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