EMBA 5202 Brand Management Home Work V

Tuna Taş Executive MBA Student No: 1168106

RED BULL:BUILDING BRAND EQUITY IN NON-TRADITIONAL WAYS

Introduction

(*) http://www.redbull.com/cs/Satellite/en_INT/Company-figures/001242939605518?pcs_c=PCS_Article&pcs_cid=1242937556133 (**) http://en.wikipedia.org/wiki/Red_Bull

World’s biggest energy drink company, employeeing around 8300 people in more than 160 countries with over 4.6 billion cans in sales(*)

Thai businessman Chaleo Yoovidhya invented the energy drink “Krating Daeng” (means Red Water Buffalo in Thai)

Founded in 1987,in Austria by Dietrich Mateschitz, in partnership with Chaleo Yoovidhya with only one SKU(**)

10 years after launch it became a global brand with its existence in more than 25 markets

Also well known with its slogan “Red Bull gives you wings/ Red Bull kanatlandırır”

Brand Salience

Imagery

Performance

Feelings Judgements

Resonance

1st in mind An OTC(*) drug/drink

Energy benefits

High loyalty Awareness

Red Bulls’ Brand Equity Model

High Quality Energy Drink High breadth,high depth

Full of energy More than a refreshment

Best of class Innovative Mysterious

Physical endurance Mental alertness

Concentration

Revitalizes body and mind Stronger than traditional soft drinks

(*) Over the Counter

Red Bull’s sources of brand equity and their dependence to market

Pricing strategy provides a “Best of class” positioning (at least %10 greater than the Most-expensive competitive product) A premium drink, not a simple drink Succesfull at communicating product value to customers, slogan is simple, easy and effective (Red Bull gives you Wings, when you are tired think of Red Bull) Supplemented its word-of-mouth strategy with event sponsorships, athleteendorsers, sampling programs, point-of-purchase marketing, and select electronicmedia buys Branded refrigerators sales units (Point of Purchase Marketing) are supporting brand awareness Also associates itself with numerous sports events which need a high energy level (Red Bull X-Fighters, Red Bull Air Race etc.) and targets sports men. Has got its own, unique package (can) whih can be easily differentiated from other drinks Very powerfull logo (logo has two bulls colliding with one another with a sun in the middle. The bulls are supposed to represent strength and energy coming together) Red Bull follows the same principle in every new market they penetrate. (One exception in U.K. And there they failed because 1) Marketed Red Bull as a sports drink, not a stimulation drink 2) Did not pursue a word-of-mouth strategy, choosing instead to sell via the largest beverage channels 3) Created new advertising and focused on billboards rather than electronic media

But consumption occasions and event marketing types may vary by market

Images from Red Bull Event Marketing

Images from Red Bull Mobil Marketing

Red Bull’s marketing program in terms of its contribution to the brand’s equity and its strengths and weaknesses.

When we look at the market share and global sales of Red Bull, we can easily say that Red Bull’s marketing strategies have been succesfull Targeting a niche segment in the beginning (focussing on dancers, clubbers, athletes) and then growing to all market (drivers, students) makes sense. “Revitalizes body and mind “ was set in people’s mind. The events which are based on high physical indurance were chosen especially for marketing which are totally aligned with the brand image and properties. Because the first target group was night walkers like clubbers,dancers etc who consume alcohol heavily and they combine Red Bull with alcohol for a better taste (Red Bull+Vodka), it may be perceived Red Bull as a alcohol complementary product which is against Red Bulls no occasion limitation because Red Bull says that you can drink it anytime of the day, anywhere you want. Since it is not a simple soft drink (it is also a nutritious drink), it is in the scope of serious public health regulations. (It was once banned in French amd Canada Market) Even today you may hear in the news about young people who dies because of mixture of Red Bull and alcohol.

Red Bull to maintain its marketing momentum

Maintain the leading position in existing countries Continue expanding its business in other countries to new markets Continue targeting to young generation (students, clubbers) Continue spending on event marketing since they are relayed to strength Stylish packaging should continue if they do not go to brand extensions (Brand extension can be another option, a lower priced one, has to be supported with market research results) A new place like “Irish Bar” where all kind of sports are watched .

Red Bull’s move into herbal teas, fast-food chains, and magazines/Sense for the company to expand into these areas/Potential benefits and dangers?

Herbal Tea Association with Carpe Diem Not directly related or supporting the main product Not a success Fast-Food Chain Carpe Diem fast-food chain in Austria and Switzerland Big players are already in the market (McDonalds, Burger King) Not a healthy image Magazines Red-Bulletin Devotedto the Red Bull lifestyle of music, extreme sports, night life, and social trends

Red Bull’s move into herbal teas, fast-food chains, and magazines/Sense for the company to expand into these areas/Potential benefits and dangers?

Benefits Diversify and grow the business Leverages brand equity Herbal tea would be consistent with the healthy image A magazine could be another good way to market the brand Dangers Less focus to its flagship product Fast-food chains are not healthy (not good for brand image)

Effectivenes of Red Bull at advertising to the mentioned various groups?

Successful among several age ranges (exhibit 2) Students are encouraged to evaluate some examples and advertisements, and compare the effectiveness of this strategy to the performance of the brand in the market. All aged amateur/professional people are encouraged to take place in actions, sports like -Red Bull Flu Tag” where they design and build up their own flying objects . -Red Bull Cliff diving, Red Bull Extreme Sailing etc. "People who attend one of our events have the indelible awareness that it was sponsored by Red Bull because of the unusual amount of control we can exert over our own events,“ Emmy Cortes-Red Bull Communications Director

Red Bull Flug Tag

Red Bull Cliff Diving

Red Bull gives you wiings