Red Bull’s Innovative Marketing Transforming a humdrum product

into a happening Brand

Red Bull Acquires Second F1 Team

• In 2005, Red Bull acquire Minardi

• In 2006, Red Bull owned Jaguar Racing

• Red Bull Racing as main team and Minardi as rookie team.

• Since 1987 Red bull was a close associate with sports.

• Red bull a trendy drink

• Till 2005 Red bull was holding 70% of the market.

Background

• Dietrich Mateschitz Born in 1944– Marketing degree from University of commerce

in vienna– Worked with unilever and Jacobs coffee and as

international director of Blendax in 1979

• Discovery of “energy drink” called Krating Daeng in Thailand

• Approach to TC Pharmaceuticals owned by Chaleo Yoovidhya

• Invested $500,000 with 49% stake each and remaining 2% were in trust for yoovidhya’s son.

• In spite of critics, Red Bull was launched with slogan “Red bull gives you wings”

Contd..

• Regulatory Approval

• Austria was first approval followed by many countries.

• Target customers were young professionals

• By 1990 4 million cans were sold

• US was a success too.

• Top 10 carbonate Beverages in world

RED Bull’s Marketing Strategies

• Company spent around 30% of its annual turnover on marketing.

• Positioned as an energy drink that ‘invigorated mind and body’ and improved endurance levels’.

• Slogan ‘Red Bull’ “gives you wings”.

• Targeted at people who sought-– Increased endurance, speed,

concentration and alertness.– Young individuals, college

students, gym goers.

Creating Brand Image

• Brand image - Stimulant or party drink for adventure seekers and risk-takers.

• Company focused it as an “energy boosting” product.

• Unconventional marketing strategy created Buzz in more creative way.

• Distributed free cases of drink, encouraged youth to party, sponsored student parties, organizations.

• Targeted “Generation Y”, used them as Brand Ambassadors.

Red Bull’s Association with Sports

• Organized sports events like kayaking, hand-gliding, rough-terrain biking, cliff driving and skateboard.

• Bought football club teams. – SV Austrian Salzburg.– New Jersey based MetroStars Major

League Soccer team.

• Association with Motor Racing– Deutsche Tourenwagen Masters (DTM).– KTM Factory Motocross Team.– Champ Car World Series.– World Rally Championship.– Sponsored two Toyota teams in

NASCAR’s 2007 Nextel Cup in U.S.

Promotional Activities

• Employed Consumer Educators to spread message across to the general public.

• Developed ‘Mobile Energy Team Program’.

• Advertised in ‘Wipeout 2’.

• Established an ‘exclusive’ network of distributors.

• Sales Reps promoted Red Bull in Bars and Trendy Nightspots.

Marketing Tools

• Unique feature – Slim & tall Aluminum canisters of 250ml/8.3 ounce around the globe.

• Packaging - Silver and Blue can carried a picture of two charging red bulls.

• Used conventional advertising media only at the maturity stage.

• Purpose was to amuse viewers rather than educate them.

• Stay focused only on one product.

Red Bull’s Connection with F1

• Sponsored Sauber team in 1995.

• In 2004, bought Jaguar F1 racing team from Ford and renamed it as Red Bull Racing.

• In 2005, acquired Minardi & built Scuderia Torro Rosso.

• Red Bull conducted Red Bull Junior Team (Europe) and Red Bull Driver Search (US).

• Used F1 as a proactive Marketing Tool.

Controversies• Ingredients of the drink

• Taurine – untested food product

• Glucoronolactone – rumoured to cause brain tumours

• RedBull as a “Mixer” with alcohol

• An Adult drink as said by health activists

• Suffering of severe after effects

• Banned in a school in California

Threats to Continued Success

• Analysts were skeptical about the company’s survival and growth.

• Had spawned a spate of imitators in energy drink market.

• Coke, Pepsi and Anheuser-Busch were also in the same league.

• Rockstar and Roaring Lion positioned themselves and direct competitors of Red Bull

• Red Bull filed cases against Roaring Line and Monster.

Contd…

• In Europe, the competition was tough as the local brands also started developing their brand of energy drinks.

• Competitors introduced energy drinks in multiple flavors thereby adding variety.

• Red Bull did not taste very good and this was a major threat to the company.

• Another limiting factor was the nature of company’s target market- college students and young urban professionals

Contd…• Company had only one product which

was another threat; even though they introduced sugar free variant.

• In 2002, launched LunAqua, a brand of still water.

• In 2005, test marketed a range of herbal teas.

• Also started chain of fast food outlets.

Contd…• Another project was a quarterly

magazine in Europe, ‘The Red Bulletin.’

• Red Bull ranked 7th among growing top 20 brands.

• Brand had low resilience mainly due to its strong association to a single product.

• Major part of Red Bull’s success as a company was its flexibility to take risks and market its products in ways publicly held companies would not.

Red Bull48%

Monster16%

Rockstar13%

Full Throttle

8%

Sobe No Fear6%

Amp4%

Sobe Adrenaline Rush3%

Tab Energy3%

Share of Energy Drink Market (% dollar sales) 2006

 Red Bull42%

 Monster37%

 Rockstar11%

 Amp4%

 NOS4%

 Full Throttle2%

 Xyience Xenergy1%  VPX Redline

0%

Share of Energy Drink Market (% dollar sales) 2012