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SWOT Analysis of Red Bull

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Section-A Date of Submission: August 08, 2011 Question no- 1: Describe the Red Bull’s sources of brand equity.

Analyze the Red Bull’s marketing program in terms of how it contributes to the brand’s equity. Do the SWOT analysis of Red Bull. Answer to the question no 1: Brand equity: The value premium that a company realizes from a product with a recognizable name as compared to its generic equivalent. Companies can create brand equity for their products by making them memorable, easily recognizable and superior in quality and reliability.

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Mass marketing campaigns can also help to create brand equity. If consumers are willing to pay more for a generic product than for a branded one, however, the brand is said to have negative brand equity. This might happen if a company had a major product recall or caused a widely publicized environmental disaster. Example: The additional money that consumers are willing to spend to buy Coca Cola rather than the store brand of soda is an example of brand equity. Red Bull’s Sources of brand equity:

Red Bull uses the non traditional ways to chive its targets and unique approaches to create the brand equity. Right from the beginning the company makes it very clears to it all its existing and potential customer the message of its product functionality in a clear way. Related to the pricing of the product company positions the product above 10% of the upper segment of the competition in order to create the mindset of the premium brand and also influencing people by not letting them buying a sample beverage drink.

This also helps the company from being categorized different from other beverages company because its uses word-of-mouth marketing and creating the brand awareness by this way. Once the brand awareness is created then it resort ads within the TV and other related media channels. The company also tries to create by mystique by participating and sponsoring events within the market even before the product is not available within the market. Also the company places the market instance relatively strategically by trading a niche audience and trying to influences them first rather than spreading out to the whole target of customers.

Indeed the company tried different ways of market instance and different kinds of brand equity management within different market; however, most of the cases this strategy failed as it is started within the case as. The UK case the company tries to play the cell strategy within markets like the USA, however this methodology is relatively same to other countries but the difference is related to geographical situation of the USA and relatively spread out demographic within this market.

The value of a brand based on the extent to which it has high brand loyalty, name awareness, perceived quality, strong brand associations, and other assets such as patents, trademarks and channel relationships. Brand Equity is a differential value of a brand which a consumer has in his mind due to the amount of knowledge he has about that brand. “Brand Equity is that incremental value that occurs to a product when it is branded. Those are the main sources of brand equity based on Red Bull:- 1. Brand awareness is one of the sources of Brand Equity. 2.

A consumer’s perception that the brand is better than it really is. 3. A consumer’s preference for a brand based on cachet or status of owning it. If one is successful in these 3 aspects an added benefit is that it will pull the customer to carry your product thus helping in increasing sale of that particular product. In the said case study Red Bull has gained Brand equity through the following ways. 1)Awareness – By 1997 Red Bull was launched in Austria, Red Bull was available 25 markets globally including Western and Eastern European, New Zealand and South Africa.

This indicates the global awareness of Red Bull. Initially the Red Bull’s slogan was “Red Bull gives you wings”. Later on as the taste changed with the change of its ingredients. Earlier it was an energy drink and later it was functional energy drink. Mateschitz devised the brand positioning that Red Bull “Revitalizes Body and Mind” This phrase conveyed the tangible benefit of the product in an easy grasping manner. It meant that Red Bull can be drunk any time whether it was morning, noon, or night. Thus Red Bulls consumption was not limited to any occasion or activities.

In Austria due to the difficulty faced in getting approval for Sale, they marketed this product this product by different ways like getting the customers to try this product by testimonials from peers who bought Red Bull. Thus by Word of Mouth the Red Bull was made aware to the masses of consumers. This is the oldest and the best method. From the beginning Red Bull was the source of interest to the consumers of Austria. Its functional energy was brand new for them. So curious consumers tried this brand and spread the word about it.

They were not contented only with the word of mouth to evolve naturally that is why shortly after the product launched in Austria the company would place empty red bull cans in clubs and bars to create the illusion of popularity. Between 1987 -1992 Red Bull was available only in Austria. Consumers in adjacent countries like Germany and Hungary who had not been to Austria heard about the product from WOM testimonials. In this way consumers outside Austria were made aware of this product Benefits. 2) Consumer’s Perception that the brand is really good than they actually it is.

The second aspect about gaining the brand equity is creating the perception about your brand in consumer’s mind that your brand is really good than actually it is. The same can be done by different ways by advertising or marketing more about end result in term of qualities and properties of the product to the user. In case of Red Bull Drink following tactics were used or applied. They came up with the slogan that “Red Bull gives you wings’. So people who really wanted boost their energy used to drink Red Bull.

They also marketed or advertised on the energy enhancing ingredients of Red Bull like Caffeine, Taurine and Glucuronolactone. It also claimed the flowing properties. So consumers used to drink Red Bull to get some of these properties. Improve physical endurance. Stimulates metabolism and helps eliminates waste substances. Improves overall feeling of well-being. Improves reaction, speed and concentration. Increase mental alertness. Next time they have changed the ingredients and flavor a bit. This they intended to communicate the product value as functional energy drink rather than just an energy drink.

It was sweet in taste and carbonated as cola. As they were more concerned about the function of the drink they did not really care about the taste. The strong taste indicated to the customer that the drink was something more than mere refreshment. As direction printed on the cans drink served”well-chilled” most of the customer found the taste more pleasant when they drank it cold. They came up with second Slogan Red Bull “Revitalizes body and mind”. This slogan was easy to grasp and covered a broad set of appropriate consumption occasion.

Whenever consumer needed lift anytime whether morning, noon or night they can drink this. It was not time bound or occasion and activities bound. The package was designed in a such way that it used to attract customers cost wise, convenience wise and aesthetic wise. In the market entry strategy Red Bull targeted Opinion leaders who are likely to influence the consumer purchased. These include sports athletes, entertainment celebrities, and hip urbanites. The company attempted to reach these individuals by making Red Bull available at sports competitions, in limos, before award shows and at exclusive after parties.

In Austria it was difficult for Red Bull to get an approval for sale because Austrian government had 3 categories for food and drugs. Therefore Red Bull lobbied to create an entirely new category. Functional food. Red Bull’s marketing strategy was encouraging product trial. People were curious to try this new category as this had some medicinal benefit beyond a dietary product, but also contained food properties that made them different from a pharmaceutical. These sources do change depending on the market or country. Every country has different government policies.

Like in this case study Austrian government had different categories for food and drug than UK and USA and Red Bull had difficulties in getting approval for sale in this country? Analyze the Red Bull’s marketing program in term of the brand’s equity: I think the Red Bull marketing program is quite successful in terms of brand equity Trading a niche segment is the beginning and then spreading out to the whole target makes a lot of sense. Because the marketing program was really focused at first as a segment of people it creates the concentration and brings up the success.

Related to the disadvantages of this methodology and also it is started for the niche segment the product understanding the for middle and upper aged people is quite different In my opinion thus these segment of people tend to stay away from the drink because of having wrong perception of the brand. On the other hand sometimes the product is understood as a mixed for the alcoholic drinks and you used time to break that perception as well. However the overall whole brand equity is successful in case of Red Bull. In the said case study Red Bull has adopted following marketing programs or strategies which contributed to its brand equity.

1) Marketing Red bull through Word Of Mouth – Red Bull Adopted the best and the oldest media called as word of mouth for marketing Red Bull. It was the central component in all Red Bull’s marketing activities. Word of Mouth drove awareness in the early stages of entering market. Knowledge of the product spread, a buzz would build around the brand. Eventually consumer everywhere would be talking and purchasing this brand. So this was a successful strategy. 2) Developing Red Bull Mystique – From the start, Red Bull was source of intrigue or fascination for consumers.

The functional energy category was brand new for Austrians so curious and adventurous customers tried the brand and spread the word. The company was not satisfied to let the word of mouth evolve naturally, that is why the company would place the empty cans of Red Bull in the clubs and bars to create the illusion of popularity. At the same time people in adjacent countries like Hungary and Germany who had not been to Austria before heard about the brand thru Word Of Mouth testimonials. Thus outside Austria this product was made aware and marketed.

Thus not only in the country where this product was born the Brand equity thru awareness about this product was gained in the neighboring countries also. So this was also a reasonably successful marketing programme. 3) Market Entry Strategy – Red Bull strove to build buzz about the product through its “Seeding Pro gramme” where the company micro – Targeted in Shops, clubs, bars and stores. This enabled the cultural elite to access the product first and hopefully spread the word of mouth to other customer and influence them. They also reached the mass markets via super markets.

Red Bull also engaged in “pre-marketing” to establish awareness in markets where product was not yet sold. Pre marketing involved where sponsoring events that took place in a country where Red- Bull was not available. Through Pre-marketing programme Red Bull tried to get recognized as pre-eminent Brand. Through this strategy not even a single thing is left where awareness and marketing of this product is not done. 4) Red Bull’s Target Market It really did not targeted on any demographic or psychographic segments. Their attempt was to reach the broad range of consumers.

They had only two dimensions people who are mentally fatigued and physically fatigued or both. This dimension covers five broadly defined categories: “students, drivers, clubbers, business people and sports people” Bye using this strategy Red Bull grew into numerous markets segments. Red Bull achieved its highest penetration in the range of 14-19 age range. 5) Marketing Activity Red Bull engaged in variety of marketing Pro gramme. a) Advertising – The Ads were effective because they clearly communicated the product benefits without promising specific physiological results. b) Sampling-

This was essential part of Red Bull marketing pro gramme. Red Bull tried to reach the maximum number of consumers only in occasions such as concerts, parties, festivals, sporting events, at the beach, at highway rest areas for tired drivers and at campus libraries.. By using sampling programme they made a point that people experience the product the right way right place and in the right situation when they have met with particular fatigue or are in the need of food. c) Event Marketing – When Red Bull created an event it controlled all aspects of event including the name, Logo, Promotion and media production.

d) Sports Marketing- Sports was done through opinion leaders who participated in action sports. These athletes who played these sports exhibited many of the qualities Red Bull wanted to project in its Brand Personality, Innovative, individual, non-conformist, unpredictable and humorous. e) Point –of –purchase Marketing – its point of purchase tool was the branded refrigerated sales units. Red Bull placed these miniature glass refrigerators and which prominently displayed the Red –Bull logo in convenient stores, bars, clubs, sports shops, office buildings, cafeterias and commissaries.

Due to these refrigerators Red Bull could establish itself in the retail market as a prominent brand as compared to other beverages. SWOT analysis of Red Bull: Strengths: Market leadership- Within the energy drinks market Red Bull is the industry leader throughout the world. Marketing Efforts- a lot of promotions and well targeted campaigns and sponsorship e. g. formula 1 helps to expand Red bull brand and increase consumer brand awareness Within the energy drinks market Red Bull is the industry leader throughout the world. It has annual sales of a billion cans, with a significant presence in Europe and the US.

In 2003 it achieved an 80% brand share of the UK energy drinks market. In Europe the company produces two-thirds of overall volume in the region. The brand is present in 13 West European countries and holds the lead in 12 of these. The rest of the top 20 brands take a combined 17% share. In terms of market trends, fewer new brands are being launched compared with the 1990s, and there has been a clear shakeout since 2000. Even the products offered by leading drinks manufacturers are failing to make major headway against Red Bull, with products such as Coca-Cola’s Burn absent from the top five.

Marketing efforts The heavyweight promotion and expansion of the Red Bull brand, which brought the concept of stimulation drinks to the western market, has driven functional drinks growth over the years. The company employs well targeted marketing campaigns that appeal to the core 18-25 age group. It has promoted its product using its’Red Bull gives you wings’ slogan and sponsoring Formula 1 driving; free skiing; BMX biking and other dangerous sports. This has significantly increased consumer brand awareness of the product, and differentiated it from its competitors.

Cadbury Schweppes alliance Red Bull has established an alliance with Cadbury Schweppes in Australia. The alliance has helped expand the brand’s marketing distribution, allowing more customers to have access to Red Bull across the nation. Sales, which are already 40% up compared to the same time last year, are set to rise dramatically as a result of the pending partnership. Red Bull believes Cadbury Schweppes can help it reach new channels such as food courts, vending machines, hospitals, colleges and sports and travel facilities, ensuring an increased customer base.

Such partnerships allow the company to reduce competitive threats from its rivals and extend its sales opportunities. Reputation management Innovation Strong brand equity Strong financial position Unique products 360 brand Effective communication Loyal customers Weaknesses: Lack of innovation There are a lot of competitors in the market and they have their own USP which leaves Red Bull behind. Reliant on small product base- The Company only markets one branded product, Red Bull Energy Drink (along with a sugar free variety). A number of new energy drinks have been launched in 2004.

Raw Energy Fuel Cell is a Canadian vitamin and glucose drink, which is endorsed by World Wrestling Entertainment. This product contains no taurine and has less caffeine than rival offerings. It also comes in 330ml PET bottles as opposed to Red Bull’s 250ml cans. Other firms are also making headway in the market by introducing sports drink packaging and other initiatives. With little change in its product format, Red Bull is being left behind from the majority of its competitors. Reliant on small product base The company only markets one branded product, Red Bull Energy Drink (along with a sugar free variety).

It is therefore vulnerable to market fluctuations, especially as the energy and sports drink category in which it operates is the smallest sector of the overall soft drinks market. With consumer interest turning away from Red Bull’s major strength of carbonates towards healthier alternatives, the firm is finding itself as less of a giant in the playing field. The company would therefore benefit from introducing drinks into other, more successful drinks categories. Marketing expense Extensive marketing efforts are required for Red Bull to boost product sales.

The energy drinks have high association with fashion and youth trends, and the company must project itself as in line with this in the face of giant rivals such as PepsiCo. Despite the massive costs Red Bull’s marketing campaigns, its rivals also investing huge amounts, resulting in Red Bull gaining smaller returns from these investments. pricing Higher price than its competitors Red Bull is only manufactured in one factory in Austria Opportunities: Extension of product line- this will help to retain market share Diversification of retail outlets

Red Bull has recently detailed an initiative to use vending as a new route to increase sales. Vending is increasingly acting as an important advertising vehicle and the company is exploiting this avenue in order to stimulate growth. The manufacturers of Coca-Cola and Pepsi have long used this route, and firms such as GlaxoSmithKline and out span have also entered the market. Red Bull’s decision to introduce vending illustrates its commitment to diversify its distribution network and keep up with industry trends. Extension of product line

New entrants into the market are unlikely, as extensive marketing and promotion are required to retain market share, needing large financial resources. Data monitor expects the most successful new product in the market is likely to be an extension of an existing brand, and will succeed best in the non-cola carbonates sector of the market. Marketing products as functional drinks the company may be able to extend its product line, capitalizing on strong consumer awareness of its brand. Geographical expansion With sales derived from 100 countries, Red Bull has an extensive geographical reach.

The company is building upon this by making inroads into developing markets such as India. With a distribution deal secured with Mount Shivalik and Narang Hospitality Services, these firms will market distribute and manage the logistics of the drink. Red Bull will initially be promoted in North, East and Central India, with a view of rolling out the product to further regions in the long-term. The Asia Pacific region holds a good opportunity for growth for Red bull as in 2003 it accounted for 50. 9% of the global market share of the Functional drinks market (40% of which is energy drinks).

The market is also predicted to grow at CAGR 5. 2% in the next five years reaching a market value of around $16. 1 billion by 2008. Other opportunities: Emerging markets and expansion abroad Innovation Product and services expansion Emerging markets and expansion abroad [New products. ex, Red Bull & vodka, Red Bull Tea, Red Bull tablets… and so on Society becoming increasingly “time-poor”. Threats: Health concerns- tougher rules from government on high caffeine content. Consumer awareness of health and well being- people may start to drink more water as it is associated with healthier life style

Public health concerns Red Bull’s energy drink has been banned in France due to concerns over its high caffeine content. Experts fear that the drink could be potentially deadly when combined with alcohol or when drunk after strenuous exercise. The move has been backed by the EU’s high court, asserting that the drink is a real risk to public health if consumed in excess. Denmark is the only other country to ban Red Bull, although authorities in Ireland, Turkey and the US have expressed concerns about it. The drink is classified as a medicine in Norway and until recent years was only available in pharmacies in Japan.

These issues are creating significant adverse press for the company. Maturing market The energy drinks market has witnessed slowing growth in recent years. In 2003, the US carbonated soft drink industry posted volume growth of only +0. 6% overall. That growth rate represents a slight decrease from the 2002 growth rate of +0. 8%. It is far below the industry’s annual 2%-4% growth rate range seen throughout most of the 1990s. This slowdown in growth may inhibit the company’s revenue expansion potential going forward. Consumer awareness of health and well being

Drinks retailers are becoming increasingly aware of the potential growth in bottled water sales. Per capita consumption of bottled water has now risen to 35 liters, in comparison to one liter 20 years ago. Consumers are becoming increasingly aware of their health, and bottled water is associated with health and well being. Although Red Bull has recently launched Red Bull Sugar free, the drink’s high caffeine content may remain a concern for the health conscious. Other threats are in the following: Competition Economic slowdown Lower cost competitors or imports

health concerns Economic slowdown European Laws against Vitamin/mineral enriched products, like in Denmark and France Lower cost competitors or imports Health Concerns Unknown whether or not the Generation Y cohort will continue to drink Red Bull as they age or whether the next generation will adopt Red Bull as their caffeine beverage of choice. Question no- 2: How can Red Bull maintain its marketing momentum? Would you recommend the Red Bull develop any brand extensions? If so, what would they be? What are the potential benefits and dangers? Answer to the question no 2:

Red Bull has a fantastic marketing momentum and it has taken the nation by storm and continues to maintain it stranglehold on the every drink market-despite an abundance of competitors. Its seems like Red Bull is omnipresent: all over TV, sponsoring every sports and utilizing every other major form of advertising. While it may seem like Red Bull is flooding every advertising arena, in fact it does not. Red Bull has an advertising strategy that separates them from competitors and it has been paying dividends. Red Bull should now concentrate on maintaining the leading position in existing countries and develop new market.

Red Bull has always focused on young-sters and uses them as brand ambassadors by recruiting student brand managers they should continue doing it because these students tend to take the brand forward with their growth. Initially they use Red Bull on its own, but over ages they can use it as mixer, which is generally done by working adults. Related to the pricing, Red Bull should take this forward, as an image has an already been created for them based on its pricing. Related to the packaging i think Red Bull should keep its packaging style as the brand and the traditional can is becoming a classic day by day.

Indeed refreshing the packaging might be an idea but my opinion would keep the tradition related to this brand extension also should remain as it is because there are quite big risks related to this as the brand image might be effected and also the focus will be lost. Figure: Marketing momentum. Sustaining Red Bull’s Brand Equity: Protecting sources of Brand Equity •“Red Bull gives you wiings” •Red Bull logo unchanged •Consistent positioning “Energy Drink” •Copy right the brand elements Fortifying versus leveraging Event marketing: Red Bull Flugtag Fortified Brand equity as the event was a perfect fit with Red Bull’s image Red Bull Sugar free

Leveraged on Red Bull’s image and charged Premium price Fine tuning the supporting Marketing Program Product related performance associations Created new food category (Functional food) Red Bull Sugar free(Innovative product) Non Product related imagery associations Keeping empty bottles at the restaurants Targeting right opinion leaders like Robby Nash (wind surfing), Eddie Irvine (Formula 1) –when Red Bull became international Glass refrigerators to display Red Bulls logo Sampling at the right place right time Expanding Brand awareness Buzz marketing Developing Red Bull Mystique Word of mouth Improving Brand Image

Scientific support Opinion leaders Entering New markets From Austria to UK then US and so on… Red Bull maintains its marketing momentum by follows: Consumer response to past Marketing Activities Increased Sales Increased awareness by WOM Brand Knowledge Image Best in class Energy Drink Consumer response to current Marketing Activities Followed the same marketing activities Changed Brand Knowledge Reinforcing the same image Maintained consistency Consumer response to future Marketing Activities Identifying changing consumer needs Deciding on Marketing activities Sustaining Red Bull s Brand Equity

Protecting sources of Brand Equity Red Bull gives you wiings Red Bull logo unchanged Consistent positioning Energy Drink Copy right the brand elements Fortifying versus leveraging Event marketing Red Bull Flugtag Fortified Brand equity as the event was a perfect fit with Red Bull s image Red Bull Sugar free Leveraged on Red Bull s image and charged Premium price Sustaining Red Bull s Brand Equity Fine Tuning the supporting Marketing Program Product related performance associations Created new food category Functional food Red Bull Sugar free Innovative product. Non Product related imagery associations

keeping empty bottles at the restaurants Targeting right opinion leaders like Robby Nash wind surfing Eddie Irvine Formula 1 when Red Bull became international Glass refrigerators to display Red Bulls logo sampling at the right place right time Sustaining Red Bull s Brand Equity Expanding Brand awareness Buzz marketing Developing Red Bull Mystique Word of mouth Improving Brand Image Entering New markets From Austria to UK then US and so on Brand Extension SPORTS BAR Near Sports facilities like Ice Skating Skiing featuring extreme sports Advertise the Sports Bar make discount passes available in the Sports facilities

ENERGY SNACK BAR Content on the same lines as Red Bull WOM and creating a Buzz Making it available to Elite class and selected stores then going down the pyramid EXTREME SPORTS CHANNEL Featuring extreme sports and the events sponsored by Red Bull Sponsoring various events to increase the visibility of the channel TVCs Potential benefits and dangers of Red Bull Red Bull s move into Herbal Teas Fast Food chains and magazines 1 Herbal Tea Red Bull associated with energy nocturnal extreme adventure Herbal Tea Stimulant and relaxant but lot of them in the market Red Bull has no POD no mystique factor

2 Fast Food chain Usually perceived as unhealthy Red Bull s association of energy adventure does not fit in here 3 Magazine Red Bulletin in Austria since late 2007 Features Formula 1 Night life Classic planes of Flying Bulls Benefits Leverages Brand Equity and goodwill Saves money Builds additional brand stature Reinforces Brand association Consumer knowledge and consumer trust –Leverages Brand Equity and goodwill Leverages Brand Equity and goodwill Saves money Builds additional brand stature Reinforces Brand association Consumer knowledge and consumer trust. –Saves money

If a person needs an extra boost of energy at some point in the day, then you already know what your options are. Due to all of the competition out there on red bull, coffee drinks and energy drinks such as monster and rock star – demand for this product niche have gone up. So, prices have gone up as well for better quality ingredients and safety. What do you think is the best energy drink? What works the best for you? What tastes the best to you? What gives you energy without crashing later? If you’re looking for something that will boost your energy while in work or at play, then red bull energy drink is the best aid for you.

Red bull has minerals, taurine, and vitamins to keep you going in your activity; you will last longer and play better when you drink red bull. I like the sugar free red bull because I believe the sugar is what makes you crash. I also like the monster energy drinks, rock star energy drinks, and 5 hour energy. They all work well for me. Some re low curb some have sugar. It’s your choice. Try them all and decide for yourself. I’ve tried everything. I’ve tried all versions of Monster, Rock star, 5-Hour Energy, AMP, Full Throttle, Go Fast, NOS, So Be, and Redline.

They all have their own flavors and effect, but for me the Red Bull is King and is #1. I do like the blue Rock stars with zero crabs, but I’d still take a sugar free red bull any day; however the blue rock star zero curb is my 2nd favorite. There are new studies out that the amino acid taurine found in the energy drink actually has some nice health benefits if used in moderation. If the Red Bull Drink happens to be your drink of choice, then finding Red Bull coupons is most important in saving money. Here are some tips to help you find them, especially if you are like me and drink them daily, every morning.

First off, and the best way to get the coupons is to visit this website. I’ll keep it updated with the latest valid red bull coupons and I will provide you with all of the information you need on how to find them. Use the Internet; it is a great resource for finding coupons. You should also try the Sunday paper. Tell your friends and family to pass those Red Bull coupons over. Tweet them, send a message on Face book, and remind them to keep an eye out for you. The more coupons gathered, the more savings will stack up. But, do not forget the Wednesday paper. Sometimes there will be something in there too. I’ve found them there on occasion.

One common way to get Red Bull coupons is the store itself. While shopping at the store, look for rebate forms and coupons for future purchases. If a can of Red bull drink or Red Bull cola is on a display in the store, always stop to look for this. Sometimes coupons will be attached to the promo for instant savings. You can use the coupon right then and there at the store and save money. Sometimes buying red bull in bulk packs is smart and the savings add up over time. Compare the sizes, but if there was a two or five dollar coupon and size did not matter, a smaller pack or a six pack could suddenly be close to free if caught on sale.

–Builds additional brand stature Six Sigma branding is a call to abide by this code of conduct, and to develop and launch extraordinary marketing programs that perform well above the disappointing average common these days. A Six Sigma brand’s “DNA” consists of seven strategic elements. 1. A profitable target 2. An exceptional positioning 3. A skilled translation of positioning into a statement, brand essence, and brand personality 4. A solid brand vision 5. A strong brand architecture 6. A great visual identity system and tag line 7. A breakthrough communications plan

Brand essence, personality, vision, architecture, visual identity system and tag line, and communications plan are deeply rooted in the target and positioning. They are dependent variables, not independent entities. The First DNA Strand: Because target and positioning are the foundation for the other Six Sigma brand elements, we want to be absolutely clear: We’re not talking about your parents’ strategies, which were in all probability selected like melons in the grocery store-using intuition alone. A Six Sigma target has five characteristics: It is sufficient in size to merit disproportionate attention (e. g. , 10%-30%).

Its potential profitability is considerably greater than its size (e. g. , 50%-70%). It grows over time. It is different demographically/chorographically (business demographics) and therefore differentially reachable with media by salespeople, via channels, through direct response programs, and so on. It has “problems/needs/wants” that are distinctly different from other segments. Profitability, not revenue generating ability, is the Six Sigma target’s defining trait. To find the most profitable target for your company, we recommend considering hundreds, thousands, even tens of thousands of alternative ways to segment a market.

Reflect on all possible market drivers: category involvement, buyer motivations, media habits, sociographics, psychographics, lifestyles, life stages, attitudes, values, database variables, and more. Using several proxies for profitability, test all of these potential drivers to determine which are related to current and prospective profitability, and to establish a customer’s (individual or company) economic value in the marketplace. Proxies include decision-making power, openness to your brand, personal influence, cost to reach and influence, and price insensitivity.

Finally, take the 10-25 most predictive drivers to create segments and pick your target. A Six Sigma positioning is not based on the attribute or benefit “most important” to buyers. When a banking customer says “offers online banking” is very important, this isn’t the same as a customer saying he or she presently has a problem with it, or that no brand currently offers it. In fact, many of the characteristics most important to buyers are the basic needs and requirements of a product or service—and are already addressed by every brand (e. g. , great taste in the soft drink category or accurate statements in banking).

They’re the price of entry for doing business in a particular segment. Simply being better at delivering basic needs and requirements is not going to generate a groundswell of sales or offer a significant competitive advantage. Exceptional positioning, like great products, often addresses buyer problems. The bigger the problem your brand can solve—for the financially optimal target—the bigger the market response. To uncover the big problems, we suggest balancing judgment and professional opinion about buyer needs with qualitative research. Compile a list of about 300 buyer problems.

Next, measure each problem in terms of motivating power in a survey of 300 customers and prospects minimum, on three dimensions. 1. Dream Detection—the desirability of tangible and intangible attributes 2. Problem detection—desirability vs. satisfaction 3. Brand Preference Detection—relationship between brand perceptions Weight and average #1 x #2 x #3 and you’ve got a “motivation score. ” Now rate how complicated and costly it would be to correct each problem—on a scale of 1-5, from “there’s an easy, inexpensive solution” to “this would be difficult and expensive to fix.

” Multiply the motivation score by this rating and you have a useful ranking of the best positioning opportunities. Completing the Helix: The next task is to assemble the second DNA strand. This begins with crafting the positioning statement, brand essence, and brand personality. A positioning statement is a two or three word message you want seared into your target buyers’ minds. It should meet three essential requirements. It specifies why the target should buy your brand over someone else’s. It provides a guide for the communications, product, and pricing strategies.

It offers a frame of reference for defining extension opportunities. Brand essence and brand personality flow naturally from the positioning statement. Brand essence is one or two words that capture the key benefit that the brand will deliver—typically higher order as opposed to feature focused. For example, we’d guess Apple’s essence is simplicity and Red Bull’s is energy. Think of it as the brand’s “elevator speech. ” It should be relevant, credible, unique, and sustainable, but it can also broaden the brand’s extension opportunities and provoke new product ideas.

Brand personality is three to six image attributes that personalize the brand. Apple’s personality is creative, friendly, and passionate, whereas Red Bull’s is youthful, party loving, and exuberant. Essence sets the content for communications, and personality sets the tone and manner. Now it’s time to bring the brand to life with vision, architecture, visual identity system and tag line, and communications plan. A brand vision provides a purpose or meaning that every stakeholder—from line worker, to stockholder, to industry analyst, to customer—understands and embraces.

It describes what your company is passionate about becoming, achieving, and creating, and it articulates goals beyond current capabilities. The best visions are inspirational, inspirational, specific, and bold; they move us and get our blood pumping. They are also readable—not arcane, overly wordy, or trying to impress us with vocabulary. Brand vision provides the lofty goal, but brand architecture provides the organizational grounding. It specifies the structure, nomenclature, and relationship of the company or brand’s various components. The Coca-Cola Company has a portfolio of brands (e. g.

, Coke, Sprite, Dasani, Barq’s, Minute Maid) and each has one or multiple extensions (e. g. , diet, low curb, caffeine free, with lemon), whereas IBM has one brand extended across categories (e. g. , IBM personal computers, services, software such as Lotus). The architecture should fit how buyers make choices in the category; for example, a decision in the soda category might follow this path: soft drink vs. not, diet vs. regular vs. low curb, and cola vs. other. Meanwhile a decision in B2B IT goes something like this: computers, servers, and software. The visual identity system and tag line are the public face of the brand.

The visual identity system is the physical embodiment of the brand’s personality-name, symbol, logo, font, color palette, and package—and the tag line captures the brand’s spirit. Both should score high on the attention grabbing scale, while being memorable and likable. The varying colors of the apple logo for the Apple brand, as well as the tag line “Think different” are good examples. Finally, there’s the communications plan: how, when, and where the brand will “touch” the buyer. It includes the overall budget, as well as the mix of traditional and non-traditional media the firm

intends to use. Ideally, while a firm does the research to identify a profitable target, it collects information about media habits, internet usage, openness to direct mail, and so on. This can be used to inform the plan. We also recommend taking advantage of today’s available customer equity and marketing mix models, to determine the ROI of different communication channels. The plan to look for is the one offering the highest ROI—in terms of sales and other brand metrics, such as positioning penetration and overall brand equity, with or without or within budget constraints.

The Future Is in Your Hands: If you stick with the visual and verbal trappings of a brand, you doom marketing to continued poor performance; mass commoditization will rapidly ensue. But if you develop Six Sigma brands—brands not just better than your competitors’, but transformational in their effects on markets, companies, and managers’ careers—you save marketing from further corporate obscurity. Branding is synonymous with marketing; it’s developing all the strategic elements and implementing them obsessively. Treat branding as such, and you’ll see performance of which most marketers only dream.

–Reinforces Brand association, Consumer knowledge and consumer trust Dangers Red Bull might lose focus from its flagship product Dilution of existing brand Negatively affects the brand image i e damages the perception of existing brand No go area Threats to Brand s capital assets Extension Zone Latent Potential Outer core Spontaneous associations Inner Core Red Bull Energy Snack Bar Line Extension Red Bull Herbal Tea Red Bull Sugar free Red Bulletin Red Bull might lose focus from its flagship product Dilution of existing brand Negatively affects the brand image i.

e. damages the perception of existing brand Question no-3: Because product usage was not marketed as being limited to one or even a few occasions Red Bull users could continue to use even as their priorities shifted. the case states that, “a Red Bull consumer first attracted to the product as a nightlife enhancer in his or her early twenties might later use the drink as a morning pick-me-up or a revitalizer during a long day of meetings. ” how effective is Red Bull at advertising to these varied groups? Answer to the question no-3:

Taking about demographics i think the younger people at early or mid twenties tend to drink the product relatively more compare to the businessman segmentation. I think this is related to the market strategy and the perception of the product. Because the product is being first launched at night clubs and so on the perception of the brand is a drink for younger people. Related to the advertising companies Red Bull also tries to push the product to this segment as well. If we think in the logical way of the body needs it is obvious that someone at his or her late thirties indeed fell exhausted more easily compare to somebody who is at twenties.

Still the product is valid and accepted by people and day by day there will be new fans of the product which is definitely help Red Bull grow in its segment if it remains focused the way it is today. Red Bull’s advertising was effective because •The ads reinforced the tag line “Red Bull gives you wiiings”which directly out of the positioning statement “Red Bull vitalizes body and mind” •Animated ads: refrained from defining specific target group –appeal to all age groups with sense of humour Red Bull’s advertising was effective because

The ads reinforced the tag line “Red Bull gives you wiiings” which directly out of the positioning statement “Red Bull vitalizes body and mind “Animated ads: refrained from defining specific target group –appeal to all age groups with sense of humour A new TV ad for Red Bull screening in Australia appears to be explicitly linking the Guarani and caffeine-laced beverage to a claim of enhanced male sexual performance. Red Bull’s long-running ad campaign featuring hand-drawn cartoons has consistently communicated the product promise that Red Bull “gives you wiiings”.

Often this idea has been depicted literally, as the cartoon protagonists sprout wings allowing them to fly out of trouble or perform at higher levels. Leading marketing academic Professor Kevin Lane Keller, in a comprehensive case study of the brand, writes that Red Bull’s ads were very effective “because they clearly communicated product benefits without promising specific physiological results”. However, although it looks similar, Red Bull’s new ad ? —? which I saw for the first time this week ? —? goes way beyond this well-established advertising formula. The setting is a nude beach.

A young woman is lying, presumably naked, reading a newspaper. A man arrives and asks her if its okay if he sets up next to her (his genitals are obscured by a horizontal black rectangle). They have a brief conversation and she offers him a can of Red Bull. He has a drink and immediately develops a reaction, depicted by a change in angle of the black rectangle. While he appears to be embarrassed, she clearly approves. The ad is tagged in the usual manner “Red Bull gives you wiiings”. The latest example of marketer-produced media arrives on Tuesday when Red Bull introduces the U.

S. edition of its monthly Red Bulletin magazine. Red Bulletin is starting out with 75,000 copies on newsstands in 20,000 locations, including Barnes & Noble, Target, Walgreens, Kmart, Borders and Safeway, with a cover price of $4. 99; a free iPad edition; and subscriptions offered at an introductory rate of $12. But the bigger splash will come on Sunday, when Red Bull sends out 1. 2 million copies of the 100-page June issue in newspapers such as the Los Angeles Times, the New York Daily News, the Chicago Tribune, the Miami Herald and the Houston Chronicle.

Subsequent issues will appear in the newspapers every month. Red Bulletin joins other marketers’ efforts to build their own media products, such as Procter & Gamble’s quarterly Rouge magazine, Johnson & Johnson’s BabyCenter website and the Kraft Big Fork, Little Fork app for the iPod. They don’t always work — remember Bud. TV? — But they appeal to marketers because they offer relationships with consumers and control over the environment that regular consumer media doesn’t.

Marketers have long paid custom publishers to produce branded magazines for their customers, but Red Bull publishes Red Bulletin through its Red Bull Media House unit. “We’re entering a new age of media in terms of what consumers of content want and expect,” said Associate Publisher Raymond Rocker. “We really feel that Red Bull and Red Bull Media House are really uniquely positioned to fulfill the promise of the brand that’s been in place for years. Now through the web, the app and print we really feel we can have that conversation in ways that are really unparalleled in the brand space.

” Red Bulletin’s tag line describes it as “almost independent,” a bit of self-deprecating humor that might help readers look past, or appreciate, the Red Bull logos and athlete endorsers on most pages. The cover story features Tim Lyceum, the San Francisco Giants pitcher who’s sponsored by Red Bull. But there are also features and pages on dance subculture, food, street art and music, from Wiz Khalifa to Bob Dylan. Its production values match those at most consumer magazines. “It really begins with the people you involve, people who are committed to the journalistic product and storytelling,” said Andreas Tzortzis, its U. S.

editor. “It’s being willing to go to the Atacama desert for a story on scientists who stare up at the heavens or head into New Orleans to talk about brass band culture years after Katrina, as well as more obvious stories about Red Bull-sponsored athletes or events. ” Outside advertisers in the magazine include Dyson, Vizio, Zappos and Skullcandy. EA Sports’ back-cover ad is an outgrowth of a broader marketing partnership with Red Bull, not a typical ad-page buy, said Christopher Erb, VP-brand marketing for EA Sports. “We have such joint audience it just made sense,” he said. “We did it to celebrate that it was coming to the U. S.

and to support our partner. This is our first public show of support for Red Bull. As we move forward you’re going to see a lot more stuff, collaborative stuff, through all the content things we do together. ” “We don’t even look at it as a media buy to be honest,” Mr. Erb added. “It’s more kind of us putting a page in their book saying welcome to the U. S. ” Red Bull already publishes the magazine in countries including Great Britain, Germany, Poland, Austria, South Africa, New Zealand and Kuwait, with distribution totaling 3. 4 million before the U. S. edition. Red Bull plans to add further editions later this year and in 2012.

Dietrich Mateschitz created the familiar Red Bull “adult cartoon “advertising with the aid of Johannes Kastner, a colleague who owned an advertising agency. All ads featured an intelligent dialogue about product benefits using one character with an energy deficiency and others who proposed the solution: Red Bull. Unlike most beverage marketers, Red Bull did not reinforce the taste of the drink, the direct benefit of the drink, or the image associations of the drink. In one ad, a dentist informs Dracula that his teeth will have to be removed. Dracula complains that without his teeth, he will not be able to drink blood.

Dracula laments, “But without fresh blood my body will wither and my mind will fade. ” The dentist tells Dracula “one revitalizing Red Bull and you’ll be prince of the night again. ” A shot of the product appears on the screen, with the copy “Red Bull energy drink. Vitalizes Body & Mind. ” The dentist samples a Red Bull himself and tells Dracula, “You know, Red Bull gives you wings,” before sprouting wings and flying away. Other classic characters to appear in Red Bull ads include Leonardo da Vinci, Adam and Eve, Frankenstein, William Tell, Rapunzel, Sisyphus, and the Devil.

The tagline “Red Bull gives you wiiings” grew directly out of the positioning statement “Red Bull vitalizes body and mind. ” The ads were effective because they clearly communicated product benefits without promising specific physiological results. The literal message of “Red Bull gives you wiiings” was obviously an exaggeration, but taken figuratively it was clever and believable. The animated television spots also refrained from defining a specific target group; anyone with a sense of humor, no matter how old, would be able to appreciate the ads.

This enabled the company to establish as wide a consumer base as possible. The Red Bull animated ads were adopted uniformly across the company’s global markets. Not only did the colorful images travel well, but also the simple execution and universal concepts of the ads ensured that they would cross cultural boundaries easily. Said Kraihamer, “Even in a country where they speak a different language, we send the same message using the cartoon…We more or less translate it word for word—the power of our marketing mix works. ” Effective Use of Media

Only when a cell was considered mature did Red Bull begin a media program in that area. “Media is not a tool we use to establish the market,” said vice president of marketing David Rohdy. “It’s a critical part. It’s just later in the development. ” Of the $100 million marketing budget for the United States in 2000, Red Bull spent less than $20 million on measured media. The company’s most visible media efforts were the two new animated cartoon commercials it developed each year. Red Bull also kept up its aggressive event marketing efforts in the United States.

In addition to the Red Bull Cliff Diving World Finals in Hawaii and the Snow thrill of Alaska winter sports event, Red Bull held The Red Bull Wings Over Aspen hang-gliding event and a street luge competition in San Francisco. In 2000, Red Bull introduced the Red Bull Rock ’n’ Air festival, a day of extreme sports demonstrations and progressive live music. Another unique Red Bull event was the Red Bull Music Academy. Started in 1998, this annual event that was held in a different city each year, brought DJs and music producers together for two weeks of collaboration, learning, and performance.

Red Bull’s initial results in the United States mirrored the brand’s success in Europe. In 2001, Red Bull was the number one seller inStore24 convenience stores, bigger than any single beer, milk, water, or soda brand. “It’s the number one beverage and the gap is widening,” said Andy Steele, a beverage buyer for Store24. “I’ve never seen anything like it. ” One new age beverage executive said, “Red Bull seems to have a cooler in every bar in every city. ” By mid-2001, Ohio, Tennessee, and the Dakotas were among the few states that did not have Red Bull. The company’s U. S.

case volume more than quadrupled that of its nearest competitor and its market share hovered near 70 percent. Red Bull varied its market entry strategy only in the United Kingdom, which it entered in 1995. Believing the British market to be too different from Austria, the management team in the United Kingdom altered the Red Bull marketing formula in three significant ways: 1) The company marketed Red Bull as a sports drink, not a stimulation drink; 2) It did not pursue a word-of-mouth strategy, choosing instead to sell via the largest beverage channels; and 3) It created new advertising and focused on billboards rather than electronic media.

As a result, Red Bull was considered a failure in the United Kingdom after losing more than $10 million during the first 18 months in that market. This was in part because the United Kingdom had an established sports drink brand, Lucozade, which had been on the market for decades. Consumers were very familiar with the sports drink category, but Red Bull did not meet their expectations of what a sports drink should be. Usually, Red Bull sought to create its own new category when it entered new markets, so when U.

K. managing director Harry Drnectook over in 1996, he repositioned Red Bull as a stimulation drink, by changing the word “energy” on the can to “stimulation,” and thus established a new category. The second strategic mistake in the United Kingdom was a departure from the word-of-mouth strategy that had fuelled Red Bull’s popularity in other markets. The original U. K. management skipped all the preliminary steps and started by selling Red Bull in the largest supermarkets and convenience outlets.

This move essentially precluded any buzz from building, because it did not allow a discovery phase or an opinion leader program to establish the brand as cutting edge. Said Norbert Kraihamer, “The U. K. team started from the wrong end, in the big chains, hoping the consumer would pick it off the shelf. But they were wrong; they totally misunderstood how to create a consumer base. ” In response, Drnec and his new management team pursued the traditional word-of-mouth strategy. Finally, the original U. K. managers overhauled the Red Bull advertising concept to suit the needs of the market as they saw them.

They used the slogan “Never underestimate what Red Bull can do for you,” which did not clarify Red Bull’s positioning at all and was too long to be catchy. By contrast, the “gives you wiiings” slogan communicated Red Bull’s positioning as a stimulation drink and translated effectively into any market. The original U. K. team also focused the ad spending on billboards that were not as effective in communicating Red Bull’s benefits as electronic media. “We go for electronic media, because energy needs movement and dialogue, “said Kraihamer. “You can hardly get smart drinks across on a billboard—it doesn’t talk.

” After new management made the necessary changes, Red Bull took off in the United Kingdom Between 1997 and 2001, Red Bull’s share of the sports and energy drink market rose from under 2 percent to 48 percent. This share exceeded that of Lucozade, the entrenched leader for the previous 74 years. Red Bull went from selling 3. 2 million cans per year in 1995 to more than 290 million in 2000. The brand claimed an 86 percent share of the “functional energy” drinks market in 2001. That same year, Red Bull was the third biggest product by value in the soft drinks market, behind Coca-Cola and Pepsi.

The United Kingdom was Red Bull’s second-largest market by volume and sales in 2001, behind the United States. WD Weather spoons have recently ceased stocking the energy drink Red Bull and have switched brands to Monster. According to a leaked report, Red Bulls plan to regain the WD Weather spoons account was to insert under cover personal into Weather spoons premises with their own supply of Red Bull to consume on site insert on buying the Monster brand, stating that they preferred to consume the Red Bull brand over the Monster brand.

The aim of the plan of attack was for the chain of pubs staff and managers feedback to their seniors that their customers were not happy with the change of brand. Since the leak of the report Red Bull has stated that this type of activity will cease. Red Bull engaged in a variety of marketing programs, including traditional television, print and radio advertising, event marketing in sports and entertainment, sampling, and point of purchase promotion.

The bulk of Red Bull’s marketing activity was directed toward encouraging product trials. This was accomplished primarily through sampling, word-of-mouth, and point of purchase efforts. According to Kraihamer, “we do not market the product to the consumer, we let the consumer discover the product first and then the brand with all its image components,” So, the advertising is effective for Red Bull, not only for Red Bull but also for the all brands over the worlds.

Cite this SWOT Analysis of Red Bull

SWOT Analysis of Red Bull. (2016, Jul 02). Retrieved from https://graduateway.com/swot-analysis-of-red-bull/

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