Red Bull Marketing Strategy: The Case Study
Red Bull is an invincible marketing powerhouse.
When it comes to its marketing strategy, the brand takes great care of everything they do.
However, their marketing efforts always put the audience first.
In fact, their product sales are second to none.
Although Red Bull is active on multiple channels and uses many different strategies, they all revolve around the same concept: creating content and experiences that appeal to people regardless of the energy drink brand.
Like major publishers, they have become one of the most talked-about brands in the world, producing content, providing mind-blowing programs, and much more.
Table of Contents
Red Bull Company: A Brief History
When the Austrian toothpaste seller Dietrich Mateschitz arrived in Thailand in 1987, Red Bull first heard of the “ energy tonic ” created by Chelio Yovidya. The tonic was thought to help keep drinkers awake and alert.
After three years of testing, Red Bull was launched in Austria, but two businessmen are skeptical. “There is no demand for such a drink in the market,” he said. No one is likely to try. But they were wrong
Today Red Bull dominated 2015 with a 43% market share . The best part? They are still going strong. Considering that Red Bull has kept the market in the first place, it is not bad to dominate almost half of it after almost three decades.
Here, is the infographic showing the growth of the Red Bull brand:
The Case Study of Red Bull’s unconventional marketing strategy
When the Red Bull first appeared, there were no energy drinks and traditional advertising was expensive.
Therefore, the Red Bull became a rookie and chose a different strategy.
What did he actually do?
They went straight to their target audience (men between the ages of 18 and 35) at college parties, libraries, cafes, bars, and other places.
They put the product in the hands of consumers by bringing free samples to the public.
It talked to people promoting its product for free.
They still use the same strategy: wherever they go, they go.
That means sponsoring a music festival or creating the most cultural content, they do.
In fact, the content that Red Bull publishes is displayed on a par with a professional publishing house. They are a media company intended to effectively sell energy drinks, not the other way around.
What is the best way to dominate the market?
Create one that does not yet exist.
This is exactly what happened to Red Bull Energy Drinks 30 years ago.
Thanks to smart marketing and creative strategy, they have been at the top for three decades.
How does Red Bull incorporate a content marketing strategy?
The elements of the Red Bull do exceptionally three things.
- First , it covers topics that interest its audience. Extreme sports, music festivals, and concerts are just some of the topics covered on the Red Bull website. Imagine being able to (or necessarily) enjoy Red Bull wherever you see it and its content covering it.
- Second , it is their ability to sell their brand, but not to push their product. Their content is focused not only on Red Bull sales but also on the pleasure of the readers. In turn, audiences begin to associate their product with the content they want to consume .
- Third , it delivers videos, blog posts, landing pages , and other types of content on the same professional level as the media sites where your target audience uses the content.
Take this video for example. It is packed with ingredients that anyone who loves high-energy, high-impact, and extreme aerobics will appreciate:
How will Red Bull reach its target market?
Red Bull focuses on three important tips for attracting its target audience:
Excellent Content Delivery: The content created by Red Bull’s marketing team is on par with other major media, allowing viewers to access the content.
Massive advertising stunts: Red Bull takes “ Go Big or Go Home ” to the next level by performing massive stunts to freeze everyone and see what happens.
Sponsorship or Event Creation: Red Bull showcases its marketing skills by taking its product and linking it to what the audience likes or creating events for them.
How does Red Bull use events to reach customers?
Part of their strategy is to host and sponsor events that their target market is already participating in. Whether it’s a concert, a film event, or extreme diving, Red Bull creates or sponsors an event around them.
Why is this a great move? His audience is already there. Their target audience is an active group. They love to try new and crazy stunts, extravagant sports, or extravagant at a music festival.
So Red Bull appears in places where they know they are their target audience .
Take Coachella for example. This huge music festival takes place over two weekends in the desert and fans should not miss a single second. This means sacrificing a few hours of sleep.
The Red Bull appears and gives them the wings (and energy) they need to stay awake and play at the festival.
How does Red Bull use advertising stunts to promote itself?
Another part of Red Bull’s marketing strategy is its insane advertising stunts. They sent a man aboard a small ship and a helium balloon 128,000 feet above the ground and sent him out. Known as the Red Bull Stratos Jump, this stunt broke two different world records:
By creating massive stunts like the Stratos jump, it makes his audience (and probably everyone agrees) stop and think, “Yeah? I have to see this.”
8 Ways to Implement Red Bull’s Marketing Strategy
The ability of Red Bull to adhere to its brand and values makes them successful.
1. Maximize the idea behind their slogan
Red Bull’s message strategy revolves around its motto, “ Red Bull Gives You Wings “. It focuses on the idea that its product gives people the “wings” or the energy they need to do what they want.
This motto feeds their content as they create and record the most action-packed, high-flying games and activities the world has ever seen.
Need some help jumping off a plane in a flight suit? Let Red Bull give you the extra encouragement you need.
2. Maintain consistent visual branding
Visual branding created by Red Bull is the key to brand success.
Check out one of his most recent YouTube videos:
Content engages viewers in fast, high-intensity stunts that make them wonder if they can really pull it off.
That side of your seat, Shock Mindset is about the Red Bull brand. Instead, I can say, we gave people the energy (and courage) to try this crazy thing.
3. Build a solid foundation of content
The main content of RedBull can be summarized as follows:
They focus on extreme sports, music, art, dance, nightlife, and more. Due to this wide range, their content can attract the right audience.
Red Bull works with the main ingredients that put them in front of the pack.
Every piece of content they create matches the quality of their publications, such as Buzzfeed, Vice, ESPN, and other publications that can be read. That level of quality seems to come from a powerhouse dedicated to creating consumer media rather than energy drink brands.
4. Let values be your guide
Their values also play a role in their content. They focus on the basic phrase “giving wings to people and ideas”. Everything the Red Bull team communicates revolves around that motto and its values.
The ability to maintain a continuous conversation for the past 30 years has brought them success.
5. Restore the way they use traditional media
Content marketing is not the only thing that dominates Red Bull. The brand also invests a significant stake in traditional mass media channels.
Red Bull TV content works in two formats: videos they create for their online channels (YouTube, social media, etc.) and ads that collaborate with traditional TV channel content:
Its TV content was streamed live on his online hub, Red Bull TV. Their videos and shows are divided into event and movie formats, as well as channel topics such as cliff diving and culture:
It also entered the field of music. In addition to covering or sponsoring major concerts, Red Bull also has its own record label, recording studio, music academy, publishing group, and online radio station.
6. Being strong and proud of social media strategy
Another channel dominated by the Red Bull power is social media .
For example, his Facebook page is filled with visually appealing art videos, music created by his record label that thrills audiences, and sports and events that his audience enjoys.
Red Bull’s message is short and sweet because the first 3 seconds will surprise you with what happens. You have no choice but to go completely:
Their Twitter and Instagram channels instead focus on recognizable images to share and promote conversation with their fans.
Which film is unique to Red Bull? According to Link Human, these films capture motion, drama, and emotion:
Their ability to create dynamic social media posts that generated enough interest to stop fans from scrolling further hit him so hard on social media. Each media element feels like its content is in motion, reflecting the brand’s high-power aesthetic.
7. Expose the product to the public with sponsorships and events
Ultimately, Red Bull’s sponsorships and programs are the last part of their marketing strategy to sell their brand dominance. We divide their efforts into three categories:
- Advertising stunt.
- Events created by them.
Their advertising stunts are insane enough to make the world stop and look. Sure, they have a stratospheric jump, but there are many more.
Take the Red Bull Air Force team for example. This group is dedicated to showcasing some of the strangest aerial feats have ever seen:
There are shows like Red Bull Crashing Ice or Red Bull Queen of the Bay, which respectfully focus on specific sports such as ice cross or surfing. These events focus on sports fans and raise awareness about the Red Bull brand.
Finally, there are sponsorships. From the Electric Daisy Carnival in Las Vegas to Coachella, the Red Bull is involved in everything. This is a great move by the company because who is attending all those events? Their target audience.
Not only that, but those sponsorships allow the Red Bull brand to be exposed to new audiences as they are attended by a large number of people.
8. Creating content around what your audience likes
What do they have in common with each item they cover (and there are many)?
They focus on the activities that people participate in when they consume their products. They also post content that their audience can navigate.
They post large amounts of content on their website and, surprisingly, do not mention their product in any way:
They produce The Red Bulletin, a magazine that distributes 2.2 million copies a month:
In short, if their target audience is consuming content on a particular channel, you can count on Red Bull’s presence.
Finally, What Did We Learn from Red Bull Marketing Strategy?
Needless to say, Red Bull has come a long way in the 30 years since its inception. From a very humble beginning to a mega-brand publishing house, Red Bull is a success story in marketing.
Are you inspired by Red Bull’s marketing strategy?
Let their story serve as a reminder that your company should start somewhere. They did not go to a multinational company overnight from an idea in Thailand. It took time, luck, and some effort (and a lot of great marketing along the way).
- Follow their leadership by starting small. Here are some ideas:
- Create a short series of weekly videos on a topic that will interest your audience.
- Curate social media content that meets your product purpose and the interests of your audience (without mentioning you directly).
- Publish an email newsletter with interesting and useful material that your audience will love (and can slap your logo anywhere).
Here’s the key: To be successful in content marketing like Red Bull, you must put your audience’s interests first and create content publishers.
Instead of imitating other marketers, imitate magazines, TV shows, news websites, and anything else your audience reads and watches.
Want to know more about how to actually do this? Here are some additional reading tips to get you started:
Because Red Bull strategy works
Red Bull’s strategy works for three different reasons:
- The first is his ability to tell a story that appeals to an audience. His focus on everything from extravagant sports to music festivals gives him a vast playing field, but that’s not all.
- Second Red Bull ranks its product in providing content and value to its audience. Attention to the details provided by their marketing team is evident. People who care about what they write, record or create around them.
- Ultimately , their commitment to the values and aesthetics that the brand created when it first launched will drive its marketing. Everything they make is associated with the idea of giving wings to people and ideas to fly.
That’s all if you find this content interesting. Don’t forget to share and leave comments. Thank you.
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Red Bull is known for more than just its energy drinks; the company has also become a powerhouse in the world of content marketing. Through their strategic use of video, social media, and event marketing, Red Bull has been able to build a strong brand identity and engage with their audience on a deeper level. In this case study, we'll explore how Red Bull has leveraged content marketing to drive brand awareness and engagement, as well as the strategies they've used to stand out in a crowded market.
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Table of Content How Red Bull Uses Content Marketing to Drive Brand Awareness and Engagement
How Red Bull Uses Content Marketing to Drive Brand Awareness and Engagement
Red Bull is a company that has built its brand on the idea of "giving wings to people and ideas". While their energy drinks are certainly a key part of their business, Red Bull has also established itself as a leader in content marketing. Through their use of video, social media, and event marketing, Red Bull has been able to create a strong brand identity and engage with their audience on a deeper level.
One of the most successful examples of Red Bull's content marketing strategy is its "Stratos" campaign. In 2012, Red Bull sponsored a skydiver named Felix Baumgartner as he attempted to break the record for the highest freefall jump. Red Bull documented the entire process, from Baumgartner's training to the actual jump, in a series of videos that were shared on social media and Red Bull's website.
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The campaign was a huge success, generating over 52 million views on YouTube and generating massive amounts of media coverage. More importantly, it helped to establish Red Bull as a brand that was all about pushing boundaries and taking risks.
Red Bull has also been able to use social media to build a strong brand identity and engage with their audience. They have a strong presence on a variety of social media platforms, including Facebook, Twitter, Instagram, and YouTube. They use these platforms to share content that is relevant to their audience, such as extreme sports videos, music performances, and behind-the-scenes footage of their events.
One of the ways that Red Bull has been able to stand out on social media is by creating content that is both entertaining and informative. For example, they have a YouTube channel that features a series of videos called "Science of Sport", which explores the science behind various sports and activities. These videos are entertaining to watch, but they also provide useful information that is relevant to Red Bull's target audience.
In addition to its video content, Red Bull has also been able to leverage event marketing to build brand awareness and engage with their audience. They sponsor a wide range of events, including extreme sports competitions, music festivals, and art shows. These events allow Red Bull to showcase their brand to a large audience and create a unique and memorable experience for attendees.
Read more: 10 ChatGPT Ways to Learn New Concepts with Examples
One of the most successful examples of Red Bull's event marketing is its "Flugtag" competition. This event challenges teams to build homemade flying machines and launch them off a platform into the water below. The event is both entertaining and exciting to watch, and it has helped to establish Red Bull as a brand that is all about taking risks and pushing boundaries.
In conclusion, Red Bull has been able to use content marketing to drive brand awareness and engagement by creating high-quality, entertaining content that is relevant to its target audience. They have been able to leverage video, social media, and event marketing to create a strong brand identity and engage with their audience on a deeper level. By continuing to push boundaries and take risks, Red Bull has established itself as a leader in content marketing and a brand that is all about giving wings to people and ideas.
What is content marketing, and how does it help to drive brand awareness and engagement?
How does video content help to drive brand awareness and engagement, how can social media be used to drive brand awareness and engagement through content marketing, how do event marketing help to drive brand awareness and engagement through content marketing, how can brands create relevant and engaging content that resonates with their target audience, what are some common mistakes brands make when using content marketing to drive brand awareness and engagement, how can brands measure the success of their content marketing efforts in driving brand awareness and engagement, how can brands continue to engage with their audience and build brand loyalty through content marketing.
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Red Bull Case Study Analysis
by Jasmine A . Henry
In this case study, Red Bull’s social media and mobile marketing strategies are highlighted and summarized using a couple examples of recent, successful implementation. The case study also highlights how Red Bull has diversified itself and has become a prominent force in the digital media empire. This case study analysis aims to: Analyze Red Bull’s social media and mobile market strategy Highlight and examine tactics and strategies employed Suggest alternative solutions Recommend a course of action for the future
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Red bull Energy drink was developed by Dietrick Mateschitz. When he went to Asia for business trip, he tried some syrups that people would put in their drinks to give them energy. He worked up and the drink was called Krateng Dang, which originally was sold in Asia. He then modified the drink and in partnership with Chaleo Yoovidhya, founded Red Bull Gmbh in Chakkapong. Red Bull was launched in Austria in 1987 . In partnership with Yoovidya, it became a global brand, with both of them investing around $500,000 of savings and taking a stake in the new company. Both of them held 49% share of the company. Every company has its ups and downs and one of the down point for Red Bull was it did not contain enough syrup and was not carbonated. Reb Bull saw this as a downfall of its sales. Red Bull took out the syrup and made it more carbonated (Hoover’s Inc., 2011) It is very important to understand the energy drink industry before understanding where Red bull stands in this particular industry. Red Bull is world wide energy drink beverage that contains caffeine along with other presumed energy enhancing ingredients like taurine, herbal extracts and B vitamins , besides calories (Heckman, Sherry & De Mejia, 2010). The Energy drinks is also known as “function” category of drinks that includes, but not limited to , sports and work out supplement drinks (Heckman, Sherry & De Mejia, 2010). Since Red Bull has been growing tremendously, it is currently experiencing a high brand and Reb Bull Takes about 70 percent of the energy drink market (Gorse, Chadwick & Burton, 2010). The main aim of Red Bull is to never give up, because in their past it is shown how they keep on doing more and different ways to reach out to its target audience and promote their brand. Rebull just does not give up whether buying a sports team or creating a magazine or sponsoring an event (Gorse, Chadwick & Burton , 2010). Red Bull has been involved with many communities as well. They host many sports events for them to market the product and hence they are now one of the biggest sponsor of sports. Now they have involved themselves within the existing night clubs The key people of Redbull are Dietrick Mateschitz- who is the founder, Nigel Trood- The director in England, John Probst who works with Red Bull racing, Ellen Applen – director of communication Elton Sawyer- director of competition, Patrice Radden who is the director of corporate communication and Walter Bachingerthe- head of controlling and accounting Red bull has been innovative in few ways. Though red Bull was one of the first to break into the energy drink industry, there has been a little innovation from the company in course of time. Red bull has sugar free drink, Cola drink and energy shot, but these have not been very impressive in term of sale in course of time. However Red Bull has innovative in advertising strategies Though Red Bull has been offering these drinks along with standard energy drink ,it is very important to keep in mind that that the primary energy drink of the company is the most important drink because this product serves the need of the largest population and it is what took the sales of the company from minor to major (Gorse, Chadwick and Burton, 2010). According to the article in Nutrition Journal, Red Bull is current leader in the energy drink market (malinauskas, Aeby, Overton, Carpentor- Aeby, & Barber Heidal, 2007) . It has been seen that energy drinks hold 62 percent of the market share, out of which 42% of share is held by Redbull ((Heckman, Sherry & De Mejia, 2010). Therefore Red Bull being a private and single company dominates more than half of the functional drink market , proving they are of the market leader. Red Bull was one of the first company to distribute energy drinks, which makes them very popular , hence they are the best.
NDARU MUKTI LESTARI
In the era of globalisation, there has been growing interconnection between nations, corporations, and people in many aspect of life. It fosters competition and demanding hard work. In order to survive, an organisation must find an effective way to face challanges and take opportunities. Brand and image became a very important aspect to gain costomer’s support. That is why almost every large organisation have public relation division, or hire a public relation company to help them build their reputation and image in public. A positive perception towards an organisation, either it is private or public, will give advantages and help them to achieve their goal in a better way. They design strategies, tactics, and campaign in order to deliver their message to the right audience. This essay will discuss how an Austrian company (Red Bull) improves their sales through an innovative campaign in US.
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The Ultimate Red Bull Marketing Strategy Study
Table of contents.
Red Bull has grown from a simple energy drink manufacturer to one of the most recognized brands in the world. It has become synonymous with sports, extreme performance, and victory. Red Bull is the extreme athlete of marketing, literally and figuratively.
A few key statistics and facts about Red Bull:
- Number of Red Bull cans sold worldwide in 2022: 11.582 billion
- Revenue of €9.68 billion
- Red Bull's marketing budget for 2022 is estimated to be €2,9 billion (it is rumored to be around 25-30% of the yearly revenue)
- Red Bull sponsors athletes in 73 countries around the world .
- Number of employees in 2022: 15,779
- The logo is a breed of cattle called gaur.
Red Bull History
The reasons for Mateschitz's conservatism lie in his family background. He grew up in modest circumstances in the upper Murgtal in Styria. His outstanding success is not an isolated case in this province. Arnold Schwar is a compatriot, as is the tennis player Thomas Muster, who for a time topped the world rankings ahead of Boris Becker, André Agassi, and Pete Sampras.
He is also a compatriot of Frank Stronach, who emigrated to Canada as a worker and returned to his homeland as a co-owner of the global auto parts manufacturer Magna. Styrians are said to have always been a bit their boss. Stubborn but not rebellious, strong, and persevering. Dietrich Mateschitz, who has been friends with half of Austria since his success and is nicknamed "Didi," has needed perseverance for his story to become a real success.
From jetlag to energy drinks
In 1976, Chaleo Yoovidhya introduced his Krating Daeng drink in Thailand. The name means "red gaur" in English. The maker was inspired by the energy drink Lipovitan, in which the main ingredient is taurine, and was popular with Thai truck drivers and blue-collar manual laborers.
When he visited Thailand in 1982, the Austrian-born Dietrich Mateschitz discovered that by consuming Krating Daeng, he was able to overcome the effects of jet lag, caused by the rapid change of time zones, much more quickly during the trip. Since the energy drink phenomenon was still unknown on the Old Continent, he was astonished at how many people consume the product, and almost immediately approached the owners of the company with the idea of bringing it there.
Mateschitz had been the international marketing manager for Blendax (now part of the Procter & Gamble Group) toothpaste at the time. The Yoovidhya family, which had already become rich through the pharmaceutical industry, welcomed the idea and began to develop a European business policy and strategy with the Austrian marketing expert.
Mateschitz founded Red Bull GmbH with Yoovidhya in 1984 intending to develop it into a global brand. Both parties invested $500,000, however, Yoovidhya and Mateschitz owned only 49-49% of the shares in the new company. The remaining 2 percent of the shares went to Yoovidhya's son Chalerm, but the agreement left Mateschitz as the de facto head of the company.
Product launch in Austria
The product was first launched in Austria in 1987. Mateschitz, still a bachelor at 39, has quit his lucrative multinational job and has been trying to introduce the Asian recipe to Austria for two or three years. The new product, the unusual flavors, the colors, the advertising are not the resounding success he had hoped for. After the initial setbacks, Dietrich Mateschitz does what he has never done before - he takes out a loan. The reason for his reluctance is simple: he was raised at home to believe that "a decent person does not have debts," and like many entrepreneurs, he still does not like financial institutions.
The startup’s growth has almost immediately slowed down because several well-known Austrian beverage companies considered the revolutionary idea too risky and refused to partner with Red Bull. The food authority was also not a fan of Red Bull, considered it dangerous, and banned its marketing in many places - but Mateschitz was not discouraged. Dietrich Mateschitz cites the three most difficult years of his life as the early days of Red Bull.
Being an experienced manager, he refused to lower the price of the not exactly cheap beverage. He is vigilant about consumer behavior. The highly stimulating product was finally a hit in Austrian discotheques. It was tempting to dance the night away. Word of the new wonder “drug” spread quickly across the border. However, on the German side, Red Bull was still not allowed to be marketed. It was banned for a time in Hungary, France, and Denmark because of what they consider to be its high caffeine and taurine content. It is the desire for the forbidden fruit that has brought the real breakthrough. Consumers "smuggle" a bootleg number of Red Bulls across the then non-EU Salzburg border crossing into Bavaria, where it is sold in nightclubs in violation of the law. From then on, the triumphal procession is unstoppable. And during this time, the custom of mixing it with vodka also arises.
Germany and the United Kingdom were introduced to Red Bull in 1994 after the company’s expansion in Eastern and Central Europe. It was able to win a 75 percent market share on the American energy drinks market despite the slow start and late expansion to the US in 1997.
In the process, Red Bull has also garnered some criticism for its use of extreme sports marketing and its impact on health. Due to this, the European Food Safety Authority (EFSA) and other food regulatory agencies have limited the levels of caffeine, taurine, and glucuronolactone in Red Bull and other energy drinks.
A serendipitous meeting between the Austrian and Thai founders of Red Bull was quickly followed by the realization of an excellent business opportunity and action. The recipe was ready - even if it still needed to be refined for European tastes - and the parties focused on market development strategies, sales, and marketing activities.
Still, launching the product in Austria was not a success, and many founders would have given up at this point. But Mateschitz kept his eyes open and recognized what the sales drivers would be in the early days.
- Word-of-mouth marketing,
- The feeling of uniqueness (energy drinks were not yet known to the European public),
- A stronger effect than coffee, which, mixed with alcohol, stimulated parties in Eastern Europe as a non-addictive and non-consciousness-altering substance,
- The progressive association of the brand with sports, in addition to nightlife.
Together, these elements have served to build Red Bull's success on an increasingly efficient and planned business foundation.
The product portfolio of the company.
A glimpse of the variety of drinks Red Bull offers
Three of Red Bull's products are core products that are sold in all relevant markets, regardless of culture or target group:
- Red Bull energy drink: the familiar gray-blue metal can that comes in a 250 ml edition. In some countries, it is also available in a 350 ml and a 500 ml version.
- Sugar-free Red Bull: Instead of sugar from sugar beets, the company uses aspartame, sucralose, and acesulfame K to sweeten the product. The product's other ingredients and packaging are the same as the original energy drink.
- Red Bull Zero Sugar. The Zero and sugar-free variants differ little in terms of content. According to the company, the only difference is the taste.
However, there have also been numerous drinks that have been launched in limited quantities or connected with specific sporting events. These include The Tropical Edition, The Coconut Edition, The Red Edition, and The Summer Edition, currently available in four flavors. However, Red Bull not only limits the time of availability but also sells specific, localized products for the largest markets. For example, ORGANICS by Red Bull, which is only available in German, is not an energy drink but a soft drink that comes in six flavors. These include cola, tonic, and ginger drinks.
Red Bull cans are 100% recyclable. In addition, with only one manufacturing location, 80% of renewable resources are saved rather than using multiple ones.
Almost all of the markets in APAC are served by Red Bull, and the company uses local development strategies to cater to consumer tastes in each market. Red Bull markets in the APAC region curate their product portfolios, and it takes a lot of time for each market to develop the most appropriate product selections. Local and center teams are continuously reviewing the portfolio of products to ensure that the energy, taste, and size requirements are met. Though the original blue and silver Red Bull Energy Drink is still a popular beverage, Red Bull is also interested in creating new products to match the changing tastes of the market.
Red Bull Editions are a seasonal range of localized products. To give an example, Red Bull has a Coconut edition in Singapore that includes coconut and blueberry flavors; in Australia, there are Orange editions (orange flavors), Tropical editions (tropical fruit flavors), and Red editions (watermelon flavors).
A graph with Red Bulls customers distribution by country
Each Red Bull market has a local team that interprets the meaning of the products to ensure they are relevant to the target customers. There is room for growth in the energy drink market through premiumization, even though the market is well established.
A new Red Bull production facility is being built in Glendale, Arizona. A joint venture between Red Bull, Rauch Fruit Juices, and Ball Corporation, RRB Beverage Operating, is investing USD 250 million in the next few years to build a new 700,000 sq ft-sized facility. Originally, the company planned to start manufacturing in 2021, employing 140 people in the process. There is no news available on how COVID-19 has modified the plans.
Instead of keeping the production process in-house, RB outsourced it to Rauch. Among other beverages, it produces Red Bull's drinks in Nüziders, Austria, and Wildenau, Switzerland. It is only 40 kilometers between the two production facilities despite being in different countries.
It was previously made at a Swiss plant and imported to the U.S., but the company's growing popularity in North America and a threat to taxing cans and products imported from Europe, in general, led to the investment.
One of the joint venture partners, the Ball Corporation, which specializes in the production of aluminum and steel packaging for the food and beverage industry, opened an aluminum can manufacturing plant in Goodyear, Arizona in 2019, not far from the new project site in Glendale.
As a manufacturer of soft drinks, Red Bull does not market its products itself but distributes them to restaurants and stores via Red Bull-owned distribution companies. One such company is Red Bull Distribution Company , which is responsible for distribution in North America. The Group currently employs around 6,000 sales staff who distribute its products in 170 countries around the world.
The sales employees directly involved in the sales process are usually field sales representatives. They cover a predetermined territory by driving around and replenishing products from Red Bull in restaurants and convenience stores. They are also responsible for ensuring that the energy drinks are in the right, highly visible places on the shelves and that the company logos get the attention they deserve.
Of course, the larger chains and online beverage stores are already negotiating directly with distributors. The company's sales activities are rounded off by various corporate purchases.
Beverage retailers in particular tend to offer their customers a diversified product portfolio to generate more sales so that they can not only order a specific beverage but also upsell it. This involves offering additional options (both products and services) to a customer who has already been won over, which can then be sold at a much higher profit because there is no need to advertise and approach the customer again. In contrast, Red Bull has opted for a narrow product range - for a long time, there was only one type of energy drink and one flavor. Today, that range has broadened, but there are still many subsectors (e.g., alcohols, premium products) where there is room for further expansion.
Red Bull works with several international and local distributors, typically owned by RB. Sales are always B2B, with restaurants, small and large grocery stores, and corporate customers on the other side.
The Red Bull Brand
The Red bull brand stands out as a category dominating queen holding 42% of the global energy drink market in 2020. Second comes Monster with a 39% market share.
The vision statement of Red Bull is “(The company) is dedicated to upholding Red Bull standards while maintaining the leadership position in the energy drinks category when delivering superior customer service in a highly efficient and profitable manner. We create a culture where employees share best practices, dedicated to coaching and developing our organization as an employer of choice.” (Source: redbull.com)
According to reviews on Indeed and Comparably , Red Bull is successful not only in building an outward-facing brand but also in creating a high-quality corporate culture. Typical feedback praises the internal social life, work environment, and highlights internal development opportunities. However, as in any other organization, those who work under a poorly performing manager are understandably dissatisfied with management skills, work-life balance, and supervisor availability.
Can of innovation: a branding move
The can became the symbol for Red Bull, even though it has been commonly used among beverage manufacturers. There is, however, a significant difference: instead of the usual 330 ml can, which is a bit chunkier, Red Bull has introduced the 250 ml sized container, which is thinner and taller than usual. There are two reasons for this: the unique appearance makes the product stand out from the competition, and it explains why Red Bull is much more expensive than the usual packaged drinks.
Red Bull’s target market: for those who need energy
Red Bull’s target market is young people between the age of 15 and 45 with high income. The company segments its target market even further offering as the main benefit a sense of belonging and enhanced physical and mental performance.
Matschitz explained the failure of Red Bull's first consumer test by claiming that such products only succeed in their intended environment. In sterile laboratories, no one needs extra energy, so Red Bull could not be treated at its true value. The moment the drink was introduced into gyms, parties, and bars, or even boardrooms, the rejection stopped, because the product found its right target audience.
Red Bull’s logo and design over the years
The energy drink was originally created for Muay Thai fighters and blue-collar workers in Thailand. A logo where two red bulls were readying to fight and the bright yellow sun rising behind them is typical for the APAC region. The only direct change was the “Red Bull” inscription written in bold, English font.
The Red Bull logo did not change significantly over the years. What makes the story special is that Mateschitz's marketing background allowed the team to spend extra time finding the right design. However, both the logo and the name and colors scored poorly on focus-group questionnaires. Nevertheless, the owners stuck to their original vision and did not change the design "rescued" from Thailand. Time has proven them right.
Red Bull brands and subsidiaries
Red Bull Racing
AKA Red Bull AKA RBR AKA Oracle Red Bull Racing is a Formula 1 racing team. The team won the 2021 championship with its driver Max Verstappen.
AKA AlphaTauri is the second Formula One racing team of Red Bull. Originally the company’s junior team, today its considered to be the sister team of Oracle Red Bull Racing.
New York Red Bulls & New York Red Bulls II
The company’s two American professional soccer teams. The first participates in the Major league and the second in the second tier league.
FC Red Bull Salzburg
AKA FC Salzburg, the company’s Austrian professional football club. Red Bull bought the club in 2015 and changed its colors, a move that its fans found controversial.
Red Bull's second league Austrian football club.
The German professional football club nicknamed Die Roten Bullen. The company bought the team in 2009 and in less than 9 years took it from the fifth tier league to the top-flight Bundesliga.
Red Bull Brasil & Red Bull Bragantino
The two Brazilian football clubs whose teams compete in the second and top tier of São Paulo state football league respectively.
EHC München & EC Red Bull Salzburg
Red bull’s ice hockey teams. The first competes at the highest level of professional German ice hockey. And the second competes in Austria’s top-tier ice hockey league.
Red Bull Records
It’s Red Bull’s global record label focusing on more niche genres like rock, alternative rock, punk rock and hip hop with bands like Awolnation, Twin Atlantic, and Beartooth.
The example of Mateschitz is rather the exception that proves the rule because his decisions - especially in the early years - were always at odds with business logic and common sense. The launch of the energy drink Red Bull in Europe was prepared through a series of processes: Testing the product, obtaining food safety and market approvals, market research as part of the launch. In the end, there were almost no areas left to support the owners' ideas, as neither the food authority nor market research considered energy drinks to be a good product.
Mateschitz, however, stubbornly stuck to his original ideas and, adapting some of the intellectual property brought from Thailand to European tastes, practically single-handedly created a youthful, trendy and energetic brand Red Bull.
Red Bull Marketing Strategy - Sponsoring Sports, Athletes And Events
Red Bull global marketing strategy focuses, but it’s not limited to, sponsorships of extreme sports, athletes and events of every scale, from local to global.
The company generates massive awareness with its presence in unique first-ever events like Felix Baumgartner parachute jump and in major regular events like the Volcom Pipe Pro and the Freeride world tour.
Red Bull’s marketing strategy, however, includes more traditional marketing practices and channels like TV commercials and social media with millions of followers across its Facebook, Instagram, Twitter, LinkedIn, and Youtube tens of accounts. It runs ads across every channel, trying to appear in front of its target audience everywhere it goes.
Red Bull marketing budget
A question on a lot of people's minds is how much does red bull spend on marketing? Unfortunately, Red Bull does not share its marketing budget, but it is rumored to be around 25% of the yearly revenue. So whilst we can only guesstimate what it spends, one thing we know is that it's a lot of money and a very important focus for Red Bull.
When the product becomes the means of Red Bull advertising
Red Bull shows off the sports it sponsors
Sponsored stars are today's flesh-and-blood heroes: athletes, drivers, Formula 1 racers, and extreme athletes who stand for real achievement.
In addition to financial support, the stars receive equipment, clothing, and accessories with the Red Bull logo. And of course their advertised product, energy drinks in the required quantity. Red Bull's branded merchandise is particularly valuable because, unlike many beverage competitors, the company does not mass-produce merchandise - it is available only in the inner circle.
The international marketing activities of Red Bull are aimed primarily at young people who are attracted to and like extreme sports. The range of extreme sports targeted is very broad and includes:
- Mountain biking
- Cliff jumping
- Ice skating
- Freestyle motocross
- Break dancing.
Red Bull also uses music and video games for marketing purposes and has brought in celebrities like Eminem (through its support of the Red Bull "EmSee Battle Rap championships").
Red Bull is also known for its events, including music and art conventions. In Hungary, the company launched Red Bull Pilvaker in 2012, one of the country's most unique music and cultural projects, which commemorated the 1848 Revolution and the War of Independence with the help of outstanding contemporary art artists. The popularity of Red Bull Pilvaker is reflected in the fact that in recent years all tickets for performances at Erkel Theater, which seats almost 2,000 people, were sold out within a few days.
A photo of the Red Bull Pilvaker event
Red Bull also maintains soccer teams in Austria, Germany, the United States, and Brazil - these teams also carry the brand name, Red Bull. By associating the energy drink with these activities, the company aims to reinforce the "cool" image of the product and thus the strength of the brand. The energy drink has also created a market for over 150 additional souvenir items.
On the PlayStation 3 community platform PlayStation Home, Red Bull created a dedicated in-game island in 2009 to specifically promote the energy drink Red Bull and the racing series Red Bull Air Race. In January 2012, Red Bull also opened its first personal community area, the " Red Bull House of Skate," which featured an indoor skating rink for visitors.
Red Bull's sports sponsorship activities focus on supporting talented young athletes and helping them achieve their goals. The Red Bull Junior program in motorsports is the most prominent branch of this, but the company follows this philosophy in its support for athletes, regardless of the sport. Sebastian Vettel, Daniel Ricciardo, and Danyiil Kvjat are among the most prominent students of the Red Bull Junior program.
Formula One Red Bull Racing
The Oracle Red Bull Formula 1 racing car
Red Bull Racing is the Austrian Formula 1 team owned by the energy drink company Red Bull. The company's other team is Scuderia Toro Rosso (later Scuderia AlphaTauri).
The team's direct predecessor is the Stewart Grand Prix, founded in 1997 by Jackie Stewart. In late 1999, it was sold to the Ford Motor Company, which raced it under the name Jaguar Racing. In 2004, Ford decided to sell the unsuccessful but costly team. It was bought by Dietrich Mateschitz, owner of the energy drink company Red Bull. The team was then able to take to the grid at the 2005 Australian Grand Prix as the successor to Jaguar, now in the blue and silver colors of Red Bull energy drinks.
Red Bull was no stranger to motorsport's premier class, having previously sponsored Sauber, Arrows, and its predecessor Jaguar. Having started its own team, Red Bull naturally terminated its contract with Sauber (the Arrows had already ceased to exist in 2002). The drinks company has also appeared in the Formula 3000 series and its successor, GP2, and has a European talent scouting program called Red Bull Junior Team. Later Formula 1 drivers have also emerged from the program, with Enrique Bernoldi, Christian Klien, Patrick Friesacher, Vitantonio Liuzzi, and Scott Speed all having raced in the premier class.
RBR enjoyed immediate success in its first season in 2005, thanks to two of its drivers, Coulthard and Klien. The 2005 Red Bull RB1 was based on the already papered Jaguar R6. The team used the weakest Cosworth engines and Michelin tyres throughout the season. The team exceeded expectations to finish seventh among constructors with 34 points.
For the 2006 season, Red Bull Racing changed engine suppliers and used Ferrari V8 power units for the season. Adrian Newey, who was signed from McLaren in November 2005, was appointed as chief designer. Newey did not play a major role in the design of the RB2, which was almost complete by then, and instead started work on the 2007 model. By 2007, the Adrian Newey-designed RB3 was finally completed, with the Renault engine replacing Ferrari's. Mid-season saw the arrival of Geoff Willis, who had worked as technical director at Williams and BAR and then at Honda. Following the departure of Michelin, Red Bull Racing naturally started on Bridgestone tyres. On the racing front, David Coulthard remained with the team, while Mark Webber took the other seat. Webber left the predecessor Jaguar after 2004 and joined the energy drinkers after two disappointing seasons at Williams. The team finished 5th in the constructors' championship with McLaren eliminated and 24 points, David Coulthard 10th with 14 points, and Mark Webber 12th with 10 points.
For 2009, the retiring David Coulthard was replaced by Sebastian Vettel from Toro Rosso, while Mark Webber remained with the team. The team ended the year with a double victory at the Abu Dhabi Grand Prix. Vettel finished second in the individual championship with 84 points, 11 behind world champion Button. The team finished second in the constructors' championship, 18.5 points behind Brawn GP. From 2010-13, RBR enjoyed a truly golden era, its World Championship victories making it unchallenged.
The 2014-20 Formula 1 era brought less success for Red Bull (regularly replaced by Mercedes in first place), but remained a worthy rival to Ferrari. In the 2021 season, with a Honda engine, they continue to pile on the surprises, and their fans are predicting the resurrection of RBR in an ever-strengthening F1 team.
Red Bull Ring
The Red Bull Ring motorsport race track in Spielberg, Austria
The Red Bull Ring (originally called Österreichring, between 1997 and 2003 A1-Ring) is an Austrian race track in Styria. The circuit itself is located in the territory of the municipality of Spielberg, but its access roads are in the immediate vicinity of the municipality of Zeltweg, which is why it is often referred to as the "Zeltweg circuit". The track was renovated in 2011 with financial support from the energy drink manufacturer Red Bull to make it suitable for Formula 1 again and will be back on the calendar for the 2014 season.
Red Bull Racing has won at its home track four times since its inception.
Red Bull sponsoring other sports
- In 2006, Red Bull announced they would sponsor the NASCAR Team Red Bull. Lowe's Motor Speedway was their first stop in the Nextel Cup Series. The team was shut down in December 2011 and its assets were acquired by BK Racing.
- A major sponsor of Repsol Honda, Red Bull is the title sponsor of Red Bull KTM Factory Racing and Red Bull Honda World Superbike Team.
- Football has also been a huge part of the company's activities. The Austrian club SV Austria Salzburg was purchased by Red Bull on 6 April 2005, and it was renamed Red Bull Salzburg, a move that has been heavily criticized by supporters' groups in Austria and across Europe. FC Liefering has also been purchased as Salzburg's feeder club.
- Since 2000, the company has owned the Salzburg team in the Austrian Hockey League, now named Red Bull Salzburg. Throughout 2012 and 2013, Red Bull became the team's title sponsor and then bought the club outright.
- A new League of Legends team was formed by Red Bull in 2017, Red Bulls, which competed in the European League of Legends Challenger Series from 2017 until it folded in 2018. Several Red Bull sponsored fighting game players to compete in Tekken and Street Fighter games, as well as The International winner OG, who competes in Dota 2.
Felix Baumgartner parachute jump from space
Baumgartner and his team saw a mission in the world record attempt, for which the athlete had been preparing since 2005. The jump offered the opportunity to collect data to improve life-saving for astronauts and pilots or potential space tourists and to study the behavior of the human body in the stratosphere. It is critical to make the return from space safe for space crews, as they may have to eject from the aircraft and it is life-threatening to enter the stratosphere in an unprepared space suit in such an emergency.
The first record attempt was scheduled for Oct. 9, 2012, at 11:42 a.m. local time, but a strong wind prevented the 834,497-cubic-meter balloon from inflating safely, as it was twisted by the wind. Wind gusts of up to 40 km/h were measured at the top of the balloon, although the wind speed was not supposed to exceed 5 km/h.
The next attempt was therefore postponed until Sunday, October 14 - a postponement that tested everyone's patience but was the only way to ensure safety. At the press conference after the jump, FAI record holder Brian Utleya announced that Baumgartner had reached a speed of 1342.8 kilometers per hour (Mach 1.24), breaking the speed of sound. The pilot came down from a height of 39,045 meters in 4 minutes and 20 seconds, covering 36,529 meters in freefall.
Red Bull, like Ferrari , has found in sports the marketing platform that best reaches its audience. However, the company has not limited its sponsorship activities to motorsports but supports all sports from ice hockey to extreme sports. The company invests most of its marketing budget in financing the Red Bull Racing Formula 1 team and maintaining the racetrack at the Red Bull Ring.
Red Bull also supports music as a nightlife player and various events aimed at partygoers.
Final thoughts and key takeaways of Red Bull’s story
Who owns red bull today.
Red Bull GmbH is a private company with its headquarters in Salzburg, Austria. Two billionaires own Red bull:
- Thai businessman Chalerm Yoovidhya, who owns the majority of the company sitting at 51%. His net worth as of 2021 is estimated at $24.5 billion.
- Austrian businessman Dietrich Mateschitz, who owns 49% of the rest of the company. His net worth as of 2022 is estimated at $26 billion.
Growth by numbers
According to Forbes , the brand that gives you wings sold 6.8 billion cans in 171 countries in 2018. Among the fastest-growing markets were India (+30%), Brazil (+22%), and Eastern Europe (+22%). Using a marketing strategy built around extreme events, Red Bull has sold a total of 75 billion cans since 1987.
Key takeaways from Red Bull's story:
- The founders’ agility: Red Bull would certainly not look the way it does today if the founders - a Thai pharmaceutical entrepreneur and an Austrian marketing manager - had not had a clear vision for the brand right from the start.
- Product portfolio: The soft drinks market is characterized by the dominance of aggregators (e.g. Coca Cola, which contrary to popular belief does not only produce Coke). To counter this trend, Red Bull has from the beginning thought in terms of a small product portfolio and focused on the energy drink market rather than a diversified range. It was not an easy task, as it was a pioneer in the field at the time of its launch - no other energy drink existed in Europe. The company invested a lot of energy in educating the market, which at first did not welcome this unique product, but now it has become an integral part of it.
- Marketing : Instead of investing millions of dollars in television, radio, and Internet advertising, Red Bull took a different approach from the beginning. Although it was initially forced to do so because many countries did not officially license the energy drink, word of mouth is still the strongest element in the company's marketing. The founders succeeded by identifying the two areas where there was a real need for energy drinks and focusing all marketing activities on them.
- Sponsorship : Red Bull quickly found its audience among athletes as well as party-goers, so it's no wonder that the company turned to sports sponsorships. One of Red Bull's main marketing weapons has been its own Formula 1 team, as well as sponsorship of a number of ball and extreme sports.
The companies more than 30-year history is a powerful story of challenges, of working against the wind, of the founders' strong vision, of defying business logic, and of perseverance. Even though the Austrian entrepreneur Dietrich Mateschitz has made countless decisions that would not have worked for others and that go against everything that business can teach us, the success of his company is beyond question.
If there is anything we can learn from him, it is surely his belief in his team and his own instinct to put an unknown product on the world map. Red Bull now inspires millions of people a year, its sales are skyrocketing (based on the sales statistics, every person on earth could drink one Red Bull), and its marketing efforts are leading the way for many other companies in the industry.
Red Bull Marketing Strategy Case Study
Marketing, management case study of red bull.
This report is developed in the form of a case study red bull. The case study is mainly aimed to examine the strategic business position of a company with the help of a case. For such purpose, Red Bull which is an energy drink producing company has been selected as a case study. The case study of Red Bull has provided a clear overview of the current strategic position of the company in the energy drink market.
As per the marketing case study of Red Bull, the company has been enjoying great success with the help of the selling non-alcoholic carbonated energy drinks. For the establishment of the worldwide forerunner of the energy drink category, the company has made great sales of about $4.7 billion on annual basis. The company, since its introduction in the United States during 1997 has been retaining the leading position in the carbonated soft drink industry (The Red Bull cans, 2014).
The company has been holding a good market share at the present date. With the passage of time, several companies have been entered into the market of soft drinks which are sharing the lucrative market of Red Bull. The dominant market position hold by Red Bull has been challenged by some of the well-established business organizations. For instance; Hensen’s Natural Company the produced Monster Energy Drink and Rockstar Incorporation with produces beverages with the same name, has been offering the beverages of the same category at the same prices.
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In addition to this, the other soft drink companies including Coca-Cola and PepsiCo have also been posing a significant degree of competition to Red Bull through increasing some share in the energy drink sphere. In order to have a significant market position and maintaining its market share the company has been producing its energy drink products with high quality and meeting all the standards of sustainability. The company has been making significant efforts to have minimization of its business impact on the immediate environment because, for the production and distribution of energy drink products, the company has been using energy (The Red Bull cans, 2014). In order to have the maintenance of its supply chain practices, Red Bull has been implementing several effective techniques and using its available resource in an optimum way. In order to minimize its carbon footprints, Red Bull has been following the “Wall to Wall” production approach, and with the help of this technique, the company has become enabled to save the high rate of transportation cost. The company has increased the use of renewable energy resources to more than 80%. With the help of the “Wall to Wall” production approach, the company has made its production process with minimum use of carbon dioxide (Wall-to-Wall production, 2014). Red Bull has been significantly managing its market share in the UK and trying to maintain its sales to a good level in the recent decade. Despite this, the stiff competition posed by other energy drink companies and the decline in the market share, and the impact of the production process on the immediate green environment are the key strategic issues that company has been facing on regular basis to a certain extent. Both in the US market and the UK market, the energy drink markets have been growing up at a rapid pace and thus it is a challenging situation for Red Bull to maintain its leadership position in the long run. In this way, this case study of Red Bull represents that Red Bull which is a leading business organization in the production of the energy drink products has to maintain its strategic leading position in the international market with adequate approaches to deal with the competitive forces, shared market, and sustainable business practices.
Defining the Business Issue: 600
The case study that has been presented above of the Red Bull company provides a clear picture of the strategic position of the company in the immediate market place. The case study on one hand reflects that Red Bull has been enjoying a leading business position in the immediate market has been having significant sales in the immediate market. However, the case study has also shown that maintenance of the leading market position in the global energy drink industry the company has to deal with some significant strategic issues. The three key issues that are critical for the company to maintain its market position are discussed below: Competitive Force from Other Key Players: Red Bull has been offering its energy drink products to a good level, yet there are several other existing key players in the marketplace of the US and UK including Monster, Rockstar, PepsiCo, and Coca-Cola. All these key market players have been posing stiff competition to the company and keeping its leading position among all these players is a key challenge for the company (The Red Bull cans. 2014). Market Share Cutting: The other key players that some exist in the marketplace of energy drink products have been sharing a significant amount of market share of Red Bull. In the UK market, Rockstar and Monster having to share a key volume of the market share of Red Bull. From the below graph it has been depicted that Monster has been sharing about 39% of the market share of the energy drink product, while that of Rockstar has been sharing 10% of the market share of the energy drink products and Red Bull has been sharing 43% of the market share. The other company including PepsiCo and Coca-Cola are also sharing a good amount of market of the company (Top Selling Energy Drink Brands. 2014). (Source: Top Selling Energy Drink Brands. 2014) Maintenance of the Sustainable Business Environment: From the case study, it is clear that minimizing the impact of the production process of Red Bull on the immediate green environment is a critical issue for the company as it has to make significant efforts to reduce carbon emission and minimizing carbon footprints of its production process. From case analysis three key questions are developed for these three issues as under: Question 1: How critical is the challenge of competitive force faced by Red Bull in the global energy drink industry? Question 2: What measures should Red Bull undertake to secure its market from companies sharing its market share to a significant level? Question 3: How essential is it for Red Bull to maintain sustainable and socially responsible production processes?
The presented case of Red bull has revealed some of the critical strategic issues faced by the company. These strategic issues can be analyzed with the application of three different strategic models and framework as below: SWOT Analysis: The issue related to the company’s inability to counter the intense competition can be reflected with the help of the SWOT Framework. The SWOT framework for the company can be applied as below: 1. Strength: Red Bull has been maintaining a strong brand image in the global market place and has been attaining a competitive advantage over other key players. The Brand Image and promotional strategies of the company have given it recognition as a synonym of energy drink product (The powerful sales strategy behind red bull 2014). 2. Weakness: The product portfolio of the company is weaker as compared to other soft drink companies as Red Bull holds a limited range of products. The competitors of the company are offering varied products with a distinct flavor. The products of the company contain Caffeine and Taurin which are quite vulnerable to industry regulations. The company does not have sufficient patents of its products (Giving wings to people and ideas 2014) 3. Opportunities: The new emerging markets at the global level are facilitating Red Bull with newer opportunities to establish new production facilities. The company has sponsorship in the new market of the US and the UK. Red Bull has established its manufacturing units in the Asian subcontinent, which is a huge business opportunity for the company to expand its business (The powerful sales strategy behind red bull 2014). Threat: the company has been facing various constrain in different geographical markets. The market position of Monster in the UK market is a great threat to securing its market share by Red Bull. The promotional activities of the company are as effective in mature markets like the UK. Increasing health concerns among customers and huge price competition in the market are also some major threatening factors in the market for the company (The Red Bull cans. 2014).
Porter’s Five Force Analysis:
This model has been applied to evaluate the competitive position of Red Bull in the Emery Drink Industry. This analysis can be done as below: 1. The threat of New Entrants: The threat of new entrants in the global energy drink industry is quite high as this industry is quite lucrative for new business investors (Henry, 2011). However, the well-established position of Red Bull has this threat only to a certain level as it holds a leading market position in the industry ((Boone and Kurtz, 2014). 2. Threat of Substitutes There is a high threat of substitute beverage and drink products in the external business environment of the soft drink industry. The existence of these substitute products can harm the market growth of Red Bull’s energy drink products. The company needs to offer a wider range of energy drink products to win competitive advantages over these products. 3. Bargaining Power of Buyers The customers in the energy drink industry have their specific requirements from the products they consume regularly. The brand image of the energy drink products is a key factor that induces the customer to switch over other products and there are already several options of beverage products for the customers, and hence the bargaining power of customers in the industry is quite high (Boone and Kurtz, 2014). 4. Bargaining Power of Suppliers The Bargaining power of suppliers in the energy drink industry is low as there are several suppliers who provide raw material and other services to energy drink producing companies. In order to use specific ingredients in its energy drink products, the company needs to pay high prices to the suppliers (Ma, 2014). 5. Rivalries The threat of rivalry is quite in the energy drink industry as there are available several competitors in this industry at a global level. The main competitors of the company are PepsiCo, Monster, Rockstar, and Burn (Berg and Pietersma, 2014). The competitors pose a great threat to the market share and leading position of the company in this industry (The Company behind the can. 2014).
For the purpose of analyzing the company’s strategic orientation in the new and existing market place, there is a need of having a thorough analysis of the related market place. In this regard, the PESTLE framework can be considered quite crucial. This framework reflects some crucial factors related to the external marketing environment. Some of the crucial external marketing environment can be elaborated as below: 1. Political factor: Political Factors of the country direct impact on the business position of the companies operating in that country. In this regard, the political stability of major economies including the US and the UK has a direct impact on Red Bull’s business. Food and Beverage regulations are very strict in the UK and even customers in the UK are quite aware of their health aspects. The Use of Caffeine has also been banned as an ingredient in the production of energy drinks products by the UK government. The government of the UK has been controlling sales of energy drinks through monitoring the use of harmful ingredients in the product of energy drinks ((Henry, 2011). Thus, Political conditions are very essential to be followed by the company to maintain its sustainable business position. 2. Economic environment: The global Soft drink industry has a significant contribution to Energy drink companies in the economic growth of the related country. In the year 2009-2010, the growth of the UK’s economy was 7%, which help Red Bull to earn a profit amount of US$ 30 Billion. The company has also held a leading market position with its sales growth in the UK market in the year 2012 when the company earned £ 2145.46 Billon (The powerful sales strategy behind the red bull, 2014). In this way, the economic conditions of an international market are very important for the company to maintain its sustainable position in the global Energy drink Industry. 3. Social Environment: There are some critical social factors that can be considered quite vital for the company. In the context of Red Bull, it can be considered that nowadays, people have become quite attentive towards their health and social prestige. Energy drink products have positive and high social values. The products offered by the company are considered a symbol of social prestige and status symbol (The powerful sales strategy behind the red bull, 2014). In this regard, the positive social perspective of the people regarding soft and energy products has created a positive and opportunistic business environment for Red Bull in the long run. However, the increasing concern of people on the health and related aspects also enhances the pressure over the company to make changes in its product offerings (Henry, 2011).
4. Technological factors: In order to attain a sustainable position, all the companies in the energy drink industry have been adopting new and advanced technologies. In order to improve its production process, Red Bull also needs to implement highly advanced technologies to survive in the changing competitive business environment. the company makes use of ‘Wall to Wall’ production technology for developing and manufacturing of freeze bottle (Wall-to-Wall production, 2014). 5. Legal factors: There are some critical legal implications that have made the beverage and energy drink industry more regulated in the existing time period. Within the country, there are certain legal and ethical guidelines for the purpose of ensuring a healthy composition of energy drink products. The legal authorities of the county have directly banned some crucial ingredients such as Caffeine and Taurin (Dietrich Mateschitz, 2014). In addition to this, from the perspective of environment safety also there are several laws and legal guidelines that affect the company’s manufacturing, packaging, and distribution process in the most effective manner. 6. Environmental Factors: Along with other external business environmental factors, environmental concern among people can also be counted as one of the critical business factor that can affect the operations of the company in the most effective manner. Growing concern towards environmental safety among people has induced the company to adopt a green production process. In the packaging of the product also some crucial changes in the company’s operational process can be seen. For instance, the company has started to use recyclable can and packaging material for making the product more environmentally friendly (The Company behind the can. 2014). Positing Map: In order to reveal the strategic position of the company in the market place in terms of the product’s perceived quality and price range, the Position Map framework can be used in the most explicit manner ((The Company behind the can. 2014). As per this framework, there is a need of exploring the position of competitors in the market and measure the relative position of the organization in the existing market. The specific position map for Red Bull in the market can be presented as below: In this way, on the basis of the analysis of different strategic models in the section, it can be cleared that for the company it is essential to the company to address some of the strategic threats that can harm the overall sustainability of the company in existing highly competitive marketplace.
On the basis of the analysis of the case and business issues with the help of a different strategic models, it can be considered that different business issues faced by the company are quite strategic by nature and for the business organization to undertake some crucial strategic direction. In this regard some specific business and strategic directions for the company can be presented as below:
- In order to overcome the threat of competition, Red Bull should make the immediate patent of its products in order to secure the product’s ideas to a significant level. With such a process, the company would be enabled to keep its production process unique and differentiated in the new market. The company in order to win the competition, the company should cater to new untapped markets so that it can have a balanced market position and extra earning from the varied new markets (Berg and Pietersma, 2014). With such a process the company will be able to reduce the threat of competitive force on the part of the rivalries to a certain extent.
- In order to keep its market share stable and increased, Red Bull should undertake some significant measures. The Company at present has a very limited product portfolio due to which the other companies have been sharing and cutting its market to a certain extent. For such purpose, the company should extend its product portfolio by increasing its product line to a certain extent. With such an initiation the new product of the company will also help it to attract new customers and improving the sales ratio for the existing customers. The new products will also help the company to cater to new emerging international markets (Codita, 2011). This approach will help the company to secure and improve its market share in the near future to a significant level.
- In order to secure its sustainable position and to overcome the impact of its business process on the immediate environment, the company should adopt new and advanced technologies through which it can reduce carbon emission from its manufacturing and production plans. The company should also use renewable resources in its production and packing process in order to minimize the waste from its production process which harms the natural environment and even affect the health aspect of the immediate community. In addition to this,
to maintain its sustainable business position the company should also follow all the government regulations very strictly so that it can maintain a sustainable legal business position through having abidance with all the production and manufacturing regulations set by the governments of the related countries (Dent, 2011). With such a process, the company can deal with the critical issue of maintaining and securing its sustainable business position in the long run. In this way, all these proposed strategic directions for Red Bull’s future business are very much supportive and significant for the future business of the company to proceed without any strategic issues or problems. Though the existing strategic issues identified from the case study are not much critical for the company they can be prospective issues for the company in the near future.
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34 Case Study: Red Bull Wins the Extreme Niche
Red Bull is an Austria-based company started in 1987 by Dietrich Mateschitz that sells one product: an energy drink containing taurine (an amino acid) that’s sold in a slim, silver-coloured 8.3-ounce can. The drink has been an enormous hit with the company’s target youth segment around the globe. In the year 2018, Red Bull boasted sales of $1.06 billion USD in the United States alone  , and has held the majority of the energy-drink market share for years, with a 35.3% market share in 2019 (Monster Energy, their closest competitor, held 25.4%).  From Stanford University in California to the beaches of Australia and Thailand, Red Bull has managed to maintain its hip, cool image, with virtually no mass-market advertising.
Red Bull’s Targeted Approach to Marketing
“Red Bull. It gives you wings.” Over the years, Red Bull has organized extreme sports events (like cliff diving in Hawaii and skateboarding in San Francisco), parties, and even music festivals to reinforce the brand’s extreme, on-the-edge image. In 2012, they sponsored Felix Baumgartner’s record-setting freefall from 128,000 feet:
(Note that the following video has limited narration. Access audio description using the widget below the video.)
You can view the transcript for Felix “Baumgartner’s supersonic freefall from 128k’ – Mission Highlights” . (opens in new window)
Their grass-roots approach to reaching the youth market worked: “In terms of attracting new customers and enhancing consumer loyalty, Red Bull has a more effective branding campaign than Coke or Pepsi,” said Nancy F. Koehn, author of Brand New: How Entrepreneurs Earned Consumers’ Trust from Wedgwood to Dell . Red Bull’s success has also gained attention (and concern) among beverage-industry giants, and some have tried to follow its lead: For a time Coke ran a stealth marketing campaign, packaging its cola in a slim can reminiscent of Red Bull and offering it to customers in trendy bars and clubs in New York City.
- “Red Bull Energy Drink Sales U.S., 2015–2018.” Statista. (September 25, 2019). https://www.statista.com/statistics/558082/us-sales-of-red-bull-energy-drinks/ . ↵
- "Energy drink market share in the US in 2019." Statista. (2019, September 25). https://www.statista.com/statistics/306864/market-share-of-leading-energy-drink-brands-in-the-us-based-on-case-volume-sales/. ↵
A Great Marketing Textbook Copyright © 2022 by Curtis Brown, Jr. is licensed under a Creative Commons Attribution 4.0 International License , except where otherwise noted.