Visit: Red Bull
A look at a key feature of Red Bull's business
Some observers say that Red Bull's branding is revolutionary, calling it an 'anti-brand' strategy.The company faced additional problems in the UK where there was already an established drink that was specifically taken as a post-illness beverage. Generations of young Britons had drunk Lucozade as they recovered from colds or flu, so Red Bull had to promote its brand differently.
The firm avoided usual methods of marketing, relying more on what is called 'buzz marketing' or word-of-mouth. A brand image was created and cultivated which associated the drink with youth culture and extreme and adventure-related sports, such as motor sports, mountain biking, snowboarding and dance music. Red Bull's target consumer segment began to adopt nicknames for the product such as 'liquid cocaine' or 'speed in a can', thus spreading its 'left-field' appeal.
Image: Red Bull associates its brand with youth culture and extreme and adventure-related sports - one example of this is its Driver Search programme. The aim of the competition is 'to find, test and support budding young American racing talent'. Copyright: Sutton Images, reproduced by kind permission of Red Bull
Red Bull then worked to ensure that their brand was visible on the street:
- Using pick-up trucks as mobile displays, painted blue and silver with a giant can of the drink mounted on top of the vehicle
- Designed to be eye-catching, these devices were aimed at promoting the red bull brand as youthful and slightly 'off-the-wall'
- Cans of the drink were also given out free to people on the street who had been identified as being in need of energy
- Red Bull was given to club DJs, empty cans would also be left on tables in hot spots such as trendy bars, clubs and pubs
The company also set about promoting the Red Bull brand directly to Generation Y, the so-called 'millennials': people born after 1981 who were believed to be cynical of traditional marketing strategies. Part of this idea involved recruiting 'student brand managers' who would be used to promote Red Bull on university campuses. These students would be encouraged to throw parties (as if encouragement was needed!) at which cases of Red Bull would be distributed. The brand managers would then report back to the company, giving the firm a low cost form of market research data.
The use of this kind of marketing strategy has become known as 'viral' marketing. It is as if a company sees no need for traditional informative or persuasive communications, rather in Red Bull's case it used the youth 'underground' to spread the popularity of the drink. So the firm would rather restrict the drink's supply and not advertise it, expecting that growing numbers of target consumers 'catch the bug' and its reputation spreads. Red Bull was a spectacularly successful example of the strategy working even though as we see later, its branding was aided by state intervention in countries like France and Denmark.
By 2004, the worldwide energy drinks market was worth an estimated £1.6 billion; Red Bull had achieved a clear market leading position, with a 70% market share. The lure of fast-growing profits in this market brought many competitors into the functional foods sector, where health and energy drinks have seen sales double every year since their introduction. Many competitors have tried to employ similar marketing strategies and tactics in order to grab sales from the market leader. Not all have been successful, of course.
When a firm tried to launch its own energy drink in 2002, it tried to target 16-24 year olds with a poster campaign featuring barely clothed young people exhibiting wounds to their bodies. As the drink was called 'Shark', the relevance of the injuries seemed clear. However, following complaints, the Advertising Standards Authority (ASA) banned the posters, as the campaign appeared to endorse sexual violence. More on this decision can be found on the ASA Web site.
The problem that Red Bull now faces is how to build on its incredible sales growth, as it has become a mature brand within a saturated market. Among the challenges that Red Bull faces, the following are some of the most serious:
- The loss of its original consumer base, as the 'millennials' become working adults. How should the firm attract a new group of 16 year old consumers?
- Health concerns that have emerged in several countries over problems associated with high intake of caffeine. Red Bull was banned in France and Denmark following the publication of these concerns. It is classified as a medicine in Norway and until recently could only be bought in pharmacies in Japan. As the health and energy soft drinks market has reached maturity, Red Bull is concerned that it is unable to target mass consumption in these countries.
- Being over-reliant on a single brand. Until 2003, the company only produced one version of Red Bull. A sugar-free version was introduced in that year.
- The mature market for energy drinks has attracted some of the global firms, such as Coca Cola, Pepsi as well as Asda/Wal-Mart, with their own brands seeking to gain a competitive advantage over the market leader