4 Red Bull

Building Brand Equity in

Non‐ Traditional Ways

Group 3Amit Chandnani

Apurv NaikMandakini Singh

Rohit SudShailendra Sharma

Sunita Rupani

Flow of the presentationIntroduction

Brand Identity prism

Target Market

Positioning

Launch of the product

Brand Equity

Marketing programs

CBBE

Answering questions given at the end of the case

Introduction

• Red bull GmBH‐ Founded in 1985 by Dietrich Mateschitz

• Launched in Austria in 1987: Slogan “Red Bull gives you Wiiings”

• 1997: available in 25 global markets

• 2004: annual sales of 2 billion cans in more than 120 countries

• Only One SKU: Silver can – 250 ml (8.3 oz.)

• Strong Competition and regulatory roadblocks not able to dislodge from market leader position

Kapferer’s Brand Identity Prism

Culture

Club-going culture,slightly off-the-track

logo –an oriental theme250 ml canslender silver & blue cansweet & carbonated‘medicinal taste’

InnovativeNon-conformistYouthfulTrying-out-new things

improves endurance, alertness, concentration, and vitalized body and mind

DaringAdventurousIndividualistic

Self Image

Ima

Innovativeyouthful and slightly 'off-the-wall'Non-conformistUn-predictable

Image of the Sender

ge of the Receiver

Target Market

• Targeting broad range of consumers based on their need of Stimulating drink.

• Mentally fatigued• Physically fatigued• Both

As a result broad consumers categories• Students• Drivers• Clubbers• Business People• Sports People

Everything flows from the positioning…

Positioning

“Revitalizes body and mind”

• Positioning based on functional benefits

• Invented the new category: Energy Drink

Positioning Red Bull

1. Category Establishment

• New category formation

• Emphasis on Functional benefits – Functional Food

2. POP and POD

• Frame of reference – Cold drink

• POP ‐ Sweet and carbonated like a cola

• POD – Energy drink, Caffeine content high so good stimulant, taurine – detoxifying agent

3. Communicating POP and POD• Word of mouth• Opinion Leaders• Buzz marketing• Event sponsorships• Athlete endorsers• Sampling programs• Point of purchase marketing• Use of electronic media

4. Sustaining POP and POD

• Protecting sources of Brand Equity• Fortifying versus leveraging• Fine Tuning the supporting Marketing Program• Expanding Brand awareness• Improving Brand Image• Entering New markets

Product

• Product (250 ml can)• Caffeine (80 mg)

• Taurine (amino acid, detoxifying agent (DA), MT)

• Glucuronolactone (Metabolism Transmitter (MT), DA)

• Properties claimed by Red Bull• Improves physical endurance

• Stimulates metabolism, eliminates waste substances

• Improves overall feeling of well being

• Improves reaction speed and concentration

• Increase mental alertness

Product

• Package• Silver and blue 250 ml can

• Red Bull logo

• “Energy Drink” under the logo to promote products benefits

• Flavor• Intended to communicate : “Functional energy Drink”

• Sweet and carbonated + medicinal taste = more than mere refreshment

Price

Premium Pricing Strategy• 10% premium on the most expensive product

• Reinforce energy drink positioning (Consumer Perception)

Launch in Austria• New category: Functional food (nutraceuticals)

• It has medical benefits beyond a dietary product but also contains food properties

• Reams of scientific support: product documentation was more that 3000 pages

• Strategy: make product available in the right places at the right time with the right message

• Product Trial : Keystone of Marketing strategy

• ATL was minimal, mainly word of mouth and Product trial

• 1987‐1991: net sales grew from $ 0.7 to $ 10 million

Launch in UK• Significant changes in Marketing Strategy

• Marketed Red Bull as a Sport drink not a Stimulated drink• Did not pursue word of mouth instead sold via the largest beverage channel

• Focused on bill boards rather than electronic media

• Red bull: A failure in UK

• Did not meet customer expectation of a sports drink• They were not able to create good consumer base as discovery phase was eliminated

• Inconsistent slogan: “Never under estimate what a Red Bull can do for you”

• Advertising a smart drink needed movement and dialog

Strategic changes in UK• Repositioned Red Bull as a Stimulation drink

• Word “energy” on the can replaced by “stimulation”

• Traditional word of mouth strategy

• Use of electronic media and change of slogan

• 1997‐2000: Share rose from 2 % to 48 %

• Sales increased from 3.2 (1995) million cans to 290 millions (2000)

Launch in US• Cell approach: divide market into geographic segments

• Started from Santa Cruz, California

• Targeted sport enthusiasts and university students

• After a success in Santa Cruz Red Bull marches on..

• San Francisco – Venice Beach – Santa Monica etc.

Launch in US• In cells: targeted trendy and active people, places like high end

night clubs, bars, exclusive health clubs, gyms etc.

• Then increased distribution to down market: restaurants, grocerystores, convenience stores etc.

• Recruited students brand managers for on – campus promotion

• Sampling program: Red Bull branded trucks and cars with team of “customer educators”

• Event Marketing

• Red Bull Cliff Diving, Hawaii• Snow thrill of Alaska winter sports event• Red Bull wings over Aspen Hang‐gliding event• Red Bull Rock n Air festival, a day of extreme sports, demonstration and progressive live music

Sources of Red Bull’s Brand Equity

• Brand Elements

• Red Bull brand name• Logo• Slogan "Red Bull gives you wiiings"• Distinctive 250ml slender silver and blue can

• Marketing Programs to build Brand Equity

• Event Marketing: Unique events like Red Bull Soapbox Race etc, that reinforced Red Bull's visibility and positioning

• Sports Marketing: Establish credibility among action sports athletes, and then provide sponsorship to these athletes

• Point of purchase Marketing: Branded refrigerated sales units / renting space in existing store refrigerators

Sources of Red Bull’s Brand Equity

• Product Strategy• Perceived premium product

• Premium pricing strategy

• Product placement: empty cans in pubs

• Channel strategy• Pull strategy, by promoting Red Bull among opinion leaders

• Advertising mainly through word of mouth

Red Bull’s Marketing Programs

• Market Entry strategy (Seeding Program)

• Targeting cultural elite (clubs, discos, bars)

• Opinion leaders (sports athletes, entertainment celebrities)

• Move down the pyramid through word of mouth

• Keeping availability limited which contributed to Brand cachet

• Expanding to nearby less price sensitive locations

• Reaching Mass market via supermarkets


• Developing Red Bull Mystique

• Creating a new food category

• Unusual ingredients like “taurine” highlighted for benefits

• Creating awareness before launching the product in the market

• Perceived as a Beer, liquor, extreme energy drink etc. all these rumors fueled the gray markets and created a buzz

• Negative rumors were tackled by press conferences and positive rumors were leveraged.


• Pre‐marketing

• Sponsoring events where Red Bull was not available (Snowthrill of Chamonix‐ Ski comp. in France)

• Exported television productions before entering the market (Colombian athlete sponsored by RB in a televised RB event will be broadcasted in Colombia)

Aim:“To be recognized as the pre‐eminent brand, even if Red Bull is not present there”


• Advertising

• Adult cartoon ads featured intelligent dialogues

Reinforce on benefits not taste

• Dracula adAgain emphasizes on the functional part

• Tagline: Red Bull gives you wiingsVery much in sink with the amount of energy Red Bull provides

• Consistency in different marketsThe cartoons speak different language but same words


• Sampling

• Product Trial

• At right places, right time (concerts, parties, festivals, sporting events, high way rest for drivers, where people need an energy boost)

• Encourage individuals to drink full can for maximum benefit and explain them the benefits, the first hand experience proved to be a strong tool

• This supported word of mouth by building up a platform


• Event Marketing

• Invented events (Red Bull Owned events)– It controlled all aspects like name, logo, promotion and media production

– Red Bull Soapbox Race– Red Bull Flugtag

• Brought product to existing events– Targeted different independent events– Reinforced Red Bull’s positioning as an independent, stimulating beverage

– Do the best things for automatic media intrusion

World Stunt Awards

Red Bull sponsors the awards

Subtle visual analogy between the statue's wings and Red Bull's slogan "Gives you wiiings"


• Sports Marketing

• Sponsored individual athletesSurfing, snowboarding, skydiving, skateboarding, rock climbing ( non‐main stream athletic endeavors)This helped in projecting personality as innovative, individual, non‐conformist, unpredictable etc.Kite surfing (great example of synthetic involvement in sport)

• Sponsorship deals‐ print logos on t‐shirts• Sign influential and leading international athletes• Acquired own Formula 1 Jaguar team from Ford motor company • Sponsor American motor sports –NASCAR (car no. 83 representing 8.3 ounces of Red bull can capacity)

• Buying and renaming a soccer team – New York Red Bulls


• Point of Purchase

• Primary tool was branded glass refrigerated sales units

• Ensured prominent display of logo

• Ensured prominent location in retail chain

• Hired teams of delivery van drivers for stocking Red Bull

• Used highly visible aluminum window sticker to indicate availability

Contribution of Marketing to Brand Equity

• Build on personality by sports marketing• Increase awareness by event marketing• Increase recall by creating category• Build on brand knowledge and image by WOM and using opinion

leaders• Sampling ensured structured way of educating the consumer• Advertising emphasized on functional benefits and strengthen the

Brand image• Point of Purchase ensured Brand awareness

“All the marketing activities were in sync with each other and helped to develop an consistent Brand image”

CBBE

SalienceSalience

Performance Imagery

Judgments Feelings

Resonance

• High market share• Brand loyalty and

awareness

•Rejuvenated•High self esteem•Culturally elite

• Personalities: mysterious energetic, non conformist,

Individual, youthful •Aspirational

•High quality product•Energy benefits

•Brand credibility ‐sportspersons

•High quality product•Energy benefits

•Brand credibility ‐sportspersons

•Physical endurance•Mental alertness

•Reaction speed and concentration

•Physical endurance•Mental alertness

•Reaction speed and concentration

•Energizing, stimulating drink

•Energizing, stimulating drink

How can Red Bull maintain its marketing momentum? Would you recommend that Red Bull develop any brand extensions? If so, what would they be? Would you use the same marketing strategy?

Question 3

Consumer response to past Marketing

Activities

Consumer response to current Marketing

Activities

Consumer response to future Marketing

Activities

Brand Knowledge

Changed Brand Knowledge

Image: Best in class, Energy Drink

Increased SalesIncreased awareness by WOM

Followed the same marketing activities

Reinforcing the same imageMaintained consistency

Identifying changing consumer needsDeciding 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 SugarfreeLeveraged 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 Sugarfree (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..

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

Evaluate Red Bull’s move into Herbal Teas, Fast Food chains, and magazines. Does it make sense for the company to expand into these areas? What are the potential benefits and dangers?

Question 4

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

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

Inner Core

Line Extension

Red Bull Sugarfree

Extension Zone

Spontaneous associations

Outer core

Latent Potential

No go areaThreats to Brand’s capital assets

Red Bull Energy

Snack Bar

Red Bulletin

Red Bull Herbal Tea

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 change…

….How effective is Red Bull at advertising these varied groups?

Question 5

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

4 Red Bull

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