Abstract

The Red Bull energy drink was launched in Austria in 1987, by Dietrich Mateschitz. He claimed to have experienced the invigorating properties of a popular Thai energy drink, Krating Daeng, on a trip to Thailand. Realizing that a similar product could have good potential in Western markets, Mateschitz obtained the license to manufacture a carbonated version of Krating Daeng from its Thai owners. Obtaining permission to sell Red Bull in Europe was not easy, as it contained several ingredients whose effects on the human body were untested. However, permissions were eventually obtained, and Red Bull became exceptionally successful in all the markets in which it was launched. It was generally acknowledged that Red Bull’s success was the product of the company’s innovative marketing efforts. This case study discusses the marketing strategy adopted by Red Bull GmbH, including the company’s effective employment of buzz marketing in new markets, and its sponsorship of sporting activities, especially extreme alternative sports, to enhance its image. The case also talks about Red Bull’s target markets, and its pricing and differentiation strategies. It includes a section on the various controversies surrounding Red Bull, and the effects of these on its brand image. The competitive situation in the energy drinks market and Red Bull’s position vis-à-vis competitors, is also discussed. The case concludes with a commentary on Red Bull’s attempts at brand extension, and the company’s future prospects in the light of its excessive dependence on a single product.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Understand how savvy marketing can transform an ordinary product into a powerful brand
• Study the use of buzz marketing in establishing a product in new markets
• Appreciate the importance of identifying suitable target markets, and designing marketing activities to reach them effectively
• Examine the role of sports sponsorships in establishing brand image
• Study the effect of controversies on brands and how, in certain circumstances, controversies can actually help in the growth of a brand

Keywords

Red Bull, Dietrich Mateschitz, Energy drink, Brand, Grassroots marketing, Buzz marketing, Product extension, Sports Sponsorship, Formula One racing, Target market, Krating Daeng, Generation Y, Product promotion, Product differentiation, Advertising clutter, Taurine