Red Bull's Innovative Marketing: Transforming a Humdrum Product into a Happening Brand

            
 
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Please note:

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.



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Case Details:

Price:

Case Code : MKTG141 For delivery in electronic format: Rs. 400;
For delivery through courier (within India): Rs. 400 + Rs. 25 for Shipping & Handling Charges

Themes

FMCG
Case Length : 21 Pages
Period : 2001-2006
Organization : Red Bull GmbH
Pub Date : 2006
Teaching Note : Available
Countries : Austria, UK, USA
Industry : Beverages

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--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.

Issues:

To understand how savvy marketing can transform an ordinary product into a powerful brand.

To study the use of buzz marketing in establishing a product in new markets.

To appreciate the importance of identifying suitable target markets, and designing marketing activities to reach them effectively.

To examine the role of sports sponsorships in establishing brand image.

To study the effect of controversies on brands and how, in certain circumstances, controversies can actually help in the growth of a brand.

To analyze the potential effects of a large number of competitors on a powerful brand and the sources of differentiation in a crowded market.

To understand the importance of brand extension and the pitfalls of being associated with a single product.

Contents:

  Page No.
Red Bull Acquires Second F1 Team 2
Background 3
Elements of Red Bull's Marketing Strategy 4
Controversies 10
Threats to Continued Success 11
Exhibits 15

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

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