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

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Case Details:

Case Code : MKTG141
Case Length : 21 Pages
Period : 2001-2006
Organization : Red Bull GmbH
Pub Date : 2006
Teaching Note : Available
Countries : Austria, UK, USA
Industry : Beverages

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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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Threats to Continued Success

Red Bull was a market leader in its category in the early 2000s, garnering strong sales in its various markets around the world. Nevertheless, analysts were skeptical about the company's continued survival and growth as there were several factors threatening the brand's long term prospects.

Red Bull's success had spawned a spate of imitators, all wanting to cash in on the booming energy drinks market. Some of the knock-offs even had names that evoked the Red Bull brand -Red Tiger and American Bull being notable examples.

The US itself saw the launch of brands like Red Devil, NRG, Eclipse, Blue Ox, Niagara, Dynamite, Red Rooster, Energy Rush, SoBe Adrenaline Rush, Mad Croc, Hansen's Functional, and Jones Whoop Azz, among others, in the energy drinks market during the early 2000s. Not to be left behind, certain American celebrities like rap stars Cornell Iral Hayes, Jr. (known as Nelly) and Jonathan Smith (known as Lil Jon) also came out with their own brands. Nelly launched an energy drink called Pimp Juice, while Lil Jon launched the Crunk brand.Overall, it was estimated that as of 2005, there were 125 players in the energy drinks market in the US.

Major beverage companies like Coke, Pepsi and beer major Anheuser-Busch had also come out with new energy drinks. Coke and Pepsi launched KMX and AMP respectively, while Anheuser-Busch launched 180, in the early 2000s. Analysts said that competition from big companies might affect Red Bull, as these companies, with their greater spending power, had the potential to give the brand a run for its money. "Strategically, Red Bull could be vulnerable to such giants as Coca-Cola and Pepsi, which can't sit back and simply do nothing," said John Hudson, coordinator of the graduate business school at the University of Palermo. "They could wind up competing in the same segment. It would be hard to fight that battle."

Exhibit

Exhibit I: Krating Daeng -The Thai Red Bull
Exhibit II: Red Bull's Ingredients
Exhibit III: Red Bull Racing's F1 2005 Car
Exhibit IV: Red Bull Energy Drink
Exhibit V: A Red Bull Print AD
Exhibit VI: Top Energy Drinks in the US by Brand - 2004
Exhibit VII: 2005 Forbes -Vivaldi Partners Next Generation Growth Brands

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