Red Bull stands out among the energy drink market because it has its own community. Red Bull has its own culture, and it represents a high-octane lifestyle - not just an energy drink. It gives its users a sense of heightened awareness, the ability to be active, and get the most of out life. In essence, “it gives you wings,” as the company’s advertising slogan goes. Whether it is for the on-thego professional or an adrenaline-seeking, action sports junkie, Red Bull is a product that can help everyone. Despite the realities of the saturated energy drink market, Red Bull is the best option for the those who live life to fullest. Thrill Seekers. Social Butterflies. Caffeine-aholics. CATEGORY DESCRIPTION Red Bull is a brand that exists within the energy drink category. Within this category, Red Bull dominates the market share and is synonymous with the energy drink category. The companies in this category strive to provide the best products to help consumers continue successfully with their on-the-go or thrill-seeking lifestyles. BRAND DESCRIPTION Red Bull has evolved from simply an energy drink to a brand that defines lifestyles and impacts consumers in a variety of ways. Taken from the company’s website, Red Bull is about “Giving wings to people and ideas and is built on the idea of energy. The brand stands for more than an energy drink and reflects an attitude that it hopes its consumers share. Because Red Bull accounts for nearly 70 percent of the energy drink market share, it is a powerhouse in the category. PRODUCT DESCRIPTION Red Bull offers consumers a variety of different versions of its product, including: Original, Red Addition (Cranberry), Silver Addition (Lime), Blue Addition (Blueberry), Total Zero, and Sugar Free. The drinks provide users with a burst of energy through caffeine and other stimulants while preventing an immediate sugar crash. By using Red Bull, users can increase their performance in whatever task they are trying to accomplish. BRAND ARCHITECTURE Red Bull, a manufacturer of energy drinks as well as its own media outlet, can be considered a corporate brand because it is known simply as “Red Bull” to all its consumers. Unlike other brands, it does not have a group of sub brands, but it rather uses its powerful name recognition to extend across multiple products. The company also its hand in many sporting events through sponsorship.
In addition to the main corporate brand of Red Bull, there are several sub-branded products that the company offers. However, the over arching brand of Red Bull is still maintainted, so we do not feel that these other products qualify as self-standing sub-brands. Some of Red Bull’s additional products include Red Bull Cola, Red Bull Sugar Free, Red Bull Silver, Red Bull Blue, and Red Bull energy shots.
COMPETITIVE SET Red Bull contains various ingredients, such as caffeine, taurine, glucunorolactone, Vitamin B, and others to increase muscle endurance. There are four major brands in the energy drink market: Red Bull, Rock Star, Burn, and Monster. Currently, Red Bull accounts for nearly 70 percent of the energy drink market. Coca Cola - Full Throttle and Nos Coffee Soda Pop Tea 5-Hour Energy
PEST ANALYSIS Political, Regulatory, Legal As with any company that is trying to introduce their product in the U.S., Red Bull faced regulatory issues early on. Part of the reason it took Mateschitz (creator of Red Bull company) a while to get Red Bull off the ground was due to the slow process of getting it approved for healthy consumption. Almost anything that is not naturally grown or requires certain packaging techniques has to pass certain requirements and guidelines in order for the company to legally sell its product. Therefore, there are federal regulations created by the U.S. Food and Drug Administration (Red Bull has global regulations as well), that Red Bull has to make sure they align with. With that said, there are specific guidelines that energy drink producers have to follow. They include anything from canned and bottled energy drinks to energy drinks found in water or syrup. Not only do they have to have proper registration and follow label requirements, but there are also strict guidelines for manufacturers, suppliers, processors, exporters, and importers. It is sometimes difficult for the FDA to make sure all guidelines are followed for low acidic or acidified products due to processing and the fact that pH balances can change. At that point an inspector would take a sample for testing. Even with these guidelines, there has been a growing concern that energy drinks need tighter regulation because they contain potential side effects and risk of addiction (Energy Drinks: Is It Time to Tighten Regulations?, 2010). There have been past health scares such as the hospitalization of students (whose ages fall in Red Bull’s demographic) after consuming an alcoholic energy drink known as Four Loko. Although the Red Bull drink itself does not contain alcohol, Red Bull was first used in bars as a beverage to mix with Vodka, and is still available in bars today. Considering Red Bull accounts for approximately 70% of the energy drink market today (Entrepreneurship Through Sports Marketing: A Case Analysis of Red Bull in Sport, 2010), these growing issues place added pressure on Red Bull to make sure their drinks are not putting their consumer’s health at risk. For example, scrutiny fell on Red Bull when a 28 year-old motorcross racer almost died when his heart stopped beating during a race in 2007 (Man’s Heart Stops After Red Bull Overdose, 2007). He had consumed eight cans of Red Bull over a five hour period. Considering extreme sports like motorcross are an integral part of promoting Red Bull’s brand, this issue put them under some pressure. Later on in 2008, a group of scientists wrote a letter to the FDA asking that they tighten regulation on energy drinks (Energy Drinks: Is It Time to Tighten Regulations?, 2010). They felt there was a lack of adequate labeling, no restriction on the sale of it (meaning individuals of any age can buy it), and that some of the advertising misleads people. The growing concern of health risks, the increased pressure put on the FDA, and the increased scrutiny placed on energy drinks, means that Red Bull may need to react to this external factor in the near future. Economic Considering Red Bull is a company whose success depends solely upon the amount of consumer consumption their product receives, economic impacts will always have a role in the company’s dayto-day decisions. Some of the political/regulatory issues that arose lead into the economic issues. Almost all organizations that are in the business of selling dealt with the pressures of the economic downfall the U.S. experienced. However, Red Bull did not have to shift too much because its product is available in other global markets whose economies were steady or booming at the time. As a strategy of branding and in an effort to make their brand more desirable, Red Bull priced their drink above other potential competitors when it was first introduced. That strategy actually helped Red Bull rather than hurt them in the long run. However, the change in consumer opinion as mentioned before could become an economic threat for Red Bull. With the growing concern placed on health risks and
the increased awareness about the detriment of Americans’ health in general, Red Bull could become subject to economic downturns in the future. Sociocultural Red Bull’s branding falls underneath the category of this modern definition. In the 1990’s extreme sports gained a lot of popularity within the Red Bull demographic. Considering its owner is one of the most innovative sport entrepreneurs today with soccer teams, Formula One, and stadiums/arenas, it was only natural that Red Bull built its brand and culture around sports. Red Bull’s brand is all about adventure, excitement, energy, youth, and sports. Therefore, its target demographic is 18-34 year-olds (Red Bull Starts Own Media Company, 2011). This demographic includes students and young professionals. When it gets down to it, Red Bull is just an energy drink. However, because of its marketing and branding strategies, Red Bull has made their product much more than that. It has now become a lifestyle. It spikes creativity and fosters a sense of freedom, hence the popular slogan “Red Bull gives you wings”. Red Bull took advantage of the extreme sports trend in the 1990’s and now it is taking advantage of the opportunity to endorse athletes. Red Bull may find itself with an issue in the message that they are presenting. Sure consumers love the use of the sports culture as a part of the brand, but Red Bull is very different than other drinks that build its brand around sports such as Gatorade. It is perfectly healthy and reasonable to see athletes drinking Gatorade before, during, and after physical activity. However it would not seem very reasonable portraying an athlete doing that with Red Bull. Red Bull uses athletes to endorse its product but there is a disconnect with the perception. After several incidents with the health risks associated with consuming Red Bull before physical activity, it is evident to the company and now more evident to the consumer, that you do not drink that when doing physical activity. Yet, that is what Red Bull built its brand around. If you compare Red Bull’s commercials to Gatorade’s you will notice a difference on how they promote their product. One reason is obviously because they are two different companies with different brands, but another reason is because Red Bull cannot advertise the same way Gatorade does. They cannot portray an athlete guzzling down a can of Red Bull before and after a competition because that sends the wrong message being that is normal and healthy to do so. Instead, Red Bull had a commercial campaign in 2001 that used cartoons a lot to promote the brand with the wellknown “Red Bull gives you wings” played at the end of the commercial. Or they produce commercials that may show action sports, but do not portray the athlete actually drinking the product. It is the same reason why competitors such as 5-Hour Energy promote their product with commercials that typically portray individuals in an office environment that need a boost of energy at work. They realize they cannot advertise it with athletes. Sure Red Bull can find a connection by saying the rush of energy you experience from drinking a can of Red Bull is relatable to the rush of adrenaline you experience through extreme sports, but how far can they take it until the disconnect becomes more apparent. Technological Red Bull has expanded its brand and increased its brand awareness by keeping up with technology and media trends that are continuously growing. As with most companies, Red Bull has taken advantage of social media outlets such as Twitter and Facebook, however Red Bull has taken it to a different level than just social media. This external trend might not be considered an issue necessarily, but it is a trend of the external environment that could have a significant impact on Red Bull’s revenue. In 2011, Red Bull started its own media company called Red Bull Media House North America. This media company will be
in charge of producing and distributing action sport/lifestyle material to networks in the U.S. “The ultimate goal of the group is to significantly expand Red Bull’s presence on TV” (Red Bull Starting Own Media Company, 2011). They also hope to capitalize on the growing trends of reality TV and the desire the public shares to feel closer to their favorite athletes by creating reality TV shows around their athletes’ lives. This will enable them to reach out to their 18-34 year-old demographic more. Greg Jacobs, the head of distribution at Red Bull Media House North America, knows how important it is to bring media to the U.S. in order to generate revenue. “If you want to be successful in this [media] world, you have to be successful in the U.S.” (Red Bull Starting Own Media Company, 2011). We would give the technological factor of the analysis of Red Bull a three. While it is a vital source of creating brand awareness and helps generate revenue to the company, it is something that Red Bull seems to have control over and so far is staying ahead of the game compared to its competitors. POSITIONING STATEMENT To young, busy, and fast-moving individuals, Red Bull is the “life in the fast lane drink”, which competes mainly with other energy drinks, soft drinks, supplements, coffee, and tea. These allow for high performance, execution, and social living because of its relationship with extreme sports, entertainment groups and its focus on community building. POSITIONING MATRIX Red Bull is positioned as one of the highest-priced and also the highest concentrated energy drinks in the market. Some of Red Bull’s closest competitors are NOS, Monster, Amp, and Full Throttle.
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BRAND AS ARCHETYPE Brand Archetype #3: The Explorer Motto: Don’t fence me in. Driving desire: the freedom to find out who you are through exploring the world Goal: to experience a better, more authentic, more fulfilling life Biggest fear: getting trapped, conformity, and inner emptiness Strategy: journey, seeking out and experiencing new things, escape from boredom Weakness: aimless wandering, becoming a misfit Talent: autonomy, ambition, being true to one’s soul Also known as: seeker, iconoclast, wanderer, individualist, pilgrim Explorer archetypes in the wild: • Helps people feel free, nonconformist or pioneering • Rugged and sturdy or for use in the great outdoors or in dangerous settings • Can be purchased from a catalog or on the Internet • Help people express their individuality • Can be purchased for consumption on the go • Differentiate from a successful regular guy/gal brand or conformist brand • Culture that creates new and exciting products or experiences BRAND AS A VOICE Red Bull’s Voice: Active, Thrilling, Engaging BRAND CHARACTER Red Bull makes the impossible possible. It helps users engage the world, engage each other, and engage themselves. Red Bull is that active friend who is always seeking the next adventure and pushing the limits. But not only is Red Bull that thrill-seeker, it can also help get you through your day, inspire your next big idea or simply wake you up. MIXED MEASUREMENTS UNDER CONSTRUCTION - UNSURE WHAT THIS MEANSS EMOTIONAL BENEFITS Consumption of Energy Drink (ED), especially Red Bull, provides various emotional benefits for its consumers. A study of ED’s drinkers among college students in a state university located in Atlantic region showed that the college students had decided to consume ED for the purpose of inadequate sleep, to boost energy and mix with alcohols while partying, for the purpose of studying or completing major course project, for driving for a long period and treating hangover (Malinauska, Aeby, Overton, Carpenter-Aeby, & Barber-Heidal (2007). Additionally, the Red Bull energy drink significantly provided upper body stamina during Wingate cycle (Forbet et al., 2007). Therefore, when consumers drink ED, especially Red Bull, it helps them to maintain their both mental and physical’s state after normal hours. • Consumers feel alive and ready to go. • Consumers feel active and engaged. • Consumers feel supercharged. RATIONAL BENEFITS Even though the price of Red Bull is expensive than other energy drinks, it still remains the most wellknown and highly consumed among college students because its primary ingredient is caffeine. The caffeine itself helps college students and people, who need to work after normal hours, to stay focus,
increase endurance, and lessen fatigue. Not only does Red Bull contain caffeine, but it is also has a higher concentration amount of Vitamin B-6 and Vitamin B-12 per serving size, where these vitamins play a critical role in human brain function and is intimately associated with energy production compare to others drinks (Yeate, 2009). Since it is made in four different tastes or flavors (Red Bull, Red Bull Cola, Red Bull Energy Drinks and Red Bull sugar free), thus, consumers are given more choices to buy which taste they prefer to.
Published on Jul 1, 2013