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RED BULL

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Transcript of RED BULL

INTRODUCTION TO RED BULL
PRODUCT
RED BULL ENERGY DRINK
Free
Tuesday, June 3, 2014
Vol Master UniKL, No. 311
Dietrich Mateschitz, Founder of Red Bull

Overview
MARKETING STRATEGY
"We don't bring the product to the people, we bring the people to the product"
Chaleo Yoovidhye,
CEO of TC Pharmaceuticals Co.

1982 -Discovered Krating Daeng, Thai Energy Drink
1984 -1987 - worked with TC Pharmaceutical Co. to adapt Krating Daeng
for the European market
1987 - product launched in
Austria
1989 - product launched in
Hungary
1997 - entered the
United Stated Market
2000 - the
Middle East
2012 -
165 Countries
World Wide
2013 -
166 Countries 5.36 Billion Can Sold
source : Claire Phoenix from 1987-1977)
RED BULL SUGARFREE
RED BULL ZERO CALORIES
RED BULL EDITIONS
Red Bull Energy Drink is a functional beverage providing wings whenever you need them.
is Red Bull Energy Drink without sugar. It is a functional beverage with only 3 calories per 100 ml
RED BULL COLA
Vitalizes Body and Mind®. Red Bull Zero Calories is a functional beverage and is for anyone who needs wings but not the calories and sugar.
Same benefit - Different taste. The Red Bull Editions combine the wings of Red Bull Energy Drink with three specific flavors: Cranberry, Lime & Blueberry.
All natural. All Cola. The Cola from Red Bull.
INCREASED PHYSICAL ENDURANCE
IMPROVED REACTION SPEED AND CONCENTRATION
INCREASED MENTAL ALERTNESS
(TO STAY AWAKE)
IMPROVED OVERALL FEELING OF WELL BEING
STIMULATED METABOLISM AND INCREASED STAMINA
BENEFITS
Legal Environment
SITUATION ANALYSIS
issues entering market under Austria's laws for traditional foods
criticized for health risks in the past
European Food Safety Authority (EFSA) concluded Red Bull Safe product
criticized for its marketing with extreme sport pictures

INGREDIENTS
Sugar (sucrose)
41 g (30.7 g for Red Bull less Sugar
Taurine
1000 mg
Glucuronolactone
400mg
Caffeine
50 mg
Vitamins
Niacin 20 mg
Vitamins
Vitamin B5 5mg
Vitamin B6 4mg
Vitamin B12 4 mg
B6
B5
B12
Largest Energy Drink company in terms of market share & volume sold
What created Red Bull's success? Where is the core franchise and benefit? Has the product's positioning changed over time? What is the role of alcohol mixing to Red Bull's success?
What is Red Bull’s success formula? For which kind of product/beverage categories will this formula work? How does Red Bull know when to turn on the advertising? What metrics would you use to make this judgment?

Why did the first U.K. launch go awry?
What changes were made for the U.S. market? Should other changes be considered?

Assume tough competition is coming. How can Red Bull protect its franchise? What actions would you recommend?

Where is the core franchise and benefit?

What is the role of alcohol mixing to Red Bull's Success?

Has the product's positioning changed over time?
What Created Red Bull's Success?
1.1
1.2
1.3
1.4
Red Bull's attributes its success to its
consistent premium branding of its product is the energy giving potential.
Red Bull

4Ps Model Marketing mix
Product
the Specific features and benefits of the product
Taste unlike any other and has functional element giving energy boost
Promotion
using the most suitable form of promotion to reach customers
Aims to create lasting impression on consumers
Price
setting the right price in each marketing
Premium pricing strategy to reflect best selling brand
Place
where and how the product is sold
Easy to obtain in retail and food & drink outlets
AIDA
Model
Raise
A
wareness
Stimulate
I
nterest
Create
D
esire
Compel
A
ction
Red bull promotion based on giving people "Wings"
Communication spirit of the brand
Innovative campaigns push boundaries and capture consumer imagination
Yes, The positioning of Red Bull has
changed over the period of time
. It was positioned
as the drink that gave you wings
when it was first launched. However, over a period of time, the positioning is now more of a sports drink. If a person needs a drink that gives her energy, the name Red Bull appears in her perception
The core franchise is that a person will feel
energized after drinking Red Bull
. The concept behind its promotional activity is to
reflect on the brand personality
, which is
‘Red Bull gives you ‘Wiiings’.
This translates
as pushing the boundaries of what is possible and nurturing people’s talent
so that
they can achieve their goals
and
dreams.
This promotional activity together with the consistent branding has translated Red Bull as the
product leading energy drink
in the world in terms of market share and volume sold.

The mixing of vodka with Red Bull has
helped increase the sales of Red Bull
but
this increase in sales has a low impact on Red Bull's
overall success.

• Mixing energy drinks with alcohol
can lead to violence and intoxication
• Drinking these mixes
lead to prolonged consumption and higher levels of intoxication

Three out of four college students
in Europe and the U.S. drink energy mixers

Mixing alcohol with energy drinks
to get a bigger hit could be more harmful than research currently suggests, claims a leading psychologist
.

Clubbers who knock back vodka and drinks such as the massively popular Red Bull may have been
falsely reassured by laboratory studies that don’t reflect ‘real world’ use
, says Professor Peter Miller.
He said concerns are growing about the harms that may arise from drinkers mixing alcohol and energy drinks which enable them to drink for longer and achieve ‘higher levels of intoxication’


2.1
2.2
2.3
Red Bull's
position in Energy drink market
. Already Popular Energy Drink through variety Campaigns.


World Wide Expansion
1987
1992
1997
1994
1984
1982
1987
Red Bull Sales Begins in Austria


First Foreign Market -
Hungary

Enters USA
Dietrich Mateschitz Discovers Krating Daeng

Red Bull founded in Austria


Giant Competitor
2001
2013
Enters Southern
Hemisphere
Red Bull in 166 Countries
1982
1984
1992
1994
1997
2001
2001
2013
Time line of Red Bull Positioning
Enters Germany and UK

2005
Above the line
Below the line
word of mouth
Sampling
Engage with customer
Athlete Endorsement and Opinion Leader Marketing
Event Sponsorship
Digital and social media as promotion

Surveys show around three out of four college students in Europe and the US regularly indulge in such combinations.
But the role played by energy drinks is under-researched and much of the work has only studied the effects of mixing low levels of alcohol with a single energy drink, said Prof Miller, associate professor of psychology at Deakin University in Australia.

What is Red Bull’s success formula?
For which kind of product/ beverage categories will this formula work? How does Red Bull know when to turn on the advertising? What metrics would you use to make this judgment?
These formula will work for other energy drinks. If modified, it may work for Coca Cola drinks also.
When the customers get interested in a particular sport, Red Bull turns on its advertising.
This is some time before the matches actually begin. The metrics we would use to judge the efficency of advertising would be

Red Bull distributed free cases
of the drink
to college students in an attempt at viral advertising
. This strategy was wildly successful, resulting in the rapid proliferation of sales.
Red Bull has since become known for its
sleek marketing targeted at young urban professionals
through various sports and entertainment based advertising campaigns.

The current mottoes, “Red Bull Gives You Wings,” and “No Red Bull, No Wings” are direct plays on the apparent stimulating properties of the beverage.



Integrating video content and social media marketing demonstrates the company’s keen understanding of its target audience’s interests. Red Bull has been utilising original video content for web channels using
YouTube channels,
integrating it to Twitter,
Facebook and the whole social sphere.
The video content highlights sports athletes from around the world.
Red Bull Media House
The first UK launch went awry because the
UK's Advertising Standards Authority
imposed advertising restrictions on Red Bull.

There were complaints against Red Bull. The claims that Red Bull made about its effects and performance were challenged.
Kraihamer commented “
the UK team started from the wrong end…. they were wrong, they totally misunderstood how to create a customer base Change Market-Entry Strategy
:

Product launched Red Bull as a sports drink instead of as stimulation drink (in Austria). In UK Lucozade’s domination of sport-drink market
Rather pushing WOM strategy, Red bull sold it products through Mass-Market channels such as chain stores
Bill board campaign in UK. New slogan “you should never underestimate what Red Bull can do for you.

Repositioned Red Bull as a functional energy (or stimulation) drink, created a new 3rd segment in UK sports-and energy-drink market also returned to WOM method. The U.K. slogan was replaced back to the original slogan of’ Red Bull gives you wiiings’ as it worked at all levels and on a worldwide scale.


2.2
tagline, “Gives You Wings”
across all of the social platforms it uses. Infact they have a Twitter hashtag for #GivesYouWings.

In fact, a Red Bull spokesperson explained that the company has seen
h
ashtags translate well across many platforms such as Twitter, Instagram, Google+, and Pinterest.

Its
Facebook Page is among the top online properties
. With more than
26.8 million “Likes”

Red Bull’s
Facebook Page ranks in the top 50 branded pages on the world’s largest social network.

Red Bull’s Winning Social Media Strategy sponsor of athletes in various extreme sports
.

The brand’s most popular posts are extreme sports videos and photos
, sometimes garnering thousands of re-shares onto the personal Facebook profiles of its fans. Many, but not all of these videos are of Red Bull’s own sponsored athletes from
various sports arenas like parkour or playstation role playing.
Handling out branded freebies at extreme events
Subtle branding
Sponsoring of extreme sports
Using Digital & Social Media
Core elements of Red bull Campaigns - support other pull marketing activities
Smartphone Apps-create connections with customers
Social network sites, blogs allow easy, quick exchange of information
provide direct & relevant comm. and interaction with core youth audience
Viral Videos showing bravery
Word of Mouth
Red bull Success
Sampling Program
Event Sponsorship
Athlete Endorsement
Below the line Activities
Reaches targeted groups of consumers through tailored promotions
Local activities can reviewed and either amended or repeated for better impact
Organize Red Bull events around the world
Designed to create big impact and generate Media Coverage
Red Cliff Diving
Red Bull Flugtag
Red Bull
Stato
Showcase athlete's Skill - Red Bull X -Fighters / Red Bull Air Race
Above line Activities
A brand stand out
Keeping the message simple
Red Bull keeps its messaging simple with its “
Gives You Wings
” tagline. consumers are bombarded with messages all day long.
Keep yours top of mind by making it simple and easy to remember and relate to.
Utilize the company’s strengths
A brand always play to its strengths by utilizing resources or connections its own company has. Red Bull uses the recommendations of its athletes to choose the videos it posts. This insider’s perspective is definitely not lost on fans.
Paid for Media TV, Radio, Press
Reaches a wide audience quickly
focus on raising brand awareness
Campaign & Promotion
Re-designed Car
Social Media
FB, my Space, Hi5
TV Media-
Magazines
Investment Sport Game
Free Red bull in Campus
Street Event
is
how it transforms an audience into a community.
Red Bull’s unique content reflects who it is as a
media company and always focuses on its core message
, making its
posts shareable and bringing fans back for more
.
Give audience what they want
Always keep an eye on what is resonating with your target market and use that information to your advantage. Every engagement tactic deserves some play time, but focus resources on the ones that really resonates with your audience.
Point of Purchase
Advertisement
the
increase in the sales
of Red Bull in the area,
the
number of requests for videos
of Red Bull,
increase in number
of Red Bull
Facebook fans
,
number of discount coupons downloaded
, and
the n
umber of free
Red Bulls
downloaded
provides everyone with fresh and innovative media content.
Leader in Energy Drinks
MARKET STRENGTH
What should Red Bull's competitors do? Coke? Pepsi? Anheuser-Busch?

If you were an investor in Red Bull, would you take your money and run or stay for the long haul

If tough competition is coming , Red Bull should strengthen its positioning through
innovations in promotion
. This will strengthen its brand image and make it difficult for the competitor to affect Red Bull’s sales.

Initiatives
that Red Bull had started include
Student Brand Manager Programme
where individual student help activate
a variety of events on campus, Red Bull Bedroom Jam
which is a
competition
to help
teenage musicians onto the big stage
and giving them experience they never have been able to have and
Red Bull Reporter where this project provides opportunities for aspiring writers, film makers
and presenters to report on
world-class Red Bull events
.
This creates interesting
media coverage
that
gets the audience talking about the brand.
Furthermore, Red Bull should
increase sponsorships of teams in different sports,
making it
difficult for competition to get a foothold
. Red Bull should attain
brand recognition through logo saturation
.

It should
develop loyalty
among a
core demographic
and then focus on another. If Red Bull increases its base of loyal customers, competition will not be able to reduce its sales.
Red Bull needs to
constantly create new methods and techniques
in the
digital and social media
to
engage
with their c
ore youth audience online
.
This is vital in such a competitive market. Red Bull uses a variety of
smart phone applications
to
promote its campaigns
. Unlike advertising campaigns which have to be planned months in advance, the great advantage about online applications is that they are easy to adapt and refine.

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 sceptical 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. 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.

Red Bull's competitors can come out with their own energy drinks but these have to be labeled differently.
For instance, if the new drink is associated with Coke or Pepsi or Anheuser-Busch then customers may not like it.



The drink became a
very popular mixer, especially with vodka
. Red Bull depend
its involvement with the club scene
by
sponsoring a month-long school for deejays
in
New York City
called the
Red Bull Music Academy.


Red Bull led the energy drink category in the United States and the United Kingdom,
where it displaced the venerable Lucozade brand owned by pharmaceutical company SmithKline Beecham (later GlaxoSmithKline).

The company
promoted the lift the beverage offered with the slogan "Red Bull gives you wings."
Traditional advertising was limited, as the company
focused heavily on getting product samples into the right hands
.
The company sometimes put up
edgy, graffiti-style billboards
. In the late 1990s,
Red Bull produced animated TV ads for mature markets.








There were
several changes made for the US market
. First, Red Bull was not launched in the entire US, but was
launched in targeted geographic areas or ‘cells’
, initially in California in 1997. It entered the US market by
appearing first in trendy on-premise locations, hip nightspots , sponsored sports competitions and athletes and Music Academy.


While
Red Bull had appealed to athlete
s
and, in the United States,
tired white collar workers
, the real story of Red Bull's growth lay in the promise of further
endurance at clubbing
, giving it a
special appeal for young people exhausted from working hard all week
.

The
Los Angeles Times
reported that the
beverage appeared to glow green under the fluorescent light of nightclubs.

If I were an investor in Red Bull, I would not take my money and run. Currently, Red Bull the leading energy drink in the world in terms of market share and volume sold, ahead of Monster and Rockstar; is
selling in 166 countries
world wide and the trend is likely it will sell in more countries.

26 Years
Established
9,694 employees
A total of
5.387 billion cans
of Red Bull were sold worldwide in 2013 an
increase of 3.1%
against an already very successful 2012.
Company
turnover
exceeded the five billion euro mark for the first time, increasing from EUR 4.930 billion to EUR 5.040 billion.
In terms of sales, revenues, productivity and operating profit, the figures were up once again and represent the best in the company's history so far.
Such positive figures can be attributed to outstanding sales in the Red Bull markets in:-
India
(+55%),
Japan
(+32%),
Turkey
(+18%),
Scandinavia
(+16%),
Russia
(+13%)
and
Brazil
(+12%)
,
efficient cost management and
ongoing brand investment.


1987- modified the ingredients to suit the taste of westerners
functional foods
Industry
global soft drink market
mainly classified into carbonated soft drink
Functional drinks (sport drink, energy drinks and elixirs)
Red bull leading energy drink
target market focus
young generation,
who leads an active and
living on the edge lifestyle
consumed -athletes, students, professionals
No specific demographic / psycho graphic market
Anyone who energy boost to combat mental and physical fatigue
SITUATION ANALYSIS
Organization
Austrian company
Red Bull GmbH
co-founded in 1987 by Austrian Enterprenuer Dietrich Mateschitz and Chaleo Yoovidhya
1997- U.S debut
7th leading Carbonated soft drink (market share)
2004-45% achieve Sales of 30 Million cases
( Top 10.US Carbonated Drinks Companies 2004 source by Beverage Digest)
2013-Annual Sales was 3.43 Billion compared to $2.95 billion, an increased of 16.27%
PRICE
PRODUCT
PRICE
PRICE
MARKETING
Full transcript