Red Bull Case Study

The Red Bull Case Study examines the upstart of an Austrian businessman named Dietrich Mateschitz. This businessman saw the potential of a Thai energy drink called Krating Daeng what most consumers know now as Red Bull. In response to his interest in the energy drink he sought out a Thai pharmaceutical company named TC Pharmaceuticals the owners of the drink. In his meeting with this pharmaceutical company Mateschitsz was able to walk away with international rights to the drink. However in exchange the company would like to retain 51 percent share in the new Red Bull Company. In addition to this Mateschitz decided to also change the taste of the current product to make more appealing to western customers. (Case 13, pg 377)

Although the Red Bull product was slated for distribution in Austria the company was placed in a problematic predicament. The country of Austria mandated that the performance benefits were not applicable to the laws of the country. Although this new product contained three characteristics from both food and drug categories it coincided with all traditional, dietary, and pharmaceutical but under this circumstance did not fit in any category this. However the Red Bull Company proceeded in offering an alternative to this restriction by advising the Austria government to create a new classification. In the aftermath of this event the a new classification was created called “functional foods.” (Case 13, pg 378)

The core element that is established in this case study is that the Red Bull Company specializes in energy drinks. The Red Bull Company also intertwined in a modern age market sector. The rapid demand for energy drinks amongst the millennial generation is outright astounding. According to the Phoenix “Red Bull.” the company is first to market to a select five categories “students, drivers, clubber, business people, and sports people. In addition to this the motivation to buy the Red Bull product amongst this group is to essential stave off mental weariness and physical low energy.

The Red Bull Company was able to establish a solid opening in the country of Austria. This was mainly due to the alternative method of integrated marketing communication. Red Bull’s strategy for building and nourishing a health market share relied on first commencing a word of mouth marketing effect. Secondly the company generated buzz in the market by slowly seeding for six months flexing limited available products to potential launch sites. This also coincides with push marketing because accelerates the sale of the product. (IMC Chap 8 pg 112)

Although this process was very successful in the beginning Red Bull’s miscalculated misstep was entrusting a new marketing company that didn’t convey the company interests. The main problems that the Red Bull Company had endured in the United Kingdom market was first the company marketed Red Bull as a common soft drink not as robust tasting energy drink. Secondly doing away with the word of mouth strategy and embracing traditional marketing communication tactics this meant launching the product through mass-market channels. (IMC Chap 8 pg 112) This particular marketing maneuvering is disrupted the creation of a solid customer base. Lastly marketing the product on Billboards and the display of the Slog: “You should never underestimate what Red Bull can do for you” presented itself as a monologue for customers instead of the simple dialogue of the cartoon commercial advertising which was Red Bull “It gives you wiiings” This particular integrated marketing communication solidifies the product as favorable marketing message. (Case 13 Red Bull pg 382)

Although the Red Bull Company is a very successful brand in the energy drink market there are problems and issues clearly seen. Although Red Bull has premium product currently on the market the price of their energy is more expensive than the competition. Also Red Bull has limited range of products to be distributed to consumers. The growth rate of new competitors entering the energy drink market is cluttering the visibility of the Red Bull Brand. One of the main causes of this market clutter is the Hansen produced energy drink Monster. This is because Monster has a wide variety of products to choose from such as Monster Energy, Java Monster, Nitrous, and X-Presso.

The best potential course of action for Red Bull is continue on with advertising in the mature product life cycle. Furthermore with the looming competition with Monster clawing up some of the market share (no pun intended). The company Red Bull should revise the current marketing strategy by parodying the Monster brand and setting the premise that Red Bull gives you wiiings not into a monster something to that effect. This particular course of action would provide Red Bull with more of a fresh outlook. Furthermore Red Bull should consider adding more energy drinks to their product line to circumvent presence of the competition from monster.

The optimal solution for the Red Bull Company is to incorporate both strategies. The continuance of advertising in the mature stage of the market is precisely plausible. The instrument of micro advertisement propagating the Red Bull agenda of elevating a higher level than Monster is absolutely strategic in strengthening the market share. The addition of new products to be distributed to the consumer would help Red Bull to be understood as a multiple flavored brand. This would alleviate the notion or the arousing idea that the Red Bull Company is a one trick pony.

Source:

Monster Monster Products Retrieved March 2 2011, 2010 from monster.com website: http://www.monsterenergy.com/us/en/products/

Peter, J. P., & Donnelly, J. H., Jr. (2007). Marketing management: knowledge and skills. (8th ed.). New York: McGraw-Hill/Irwin Case 13 Red Bull Background Section V pg 377

Peter, J. P., & Donnelly, J. H., Jr. (2007). Marketing management: knowledge and skills. (8th ed.). New York: McGraw-Hill/Irwin Case 13 Red Bull Background Section V pg 378

Peter, J. P., & Donnelly, J. H., Jr. (2007). Marketing management: knowledge and skills. (8th ed.). New York: McGraw-Hill/Irwin Case 13 Red Bull pg 379

Peter, J. P., & Donnelly, J. H., Jr. (2007). Marketing management: knowledge and skills. (8th ed.). New York: McGraw-Hill/Irwin Case 13 Red Bull pg 379

Peter, J. P., & Donnelly, J. H., Jr. (2007). Marketing management: knowledge and skills. (8th ed.). New York: McGraw-Hill/Irwin Case 13 Red Bull pg 379

Peter, J. P., & Donnelly, J. H., Jr. (2007). Marketing management: knowledge and skills. (8th ed.). New York: McGraw-Hill/Irwin Chapter 8 Integrated Marketing Communication pg. 112