Red Bull
Red Bull
Red Bull
Marketing Plan Outline: Red Bull
Marketing Background
Company and Product Review
In 1982, Dietrich Mateschitz, creator of Red Bull alongside Chalerm Yoovidhya, saw
where Japan and Thailand were heading in the energy drink market and decided they
wanted a piece of the pie. By 1987, Austria proved to be a difficult market for Red Bull to
survive in and soon Mateschitz expanded into Hungry and the rest of Germany. After
expanding across Europe with a lot of trial and error Red Bull was $12 million in the hole.
Rather than scrapping Red Bull as a loss, Mateschitz fired all his staff and hired a marketing
firm to help him target nightclubs and students. Buzz marketing became the main focus of
Red Bull’s marketing plan, and soon students were pounding campus pavement and driving
around in Mini Coopers with a big Red Bull can strapped on top with free samples. His buzz
marketing proved to be not only cost effective, but the very thing that gave Red Bull its
appeal. Although Red Bull was not welcomed with open arms in all countries, such as
France, Denmark and Norway, it was growing and expanding.
Mateschitz soon realized that an extreme sporting event was a profitable avenue to
take Red Bull down. Red Bull started supporting approximately 500 extreme sports
athletes and hosting exclusive parties for these rock star competitors. By 1997, Red Bull’s
buzz marketing strategy proved successful in the U.S. as well. Events are now hosed
throughout the world ranging from B.A.S.E. jumping to surfing. Their tagline, “gives you
wings” is known worldwide and Red Bull sponsors public and private events such as the X‐
games and the Red Bull Air Races.
2
Distribution/Penetration
Red Bull is distributed in most grocery store, convenience store, and gas station
across the U.S. such as HyVee, SuperSaver, Safeway, Trader Joes, Conoco, Quick Trip, and 7‐
11. It is also found in discount/supercenter stores such as Target and Wal‐Mart. In 2002,
Red Bull completed its distribution share and the product is now available in all 50 states
(Todd, Heather).
Target Market Statement
Red Bull’s target market are young, on the go people, who enjoy extreme sports and
lead an active nightlife, anywhere from 18‐35, who lead an active lifestyles, and are
skeptical of traditional marketing (Swartz, Jon).
Pricing
The pricing of Red Bull varies from if the consumer is buying an individual can,
which the price is $1.99, compared to a case of Red Bull. The average price of a case of 24
Red Bull is $65.99, but depending upon the distributor, the prices may vary. Pricing for
energy drinks vary by brand, but Red Bull is typically $1.99 (Dolan, Kerry).
Sales and Market Share Analysis
The sale of Red Bull has only increased from the time Mateschitz introduced it back
in 1987. In 2008 Red Bull’s net sales was $4.28 billion, which was up 7.9% from the
previous year. A contributor to these sales is the fact that Red Bull started to distribute
more to the Middle East, Far East and South America (DPA). In “some countries, Red Bull
commands 80% of the market share. In the U.S. where Red Bull enjoys a 47% share of the
energy drink market, sales are growing annually at a 40% clip” (Dolan, Kerry).
3
Competitive Analysis
Red Bull can be easily copied because the ingredients were printed on the can and
the drink was not patented. Even though the taste of Red Bull did not do well in taste tests,
it was the marketing strategy that made Red Bull so successful (Gschwandtner, Gerhard).
In the late 80s, around the same time Red Bull was spreading across Europe,
American’s were drinking Jolt Cola, which was advertising as having “all the sugar and
twice the caffeine as Coke”. It can be said that Red Bull was the first energy drink to be in
competition with soft drinks but also created the new energy drink category in most
markets. After Red Bull hit the market hard in the late 90‐the present, many other
companies have tried to hop on the energy drink bandwagon such as when Hansen, the
natural soda company, created Monster Energy.
Red Bulls has approximately 100 major competitors, such as 5 Hour Energy Drink
and Rock Star Energy Drink. Not only do energy drink companies fall in these 100 major
competitors of direct competition but, there is also the sector of soft drinks that have
proven to be a viable opponent. Coca‐Cola (Full Throttle & Monster), Pepsi (AMP Energy
Drink) and Gatorade (Rebranded as G and G2) are three of Red Bulls major competitors.
Many celebrities have also taken on the role of putting their face to an energy drink
label, such as Ice‐T creating an energy drink called Liquid Ice, Nelly’s Pimp Juice and Lil’
John’s, Crunk Juice.
However, in the end, no other energy drink has been able to claim Red Bull’s 70‐
90% of the market share it has in over 100 countries worldwide, despite these competitors
(Penalty, Jeff).
4
Product Awareness and Attributes
Red Bull is known worldwide not only because of what’s inside the can but because
of the lifestyle the brand represents. Red Bull does not take advantage of the traditional
media, instead they rely on sponsoring extreme sporting events and they give away free
samples of Red Bull at the events. “Red Bull relies heavily on bars and night clubs for its
sampling events, alternative sports have also proven to be a successful product‐trial arena.
The company underwrites a number of extreme sports competitions and sponsors about
three dozen alterna‐athletes” (Hein, Kenneth).
Demand Analysis
The demand of Red Bull increases each year and that is evident with how rapidly
Red Bull has spread not only all over the United States but the world. From just looking at
the market share analysis of Red Bull, sales are increasing every year and sales are
expected to keep rising with each coming year. Even though Red Bull’s demand has
increased with each coming year, the “Red Bull’s U.S. market share has fallen from 75% in
1998 to roughly 47% today” (Dolan, Kerry).
Purchase Rates and Buying Habits
Red Bull consumers are loyal purchasers. They buy Red Bull for its high energy kick
before a class, before a work‐out, before performing in a sporting event or anytime they
need to get an extra boost to perform at top level. Red Bull is also purchased to drink
recreationally during social functions and at nightclubs and bars to create various alcoholic
beverages.
5
Problems
and
Opportunities:
Problems:
Red
Bull
is
not
a
patented
drink
product,
therefore
anyone
is
able
to
pick
up a can, read the ingredients and go into business for themselves. This is one of the
reasons the market is flooded by competition. In addition to this Red Bull, along with all
energy drinks and supplements, has received negative press from a medical standpoint.
High levels for caffeine and sugar can create negative effects on heart rate and blood
pressure along with dehydration.
Opportunities: Red Bull is one of the most popular energy drinks in the world. They
earned this title by intelligent, consistent marketing. Red Bull has the opportunity to
maintain their position and grow by continuing to target their niche target audience by
heavily using untraditional marketing tactics and traditional marketing tactics sparingly.
This will not only maintain their dominance in the energy drink market, it will strengthen
their relationship with their target audience (Mr. Burgundy).
Strengths
Opportunities
• Most
popular
energy
drinks
in
the
world.
• Increase
awareness
of
Red
Bull’s
• Red
Bull
represents
a
specific,
edgy
dominance
in
the
energy
drink
market
subculture,
while
still
being
consumed
• Strengthen
the
relationship
between
by
a
variety
of
demographics.
Red
Bull’s
target
audiences.
• Three
different
versions
(Regular,
Sugar‐ • Increase
Red
Bull’s
sales
in
specific
Free,
and
Cola)
allow
for
variety
without
markets
such
as
the
Dakotas,
Tennessee,
spreading
the
brand
too
thin.
&
Ohio.
Weaknesses
Threats
• Not
a
patented
drink
product
• Health
risks
associated
with
over
consumption.
• Competition
is
increasing
6
Marketing Plan
Sales Objectives
We want to maintain our position as the leader in energy drinks and the face of
extreme sports worldwide, while expanding our reach in the U.S. Currently North Dakota,
South Dakota, Tennessee, and Ohio are lagging in Red Bull awareness and consumption. We
want to increase distribution of Red Bull in these states by 5% and increase brand
awareness by 85% in these markets while maintaining our national presence.
Target Market
(Malinauskas, Brenda et.al.)
The uniqueness of Red Bull is that the company does not follow traditional media
guidelines and that is why they chose the untraditional platform (Hein, Kenneth). Their
target audience is very receptive to this. As stated above, the target audiences of Red Bull
are people between the ages of 18‐35, who lead an active lifestyle and what to have a sense
of
belonging
in
their
community,
but
in
an
untraditional
way.
But
there
is
much
more
to
7
Red Bull’s target audience. Not only do they not trust traditional media they are turned off
by it. These antiestablishment and adventure seeking individuals that do not follow the
rules and needed Red Bull needed buzz marketing/extreme sports in order to tap into
them (Rodgers, Anni Layne).
The target audiences of Red Bull are people who work hard and play hard. They
take their profession very seriously but like to have fun in their free time. From the college
classroom to the boardroom, these people don’t check out of life at five o’clock. The
common thread connecting Red Bull consumers is that they all enjoy staying active by
participating in sporting events, watching sporting events, playing video games or
socializing (Hein, Kenneth).
Marketing Objectives and Strategies
Our marketing objective and strategy is to launch localized events to attract youth
on college campuses and at sporting events in North Dakota, South Dakota, Ohio, and
Tennessee. These events will feature some of our sponsored athletes making guest
appearances and free give‐a‐ways of Red Bull and Red Bull products. We will host a
Soapbox Race and a Flugtag Flightlab event the in major cities in these states in order boost
awareness and consumption of Red Bull in those areas. In addition, Red Bull vehicles will
make their way across the United States, specifically in larger cities, promoting the brand
and giving away free samples. The Red Bull vehicle routes will travel with reps to college
campuses in major cities promoting the brand and its lifestyle. A million samples will be
distributed by these Red Bull Reps and have a code on the bottom of each can. Also, an
additional million cans will be distributed across the U.S. to be sold by retailers. These
codes
can
be
entered
online
to
win
free
Red
Bull,
a
VIP
trip
for
two
to
the
2010
winter
X
8
Games in Aspen, CO, a VIP trip for two to the summer X Games in Los Angeles, CA, or free
entry passes to the Soapbox Races, or Flugtag Flightlab events hosted in our target states.
National, one in 50 can codes will give away free Red Bull, four in two million will give
away the two winter and two summer X Game packages. In our target states, 200 cans will
award recipients with passes to their local Soapbox Racing and Flugtag Flightlab events.
As well as targeting North Dakota, South Dakota, Ohio and Tennessee, there will also
be two groups of two people assigned to each state. These Mini Cooper teams will go to
colleges and major cities promoting Red Bull and advertising the Winter and Summer X
Games.
Positioning Strategy
R&A Agency will continue to position Red Bull and Red Bull events as a unique, off
the radar subculture. Spotting the Red Bull vehicle will be an event in itself, creating buzz
on the streets and water cooler talk. By using Red Bull to guide drinkers to Red Bull events
we will succeed in increasing consumption and awareness in lagging markets and stay
consistent across the U.S. The events will be a place where like minded people can come
together, have fun, be creative, blow off some steam and feel like a part of the exclusive Red
Bull family. R&A Agency will not change Red Bulls existing tagline, Red Bull Gives You
Wings, because we feel the company has already established a tag line that many people
already know about. R&A Agency will continue to use the tag line on products and just
make the tag line more evident on products, such as on the give‐a‐ways that the college
Reps will be giving out.
9
Marketing Mix Implementation Tools
“Red Bull Gives You Wings” across the United States
Red Bull is an energy drink that represents a lifestyle, and we want to bring that lifestyle to
the masses. Our marketing mix will consist of Public Relation promotions, non‐traditional
advertising, and sponsorships of extreme sports athletes and events. By using this mix, we
will attract traditional media to cover our product without creating traditional ads
ourselves. We plan to keep the price of Red Bull the same as it is now, but do free give‐a‐
ways during PR events and during sponsored events.
Our PR event is a cross‐country road trip in Red Bull’s Mini Coopers. The road trip
will consist of 100 two‐men teams that will be making stops at major colleges and
universities across the U.S., including Yale, Berkley, Notre Dame, and the University of
Nebraska‐Lincoln. In addition to the stops in major cities, special attention will also be
given to North Dakota, South Dakota, Ohio, and Tennessee to increase consumption and
brand awareness. During their stops, they will host events that give‐a‐way free Red Bull
and Red Bull products as well as other prizes such as flat screen T.V.s and Playstation 3s. It
will be a year long event of appearances by the Red Bull Mini Coopers at college campuses
in major cities. These colleges will be contacted ahead of time to arrange free interns to
help plan and set up the events. Students will be able to play video games, test drive the
Mini Cooper, win prizes, all while drinking Red Bull.
Red Bull will continue to have heavy sponsorship of their 500+ athletes and at the
Winter and Summer X Games. Clothing, banners, mini events will be the main tools during
these sponsorships that will be picked up by the local and national television and radio
stations
covering
these
athletes
careers
and
sporting
events.
10
Marketing Plan Budget and Calendar
Part of our 50 million dollar budget is meant to focus on North Dakota, South
Dakota, Tennessee and Ohio to make them feel more as if they are part of the Red Bull
community by tying them into major events that Red Bull sponsors. The bulk of our 50
million dollar budget will be going towards sponsoring the Winter and Summer X Games as
well as purchasing give‐a‐ways.
• $15,000,000 = January 2010
o Sponsoring Winter X Games
• $15,000,000 = August 2010
o Sponsoring Summer X Games
• $30,000 = In between the months of the Summer and Winter X Games
o The one in fifty can give away
• $40,000 = January 2010 (Winter), August 2010 (Summer)
o The room and board for the Summer and Winter X Games
o Transportation =
Winter = Four Red Bull snow mobiles
Summer = Four Red Bull mopeds
o 8 VIP passes each for the Winter and Summer X Games
• $5,000,000 = Throughout the year, teams of two will drive to twelve major
cities which will be in our target states.
o Red Bull vehicle trips and events
• $10,000 = April and November 2010
o For
free
entry
fee
to
Soapbox
and
Fluegtag
Flight
Events
11
• $1,000,000 = Throughout the year.
o On collateral
Red Bull clothing
Play Stations
X Boxes
Video Games
X Game DVDs
Blue tooth players
Flat Screen TVs
• $10,000,000 = November and December before Winter X Games and June
and July before Summer X Games.
o TV advertisements Winter and Summer X Games
• $3,920,000 = November and December before Winter X Games and June and
July before Summer X Games.
o Magazine advertisements in men’s magazines advertising Winter and
Summer X Games and direct mail sent to men advertising Winter and
Summer X Games.
12
Works Cited
Dolan,
Kerry.
“The
Soda
With
Buzz”
Forbes
28
March
2005:
1.
http://www.forbes.com/free_forbes/2005/0328/126_2.html
DPA.
“Red
Bull’s
growth
rate
halved
in
2008”
Business
News
4
February
2009:
1.
http://www.earthtimes.org/articles/show/254168,red‐bulls‐growth‐rate‐halved‐in‐
2008.html
Gschwandtner,
Gerhard.
“Red
Bull”
Selling
Power
September
2004:
1‐11.
Hein,
Kenneth.
“A
Bull’s
Market
–
the
marketing
of
Red
Bull
energy
drink”
Brandweek
28
May
2001:
1‐4.
http://findarticles.com/p/articles/mi_m0BDW/is_22_42/ai_75286777/pg_2/?tag=content
;col1
Malinauskas,
Brenda
et.al.
“Red
Bull”
Nutrition
Journal
2007:
1
Mr.
Burgundy.
“The
Health
Effects
of
Energy
Drinks”
Associated
Content
17
May
2007:
1‐2.
http://www.associatedcontent.com/article/234299/the_health_effects_of_energy_drinks_p
g2_pg2.html?cat=51
Penalty,
Jeff.
“A
Brief
History
of
Energy
Drinks”
Swindle
Magazine
Issue
06
2009:
1
Rodgers,
Anni
Layne.
“It’s
a
(Red)
Bull
Market
After
All”
Fast
Company
19
December
2007:
1‐2.
http://fastcompany.com/articles/2001/10/redbull.html
Swartz,
Jon.
“More
marketers
use
social
networking
to
reach
customers”
USA
Today
27
August
2009:
1‐3.
http://www.usatoday.com/tech/news/2009‐08‐27‐social‐networks‐
marketers_N.htm
Todd,
Heather.
“Red
Bull
North
America,
Inc”
Beverage
World
15
May
2003:
1.
http://www.allbusiness.com/retail‐trade/eating‐drinking‐places‐eating/4130114‐1.html