Submitted to:

Abdullah Mohammad Ibrahim Assistant Professor in Marketing Northern University Bangladesh

Submitted by:
Group Name: Night Queen Members of the group: Name I.D. Syeda Bashira Khatun BBA080260787 Mrinaliny Bhoumick BBA080260796 Session: Summer 2011 Section: BBA B Course Title: Brand Management Course Code: MKT 4209 Date of submission: 09August, 2011.

Introduction:
In 2008, the worldwide Functional Drinks market was worth $26.9 billion. Relatively new and still developing, by 2013 the market is expected to expand by 64.3% to a value of $44.3 billion, spread over three different categories: Sports, Energy, and Nutraceutical. These products aim to improve users, physically and mentally or just improve well-being

History:
Red Bull was the brainchild of Austrian, Dietrich Mateschitz, ex-managing director of toothpaste manufacturer Blendex, where he travelled widely, and experiencing different cultures (Gschwandtner 2004). On one business trip, Mateschitz read that one of Japans highest taxpayers was Mr. Taisho, manufacturer of an energy giving drink. Later in Thailand, he learned that taxi drivers use these drinks to counter fatigue. Mateschitz also noted that the drinks ingredients lacked a patent.

Does Red Bull Revitalizes the Body and Mind?

Red Bull is billed as a drink which: Improves physical endurance, Stimulates metabolism and helps eliminate waste substances, Improves overall feeling of well-being, Improves reaction speed and concentration, Increases mental alertness, At times of increased mental and physical strain, On long sleep-inducing motorways, During intensive working days, Prior to demanding athletic activities.

How is Red Bull Marketed?

Red Bull presents an image of a small, friendly enterprise. We dont want to be seen as having lots of money to spend. The truth however is quite the contrary. The company spent $600 million, or 30% of its revenue on marketing in 2004, Coke spends 9%. This huge sum is spent on extreme sport sponsorship, live events, and eye-catching design, with less emphasis on media advertising. Their techniques are: Sponsorship, Advertising, brand image, some of the Red Bulls extreme athletes and events in picture.

Describes the Red Bulls sources of brand equity. Analyze the Red Bulls marketing program in terms of how it contributes to the brands equity. Do the SWOT analysis of Red Bull.

The Red Bulls Sources of Brand Equity:

Red Bull brand equity is the strong, favorable and unique brand association in the memory of customers. Two sources of brand equity for Red Bull: I. II. Brand Awareness; and Brand Image.

Red Bull has well defined tactics for both sources.

Brand Awareness:
A. Recognition; and B. Recall. The buy decisions are made at the point of purchase, and then brand name, logo, packaging and the other elements of brand recognition are important factors. If the buy decision is made before arriving at the point of purchase, then brand recall is centrally important.

Brand Image:
Red Bulls logo two thick-necked Herculean crimson bulls in opposing charge against a yellow sun is the epitome of the kinetic virility and pugnacity the beverage claims to provide. Indisputably, the dominant energy-drink brand, Red Bull has chosen to stick with its one product beverage line, avoiding branching out into similar areas such as energy bars or other sportsrelated products. In Red Bulls Brand equity is: Brand Elements: i. ii. iii. iv. Red Bull brand name, Logo; Red Bull gives you wiiings; Distinctive 250 ml slender silver and blue can.

Marketing programs to build Brand Equity: i. Event Marketing;

ii. iii.

Sports marketing; Point of purchase marketing.

Product Strategy: i. ii. iii. Perceived premium product; Premium pricing strategy; Product placement: empty cans in pubs.

Channel Strategy: i. ii. Pull Strategy, by promoting Red Bull among opinion leaders. Advertising mainly through word of mouth.

The Red Bulls Marketing Program in terms of it Contributes to the Brand Equity:
Red Bull engaged in a variety of marketing programs, including traditional television, print and radio advertising event making in sports and entertainment, sampling, point of purchase promotion. The bulk of Red Bulls marketing activity was directed toward encouraging product trials. Marketing program contributes to the brand equity by the following way:

Advertising:
Their advertising techniques are Red Bull vitalizes body and mind and Red Bull gives you wiiings. The Red Bull animated ads were adopted uniformly across the companys global market.

Sampling:
Product trial was an essential part of the Red Bull marketing. Red Bull sampling campaigns took place at concerts, parties, festivals, sporting events, at the beach, at the high way rest areas (for tried drivers), and at campus libraries. Aside from sampling, student managers research drinking trends, designed on campus marketing initiatives and wrote stories for student newspaper.

Event Marketing:
Red Bull had extensive network of events that it was involved with. When Red Bull created the event, it controlled all aspects of the event, including the name, logo, promotion, and media production. Classic Red Bull owned events included the Red Bull Soapbox Race and the Red Bull Flugtag Flying Day.

Sports Marketing:
Generally Red Bull sponsored individual athletes. Red Bull engaged in sports marketing first and foremost to establish credibility among opinion leaders who participated in action sports such as surfing, snowboarding, skydiving, skateboarding, rock climbing, mountain biking, and many other non-mainstream athletic endeavors. Red Bull became an international brand; it is able to sign influential and leading athletes.

Point of-Purchase Marketing:

Red Bulls primary point of-purchase tool was the branded refrigerated sales unit. These refrigerators set the brand apart from other beverages and ensured Red Bull a prominent location in the retail environment. Red Bull hired teams of delivery van drivers whose sole responsibility was stocking Red Bull. Red Bull limited the use of posters, shelf talkers, and ceiling hangers in store by the stocking facility. These marketing programs are mainly adopted by the Red Bull in terms to contribute to the brand equity.

The SWOT analysis of Red Bull:

SWOT analysis is a strategic planning method used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture. It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favorable and unfavorable to achieve that objective. A SWOT analysis may be incorporated into the strategic planning model. Strategic Planning has been the subject of much research. The Red Bulls SWOT analysis is described below:

Strengths
Strong, fresh, fashionable brand identity. Dangerous ingredients add edge. Consumer recognition through sponsorship of extreme sports and events. Non-descript consumer makes for infinite market. High revenue as price is set 10% higher than normal soft drink due to drinks function adding value. Shareholder investment minimal due to huge Turnover. 29% global market share selling in 70

Weaknesses
Red Bull may have lost its edge as it is now accepted as being safe by most governments. Lack of patent on Red Bulls recipe means that anyone can copy it. Red Bull having to sell Toro Rosso due to F1 rules may decrease marketing opportunities.

countries. Red Bull GmbH valued at 10.9 billion. 4 billion cans sell globally per annum. Strengths: Market leadership- Within the energy drinks market Red Bull is the industry leader throughout the world Marketing Efforts- a lot of promotions and well targeted campaigns and sponsorship e.g. formula 1 helps to expand Red bull brand and increase consumer brand awareness. Weaknesses: Lack of innovation- there are a lot of competitors in the market and they have their own USP which leaves Red Bull behind. Reliant on small product base- The Company only markets one branded product, Red Bull Energy Drink (along with a sugar free variety).

Opportunities
Turnover increased through: New products Carpe Diem, Red Bull simply Cola and Red Bull energy shots. Expanding into developing markets such as Asia and Africa. Consumer recognition through sponsorship of extreme sports and events. New ventures like Red Bull Mobile, partnerships with Face book, Fijian resort and theme park. Energy drinks consumption increase of more than one third by 2011.

Threats
Turnover decreased through: Consumers purchase other more Illegal energy drinks containing more taurine and caffeine. Accepted as being safe Red Bull may lose its edge. Changing buying habits of Red Bulls largest market (18-24) Market share reduction due to competition from the 228 other energy drinks. Organic energy drinks market may steal Red Bulls consumers.

Opportunities: Extension of Expansion.

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Threats: Health concerns- tougher rules from government on high caffeine content. Consumer awareness of health and well being- people may start to drink more water as it is associated with healthier life style. "Opportunities" should, in the SWOT model, be understood as external factors posing opportunities for the companies. "Extending product line" is a possible strategic move which should be used in reply to, for example, an opportunity. An example of an opportunity for Red Bull could be the fact that the recession is forcing their competitors to shut down. As an answer

to this, Red Bull might expand their product line to cover larger parts of the market.

How can Red Bull maintain its marketing momentum? Would you recommend the Red Bull develop any brand extensions? If so, what would they be? What are the potential benefits and dangers?

The way in Which Red Bull Maintain its Marketing Momentum:

Since its inception, Red Bulls successful market strategy and process of going to market has revolved around the companys ability to think outside the competitive box by focusing on customers through innovative branding and sales and distribution strategy. Red Bull has consistently challenged the traditional way of going to market and created new ways; continuously evolving the brand positioning; as well as understanding and managing its key relationships, building a sustainable competitive advantage in the energy drink market.
Understand and manage key relationships Continuously evolve brand positioning Create new ways of going to market Think out of the competitive box

Strategy Pathway

Build a sustainable competitive advantage!!!

In its quest to provide superior customer value, Red Bull, initially built its brand through nontraditional advertising routes. At the time of launch, Red Bull did not use billboards, banner adverts, taxicab holograms, or blimps. Instead a buzz-marketing or viral marketing strategy was used, that steered consumers to exclusive and exciting events that got high media coverage. As the market matures and new players come to the fore, Red Bull has had to review its market strategy slightly and adopt some more traditional marketing tools. It has further established its brand positioning by expanding its sponsorship portfolio utilizing brand and product advertising as well as celebrity endorsements at no fee. Whilst the former is true, sensing a new opportunity in the growth of the popularity of soccer in the U.S. By drinking Red Bull, customers are able to associate themselves with an inspirational lifestyle created by Red Bulls links with top world athletes and extreme sport professionals. Customers are also able to demonstrate their creativity through fashion, music, dance and art, thus Red Bull creates superior customer value through its marketing assets and brand.

By the above the Red Bull maintains the market momentum.

The Red Bull Develop which Market Extension:

Yes, the Red Bull develops some brand extension. The processes are: Product: Energy foods have an Australian market value in the hundreds of millions of dollars. Products range from high-energy, high-performance bars such as Musashi and Power Bar to powder supplements like Sausage and the more traditional jelly beans. The market is segmented into high-protein, high-carbohydrate, sugared and sugar-free products. All have varying nutritional value. Two categories; those for whom taste and function are important (regular consumers), and those
seeking Features: a more functional product (serious athletes).

To be produced under license in Melbourne, Red Bull energy beans are a non-durable functional food. They will be similar to jelly beans in style, but differ in substance. For one, the energy beans will all be of the same color (red-purple), contain many of the energy drink ingredients, and be embossed with a small Red Bull logo (comparable to M&Ms). Target Market: Red Bull energy beans are broadly targeted at two groups of people (regular consumers and serious athletes), but will probably appeal more to the former group. There is inevitably a tension between taste and performance-enhancing effects, and we can fairly assume that sportspeople will continue to prefer "high-octane" Power Bars over Red Bull energy beans. Packaging: The Red Bull drink can is an icon of modern design. To differentiate Red Bull energy beans from pharmacy-style jelly beans, the product should be packaged in metallic rectangular containers embossed with the Red Bull livery. Size: It is anticipated that Red Bull energy beans will be offered in one size only to begin with. That size has not been finalized but is expected to be 70 150 grams including container. This corresponds to the size of Gold Cross jelly beans sold in pharmacies.

Potential benefits of brand extension strategy are:1. Consumer knowledge: The remaining strong brand used to promote a new product makes it less critical to create awareness and imagery. 2. Consumer trust: The existing well-known-strong brands represent a promise of quality, useful features etc. - for the consumer. 3. Lower cost : Compared to launching a new brand, brand extension strategy is cheaper especially because the new product use the name of an already well-known brand. 4. Enhancement of brand visibility: When a brand appears in another field it can be a more effective and efficient brandbuilding approach than spending money on advertising. 5. Provide a source of energy for a brand: The brand image especially when the brand is a bit tired- is expected to be reinforced by the extension. 6. Defensive strategy:

An extension can prevent competitors from gaining or exploiting a foothold in the market and can be worthwhile even though it might struggle

Potential dangers of brand extension strategy are:I. Dilution of the existing brand image: The extensions are using the most important asset of the company that i.e. its brand name. It can be a major advantage for the extension but it represents as well a huge risk for the existing brand because the brand image can be diluted. II. Cannibalization: Aaker states that the extensions can cannibalize the existing products of the brand when there are positioned in a close market. It means the extensions sales are increasing while those of the existing brands products are following the Opposite curved. In the light of very high rates of new product failures, brand extension seems very attractive. After all, all companies seek to extract the maximum possible returns from the investment in their brands. Brand extensions done without due diligence can be equally detrimental to companies. But if companies carefully study the brand extensions and follow the general guidelines, brand extension success could indeed become a corporate reality.

Because product usage was not marketed as being limited to one or even a few occasions, Red Bull users could continue to use the product as their priorities shifted. The case states that, a Red Bull consumer first attracted to the product as a nightlife enhance in his or her early twenties might later use the drink as a morning pick-me-up or revitalize during a long day of meetings. How effective is Red Bull at advertising to these varied groups?
Red Bulls advertising was effective because:
This ad reinforced the tagged line Red Bull gives you wiiings. Which directly out of the positioning statement Red Bull vitalizes body and mind. Animated ads refrained from defining specific target group appeal to all age groups with sense of humor. Related to the efficiency of the different age demographics I think the younger people at early or mid twenties tend to drink the product relatively more compare to the businessman segmentation. I think this is related to the market strategy and the perception of the product. Because the product is being first launched at night clubs and so on the perception of the brand is a drink for younger people. Related to the advertising campaigns red bull also tries to push the product to this segment as well. If we think in the logical way of body needs it is obvious that someone at his/her late thirties indeed fell exhausted more easily compare to somebody who is at twenties. Still the product is valid and accepted by people and day by day there will be new fans of the products.

Alternatively, it can be argued that advertising adapts and mirrors societal trends. For example, the increase in technologies such as the Internet, social networking and digital devices over the past decade has lead to entirely new methods of advertising. The notions of market segmentation, targeting and positioning are key to the success of firms marketing efforts. Segmentation is important because firms cannot appeal to all customers at once, especially not with the same offering. Rather, firms need to design products and services that fit with particular groups of individuals. Firms can segment their market in a number of ways, including geographical, demographic, psychographic and behavioral segmentation. In order to segment a market effectively, the segment must be measurable, accessible, substantial, differentiable and actionable. Once segmented, a firm should target specific segments. Ultimately, a firm must select those market segments that it wishes to target, which consist of groups of buyers with relatively homogenous needs or characteristics. The type of marketing strategy that should be employed will vary on the target market, but will broadly fit along four types.

Conclusion:
Revolutionary marketing techniques created the Red Bullbuzz coupled with controversial ingredients ensured the drink was edgy, and the product sold itself. Non-specific advertising captivated a non-descript audience, whilst sponsoring extreme sports and events proved effective in not only publicizing the drink, but also making it become a way of life. Competitors such as Monster may well gain global market share. However, diversifying into Organic energy drinks such as Carpe Diem and Red Bull simply Cola, and creating a lifestyle to match, Red Bull has entered a new market for the health conscious consumer.