Red Bull’s growth strategy

 

Case Study

 Red Bull GmbH is a privately-owned company based in Austria. Red Bull energy drink is based on the Thai energy drink, KratingDaeng (Thai for Red Bull), first produced in Thailand by the T.C. Pharmaceutical Company. The formula became popular as a tonic for blue-collar workers in Thailand.

Red Bull Beverage Company Inc. became a subsidiary of the T.C. Pharmaceutical Company in Thailand in 1984 and Red Bull GmbH began marketing Red Bull in Austria in 1987. One millions cans were sold in Austria during the first year of production. The original formula was adjusted for “western” tastes adding sugar and carbonation. Its unique selling proposition was increased stamina and mental concentration relevant to its initial target market of long-distance truck drivers.

Red Bull was introduced to the U.S. in 1997 focusing on four western states: California, Oregon, Texas, and Colorado. While the target appeal was initially to athletes, it soon became clear that Red Bull had a special appeal to young, white-collar workers looking for endurance for after-hours “clubbing.” The club scene developed Red Bull as a very popular mixer with vodka.

Red Bull has expanded their product line from the original one can, one size, one label, one sticky-sweet liquid energy drink to Red Bull Sugarfree, Total Zero, Energy Shot, and most recently, Red Bull Editions. Red Bull Editions is their line of fruit flavored drinks which include cranberry, lime, and blueberry.The can looks like a global product. Red Bull GmbH has divided the US into eight decentralized sales units each responsible for creating distribution channels, making sales calls, and developing targeted marketing strategies for the unit. Its slogans: “Red Bull gives you wings,” “No Red Bull, No Wings!” and “Red Bull vitalizes body and mind” speak directly to the core product.

Today, global sales of Red Bull exceed $1billion annually and hold a 65% share of the energy-drink market (45% in the U.S.). Red Bull has targeted its young demographic (16 to 29 year-olds) with buzz. There’s more to the guerrilla strategy than just building buzz at clubs. Student brand managers (brand evangelists) are enlisted for college campuses and sales teams will open off-premise accounts at convenience stores near colleges, gyms, health-food stores and supermarkets. Part of their strategy is almost “hokey” – they have representatives seek out individuals who need energy and give them a free can.

Red Bull’s strategy does not include the traditional mass-marketing media. The consumer will not see billboards, banner ads, or Super Bowl TV spots. Red Bull is targeting a market that has grown skeptical of the traditional media message. Its target market is looking for uniqueness, authenticity and self-identity in the brands they choose. In the overcrowded beverage market, Red Bull has become the “anti-brand”. Red Bull consumers live for experiences. The Red Bull brand is about experiences. And those experiences turn consumers into brand lovers. And those brand lovers engage. Red Bull has met the desires of a generation of consumers who are constantly on the go.

Red Bull is currently linked with more than 167 separate sports worldwide and runs more than 300 sponsored events in the U.S. alone each years. Red Bull especially focuses on auto racing and extreme sports.Its sporting-event sponsorships are intended to “speak to” athletes and give credibility to that sport on behalf of the participating athletes.Red Bull has formed a unique feeling of community within many sports groups.

 

In 2007, Red Bull joined the “virtual world” by signing an agreement with Sony for exclusive content within its Playstation® Home platform. It seems that Red Bull will have its own ‘space’ in the virtual world, with its space coming in the form of its very own island.

 

 
Questions:

  1. What specific direct and indirect competitors can you name for Red Bull?

 

  1. Describe Red Bull’s target market(s).

 

  1. How would you describe Red Bull’s product position?

 

  1. How would you describe Red Bull’s product strategy? Why?

 

  1. What is Red Bull’s growth strategy?

 

  1. Where in your local grocery store are you likely to find Red Bull?

 

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