1)Describe Red bull’s sources of brand equity. Do these sources change depending on the market or the country ?


Ans : Meaning or definition of Brand Equity

Brand Equity is a differential value of a brand which a consumer has in his mind due to the amount of knowledge he has about that brand.

“Brand Equity is that incremental value that occurs to a product when it is branded”

Sources of brand equity. –
  • Brand awareness is one of the sources of Brand Equity.
  • A consumer’s perception that the brand is better than it really is.
  • A consumer’s preference for a brand based on cachet or status of owning it.
If one is successful in these 3 aspects an added benefit is that it will pull the customer to carry your product thus helping in increasing sale of that particular product.

In the said case study Red Bull has gained Brand equity thru following ways.

Awareness -


By 1997 Red Bull was launched in Austria, Red Bull was available 25 markets globally including Western and Eastern European, New Zealand and South Africa. This indicates the GLOBAL AWARENESS of Red Bull.


Initially the Red Bull’s slogan was “Red Bull gives you wings”. Later on as the taste changed with the change of its ingredients. Earlier it was an energy drink and later it was functional energy drink. Mateschitz devised the brand positioning that Red Bull “ Revitalizes Body and Mind” This phrase conveyed the tangible benefit of the product in an easy grasping manner. It meant that Red Bull can be drunk any time whether it was morning, noon, or night. Thus Red Bull’s consumption was not limited to any occasion or activities.

In Austria due to the difficulty faced in getting approval for Sale, they marketed this product this product by different ways like getting the customers to try this product by testimonials from peers who bought Red Bull. Thus by Word of Mouth the Red Bull was made aware to the masses of consumers. This is the oldest and the best method.

From the beginning Red Bull was the source of interest to the consumers of Austria. It’s functional energy was brand new for them. So curious consumers tried this brand and spread the word about it. They were not contented only with the word of mouth to evolve naturally that is why shortly after the product launched in Austria the company would place empty red bull cans in clubs and bars to create the elusion of popularity.

Between 1987 -1992 Red Bull was available only in Austria. Consumers in adjacent countries like Germany and Hungary who had not been to Austria heard about the product from WOM testimonials. In this way consumers outside Austria were made aware of this product. Benefits.

2 .Consumer’s Perception that the brand is really good than the actually it is.

The second aspect about gaining the brand equity is creating the perception about your brand in consumer’s mind that your brand is really good than actually it is.

The same can be done by different ways by advertising or marketing more about end result in term of qualities and properties of the product to the user. In case of Red Bull Drink following tactics were used or applied.

They came up with the slogan that “Red Bull gives you wings’. So people who really wanted boost their energy used to drink Red Bull. They also marketed or advertised on the energy enhancing ingredients of Red Bull like Caffiene, Taurine and Glucuronolactone. It also claimed the flowing properties. So consumers used to drink Red Bull to get some of these properties.
  • Improve physical endurance.
  • Stimulates metabolism and helps eliminates waste substances.
  • Improves overall feeling of wel-being.
  • Improves reaction, speed and concentration.
  • Increase mental alertness.

Next time they have changed the ingredients and flavor a bit. This they intended to communicate the product value as functional energy drink rather than just an energy drink. It was sweet in taste and carbonated as cola. As they were more concerned about the function of the drink they did not really care about the taste. The strong taste indicated to the customer that the drink was something more than mere refreshment. As direction printed on the cans drink served ”well-chilled” most of the customer found the taste more pleasant when they drank it cold.

They came up with second Slogan Red Bull “ Revitalizes body and mind”. This sogan was easy to grasp and covered a broad set of appropriate consumption occasion. Whenever consumer needed lift anytime whether morning, noon or night they can drink this. It was not time bound or occasion and activities bound.

The package was designed in a such a way that it used to attract customers cost wise, convenience wise and aesthetic wise.


In the market entry strategy Red Bull targeted Opinion leaders who are likely to influence the consumer purchased. These include sports athletes, entertainment celebrities, and hip urbanites. The company attempted to reach these individuals by making Red Bull available at sports competitions, in limos, before award shows and at exclusive after parties.

In Austria it was difficult for Red Bull to get an approval for sale because Austrian government had 3 categories for food and drugs. Therefore Red Bull lobbied to create an entirely new category. Functional food. Red Bull’s marketing strategy was encouraging product trial. People were curious to try this new category as this had some medicinal benefit beyond a dietary product, but also contained food properties that made them different from a pharmaceutical.


These sources do change depending on the market or country. Every country has different government policies. Like in this case study Austrian government had different categories for food and drug than UK and USA and Red Bull had difficulties in getting approval for sale in this country.

















2. Analyze Red Bull’s marketing program in terms of how it contributes to the Brand’s Equity. Discuss its strength and weaknesses.

In the said case study Red Bull has adopted following marketing programs or strategies which contributed to its brand equity.

1)Marketing Red bull through Word Of Mouth –

Red Bull Adopted the best and the oldest media called as word of mouth for marketing Red Bull. It was the central component in all Red Bull’s marketing activities. Word of Mouth drove awareness in the early stages of entering market. A knowledge of the product spread, a buzz would build around the brand. Eventually consumer everywhere would be talking and purchasing this brand.

So this was a successful strategy.

2)Developing Red Bull Mystique –

From the start, Red Bull was source of intrigue or fascination for consumers. The functional energy category was brand new for Austrians so curious and adventurous customers tried the brand and spread the word.
The company was not satisfied to let the word of mouth evolve naturally, that is why the company would place the empty cans of Red Bull in the clubs and bars to create the illusion of popularity.
At the same time people in adjacent countries like Hungary and Germany who had not been to Austria before heard about the brand thru Word Of Mouth testimonials. Thus outside Austria this product was made aware and marketed.
Thus not only in the country where this product was born the Brand equity thru awareness about this product was gained in the neighbouring countires also.

So this was also a reasonably successful marketing programme.

3)Market Entry Strategy -

Red Bull strove to build buzz about the product through its “Seeding Pro gramme” where the company micro – Targeted in Shops, clubs, bars and stores. This enabled the cultural elite to access the product first and hopefully spread the word of mouth to other customer and influence them.

They also reached the mass markets via super markets.

Red Bull also engaged in “pre-marketing” to establish awareness in markets where product was not yet sold. Pre marketing involved where sponsoring events that took place in a country where Red- Bull was not available.

Through Pre-marketing programme Red Bull tried to get recognized as pre-eminent Brand.

Thru this strategy not even a single thing is left where awareness and marketing of this product is not done.

4)Red Bull’s Target Market

It really did not targeted on any demographic or psychographic segments. Their attempt was to reach the broad range of consumers. The had only two dimensions people who are mentally fatigued and physically fatigued or both. This dimensions covers five broadly defined categories: “
students, drivers, clubers, business people and sports people” Bye using this strategy Red Bull grew into numerous markets segments.

Red Bull achieved its highest penetration in the range of 14-19 age range. Followed by 20-29.

5)Marketing Activity

Red Bull engaged in variety of marketing Pro gramme.

a)Advertising –

The Ads were effective because they clearly communicated the product benefits without promising specific physiological results.

b)Sampling-

This was essential part of Red Bull marketing pro gramme. Red Bull tried to reach the maximum number of consumers only in ioccasions such as concerts, parties, festivals, sporting events, at the beach, at highway rest areas for tired drivers and at campus libraries..

By using sampling programme they made a point that people experience the product the right way right place and in the right situation when they have met with particular fatigue or are in the need of food.

c)Event Marketing –

When Red Bull created an event it controlled all aspects of event including the name, Logo, Promotion and media production.

d)Sports Marketing-

Sports was done through opinion leaders who participated in action sports. These athletes who played these sports exhibited many of the qualities Red Bull wanted to project in it’s Brand Personality, Innovative, individual, non-conformist, unpredictable and humorous.


e)Point –of –purchase Marketing –

It’s point of purchase tool was the branded refrigerated sales units. Red Bull placed this miniature glass refrigerators and which prominently displayed the Red –Bull logo in convenient stores, bars, clubs, sports shops, office buildings, cafeterias and commissaries. Due to these refrigerators Red Bull could established it self in the retail market as a prominent brand as compared to other beverages.


Strengths.

1)Through Pre-marketing strategy Red Bull could recognize as a pre-eminent Brand
2)Through Event Marketing this brand is positioned as an independent stimulating beverage.
3)Targeted , board Range on consumers thus could grew into numerous market segments.
4)Through Sampling pro gramme this product was made available at the right place, right situation and in the right way where it was needed the most. Thus created awareness and good marketing.
5)Through POP Marketing strategy Red Bull could develop itself a prominent brand in a retail environment.

Weaknesses-

1)Word of mouth is a very time consuming process. When one person talks about the product to the other person not necessary that the other person will buy that product immediately unless needed very urgently. Whenever the other person needs to buy the drink it is not necessary that the person will remember the mouth publicity by that time.

2)In Target markets although they did not restrict them to any specific segment as demographic or psycho graphic markets and tried to cover a broad range of consumers they could target only the age group of 14-29 years. Rest was not covered.




Q: How can Red Bull maintain their marketing momentum ? Would you recommend that Red Bull develop any brand extension ? If so what would they be ? Would you use the same marketing strategy

Marketing momentum is being maintained by Red Bull as this popular energy drink has taken the nation by storm and continues to maintain its stranglehold on the energy drink market – despite an abundance of competitors. It seems like Red Bull is everywhere: all over TV, sponsoring every sport, and utilizing every other major form of advertising. While it may seem like Red Bull is flooding every advertising arena, in fact it does not. Red Bull has an advertising strategy that separates them from competitors, and it has been paying dividends. They shun print, don’t waste money on Super Bowl advertisements, shy away from outdoor media outlets, and do only a limited amount of TV advertising. Yet Red Bull is tremendously successful.

Red Bull has to now concentrate on maintaining their leading position in existing countries and develop new markets. This can be done by continuing in the following ways.

Positioning : Red Bull has always focused on youngsters and used them as brand ambassadors by recruiting student brand managers. They should continue doing it because these students tend to take the brand forward with their growth. Initially they use Red Bull on its own, but over age they can use it as a mixer, which is generally done by working adults.

Pricing : Since Red Bull has been in the market from many years and its popularity has only grown over time, they have to maintain their high price standard. People generally associate high prices with high quality and standard. Red Bull should take this forward, as an image has already been created for them based on its pricing.

Product : Red Bull has always concentrated on its packaging and Design. But when a Brand goes through a life cycle, it has to continuously refresh itself. Therefore it would be recommended that Red Bull redesign its packaging and overall look and feel whereas it should use its existing look in new markets and then after gaining market share, should again redefine its look.

Advertising : Red Bull should understand the taste and preferences of people in new markets they enter. This is very important because culture and perceptions play a huge role in different countries and markets.
Traditionally they have shied away from above the line advertising and used it in minimums, but for new markets they will have to use it extensively as it has to totally start afresh in terms of awareness. Due to Globalisation, stiff competition exists. Red Bull has to support its main strategy with heavy advertising. Outdoor Advertising is another great format because it is generally used for long term recall.






Brand extension or brand stretching is a marketing strategy in which a successful firm uses the same brand name on a different product. Organizations use this strategy to increase and leverage brand equity.

We do not recommend that Red bull should develop any brand extension.
Strategy is strategy. Tactics are tactics A strategy should never change. Tactics should be changed frequently to adopt the new ideas, new concepts, new opportunities and new media that are constantly coming into the market. Company after company tries to win their marketing wars by constantly changing their strategies.

Brand extension for Red Bull can lead to few dangers like

Image :The brand image of Red Bull will be damaged if it does not choose the correct brand extension. The brand is valued as a premium drink and has lot of aspirational value. This could be damaged if its extension gets a negative impact.

Consumer Perception: Red Bull will further create consumer confusion if it gets into extensions like isotonics, juices etc. This is because Red Bull has never positioned itself as a health drink. It will make consumers wonder as to what they are trying to promote. Energy drink on one side and health on the other. This will then make consumers think that Red Bull indeed is not good for health and that is the reason they are now getting into other categories. Further strengthening incidents like its ban in France.

Focus : Red Bull has always used a focus strategy wherein they are promoting their core competency without any other dubious claims. If they go in for a brand extension and this brand fails then the effects of the failure might directly damage Red Bull’s reputation.

New Market : Brand extension failure can hamper the Core brands progress. Since Red Bull is trying to enter new markets and countries, competitors can easily use the tactic of spreading wrong information and thus make Red Bulls entry difficult. Also the image will be further tarnished and make it very difficult for Red Bull to attain Brand Belief.



*Plz note the above report is un- edited