How Red Bull woke up the teen market
It looks (and tastes) like medicine, but it still conquered the soft drinks trade. Now the edgy pick-me-up is moving into the grown-up world of motor racing. John Arlidge reports
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John Arlidge
The Observer, Sunday 5 December 2004
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At this time of year fallen leaves shroud the carefully planned suburbs of Milton Keynes. Mist drifts in from the fields. The posh car firms - Mercedes, Volkswagen, Audi - whose UK head offices ring the Buckinghamshire town are gearing down for the winter. But last week the end-of-year gloom was lifted by the arrival of a most unlikely new inhabitant.
A bronzed and energetic Austrian, who has made a billion-pound fortune selling a drink
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The health and energy drinks market is the fastest-growing sector of the burgeoning soft drinks market, doubling in size every year to reach £1.5bn last year. Red Bull is the market leader and its revenues rose 10 per cent to £1bn last year, on sales of 1.5bn cans. Vodka and Red Bull is still the most popular alcoholic drink for under-20s.
The pick-me-up 's 'anti-brand brand ' status explains its rapid success, argues Nirmalya Kumar, senior analyst at the London Business School. 'Red Bull has never done anything in a conventional way. It has not used normal advertising, nor marketing. When it sponsors events or sports, it tends to go for minority ones. '
While the no-logo generation is happy, the premium price on cans - more than £1, compared with 50p for Coke or Pepsi - has kept the money flowing in to the firm 's Alpine HQ. But what is an irreverent Austrian doing in one of Britain 's newest towns and why is he spending a fortune buying his way into a big-brand sport in crisis?
Frustrated by the dominance of business interests over sport and the continued dominance of Ferrari, some of the big F1 teams are threatening to leave the F1 circus and form a new competition. Some observers say Red Bull is keeping pace with its core market as it gets older. 'Formula One has the kind of dangerous, edgy, masculine image that suits Red Bull, ' says Richard Hall, chairman of the drinks consultancy Zenith International. 'The early adopters who made it what
The soft drink industry is one of the most highly profitable industries in the USA. Also, the competitive market is a very large market. Americans consumed about 53 gallons of soft drinks per person a year in 2000 by $ 60.3 billion!! Comparing with the market in 1990, since it was 47 gallons. In recent years, the market growth has slowed.
At such a point in marketing, Red Bull had found its calling, so to speak, in its advertising strategies, but that did not stop them from coming up with new creative tactics to persuade more than 86% of the American public to try their energy in a can' (Gschwandtner). In fact, they hired "hip locals" of busy cities known as the MET's (mobile energy team) to drive around a Red Bull logo car with daily missions that include bringing energy where it's needed, sporting events,
Red Bull targets only a particular segment of market and therefore makes its product only available at those places where the target can be reached. The energy drink can be bought at colleges, supermarkets and is mainly associated to extreme sports. In particular, the energy drink has also known a tremendous success in India, where the segment is the fastest growing in the category, due to India’s youth centric population and fast urbanization. Red Bull was actually the brand that created energy drink category in India (Docstoc, April 2012).
These manufactures will grab young people attention who are in need to increase and improve their concentration, reaction speed, and emotional state; but they fail to acknowledge the side effect of their products, such as being very tired after several hours of “sugar rush”. An over dosage of Red Bull cause a twenty-eight years old man to have a heart attack (Richards), this incidents is one of many that prove to us that this dangerous products should be banned from super markets and other easily accessed places for younger generation.
Red Bull is now in the position as the market leader of energy drinks sector, which hold up to 70 percent of the market shares
The soft drink industry in the United States is a highly profitably, but competitive market. In 2000 alone, consumers on average drank 53 gallons of soft drinks per person a year. There are three major companies that hold the majority of sales in the carbonated soft drink industry in the United States. They are the Coca Cola Company with 44.1% market share, followed by The Pepsi-Cola Company with 31.4% market share, and Dr. Pepper/Seven Up, Inc. with 14.7% market share. Each company respectively has numerous brands that it sales. These top brands account for almost 73% of soft drink sales in the United States. Dr. Pepper/Seven Up, Inc. owns two of the top ten
New employees in the career of sports marketing lead by example from some of the most successful products such as the Red Bull energy drink and Skullcandy products. The most efficient way to be successful is to promote products with several sponsors. For example, everyone knows what Red Bull is, a sports drink known for its burst of energy right when we need it. The company has had great success taking a new approach on sponsorship. Conway argues in his article “A Sports Marketing Success Story” that “Red Bull wants to own teams and events. The company has a huge focus on brand management and ownership allows it to completely control how its brand
In 2003, Owsley hired David Holt as a consultant for NBB who was a professor at Oxford and an expert in branding. Holt and Owsley outlined a paper to describe the brand identity, character, culture and promise at NBB. Holt determined the brand identity for NBB as a culture that practiced creative activities for the pleasure of doing them well and in accord with the natural environment. Second, there was a key fact in promotion. In the beginning, NBB used word of mouth, but recognized a need to reach more customers. They increased the awareness of the NBB product by attending festivals to give out samples of the beer and created a sales team throughout the territories of distribution. NBB found an advertising agency in New York, Amalgamated, to communicate the brand identity. The advertising campaign was created to target men that were sophisticated beer drinkers between the ages of twenty-five to forty-four with the image of being practical. The ad focuses on presenting the organizational image of being down to earth by positioning the brand as fanciful, thoughtful and insightful.
Red Bull energy drink competes in the Non-alcoholic drink market which could be the overall Food and Beverage market. ‘Red Bulls target market is young, on the go, who enjoy extreme sports and live an active nightlife, anywhere from 18-35’(Swartz,Jon).
A slow growing market is a great way to characterize the energy beverage category in late 2007. This industry was increasing in profits still but was not increasing in profits as quickly due to factors such as market maturity, increasing in prices, competition and new hybrid products (Kerin & Peterson, 2010). The market was still very small but was dominated by Red Bull due to it being one of the first energy drinks, which caused it to dictate the market and have more of an advantage than the other energy beverages. So in late 2007 the market for energy drinks was still
The category is dominated by 5 major brands (94% of dollar sales), with Red Bull far above the pack with a 43% dollar sales market share. The other 4 are in close competitions with
RedBull is also different from other energy drinks that it uses half the quantity of caffeine and sugar than any other competitors energy drink. RedBull had produced many advertisementsas TV commercials and also increases their sales with the help of magazines, internet and billboard advertising. Advertisements in magazines are limited because there are only few magazines which suits to publish RedBull advertisements in them. Internet advertising will gain the response of the particular audience as it truly depends on people using online services. Billboard advertising is also a very good method for attracting customers, but it should be placed at the places
Red Bull receives a lot of publicity throughout the media, mainly to do with health issues. This causes controversy over the drink, and is considered a weakness. The media often report that Red Bull is unhealthy and damages your body. The media often targets parents, telling them that it is harmful for teenagers and children. This being Red Bulls target market has a very negative impact on the company.
Cultural-symbol as a positioning strategy - The brand had Vivek Oberoi, the bollywood rising star of that time endorsing the brand in an unusual style. Vivek was shown in the retro look with typical combination of Elvis style and Shammi Kapoor style in an old lamby scooter screaming Wakaw. The 360 degree branding efforts ensured the good publicity of Vanilla Coke. But by this kind of advertisement they positioned Vanilla Coke as ‘Cool and Different Drink’. The targe segment for this campaign was not right. People liked this campaign because they have seen flashy old star and the lamby and could easily relate the old characters and the concept. But a twenty year old person may not relate or understand the concept. In that respect, the brand may have
Red Bull’s target market is young adults and young professional (aged 16-22). If the number of people in this age – group form a small fragment of the country’s overall population, then entering such a market would be risky and not profitable enough. Red Bull has built a brand image of a youthful energy drink and hence it can be successful only in markets that have a large number of young people.