Red Bull GmbH

By John Dudovskiy
August 1, 2012

Red Bull Red Bull GmbH is a multinational beverage company based in Austria that sells a famous Red Bull energy drink. The company sells its products in 162 countries, and 4,204 billion cans of Red Bull were sold during the year of 2010 alone (Company Figures, 2011, online).

The company product range consists of Red Bull drink, Red Bull sugar free, Red Bull Cola and Red Bull energy shots. Its mission statement is: “We are dedicated to upholding Red Bull standards, while maintaining the leadership position in the energy drinks category when delivering superior customer service in a highly efficient and profitable manner” (Mission/Values, 2011, online)

This article represents a report that presents analysis of marketing communication strategies of Red Bull in two countries – UK and China. The article comprises the review Red Bull’s current marketing communication strategy in UK and China and formulates recommendations for improvement and change for the company.

Red Bull GmbH Report contains the application of the major analytical strategic frameworks in business studies such as SWOT, PESTEL, Porter’s Five Forces, Value Chain analysis and McKinsey 7S Model on Red Bull GmbH. Moreover, the report contains analyses of Red Bull’s business strategy, leadership and organizational structure and its marketing strategy. The report also discusses the issues of corporate social responsibility.

Review of the Current Practice

Red Bull’s Marketing Communication Strategy

Usage of Marketing Communication Strategies by Red Bull

Marketing has been identified as one of the most crucial aspects of the business by Red Bull along with many other businesses. Red Bull relies in marketing communication in order to conduct its marketing strategy. Marketing communication can be defined as “all communication activities an organisation undertakes to promote its agenda to its audiences” (Gillis, 2006, p.392).

Marketing communication mix, on the other hand, has been defined as “a number of promotional methods used in combination to promote a particular product through communicating with individuals, groups and organisations in the ‘target group’” (Ruskin-Brown, 2006, p.136)

Moreover, marketing communication mix represents a set of marketing communication modes that can be divided into the following six categories (Kotler and Keller, 2006): advertising, sales promotion, events and experiences, public relations and publicity, direct marketing and personal selling. Each category consists of specific marketing communication tools.

Also, it is important to note that “marketing communication mix refers to totality of efforts made by the firm to communicate with the wholesalers, retailers, present consumer, general public, etc.” (Trehan and Trehan, 2009, p.21). In other words, all the marketing efforts initiated by Red Bull in order to communicate with different stakeholders of the company can be specified as the company’s marketing communication mix.

The Appropriateness of Marketing Communication Messages to the Target Market

A specific customer segment targeted by companies producing energy drinks including Red Bull represent mainly young, urban males within the age range of 16 to 29. These people typically have a habit or aspirations of living on the edge. Accordingly, extreme sports, as well, as other challenging pastimes are popular among this specific category of consumers.

The slogan ‘Red Bull gives you wings’ has been developed by the company in order to attract this specific customer segment, through communicating a message that consumption of the drink makes challenging tasks easier. Moreover, “Red Bull epitomised the modern brand: using the marketing communications mix to become culturally relevant by selling style, a way of life not just product” (Dahlen et al, 2009, p.316).

To summarise the point, it can be stated that Red Bull has formulated appropriate marketing communication messages in order to reach to its target market. As it has been noted, Red Bull target customers are people attempting to live their life fully by leading an active lifestyle and engaging in various dangerous activities. Accordingly, Red Bull marketing communication messages try to convey the idea that the drink provides necessary edge and energy for people that would assist them to lead their desired lifestyle and achieve increased level of performance in many aspects of their life.

 

Marketing Communications Tools and Media Used by Red Bull

Red Bull communicates its marketing messages to the target customer segment of the company through a wide range of communication tools and media. Marketing communication tools used by the company can be best analysed by dividing them into six broad categories as suggested by Kotler and Keller (2006).

Advertising

Advertising can be defined as “company’s external communication” (Janoschka, 2004, p.15).

Print and broadcast ads. Red Bull is engaged in advertising through print and broadcasting ads in both countries: UK and China. In UK the company has a close partnership with Sunday Telegraph newspaper, distributing the company’s own Red Bulletin magazine with the newspaper, whereas in China Red Bull is advertised occasionally in local newspapers and TV channels.

Billboards. Advertising through billboards is not one of the main marketing strategies for Red Bull. However, billboards are still used to advertise the brand in an occasional manner in UK as well as China.

Packaging outer. The design of packaging outer is used by Red Bull in order to advertise the product. This has been done through displaying the logo of the brand in big size in all Red Bull packages.

Point of purchase displays is one of the main advertising tools used by Red Bull in UK and China. Specifically, in most of the grocery and off-license stores the cans are stored in a container that represents a magnified version of the Red Bull can. Moreover, Red Bull shots are usually placed near the tills advertising the product to all customers of the store.

Symbols and logos are also used by Red Bull as an effective advertising tool in UK, China and other countries. Specifically, the logo of the company, a raging bull is instantly recognised by customers and reminds customers about the value promise of the brand.

Posters advertising Red Bull and sports events sponsored by the company can be found in pubs and clubs in UK as well as China. However, this form of advertising is used in UK in a greater extend compared to China.

Alternative advertising tools currently not used by Red Bull include the use of audiovisual materials, packaging inserts, leaflets, directories and brochures and booklets.

Sales Promotions

Sales promotions is defined by Kurtz et al (2009) as short-term incentives that encourage the sales of products and services.

Sampling has been acknowledged as one of the most effective sales promotion techniques and it is used by Red Bull in an intensive manner. A significant sampling campaign has been initiated by the company with the introduction of Red Bull Cola in Northern America, UK, China and many other substantial markets of the company (Bashin, 2011, online).

In order to achieve a greater level of efficiency, sampling campaigns have been conducted with the use of Mini brand cars that have been specifically designed to carry a magnified version of Red Bull Cola can.

Entertainment is also used by Red Bull for sales promotion purposes. Entertainment activities initiated by the company range from organising Freestyle DJ battles, and dance competitions to various sport events (Featured Entertainment, 2011, online). However, Red Bull initiates entertainments mainly in Europe and US, and the company does not engage in this form of sales promotion in Chinese market.

Other popular sales promotion techniques not engaged in by Red Bull include premiums and gifts, coupons, rebates, exhibitions, and tie-ins.

Events and Experiences

Various types of entertainment events are organised or sponsored by Red Bull in a regular basis. During the year of 2010 alone Red Bull had sponsored more than 23 racing events that include British Grand Prix, Chinese Grand Prix, Australian Grand Prix, and Abu Dhabi Grand Prix to name just a few (2010 Press Releases, online).

Businesses support various types of causes with the purposes of increasing the brand awareness in positive terms. Red Bull supports specific causes for the same purposes as well. For instance, “to raise money for Wings for Life, the charity which funds research into spinal injury, Red Bull is auctioning off some of the most interesting and unique second-hand sporting goods the internet auction site has ever seen” (Coulthard, 2009, online)

Moreover, a number of festivals and arts are sponsored by Red Bull each year that include See No Evil Graffiti Project (Bristol), Fringe NYC Live Art, Edinburgh Festival, Impulstanz Vienna International Dance Festival and others. Sponsoring festivals and arts offers wide brand exposure to the company at the same time creating a good company image.

There are other marketing techniques available Red Bull under the events and experiences category that include organising factory tours and company museums, initiating street activities etc.

                                   

Public Relations and Publicity

“Public relations is concerned with an organisation’s relationships with the various groups, or ‘publics’, that affect its ability to achieve its goals and objectives” (McDonald and Wilson, 2011, p.290).

Press kits and publications are initiated by Red Bull in a regular basis to inform the stakeholders of the company in UK, China and other places about new products, events and news related to any other aspect of the business.

Along with many other multinational corporations Red Bull publishes annual reports through which the company communicates important messages to the public and other stakeholders of the company. At the same time, annual reports serve as an effective advertising tool where the main achievements and strengths of the business are highlighted.

Identity media is considered to be one of the most effective advertising tools. This form of advertisement is fully used by Red Bull through developing the brand’s own online TV channel and magazine. Red Bull TV is an online television channel that mainly covers sporting events sponsored by the company and airs other programs that aim to attract the target customer segment of the company. Red Bulletin, on the other hand, is a monthly magazine that is distributed with Sunday Telegraph newspaper.

Red Bull can also explore alternative public relations and publicity tools and techniques that include initiating speeches, seminars, lobbying, as well as, engaging in community relations.

Direct Marketing

Direct marketing is defined by Mueller (2010), as a direct communication between seller and the buyer without use of any intermediary media. There are many forms of direct marketing that include shopping online, telephone shopping, catalogues, shopping through fax, mailings, TV shopping, telemarketing and others.

Direct marketing is mainly popular with products of high value such as technology items, furniture etc. Red Bull does not use any of the above mentioned direct marketing tools for the retail customers.

Personal Selling

Kitchen (2010) explains personal selling as personal sales presentation made by company’s sales representatives with the aims of making sales and initiating customer relationships. The advantages of personal selling are two-way communication of messages, and personal attention to customers, whereas it’s main disadvantage relates to its extremely high costs.

No evidences have been found in secondary research related to the Red Bull’s engagement in personal selling initiatives.

Additional  Marketing Tools

Apart from traditional marketing tools and techniques listed above Red Bull is also engaged with a range of additional marketing tools that include product placement and viral marketing. For instance, Red Bull has been effectively advertised in movies such as Hellboy and Hellboy II, where the main character, a positive character is seen drinking Red Bull on several occasions.

Moreover, “Red Bull has integrated its product in the platform game Worms 3D where it serves as a follow up. A clever integration, oddly shaped power-ups with ever weirder results are part of all games in the Worms series. In the game a can of Red Bull serves as a powerful dimulation of the Red Bull slogan ‘Red Bull gives you wings’”(Graaf and Washida, 2007, p.105).

The Key Similarities and Differences of Marketing Communications in UK and China

The key similarities in the use of marketing communication tools in UK and Chinese markets relate to highlighting the high quality of the drink and its ability to increase mental and physical performance of individuals, however there are differences as well.

The key differences in marketing communications of Red Bull in UK and Chinese markets relate to the slogan of the company, as well as the design of the cans.

The slogan of ‘Red Bull gives you wings’ is used by the company in order to sell the drink in European and US markets. In Chinese market, on the other hand, this slogan has been altered to ‘Drink Red Bull when you feel sleepy or tired’ in order to address the cultural differences associated with the local consumers (Xinzhen, 2009, online).

Moreover, Red Bull cans in Chinese stores have a bright yellow colour with words written in black colour, in order to appeal to the preferences of local customers.

The Challenge of Practicing Integrated Marketing Communications (IMC) by Red Bull

The definition of IMC has been proposed as “a communication process that entails the planning, creation, integration, and implementation of diverse forms of marcom (advertisements, sales promotions, publicity releases, events etc.) that are delivered over time to a brand’s targeted customers and prospects” (Shimp, 2007, p.10).

The key features of IMC can be summarised into the following points as proposed by Pickton and Broderick (2005) and Sharma (2009):

  • Marketing communications have to be devised addressing the needs of customers;
  • The choice of elements of marketing communication tools depends on the nature of the product (or service) and other factors associated with it;
  • Marketing messages communicated through different channels have to convey the same idea (which is the value offering of the brand);
  • Building long-term relationships with customers;
  • Affecting consumer behaviour.

The Key Issues Impacting upon Red Bull’s Ability to Practice IMC

There are set of issues that impact upon Red Bull’s successful implementation of IMC practices. The greatest issue of this nature relates to the integration of marketing communication efforts implemented through various channels. In other words, unless all elements of Red Bull marketing communication tools are fully coordinated with each other, the quality IMC outcome would be greatly compromised.

Moreover, another issue related to the successful implementation of IMC practices by Red Bull involves marketing communication suppliers such as public relations agencies, advertising agencies, sales promotion companies etc. Specifically, the differences between various business strategies of these companies may negatively affect on the level of integration of the company marketing messages and the level of customer perception of those messages.

The Evidence of IMC in Red Bull’s Marketing Strategy

There is a clear evidence of IMC in Red Bull’s marketing strategy. The company management aim to associate the brand with such ‘values’ as being highly energetic, living and enjoying the life to the full, and performing with an increased level of efficiency in whatever an individual is engaged in etc.

Marketing messages communicated by Red Bull through various channels aim to highlight the above ideas and they do not contradict with each-other. For instance, being an important marketing communication tool the company slogan of ‘Red Bull gives you wings’ is further highlighted by the company initiatives that involve sponsoring racing events.

Recommendations for Improvement and Change for Red Bull

Marketing Communication Objective for Red Bull

Red Bull is to introduce a new marketing campaign in Autumn 2011 in China. The marketing communication objectives for the campaign would include the following points:

  1. To enhance the level of Red Bull brand awareness in China by 50%;
  2. To improve the image of the company among different stakeholders of the company;
  3. To appeal to a new customer segment of girls aged between 16-29 and increasing their share within current Red Bull customers to 40%

Marketing communication objectives for the new Red Bull campaign relate to the company’s organisational objectives in a direct manner. This is because all three objectives formulated above serve the primary objective of profit maximisation of the company, and at the same time they contribute to the long-term growth of the company through increasing the level of brand awareness among population and improving the image of Red Bull in general.

Target Market for Campaign

The importance of selecting appropriate target market is stressed by Pride and Ferrell (2011), who maintain that products and services cannot appeal to everyone due to the differences among individuals in various levels; hence classifications are required among the population according to their common needs.

Red Bull’s target market in China so far has represented males aged between 16-29, that lead an active lifestyle or aspire to lead such a lifestyle. The company has successfully communicated its marketing messages to this target market which has resulted in increasing levels of revenues for the business.

However, there is a potential for further increasing Red Bull revenues, through increasing the target market for the company. Specifically, the marketing campaign to be implemented in Autumn 2011 aims to target girls in China within the same age range of 16-29.

The justification for the selection of the target market can be done by pointing to the fact that due to the increasing forces of globalisation Chinese society is being influenced by the values of Western societies, and as a result increasing numbers of Chinese girls aged 16-29 are starting to appreciate the values of active lifestyle traditionally communicated by Red Bull.

Campaign Message and Creative Idea

The message for Autumn 2011 campaign is “Drink Red Bull & Perform in Full Capacity”. The marketing campaign involves the communication of this message through various channels in an integrated manner.

The effectiveness of the campaign slogan can be justified by pointing to the fact that traditionally Chinese women and girls have assumed secondary roles in society due to cultural characteristics. However, as a result of globalisation numbers of females are increasing within the Chinese society who dare to be active and compete with males in aspects of personal and professional lives. The new Red Bull slogan appeals to this specific category of females.

It is important to note that, the new Red Bull slogan proposed in this report does not contradict with precious slogans, and even compliments them, thus ensuring that traditional Red Bulls customers – males are not negatively affected.

The main creative approach to the implementation of the marketing campaign relates to the use of viral marketing. It has been stated that “the concept of viral marketing starts with the premise that people pass or tell people they know about products or anything they like or even dislike” (Allen, 2010, p.60).

The viral marketing for the campaign is going to be conducted through a range of global social networking sites such as Facebook.com, MySpace.com, and Friendster.com, as well as Chinese social networking sites that include renren.com, igloo.com and kaixin001.com.

Moreover, during the marketing campaign the viral marketing is going to be integrated with other forms marketing that include celebrity endorsements, TV ads, events and experiences, as well as billboards advertisement.

Gantt Chart Plan for the Campaign

The proposed marketing campaign is going to be conducted on the following manner:

Month

 Sep Oct Nov

Week

36

37

38

39

40

41

42

43

44

45

46

47
Preparations for viral marketing
Preparing for endorsements
Choosing agencies for TV ads
Working on TV ads
Planning events & experiences
Finding an agency for billboards
Working on billboards
Conducting viral marketing
Organising celebrity endorsements
Airing TV ads
Staging events and experiences
Displaying the billboards

 

Budget

The budget for the marketing campaign is going to be distributed in the following manner:

Expense % of total budget
Viral marketing 29.3
Celebrity endorsements 33.4
TV advertisements 14.8
Events and experiences 14.7
Billboards 7.8

Evidence of Integration

The marketing plan for the campaign Autumn 2011 is fully integrated with the general marketing strategy of Red Bull. This statement can be proved by the following two points:

First, the proposed marketing plan will positively contribute to the level of revenues of Red Bull through extending the target customer group of the company.

Second, the Red Bull brand in general is going to be promoted as a result of  successful implementation of  the proposed plan that contributes to the long-term aims and objectives of the company

References

Category: Management
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