Red Bull, over the years has employed a unique and creative style of advertising. As such, the company’s products are available in 120 countries with sales amounting to more than 3 billion cans annually. As such, its energy drink serves tom combat physical and mental energy building benefits. As such, this paper seeks to analyze the Red Bull company in retrospect to its success in establishing markets for its products.
Presently Red Bull has annual sales of 4 billion cans in 160 countries. Red Bull employs a distinctive approach to marketing. It employs a progressive marketing strategy that aims at constantly evolving and developing the brands. As a result, this strategy allows the company to engage with consumers by employing new and exciting communication channels.
The 21st century has proved social media as an imperative marketing tool for many organizations. It is augmenting popularity, principally with the young audience. Tentatively, social media have had an immense impact on the present marketing techniques. Red Bull’s media venues are Facebook, Twitter and Digg.
Upon the exploitation of the Red Bull Company in the United Stated, it employed alternative marketing methods to selling their product. They identified a target audience- those who mostly proffered the buzz created by the energy drink. The key constituent group was the college students. The Red Bull created a group of “consumer educators” who toured various locations to supply the free samples.
The Red Bull company follows the dominant level of cooperating strategy as it heavily relies on its main product, the Red Bull energy drink. Tentatively, other business includes various professional sports clubs, leading soccer leagues as well as, Red Bull Cola. Since Red Bull’s strength is a core capability, it has been proficient in providing sports teams, apparel, as well as, extreme sports events. Despite diversification of Red Bull, all of the innovative divisions employ strategies similar to the cooperation leading business –level strategy of centered differentiation.
Value Chain Analysis
The company does not manufacture its products from top to bottom. Even though, it does the filling of the cans it outsources the cans production to Rexam the leading can manufacture in the world. As such, the company made use of the leveraging advantage over Rexam in building a factory, devoted to the unique can production, adjacent to its factory at Ludesch, Austria. Undoubtedly, it eases the inbound logistics as they can simply shift to the adjacent factory for packaging.
The company does not center or rather does not heavily manufacture its products, only the final steps of filling the cans. As such, it is imperative for the company to be involved in the concluding steps of the manufacturing as it serves to maintain the quality of the product. As such, Red Bull ascertains the quality standards of its products.
The company’s distribution has to keep up with the stunning augment in volume as it explores new markets. Speed of growth serves as the most fundamental aspect in Red Bull’s strategy as it cannot afford to compromise this entity. Conversely, in 1994, the company was unable to keep up with the demand and was out of stock in Germany. This experienced partial recovery in Germany to achieve dominance it enjoys in other markets. As such, Red Bull centers on “order filling” as opposed to “inventory reduction” in retrospect to outbound logistics.
Certainly, the company’s supply chain serves to be reliable as well as, reduce problems. The company has realized this through the employment of single logistics provider (Ozburn-Hessey Logistics) and a single warehouse management system. Red Bull opted for the OHL system as it is flexible in warehouse network. As such, through the incorporation of the internet, based visibility, the system allows the company to manage the intricacy of thriving markets. On the other hand, the Red Bull company maintains a high inventory, usually 50-60 days since it can meet the expense running out of stock. As the energy drink industry faces maturation and growth, the company opts to shift its emphasis and opt for cost minimization.
Below the Line
Below the line, promotions encompass all forms of promotional activities. As such, Red Bull focuses on developing creative below the line promotion. In comparison to other businesses, Red Bull does not employ the traditional sponsorship as such it employs event organization. Sporting events include Red Air Race and Red Bull X-Fighters where top FMX riders and pilots perform world class tricks and flips. These events effectively establish the brand values. As such, Red Bull uses AIDA (Awareness, Interest, Desire and Action respectively) process in creating interest and awareness in their products.
Advertising has been the most effective traditional promotional approaches. This delivers message to a wide audience by using television, radio and television. Consumers bombard with the messages during radio, television, newspaper advertisement in promoting their products. Despite easy reach to a large market, it is more difficult to deliver memorable messages. As such, it helps augment top of mind brand awareness.
Sales and Marketing
The Red Bull company employs regional distributors for its varied and extensive markets. As such, the Red Bull company selects its distributors, with the prospects of projecting their image. Moreover, marketing is Red Bull’s primary core and activity. Red Bull owes its high margins to its image as trendy, sporty relayed and with its touch of extreme. Tentatively, the company invests 30% of its return in augmenting its brand image. As opposed to other companies, Red Bull does not market as other firms: they do not center on celebrity endorsement and hardly employs television advertisement. As a result, it uses “guerilla marketing”, which links their products to fashionable as well as, extreme events to build their image. Red Bull sponsors more than 600 athletes worldwide they organize sporting and cultural events such as their own Formula One racing team. Additionally, Red Bull targets to sell Red Bull as a mixer (Recd Bull vodka) that has become a famous drink. As such, marketing forms the core competency for the company, which serves to defend and extend supremacy in the face of numerous challengers.
As a private firm, the company does not have pressure from the shareholders in offering dividends, thus enabling the company in building the company’s identity as well as, its brand. As such, the company centers in building their brand name, advocating the importance of the company’s marketing division.
Since 1988, the company has employed the same recipe thus Red Bull uses remarkably little research as the consumer enjoy the classic product. Furthermore, the company conforms to the growing health conscious trend by the introduction of sugar free alternatives in 2003. With the growth of mobile and online marketing, traditional media opportunities continue to have an essential role as a viable marketing solution. Traditional media have acted as the proffered strategy for years in the forms of sales promotion and advertising as well as, public relations (Jordan 2000). Unlike alternative media that target an audience on the web, traditional media will be useful to Red Bull for those who are not on the web, will be able to see their ads and know about them
The company chooses their own ingredients, as such; they employ relatively unsophisticated raw materials. Undoubtedly, procurement is imperative for the company, yet poses exceedingly minimal difficulties due to the ease of inbound logistics.
The presence of Pepsi and Coca Cola brand’s clout will cause the alcove to augment over the next years. As such, the company will have to work harder to safeguard its build and position sales. New arrivals at lower prices tend to pose a greater risk for the company. The Coca Cola Company established distribution network that provides instant credibility and shelf space for its brand. As such, Red Bull will have to change its marketing approach in order to stay competitive in the shifting market.
Brand community is a term used to describe like-minded consumers who identify with brands and share significant traits. Red Bull can build a brand community for those who are all-nighters for school, work, partying as well as those engaged in extreme sports. These members can become Red Bull best promoters. Twitter, Digg, or Facebook will help in creating, improving, and sustaining links among brand community members. As more people become brand members, more people get to know more about the brand (Red Bull).
The Company should maintain to augment its international scope, through augmenting its strong grip in countries that it already exists in like Southern Europe, where the product is beginning to take off. In the US, where it receives massive support, space still remains for improvement due to availability of the Convenience stores. As such marketing in dominant regions would assist maintain their popularity.
The Red Bull Company has come a long way in dominating the market. Beginning in a practically non –existent market, presently the market is diverse, saturated with competitors. Revolutionary marketing techniques created the company’s successes. Competitors such as Coca –Cola and Monster may well gain global market share. Nevertheless, diversifying into Organic energy drinks like Carpe Diem and Red Bull simply Cola has entered innovative market for health conscious consumer.