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Red Bull Company’s Strengths and Advertising Case Study


Introduction

Red Bull is a company whose rise to prominences is predicated on a successful launch of a single product—an energy drink (Red Bull, 2016). Since its creation in 1987, the company has managed to sell more than 62 billion cans of the eponymous caffeinated beverage, thereby taking a leading position in the global market of energy drinks (Red Bull, 2016). This paper aims to discuss Red Bull’s strengths in the context of soft drinks producers such as Coca-Cola and Pepsi entering the market. The paper will also discuss the company’s approaches to advertising and provide recommendations for improving its marketing instruments.

Discussion

Strengths

The company’s brand is, arguably, its biggest strength. A high level of brand recognition can be attributed to Red Bull’s brand-building activities the scope of which surpasses even that of Coke and Pepsi. Effective marketing positioning provides the firm with another advantage that will make it difficult for newcomers to the market to challenge its position. It has to do with the fact that Red Bull’s product is associated in the minds of its target audience with sports and “adventurous spirit,” which is extremely important for “the young or the young at heart” (Pangarkar & Agarwal, para. 11).

Having strong brand equity is a source of sustainable competitive advantage in the competition with reputable companies that enter the market (Amini, Darani, Afshani, & Amini, 2012). It follows that by properly using its intuitively appealing brand image, Red Bull can solidify its standing in an increasingly competitive environment.

Marketing Tactics

Sponsorship has been long recognized as an exceptionally effective marketing tool that can help to communicate the desired brand image to a target market (Grohs & Reisinger, 2014; Kotler & Keller, 2016). However, Red Bull does not subscribe to the traditional model of sponsorship exposure. Instead, the company prefers to own sports teams to have better control of numerous drivers of its brand image.

Moreover, Red Bull regularly stages unique sporting events, which is a considerable advantage of the company’s approach to marketing. By organizing events and owning teams, the company can customize commercialization activities, thereby changing spectators’ perception of its brand. However, the strategy is associated with a drawback of over-commercialization, which might cause the audience to develop a negative association with the company’s product (Abosag, Roper, & Hind, 2012).

In 2012, the energy drink manufacturer organized an event that was described as “the world’s biggest jump” (Aaker, 2013, para. 4). This was an example of sensation marketing which falls in a broader category of guerrilla marketing. This approach to communicating a company’s message has been widely acclaimed by experienced marketing practitioners for its ability to produce a massive effect with a minimum investment (Nufer, 2013). The marketing tactic’s disadvantage is that it cannot be effectively utilized outside a traditional marketing mix. Therefore, Red Bull is recommended to use guerrilla advertising in conjunction with traditional approaches to marketing.

Effectiveness

The company owns several soccer and Formula One teams, which helps it to influence consumer attitudes towards its drink (Aaker, 2013). The energy drink producer also arranges three types of sporting events: the Red Bull X-Fighters, the Red Bull Air Race, and the Red Bull Cliff Diving World Series (Aaker, 2013). Furthermore, Red Bull stages non-traditional promotion events.

The company is extremely effective in finding alternative approaches to the marketing of its product. These approaches can help to add subtlety into brand promotion, instantly grab the attention of prospective customers, and effectively allocate marketing resources. By featuring short clips on its YouTube channel, Red Bull caters directly to its first and second demographic. Also, the energy drink producer invites its consumers to explore their potential and take action. It has to do with the fact that Red Bull’s marketing activities are associated with the imagery of heroism and bravery, which allows creating a credible connection between campaign events and the brand.

Red Bull’s savvy approach towards marketing should be complemented with a clear understanding of risks related to viral advertising. There is a fine line between fascination and annoyance, which should not be crossed by the company. Also, Red Bull can permanently damage its reputation to be exposing athletes participating in its promotion events to undue risk.

Recommendations

Red Bull possesses a wide range of extremely effective marketing instruments the use of which is aligned with its marketing mix. However, the company should concentrate on the elimination of the threat of substitute products such as energy shots. Red Bull can safeguard itself from both substitute products and new entrants into the industry by emphasizing that their product represents not only a jolt of energy but also a heroic adventure. Also, the company should increase its market penetration by gaining new customers in the gaming community. This can be achieved by sponsoring the development of engaging and innovative video games.

Conclusion

The paper has analyzed Red Bull’s strengths in the market of energy drinks. It has been argued that the company is extremely effective in using guerrilla marketing for delivering its message to target audiences. The paper has emphasized the necessity of increasing the company’s market penetration by moving beyond a niche area of traditional sports.

References

Aaker, D. (2013). . Web.

Abosag, I., Roper, S., & Hind, D. (2012). Examining the relationship between brand emotion and brand extension among supporters of professional football clubs. European Journal of Marketing, 46(9), 1233-1251.

Amini, A., Darani, M., Afshani, M., & Amini, Z. (2012). Effectiveness of marketing strategies and corporate image on brand equity as a sustainable competitive advantage. Interdisciplinary Journal of Contemporary Research in Business, 4(2), 192-205.

Grohs, R., & Reisinger, H. (2014). Sponsorship effects on brand image: The role of exposure and activity involvement. Journal of Business Research, 67(1), 1018-1025.

Kotler, P., & Keller, K. L. (2016). Marketing management (15th ed.). Upper Saddle River, NJ: Pearson.

Nufer, G. (2013). Guerrilla marketing—innovative or parasitic marketing? Modern Economy, 4(1), 1-6.

Pangarkar, N., & Agarwal, M. (2013). . Forbes. Web.

Red Bull. (2016). Milestones. Web.

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IvyPanda. (2020, November 21). Red Bull Company's Strengths and Advertising. Retrieved from https://ivypanda.com/essays/red-bull-companys-strengths-and-advertising/

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"Red Bull Company's Strengths and Advertising." IvyPanda, 21 Nov. 2020, ivypanda.com/essays/red-bull-companys-strengths-and-advertising/.

1. IvyPanda. "Red Bull Company's Strengths and Advertising." November 21, 2020. https://ivypanda.com/essays/red-bull-companys-strengths-and-advertising/.


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IvyPanda. "Red Bull Company's Strengths and Advertising." November 21, 2020. https://ivypanda.com/essays/red-bull-companys-strengths-and-advertising/.

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IvyPanda. 2020. "Red Bull Company's Strengths and Advertising." November 21, 2020. https://ivypanda.com/essays/red-bull-companys-strengths-and-advertising/.

References

IvyPanda. (2020) 'Red Bull Company's Strengths and Advertising'. 21 November.

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