Red Bull GmbH (Red Bull) is an Austrian company founded in 1984, which produces in distributes energy drinks. Between 2003 and 2008, before the global recession, the energy drink industry had explosive volume growth rates of 17 % on the total market. The primary market, North America accounted for a 35 % increase in that period1. However, the recession in 2008 caused the growth rates to decrease significantly. Even though the energy market outperformed the general soft drink market and growth rates started increasing again, there are no clear signs that the growth volume will return to their previous high levels in the North American and European markets. The high growth rates in the 80’s and 90’s meant, attracted a numerous competitors, many of which, trying to follow in the footsteps of Red Bull, thriving “on the principles if shock, awe and rebellion”2, as is evident from the names like Monster or Rockstar. The emergence of these brands, that offers a similar product to Red Bull – often at a lower price, in markets the seems to be stagnating or at least to a great extent has matured compared to previous years growth rates is cause for concern for Red Bull. For this reason emerging markets are key to future success. There are still opportunities to capitalize on markets where the growth rates are in the double digits – like the Australian and Latin American. This report focuses on Red Bull and particularly their new product lines in the Brazilian market.
The Brazilian market is not as developed as Red Bull’s main markets in the US and Western Europe and some of their main competitors in the global market, like Monster and Rockstar, has yet to make an impact. However, increasingly sophisticated customers and trends towards healthy natural products are issues that need to be addressed for Red Bull to consolidate and improve their current leading position in the Brazilian energy drink market. To make sure that they can target new customer segments in an effective manner, without compromising their brand identity, Red Bull needs to conduct thorough marketing research.
Up to this point in time, Red Bull has put almost all of their emphasis regarding communication on building a strong brand, going up the right side of the Customer-Based Brand Equity Pyramid3. It is important for Red Bull to stay true to their Integrated Marketing Communication (IMC), but at the
Energy Drinks Entering a New Phase of Growth
Energy drinks embrace negative image
3 Brand Management – Theory, Research and Practise, 2008, p. 11 2
same time, they could gain from adopting a bit more product oriented communication strategy to attract new customer segments.
To be successful in the Brazilian market, I recommend that Red Bull: •
Get to know the new customer segments using marketing research
Grow revenue by expanding customer base through their new products
Stay true to brand image using “buzz” marketing to familiarize customers with new products
Make modifications to IMC, incorporating an a bit more product related communication tactic, without upsetting core-customers
Take advantage of being perceived as a high-end product
Use performance measurements to track and evaluate strategy as an on-going process.
Be proactive and innovative – use market knowledge to spot trends and be aware changes in customer preferences.
Structure and framework
The structure of the assignment has been built around the Brand Value Chain4. The first two stages have to do with market research, getting to know the customer and the market, which is the foundation for choosing a segment and positioning the brand and...
Bibliography: Malhotra, N.K., Birks, D.F. (2007); “Marketing Research – An Applied Approach”, Third
European Edition. Prentice Hall
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