Marketing Research: Red Bull Strategy

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Executive Summary

Red Bull is the pioneer in the energy drink category worldwide. Founded in 1984 by Dietrich Mateschitz in Austria, the product was formally launched in 1987. Mateschitz originally became aware of products called “tonic drinks”, which enjoyed wide popularity in Asia. He brought this effective product in Austria and developed a unique marketing strategy. The drink mainly targets young students and urban professionals. It is exclusively produced in Austria and then distributed around the world via a network of local subsidiaries and external importers and distributors. The key factor of the brand’s success is Red Bull’s marketing strategy, mainly known as “buzz marketing”, an art that involves the trendsetters in any community to carry the brand’s message. This exclusivity in selling their product helped to retain the credibility and uniqueness of the brand. A brand image was cultivated which associated the drink with youth culture and extreme and adventure-related sports, such as motor sports, mountain biking or snowboarding. By 2004, Red Bull had achieved a clear market leading position, with a 70% market share. The lure of fast-growing profits of the market and the legendary success of Red Bull brought many competitors into the functional drink sector, including global key players such as Coca-Cola and Pepsi. Several competitors started to imitate Red Bull’s marketing tactics in order to grab market shares from the energy drink leader. Red Bull soon lost its uniqueness and began to suffer from a decrease in its customer perceived value, also affected by negative publicity associated with taurine-based energy drinks, claimed as unhealthy. Red Bull has become a mature brand within a saturated market, and needs to figure out how it can keep its market leader position. A marketing research design could be used to identify the possible actions the brand should undertake with regards to its marketing strategy and product mix in order to keep its sales growth. A descriptive research design will allow to evaluate the potential of a product diversification. On the other hand, we will use a test marketing to assess the performance of Red Bull’s buzz marketing strategy, as part of a causal research design. While Red Bull should maintain its buzz marketing strategy, as a signature to its unique brand image, the energy drink leader should also use more traditional advertising routes in order to maximize contact with its current and potential users. Though the product is more expensive than its competitors’, Red Bull should maintain its high price, resulting in keeping the image of a high-quality product. We would also advise Red Bull to diversify its product line, in order to reach a higher customer base, by targeting new groups such as young women and senior workers, for instance, but also niche groups like party users.

1. The founder of the company, Dietrich Mateschitz, strongly believes in the importance of context for consumption. Since the launch of Red Bull society, consumption and competition has changed. Use secondary data from relevant databases to document the major trends affecting Red Bull regarding branding, marketing activities, market share etc. and how these have changed since the launch of the brand? Red Bull is considered as the pioneer in the energy drink market worldwide. It was created by the Austrian businessman Dietrich Mateschitz in 1984 and was formally launched in 1987. Mateschitz got to know about a so-called energy drink in Asia, which was very popular. He decided to bring the product to Austria, developing a unique marketing strategy, and named the product « Red Bull ». The main segments that the brand targets are overstressed students, party animals, athletes and sportspersons and young urban professionals. By 1987, Red Bull had already achieved a great success in Europe and America, reaching the market leader position in the global...
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