The International UNO
Summer School 2012
Red Bull: Case Analysis
Daniel Mader
Andreas Mair
Ellie Walker
Macon Blount
Jennie Walker
Marketing Principles
Jeffrey R. Foreman, PhD
MKT 3501.1
1
Table of Contents
Company Overview
3
Corporate, Business, and Marketing Strategy
5
Market Orientation
6
Marketing Macro Environment
7
Consumer Behavior and Psychology
8
Porter’s Five Forces
12
Pricing Strategies
14
Integrated Marketing Communications
17
Social Media Press Release
19
Future Problems for Red Bull
20
2
Company Overview
I. Mission Statement and Slogan
A. Mission Statement
 No official mission statement could be obtained, since Red Bull is not a publically traded
company.
B. Slogan
 “Red Bull gives you wiiings.” / “Red Bull verleiht Flüüügel.”
 This slogan was popularized via TV commercials in German-speaking countries in the
1990s; the slogan was later translated into English as Red Bull became more
internationalized.
 Controversy arose over the rights to use the English slogan in the early 2000s when a
patent attorney from Sarajevo claimed that he had patented the slogan for his own
purposes back in 1997 in Romania1. The slogan is still in use today by Red Bull.
II. Core Competencies
 Needless to say, the brand has developed an image for power, speed, and recklessness2,
and dominates the energy drink market all across the globe.
 As can be seen in Pricing Strategies, the energy drink is marketed as a premium product.
 Special ingredients like taurine and alpine spring water in addition to a high
concentration of caffeine in a can half the size of other energy drinks are used to
differentiate Red Bull from competitors
“Streit um Red-Bull-Slogan.” Der Spiegel 23/2001: 102. Print.
Brasel, S. Adam, and James Gips. "Red Bull ‘Gives You Wings’ For Better Or Worse: A Double-Edged Impact Of
Brand Exposure On Consumer Performance." Journal Of Consumer Psychology (Elsevier Science) 21.1 (2011): 5764. Academic Search Premier. Web. 29 July 2012.
1
2
3
 Red Bull is known primarily for its dominating position in the energy drink business,
selling its Red Bull Energy Drink.
 In Austria, the company has also started its own TV channel, called Servus.TV, and a cell
phone service called “Red Bull Mobile”3
 Red Bull sponsors not only many extreme sports athletes4, but also a Formula 1 racing
team that won both the constructors’ and drivers’ championship in 2010 and 20115
 Red Bull CEO Dietrich Mateschitz has also created the foundation “Wings for Life”,
which seeks to support people suffering from paraplegia. The ultimate goal of the
foundation is to make paraplegia curable6.
III. Energy Drink Production
 Production of Red Bull is completely outsourced. Rauch is Red Bull’s licenced partner,
and produces and fills the cans in factories in Austria (for the European market) and
Switzerland (for Americans)7
IV. Official Company Figures8
 Red Bull employs 8,294 people in 164 countries
 2011: Company turnover increased by 12.4% from EUR 3.785 billion to EUR 4.253
billion
 Key markets: USA (+11%) and Germany (+10%)
 Growing markets: Turkey (+86%), Japan (+62%), France (+35%) and Scandinavia
(+34%)
3
Red Bull. Web. 5 Aug. 2012.
“Athletes and Teams” Red Bull. Web. 5 Aug. 2012.
5
“Company Figures” Red Bull. Web. 5 Aug. 2012.
6
Wings For Life. Web. 5 Aug. 2012.
7
“Red Bull.” Wikipedia: The Free Encyclopedia. Wikimedia Foundation, Inc. 26 July 2012. Web. 5 Aug. 2012.
8
“Company Figures” Red Bull. Web. 5 Aug. 2012.
4
4
Strategy
I. Introduction
 Little official information could be obtained, as Red Bull is not a publically traded
organization. Thus, much of what follows is essentially speculation.
 For corporate level strategy, see the Overview.
 In recent years, Red Bull has developed several different SBUs, including their own
media house for TV, mobile phone services, print and digital media, music publishing9,
and movie and documentary production; hosting extreme sports events; and of course
their Red Bull energy drink.
II. Marketing Strategy for Red Bull Energy Drink
 Red Bull started marketing its energy drink to club goers and the underground scene in
Austria in the 1980s and 90s10.
 “Viral” marketing: CEO Mateschitz paid opinion leaders like DJs and students for
promoting the energy drink at parties.
 Marketing for Red Bull became more diverse as the company became more well-known,
both in Austria and abroad.
o Comic-style TV spots popularized the slogan “Red Bull gives you wiiings.”,
while the Red Bull logo started to appear on the suits and vehicles of sports
athletes.
o The Red Bull homepage also advertises the product to industrious students and
business (wo)men, broadening their original target segment.
9
Red Bull Media House GmbH. Web. 5 Aug. 2012.
Arlidge, John. “How Red Bull woke up the teen market.” The Observer 5 Dec. 2004: n.p. Print.
10
5
 The shift from focusing on the underground youth scene to extreme sports sponsorship is
probably the most drastic change in marketing strategy Red Bull has executed.
 Red Bull is today priced as a premium energy drink (see Pricing Strategies).
 The company often organizes free trial distribution to attract new customers. This seems
rational especially considering the reluctance a potential consumer might feel when
pondering the purchase of the expensive drink for the first time.
Market Orientation
I.
Target Market
 Young urban males ages 16 to 29
 Risk takers
 Young consumers and athletes
II.
Positioning
 Alcoholic drink mixer
 Extreme Sports
 Sky diving
 Formula 1 sponsor
 Spends 30 to 40% of revenues on hard core marketing11
 Buzz marketing
11
Bhasin, Kim. "How Dietrich Mateschitz Ignored The Haters and Created the Top Energy Drink on the
Planet." Business Insider. Business Insider, 15 Feb 2012. Web. 6 Aug 2012.
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 Guerilla marketing
 Mixed marketing
12
Macro Environment
I.
Political
 Bans from EU countries
 No regulation on labeling of such drinks
12
"Market Report on the $10 billion Energy Drink Market." . WorldPress.com, 26 Nov 2010. Web. 6 Aug 2012.
<http://fixteas.wordpress.com/2010/11/26/market-report-on-the-10-billion-energy-drink-market/>.
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 Age limits should be set on purchasing
 Health risks associated with Red Bull
II.
Economic
 Rising disposable incomes encourage premium purchases
 Major soft drink manufacturers have been attracted to the sports and energy drink market
partly by the premium prices that currently exist for these market products.
III.
Social
 Negative health concerns
 Longer working hours, increased road traffic, more need for energy boost
 Increasing consumer concern around diet and personal health
IV.
Technological
 Improved manufacturing techniques and processes could lead to lower prices
 Innovation within the market—new products—looking for ultimate hangover cure
Consumer Behaviour and Psychology
I. Consumer Purchase Decision Model for Red Bull Energy Drink
A. Problem Recognition
 Red Bull is mainly marketed to people who feel the need for an extra energy boost in
their lives, e.g. athletes, but also stressed-out business people, students, etc.
B. Information Search
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 Since Red Bull is a relatively low involvement product, value is accessed primarily
through an internal search13.
C. Alternative Evaluation
 Evaluative criteria for Red Bull Energy Drink include:
o Red Bull has the image of being a premium product (see Pricing Strategies), and
will thus best satisfy the consumer’s need for additional energy when compared to
the competition.
o Recent controversy over the possible negative side effects of Red Bull may also
impact the evaluation process (see Problems for Red Bull)
o The traits associated with the brand personality of Red Bull – speed, power, and
recklessness14 - may also factor favourably into the evaluation process, given that
they are similar to the traits of the potential consumer.
 Consideration Set
o Direct Competition: Monster, burn, Full Throttle, Rockstar

Advantage for Red Bull: One brand = one company. The other energy
drink brands are subsidiaries of larger companies, and may be neglected.
o Indirect competition: The soft drink market in general, esp. the cola and fruit
drink producers, eg. Coca Cola, or Rauch

Advantage for Red Bull: Smaller size of serving, special purpose for
drinking (energy boost!)
Alba, Joseph andWesley Hutchinson. „Knowledge Calibration: What Consumers Know and What They Think
They Know.“ Journal of Consumer Research. 27.2 (2000): 123-57. Print.
14
Brasel, S. Adam, and James Gips. "Red Bull ‘Gives You Wings’ For Better Or Worse: A Double-Edged Impact
Of Brand Exposure On Consumer Performance." Journal Of Consumer Psychology (Elsevier Science) 21.1 (2011):
57-64. Academic Search Premier. Web. 29 July 2012.
13
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D. Purchase Decision
 There are two possible points of sale for Red Bull: The “ON” and the “OFF” sector (see
Pricing Strategies):
o “ON” sector: Since the product is consumed at the point of sale, the purchase
decision is very straightforward. One example is consuming Red Bull at a dance
club strictly to combat sleepiness and exhaustion. No great consideration will go
into where or when to buy the product.
o “OFF” sector: Many supermarkets will receive special display shelves from which
to sell Red Bull. This helps to differentiate Red Bull from competitors, who often
share a shelf with other energy drink brands.
E. Post purchase Behavior
 There is conflicting scientific evidence as concerns the effects of Red Bull on the human
mind and body:
o The consumption of Red Bull may lead to negative side effects (see Problems for
Red Bull)
o “Red Bull® Energy Drink significantly improves driving performance and
reduces driver sleepiness during prolonged highway driving.”15
o “Findings indicate that 255 mL of Red Bull containing 1.3 mg/kg of caffeine and
1 g of taurine does not alter repeated sprint performance, RPE, or HR in women
athletes versus placebo. One serving of this energy drink provides no ergogenic
benefit for women athletes engaging in sprint-based exercise.”16
15
Joris Verster, et al. "Positive Effects Of Red Bull® Energy Drink On Driving Performance During Prolonged
Driving." Psychopharmacology 214.3 (2011): 737-745. Academic Search Premier. Web. 29 July 2012.
16
Rodney Marquez, et al. "Effects Of Red Bull Energy Drink On Repeated Sprint Performance In Women
Athletes." Amino Acids 42.5 (2012): 1803-1808. Academic Search Premier. Web. 29 July 2012.
10
o “We show that brand exposure can have double-sided effects on behavior, with
brand identity associations creating both positive and negative effects on objective
consumer performance. [...] as Red Bull's brand identity of speed, power, and
recklessness work both for and against the players. Even though brands were
exposed supraliminally, effects travelled through unconscious channels.”17
o “Red Bull energy drink significantly increased upper body muscle endurance but
had no effect on anaerobic peak or average power during repeated Wingate
cycling tests in young healthy adults.”18
o “Energy drink consumption has been anecdotally linked to the development of
adverse cardiovascular effects in consumers, although clinical trials to support
this link are lacking. [...] Red Bull® consumption was associated with a
significant increase in pain tolerance in all participants. These findings suggest
that Red Bull® consumption ameliorates changes in blood pressure during
stressful experiences and increases the participants’ pain tolerance.”19
o “The limited research concludes that taurine and glucuronolactone in Red Bull
have not been proven to improve body functions.”20
Brasel, S. Adam, and James Gips. "Red Bull “Gives You Wings” For Better Or Worse: A Double-Edged Impact
Of Brand Exposure On Consumer Performance." Journal Of Consumer Psychology (Elsevier Science) 21.1 (2011):
57-64. Academic Search Premier. Web. 29 July 2012.
18
Philip D. Chilibeck, et al. "Effect Of Red Bull Energy Drink On Repeated Wingate Cycle Performance And
Bench-Press Muscle Endurance." International Journal Of Sport Nutrition & Exercise Metabolism 17.5 (2007):
433-444. Academic Search Premier. Web. 29 July 2012.
19
Ted Wilson, et al. "Effect Of Red Bull Energy Drink On Cardiovascular And Renal Function." Amino Acids 38.4
(2010): 1193-1200. Academic Search Premier. Web. 29 July 2012.
20
"Red Bull: The Other Energy Drink And Its Effect On Performance." Athletic Therapy Today 12.2 (2007): 43-45.
Academic Search Premier. Web. 29 July 2012.
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II. Sociocultural Influences on Consumer Behavior
 From the beginning, marketing for Red Bull was conducted via word of mouth and viral
marketing in the youth-oriented underground21.
 Extreme sports athletes are sponsored by Red Bull to serve as opinion leaders and
aspirational reference groups.
Porter’s Five Forces
I.
Industry Competitors and Extent of Rivalry: Low
 Red Bull has turned their niche market into a mass market and a regular buy for people
around the world.
 Its brand familiarity has given them a key source of competitive advantage.
 Differentiation by Lucozade (another popular energy drink that is trying to enter the market)
is a strategy being used. They are becoming direct competition adding caffeine into their
drink making it a stimulation drink.
 Red Bull has secured distribution channels that make it hard for competitors to enter the
market.
 Red Bull has a very loyal customer base, and it’s own research shows that 40% of it’s
customers would go to another store to find Red Bull if a store didn’t carry their product.
II.
Threat of New Entrants: Medium
 Red Bull equates in the stimulant drink industry to Coca Cola or Pepsi in the soft drink
industry.
21
Arlidge, John. “How Red Bull woke up the teen market.” The Observer 5 Dec. 2004: n.p. Print.
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 Supermarket stimulant drinks dominate the budget end of stimulant drinks, but mid range
drinks don’t have many suppliers and attempts to compete with Red Bull’s marketing it a
huge barrier to entry.
 Red Bull’s brand power alone would make it hard for anyone to successfully enter the
market.
III.
Threat of Substitutes: Low
 Price sensitivity is low within Red Bull’s target segments, and because Red Bull
is a spur of the moment purchased commodity, convenience is a standard
purchase criteria for the drink. Brand power and customer loyalty have created
a low situation for product substitution.
 Red Bull’s High prices are linked to their high quality, thus identical substitutes
at lower prices don’t really affect the Red Bull market.
 Other stimulant substitutes such as coffee, Five Hour energy, or energy
smoothies, all have trade offs with stimulation duration, caloric intake, and
convenience, giving Red Bull its own niche in the stimulant market.
IV.
Bargaining Power of Buyers: Low
 Being a small market with strong customer loyalty, it’s possible for the company to have all
of the pricing power and for the customers to have very low bargaining power.
 There is a pull in the market or a derived demand giving retailers not much bargaining
power.
V.
Bargaining Power of Suppliers: Low
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 Red Bull has a short supply chain meaning high profit at each stage of the chain.
 The production process for Red Bull is uncomplicated, leaving the suppliers with not much
power because there are low input costs.22
Pricing Strategies
I. Pricing Strategy For Red Bull Energy Drink
A. USA prices:
8.4 ounce can $2.00-3.20
24 pack of 8.4 ounce cans $32.00-49.00
B. Pricing Objectives
 Red Bull has a strict policy of keeping prices relatively similar and high compared to the rest
of the beverage industry.
 Compared to can of Coca Cola, Red Bull is around 3-6 times more expensive.

This is to always maintain the image of a premium, quality product.
C. Pricing Strategy
 There are two separate sectors of pricing strategy based on the location of the point of sale23:
 “ON” sector: Any place where product is consumed at location.

22
Examples: nightclubs, restaurants, cafes
Hanrahan, William. "Market Audit Sports and Energy Drinks UK Market Focusing on the Microenvironment of
Red Bull." . Warwick, n.d.
23
Louvet, Claire. "Red Bull: A Brand Built on Marketing." Business Development Strategies. We Are
Development, 28 Dec. 2011. Web. Web. 1 Aug. 2012.
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
Regional managers set this price at a constant level. Very little to no deviation of
price.
 “OFF” sector: Any location where the product is consumed at a later time.

Examples: grocery stores, gas stations

Pricing is still dictated by a regional manager, but more deviation and the possibility
of sales exists.
D. Possible Disadvantages
 Due to the high price, the product may simply be too expensive for lower income
demographics.
 Sampling Red Bull for the first time is much more expensive than other beverages thus
possibly deterring the first purchase.
E. Possible Advantages
 Customers often associate a high price with high quality24.
 As a premium product with substantially high market share, Red Bull is able to charge such a
high price without loosing many customers.
II. Positioning
A. Price Communication
 Red Bull’s overall value in the marketing mix is greatly affected by price.
 Due to a constant high price product, consumers believe that Red Bull is a premium
product.
B. Price Elasticity
24
Friescher, Tim. "Pricing Strategies." Marketing Teacher. Marketing Teacher, n.d. Web. 1 Aug 2012.
<http://www.marketingteacher.com/lesson-store/lesson-pricing.html
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Red Bull has a high Price Elasticity of demand due to25:
1. Large number of substitutes (both within energy drinks and even more broad)
2. Low degree of necessity (considered a luxury product)
II. Product Life Cycle Stage
 Red Bull is currently in the Maturity stage.
 The company has began to differentiate its product due to the large increase in substitutes
 Much larger emphasis on brand loyalty
 Growth figures are slowing down as the product ages (exception with 2011 where growth
nearly tripled from the previous year26)
A. Distribution Channels27
 To ensure quality Red Bull manufactures and packages all of its products by itself
 The company does not license out or franchise their name
 All for quality control.
 Red Bull sells its product through the sectors mentioned above.
B. Supplier-Retailer Relationships
 Red Bull has recently instituted a new program, called Perfect Partnership28, for retailers that
help grow the Red Bull brand.
25
Price Elasticity of Demand." QuickMBA. QuickMBA, n.d. Web. 1 Aug 2012.
<http://www.quickmba.com/econ/micro/elas/ped.shtml/>.
26 "Red Bull Marketing Plan: 2011-2012." Roaring Haus Studio. Roaring Haus Studio, 2011. Web. 1 Aug 2012.
27 "Red Bull. A success Story.." Mint Innovation. Kastner & Partners, n.d. Web. 1 Aug 2012.
<http://mintinnovation.com/links/docs/Marketing/Red Bull Success story.pdf>.
28 "New loyalty programme for Red Bull ." Talking Retail. 18 Nov 2011: n. page. Web. 1 Aug. 2012.
<http://www.talkingretail.com/products/product-news/new-loyalty-programme-for-red-bull>.
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 Retailers will be rewarded based on the amount of Red Bull sold, the visibility of the
product, the percentage of Red Bull in the store as compared to the rest of the energy
drinks, and product placement.
Integrated Marketing Communications
I. Red Bull’s targeted forms of IMC:
A. Public Relations
 Red Bull is successful in their public relations field because they plan accordingly through:
 Generating extensive publicity across all mediums, such as: TV, radio, print, flyers,
drinks, towels, stickers, cars, etc.29
 Launching parties, activities, events, press releases, and commercials that clearly
communicate the meaning of their product.

Attracting spectators through fun and exciting projects. They make their product look
interesting, intriguing, engaging to participate in and watch to the general public, as well as,
the extreme. Also, Red Bull hits international frontiers.
II. Social Media
 Red Bull invests in online platforms that will give them a better marketing ROI in the long
run.30
29
"Red Bull Flugtag." University of Technology Sydney. Crisco Provider, 2008. Web. 6 Aug 2012.
<http://www.lib.uts.edu.au/gta/14227/red-bull-flugtag-magnum-pr>
30
Brad, Smith. "Why Red Bull Uses Social Media To Get New Customers (Instead Of Only Advertising)." Social
Media Today. N.p., 04/20/2012. Web. 6 Aug 2012. <http://socialmediatoday.com/fixcourse/492753/why-red-bulluses-social-media-get-new-customers-instead-only-advertising>.
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 Instead of relying on audience traditional media properties, Red Bull is building their own
audiences through business development and inbound marketing.
 Examples of how Red Bull shows content marketing and social media functions:
 Red Bull’s homepage looks like an action sports news site.
 The company puts out professional-grade news articles, feature stories, and videos
everyday which channels them to social marketing networks like Facebook and Twitter.
III. Advertising
 Red Bull mainly markets through creative advertising, targeted sponsorships and events, and
sampling to consumers, in order to receive their product.31
 Media Advertising:
 Red Bull uses media channels, such as: cinema, TV, radio, press, and the most important,
the Internet.
 Their focused advertisements are towards young people.
 Sports and Events Sponsoring:
 Company’s concentration is on supporting the image, credibility, and visibility of their
product.
 They do this by sponsoring extreme athletes and events, as well as, with logos and
stickers.
 Sampling:
 Sampling the drink is a major purpose of Red Bull because Red Bull is all about being in
the right place and the right time.
31
"The Marketing Mix Strategy." Drawert. N.p., 2012. Web. 6 Aug 2012.
<http://www.drawert.com/red_bull_7.php>.
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Social Media Press Release
Red Bull Merges with Apple to Expand its Web TV Channel
INNSBRUCK, AUS., Aug. 7, 2012--In April of 2010, the Red Bull company launched its own Red Bull
Web TV showing extreme sports competitions and following athletes such as Travis Pastrana and Felix
Baumgartner all over the world32.
In early January of 2012, however, Red Bull has extended this online network to Apple’s iTunes and app
store for complete mobile access. By downloading the Red Bull TV app along with many others, Red
Bull Web TV brings you a selection of international shows ranging from Red Bull Air Races to Red Bull
Mountainbiking Chronicles every hour on the hour.
By having the web series available at iTunes and the Apple app store, these amazingly rare video clips are
ready to watch at the palm of your hands. The shows can stream live on your iPhone, iPod, or iPad, with
just a simple download and there are even breakdancing and music apps you can download from the Red
Bull record label app33. From the Red Bull website, you can click “share” to post the link of the shows
onto other social media websites like Twitter and Facebook.
Many celebrity athletes associated with Red Bull use the Web TV shows to allow their fans to follow
their every day lives. One of these entertainers is Ryan Sheckler, an American professional skateboarder,
and three-time X-Games gold medalist. “I want to make a huge contribution to skateboarding…the only
way I will know that I have achieved legendary status is when my peers say I have. There is no other
way,” he says. He makes his contribution through at least six shows on the Red Bull Web TV.
Red Bull, known for its sensational digital marketing strategies, has truly “upped the anti” with its Red
Bull Web TV series. It has especially made a lasting impression in its homebase country, Austria. Red
Bull’s new mission at this time is to carry this social media movement to the United States. The plan is to
more actively promote their international hardcore sport video clips and shows from their website on the
YouTube homepage, Facebook advertisements, tweets, and other blog sites like Tumblr and Stumble
Upon.
###
32
Red Bull. RED BULL WEB TV TAKES OFF. Redbull.com. Red Bull, 21 Apr. 2010. Web. 5 Aug. 2012.
<http://www.redbull.com/cs/Satellite/en_INT/Article/Red-Bull-Web-TV-takes-off-021242829272939>
33
"Red Bull TV." App Store. N.p., n.d. Web. 5 Aug. 2012. <http://itunes.apple.com/us/app/red-bulltv/id364269164?mt=8>.
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Problems for Red Bull
I. Increased Scrutiny on Health Benefits vs. Risks
 Red Bull makes the following claims about its energy drink34:
1. Increases performance
2. Increases concentration and reaction time
3. Improves vigilance
4. Stimulates metabolism
5. Makes you feel more energetic thus improving your overall wellbeing
 The company provides very little information regarding the health side effects of consuming
their product.
 Many studies have been conducted, and there is overwhelming evidence that there are many
negative side effects of consuming Red Bull.
 The University of Wisconsin35 has found that Red Bull does not give the boost of
performance and alertness that the company claims.
 Research has shown that some of the side effects of Red Bull are: increased risk of heart
disease, increased blood pressure, anxiousness, jitters, and increased chance of stroke.
 Red Bull must try to avoid what happened to the tobacco industry after the Surgeon
General’s study.
34
Red Bull. 2012. Red Bull GmbH. 1 Aug. 2012. <http://www.redbull.com/cs/Satellite/en_INT/Red-Bull-EnergyDrink/001242937921959>
35
Michelle PHD, Harris, Bichler Allison, and Swenson Annika. "Red Bull May Not Give You Wings."
Biotech.wisc.edu. University of Wisconsin, n.d. Web. 1 Aug. 2012.
<http://www.biotech.wisc.edu/outreach/pdfs/redbullposterltr2p.pdf>.
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 There is debate about whether the FDA should increase its regulation on energy drinks. If
they decide to take further action, Red Bull as a company would be unable to survive.
II. Possible Alternatives
 Red Bull has yet to comment on the adverse effects of their product.
 To help avoid the possible devastating effects of the studies being conducted Red Bull could:
 Do their own studies and accept whatever results they find.
 Decrease the amount of taurine and caffeine that is currently used in Red Bull.
 Create a PR campaign in which they focus on the positives of the product rather than the
negatives.
III. Immediate Action
 It is important for Red Bull to know exactly when and where various governments are
increasing the regulation of energy drinks.
 The energy drink industry needs to increase its lobbyist presence in governments around
the world.
 While there may not be a quick fix to this situation, Red Bull should plan for the worse by
looking into different formulas for their most popular product.
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