Effective firm/product that brings the mix together for its consumers:
I am a caffeine junkie. While my first love is coffee to achieve my habit, I do like fizzy drinks and sometimes I want something other than a hot drink. I cannot say what first drew me to try Red Bull, but discounting the dubious claims of the health benefits of the ingredient, Taurine, it was primarily the tangible benefit of its caffeine content that reeled me in. I did find the drink refreshing, I liked the taste and it was a nice change from the routine.
I would categorize Red Bull as having an intensive distribution approach, being widely available in grocery stores, convenience stores, restaurants and bars. It started more selectively however, relying on the word of mouth and viral effects. With a tagline of “Red Bull Gives you Wings”, it was originally targeted at young males with the emotional appeal of advertising to associate itself with the image of extreme sports and the energy needed to participate in these activities, “it revitalizes the body and mind”. It has also grown as a subculture product in bars and dance clubs. This is attributed to the interesting nature of mixing alcohol with a stimulant: this allows young partygoers to drink more while masking the depressant effects of alcohol, thereby giving them stamina well into the wee hours of night. Although the company seems to officially shy away from this particular use of their product, the fact that their promotional activities involve sending representatives in attention getting vehicles to alcohol related events and festivals suggest they understand the value this particular benefit provides to this segment, and its importance to the overall business.
The pricing is pretty high for what I consider a soft drink, and I have rarely witnessed discounts, despite increasing competition and availability of other energy drink brands. Thus, I would categorize it as a fixed pricing scheme, with premiums paid for the drink on an individual basis (primarily for the convenience at particular establishments) vs. buying it in bulk at the grocery store. Keeping the price high maintains its positioning as a premium, highly desired and “cool” product for its target base.
As the product has gained in popularity amongst the young, it would seem that the company does seek to target further growth with other segments. This is evidenced by their quirky commercials on television and other mainstream media with the very simple cartoons and the impression when you drink the product, that you can fly away. I am not sure if these commercials are targeted towards the very young as future customers (being a cartoon with a fantasy theme) or whether they promote general awareness to a broad market.
Red Bull chooses its communication tools very effectively. The Red Bull website, www.redbull.com, barely mentions the actual product, just all the activities they are sponsoring. Curiously, you have to look for the small link under other menu options to actually view information about the product. Its Facebook page boasts nearly 28 million “likes”, evidence of its success at social media. This page also emphasizes more heavily on the sports and activities for which it seeks to be associated rather than the actual product it sells. Even more curious, Red Bull pretty much is about this single product, the energy drink. They have packaged it differently (the “energy shot”, a “cola”), but it is essentially a one product company. However, they have capitalized on this product to offer apparel, posters and other chotchkies (for the various activities they sponsor at premium prices, I might add) which in turn provide more advertising and promotion for them. It is quite a feat when a company can get the consumer to pay for merchandise which essentially helps the company advertise its product! Red Bull is active in public relations, with its “Wings for Life” campaign, selling merchandise with a portion of the proceeds benefitting research for spinal cord injuries.
The company reported over 4.6 billion cans of the product sold in 2011, with revenues of €4.2B. Although I am not sure of the distribution of these revenues of the drink vs. promotional merchandise, it is a very impressive mix of perceived value by the targeted consumer segment involving clever advertising, channel selection, and pricing strategy.
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