Thursday, August 07, 2008

Red Bull : It Gives You Wiings

Brand : Red Bull
Company : Red Bull Gmbh

Brand Analysis Count : 342


Red Bull can be called as a pioneer in the energy drink category worldwide. In India too, Red Bull was the brand that created the energy drink category.

Red Bull is a highly successful branding story. The brand came into existence in 1984. The brand was created by an Austrian professional turned businessman Mr Dietrich Mateschitz. The story goes like this.

The original inventor of Red Bull energy drink is said to be Chaleo Voovidhya, a Thai businessman . In 1962 he created a drink named Krating Daeng ( meaning Red Bull in Thai). In 1982 when Mr Dietrich visited Thailand, he came across this product which helped him to tide over the jetlag very quickly. Impressed by the product efficacy, Dietrich decided to take this product to Europe. He started Red Bull Gmbh with equity participation from Chaleo Voovidhya.

By the year 1987, Red Bull achieved a cult brand status across Europe and America.

The brand came to India in 2003. Although the brand has been keeping a low profile compared to the Cola majors , Red Bull has created a category of energy drinks in the Indian market. According to Economic Times ( 30.05.08) the energy drink market in India is estimated to be around 100 crore. The market now has two main players Red Bull and Power Horse.

Energy Drinks are not much popular in India or it can be said that this product is used mostly by sport persons hence a niche. So far the use of these kind of drinks has not percolated to the mass market.

From my childhood experiences, I used to take either fruit juices or products like Glucose powders ( Glucon-D ) to energize my self after playing.

The energy drink broadly comes under the category of functional drinks which is a bigger market estimated to be around Rs 543 crores.

Red Bull globally is known for buzz marketing. It is a brand which has built its equity through careful below the line marketing. During the initial launch time, Red Bull used to invest heavily in buzz marketing .
Some of the famous marketing strategy adopted by Red Bull is given below :

Student Brand Managers : The brand tried to reach the trend setters and opinion leaders by appointing ( informal agreement ) student brand managers across campuses. These members were given free Red Bull cans and was encouraged to organize parties for other youngsters.

Identify Hot Spots : The brand identified hot spots where the majority of consumers /opinion leaders gather. This could be a bar or a party area. Once these hotspots are identified, the brand campaigns in that spot.

Extreme Sports : Red Bull is adopted following brand qualities : Energy , Danger and Youthfulness. Hence the brand chose to sponsor or associate with extreme sports. At one point of time the brand also owned a Formula 1 racing team.

Athletes : Rather than roping in expensive celebrities, Red Bull sponsors high performing athletes who are not celebrities. One advantage of doing that is that the brand gets a highly dedicated brand loyalist from the fans of these athletes. According to Forbes Magazine, Red Bull sponsors more than 500 athletes.

Quirky Ads : Red Bull is a brand which was built without depending too much on advertising. The brand used advertising for reinforce brand identity rather than for selling the product. The ads of Red Bull has the classical cartoon format with a touch of humor.

Red Bull has the famous slogan " Red Bull gives you wiings ". The ads are revolving round this theme of the brand giving a high. One fact is that Red Bull need not do much of a product advertisements because the brand was confident that once the customer tries the product, he will start understanding the benefits of this product.

In India which is a market which is characterized by heavy duty advertisements, high profile celebrity endorsements and mouth watering sales promotions, Red Bull has managed to take the different route.
Since the launch the brand has managed to dominate the Indian market with more than 60 % market share . The popularity of Red Bull has prompted many cola majors to launch their energy drinks brand in India. There are news reports of Coca Cola and Pepsi bringing their global brands in this category into the Indian market.

Despite the success of Red Bull and Power Horse, there are stumbling blocks in the development of this category . The main issue is regarding the perception of consumers towards this category.

I always viewed this type of drinks with suspicion. Frankly speaking I had a perception that this energy drinks are associated with alcohol ( it was a perception). I was surprised to find that these products are targeted towards youth.And these products are more found in pubs and bars which further reinforced the perception that these drinks have parity with products like beer.

In the European markets, the consumption of beer and alcoholic beverages are not a taboo. Its a part of ones social life. But in India, the culture is different. The consumption of these beverages are not considered a part of social living. There are restrictions in consumption and availability of these beverages.

Red Bull is marketed heavily through pubs and bars across the western markets. But in India , Red Bull should keep away from associating itself with these kind of beverages. Because such an association will repel many customers especially ladies.

Having said that, this category also offers excellent growth potential also provided the brand rationalizes the price. The price of energy drinks vary between Rs70-95 per can which can restrict the frequency of purchase of this product.