Red bull stratos marketing case study

Marketing Case Studies

Evaluate the case, and respond to each question that follows the case using both theory and practical managerial thinking.

Red Bull’s integrated marketing communications mix has been so successful that the company has created an entirely new drink category—functional energy drinks—and has become a multibillion-dollar brand among competition from beverage kings like Coca-Cola and Pepsi. In less than 20 years, Red Bull has become the energy drink market leader by skillfully connecting with the global youth. Dietrich Mateschitz founded Red Bull in Austria and introduced the energy drink into Hungary, its first foreign market, in 1992. Today, Red Bull sells 4 billion cans of energy drinks each year in over 160 countries.

So how does Red Bull do it? The answer: differently than others. For years, Red Bull offered just one product, Red Bull Energy Drink, in one size—a slick silver 250 ml. (8.3 oz.) can with a European look and feel. Red Bull’s ingredients—amino acid taurine, B-complex vitamins, caffeine, and carbohydrates—mean it’s highly caffeinated and energizing, so fans have called it “liquid cocaine” and “speed in a can.” Over the last decade, Red Bull has introduced three additional products: Red Bull Sugarfree, Red Bull Energy Shots, and Red Bull Cola—each slight variations of the original energy drink.

Since its beginning, Red Bull has used little traditional advertising and no print, billboards, banner ads, or Super

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Bowl spots. While the company runs minimal television commercials, the animated spots and tagline “Red Bull Gives You Wiiings” are meant to amuse its young audience and connect in a nontraditional, nonpushy manner.

Red Bull builds buzz about the product through grassroots, viral marketing tactics, starting with its “seeding program” that microtargets trendy shops, clubs, bars, and stores. As one Red Bull executive explained, “We go to on-premise accounts first, because the product gets a lot of visibility and attention. It goes faster to deal with individual accounts, not big chains and their authorization process.” Red Bull is easily accepted at clubs because “in clubs, people are open to new things.”

Once Red Bull has gained some momentum in the bars, it next moves into convenience stores located near colleges, gyms, health-food stores, and supermarkets, prime locations for its target audience of men and women aged 16 to 29. Red Bull has also been known to target college students directly by providing them with free cases of Red Bull and encouraging them to throw a party. Eventually, Red Bull moves into restaurants and finally, into supermarkets.

Red Bull’s marketing efforts strive to build its brand image of authenticity, originality, and community in several ways. First, Red Bull targets opinion leaders by sampling its product, a lot. Free Red Bull energy drinks are available at sports competitions, in limos before award shows, and at exclusive after-parties. Free samples are passed out on college campuses and city streets, given to those who look like they need a lift.

Next, Red Bull aligns itself with a wide variety of extreme sports, athletes, teams, events, and artists (in music, dance, and film). From motor sports to mountain biking, snowboarding to surfing, dancing to extreme sailing, there is no limit to the craziness of a Red Bull event or sponsorship. A few have become notorious for taking originality and extreme sporting to the limit, including the annual Flugtag. At Flugtag, contestants build homemade flying machines that must weigh less than 450 pounds, including the pilot. Teams then launch their contraptions off a specially designed Red Bull branded ramp, 30 feet above a body of water. Crowds of up to 300,000 young consumers cheer on as the contestants and their “planes” stay true to the brand’s slogan: “Red Bull gives you wings!”

Another annual event, the Red Bull Air Race, tests the limits of sanity. Twelve of the world’s top aerobatic stunt pilots compete in a 3.5 mile course through a low-level aerial racetrack made up of air-filled Red Bull branded pylons 33 feet apart and reaching 65 feet in height. In other words, pilots fly planes with a 26-foot wingspan through a gap of 33 feet at 230 mph. These Red Bull–branded planes crash occasionally, but to date no fatalities have ever occurred.

Red Bull’s Web site provides consumers with information about how to find Red Bull events, videos of and interviews with Red Bull–sponsored athletes, and clips of amazing feats that will be tested next. For example, Bull Stratos is a mission one man is undertaking to free-fall from 120,000 feet, or 23 miles high. The jump will be attempted from the edge of space and, if successful, it will mark the first time a human being has reached supersonic speeds in a free fall.

Red Bull buys traditional advertising once the market is mature and the company needs to reinforce the brand to its consumers. As one Red Bull executive explained, “Media is not a tool that we use to establish the market. It is a critical part. It’s just later in the development.”

Red Bull’s “anti-marketing” IMC strategy has been extremely successful connecting with its young consumers. It falls directly in line with the company’s mission to be seen as unique, original, and rebellious—just as its Generation Y consumers want to be viewed.

Questions

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1.

What are Red Bull’s greatest strengths and risks as more companies (like Coca-Cola, Pepsi, and Monster) enter the energy drink category and gain market share?

2.

Should Red Bull do more traditional advertising? Why or why not?

3.

Discuss the effectiveness of Red Bull’s sponsorships, for example, Bull Stratos. Is this a good use of Red Bull’s marketing budget? Where should the company draw the line?

Sources: Kevin Lane Keller, “Red Bull: Managing a High-Growth Brand,” Best Practice Cases in Branding, 3rd ed. (Upper Saddle River, NJ: Prentice Hall, 2008); Peter Ha, “Red Bull Stratos: Man Will Freefall from Earth’s Stratosphere,” Time, January 22, 2010; Red Bull, www.redbull.com.

Marketing Excellence >>Target

Like other discount retailers, Target sells a wide variety of products, including clothing, jewelry, sporting goods, household supplies, toys, electronics, and health and beauty products. However, since its founding in 1962, Target has focused on differentiating itself from the competition. This became evident in the mid-1980s when Kmart dominated the mass retail industry and Walmart was growing rapidly. Kmart and Walmart’s marketing messages communicated their low price promise, but their merchandise was perceived as cheap and low-quality. Target sensed a gap in the market for “cheap chic” retail and set out to distinguish itself from the other big-box retailers.

Target planned to build an up-market cachet for its brand without losing its relevance for price-conscious consumers. It positioned itself as a high-fashion brand with trendy styles and quality merchandise at affordable low prices. To fulfill this brand promise, Target’s teams of merchandisers travel the world looking for the next hot items. Next, Target brings these trends to the shelves faster than its competitors.

Many styles are sold exclusively at Target through partnerships with world-renowned designers, such as Mossimo

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Giannulli, Jean Paul Gaultier, and Liz Lange in clothes; Anya Hindmarch in handbags; Sigerson Morrison in shoes; Michael Graves in home goods; and Pixi by Petra Strand in beauty. They are either staples in Target stores or part of the Go International line, a special design collection available for only a few months. In 2006, Target introduced U.S. consumers to the concept of “fast fashion,” already popular in Europe, to help keep the product selection fresh, which in turn led to more frequent shopper visits.

Target’s designer line collections are just one unique part of its entire integrated marketing communications mix. The company uses a variety of tactics to communicate its “cheap chic” positioning, beginning with its slogan, “Expect More, Pay Less.” In its stores, Target uses strategically placed low shelves, halogen and track lighting, cleaner fixtures, and wider aisles to avoid visual clutter. Signage features contemporary imagery but is printed on less expensive materials. Target even catches the eye of consumers in the air by painting its signature red bull’s eye on the roof of stores located near busy airports.

Target uses a wide range of traditional advertising such as television ads, direct mailers, print ads, radio, and circulars. Its messages feature hip young customers, a variety of strong name-brand products, and a lighthearted tone—all which have helped make Target’s bull’s eye logo well recognized. Target also aligns itself with a variety of events, sports, athletes, and museums through corporate sponsorships. From Target Field, the home of the Minnesota Twins in Minneapolis, to Target NASCAR and Indy racing teams and contemporary athletes like Olympic snowboarder Shaun White, sponsorships help Target pinpoint specific consumers, interests, attitudes, and demographics. Target also advertises on and sponsors major awards shows such as the Oscars, Emmys, Grammys, and the Golden Globes.

Target has a strong online presence and uses Target.com as a critical component in its retail and

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