BRAND AUDIT- RED BULL

NISHANTH CHOTALIA A 015

ABHINAV GOEL A023
JEEVA MARIA JOY A028
APAAR MIGLANI A036
ABHISHEK SHRIVASTAVA A053
Index

Table of Contents
Introduction to brand audit.................................................................................................. 1
1.Background of energy drinks ................................................................................................. 3
2. Market analysis of energy drinks . 4
3.Red Bull. 7

4.Integrated marketing communication channels....13

5.Survey Analysis.....22

6.Red Bull brand.29

7.Competitor analysis..38

8.Red Bull positioning...40

9.SWOT analysis.42

10.PESTEL analysis...43

11.Supply and distribution of red bull..45

12.Red bull in news....46

13.Reccomendations. 50

References

Exhibit(survey questions).53

2
INTRODUCTION TO BRAND AUDIT
A brand audit is a thorough examination of a brands current position in an
industry compared to its competitors and the examination of its effectiveness.
When it comes to brand auditing, five questions should be carefully examined and
assessed. These five questions are how well the business current brand strategy is
working, what are the companys established resource strengths and weaknesses,
what are its external opportunities and threats, how competitive are the business
prices and costs, how strong is the business competitive position in comparison to
its competitors, and what strategic issues are facing the business.

Generally, when a business is conducting a brand audit, the main goal is to

uncover business resource strengths, deficiencies, best market opportunities,
outside threats, future profitability, and its competitive standing in comparison to
existing competitors. A brand audit establishes the strategic elements needed to
improve brand position and competitive capabilities within the industry. Once a
brand is audited, any business that ends up with a strong financial performance
and market position is more likely than not to have a properly conceived and
effectively executed brand strategy. A brand audit examines whether a business
share of the market is increasing, decreasing, or stable. It determines if the
companys margin of profit is improving, decreasing, and how much it is in
comparison to the profit margin of established competitors. Additionally, a brand
audit investigates trends in a business net profits, the return on existing
investments, and its established economic value. It determines whether or not the
business entire financial strength and credit rating is improving or getting worse.
This kind of audit also assesses a business image and reputation with its
customers. Furthermore, a brand audit seeks to determine whether or not a
business is perceived as an industry leader in technology, offering product or
service innovations, along with exceptional customer service, among other
relevant issues that customers use to decide on a brand of preference.

3
A brand audit usually focuses on a business strengths and resource capabilities
because these are the elements that enhance its competitiveness. A business
competitive strengths can exist in several forms. Some of these forms include
skilled or pertinent expertise, valuable physical assets, valuable human assets,
valuable organizational assets, valuable intangible assets, competitive capabilities,
achievements and attributes that position the business into a competitive
advantage, and alliances or cooperative ventures.

The basic concept of a brand audit is to determine whether a business resource

strengths are competitive assets or competitive liabilities. This type of audit seeks
to ensure that a business maintains a distinctive competence that allows it to build
and reinforce its competitive advantage. Whats more, a successful brand
audit seeks to establish what a business capitalizes on best, its level of expertise,
resource strengths, and strongest competitive capabilities, while aiming to identify
a business position and future performance.

4
1. BACKGROUND OF ENERGY DRINKS
Energy drinks are non-alcoholic beverages which are intended to provide a quick burst of
high energy to the consumer. These may be prepared with a composition of
methylxanthines, caffeine, natural flavors, some herbal components or specific vitamins
including Vitamins B. They may also contain taurine, guarana, maltodextrin, ginseng,
carnitine, inositol, glucuronolactone, creatine and ginkgobiloba. Most products include
artificial sugar. The primary active component is generally caffeine.

Japan and Thailand have a longer history of energy drinks and the use of caffeine has
been a key ingredient in those countries. Energy drinks acting as an alternative to coffee
were first introduced in Europe. The market received a significant boost when Red
Bull entered the US market in 1997. After this successful market introduction, various
beverage companies including Coca-Cola and Pepsi entered the market. Austria-based
Red Bull remains the market leader though with an approximate market share of 65%.
According to Beverage Marketing, the growth rate of this industry had been doubling
every since the late 90s. The current U.S. domestic market may be approximately $4
billion, expected to grow to an estimated US $10 billion by 2010.

Recent years have witnessed the emergence of several new energy drinks. They include
KMX of Coca-Cola, 180 of Anheuser-Busch, Hansen's Energy, and Adrenaline Rush of
PepsiCo's SoBe. Pepsi had earlier introduced AMP under the Mountain Dew brand and
also Extreme Energy by Arizona Beverage Company was launched. Growth of the
current worldwide market for energy drinks is estimated at 17.8%. Major producers are
focusing heavily on marketing, targeting the promotion of energizing conception, result-
oriented marketing and product positioning and a greater push into developing markets.

5
2. Market Analysis of energy drinks
2.1 MARKET METRICS
Energy drinks were launched in the U.S. in 1997 with Red Bull which has the largest
market share. By 2001, the energy drink market had developed to almost $400 million
per fiscal year accounting the retail sales. The current market valuation in 2005 is
approximately $4 billion. Japan pioneered the energy drink phenomenon. The emergence
of the energy drinks market dates back to the early 1960s, with the launching of
Lipovitan. In 1929, Lucozade of UK was launched.

2.2 MARKET STRUCTURE

The primary consumers of this industry are under 35 years of age and are predominantly
male. Teenager and college students are core target market segments for the
manufacturers and consist of the core age group of 12 to 30. A recent survey estimates
that around 35% percent of energy drink consumers are above 35 years old. Furthermore
energy drinks with high sugar levels are more popular among children and women, while
energy drinks with strong taste and flavor are more preferred by male consumers. Recent
studies also indicated that 65% of the energy drinks market consists of male consumers.

There are several types of energy drinks products. Different varieties of tea and coffee
along with green tea forms one group. Second are traditional energy drinks such as Red
Bull and others. In emerging market, however, several producers have introduced new
products. Combining energy drinks with alcohol has resulted in new products including
Hair of the Dog. Mixing energy drinks with smart drinks has also created new brand
names such as NOS.

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The energy drinks market in India is pegged at Rs 250 crore and is growing annually at
20 per cent. Since Red Bull made its debut in 2002, many imported brands (Burn,
Monster) and Indian brands (Cloud, Tzinga) have entered the market. Energy drinks were
put in the proprietary food category, for which there were no standards in the Prevention
of Food Adulteration (PFA) Act of 1954.

2.3 CHALLENGES FACED BY ENERGY DRINKS IN INDIA

Energy drinks made news in 2005 when the Central Food Laboratory (CFL) at Mysore,
under the direction of the customs authority at Chennai, tested Red Bull as a carbonated
beverage. The consignment was seized as the drink did not conform to the standards for
carbonated beverages, for which a caffeine cap of 200 ppm was mandated. Red Bulls
caffeine content was about 320 ppm. There was lack of clarity on standardsthe PFA
authority at the Centre had registered the beverage as a proprietary product; the state food
authorities conducted tests keeping in view norms for carbonated beverages.

Red Bull challenged the findings of CFL in the Madras High Court. It pleaded that the
drink be treated as proprietary product, not carbonated beverage. The court ruled in
favour of Red Bull, but CFL continued testing energy drinks as carbonated beverage. The
company dragged CFL to court for contempt.

Red Bull was in trouble again when regulations for proprietary food were amended in
September 2008. The change in Rule 37-A(2) of the PFA Act states that proprietary
foods have to conform to the standards under appendices of the PFA Act and Rules. The
amendment implied that energy drinks would have to conform to a caffeine cap of 200
ppm, so far applicable to carbonated beverages.

Six months on, the caffeine limit in carbonated drinks was lowered to 145 ppm on the
recommendations of the Central Committee for Food Standards.

After this amendment, the customs department at Chennai again seized consignments of
energy drinks; tests by CFL showed these violated rules. Red Bull again moved court,

7
this time challenging the amendment. The Madras High Court, on May 20, 2010, granted
an interim stay on the amendment, which was extended in July 2010, till further notice.

With the stay, energy drinks continue to be sold as proprietary food and the number of
players are increasing. Some brands are being sold with a caffeine content of 320 ppm,
which Red Bull claims is safe. Some of the manufacturers have limited the caffeine
content in their product to 145 ppm while others are touching the 320 ppm mark. About
100 ppm is the typical level of caffeine in colas. Hence it would be incorrect to categorise
any beverage with that level of caffeine as an energy drink, says a statement issued by
Red Bull. The JMJ group that owns the brand XXX energy drinks and claims 100 ppm
caffeine in its products did not respond to mailed queries.

8
3. REDBULL

HOW IT ALL STARTED

In 1982, Dietrich Mateschitz became aware of products called "tonic drinks", which
enjoyed widespread popularity throughout the Far East. The idea to market these
functional drinks outside Asia came to him while sitting at a bar at the Mandarin Hotel in
Hong Kong. In 1984, Mateschitz founded Red Bull. He fine-tuned the product, developed
a unique marketing concept and in 1987, started selling Red Bull Energy Drink on the
Austrian market . This was not only the launch of a completely new product, in fact it
was the birth of a totally new product category. Meanwhile Red Bull is present in over
164 countries. Since 1987, around 30 billion cans of Red Bull have been consumed, more
than 4.6 billion in 2011. The responsibility for the success of the world's No. 1 energy
drink is shared by the company's 8,294 employees around the world (compared to 7,758
in 2010). The Red Bull headquarters are based in Fuschl am See, not far from Salzburg,
Austria.

WORLD WIDE EXPANSION

Red Bull has been giving wings from the beginning and has started to spread its own
wings around the world quickly. While the consumption was doubling year on year in
Austria, Red Bull arrived in its first foreign markets, Singapore (1989) and Hungary
(1992). The authorization for Germany was granted in 1994, the UK followed in 1995
and in 1997, the US business started in California. Red Bull has been available
since 1987.Today Red Bull has annual sales of approx. 4 billion cans in more than 160
countries.

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COMPANY FIGURES

A total of 4.631 billion cans of Red Bull were sold worldwide in 2011, representing an
increase of 11.4% against 2010. Owing to currency and price factors, however, company
turnover increased by 12.4% from EUR 3.785 billion to EUR 4.253 billion.

In all key areas such as sales, revenues, productivity and operating profit, the figures
recorded were the best in the company's history so far.The main reasons for such positive
figures include outstanding sales especially in key markets such as the USA (+11%) and
Germany (+10%) and also in other markets such as Turkey (+86%), Japan (+62%),
France (+35%) and Scandinavia (+34%) combined with efficient cost management and
ongoing brand investment.Besides winning both the constructors' and drivers' Formula 1
championships, for the second year running, 2011 also saw the extremely dynamic
expansion of our media activities. In terms of further expansion, Red Bull is targeting the
core markets of Western Europe and the USA, as well as the growth markets of Brazil,
Japan, India and China. Growth and investment will as is customary at Red Bull
continue to be financed from the operating cash flow.

As of the end of 2011, Red Bull employed 8,294 people in 164 countries (end 2010:
7,758 in 161 countries). In addition, more than 5,000 students are gaining first work
experience every year within our wings teams and SBM programs.In spite of the still
very difficult and uncertain financial and global economic climate, our plans for growth
and investment in 2012 remain just as ambitious and we envisage a continued upward
trend.

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3.1 PRODUCT PORTFOLIO

Red Bull is a privately held company that produces and markets energy drinks under the
brand, Red Bull. The products that are included in Red Bulls portfolio are:

Red Bull Energy

Red Bull Sugar free

Red Bull Energy Shots

Red Bull Cola

Red Bull markets its non-alcoholic drink in 164 countries across the world. The targeted
demographic group is teenagers, young adults, mainly the 18 to 34 years old age group.
However, in India, Red Bull has only one product, Red Bull Energy.

Red Bull Energy Drink is marketed as a functional beverage with a combination of

ingredients. The energy drink contains caffeine, taurine (an amino acid),
glucuronolactone (sugar derivative), B group vitamins, sucrose and glucose, in a base of
alpine spring water specially sourced from springs in the Swiss alps. Hence Red Bull is
only produced in factories in the Austrian and Swiss alps. 80% of the energy used in
production comes from renewable sources, which is abundant there.

The drink is offered in two sizes, 250 ml and 355 ml cans in India.

The company claims that the Red Bull energy drink

Increases performance
Increases concentration and reaction speed
Improves mental alertness
Stimulates metabolism

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3.2 LOGO

The Red Bull logo has two thick necked Herculean crimson bulls charging each other in
the backdrop of the sun. It symbolizes power, energy, strength and life.

3.3 SLOGAN

Red Bull gives you Wings

A good deal of care went into choosing Red Bulls logo and its slogan gives you
wings. They created a new category a fiery bull that flies. This is precisely the sort of
animal that never stays quiet. Red Bull has wings. It flies, and it encourages you to play
and live with intensity,

3.4 TARGET GROUP

Targeting broad range of consumers based on their need of Stimulating drink.

Mentally fatigued

Physically fatigued

Both

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As a result the broad consumer categories are

Students

Drivers

Clubbers

Business People

Sports People

3.5 PRICING

Red Bull uses a premium pricing strategy. Its competitors in the Indian market Edge,
XXX, Cloud 9, Burn are all available for 75 rupees for 250 ml cans. However, Red Bull with
its premium pricing, is available for 95 rupees for 250 ml can and 120 rupees for its 355 ml
can.

However, there is a new entrant in the Energy drinks market recently, Tzinga by Hector
Beverages which is available for just 25 rupees! This could potentially tap the price
conscious and the virgin market who havent explored the energy drinks segment yet.

3.6 PACKAGING

The blue and silver can of Red Bull is distinctively slimmer than normal cans. The
slender container is used to suggest a "sexier" image than its competitors. Also, it is
easier to transport because of its form and low weight. Thus, it can be said that the can is
an ideal transport packaging, especially when compared to other forms of packaging: it
saves about 40% in truck loads compared to glass bottles and about 30% compared to
PET bottles.

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4. INTEGRATED MARKETING COMMUNICATION CHANNELS

4.1 Television Commercials

Red Bull designed a series of cartoon/pencil sketched television commercials

centred around their slogan Red Bull gives you wings. The objective was to
strengthen brand identity rather than create interest. Of late, Red Bull has
launched a new campaign, Red Bull decide the story where users send scripts
with the animated anchor cartoon as the main character. The best scripts would
be produced an aired on TV as 15 second commercials.

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4.2 SOCIAL MEDIA

Red Bull is among the top 10 biggest brands on Facebook by sheer numbers (29,456,957
likes at the last count). Its fan page is listed as an example in every tutorial of how to
build amazing brand pages. It has been extremely innovative in this area, breaking out
from the clutter by providing fun content that encourages fans to connect with the brand.
It never promotes its products on the Facebook page. They have also integrated twitter
into their facebook page. However, instead of linking the corporate account, they have
linked accounts of all their sponsored athletes who are extremely popular and included
them directly. Their extremely popular posts are extreme sports and videos, which get
them thousands of re-shares and reach. They have lots of gaming apps which are linked
to their website. One of their more popular app on facebook is where fans can rate phone
calls of people who drunk dial their 1-800 number. Its hilarious, as well as encourages
additional fan engagement.

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4.3 WEBSITE

The website of redbull (www.redbull.in) is user friendly and extremely content heavy. It
provides information on the product as well as other interactive content.
The links that can be seen on the website are

Athletes and Teams - This link offers information about athletes and teams that are
endorsed by the Red Bull Company.

Sports It provides articles, videos, photos, and calendar of events. The sports featured
are adventure, aerial, ball, bike, motor, skate, water, and winter.

Events This provides information on Red Bull sponsored events (usually sporting)
across the world.

Music & Culture Here, they offer a variety of music and cultural activities, videos,
photos, articles etc. They have a recording label as well, Red Bull Records.

Products and company- This link offers information about the product with descriptions
of the products. It also offers company history information.

Videos- This link offers users to watch video documentary and footage of a variety of
sporting events.

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Photos- This link offers many photos of all over world particularly athletes that are
participating in the sporting events.

Games- This link offers a variety of sports themed games, even featuring augment reality
games.

Just Epic- This link offers amazing and unbelievable footage of events that Red Bull
considers out of this world.

Red Bulletin- This link offers announcements, dates, and current winners of sporting
events.

Red Bull TV- This link offers Red Bull TV that gives the user a chance to view
everything that Red Bull is involved with. Red Bull TV also offers interviews with
athletes and Red Bull employees because Red Bull recognizes their employees as being a
key contributor to their success.

Redbullshop.com- This link offers consumers to purchase products from the Red bull
company. The products are shirts, hats, gloves, key chains, and posters all include the
Red Bull name, logo, and bull fighting picture.

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4.4 SPORTS SPONSORSHIPS

Red Bull sponsors activities ranging from extreme sports like mountain biking, BMX,
motocross, windsurfing, snowboarding, skateboarding, kayaking, wakeboarding, cliff-
diving, surfing, skating, freestyle motocross, rally, Formula 1 racing, and break dancing
to art shows, music, and video games. It sponsors over a hundred athletes.It also
organizes its own competitions like the Flugtag ("flight day" in German), a competition
where entrants launch themselves off a 10 metre ramp in homemade "flying machines"
into a body of water; its own version of the soapbox derby called the Red Bull Soap Box
Race which was recently held in Cincinnati, Ohio; the Red Bull Art of the Can
Competition, an international art competition in which artists are asked to create works
using the Red Bull can; and the Red Bull BC One individual breakdance competition.
Also, Red Bull Illume is an international action and adventure sport photography contest
that occurs every three years. Its purpose is to showcase the most exciting and creative
action sports photography from around the world and bring the public into the world of
action sports.

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19
4.5 SPORTS OWNERSHIP AS A BRANDING EXERCISE

In motorsports, it owns two F1 teams, Red Bull racing and Scuderia Toro Rosso, and one
NASCAR team, Red Bull Racing. It also owns football clubs Red Bull Salzburg, New
York Red Bulls, Red Bull Brasil and RB Leipzig. It also owns an Ice Hockey team EC
Red Bull Salzburg. These ownerships create a strong sense of association with the fans.

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4.6 InGame Advertising

Red Bull was also one of the pioneers in advertising inside video games. It has its own in-
game island inside PlayStation Home and its own Red Bull air race event. In the video
game Worms 3D, Red Bull allows the worms to move more quickly. Red Bull is
displayed on virtual track-side billboards during gameplay and in the opening cinematic
in the video game Wipeout 2097.

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4.7 PRINT ADS

Print advertisements are on brand. This advertisement is of a plane flying in the air with a
tagline that states the claim that Red Bull gives you energy. The Red Bull advertisements
are aimed to strengthen brand identity rather than create brand awareness.

As can be seen from the marketing mix, most of Red Bulls advertising revolves around
Buzz-marketing, i.e. word of mouth marketing. Its content is centred on interactivity
and allowing users to be creative.

Red Bull uses a well known phenomenon called uneven distribution of information.
When something is not available to you, you tend to want it and definitely want to talk
about it. When Red Bull enters a new market, it does not go for mass distribution
immediately. First, it allows selected outlets to carry their product. Its advertising focuses
on reinforcing a message rather than introducing the product in the marketplace.

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5. SURVEY RESPONSES
1) What is the age of the respondents?

Age of Respondents
100

0
20-24 25-29 >30
Age of Respondents

2) What is the gender of the respondent?

Gender
Gender

Female 30

Male 48

0 20 40 60

3) When you think of energy drinks which brand comes to mind?

Brand Recall
Red Bull Tzinga Cloud9

22

76

23
4) Views about pricing of Red Bull

Pricing
Over priced Reasonably priced
20%

80%

5) Do you think energy drinks are harmful to health

Harmful to health
Harmful to health

100
16
0 58
No

Yes

6) Most preferred Energy drink brand

Most preferred Brand

Most preferred Brand

4
Cloud 4
2
XXX 0
0
Red Bull
62
0 20 40
60
80

24
7) When do you consume energy drinks?

Point of consumption
40
35
30
25
20
15
10
5
0 Point of
Study/Pulling

consumption
Partying
On the road

Not unless
Sports
Stress buster

8) Which product size do you prefer?

Product Size
Product Size

58
16

250ml 355ml

9) What is the perception about Redbull?

Perception of Brand

10
Energy Drink
12 Sports Drink
50 Lifestyle Drink

25
10) Where do you purchase energy drinks?

Point of Purchase

Bars/Clubs 18

Local Stores 25
Point of
Purchase
Supermarket 35

0
20
40

11) Customer perceptions about benefits expected from energy drink and benefits
derived from Red Bull ( Lower cells have the most gap in perceptions)

Attributes RED BULL

Endurance
Improvement
Reaction
Alertness
Concentration
Metabolism
Performance

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12)How will you rate the following with Red Bull?

Attribute ratings
Marketing activities Delivering on brand promise
Identification with slogan Design
Taste
12% 31%
19%

19% 19%

12) How often do you purchase energy drinks?

Frequency of Purchase
40
20
0
Frequency of
once a once in
once in Purchase
month six
a week
months

13) Which promotional activities are most effective?

Effectiveness of Promotional Activities

Sponsorships

Merchandising
F1
TV ads

0
5
10
15

27
14) What influences purchase decisions of Red Bull?

a
Rotated Component Matrix

Component

1 2 3

SMEAN(WBrandloyalty) .197 .629 -.440

SMEAN(Price) .728 .335 -.080

SMEAN(CanSize) .812 .250 .019

SMEAN(Health) .870 -.064 .183

SMEAN(Taste) .678 .367 .013

SMEAN(Effectivenessofthedri .122 .184 .902

nk)

SMEAN(Thirstquenching) .195 .696 .000

SMEAN(Advertisements) .310 .681 .145

SMEAN(Wordofmouth) .069 .794 .322

Extraction Method: Principal Component Analysis.

Rotation Method: Varimax with Kaiser Normalization.

a. Rotation converged in 4 iterations.

From the factor analysis it can be inferred that the customers are focused on the tangible
benefits ie. Price, can size, taste and also get influenced by the promotional activities like
advertisements and word of mouth

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15) What are the most prominent brand attributes of Red Bull?

a
Rotated Component Matrix

Component

1 2 3

SMEAN(Innovative) .122 .735 -.030

SMEAN(Youthful) .142 .849 .046

SMEAN(Nonconformist) .226 .730 .518

SMEAN(Unpredictable) -.012 .056 .953

SMEAN(Daring) .544 .197 .702

SMEAN(Energetic) .201 .717 .148

SMEAN(Adventurous) .803 .287 .090

SMEAN(Sporty) .851 .068 .011

SMEAN(Masculine) .762 .082 .115

SMEAN(Exciting) .693 .519 .163

SMEAN(Outgoing) .584 .496 .296

SMEAN(Funloving) .356 .646 .485

SMEAN(Independent) .520 .399 .303

Extraction Method: Principal Component Analysis.

Rotation Method: Varimax with Kaiser Normalization.

a. Rotation converged in 4 iterations.

From factor analysis it can be inferred that the Sporty & adventurous attributes appeal to a
major section of consumers and also the daring, innovative and non conformist image
associated with the brand appeals to another section.

29
6. RED BULL BRAND

6.1 BRAND POSITIONING

Primarily targets the age group of 18-30 which accounts for a majority of its sales
An important segment of the target group consists of Party-goers and clubbers
for which the brand tries to maintain contracts with clubs and lounges
Red-Bull has also made a deliberate attempt to associate itself with sports so as to
enhance its perception of a drink enjoyed by sportsmen. In India, it launched a
huge marketing campaign to coincide with the F1 race, more so, because it is
already famous for having a team of its own called the Red Bull Racing.
Red Bull is positioned as an All purpose drink whereas its international
competitor Burn by Coke is primarily considered a clubbing-purpose drink
In terms of positioning, Red Bull has competition from Cloud 9 which follows
the same strategy of positioning the drink as an All-Purpose drink. Also, newer
entrants like Tzinga and Monster are primarily positioning their drink as an All-
Purpose drink
Red Bull doesnt compete with the likes of sports drink like Gatorade. Energy
drinks like Red-Bull are caffeinated drinks whereas sports drinks like Gatorade
have no or very low caffeine content. Sports drinks are primarily used by athletes
to replenish lost electrolytes. Therefore, there is really no competition with
Gatorade and the likes. So much so, an athlete might choose to have both the
drinks than prefer one over the other.
Red-Bull tries to projects itself as a drink meant for both physical agility as well
as mental alertness. It is therefore also popular with college students as well as
working professionals.

6.2 BRAND PERCEPTION

Red Bulls perception is that of a caffeine based energy drink whereas Cloud 9 is
perceived as a natural energy drink with flavours like pomegranate
commanding an extra premium of Rs.15.

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Companys aim is to educate consumers which helps in physical agility as well as
mental alertness.

The above aim and perception is promoted through its tagline red bull gives
you wiiings with stress on additional Is in wings.

Red and Blue color are quite prominent and are always the color in their
promotional campaigns and cartoons even when the brand red-bull is not
mentioned.

However, brand is hit by its perception of providing temporary energy through

stimulants which can have a harmful effect on health

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6.3 BRANDING EFFORTS

It does not make much use of famous media like print media, TV, radio etc.
However, it has a YouTube account which does media promotion and is targeted
to increase its brand loyalty among the select group of fans and loyalists.

It puts comparatively less focus on ATL strategy and has largely been inclined
towards making marketing efforts which resemble that of a BTL strategy.

The Red-Bull drink has been here for the past 9 years, however the sales and
marketing efforts to make it a popular brand are just 3 years old. Prior to this, it
was caching on its already popular global branding.

Brand promotion is done primarily through creating live events. Red bull has its
own sports competitions and culture events which are organized by red bull itself.
It does not partner as a sponsor for events which are not created by it.

WTM Wings Team Member is appointed to take care of colleges, corporate

offices where he/she provides free red bull cans and is also a method through
which company conducts sampling

Student brand manager (SBM) - Each campus has an appointed student who is
designated by red bull as its brand manager. The student also helps spread
awareness through the college by helping conduct surveys and providing free
samples

Use of social media Facebook, twitter which report webcasts and upcoming
events, run contests and showcases cartoons. These channels are used to create a
direct interactive involvement with the consumer.

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6.4 KAPFERERS BARND IDENTITY PRISM

33
 6.5 CUSTOMER BASED BRAND EQUITY PYRAMID
High market share

Brand loyalty and awareness

Rejuvenated
High quality product
High self esteem
Energy benefits
Culturally elite
Brands credibility-sportspersons
Personality-Mysterious, Energetic,
Physical endurance Non-Conformist, Youthful,
Aspirational
Mental alertness,Reaction speed
and concentration

Energizing stimulating drink

CBBE is formally defined as

The differential effect that brand knowledge has on customer response to the marketing
of that brand

1. Salience Dimensions

a) Depth of Brand Awareness-Ease of Recognition & Recall

If a brands value is to be judged by the ease with which it can be recalled, then Red
Bulls marketing campaign wins hands down as it is the first thing that comes to mind
when someone thinks of an Energy Drink. This is evident from the following customer
response.
I was working all day and I needed something to get me going said a young lad after
sipping the Red Bull at a party at New York Club. Heading the dance floor he said, It
really works

34
b) Breadth of brand awareness

Purchase consideration
In the past 15 years, this energy drink company has quietly captured more than 70%
market share in over 100 countries. Never before has any brand been covered so quickly
on the Top Selling magazine of US (Selling Power). If you dont create the market, it
doesnt exist says Dietrich Mateschitz, a former toothpaste salesman of a toothpaste
company who built a $1.6 Billion energy drink company with creative selling ideas that
made him incredibly rich.
Red Bull is the energy drink that doesnt do well in the taste tests; some say its too
sweet; others just shake their heads saying No. But still it has the maximum market
share in the Energy Drink Market. Red Bulls prime consumers are young adults, better
known as kids in their 20s. (Energy Drinks are not recommended for Children).
Consumption consideration

Red Bulls is the first thing that comes to the mind when any Energy drink is considered.
Its very famous amongst the so called Young Adults.

2. Performance Dimensions

a)Primary characteristics & supplementary features

Quality

No brand survives long if its quality does not equal or exceed what the buyer expects.
There simply cant compromise. Thats the essence of the contract.Red Bull is the
ultimate Energy Drink which gives you a long stint without Sleep. The berry flavored is
spiked with mysterious additives like Taurine and Glucuronolactone. But it does pack
some energy. Red Bull, with 80 mgs of caffine, has more than double the dose found in
larger coke serving, and it has 110 calories per serving versus Cokes 140.

b)Style and design

Red Bull has aggressive international marketing campaign. The numerous sponsored
activities range from extreme sports like windsurfing, snowboarding, skateboarding,
cliffdiving, surfing, skating, freestyle motocross, rally, Formula 1 racing, and break

35
dancing to art shows, music, and video games. It also hosts events like the "Red Bull
Flugtag" (German for "flight day" or "flying day") and other such contests. Red Bull is
also sponsoring soccer teams, in Salzburg, Austria; Leipzig, Germany; New York, USA
and Brazil and have included their company name in the club's names. By associating the
drink's image with these activities, the company seeks to promote a "cool" public image
and raise brand power. Hence, this one energy drink has helped create a market for over
150 related types of merchandise, like Red Rooster (drink) and Blue lightning.

3. Imagery Dimensions

Since introducing Red Bull in 1987, Mateschitz has invested heavily in building the
brand. Red Bull sponsors some 500 athletes around the world, the type who will surf in
Nova Scotia in January or jump out of a plane to fly across the English Channel. Every
year the company stages dozens of extreme sporting events like the climbing of iced-
down silos in Iowa or kite sailing in Hawaii, as well as cultural events like break-dancing
contests and rock music jam sessions. Then there is a Hangar- 7, an eye popping structure
of glass that Mateschitz erected next to the airport in Salzburg, Austria. The building
serves the chic eatery for club crawlers and provides shelter for the flying bulls, a fleet of
15 show planes that appear at Air show around the world. Mateschitz latest indulgence:
The purchase of formula one racing tea006D, an extravagance that will absorb $ 100
million an year to keep on the track while generating only $70 million for revenue. All
these activities are geared to one objective: to expand Red Bulls presence amid a deluge
of new energy drinks being introduced and beverage behemoths like Pepsi and Coke.

4.Judgment Dimensions
Brand quality
Fun
Energizing
Good to taste

36
 Brand credibility
Expertise
High Energy
Likeability
Brand consideration
Stands strong in the Energy drink industry.
High recall when compared to its competitors
High recommendations by category intenders and category users.
Brand superiority

Different from Conventional Colas

Better to taste when compared to Gatorade & Power Horse
Can be used to make a Cocktail with Vodka
Masculine Brand

7. Feelings Dimensions

Sexy
Fun
Excitement
Hip
Youth
Sporty
8. Resonance Dimensions

Behavioral loyalty
Frequency and amount of repeat purchases.
People purchasing Red Bull will never substitute it with any other energy drink
like power horse or Gatorade.
Attitudinal attachment
The brand represents strength and vigor because of which consumers purchasing
it stick to it.

37
Sense of community
A brand representing Kinship as it is a party drink as well. Evolves as group
brand.
Lots of youngsters affiliate themselves with the brand as it a symbol of
masculinity.
Active engagement
Resorts
Sports club
Web site
Chat rooms
Health Clubs
Gym
Swimming Pools
Music & Entertainment

6.6 INTERNAL BRANDING

Drivers are on brand.

Drivers are on brand because they are representing Red Bull at their full capacity. The
drivers wear uniforms that are navy blue jumpers. The Red Bull name is located on front
upper left side of the uniform. The Oriental bull fighting picture is located on the back
side of the uniform.

Truck- Delivery Trucks are blue with Red Bull in red font located on the sides of the
truck. The picture of the red bulls fighting in front of the yellow is located in the front
part
of the truck located on both sides and in the rear of the truck.
Staff is on brand. The Red Bull company treats all employees like family. The
company considers everyone that works for them along with their families part of their
network. This gives Red Bull a advantage of Positive reinforcements. If the employees

38
and their families are treated as if they are family then they will give believe in the
products and give Red Bull a positive reputation.

Business cards- The business cards for Red Bull Energy Drink are on brand. The
business card has employee name and title of position he hold through Red Bull.
The name of the product is in Red bold font with a white outline located in the
upper left hand corner. The picture of an oriental themed depiction has two red
Bulls about to collide head on in front of yellow sun.

39
7. Competitor Analysis

Column1 Column2
Energy Drink Market Share

Red-Bull 90%

Cloud 9 5-7%

Others (Burn, XXX, Monster, 28Black, SoBe) 3-5%

Red Bull
Vs.
Cloud 9

Red-Bull is a clear market leader with a staggering 90% market share in the energy
drinks market. Cloud 9 is the primary competitor with a market share of around 5 -7 %

Red Bull is positioned as an all-purpose drink which is the same strategy Cloud 9 has
followed. It is interesting to note that the name Cloud 9 also seems like a dig on Red-
Bulls tagline red bull gives you wings, where Cloud 9s name seems to suggest that
the energy drink already makes you feel on Cloud 9.

Cloud 9 has tried to distinguish itself from the rest of the energy drinks market by
introducing natural flavours and keeping the caffeine content low to promote it as a
healthy drink, a perception which is unique to Cloud 9 in the energy drink market. Its

40
Pomegranate flavour has especially been very successful and is what has made Cloud 9
as the primary competitor in the market

Pricing: Red Bull is priced at Rs.95 for the 250 ML can.

Cloud 9 comes in four variants:

Wild Berry : Rs.75

Red Grape : Rs.75
Pomegranate : Rs.95
Premium : Rs. 85
Red Bull charges a premium price of Rs.95 over it other competitors like Cloud
9(Basic Variants), Burn, XXX, Tzinga etc. who charge a price of Rs.75 per 250
ml can.
Red-Bull used to be priced at the similar price point of Rs.75. This point is
therefore an important price break point. However, Red-Bull with its cult
following has been able to command a premium of Rs.20 (27%) over the other
brands.
In spite of the price increase, the sales have grown substantially owing largely to
the fact that energy drinks market in itself is growing at a substantial rate of 50%

Other Competitors

41
 All the other competitors enjoy only a minor share in the energy drinks market in
India
Monster energy and Burn are U.S brands with Monster having recently made an entry
into the Indian markets. Burn has been present in the Indian market for some time.
However, it is accessible primarily at clubs and lounges as its primary target group is
the party-goers segment.
Tzinga is an Indian brand which has recently made its foray into the energy drinks
market. Its is yet to make its presence felt in the Pan-India market, as so far, it has
been present only in the North-Indian market
28Black is an Australian brand which entered the energy drinks market in 2011.

Column1 Column2 Column3

Red-Bull
POP POD
Cloud 9 All-Purpose Drink Cloud-9 comes in natural flavours
Has 4 variants : Pomegranate, Wild
Caffeinated Drink Berry, Red Grape, Premium
Basic Variant priced at Rs.75 unlike
Similar Packaging in 250 ml cans Red-Bull's premium price of Rs.95
Target Group positioning at 18-30
years
Cloud 9 follows ATL marketing
Distribution at Pan-India retail whereas Red-Bull is more inclined
outlets towards BTL strategy

Burn is primarily a "Clubbing-Purpose"

Burn Caffeinated Drink
Both Follow BTL strategy
Similar Packaging in 250 ml cans
Tagert Group positioning at 18-30
years
drink
Distribution limited to pubs and
lounges
Basic Variant priced at Rs.75 which is
lower than Red-Bull's premium price
of Rs.95

Packaging more similar to that of

Tzinga All-Purpose Drink Sports Drinks like Gatorade
Caffeinated Drink Tzinga comes in Natural Flavours
Tagert Group positioning at 18-30 Follows ATL strategy unlike Red Bull's
years BTL strategy

42
 Distribution limited to Delhi and Basic Variant priced at Rs.75 which is
Bangalore outlets whereas Red-Bull lower than Red-Bull's premium price
has a Pan-India presence of Rs.95
Has 2 variants - Lemon Mint and
Tropical Trip
Brand XXX
The brand XXX energy comes in two variants currently- REJUVE and NICOFIX. The
USP of NICOFIX" is that it is formulated with NPR which reduces the Nicotine urge and REJUVE" is an
exciting energy drink specially formulated to suit India taste buds." REJUVE rejuvenates the
mind and body and enhances your immunity, thus increasing stamina. Both the cans are
very competitively priced at Rs.75/- for 250 ml.

Monster energy drink

Depicted by a logo of three claws, Monster energy drink is distributed by distributedby
Hansen Natural Corporation, Corona California. With ingredients like guarana,caffeine
and glucose, monster artificially stimulates energy. With a fairly tolerabletaste, this
energy drink sparks one up and packs quite a vicious punch. ThoughMonster Energy is
not widely advertised in the media it receives a large amount of recognition from its
sponsorship of various sporting events.

Full Throttle
Produced by the Coco Cola company, Full Throttle debuted in late 2004. This
energydrink contains ingredients such as carbonated water, high fructose corn syrup
and/orsucrose, citric acid, natural and artificial flavors, sodium citrate, sodium benzoate
(toprotect taste), d-ribose, caffeine, acacia, niacinamide (vitamin B3),
calciumpantothenate, (vitamin B5), glycerol ester of wood rosin, yellow 5,
pyridoxinehydrochloride (vitamin B6), cyanocobalamin (vitamin B12). Available in great
flavorslike citrus, full throttle energy drink has great flavors.

43
Conclusion:
The primary reason why the energy drink market has been attracting foreign as well as
home-grown players is primarily the growth and current penetration level of the Indian
market which could eventually provide a fair share to all the players involved. Red-Bull,
however, with its global brand equity and the first-movers advantage in India can exploit
the market further and make it a tough challenge for the other players to capture its
existing market

44
8. Red bull positioning

Genaral positioning strategy

The brand is positioned as something that,revitalized body and mind.It was also
intended that red Bull be drunk whenever consumers needed a lift,whether it was
morning,noon or night.The broad positioning was designed to enable growth into a
variety of market segments. Red bulls advertising did not specify any consumption
occasions, which further facilitated an elastic positioning.

Positioning through market strategy

In every market,Red bull set a price at least 10 percent greater than the most expensive
competitor in order to maintain a best of class positioning.The 250 ml can of Red bull
cost upto 300 percent more than traditional soft drinks.

COMMUNICATION CONCEPT

Above-the-line Advertising

To build up awareness and image

Aim of the campaign is to reflect the brand personality: Cheeky, witty, self-ironic,
unpredictable and unique. While the distinctive execution style helps establish it as
beyond fashion.

Opinion Leader Marketing

To support credibility of the product and the brand

Opinion Leaders, especially in the sport and cultural area, are a perfect target group for
Red Bull.

Red Bull develops relationships with them and treat them like friends. Red Bull
worldwide has over 250 agreements with top athletes, but not one written contract.

Event Marketing

To prove that the brand is up-do-date and different

Red Bulls event marketing also covers both areas, sports and culture, through a variety
of events like Flugtag, Creative Contest, Music Academy, Local Hero Tour and many
more. Red Bull doesnt sponsor events, Red Bull creates, organizes and supports new,
innovative and image building events.

45
Sampling

Sampling is done by highly motivated and welleducated emloyees of Red Bull and not
professional promotion teams. Their briefing is simple: Find tired and exhausted
people. They do it in a charming, non offensive way. All is given to them is the product, a
free range of clothes and a tiny.

46
9. SWOT Analysis
Strengths
Market leadership-Within the energy drink
market,it is the industry leader,throughout
the world.
Marketing efforts-Many promotions and well
targeted campaigns and sponsorship eg.F1
helps to expand Red bull brand and increase
customer brand awareness and recall
Strong,fresh and fashionable brand identity
Opportunities:
Extension of product line-This will help to
retain market share.
Hardcore advertising and promotions
Consumer recognition through sponsorship of
events
PESTEL Analysis
New ventures like partnership with Facebook.
7.1 Political and Legal Factors:
47
Weakness
Above average prices
Reliant on small product base-the
company only markets one branded
product,Red bull energy drink(along
with a sugar free variety)
Lack of patent on its recepie means
anyone can copy it
Threat
Health concerns-Tougher rules from
government on high caffeine content
Organic energy drinks might take away
red bulls market
Drinks might not be accepted in the
new markets.
Consumer awareness of health and well
being-people may start to drink other
alternatives as red bull is not associated
with healthy lifestyle.
10 .PESTEL ANALYSIS

Political factors and legal factors:

In India, there are no standards for energy drinks under PFA Act,1954. The standards of
carbonated water under PFA Rules, 1955 specify the maximum limits of caffeine of
200ppm which subsequently on recommendations by Central Committee on
FoodStandards were reduced to maximum level of 145ppm.Food Safety and Standards
Authority constituted an expert group to examine the scientific literature and global
position on use of caffeine and non-carbonated beverages and their labelingand to
recommend the limit of caffeine in energy drinks and non-carbonated beverages under
Food Regulations. The Group was also asked to suggest whether any standards need to be
laiddown for energy drinks keeping in view the assessment of risk. It made the
observation thatCaffeine is not an additive but a chemical with addictive property.
Caffeine up to 200 ppm isadded as a flavouring agent but above 200 ppm it is a
functional ingredient. The functionality of caffeine at 320 ppm needs to be ascertained
along with justification for fixing a cut-off limit at320ppm.

Economic Factors:
Economic factor affects the purchasing power of potential customers and firms cost of capital. The
following are the examples of factors in macro-economy: economic growth, interest rates, exchange rates,
inflation rate. The inflation rate in India was last reported at 13.73 percent in June of 2010. The economy is
not much developed and wide variations among states and regions within states are there due to which we
might have to make different promotional strategies.

Socio- Cultural Factors:

The key emerging health concerns amongst Indians include diseases of the heart and
digestive system, obesity, bone and joint pain, depression and anxiety, lack of energy and
stamina and sleeplessness. The growing awareness amongst Indian consumersregarding
several ingredients and their associated health benefits is making them more inclinedto
use nutritional information very often to make product choices. Hence there is a demand
forfood and beverages with health claims.

48
Technological Factors:
The technological factors can lower barriers to entry, reduce theminimum efficient production levels and
influence outsourcing decisions.

49
11. SUPPLY AND DISRIBUTION OF REDBULL

The annual supply for India is 40 containers per month and each container has 2659 cases
of 24 cans each. The distribution of Red-bull in India is outsourced to Narang
Enterprises. Narang Enterprises established in 1997 is a professionally managed
company, which is an importer and distributor.

Narang has 14 Depots across India, including the major metros Mumbai, Kolkata, Delhi
and Chennai.Red bull strategically located all its warehouses just nearby the
existing Narangs Depots

Narang provides specialised logistics service to Red Bull including

- sales forecasting and demand management

- logistics operations
- production handling
They also help in reverse logistics, for Red Bull's recycling campaign

Intensive distribution aims to provide saturation coverage of the market by using all
available outlets such as:

Supermarkets
Gyms
Coffee houses
Restaurants
Discotheques &pubs

50
12. REDBULL IN NEWS

51
52
13.Recommendation:
Red-Bulls marketing efforts have primarily been inclined towards following a Below-the-line
strategy which has helped create itself as a cult-brand among its fans and loyalists. The
company does not make much use of mass media unlike its primary competitor Cloud 9
which is heavily into TV and print advertising. We suggest Red-Bull not to push its brand
through the mass-media channels as it already is a brand leader in its segment. Red-Bull
could however increase its presence by associating itself with various events and not just be
restricted to creating its own events, a strategy which Red-Bull is currently following. Also,
it could try to extend its target group beyond the current age group of 18-30 by building and
enhancing its perception of an All-purpose drink. It must however be said that the
companys marketing efforts are currently self-sufficient and have helped it to grab a
staggering share of close to 90% in the Indian energy-drinks market.

53
References:

Websites:
http://www.socialbakers.com/blog/73-facebook-battle-red-bull-vs-monster-energy/

http://www.socialbakers.com/facebook-pages/14226545351-red-bull
http://www.scribd.com/doc/63623217/Red-Bull-Internet-Marketing-Analysis

http://socialmediatoday.com/larry-weintraub/461766/red-bull-facebook-timeline-timewarp

http://www.kgsepg.com/project-id/2835-strategic-brand-management-red-bull-energy-drink

Databases:
TAM database

Research Papers

Newspaper articles

54
Exhibit: 1
SURVEY QUESTIONANNAIRE

1.What is your age? *

<19

20-24

25-29
>30

2.Do you consume energy drinks? *

Yes
No

3.When you think of energy drinks, which is the first that comes to your mind? (most prominent) *

Red Bull
Edge
XXX

Cloud 9
Burn
Tzinga

4.Which of these energy drinks do you know about *

55
 Red Bull

Edge

XXX
Cloud 9

Burn

Tzinga
Other:

5.Rate the energy drinks on preference *

1 Least 5 Most
2 3 4
preferred preferred

Red Bull

Edge

XXX

Cloud 9

Burn

Tzinga

6.Rank Red Bull according to your perception *

Least in Most in
sync sync

It's an energy drink

It's a sports drink

56
 Least in Most in
sync sync

It's a lifestyle drink

7.Do you think Red Bull is *

Under priced
Reasonably priced
Over priced

8.How much do you identify Red Bull with the following attributes? *

Don't
Reasonably Strongly
identify 2 4
identify identify
at all

Innovative

Youthful

Non-conformist

Unpredictable

Daring

Energetic

Adventurous

Sporty

57
 Don't
Reasonably Strongly
identify 2 4
identify identify
at all

Masculine

Exciting

Outgoing

Fun loving

Independent

9.Which of the benefits do you expect from energy drinks?

Least expect 2 3 4 Most expect
Endurance
improvement

Improvement in
alertness

Improvement in
concentration

Reaction speed

Stimulating metabolism

Performance

58
10.Which of the benefits do you get from Red Bull?

Which f the benefits do you get from Red Bull?

Least 2 3 4 Most
Endurance
improvement

Improvement in
alertness

Improvement in
concentration

Reaction speed
improvement

Stimulating metabolism

Performance
improvement

11.Rate Red Bull on the following attributes

1 least 2 3 4 5 most

Taste

Design

Delivering on brand
promise

Identification with
slogan

Marketing activities

12.Which factors affect purchase decision of energy drinks? of energy drinks

1 least 2 3 4 5 most

Brand loyalty

Price

Can Size

59
 1 least 2 3 4 5 most

Health

Taste

Effectiveness of the
drink

Thirst quenching

Advertisements

Word of mouth

13.Rank the promotional activities of Red Bull in terms of effectiveness

1 least 5 most
2 3 4
effective effective

TV ads

Campus ambassadors

F1 association

Sponsoring Xtreme
games

Merchandising

Social media
(Facebook activities
and so on)

Sponsoring campus
events

14.Which can do you prefer?

250 ml

355 ml

15.Where do you purchase?

60
 Don't purchase at all

Supermarket

Bars/Clubs/Lounges

Local Stores

Other:

16.Do you think energy drinks are healthy?

Yes

No

17.When do you consume energy drinks?

Study/Pulling an all nighter

On the road

Sports

Partying

Other:

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