University of Economics, Prague

International Business Central European Business Realities

Analysis of Red Bulls Strategy and its

Association with Extreme Sports

Author: Alicja Janek

Thesis instructor: Gina Cook, Ph.D.
Scholar year: 2012/2013

Declaration:
I hereby declare that I am the sole author of the thesis entitled Analysis of Red
Bulls Strategy and its Association with Extreme Sports. I duly marked out all
quotations. The used literature and sources are stated in the attached list of
references.

In Prague on .....................

Signature
Alicja Janek

Acknowledgment

I hereby wish to express my appreciation and gratitude to the supervisor of my thesis,

Gina Cook, Ph.D. I would also like to thank my parents for providing me the opportunity
to experience and excel my education and for their full support during my masters
education.

TABLE OF CONTENTS

Introduction .............................................................................................................................................. 3
Part 1 Sports marketing ........................................................................................................................... 6
1.1 Definition of sports marketing .................................................................................................. 6
1.2 The Sport Marketing Exchange Process ................................................................................ 8
1.3 Sport marketing mix ................................................................................................................. 10
1.4 Sponsorship ............................................................................................................................... 14
1.5 The Sport Marketing Research Process ............................................................................... 16
1.6 Sport markets consumers ....................................................................................................... 19
Part 2 Analysis of Red Bulls marketing strategy .................................................................... 23
2.1 SWOT Analysis .......................................................................................................................... 24
2.2 Marketing mix ........................................................................................................................... 32
2.3 Analysis of consumers ........................................................................................................... 41
2.4 Analysis of consumer decision process ........................................................................... 45
2.5 Analysis of competitors ......................................................................................................... 47
Part 3 Red Bulls extreme sports events ..................................................................................... 52
3.1 Red Bull Stratos ........................................................................................................................ 52
3.2 Red Bull Air Race World Championship ......................................................................... 56
3.3 Red Bull Formula 1 .................................................................................................................. 58
3.4 Other events ............................................................................................................................... 60
Conclusion .............................................................................................................................................. 64
References .............................................................................................................................................. 67

List of figures
Figure 1 Managing the Exchange Process, George R. Milner ................................................. 8
Figure 2 Marketing Mix, George R. Milner ................................................................................. 11
Figure 3 Characteristics Of The Sport Product, Sport Marketing, B. Mullin.................. 12
Figure 4 Three Systems Interacting in Event Sponsorship, A. Ferrand, L.Torri .......... 16
Figure 5 Marketing Information System, P. Blakey ................................................................ 18
Figure 6 Red Bulls Line extension, Red Bull Brand Strategy, S. Jaindl ........................ 30
Figure 7 Red Bull In The World, www.redbull.com................................................................ 38
Figure 8 Red Bull Wings Teams Car ............................................................................................ 40
Figure 9 Use Of Energy Drinks By Brand and Age, www.samsha.gov ............................. 43
Figure 10 Energy Drink Brand Market Share 2012, www.energydiend.com .............. 47

List of tables
Table 1 SWOT, Red Bull: A Trailblazer in marketing strategy ........................................... 24
Table 2 Red Bull revenues, Red Bull: A Trailblazer in marketing strategy ................... 25
Table 3 Energy Drink Prices, Consumer Reports Online ..................................................... 37
Table 4 Based on Sales of energy drinks, www.theatlantic.com ....................................... 48
List of pictures
Picture 1 Red Bull Stratos, Red Bull Stratos website ............................................................. 53
Picture 2 Felixs landing, Red Bull Stratos website ................................................................. 55
Picture 3 Red Bull Air Race, Red Bulls website ....................................................................... 57
Picture 4 Red Bull Formula 1, Red Bulls website ................................................................... 59
Picture 5 Red Bull Flugtag, Red Bulls website ......................................................................... 61
Picture 6 Red Bull X Fighters, Red Bulls website.................................................................... 62
Picture 7 Red Bull X Alps, Red Bulls website ........................................................................... 63

Introduction
This thesis is an analysis focused on Red Bull, one of the most unique and innovative
organizations within the dynamic area of energy drinks, a fast-growing area of the
beverage sector. It is an important topic because Red Bull GmbH is a market leader with
a very successful marketing strategy that plays a big role in todays sports sector. Red
Bull manufactures energy drinks, which are described as functional beverages providing
various benefits, especially in times of increased performance (Red Bull, 2013). It is
said to improve concentration, alertness, increase the energy level and reduce the feeling
of tiredness. Today, there have been over 35 billion cans of Red Bull sold in 165
countries over the world. Their headquarters is in Austria and the company is currently
employing 8,966 employees; Red Bull continues to have incredible growth recording a
15,9% increase in 2012 (Red Bull, 2013).

Brief History of Red Bull GmbH

In 1982 Dietrich Mateschitz visited Thailand and for the first time tried the Thai energy
drink called Krating Daeng, which was created by Chaleo Yoovidhya. He was amazed by
the drink that immediately took away his jet lag. Therefore he decided to develop the
recipe of Krating Daeng and in 1984 he founded Red Bull GmbH and Chaleo Yoovidhya
together with his son became Dietrichs business partners owning 49% of the company
shares. Red Bull was first sold in its domestic market of Austria and the official launch of
the product took place on the first of April in 1987. And in the same year, they reached
sales of one million cans. Since the sales were very successful, they decided to expand
distribution into the neighboring countries, so in 1992, they started in Hungary and
Slovenia. They introduced their energy drink into the German market in 1994 and only a
couple of months later, Red Bull became number one in the energy drinks market, putting
it ahead of Gatorade, which is a very famous brand producing sports-themed beverage
and food products. However, after expanding across Europe with no experience, there
3

were many trials and errors done by the company and at the end Red Bull was $12
million in the hole. Mateschitzs strategy to overcome this problem was to fire all his
staff and hire a professional marketing firm instead. They focused on buzz marketing
targeting students and young males. They also hired many students to promote their
brand within their campus and to give free samples away. This strategy was very
successful and effective in most of the countries; however Red Bull still did not manage
to enter markets of France, Denmark or Norway because of some health concerns.
After hiring marketing teams, Mateschitz realized that extreme sports events could be a
profitable avenue to take Red Bull up. Therefore, they started supporting around 500
extreme sports athletes and organizing exclusive parties. By 1997, Red Bull managed to
expand into the U.S. market proving that buzz marketing strategy was very successful.
Todays extreme sports events are hosted all over the world and almost every sports
sector is covered. Red Bulls desire to maintain their leadership position is reflected in
their mission statement To spread out wings over the world (Red Bull, 2013).

The author has chosen this topic for her thesis because she has always been impressed by
Red Bulls way of running their marketing campaigns and loves how much they
contribute in extreme sports world. The author believes they change the world and not
because of introducing their energy drink into the market, but they create unforgettable
events, increase the extreme sports popularity and help many talented athletes to become
the best ones in the world. As Dietrich Mateschwitz said Red Bull isnt a drink, its a
way of life. Red Bull does not have any extraordinary taste or quality, but people love it
because of Red Bulls GmbH style and contribution to extreme sports. It is important to
understand the success of their way of marketing, its innovative features and engagement
to extreme sports.

The objectives of this thesis are to show how Red Bull develops its marketing strategy
and identify the principles and processes involved, to describe the tools and techniques
used in their marketing and show how they have been applied. However, the main goal of
this thesis is to explain how effective is the association with extreme sports for Red Bull.
In order to achieve all the above objectives, the thesis will begin by explaining what is
4

sports marketing, why it exists and how it works. Afterwards, the author will focus on
Red Bulls marketing strategy and explain in detail what is their current strategy, what
tools they are using and who are their consumers and competitors. The last section will
give the examples of Red Bulls marketing strategy and attempt to show that their
association with extreme sports makes their brand extremely successful.
The methodology used during the writing of this thesis was broad. The first theoretical
part was based on texts related to the field, including those written by Kotler, Ketler or
Brooks. The author of the thesis also referred to theoretical texts and literature reviews.
For the second part, a review was done including articles from contemporary journals as
well as interviews with famous marketing specialists. The practical part was written
according to recent big Red Bull events and all the facts and data were taken from the
energy drinks official website.

Part 1 Sports marketing

1.1 Definition of sports marketing

Sports marketing is divided into three sectors: marketing of a sport, marketing products
and services through sports and promotion of a sport to public. This thesis is mostly
referring to marketing through sport, which dates back as early as the 1870s when
tobacco companies used to make cards with pictures of baseball players on them and used
to insert them within cigarette packs to boost their sales and develop loyalty for their
brands. Since then marketing through sport has changed and improved to the more
advanced one with huge sport events sponsoring a brand. The change was done because
of the society who became more demanding and it is more difficult to impress and
convince them.
Therefore, todays marketing of a sport is about advertising of a sport and sport
associations such as Olympics or Tour de France (F. Samet, G. Russell, 2008; The four
domains of sports marketing). Their goal is to catch the attention of many people and
make their events famous all around the world. They bring huge revenues and promote
the winners or their countries.
Promotion of a sport to the public is about promoting a certain sports category in order
to increase the participation. The idea of it is to stimulate people to start doing sports. The
purpose of it is not to create a lot of revenue, but to bring some positive social changes.
For example social sports marketing can be used by the government to improve the
national public health.

Marketing products and services through sports is the use of sporting events, sporting
teams and individual athletes to promote various products, whether they are sport related
products or non-sport related ones. (F. Samet, G. Russell, 2008; The four domains of
sports marketing). In this case, product does not have to do anything with the sport but

famous sport athletes use their image to promote the product. I am going to focus on this
sector as it applies to Red Bull, whose product is non-sport related.
To sum up, sport marketing is simply the marketing of brands by using sports to connect
with a broad set of targeted customers. It is a tool used to build brand awareness and
promote their product to increase sales. It can take any form from using sporting events,
teams or athletes to promote various brands and products. Organizations can use different
sources like sponsoring events, athletes or teams using media channels like radio or
television during sports events broadcast, or advertisement at the point of play or sporting
venues.

One way brands reach out to consumers is through sport. Sport marketing has taken off
recently, with approximately $11.6 billion spent on sport sponsorships in 2008, according
to Contemporary Advertising & Integrated Marketing Communications by Arens,
Weigold and Arens. According to an ESPN poll, 21% of people have tried a product for
the first time due to a sport sponsorship, and 65% of people believe that sponsorship is an
integral part of producing the game. Sports fans believe that sponsorships are necessary at
their favorite games and events.
Sports marketing takes advantage of the fact that fans are loyal to their teams and
athletes with the latter being loyal to their endorsements and the loyalty tends to persist
over a longer period of time as compared to other forms of marketing. Apart from brand
visibility, companies are targeting more emotional connect with the fans for their brands
and this is facilitated through social media which makes it possible to reach different
segments of customers.
Another reason for sports marketing taking off in a big way is the fact that sportsmen are
seen to be more real in comparison to a movie star: the audience knows that when an
athlete runs its him running in the flesh and blood giving the event hes taking part in his
everything, while the same may not hold true for an actor performing a stunt scene in a
movie as it is not the actor who is being exposed to risk but rather a body double who is
doing the scene (IIFT, A. Budati, N. Bansal).

1.2 The Sport Marketing Exchange Process

If the company wants to be successful, they first find out customers needs, they include
their wants into organisations planning and decision making process and the last very
important stage is to take into the account their competitors marketing strategy to make
sure ours will be innovative and different from anyone elses. It is called an exchange
process when many people are involved in. Below is a description of this concept and
explanation of who and why is managing the exchange process.

Figure 1 Managing the Exchange Process, George R. Milner

Sport marketer

One important role in sport marketing is playing a sport marketer whose job is to identify
what needs and wants are being satisfied during the exchange process. As Kotler and
Ketler said in Marketing Management (13th ed), Pearson Education International,
Prentice Hall, identifying the process of exchange is the act of obtaining a desired object
from someone by offering something in return. In return for the sport consumers
membership they can receive physical activity, entertainment or health and fitness. The
very challenging process is to correctly identify various segments of the population. Once
the sport marketer has obtained the above information, he/she can introduce sport
benefits to different groups. For example, the special product assigned to a one-day
football match and one-week football match are different and will attract different
segments of the market. Some people will be interested more in a one-day event, because
they are busy, work hard and do not have a lot of free time. Other segment such as
students or young professionals would enjoy more spending a couple of days in the
entertaining event.
After having established the range of product attributes in relation to consumers needs,
the sport marketer will start on the challenge of affecting the exchange.

Consumers

Consumers are the most important element in the whole process, as without them, sport
marketing wouldnt exist. Developing an understanding of who sport consumers are and
what factors influence their consumption behaviors guarantee to achieve the success.
Consumers are the ones who make the final decision and purchase our product, so it is
relevant to find a way to satisfy their needs and keep them happy. Satisfied consumers are
the ones who are loyal to the brand. Therefore it is fundamental to learn how to
communicate with your consumers. Many sport brands do that via subscriptions where
they notify their consumers about scores or news of their favorite teams, athletes or

players and the end are sending the reminder or a sample of their product. They want to
keep their consumers constantly engaged and interested in their brand.

Marketing Challenges and Opportunities

Every marketing challenge can be converted into new opportunities. For example
building Internet website of our organization or promoted product, we can develop and
maintain close relationships with customers. This communication could be useful for
increasing fun identification. In general, social media is a challenge for sport marketers.
In order to turn it into new opportunities, companies should start with a strategy and a
social media business concept to define objectives such as sales, brand awareness,
marketing goals and create a plan of how to achieve these goals.

External Stakeholders

Sport marketing is known as marketing of sport, however marketing through sport is

becoming more famous. The best example of this is Red Bull GmbH who is sponsoring
sporting events as a way to identifying with sport. It can be also used as an improving
ones image through their association.

1.3 Sport marketing mix

Every sport organization must develop a mix of marketing strategies to convince
customers to buy their products. The four factors price, product, promotion, place are
very well known as 4Ps of marketing (D. Shilbury, Strategic Sports Marketing, 2004).

10

Figure 2 Marketing Mix, George R. Milner

The sport product

Below figure 3 presents the important divisions for sport products. Within the core, the
sport product offers some benefits to the consumers such as health, entertainment,
sociability or gaining achievements. As mentioned before, the job of sport marker would
be to find out why a certain group of consumers would choose to satisfy their need by
purchasing a sport product or a product that is related to sport events. The most
significant point should be that this sport product is unique.
The second circle is about generic sport form such as equipment or sport rules. In every
sport there are some rules that need to be followed or equipment that needs to be used.
What each consumer sees in a sport is very subjective, however there are some general
forms that should be set and followed.
Third circle specifies sport forms and divide them into different categories. There is
football, volleyball, skydiving, scuba diving and many others, which helps us to identify
consumers and focus more on their marketing strategy.
The last one divides Marketing into sectors like Product description, Price, Place,
Promotion and Public relations.

11

Figure 3 Characteristics Of The Sport Product, Sport Marketing, B. Mullin

Sports pricing

It is difficult to price an individual sport product unit by a standard costing. For example,
how can we allocate fixed and operating costs to the game ticket. Therefore, pricing the
sport products is usually based on the marketers sense of consumer demand, which
means for certain seats or certain hours during the day. The company needs to decide
what is the expected profit from the specific sport form and how to achieve it. If it is a
football game, how much can we charge for a seat comparing to other sports. Then they
have to analyze if it is a certain sport season. For example if it is summer, then it costs
less to organize a tennis match, because it can be outdoor so the organization can save
some expenses.
A consumer attending an event considers the entire cost of attending when determining
the value of the event. This cost includes both the monetary cost and the personal cost of
attending.
The price of a sport product is relatively small comparing to the total costs paid by the
consumer. For example, if their family goes to the football match, they pay 1000CZK for
a game ticket, but additional costs include travel, accommodation, food, drinks and that

12

would be at least a few thousands Czech crone more. Indirect revenues from the events
are often greater than direct operating revenues.

Sports distribution

A typical product is made at the manufacturing site and then transferred to the location
where it is available to customers. Moreover, even if they will not be bought the day
after, most likely they can be sold a week later. However, none of these apply to sport
products or events. Place where products are produced are usually stadiums or some
special fields and at the same place product will be consumed. It means that once the
game or event is over, the ticket cannot be sold later on. Furthermore, location of the
event is very relevant. Sometimes there are special reasons for located a game or event at
the certain place including tradition or history of a performing team. However, the nonsport products can be produced and consumed in two different locations. It is important
to make your product easily available to all the consumers.

Sports promotion

There are different types of promotion. The most common is advertising and these are
paid messaged via media, newspapers, magazines, television or radio. That means often
commercials promotion the sport or product before or after the movie in TV. There could
be also some adverts and notes in the magazines or newspapers informing about the
product or sport event. Another option is to choose radio advertising where a speaker
would be promotion the product. All of the above methods are usually expensive and
require some investment.
There is also personal selling, which includes face-to-face presentations when a seller
directly approaches a potential consumer. It is mostly about building a relationship with
the consumer and making them feel special. A sales person can immediately answer all
the consumers question and convince them about the quality of the product. Another one
is PR, when media create a non-paid advertisement of the organization It is not always a
13

good promotion because it can be also negative. The company has no impact on the
media and cannot predict on what will be published. The last one is called sales
promotion including various special offers in order to increase sales of a product such as
free samples or discounts in order to get to know the product.
While promotion sport, the sport marketer should be aware of the unpredictable nature of
the product. Promotion can help offer a tangible aspect with the use of souvenir sales. For
example when a consumer buys a ticket to watch a basketball match of his favorite team,
if he receives a mug with a picture of this team, he will most likely remember attending
this event.
Another good way to make your consumers remember the event they have attended is to
use some celebrities. Their expanded egos can lead to wholesale promotion and can get
the media attention.
The best way but also the most expensive one of promoting sport, sport products or nonrelated sport products would be through sponsorship. Thanks to that, companys brand
would get famous, gain a good image and increase products awareness.

1.4 Sponsorship
Sponsorship is the exchange process between two parties when one of them is obtaining
something from the other one and in return receives something that satisfies both of them.
According to Alain Ferrand, there are four conditions that have to be met:

An organization that is looking for sponsors has to conceive a sponsorship offer in

connection with the rights which it holds

The offer must represent value for the potential sponsor

The organization must be able to deliver this provision of services specified in the
exchange

The potential sponsor should be free to accept or refuse the offer

In other words, the right holder should be able to analyze the offer and expectations of
potential sponsors and can design or implement changes in order to satisfy them.
14

The provision of a service depends on the possessing marketing rights related to the range
of use of an events brand and athletes image. It is necessary to point out that no
organization holds the marketing rights of sport in general or in a particular sport. Indeed,
sport is a social practice that can develop outside all institutional contexts. The practice of
sport becomes institutionalized insofar as an assembly is structured around a mission.
The mission is embedded deep within the statues of sports organizations (A. Ferrand, L.
Torri, Routledge Handbook of Sports Sponsorship Successful Strategies, P. 47).
Nowadays, sports sponsorship exists within a global system. It joins together more and
more stakeholders. There are two types of stakeholders: internal and external ones. The
internal stakeholders are employees, politicians, athletes, sport clubs, and the external
ones are media, sponsors, communities etc. Sponsorship is a multilateral relationship
involving a number of stakeholders within the global system.
Below figure 4 presents a system mentioned above where stakeholders are independent.
In the event system the main stakeholders are:

Rights holders and they are held either by an association or a company. The most
important goal is that athletes or sporting groups have their own rights while
organizing an event.

Audience are participants, spectators or judges and they differ depending on the
sponsorship operation. It is expected from them to attend a sport event, be excited,
entertained and do the search of information regarding the event.

Media do not construct the event, but they will help to build an image if the
interests of event will be sufficient.

Sponsors are the ones who provide funds or support for an event.

Agencies are usually the consulting firms in sport marketing. Their goal is to find
firms for sponsorship, work on an agreement etc.

Local authorities are the state, regional or local ones who can be involved in the
events system.

Sports system involves participants who are specific to the sport club and it establishes a
traditional hierarchy (international, national or regional clubs). It also points out public

15

and semi-public sport management organizations because their number can influence the
impact of the event.
The geographical and social system covers events and its stakeholders.

Figure 4 Three Systems Interacting in Event Sponsorship, A. Ferrand, L.Torri

1.5 The Sport Marketing Research Process

Marketing research is a process involving a few necessary steps and each of them must
be completed in order to achieve success. If the problem or decision has not been
correctly identified, then all the further steps will be misdirected. The most important role
during the research process is played by decision makers in the organization and those
responsible for carrying out possible future directions related to the issue.

The sport marketing research process creates the need to get inside of the sport
environment, sport competitors and sport consumers. After gathering all data, they are
being analyzed and the relevant information is being used. This process requires a
16

database system often referred to a Marketing Information System (MIS) (Source:

George R. Milner, Mark A. Macdonald, Managing the Exchange Process, 1999). The key
information requirements are:

Who are the sport consumers, their profiles, segmentation and consumers of
competitors?

For example: extreme sport addicts, students in the age between 18 to 25

Where is the sport purchase made, is the decision made

For example: from home

When is the purchase made?

For example: after school, during the weekend

What are the benefits that consumers are looking for, factors influence their
decision?

For example: adrenaline, satisfaction

Why do sport consumers purchase?

For example: to increase their excitement level

How much do consumers purchase?

For example: 1 product per day

Marketing Information System should contain answers to all above questions. The basis
of a good MIS is the management of the data flow. Mullin (2007) suggested the five steps
of data flow as:
1. Collect data from a wide range of sources e.g. ticket buyers, groups, enewsletters
2. Process the data
3. Create one single data repository
4. Use the data for all sport marketing activity
5. Track campaign effectiveness

17

MIS gathers both internal and external information. The internal one includes information
such as sales records, enquiries, personal details. The external one relate to sport market
reports, sport market segment, characterizes of consumers. Below Figure 5 presents a
basic process performed by a MIS.

Figure 5 Marketing Information System, P. Blakey

The necessity for a sport organization to focus on information sources internal and
external to the organization means that the factors that can be controlled by the sport
organization and the factors outside the control of the sport organization are accounted
for in the process. This process requires special tools such as MIS or SWOT analysis to
coordinate the data that has been generated. These tools also help to identify the most
significant components for the sport marketer to consider in the planning phase or the
sport marketing planning process (P. Blakey, Sport Marketing, 2009).

First step was to do the research process and now we know what kind of product we
should deliver to our consumers, why would they enjoy it and where would they make
the purchasing decision. Next step would be to specify our consumers market, divide
them into different segments, then choose our target and work on the positioning, so how
to make our brand unique.

18

1.6 Sport markets consumers

Segmentation

Sport market segmentation helps to identify the consumer market. Usually the sport
consumers market is split into smaller groups that have some similarities and their
characteristics help to create a target group. The goal of market segmentation is to
identify groups of sport consumers who have common wants and needs and the person
responsible for it a sport marketer. He divides the target groups according to
demographic, geographic, psychographic and behavioral factors and then prepares the
strategic sport marketing planning.

Demographic segmentation

Demographic information includes age, gender, ethnic background and stage of the
family lifecycle or income, education, occupation of potential consumers. This
information is easy to obtain and very helpful while preparing the marketing strategy.
Age is a basis of demographic segmentation. Sport has been always divided into age
categories. Back in the school, children compete against their own age group because of
the similar size and skills level and therefore it encourages fair competition. Age from a
spectator perspective combines with other variables such as gender and income, to
predetermine consumption behavior. For example, the audience at a Super League
netball games is not the same composition as a Premier League football match. This is in
part due to differences in ticket prices (income related), fan identification perhaps
through cultural socialization in school (gender related) and these factors help to create
the average age profile of sport spectators and participants (P. Blakey, Sport Marketing,
P. 45).

Gender differences have been always playing an important role in sport marketing. This
was established years ago when girls were assigned to different sports than boys.
However, males and females can participate in the same events or activities so in the
19

marketing strategy one should take into account both groups. However, usually males and
females have different interests. Males are fans of football, basketball or rugby, while
females enjoy more watching volleyball, handball or badminton. Different interests
would result in attending various events. On the other hand, there are many uni-sex sports
such as tennis, jogging or swimming so it is relevant to keep in mind both males and
females when creating sport marketing.
Ethnic background takes into the account race, religion and nationality. Ethnicity implies
common customs, values, and attitudes within a group of people who are bound by a
common cultural identification. Many aspects of consumer behavior, for example their
perceptions, likes and dislikes are often different among consumers with dissimilar ethnic
and cultural backgrounds. Some ethnic groups spend more than the market average for
certain types of goods and services.

Income, education and occupation are usually combined. Involvement in sport at any
level can be very costly. Not everyone can afford to fulfill expensive sport requirements
and get necessary equipment. Therefore there are some barriers to entry certain sports
because of the costs of participation. However, these have decreased in recent years as
average income has increased, meaning greater power for new members.

Geographic segmentation

Geographic segmentation is the division of the market according to different

geographical units such as continents, countries, regions or neighborhoods. This form of
segmentation provides the sport marketer with a quick overview of consumers within a
limited area. Increased mobility means greater access to sport events. Geographic
segmentation can be a useful strategy to segment markets because: it provides similarities
and differences between consumers in a certain area, can identify cultural differences
between these areas, it also takes into account climatic, cultural and language differences
between geographical units.

20

One of the tasks of sport marketers is to identify the similarities of sport consumers to
propose sport products, services or events that fulfill their wants and needs. Sport
consumers are influenced by both internal and external factors.
For the providers of sport products or services, it requires time and effort to understand
their consumers needs in order to bring some sporting experience to their happy
consumers.

Targeting

Once the marketer creates different segments within the market, then he devises various
marketing strategies and promotional schemes according to the tastes of the individuals
of particular segment. This process is called targeting. Once market segments are created,
organization then targets them. In sports marketing this is the selection of the groups,
which the sport marketing objectives aim to be satisfied. The final decision is based on
size, reachability, measurability, and degree of behavioral variation (R. Shank, Marketing
of sport, 2009) in the potential sport target market.
The size of the sport target market should not be too large otherwise it becomes too
difficult to differentiate similarities and differences between its members. It also should
not be too small, because than the potential of sales is limited.
Reachability is the ability to communicate with the sport target market. Nowadays, it is
easy to reach all kinds of consumers via different kinds of advertising. However, most of
the methods are expensive and limited by the marketing budget.
Measurability covers size, accessibility and purchasing power. As mentioned, before,
MIS can measure demographic, geographic and behavioral segmentation.
Behavioral variation is about the similarities in behavior, attitudes and lifestyles. It is
important to understand consumers lifestyle in order to select a suitable marketing
strategy.
Target market selection can equally be based upon distance or drive-time from the sport
revenue, historical sales records, identified through a market research survey, or from
21

sport industry sales patterns informing indexing methods to identify market potential
(especially in sport retail sales). One, or multiple, sport target markets can be pursued
depending upon the sport marketing objectives of the sport organization, that is, to
maintain or penetrate sport markets. Again the sport marketing budget will determine the
sport marketing strategy to be followed, be it a parallel or staggered program of sport
marketing implementation where multiple sport markets are being targeted (Balley, P.
59).

Positioning

Sport market positioning builds an image of the sport product or service in the mind of
the target sport consumer. Usually, this image is compare to the one created by the
competitors, so the product should be unique. So the most crucial question is how to
differentiate our sport product or service from that of the competitors and then determine
which sport market niche to fill. It is important to remember that one product can be
targeted into different market segments and hence, it would require multiple market
positioning strategies.

22

Part 2 Analysis of Red Bulls marketing strategy

The marketing strategy that has worked best for us is not to publish our strategies
-- Red Bull

Red Bull has a well-known, innovative and simplified brand all over the world.
Mateschitz, the owner of Red Bull, once said We do not bring Red Bull to the people.
We bring the people to our product. Red Bull employed special marketing teams,
building the Red Bull brand from the ground up. And they managed to establish brand
awareness across the world and they keep growing the brands identify through word of
mouth. Red Bull succeeded in entering new markets, today their brand exists in 165
countries. Their marketing strategy is very unique and it is not directly correlated to the
energy drink. Red Bull has aligned its brand unequivocally and consistently with
extreme sports sponsorship. They are number-one at creating content so engaging that
consumers will spend hours with it, or at least significant minutes." said by Rebecca Lieb,
analyst at Altimeter Group. That is very true, because Red Bull as a brand is mostly
associated with extreme sports. The drink by itself is not very unique, its recipe is shown
on the package and has never been patented so it is easily copied.
Red Bull is associated with sports to further promote and grow the Red Bull brand and
reach a broader audience of fans. Thanks to the establishment of Red Bull as an extreme
sports icon, the company has become a leader not only in the energy drinks market, but
also in the use of sport as a brand extension (S. Gorse, Entrepreneurship through sports
marketing: Red Bull, 2010).
In order to analyze Red Bulls marketing strategy, below there is a description of
companys advantages and disadvantages, and then detailed description of the product
itself and what it consists of, how is it distributed, where is it available for purchase and
what methods Red Bull is using for promoting their energy drink through the company.
Once we know more about the products marketing strategy, the author will analyze
energy drinks and then Red Bulls consumer market: who are they, how many of them
there are and how can we find them. At the end, the author provides a presentation of Red
Bulls competitors, i.e. who they are and if they can harm Red Bulls business.
23

2.1 SWOT Analysis

SWOT is a structured way of evaluating the image of a company. The author will now
describe strengths, weaknesses, opportunities and threats of Red Bull GmbH and give
some examples and ideas on how to improve their image.

Table 1 SWOT, Red Bull: A Trailblazer in marketing strategy

STRENGTHS

Market leader
Unique marketing
Generation Y
Brand identity

OPPORTUNITIES

WEAKNESSES
Lack of innovation
Unhealthy product
Expensive marketing campaigns
Lack of patent
Side effects

THREATS

Product line extension

Extending target group
Geographical expansion
Distribution

Public health concerns

Dangerous mix with alcohol
Competition
Inability to move forward

Source: Hein, K. A Bulls Market the marketing of Red Bull energy drink, 2011.

Strengths

Market leader

Red Bull has been the leader in the energy drinks market for a long time. Every year, it
achieves sales of between 4 to 6 billion dollars (figure 5). Red Bull was the first launched
24

energy drink and has achieved today a clear market leading position with 4,204 billion
cans sold worldwide in 2011, representing an increase of 7,6% against 2009.
Furthermore, Red Bull is competing in 13 West European countries and is the main
leader in 12 of these and other top 20 brands are having only 17% of share (Red Bull: A
Trailblazer in marketing strategy, 2011). Even the products offered by leading drinks
manufactures are failing to make major headway against Red Bull, with products such as
Coca-Colas Burn absent from the top five.
Table 2 Red Bull revenues, Red Bull: A Trailblazer in marketing strategy

Source: Hein, K. A Bulls Market the marketing of Red Bull energy drink, 2011.

Unique marketing

Red Bull has been very successful in its marketing strategies and increasing consumers
brand awareness. They create many sports events, promotions and street marketing
campaigns to get consumers attention. The Wings Teams (group of students giving
away free red bulls to active consumers) role is to establish a relationship with the
potential consumers, to let them discover the product, talk to them about its advantages
and to convey the information from the consumers to the company about their
appreciation or dissatisfaction of the product. Red Bull found out that the best way to be
close to its consumers and to convince them is to hire them. The Student Brand Manager
is an ambassador of the brand in their own school. Their objective is to be sure that Red
Bull is present at every strategic moment in the student social calendar: integration weekend, sportive events, big parties, etc The strength of Red Bull is an ability to instill a
genuine passion for the brand in the Wings Team and the Student Brand Managers.
Therefore, these committed people are more likely to promote a good image of the brand
and to have a greater positive impact on targeted consumers (Red Bull: A Brand built on
25

Marketing). Red Bull is famous for its unique methods of marketing. For example since
1992, Red bull has been creating easy cartoons with simple but recognizable drawings,
which are telling some funny ,short, cheeky, self-ironic and unpredictable stories and can
be adapted to every market. Every year each of the subsidiaries can choose some spots in
the Red Bull cartoon data base according to their current market situation.

Generation Y

Red Bull is mainly targeting generation Y, which focuses on people born between 1980
and 1994. Generation Y consists of young individuals whose attention needs to be grab
by interesting and original marketing campaigns.

Red Bull speaks to the young

generation with worldwide positioning: Red Bull vitalized body and mind and its
slogan is known by all: Red Bull gives you wings. Red Bull is organizing such teams
as Red Bull Wings or Student Brand Manager Programme, where their own target
consumers can promote their product because that makes their product look more
reliable.
Focusing on one certain group gives Red Bull an advantage over other brands who target
wider groups of consumers.

Brand identity

Red Bull has built its brand identity for many years around sponsored events. Two years
ago, there was a survey made on the website brandtags.net where users could have
entered words, phrases or any sentences that they associate with different brands. Nine of
the 40 most commonly occurring terms for Red Bull dealt with speed and power and four
pertain to risk-taking and recklessness. In comparison, the 14 other most popular drink
brands at brandtags.net average less than one speed or power associated word per brand
and almost zero risk-taking or recklessness associated words per brand (J. Acquino Red
Bulls Logo alone can affect your behavior). Red Bull has a strong, fresh and
fashionable brand identity. Their logo is well known all over the world and the image
they build around their logo is very successful.

26

Weaknesses

Lack of innovation

Todays Red Bull owns few brands: Red Bull, Red Bull Sugar Free, and three new
flavors drinks (The company had decided to discontinue its Red Bull Energy Shot and
Red Bull Cola brands in 2011). The release of Red Bull Sugar Free was a response to
consumers worry about calories intake. The answer to the diet drinks was strong and,
despite this lack of innovation in healthy drinks, Red Bull remained the US value leader
with 43.2% share, leading second place Monster by over US$800 million in 2011 retail
sales (J. Feliciano, Innovations in Energy Drinks, 2011). In the energy drinks market,
there are more and more new drinks launched by competitors. For example, one of the
biggest competitors of Red Bull, Rockstar has launched 10 different products with
various flavors and less caffeine inside.
Red Bull has established itself as the traditional energy drink leader. For many years, they
have been using the same logo and packaging while other rivals introduce new drinks,
more new flavors and more healthy ones to the market.

Unhealthy product

Red Bull contains of 80mg of caffeine in one can, and it is more than twice that in a can
of Coke. Dylan ODonnell says the amounts of guarana, taurine, and ginseng found in
popular energy drinks are far below the amounts expected to deliver either therapeutic
benefits or adverse events. Energy and sport drinks are a very small sector of the overall
soft drinks market. Nowadays, many consumers interests are changing their lifestyle into
the healthy one, drink fresh drinks and be active instead of sitting home and drinking
energy drinks. In my opinion, Red Bull would benefit a lot by introducing a healthy drink
into the market.

Expensive marketing campaigns

27

As mentioned before, Red Bull is focusing on sponsoring extreme sport events. Red Bull
GmbH is a private company and does not report its financial statements. However, it is
easy to calculate that all the events they have sponsored, for example Red Bull cliff
diving, skydive from the edge of space, Formula 1 and many others are very expensive to
organize. Despite the massive costs Red Bulls marketing campaigns, their rivals also
investing huge amounts, and therefore Red Bull is gaining smaller returns from the
investments. For example, sponsoring Red Bull Stratos, where Felix Baumgartner was
jumping out of the stratosphere cost Red Bull approximately 15 million dollars. (Red Bull
website).

Lack of patent

Unlike Coca Cola, the contents of Red Bull are actually not patented. All the ingredients
are listed on the side of the can. That makes it easy for the competition to copy the recipe
and create a similar taste of the new energy drink.

Side effects

Red Bull is famous because of its energy boost and is very often used by students to
enhance focus, alertness and concentration. Red Bull website claims that its product
vitalizes body and mind and that it increases performance, concentration and reaction
time; stimulate your metabolism and improves vigilance and emotional state. However, it
is essential to remember not to overdose such energy drinks as it might cause some
harmful effects on consumer health.
Caffeine is a central nervous system stimulant, and one 8.3-ounce can of Red Bull
contains 80 mg of caffeine. If someone drinks several cans of Red Bull daily, they likely
will experience some adverse reactions due to excessive intake of caffeine. Examples of
side effects from too much caffeine are feelings of anxiousness or nervousness. Another
common side effect from too much caffeine is trouble sleeping or insomnia. The Mayo
Clinic reports that excessive ingestion of energy drinks is associated with increasing
cardiovascular danger that includes experiencing chest pain, a myocardial infarction or
28

heart attack, and cardiac death. (A.M. Tacon, Side Effects of Red Bull Energy Drink)
Because of the mentioned side effects, sales of Red Bull is banned in Norway, Uruguay
and Denmark.

Opportunities

Product Line Extension

The brand has the financial ability to develop and offer a line extension which could
result in gaining new consumers. As mentioned before, one of the biggest weaknesses of
Red Bull is their lack of innovation. Red Bull should extent its product line to include
energy drinks which provide health benefits. These new energy drinks should be also
formulated with dietary supplements so that older consumers would be interested in the
new edition too.
A few examples of the energy drinks in the proposed product line are shown below:
Red Bull Vitamin C Vitamin C is an essential vitamin to boost the immune system for
all age groups. Therefore, this drink would provide plenty of benefits to revitalize the
skin as well as boost ones energy
Red Bull Memory Boost It includes Ginko Biloba which helps to improve memory and
also promote overall mental health. It would be perfect for students to improve their
memory task performance.
Red Bull Stress Reliever Nowadays, everyone is often stressed over their work and that
drink would include Ginseng that helps to relieve stress and increase ones energy level at
the same time. (Red Bull Brand Strategy: Line Extension, 2011)

29

Figure 6 Red Bulls Line extension, Red Bull Brand Strategy, S. Jaindl

Extending target group

Red Bull is mostly focus on 18-25 target age group, but when they grow up, it does not
necessarily means they will not be drinking energy drinks anymore.
Red Bull is strongly associated with extreme style sports such as skydiving, paragliding,
hang gliding or base jumping. They should also expand their target market to less
extreme sports enthusiasts such as golfer, women and healthy conscious consumers. By
doing so, they would show that anyone can enjoy their product and not just males sport
addicts.

Geographical expansion

Today Red Bull exists in 165 countries around the world. They are targeting the core
markets of Western Europe, USA and the growth markets of Brazil, Japan, India and
South Korea. Red Bull plans to strengthen its global position by expanding its presence in
Asia. That is a great opportunity for a company, because the more countries will be
selling their product, the more profit the company makes. In Asia-Pacific, Japanese
brands have traditionally led the regional rankings table. However, stagnant domestic
demand and the slow or non-existent overseas expansion of Japanese brands have led to
poor share gain at regional level. In contrast, Red Bull is more aggressive in terms of
geographical expansion and recorded strong volume growth in China, Hong Kong, India,
30

the Philippines, Azerbaijan and Pakistan over the past few years. Red Bull overtook
Osotspa Co Ltd's M brand in 2005 and took the lead in the category with a retail volume
share of 13% in the Asia-Pacific region. However, Red Bull's leading position is not yet
well established, and this is reflected in the marginal gap between itself and the second
and third ranked brands, M and Otsuka's Oronamin C with respective shares of 12.1%
and 11.7% (Euromonitor International, Red Bull plans Asian expansion, 2011).

Distribution

Vending machines are effective advertising tool and sales tools, because of the constant
exposure. Red Bull should focus more on this way of product distribution as it would
help to increase their sales and face industry trends. Moreover, even though Red Bull is a
top selling energy drink in the clubs and pubs, there are still places where Red Bull is not
distributed to. For example, in some of the supermarkets, the only energy drink available
is Monster.
Additionally, there are countries such as Norway, Denmark or Uruguay where sales of
Red Bull is prohibited. In my opinion, Red Bull GmbH should focus more on those
markets and think of a strategy how to enter their markets.
Threats

Public health concerns

In Norway, Uruguay and Denmark sales of Red Bull is banned because of the risk that
products can have for ones health. Several media make negative publicity around the
brand. Sometimes Red Bull is forced to proof with scientific evidence that its product is
not so dangerous with a normal use. Other media reports were targeted towards parents
stating the caffeine levels in Red Bull can be dangerous if consumers by children or
teenagers. Red Bull released a lot of statements to cut the negative media attention.
However, it keeps coming back and will be difficult for Red Bull to ever achieve a
31

positive aura around their product.

Dangerous mix of Red Bull with alcohol

In Poland, there is a special warning on the cans of Red Bull, saying that mixing Red Bull
with vodka could have dangerous effects. One study showed that ingestion of a
caffeinated energy drink (Red Bull) with vodka reduced participants perception of
impairment of motor coordination in comparison to vodka alone, but did not significantly
reduce objective measures of alcohol-induced impairment of motor coordination, reaction
time, or breath alcohol concentration (Ferreira et al., 2007).

Competition

Major competitors of Red Bull are Coca Cola and Pepsi. They both have launched their
own energy drink versions to compete with Red Bull products. However, at the moment
they do not succeed. Nevertheless, Red Bull should keep their eyes open and be
innovative in order not to get surprised by new rivals such as Monster or Rockstar.

Inability to move forward with the product

As discussed before, Red Bull is well known for its very successful advertising; however
the product itself could be in danger of becoming stale. Funny cartoon adverts is working
very good for now, but it will not entertain people forever. The same with sponsoring of
extreme sport events, it is a large investment for the company but one day it can be not
enough for the consumers. Hence, Red Bull should be more creative and work on some
new ideas to keep their product interesting.

2.2 Marketing mix

After analyzing the advantages and disadvantages of Red Bull GmbH, below there is a
32

detailed description of Red Bulls product, price, how they promote it and where is it
distributed to. This will be done using a method called "Marketing mix" as it is a general
phrase used to describe the different kinds of choices organizations have to make in the
whole process of bringing a product or service to market. The 4Ps is one way of defining
the marketing mix, and was first expressed in 1960 by E J McCarthy.

Product
This section is focused on specific features and benefits of its product. Red Bull is a
popular sweet energy drink brought to the market to give something of an adrenaline
effect to the consumers. It contains caffeine, taurine, glucuronolactone, B-group vitamins,
sucrose, and glucose and it is sold in 250ml cans. The product is the same all over the
world. Its logo presents two crimson coloured bulls facing each other at the background
of a yellow sun and it symbolizes the tenacity and the high octane energy that drink
provides. It comes in one design and the recipe of Red Bull can be copied as it is not
patented.
Red Bull is created to increase performance during physical and mental activities. The
benefits of this product are increased performance, concentration, reaction speed,
vigilance, improved mood and stimulated metabolism.

Now I am going to describe each ingredient from Red Bull (source: Bryan DiSanto, The
Complete Guide to Red Bull Ingredients, 2012)

33

Source: Red Bull Label, www.redbull.com

Taurine

Taurine is a nonessential amino acid that plays a big role in brain tissue and nervous
system function. It is an very strong antioxidant, act as a blood thinner (reduces blood
clots), and can reduce numerous risk factors for heart disease, for example LDL
cholesterol, triglycerides or blood pressure. Taurine regulates levels of waters and salt in
the body, as it can form into bile salts. It works as an inhibitory neurotransmitter in the
brain and can also affect learning and memory.
Glucuronolactone

It is a chemical made naturally in the body when glucose is metabolized. It boosts energy,
increases the feeling of well-being, reduces drowsiness and increases attentiveness and
reaction time. It also has a detoxifying effect on the liver and can help spare glycogen
stores stored carbohydrates that supply muscles with energy during intense exercises.
34

Glucuronolactone may fight fatigue and it is present in many energy drinks.

Caffeine

This ingredient increases alertness, attentiveness, reaction time, metabolism, heart rate
and the amount of body fat burned by the body. It can also cause side effects such as
jitters or raise blood pressure. Red Bull contains 9.5mg caffeine about 80mg per 8.4
can.

Source: http://www.energyfiend.com/caffeine-content/red-bull

Niacinamide

It is a simple Vitamin B3 and it is used for the metabolism of fats and carbohydrates. It is
good for the cholesterol and improves skin condition.

Pyridoxine HCL

35

It is a Vitamin B6, relevant for protein metabolism. It is proved that this vitamin
increases the amount of growth hormone released as a result of hard workout.

Inositol

Vitamin B8 which helps build cell membranes regulates proper fat and carb metabolism
and helps to prevent excess fat build-up in the liver. Inositol combines with choline to
form a compound called lecithin, which helps reduce cholesterol levels. Interestingly,
inositol is vital for proper hair growth and can help prevent constipation. It has also been
shown to improve mood and treat depression (Bryan DiSanto, The Complete Guide to
Red Bull Ingredients, 2012).

Price
Red Bull is using a premium pricing strategy all over the world. As we can see in the
table below, Red Bull is priced above the competitors products and not only in UK, but
in all the countries where Red Bull is available, their price is highly above their
competitors. Consumers will pay more due to the high quality of the product, well known
brand and products benefits. It is a unique functional drink that has promising and
delivering benefits that no other energy drinks can offer and that is the reason of their
premium price.

36

Table 3 Energy Drink Prices, Consumer Reports Online

Source: www.mysupermarket.co.uk

Place and distribution

Red Bulls distribution strategy was different from others. At the beginning, instead of
targeting the biggest distributors with the greatest reach, Red Bull targeted small ones
who often become exclusively Red Bulls distributors. Red Bull would find the small
bars, restaurants or stores and provide them a small cooler to sell the beverage from.
Red Bull has created a pull distribution policy, when consumers demanded the product
and therefore supermarkets and shops needed to stock their product. Red Bull has also
considered using vending machines as a distribution method. If vending machines were
installed at key locations (gyms, universities, clubs) then there would be increased
awareness and sales. Today Red Bull is distributed to all bars, restaurants, clubs, stores or
gas stations. It is easily available everywhere we go.

37

Figure 7 Red Bull In The World, www.redbull.com

Above figure shows the map of countries Red Bull is being sold. There are 165 countries
where Red Bull is available. 4.631 billion cans of Red Bull were sold in 2012 worldwide;
that averages out to about 12.7 million cans being sold a day worldwide, an 11.4 percent
increase from 2011 (Red Bull website).
Promotion
The most interesting element of Red Bulls marketing mix is its approach to promotion.
They know how to involve all the activities in order to reach all target market. Their
favorite promotional approaches are:
Above-the-line

These are the advertisements related to things people can see via media. This type of
promotion focuses on advertising to large audience and the examples are television,
cinema advertising or online media. Red Bulls above the line promotion is meant to
increase top of mind brand awareness among customers.
38

 Below-the-line

Below the line advertising is trying to reach consumers directly and focuses on small
target group instead of mass audience. Red Bull creates and organizes different events all
over the world in order to reach wide group of consumers. The examples of events are
Red Bull X-Fighters, huge tournament of freestyle motocross motorbikes, Crashed Ice a
world tour winter event, which involves downhill skating in an urban environment or Red
Bull Flugtag where competitors attempt to fly home made flying machines.
These events begin the AIDA process, which stands for sales process, attention, interest,
desire and action. Red Bulls events provide experiences that excite surprise and
challenge both participants and audiences.
Pull marketing
Word of mouth promotion is based on the principle of pull marketing. It relies on the
transmission of a positive marketing message from person to person through conversation
or a personal communication such as email or text message. Pull marketing gets
consumers to bring other consumers to product. In contract, push marketing uses abovethe-line promotional techniques to put product in front of consumers in order to generate
sales. (G. Salsburg, Marketing Company of the year, 2010).
Red Bull is using this promotional approach very often by getting consumers excited
about the product and sharing this excitement with their family and friends. Once they
hear something about the product or event, then they will do more research by
themselves. The idea is to create interesting stories for people to talk about, which at the
end helps to create brand awareness and grow sales.
Dietrich Mateschitz, founder of Red Bull has also used this strategy to promote his
original product in the 1980s. Back then, he hired a Red Bull Wings Team to go out to
the people and talk face to face with them about the product. It resulted in creating
consumer interest in the product and once they tasted the product, they became advocates
for the brand and shared their feedbacks with friends and relatives creating Red Bulls
39

awareness.
Innovations in promotion

Red Bull is doing its best to approach consumers in the most original ways, for example:
Red Bull Wings Team It is a group of students who go out on the road in their Red Bull
car to help launch the product in new markets. The branded car has a Red Bull can on the
back of it (picture below). Teams offer a cold can of Red Bull to the ones who are active
and in need of energy boost in order to show the products qualities. It creates a personal
and positive product experience.

Figure 8 Red Bull Wings Teams Car

Student Brand Manager Programme When individual students help to organize

different events on their campus. The idea of it is to get people talking about the product
and get students involved on their own campus. For example building excitement in
Flugtag event or spreading the word about new upcoming events or coordinating Red
Bull Wings Team to provide energy drink to students who need it the most.
Red Bull Bedroom Jam It is a competition for young musicians to get them of their
bedrooms and onto the big stage and giving them a life experience. Red Bull records
bands playing live from their bedrooms and make it available for others to watch via
Internet. The bands that managed to get the most attention online, then compete for long
40

term career support and the opportunity to play at big festivals around the world. This
programme brings a lot of attention and media interests and hence, increases the brand
awareness.
Red Bull Reporter It provides opportunities for writers, filmmakers or presenters to
report on Red Bull events giving them a chance to have their work published. This
project helps Red Bull to get the attention of its knowledgeable audience. And the goal is
to build brand loyalty by creating close relationship with consumers. (Greg Salsburg,
STiR- Communications Marketing Company of The Year)

Red Bull is famous from their creativity and innovative ideas. After a detailed
explanation of their marketing tools, it is important to understand who they are aiming at
while creating such programmes. Below there is an analysis of the whole energy drink
consumers and then, description of Red Bulls consumers.

2.3 Analysis of consumers

Red Bull has consumers all over the world. In this section the author will analyze energy
drink consumers market and then focus on segmentation, targeting and positioning of
Red Bulls consumers. It is also important to understand why do the consumers drink
energy drinks and how can we influence their choice. This will be analyzed in the part
regarding the consumers decision process.
Energy drink consumers

65% of energy drink consumers are between the ages of 13 and 35, with 65% of those are
male. Teen consumption has grown rapidly since 2002, with an increase in ages 13-17
from 18% to 31% (Marin, 2007). In the U.S., 35% of all teens aged 12-17 drink energy
drinks, vs. 15% of adults aged 18 and over (Mintel, 2008).
Young adults ages 18-24 are the key consumers in the market with 34% drinking energy
drinks in 2008. However, during 2003-08, respondents ages 25-34 have also exhibited
41

impressive growth in the incidence of consumption (14% in 2003, rising to 23% in 2008).
Combined, these two demographic groups accounted for 45% of all energy drink users in
2008 (Mintel, 2008). Young adults are also typically more likely to try new beverages
(Strenk, 2008). They are not afraid of anything and like new things and changes.
Moreover, young adults are the ones who also like to drink alcohol and most of them like
mixing energy drinks with alcohol, which is very dangerous. A large appeal of energy
drinks is the ability to mix with alcoholic beverages. Approximately, 52% of adult
internet users ages 21-34 used energy drinks to mix with alcohol over a three month
period. According to one study of college age consumers, the most common reasons for
energy drink consumption were insufficient sleep (69%), studying (56%) and to mix with
alcohol (57%) (Nutrition Journal, 2007). Therefore, the biggest reason of drinking
energy drink is not for mixing it with alcohol but to prevent insomnia. However, there are
many sources that say energy drink can be addictive and can increase ones chances of
living unhealthy and dangerous life.
The journal of Drug and Alcohol Dependence published a paper that found energy
drinks could result in caffeine toxicity and addiction, plus increase a young persons
chances of abusing hard drugs (Warlick, 2008). Another study by the American College
of Health stated, students who drank at least six energy drinks per month were three
times as likely to have smoked cigarettes, abused prescription drugs and been involved in
fights, (Warlick, 2008). Young consumers have reportedly abused energy drinks having
multiple drinks one after another to provide a consistent boost of energy (Gates, 2008).
Todays biggest group of consumers of energy drinks are men, as women care more
about their health and weight and energy drinks contain a lot of sugar. Moreover, high
amount of caffeine and aggressive marketing campaigns of energy drinks are also the
reasons of negative influence of women when choosing drink.
Additionally, because of the high caffeine content in energy drinks some doctors, parents
and schools are warning teens not to consume these potentially unhealthy energy drinks
(Mintel, 2008). The Virginia chapter of the American Academy of Pediatrics revealed,
There is no good reason for children and teenagers to consume these products (Legge,

42

2008). It is important to remember that energy drinks are not for everyone and in my
opinion there should be a prohibition of energy drinks sales to young consumers.

Red Bulls consumers

Red Bull energy drink focuses on people who are interested in sports. However, in their
marketing strategy, young adult males are on the top of their target list.
Figure below shows that Red Bull is consumed the most by people aged between 18 to
24, but it is still high up to age 44. Therefore, we could say very generally that target
market for Red Bull consists of Men between the ages of 18 to 44.

Figure 9 Use Of Energy Drinks By Brand and Age, www.samsha.gov

However, Red Bulls top target audience will be male college students and young
professionals who spend their days studying, or at the office and go out to bars or clubs in
the night. They can afford Red Bull, as most of them have some part-time jobs or are still
depending on their parents. They live a very stylish life, share apartment with their
friends, own an iPhone, dress fashionably and drink alcohol 1-3 times per week. They are
43

usually single who enjoy their freedom and like sport and try to keep being fit and
attractive (Medimark, 2011).

Red Bull has an image of a cool and affective alternative to coffee or soda. Their
advertising is focused on sports and entertainment and that brings them a lot of young
consumers. Sponsorship of extreme sports results in a big group of new sport freaks, who
like the fact that their favorite sport or athlete is being promoted. Additionally, Red Bull
knows how to get the attention of people and bring new customers into their company.
Their promoting activities such as driving a car with a massive Red Bull can on top and
handing out free energy drinks on college campus is consistent and very effective.
However, their main role of strategy is played by word of mouth (WOM). After a big
event such as Red Bull Stratos, everyone was talking about Red Bull for a couple of
weeks. It brought the interest of even non-target group and helped Red Bull to get the
attention from all over the world.

People drink Red Bull during the day to stay concentrated while working or studying and
during the night because it tastes good to mix it with another alcoholic beverages. Red
Bull is available to consumers in gas stations, grocery stores convenient stores and many
bars or night clubs. It is very easy to get it and its accessibility brings every day at any
time more and more new consumers.

Red Bulls non consumers

Women do not drink Red Bull very often. They are drawn to the social status that
accompanies coffee and tea drinks (Heckman, 2010). It is because they are more
concerned about their health and the high caffeine content that drinks have. Additionally,
they prefer to drink some more female drinks instead holding a grey can in their hand.

The other type of non-user is people above 45 years old. They already have a habit of
drinking coffee when they are nervous and have no need to drink Red Bull. They are also
44

not very interested in extreme sports so Red Bulls marketing strategy is not very
convincing for them.

The last group that does not drink Red Bull are children, because their parents will not let
them buy the product with caffeine and they do not have their own money to purchase the
product by themselves.

2.4 Analysis of consumer decision process

Before consumers make a final decision of purchasing the product, first they all go
through some stages in order to make a good decision. During this process, consumers
select a product among multiple alternatives. There are four stages that everyone goes
through and I am going to describe each of them.

1. Need Recognition
It is the first stage of consumer decision making process and it can be described as result
of an imbalance between actual and desired needs (Lamb et al, 2011, p.190). In the case
of Red Bull, consumer finds the need of increasing his energy level because he feels tired
or needs to stay more awake. It occurs in the Red Bull target segmentation, when people
instead of having a coffee to wake up, they will look for energy drink. Therefore, when
they feel exhausted, having no energy, then they will think to consume Red Bull because
of its positive desired result afterwards.

2. Information Search
The second stage related to information research. Once the consumer realized his needs,
he would be looking for information about possible ways to satisfy himself. It is relevant
to stress that the extent to which the consumer needs to search for information depends
on his current information levels and the perceived value of the additional information
45

(Pradhan, 2009, p.123). Customers are usually influenced by marketing strategies of

retailers during this stage. Namely, retailers communicate information about the brand
through various communication channels that can include any combination of
advertising, direct marketing, public relations and publicity, personal selling, events and
experiences and sales promotion (Kotler and Keller, 2009). Red Bull is doing very well in
this stage, because of its effective advertising campaigns. Consumers will already know
about Red Bulls existence so they will not spend too much time on market research.
3. Evaluation of Alternatives
It is a third step of consumer decision making process where consumers are looking for
other options. In this stage Red Bull should influence their choice and attract their
consumers more than competitors do. When customer will be choosing an energy drink,
he will most likely compare price, taste, nutritional values and size of the product. So far,
Red Bull dominates on the energy drink market even though Monster and Rockstar sell
their drinks in a bigger size for the same price.
4. Purchase
The last stage is about making a purchase. Red Bull purchases are generally planned,
knowing the product category, but not the specific brand. So people know they want
some energy drink, but they are not sure which one to buy. He will be presented with all
the options from this category once he arrived at the shop, and then make a final decision
to purchase the one that would satisfy him the most.
However, it has to be stated that if the need isnt great and the solutions the consumer
finds arent desirable enough to motivate a purchase, the consumer may postpone the
purchase until a satisfactory opportunity presents itself (Lake, 2009, p.29)
Since we already know what market are we interested in, now would be relevant to focus
on rivals and get to know something about them. Even though, for now on Red Bull is a
market leader, there are more and more new energy drinks being introduced into the
market.
46

2.5 Analysis of competitors

Since the introduction of Red Bull into the energy drink market in 1987, it has risen to the
very top of the market, holding 42% of the current energy drink market. Since Red Bulls
inception, there are now over 300 varieties in energy drinks in over 210 brands in North
America alone (Agri-Food, 2008). Red Bull is known for expanding, its high quality
product and great advertising. Other energy drink companies offer wider variety of
products and at a discounted rate in order to encourage consumers to their new product.
Red Bull is famous from sponsoring extreme sports such as snowboarding, surfing, car
racing, skydiving and many others and that keeps them in front of the competition.
Below figure presents the amount of market share in energy drink market where Red Bull
is the leader.

Figure 10 Energy Drink Brand Market Share 2012, www.energydiend.com

In the todays energy drink market, there are two other drink companies holding the other
high percentage of the market share and the author will focus only on these two, as others
are not real competitors to Red Bull.

Table below shows the rank of Top 3 energy drinks and its sales among few years.
47

Table 4 Based on Sales of energy drinks, www.theatlantic.com

Drink

Rank

2012 sales

2011 sales

2010 sales

2009sales

2008 sales

2007sales

($millions)

($millions)

($millions)

(% share)

(% share)

(% share)

RED BULL

2,950

2,300

2,200

40

35,2

42,6

MONSTER

2,600

1,900

1,500

23

27,3

14,4

ROCKSTAR

780

660

400

12,3

11,1

11,4

Monster Energy

Monster Energy is an energy drink launched by Hansen Natural in 2002. It uses a very
similar advertising strategy to Red Bull. They sponsor extreme events such as motocross,
car racing, BMX, snowboarding or skateboarding. However, Monster uses a very
different marketing strategy than Red Bull. Monster chooses to use a local approach and
be focused on smaller audience groups. While Red Bull creates commercials that can be
shown on TV in many different countries after editing the language. The local approach
appears to be working, because ever since Monster has come into the market it has been
pulling away from Red Bulls market share (Rexrode, 2011). Monster generates most of
its sales from convenience stores and mass merchandisers, club stores or bars and
nightclubs. However, due to exclusive agreements, Red Bull has commanding presence
in this segment and that limits Monsters ability to generate big revenue from this
channel. Monster has also a very good website, which lists profiles of bands and extreme
athletes, as well at the Monster Girls who tour events in order to promote the energy
drink.
One of the Monsters biggest advantages is its can size as its product is being sold in
16oz cans, twice the size of Red Bull. Therefore, consumers get twice the product for the
same price. Namely, Monster offers 16 oz. can per $2, while Red Bull can has quantity
8.3 oz in $2. Another advantage is that Monster has a great number of flavors such as
original, Lo-Carb, Ripper, Mixed, Assault, Java, Hit man etc. Ingredients of Monster are
Carbonated water, sucrose, glucose, taurine, sodium Citrate, caffeine, sugar etc. when
Red Bull currently has only 3 new flavored drinks.

48

Source: www.monster.com

Monster is targeting a similar group to Red Bull as their consumers live an active life full
of moments that are mentally and physically stimulating. Their target market consists of
males from the teen years to the ages of around forty who follow extreme lifestyle.
However, Monster is focused more on small specific segment, for example young surfers
or skateboarders. For example Monster has aligned its brand with extreme athletes such
as those who compete in the X-Games and promotes the M logo on their clothes.
(Integrated Company Analysis Report, Hansens, 2011).

Rockstar

Rockstar is another energy drink which was launched in 2001 by Russell Weiner and
became an international brand sold around the world. They currently offer ten different
products from the original energy drink and these include Rockstar Energy, Rockstar
Sugar Free, Rockstar Zero Carb,Rockstar Juiced Mango, Rockstar Juiced Pomegranate,
Rockstar Juiced Guava, Rockstar Punched, Rockstar Punched Citrus, Rockstar Roasted,
and Rockstar Energy Shots in Tropical Punch and Wild Berry. The companys website
offers the following description of the Rockstar brand:
Bigger. Better. Faster. Stronger. Rockstar is the world's most powerful energy drink.
Enhanced with the potent herbal blend of Guarana, Ginkgo, Ginseng and Milk Thistle,
Rockstar is scientifically formulated to provide an incredible energy boost for those who
lead active and exhausting lifestylesfrom athletes to rock stars. Enjoy this fully
refreshing lightly carbonated beverage super chilled.

49

Rockstar also comes in a 16oz can for similar price to Monster. Their advantages are big
variety of flavors and sponsoring sport events. Rockstar is a major sponsor of the
Mayhem Festival, a music festival consisting of heavy metal artist (Rockstar website).
Red Bull has sold more than 4 billion cans in over 160 countries, while Rockstar has only
19 international locations so far.

Source: www.rockstar.com

Rockstars advertising is not very successful yet and hence, the revenue does not each
billions of dollars. Rockstar was also the only of the top five energy drink companies to
show a decline in sales for the year, losing the 1% of its previous market share. Rockstar
also contains the most calories, sugar, and added ingredients of all its competition
(Jacobson, 2011).

Secondary competitors

Every year there are more and more drinks coming into the energy drink market.
According to surveys done by senior analyst with Mintel Chicago, Garima Goel Lal
consumers want natural energy products. They say they would like an all-natural aspect
in energy drinks, says Geol Lal. Nowadays, people want to live a healthy life and they
are getting more interested in natural alternatives to energy drinks. In 2010 Nestle USA
partnered with Jamba Juice Co. and developed three Jamba All Natural Energy Drinks.
The drinks, which contained 80 mg. of natural caffeine and only 90 calories, were also
made with 70% fruit juice. The Campbell Soup Co. also produced a line of natural energy
drinks as part of their V8 vegetable and fruit juice line called V8 V Fusion + Energy.
50

Like Red Bull the V8 drinks come in 8oz cans, however the V8 drink contains 80mg of
caffeine and only 80 calories. According to Goel Lal, a lot of energy drink users show
interest in hybrid products like juice-based energy drinks or tea based energy drinks
(Jacobson, 2011).

Red Bull, Monster and Rockstar are heavily competitive. There are also many different
no-name energy refreshments or healthy drinks, which are not mass produced yet and
not sold in stores, but they are still competitors to Red Bull.
While Monster Energy and Rockstar energy drinks take up a big percentage of the market
share, it still takes up significantly less than Red Bull. To conclude, Red Bull was the first
one who produced energy drink and still managed to remain a market leader in terms of
market share and revenues.

51

Part 3 Red Bulls extreme sports events

Red Bull has a long history of sponsoring high-end events and currently there are many
of them worth attention. One of the biggest advantages of Red Bulls marketing is their
willingness on creating extreme sport events in order to grab attention of sport freaks who
love adrenaline. All events sponsored by Red Bull are always big and bring the new
records and that is what keeps them so unique. It is important to point out that Red Bull
spends around 35% of its budget on marketing (R.Clancy, Red Bull worth $5bn, 2013).
The author picked the biggest sport events that Red Bull had sponsored so far because
they were unique, full of adrenaline and brought some new records to the world. In this
part I want to describe each of them and analyze if the event was successful in terms of
marketing and if it brought new consumers or fans to the brand.

3.1 Red Bull Stratos

Red Bull Stratos was a big skydiving event sponsored by Red Bull Energy Drink. On 14 th
of October 2012 Felix Baumgartner, an Austrian skydiver jumped out of the capsule on
the height of 39km above Earth. He broke a few world records and grabbed the attention
this day of 8 million people.

52

Picture 1 Red Bull Stratos, Red Bull Stratos website

Felix Baumgartner is a famous skydiver and a basejumper, who has already set free
falling records such as highest base jump from a building in Malaysia and lowest base
jump in Rio de Janeiro. Felix became also the first person who skydived across the
English Channel using a specially made carbon fiber wing. He has been a very good
skydiver, very strong and fit athlete and that is why he was chosen to participate in Red
Bull Stratos.
It took Red Bull one year to prepare for this mission. It all started in March 2012, when
Felix did a first time from 21km and was free falling for three minutes and 43 seconds
reaching the speed of 580km/h. Six months later Felix jumped from 29km, was free
falling for 3 min and 48 seconds and reached the speed of 863km/h. Both jumps were
successful and Red Bull was ready to begin the real mission.
The final jump took place on 14th of October 2012 after the first unsuccessful trial. In
front of a global audience of millions of people who watched the mission live, Felix took
off at 9.31am, ascending to a total of 39km in a stratospheric balloon before jumping out.
After 10 minutes he opened his parachute and landing safely on the ground. Mission was
accomplished and the team celebrated the unique achievement which includes the
breaking of three world records (www.redbullstratos.com).
53

Felix's record breaking achievements: (Red Bull Stratos website)

Fastest freefall: Maximum vertical velocity without a drogue chute - 373m/s

(breaking the sound speed)

Highest jump (exit) - exit at 39,045 metres

Longest freefall without a drogue chute - 4 minutes, 20 seconds.

The success of Red Bull Stratos was also a huge success of Red Bulls marketing team.
The value for Red Bull is in the tens of millions of dollars of global exposure, and Red
Bull Stratos will continue to be talked about and passed along socially for a very long
time. said Ben Sturner, President and CEO of Leverage Agency, a full-service sports,
entertainment and media marketing company. He and many others believe that Red Bull
Stratos was one of the best marketing stunts done by Red Bull so far. There is no other
brand that would be that efficient and effective in marketing their products.
Red Bull started introducing this event as a death defying and it kept stressing its
importance to science. The marketing team was trying to get as much attention as
possible from different media. They had a good story to build on the event and they knew
how to present it to the public. According to ABC News, besides YouTube, the jump was
shown by more than 40 TV stations and 130 digital outlets. Red Bull's Facebook postjump photo of Baumgartner gained almost 216,000 likes, 10,000 comments and over
29,000 shares within 40 minutes, and half the worldwide trending topics on Twitter were
related to Red Bull Stratos.
"The Red Bull jump was a gigantic sponsorship leap forward. Not only did Felix break
three world records, but the sheer audacity of the successful attempt perfectly matched
Red Bull's brand persona: rebellious, adventurous a product that gives you wings,"
said Jonathan Gabay at Brand Story Architect said.
What made the event very special was the fact that everyone could have watched Felixs
jump out of the stratosphere. According to the Red Bull Stratos site, the capsule itself
contained nine HD cameras, three digital cinematography cameras, and three digital still
54

cameras. Baumgartner wore three HD cameras, while on the ground even more video
technology was deployed. There were 8 million people watching the live stream of a
jump. After the mission, there were hundreds of footages presenting Felix, his capsule
and even the landing on the desert. Red Bull Stratos has even their own website providing
all the information about the mission and many photos and videos of a jump. They also
put there many fact sheets and that makes it really easy for journalists to put the story
together.

Picture 2 Felixs landing, Red Bull Stratos website

Red Bull has done something remarkable with Stratos. They have created a massive
campaign built on top of more than 60 million trusted consumer impressions 82% of
which were positive. Apart from setting up new science records, Red Bull also broke
records on social networks: (C.Smith, Red Bull Stratos, Forbes, 2012)

721,000 fans on the Red Bull Stratos Facebook Page

88,000 new fans after the jump

70% of fans liked the landing picture

More than 51,000 photos were shared

55

252,000 Twitter followers on @RedBull Stratos

2,000 tweets during the jump

103,000 new followers after the jump

3.2 Red Bull Air Race World Championship

The Red Bull Air Race was established in 2003 by Red Bull GmbH and it is an annual
international event. This popular event gathers airplane pilots from around the world to
compete for the title of World Champion race pilot. All pilots use high-grade
performance aerobatic airplanes that can travel at top speeds of 260 mph and all of them
have a wingspan of less than 25 feet across. The winner is the one who navigates a very
challenging obstacle course in the fastest time. The aim of this event is to develop a new
race that would challenge the worlds best pilots while creating an air race that would be
not about the speed, but precision and skills. Pilots must fly solo and manage their craft
through a difficult route with many obstacles called Air Gates. They are required to
complete the 5-6 km race and fly between the Air Gates following a race track
configuration. Each aircraft carries a special equipment that transmits timing and speed
data which is checked and displayed on large spectator screens. Pilots can be disqualified
if they are flying too high through or over an air gate or if they use an incorrect level
(horizontal or vertical) of flying. They usually have two trainings before the competition
begins to get to know the race and get better prepared.

56

Picture 3 Red Bull Air Race, Red Bulls website

Event locations have differed over the years. Air Races are usually taking place over
water near big cities during the weekends so that more people can come watch them.
Some of the most famous Red Bull Air Race locations have been Abu Dhabi, Rio de
Janeiro or Perth in Australia. The first official Red Bull Air Race took off in Zeltweg,
Austria in 2003, the second one was held in Budapest, Hungary or third one in Kemble,
England. Every year there was a different city chosen to make it available for wider range
of consumers (www.redbullairrace.com).
Red Bull, during the extreme sport events, always makes sure that everyone stays safe.
So far there has been only one accident during the Red Bull Air Race where one plane
crashed into the river. It happened in 2010 during the training, when Brazilian pilot,
Adilson Kindlemann was hit by a gust of wind hit the water. There was a lot of damage
on the plane, but Adilson was plucked from the river by emergency rescue crews a few
seconds after the crush and was transported to the hospital. Thanks to the very quick
medical help and rescue, he did not suffer any serious injuries. However, after the
accident, Red Bull decided to stop holding Air race World Championship for some time

57

in order to implement new safety measures. And that proves how much Red Bull cares
about the safety and their image.

Red Bull Air Race has been one of the most creative sporting events created by Red Bull.
It is always a huge performance when lots of people are coming to watch flying aircrafts.
The first event was attended by over 50 000 people and was broadcast live on many
channels. This event is one of the most important components of Red Bulls extreme
sports marketing campaign, mainly because it is an annual event so it is a continuously
functioning marketing strategy tool. Moreover, it promotes very well their slogan saying
Red Bull gives you wings. Red Bull Air Race became popular all over the world also
because of its constantly different locations. Therefore, the event is well known
internationally and it is on television in many parts of the world. And that brings a huge
advantage to Red Bull energy drink as the demand for the product increases due to the
big interest of an event. The event has been very popular for many years and there are
always thousands of spectators because of the amazing views of the performance. The
low level flying of aircrafts and close view of the contest, make Red Bull Air Race very
special. Even when you did not buy a ticket and you do not have a privilege with
exceptional view of the track, you can still enjoy the race from a distance away and there
are always many massive screens projecting the images via camera.

3.3 Red Bull Formula 1

Infiniti Red Bull Racing is a Formula 1 racing team based in England with an Austrian
license and it is owned by Red Bull GmbH. The team is very successful and won the
Championships title in 2010, 2011 and 2012.
The current Red Bull team was established in 1997 and their first performance took place
in the Stewart Grand Prix. But only in 2004, Red Bull decided to purchase the team. They
created their own Formula One team for both professionals and young drivers called Red
Bull Junior Team.
58

Red Bulls first year in Formula One was a huge success.

They were 6th in the

Constructors Championship for most of the season. Only during this single season, they
gained more points than Jaguar racing (the name of a team before Red Bull purchased it)
in both 2003 and 2004. Red Bull increased the speed of Formula 1, brought some new
drivers into the team that became more productive. And finally 2010 was a championship
year. Red Bull finished this year with a total of nine Grand Prix victories with five going
to Sebastian Vettel and four going to Mark Webber. In 2011 and 2012 Red Bull team
defended the championship title. Today Formula 1 is the most competitive team in the
world.

Picture 4 Red Bull Formula 1, Red Bulls website

Red Bull knows how to run a big, global operation very well. Red Bulls meteoric rise
and uncontested success should not be that surprising. They have injected more cash into
Formula 1 than any other ownership group over the last few seasons. said Zak Brown,
founder and CEO of Motosports marketing firm. (C. Smith, Forbes, Red Bull Soars, But
Ferrari Is Still Formula Ones Most Valuable Team, 2012)

Red Bull Racing is now worth $400 million. The team collected almost $98 million in
prize money in 2011 and gained another $62 million in technical support, merchandise
59

sales and sponsorships. (C. Smith, Forbes). There are huge numbers and no other
company has ever achieved such high revenue due to sponsoring.
Energy drinks manufacturer Red Bull gave its championship-winning Formula 1 team a
3.5million marketing boost last year, driving its revenue to a record 108.5million,
according to Christian Horner, the boss of the racing outfit. Red Bull F1 marketing
activity is based in Red Bull Technology, and activities that exploit the success of the
Red Bull Racing team are recharged to the parent, said Horner, the boss of the racing
outfit (C. Sylt, Revenue record for Formula 1, 2012).
Red Bull has been always famous from their approach to brand marketing and Formula 1
ownership is just one of their many strategies. However, they did not come to the sport
just to have a presence, but to win the championship and spread the name of Red Bull.
And that really worked. Winning championships few years in a row and being so
successful that is also a great marketing campaign for the energy drink where no expense
is spared. Their involvement in sport brings Red Bull more consumers and media
attraction all over the world. Each of their project has the same objectives of brand
recognition, brand awareness, brand imagine and ultimately sales of the every drinks.
And so far this strategy is very successful, as sales of drinks is increasing from year to
year. Red Bulls volume sales grew 13 per cent to over 5 billion cans in 2012 and its
value sales by 16 per cent to 4.9bn (4.2bn) (M. Barnett, Red Bull and F1, 2013).

3.4 Other events

Red Bull Flugtag

Another event organized by Red Bull is about flying home made, but size and weight
limited flying machines. The first event took place in 1992 in Austria and it was a big
success. Today it is held annually and in over 35 cities all over the world. Anyone can
attend the event and the only participation requirements are to follow the restrictions
60

regarding the size and weight of the flying machine. The criteria varies with location of
the event, however the common rule is that machines should be constructed from the
environmentally friendly materials. In most of the cases, flying machines are taking off
from a low pier high into the sea. Competing teams are judged in three categories:
distance, creativity and showmanship. So far the longest flight was around 70 meters.
Most of the machines land immediately in the water, as people attend this event more for
fun rather than to win a prize (www.redbullflugtag.com). Red Bull Flugtag is taking a big
part of a Red Bulls marketing strategy because it manages to gather plenty of potential
new consumers to watch a show where name Red Bull is appearing everywhere.
Consumers are aware that this event would not exist if Red Bull was not a sponsor of it.
Moreover, because of the original idea it creates a big media interest and therefore,
increases the awareness of a brand.

Picture 5 Red Bull Flugtag, Red Bulls website

Red Bull X fighters

Red Bull X-Fighters is the biggest motocross tour in the world where the worlds best
riders doing crazy and dangerous tricks in different locations across the globe.
Participants are the best moto freestyle riders who compete against each other. The first
time when Red Bull organized such an event was in 2001 in Spain. There were 23 000
spectators and it became Europes greatest FMX (freestyle motocross) event. A few years
61

later, in 2005, the event took place in Mexico and there were 43 000 people in
attendance. And in 2010 it was held in Sri Lanka and it reached 230 000 spectators and
breaking the new record (www.redbullxfighters.com). Red Bull X-Fighters gets the
attention not only of the motocross fans, but the extreme sport fans in general and people
who like to see a good show. Every year the event is taking place in a different country.
Red Bull GmbH is a global company that exists in 165 countries in the world and hence,
the international events are being very helpful for the marketing strategy because it does
not focus only on the domestic market, but mainly on the global one.

Picture 6 Red Bull X Fighters, Red Bulls website

Red Bull X Alps

Red Bull X Alps is another extreme sports event organized by Red Bull GmbH. It is a
very intense race across the Alps. It is an annual event that started from 2003 and is
always located at the same place. Strong athletes need to hike or paraglide for around
900km across the Alps from Salzburg to Monaco as fast as possible. Each team consists
of one athlete and two supporters, however no technical assistants are allowed. In order to
compete, you have to have paragliding experience, and be very fit as you would have to
hike 100km per day. There are usually around 20 athletes who compete and they are
chosen after a very strict selection and it usually takes them 12-15 days to complete the
route. The event is very famous in the extreme sports society and brings a lot of media
attention (www.redbullxalps.com).
62

Picture 7 Red Bull X Alps, Red Bulls website

To sum up, today in extreme sports the most visible sponsor is Red Bull GmbH. Their
association with extreme sports has given an awesome image to young generation. In
their eyes, Red Bull is a cool brand that sponsors their favorite teams and creates big
show events. Red Bull managed to influence almost every sports sector: skydiving, base
jumping, paragliding, surfing, cliff diving, rock climbing, skiing racing and many others.
And every year they come up with new ideas and new extreme sports events to sponsor.
So far they have been very successful and their sales of energy drinks keep increasing
from year to year.

63

Conclusion
While writing this masters thesis, many interesting facts about Red Bull GmbH were
discovered. It all started in 1984 when Dietrich Mateschitz established the company and
they have been a market leader since then. Red Bull GmbH started its existence in
Austria and today their products are sold in 165 countries. They have introduced very
original programmes such as Red Bull Wings Team or Red Bull Bedroom Jam that helps
them to promote their products within the young target group. Red Bull was also the first
company who got engaged into the extreme sports world inventing annual events like
Red Bull Flugtag or Red Bull Air Race. Not to mention, they sponsor one shot events
such as Red Bull Stratos while breaking world records, making a huge science step
forward and creating mass media interest.
The objectives of this thesis were to show how Red Bull develops its marketing strategy,
identify the principles and processes involved, to provide a description of the tools and
techniques used in Red Bulls marketing strategy and show how they have been applied.
To sum up, the main goal of this thesis was to explain how effective is the association
with extreme sports for Red Bull, which is detailed below.
The thesis has started from a theoretical description of sports marketing and focusing on a
definition of marketing through sport. It was explained why companies use such a
method, who is involved in the process and who can be the potential consumers.
Afterwards, using the marketing mix structure, the author wrote more about what is
important while promoting the product through sport, where to do it and how to do it. At
the very end, the definition of sponsorship was explained, what is it for, who are the
consumers and how to choose the target market. The theoretical part is based primarily
on a review of scholarly texts related to sports marketing as well as journal articles and
widely accepted practices in the industry.
In the second part of a thesis, the author focused on Red Bulls marketing strategy and
started from analyzing their strengths, weaknesses, opportunities and threats. Even
though, Red Bull as an energy drink has some side effects, is not very healthy and has
been the same over the years, it is still a market leader with the biggest number of market
shares. The next used method for analyzing Red Bulls strategy was marketing mix
64

describing in detail what is the product consisting of and how is Red Bull GmbH
promoting it. Red Bull is using all kind of marketing methods such as below the line,
above the line, and advertising, but the one that played the most important role is buzz
marketing. They are the best in innovation of energy drink promotion, always coming up
with original and effective ideas such as Red Bull Wings Team or Red Bull Bedroom
Jam. Afterwards, the author had analyzed consumers of energy drinks in general as well
as those of Red Bull. It was found that Red Bull is mostly targeting young students aged
between 18 to 24 and most of them are male. Their non-consumers are children, women
and people above 45 years old who have already different drinking habits. The next
analysis was to understand how consumers come up with the decision of buying Red Bull
among the other alternatives. There are four different stages that every consumer goes
through before making a final purchase decision. The most difficult one for Red Bull is
called Evaluation of Alternatives, where consumers look for other options. In the case of
Red Bull, there are two other drinks that are considered as dangerous rivals: Monster and
Rockstar. Both energy drinks have some benefits over the Red Bull, for example the size
of a can and the price. However, Red Bull is still the market leader with the biggest
market share and a more recognized brand. All of the above mentioned brands, have a
similar marketing strategy and they all organize extreme sport events. On the other hand,
Red Bull GmbH is the company with the biggest revenue, so they can afford to sponsor
more and make the events bigger and thats their biggest competitive advantage over the
Monster and Rockstar.
In the last part, the author presented the examples of extreme sports events that Red Bull
had sponsored or has been sponsoring annually. The first one was Red Bull Stratos, the
biggest and the most expensive event sponsored so far. It was a skydiving project
involving Felix Baumgartner who flew 39 kilometers into the stratosphere and then made
a spectacular jump from the capsule breaking the sound barrier and three other world
records. It became a very successful event for Red Bulls marketing and not only because
of the increased sales of the energy drink but thanks to its importance to science, Red
Bull Stratos will be talked about for a very long time. The other events that Red Bull was
sponsoring are Red Bull Air Race, Formula 1 or Red Bull Flugtag. They are all held
annually and bring a huge number of people participating in the audience. In all those
65

events, Red Bull cares the most to make them original, spectacular, interesting and safe.
And so far they have been very successful and they proved that sponsoring extreme
sports has been extremely effective for Red Bulls strategy.
To conclude, their marketing strategy is very impressive and yet, extremely successful.
They keep developing their strategy and I believe they will hold their market leader
position for the next decade.

66

References
Acquino, J., Red Bulls logo is enough to affect consumer behavior, online version
Available at: http://www.businessinsider.com/red-bulls-logo-is-enough-to-affectconsumer-behavior-study-shows-2011-2

Barnett, B., Red Bull and Formula 1, 2013

Brooks, C., Sports Marketing: competitive business strategies for sports, 2004

Budati, A., Bansal,, N., IIFT, 2005

Clancy, R., Red Bull worth $5bn, 2013

Database Energy drink review, online version. Available at

http://www.energyfiend.com/the-15-top-energy-drink-brands

Euromonitor International, Red Bull plans Asian expansion, online version available at:
http://www.marketresearchworld.net/content/view/1232/77/

Feliciano, J., Innovations in Energy Drinks, 2011

Ferrand, A., Torri, L., Routledge Handbook of Sports Sponsorship: Successful Strategies
(2006)

Ferreira et al., Is Red Bull and Vodka more dangerous than orther spirit cocktails, 2007,
Available online at: http://skeptics.stackexchange.com/questions/14328/is-red-bull-andvodka-more-dangerous-than-other-spirit-cocktails

Gabay, J., Creative hunt, Red Bull in Space, 2012. Available online at:
http://www.creativehunt.com/shanghai/wire/2012-10-18-Red-Bull-in-Space-and-Lego
67

George R. Milner, Mark A. Macdonald, Managing the Exchange Process, 1999

Gorse, S., Entrepreneurship through sports marketing: Red Bull, 2010
Hansen Natural: Charging at Red Bull with a brawny energy brew. Businessweek, 2005
Hein, K. A Bulls Market the marketing of Red Bull energy drink, 2011
Heitner, D., Forbes: Red Bull Stratos Worth Tens of Millions of Dollars in Global
Exposure For the Red Bull Brand, 2012, Available online at
http://www.forbes.com/sites/darrenheitner/2012/10/15/red-bull-stratos-worth-tens-ofmillions-of-dollars-in-global-exposure-for-the-red-bull-brand/

Hoye, R., Smith, A., Westerbeek, H., Stewart, B. & Nicholson, M. 2006

Jane, M., Morgan, J., Summers, J. Sports Marketing , 2005

Kotler P., Keller K.L, Marketing Management (13th edn). Pearson Education
International, Prentice Hall, 2009
Lamb, C.W, Hair, J.F & McDaniel, C., Essentials of Marketing Cengage Learning,
2011
Langley, S, Energy drinks and youth: a cause for concern., 2008

Management: Principles and Applications, 2007

Medimark, Use of Energy drinks, 2011

Mintel, Consumer Choices in the Beverage Aisle, 2008

Mintel, Market Research Reports, January 2008

68

Mintel, Non-alcoholic Beverages: The Consumer , 2008

Mintel, Social Networking and Connectivity in the Digital Age, 2009

Monster Energy Reviews, Bev Net Your Source of Beverage News and Reviews.
Monsters website, www.monster.com
Mullin, J., Hardy, S., Sutton, W., Sport Marketing Volume 13, 2007

Nutrition Journal, Energy Drinks, 2007

ODonnell, D., Is Red Bull unhealthy or is it great marketing, online version available at:
https://www.dnadigital.com.au/is-red-bull-unhealthy-or-is-it-great-marketing/
Pradhan, B. Retailing Management 3rd edition, Tata McGraw-Hill Education, 2009
Red Bull brand strategy product line, online version available at: http://redbullbrand.blogspot.be/2011/11/red-bull-brand-strategy-product-line.html
Red Bulls website, http://energydrink.redbull.com/company

Rockstar Reviews, Bev Net Your Source of Beverage News and Reviews, 2012
Rockstar Website, Available at: http://www.rockstar69.com
Salsburg, G., Marketing Company of the year, 2010

Salsburg, G., STiR- Communications Marketing Company of The Year, 2010

Samet, F., Russell, G., The four domains of sports marketing, 2008
69

Shank, R., Marketing of sport, 2009

Shilbury, D., Strategic Sports Marketing, 2004
Smith, C., Forbes, Red Bull Soars, But Ferrari Is Still Formula Ones Most Valuable
Team, 2012

Smith, P.R., Taylor, J. Marketing Communications: An Integrated Approach

Sylt, C., Revenu record for Formula 1, 2012

Tacon, A., Side effects of Red Bull, online version available at:
http://www.livestrong.com/article/347125-side-effects-of-redbull-energy-drink/
Theodore, S. Energy drinks: New concepts keep category charged. Beverage Industry.,
2008

70