RED BULL GLOBAL EXPANSION

Red Bull Global Expansion

Red Bull Global Expansion

Introduction

Market performance is based on the mindset of customer responses. There are six key outcomes of those responses. The first outcome is the price premium. A great targeted brand can sustain a premium price that mass-market brands cannot. Red Bull takes this to an extreme by charging three to six times more than Coca Cola. Red Bull charged up to 4 times more per ounce than average soft drinks prices. (Srinivasan et all, 2005, 65-78)

They deliberately set higher prices to develop and maintain a premium brand image. They give high trade premiums to the retailers and news agents for selling at the premium price which is set by the company. The third outcome is the market share where Red Bull got highest market share worldwide in energy drinks market that measures the success of their marketing plan. Brand extension is the fourth key outcome, as part of brand extension strategy Red Bull launched Red Bull Cola that shows the success of the brand in supporting line and category extension. (Srinivasan et all, 2005, 65-78)

The last two important key outcomes are cost structures and profitability. Red Bull is operating in the soft drinks industry where profit margin are higher compare to their expenses as their marketing activities are depending on” buzz marketing” than other traditional marketing strategy. Pulling al outcomes tighter in market performance lead to brand profitability, which is the last outcome. The last stage of the value chain model is not applicable in the Red Bull case as they are not the public listed company, therefore they don't have any share holders to take in considerations. By looking at all the stages of the value chain model it is evident how successfully Red Bull had build their brand equity. (Srinivasan et all, 2005, 65-78)

State whether you agree or disagree with the title of the case? Some observers and critics say that Red Bull's branding is revolutionary, calling it an 'anti-brand' strategy. I personally don't agree with the title of our case study, “Red Bull-The Anti-Brand Brand”. Although Red Bull had not use the traditional methods of marketing but they relied more on out of the box thinking and marketing calling it” buzz marketing” or “word of mouth marketing”.

Explanation

Four Steps In Brand Building

Red Bull followed all the four steps that are to be followed in building a brand:

1.Ensure identification of the brand with customers and an association of brand in customers' minds with a specific product class or customer need.

2.Firmly establishing the totality of brand meaning in the minds of the consumers by strategically linking a host of tangible ad intangible brand associations with certain properties.

3.Elicit the proper consumer responses to this brand identification and brand meaning.

4.Convert brand response to create an intense, active loyalty relationship between customers and the brand.

The firm avoided usual so called traditional methods of marketing, relying more on what is called 'buzz marketing' or 'word-of-mouth'. A brand image was created and cultivated which ...