Red Bull case study

Red Bull overview

The beverage-industry company Red Bull entered the market for the

first time in Austria on 1 April 1987. Red Bull introduced its new product,

and arguably a new product category, Red Bull Energy Drink (Red Bull, n.d.

c). The inspiration for the founder, Dietrich Mateschitz, were functional

drinks from the Far East (Red Bull, n.d. a). Without any doubt, the idea of a

carbonated ultra-premium energy drink was successful because after

almost 25 years on the market, Red Bull is an employer for 8,966 people,

its product can be bought in 165 countries all around the world, and the

company still keeps growing (Red Bull, n.d. c).

At present, there are four categories of Red Bull products: Red Bull

Energy Drink (Gives you wings when you need them), Red Bull Sugarfree

(Wings without sugar), Red Bull Zero Calories (Zero calories, 100%

wings), and flavoured Red Bull Editions (Wings for every taste). Even

though each category has its own motto and a distinct feature, they all

consist of the same basic formula and promise identical effects:

concentration, alertness, mental performance, and reduction of tiredness

and fatigue (Red Bull, n.d. b).

The aim of this essay is to understand consumer behaviour of Red

Bulls customers, and explain marketing communications for Red Bull in

terms of the roles in the buying decision process, target market, potential

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choice criteria, social influences on consumer behaviour, and sports

marketing.

Marketing communications and roles in the buying decision

process

Marketing communications can be characterised as a management

process through which an organisation enters into a dialogue with its

various audiences (Fill, 2002: 12). Verity (2002: 162) distinguishes

between active (incentives for purchase) and passive (mass media

coverage) communication with target audience. The aim is to promote

both the brand and its product(s) (Fill, 2002: 13).

In terms of audience, Blackwell, Miniard, and Engel (in Jobber and

Ellis-Chadwick, 2013: 117) distinguish between five different roles that are

involved in the buying decision process: initiator considers making a

purchase, influencer uses information they gathered to affect which

product or service will be bought, decider makes the final decision, buyer

makes the purchase, and user consumes the product or service. In some

cases, one person can have more than one role and, according to

Woodside and Mote (in Jobber and Ellis-Chadwick, 2013: 117), product

type affects the roles people have.

In terms of Red Bull, it may be argued that all roles, except for

influencer, might be conducted by the same person. Therefore, marketing

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communication needs to focus on the influencer and the person that

represents the remaining roles.

During the initiation process, Red Bull should make their target

market aware of their needs to create (or increase) demand for energy

drinks. Red Bull has a section of their website called When to drink

(n.d. b) which describes various occasions and professions that might need

an energy drink; it can be argued that by identifying these aspects which

influence Red Bulls marketing strategy, Red Bull is already conducting

market segmentation. The target market includes productive people,

mostly males 18-34 years old, who need to stay alert, and very often fall

into the following categories: drivers, students, high-performance workers,

athletes, gamers, and clubbers (Red Bull, n.d. b).

Furthermore, Red Bulls customers are most likely to come from the

first four major lifestyle groups identified by Young & Rubicam (in Jobber

and Ellis-Chadwick, 2013: 136-7): the aspirers, succeeders, transitionals,

and reformers. The aspirers are ambitious, follow trends, and indulge in

conspicuous consumption, which allows them to display their wealth

publicly. Red Bull may be appealing to this group because it is an ultra-

premium brand. The succeeders prefer quality and luxury goods, and the

exclusivity of Red Bull can be applied to them, too. The transitionals tend

to shop impulsively, and often are members of counter-cultures which is in

accordance with the non-conformist and rebellious features of Red Bull.

Since the reformers are ecology-focused, they might be allured by the fact

that Red Bull cans are 100% recyclable. However, the mainstreamers,

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struggling poor, or resigned poor are less likely to be interested in buying

Red Bull due to having a limited income and/or a different lifestyle. All

these criteria have to be borne in mind in order to create an effective

marketing mix.

Another role in the buying decision process is the influencer. Their

opinion is very important because by having good arguments based on

information research, they can support or entirely decline the decision to

purchase a particular product or service. The weight of their opinion can

be increased if they belong to the important others group or a reference

group (discussed further in question 3). Red Bull should, therefore, ensure

that the brand is perceived well, and that people have positive attitude

towards it. Harmful misconceptions about the brand must be avoided;

otherwise the company might lose some prospective customers.

Supposing that the influencer is in favour of the purchase of a Red

Bull energy drink, the decider then makes the ultimate choice. The final

product or service will have won against alternatives, therefore positive

beliefs and attitudes towards Red Bull must be reinforced. However, Red

Bull energy drinks fall into a low-involvement category; hence the search

for alternatives will not be very thorough. Rossiter (in Fill, 2002: 98)

defines involvement as the degree of personal relevance and risk

perceived by members of the target market in a particular purchase

situation, therefore the higher the involvement, the more extensive is the

evaluation of alternatives (Jobber and Ellis-Chadwick, 2013: 122).

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 Since the purchase of a can of a Red Bull energy drink is a very

simple transaction, this stage is not very relevant. However, it is important

for Red Bull to ensure maximum satisfaction for the consumer so that the

purchase is repeated.

Potential choice criteria used to evaluate alternative energy

drinks

Customers have various criteria for considering purchase of a

product or service. Jobber and Ellis-Chadwick (2013: 125) list four main

types of criteria and sub-categories: technical (reliability, durability,

performance, style/looks, comfort, delivery, convenience, taste), economic

(price, value for money, running costs, residual value, life-cycle costs),

social (status, social belonging, convention, fashion), and personal (self-

image, risk reduction, ethics, emotions).

However, OShaughnessy (1995: 173) points out that customers

have bounded rationality in terms of using these criteria due to their

knowledge, time constraints, and the influence of sub-consciousness. Also,

the combination of criteria might vary and the same criterion may possibly

be used differently. Various evaluation criteria put together form what

Tsiotsou and Wirtz (2012: 153) call multi-attribute models.

First, technical criteria are related to the delivery of promised results.

Energy drinks are consumer goods, not durables, therefore reliability and

durability may be omitted since their consumption is not long-term.

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However, the remaining criteria are important. Performance and taste are

crucial aspects of energy drinks; hence products with a longer stimulating

effect or better taste will most likely be chosen. The aspect of good looks

of a can of an energy drink might overlap with social criteria because the

target market is concerned with the way they are perceived by their peers.

Comfort that is not up to a certain standard might deter customers if, for

example, cans cannot be opened or users get splashed while opening

them. Delivery and convenience should be related to the points of sale so

that the inventories are never empty and the product is available in as

many shops, petrol stations, and clubs as possible.

Second, the economic criteria might deter some customers of Red

Bull, given the fact that it is an ultra-premium brand. Lower prices of

alternative energy drinks can be very appealing to budget-conscious

customers. Value for money is also very important because it can be

argued that few people would be interested in buying a product that is

very expensive and under-performing. The remaining economic criteria

running costs, residual value, and life-cycle costs are not relevant in the

case of consumer goods.

Third, influential social criteria might make customers more inclined

towards certain energy drinks (and energy drinks in general) if the society

considers a particular brand as fashionable. Being seen with a can of an

energy drink of a particular brand might help people to become a member

of an aspirant reference group or to enhance their social belonging in their

membership group, supposing that these groups value such behaviour.

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Also, drinking premium or ultra-premium drinks can be considered as

another way of reinforcing ones own social status.

Fourth, some personal traits or lifestyle could affect the final choice

of the product; therefore people will most likely choose a brand, which is in

accordance with their beliefs: ecology-conscious people prefer recyclable

packaging, people having a healthy lifestyle will demand products

consisting of natural ingredients and perhaps low-sugar or zero calories

products. If some brand does not offer such versions of their drinks, it may

lose some customers to their competition. Also, some brands might be

appealing to certain people because the image of the brand reflects their

self-image. Furthermore, positive emotions associated with a brand can be

sufficient for a consumer not to experiment with different brands because

he or she wants to reduce the risk of purchasing an under-performing

product.

As long as all companies producing energy drinks offer products with

similar functions, they can be regarded as substitutes (OShaughnessy,

1995: 172). However, when the products are chosen according to the

same criteria, they become close segment rivals. OShaughnessy also

mentions an important point: when emphasis is put on certain criteria, the

target market starts considering these criteria as important. Therefore,

marketers can take advantage of this and stress criteria that are well

catered to by their product.

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Social influences on consumer behaviour with respect to the

target market

Zygmund Bauman (in Heelas, 1994: 105) describes post-modern

culture as dominated by empowerment, innovation, rapid change,

enjoyment, freedom, and consumer choice. Furthermore, hedonism is

defined as the belief that pleasure is the most important thing in life.

Hedonistic consumption, therefore, has an emotional impact on customers.

Furthermore, advertising for luxury brands, which might include Red Bull,

commonly encourages individuals to project themselves into a desirable

or pleasurable environment or situation (Fill, 2002: 99).

The pleasure-seeking aspect of contemporary society helps Red Bull

in its success. Its target market is indeed a post-modern hedonistic group

(Cosgrave in Jobber and Ellish-Chadwick, 2013: 150), because members of

such group need to have sufficient energy to enjoy themselves, which

creates demand for energy drinks.

Jobber and Ellis-Chadwick (2013: 137) distinguish between four

social influences on consumer behaviour, which are: culture,

geodemographics, social class, and reference groups.

First, culture reflects the basic building stone that society is built on

(Jobber and Ellis-Chadwick, 2013: 138). Individuals are expected to

conform to norms, and can be given rewards or sanctioned in order to

achieve the desired conformity. Also, certain traditions must be preserved,

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while taboos must be avoided. It can be argued that the consumption of

energy drinks in general is widely accepted, which makes it a little easier

for all energy drinks marketers because they do not have to fight taboos.

Therefore, culture is not the most relevant problem for Red Bull.

Second, the population and location factors (geodemographics) do

have some implications for marketing. The factors that are analysed

include age, gender, ethnicity, occupation, et cetera (Jobber and Ellis-

Chadwick, 2013: 139). The factors can be used for market segmentation

with regard to the target market. The implications of occupation and

lifestyle groups for Red Bull were already discussed in question 1. In order

to have the desired impact on the target market, knowing the structure of

population in certain area can increase effectiveness and perhaps lower

advertisement costs because direct messages can be used. However,

people can move between socioeconomic groups and may not be a good

representative sample of the group (Fill, 2002: 126). Furthermore, Fill

illustrates on the example of alcoholic beverages that geography may

have an influence on taste preferences.

Third, social class is also derived from occupation. There are eight

social class categories, which are based on a country-specific method

(Jobber and Ellis-Chadwick, 2013: 138-9). Arguably, all social classes might

be interested in consuming energy drinks, however only some categories

will buy an ultra-premium-priced product - Red Bull. The most likely

customers for Red Bull are probably the first three occupation classes:

higher managerial and professional, lower managerial and professional,

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and intermediate. These classes have a higher disposable income than the

remaining classes (small employers and sole traders, lower supervisory

and technical occupations, semi-routine occupations, routine occupations,

and those that never worked and long-term unemployed).

Fourth, a very powerful social influence is a reference group, which

consists of people who shape the attitude or behaviour of an individual,

and are used as a frame of reference (Jobber and Ellis-Chadwick, 2013:

139-40). There are two types of reference groups membership groups

(an individual is already a member) and aspirant groups (an individual

wishes to become a member). The approval or disapproval of a reference

group can change individuals decision entirely (Jobber and Ellis-Chadwick,

2013: 140). Therefore, the implications for Red Bull are to maximise the

approval of important others, who might also be the target market

themselves.

Potential benefits of sports marketing as a tool in the consumer

decision-making process

Red Bull has always put emphasis on improving athletic performance

(Cosgrave in Jobber and Ellis-Chadwick, 2013: 150). The focus is on

extreme sports, although it is also engaged in other extreme activities and

culture. Some examples of sports marketing may be: Red Bull Flugtag,

Infinity Red Bull Racing, Red Bull Crashed Ice, Red Bulls, and Red Bull Air

Force. All the events mentioned above are either sponsored or directly

organised by Red Bull.

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 Sports sponsorship is a valuable communication tool for

international and global brands due to globalisation (Verity, 2002: 159).

Verity (2002: 161) lists four benefits of sponsorship: increased awareness,

positive brand image, brand preference, and repeated purchase and

loyalty. These four effects complement the consumer decision-making

process, which consists of five steps: need recognition or problem

awareness, information search, evaluation of alternatives, purchase, and

post-purchase evaluation of decision (Jobber and Ellis-Chadwick, 2013:

118). These steps overlap with the roles of the buying process discussed in

question 1. However, the decision-making process is only one out of three

perspectives on how customers behave during the purchase process; the

other two are experiential and behavioural (Mowen, 1998: 15).

In the first step, the benefit of sponsorship is that a potential

customer can become more aware of their needs and/or the brand.

Furthermore, while searching on the internet and evaluating alternatives,

positive brand image and brand preference, both of which can be enforced

by sponsorship, play an important role in the final decision. These two

factors can be crucial if the potential customer has a variety of

alternatives, which offer the same performance for similar prices. After the

purchase, it is important to make sure that the customer was satisfied with

the product in order to achieve a repeated purchase and loyalty.

Conclusion

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 To summarise, this essay has discussed four questions related to

consumer behaviour and marketing communications for Red Bull. In the

first question, five roles of the buying decision process were discussed, as

well as the target market and lifestyle groups. It has been shown that Red

Bull should put emphasis on the initiator, influencer, and decider. In the

second question, four criteria and relevant sub-categories for purchase

evaluation have been discussed. Due to Red Bull having the features of a

consumer good, some sub-categories are more relevant than others. A

market research among Red Bull's target market could identify essential

choice criteria, on which Red Bull should focus. The third question has

shown that the post-modern hedonistic feature of contemporary society

plays quite an important role in the creation of demand for energy drinks.

It has been shown that neither culture nor geodemographics are crucial

influences due to Red Bulls international dimension. However, both social

class and reference groups are essential, and can be targeted and

exploited by the marketing activities of Red Bull. The fourth question has

shown that the effects of sponsorship correspond with the five steps of

consumer decision-making process, which should focus on making a

potential customer aware of their needs and showing them that Red Bull is

their best choice. Last but not least, even though some answers are

considerably shorter than others, they all overlap and all the information

from other answers should be always borne in mind.

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 References

Fill C. (2002) Marketing Communications: Contexts, Strategies and

Application, 3rd edition, Harlow: Pearson Education Limited.

Heelas P. (1994) The limits of consumption and the post-modern religion

of the New Age, in Keat R., Whiteley N., and Abercrombie N. (ed) (1994)

The Authority of the Consumer, London: Routledge.

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Jobber D. and Ellis-Chadwick F. (2013) Principles and Practice of Marketing,

7th edition, Maidenhead: McGraw-Hill Higher Education.

Mowen J. C. (1988) Beyond Consumer Decision Making, Journal of

Consumer Research 5 (1), 15-25.

OShaughnessy J. (1995) Competitive marketing, 3rd edition, London, New

York: Routledge.

Red Bull (n.d. a) Red Bull History, [Online], Available:

http://energydrink.redbull.com/red-bull-history [26 February 2013].

Red Bull (n.d. b) Red Bull Energy Drink, [Online], Available:

http://energydrink.redbull.com/red-bull-energy-drink [26 February 2013].

Red Bull (n.d. c) Red Bull Company, [Online], Available:

http://energydrink.redbull.com/company [27 February 2013].

Tsiotsou R. H. and Wirtz J. (2012) Consumer behaviour in a service context,

in Wells V. and Foxall G. (ed) (2012) Handbook of Developments in

Consumer Behaviour, Cheltenham: Edward Elgar Publishing Limited.

Verity J. (2002) Maximising the marketing potential of sponsorship for

global brands, in Kitchen P. J et al (ed) (2005) A Reader in Marketing

Communications, London, New York: Routledge.

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