RED BULL Ad Strategy : Action Action and more Action

Arjun J chaudhuri

Combination of Corporate Sponsorship & Broadcasting is vital for commercial success of sport today. let us examine case study of Red Bull energy drink vis-à-vis Coca Cola and PepsiCo in how sport has been used as platform for increasing sales, and beating market competition.

Any fizz drink other than water is part of everyday beverage consumption today. Coca Cola company which traces its origins to 1866, pioneered development of beverage drink from carbonated water, cane sugar syrup, caffeine, and extracts of kola nuts and cocoa leaves. Today, it produces and distributes several of its brands of soft drinks, fruit juices, and non-soda beverages worldwide, spends millions of USD in advertising to increase sales of it product. This trend has continued since 1892 when the company spent 11,000 USD on its first massive advertising campaign, and popularized Coca Cola logo as leading brand in beverage market. To bring efficiency in producing and distributing Coca Cola beverage, and reduce time, effort & cost, the company introduced franchise system of granting exclusive right for contractors to market its beverage products in designated territory in return for specified fee, and share in profits. In exchange Coca Cola as franchisor provided product, name, and sometimes physical plant and advertising. Increased competition from 1923 in beverage market meant that more resources were expended on market research than into manufacturing, such as development of marketing slogans. 

In 1950, the famous Cola Wars began. Pepsi-Cola, another company from USA, which traces its origins to 1898-1903 became leading beverage company in US & overseas markets, and is till date closest rival to Coca Cola in sales because of its aggressive advertising campaign aimed at young consumers which Coca Cola was relatively slow to catch on. Target Marketing based on age demographics was principle reason for PepsioCo’s success, and proved to be template for other competitors to follow.

Post year 2000, this Fundamental Strategy was taken to higher level by RED BULL GmBH, company formed in 1987 by Austrian to produce and distribute energy drinks at retail price which is higher than what is sold by existing competition in markets globally. According to 2012 sales figures, the company has sold over 5 Billion cans, and begs question as to how they did that beating marketing resources expended by Coca Cola and PepsiCo. ‘Red Bull’ was originally Thai Energy Drink called Krating Daeing. It was re-introduced as Red Bull to suit western taste through innovative marketing by former toothpaste salesman from Austria, Dietrich Mateschitz. The company has marketed itself not just as energy drink, but also as vital accessory of extreme lifestyle by consistently sponsoring extreme sports around the world. All of their sponsored athletes are decked out in Red Bull clothing gear reminding target audience that Red Bull lifestyle is characteristic of group culture of youth. 

Red Bull has sponsored F1 constructor champion for 2013, and F1 Driver champion for 2013, Sebastien Vettel, beating noted competitors like Ferrari, BMW and Renault. To attract eyeballs away from marketing action of its competitors, Red Bull GmBH sent Felix Baumgartner into space to sky-dive down to earth in Red Bull Space Apparel, who dropped 24 miles and fell so fast that he broke the sound barrier. The company also organizes extreme sporting events such as National Red Bull Flugtag competition in which participants create and attempt to fly their own Flying Machine into sky.

However, this is not without injury, loss or damage to its participants, and stuntmen, who have suffered fatalities, and objected to by advertsing standards authority in different markets whenever footage of such related incident are showed in advertisements. The flip side of this brand image of Red Bull GmBH identifies with youth who consume its product, and even though extreme nature of this type of marketing tactic borders on high risk, sporting events have proved to be perfect marketing platform to embody what Red Bull stands for: Action, Action, and more Action…