Market Opportunity Factors for Red Bull Energy Drink
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Market Opportunity Factors for Red Bull Energy Drink
Red Bull Energy Drink is the worlds number one selling energy drink, selling 4.631 billion cans of Red Bull in 2011 (“Red Bull Company Figures,” 2012). Red Bull was founded in 1982, and was introduced into the United States in 1996. Since the introduction of Red Bull in 1982, the company has seen double-digit growth almost every year. By creating a unique category within the beverage industry, Red Bull has capitalized on its product uniqueness, image, and marketing strategy to maintain its popularity and astounding sales figures. This paper will analyze several market opportunity factors as they relate to Red Bull, including market demand and environmental elements specific to Red Bull.
Kotler and Keller define market demand as “the total volume that would be bought by a defined consumer group in a defined geographical area in a defined time period in a defined marketing environment under a defined marketing program” (Kotler & Keller, 2012, p. 86). Red Bull entered the market as an unknown participant in a never before seen category, carefully positioning the brand as dynamic, energetic, and innovative. By being first to market with Red Bull Energy Drink the company had no direct competition from energy drinks, they needed to identify and target a new consumer base. The market potential for Red Bull at the time of its launch was high, and Red Bull chose not to invest heavily in major media, instead opting to build a slow, controlled, and loyal customer base. Red Bull invested its marketing dollars into high profile iconic events that positioned themselves onto the cutting edge of “hip”, associating these events with the drink (“Red Bull,” 2012). Red Bull also sought out social, cultural, and athletic leaders in each market, calling these leaders “friends of Red Bull” and by donating product, sponsoring local events, and participating in grass roots social activities that created an association with societys leaders and developed an intense loyalty to the brand. The environmental factors today are much more relevant than when Red Bull entered the market.
Red Bull entered the market with an eye to cultural/social and demographic factors by targeting young consumers to create a long term brand loyalty, and touting the benefits of Red Bull (“It gives you wings”). Red Bull also ingeniously tied in the “hip” aspect to the targeted demographic, making it very desirable to a young consumer to be seen with a can of Red Bull. One macro-environmental factor that Red Bull did not consider was the political/legal environment of the U.S. Red Bull has been named in several lawsuits claiming that there are limitations to Red Bulls use of all natural ingredients, and the mixture of Red Bull with alcohol can create deadly situations. The economic environment was addressed