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In 2004, Red Bull found itself at a crossroad, challenged with defending its 70% worldwide market share of the €2.5 billion energy drinks category that it had pioneered. Through a combination of buzz marketing tactics, decentralised distribution and sponsorship of extreme sports and pop culture events, Red Bull had managed to build a certain mystique, which was central to building its appeal among its targeted customers, 18-35-year-olds.
The category of energy drinks was maturing in some markets and there was an onslaught of competitor brands; some promoted by beverage industry giants such as Coca-Cola and Pepsi, and others private labels launched by mass retailers such as Asda (part of Wal-Mart). Red Bull had to make the strategic decision whether to actively target the mainstream and decide to what degree its growth could be supported by a narrow product line. Its choice of strategic options needs to consider its resources and capabilities and will potentially result in a fundamentally different marketing mix. Red Bull also had to consider the impact of its choices on its anti-brand mystique.
- The case is appropriate for undergraduate, MBA and executive-level courses on marketing, and for courses on advertising and marketing communications, brand management, and strategy.
- The case explores buzz marketing and other non-traditional marketing techniques, as well as some of the challenges associated with brand extensions, such as preserving brand integrity and managing product/brand lifecycle.
- The case can be used to focus on (1) brand essence and segmentation/targeting; (2) non-traditional communications; (3) integrated marketing communications; and (4) product/brand lifecycle.
|LBS Case Code:
|Brand management, Brand strategy, Growth strategy
|Consumer goods, Soft drinks