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INDEX

1  Introduction.  2

2  The company and its product.  3

2.1  The history of “Red Bull GmbH  3

2.2  The product “Red Bull Energy Drink  4

2.2.1  The energy drink and its ingredients.  4

2.2.2  The packaging  5

2.2.3  The logo and its meaning  5

2.2.4  Expansion of Red Bull’s product range.  6

3  Red Bull’s market situation  7

3.1  The industry and rivalry among existing firms.  7

3.2  Potential Entrants  8

3.3  Substitutes.  9

3.4  Buyers  10

3.5  Suppliers.  11

4  Red Bull’s marketing mix.  12

4.1  Red Bull’s promotion policy  12

4.2  Red Bull’s price policy.  16

4.3  Red Bull’s place policy (distribution policy)  17

4.4  Red Bull’s product policy  20

4.5  Conclusion.  20

5  Standardization versus Culture: Adaptations and pitfalls  

made  by Red Bull  21

5.1  Standardisation of Red Bulls Marketing.  21

5.2  Reasons to Red Bull’s success with standardization in all four markets.  22

5.3  General advantages of such a standardized policy  23

5.4  Ignoring of cultural differences.  23

5.5  Conclusion.  24

References   25

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1 Introduction

This paper looks closer at international marketing with an emphasis on the cultural issues, which are often forgotten in real life. The company Red Bull was chosen as an area of study in order for us to be able to apply and test the theories in our course literature with the way things are done in reality. The choice of Red Bull was an obvious one because of its presence in the global marketplace as well as the groupmembers home countries. The course literature has been used as a point of reference when it comes to examining whether the company is standardizing or adapting and also regarding international marketing as a whole. Moreover, the paper will focus on the Czech Republic, France, Germany, and Sweden in correlation to the market- ing Red Bull adopts in these countries.

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2 The company and its product 2.1 The history of “Red Bull GmbH”

In the early ‘80s, an Austrian named Dietrich Mateschitz

(today a managing partner of Red Bull GmbH), came across several “energy drinks” during business trips to Asia. ¹ Essentially, Mateschitz noticed that the Japanese seemed to be particularly predisposed to drinking bottles of 'energy drink' to keep themselves alert. Having tried these drinks himself, and finding that they did indeed help him stay sharp, Mateschitz decided to reformulate the concept for the European market - and Red Bull was born. ² He spent three years analysing the market, work-

ing on the concepts, the design of the can and finally got the registration from Austria's Ministry of Health. ³ In 1987 he launched the now wildly successful “Red Bull” energy drink brand. Nothing like this had ever before been seen in Europe. ⁴ Red Bull first appeared outside of Austria in 1993, when Slovaks, Hungarians, and Croats started importing it and hawking it to individual stores and nightclubs. Soon West Coast clubs were importing Red Bull to sell as a drink mixer. Big cities such as L.A. and Seattle were the company's first target markets when it kicked off its U.S. distribution in 1997. ⁵ Red Bull (the product) is currently present in more than 70 countries and has quickly become a well-recognized energy drink, ⁶ with European sales for 2002 estimated at over 1.3 billion cans - more than all its closest competitors put together. ⁷ Today the company has reached a minimum market share of 70 % ⁸ in all the markets it has entered. Red Bull the company now provides work for 1200 employees all over the world (2001). 9

¹ http://www.thelocalplanet.com/Archives/Authors/Article.asp?ArticleID=3365 (14.10.2003)

² http://www.itweb.co.za/office/3Com/9902161139.htm (14.10.2003)

³ http://www.bangkokpost.net/290803_Business/29Aug2003_biz76.html (14.10.2003)

⁴ http://www.thelocalplanet.com/Archives/Authors/Article.asp?ArticleID=3365 (14.10.2003)

⁵ http://www.businessweek.com/bwdaily/dnflash/june2000/nf00630b.htm (14.10.2003)

⁶ http://www.theproduct.com (14.10.2003)

⁷ www.marketingclub-dresden.de/ Kaleidoskop2002Rueckblick.pdf (14.10.2003)

⁸ Hansen, Produktpolitik, 2001, Steffen Poeschel

⁹ http://www.mc-bielefeld.de/report/2001/cr9.htm (14.10.2003)

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Red Bull’s corporate strategy is focused on their core competence in marketing. Other activities like production and distribution are outsourced to third parties. ¹⁰ Slim management structures and flat hierarchies allow the company to maintain flexibility and their ability to react promptly. On an estimate company’s net value is 10 billions euros, which prove their immense success. ¹¹ 2.2 The product “Red Bull Energy Drink”

2.2.1 The energy drink and its ingredients

What is Red Bull? On their webpage the beverage is declared as a functional energy drink and not as thirst quencher. ¹² It has not been formulated to deliver re-hydration. The company’s energy drinks are filled with added synthetics and natural technological ingredients that promise boosts of energy or concentration. For best effects, manufacturers recommend consumption about 30 minutes before the start of a task requiring added concentration or the beginning of a race or competitive sport. 30 minutes is roughly the time it takes for the human body to be affected by Red Bull’s ingredients. 13

Where does the buzz come from? Red Bull says it’s the result of two natural ingredients, amino-acid taurine and glucuronolacton. It’s their reaction with caffeine that makes the product work, according to the company. Red Bull claims that the end result, Red Bull's maker claims, is an invigorated state of both the body and mind, not to mention a boost in performance and longer endurance. ¹⁴ Each can contain 250 ml of the Red Bull drink that consist of the ingredients mentioned below; most of these are synthetically produced by pharmaceutical companies: 15

¹⁰ http://www.news.at/profil/index.html?/articles/0337/568/64673.shtml (14.10.2003)

¹¹ Absatzwirtschaft, Sondernummer zum dt. Marketingtag 2001, S. 22 f.

¹² http://www.redbull.com (14.10.2003)

¹³ http:// www.theproduct.com (14.10.2003)

¹⁴ http://www.businessweek.com/bwdaily/dnflash/june2000/nf00630b.htm (14.10.2003)

¹⁵ http://www.redbull.com/product/history/index.html (14.10.2003)

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• Carbonated water • Vitamins • Sugar (sucrose, glucose) 27 g • Niacin 20 mg • Taurine 1000 mg • Vitamin B6 5 mg • Glucuronolacton 600 mg • Pantothenic acid 5 mg • Caffeine 80 mg • Vitamin B12 0,005 mg

2.2.2 The packaging

Red Bull is sold in a silver-blue 8.3-ounce aluminium can. “It’s all in the can. Gobé ¹⁶ emphasises that the sleek, silver can is Red Bull's "anti-Pepsi statement.” He calls it slim, sexy, and powerful, and says that its diminutive size only bolsters Red Bull's reputation as a concentrated experience.

Koehn ¹⁷ agrees with Gobé when he says that "packaging is critical for a product". "Red Bull really looks like a product from the global economy. It doesn't look like a traditional American soft drink - it’s not in a 12-ounce can, it’s not sold in a bottle, and it doesn't have script lettering like Pepsi or Coke. It looks European and that matters for people.” 18

2.2.3 The logo and its meaning

The brand name conveys the Red Bull logo, consisting of two red bulls charging against each other in front of a yellow spot. The bulls demonstrate the strength that is connected with the logo incurs. The blue and silver parts in the background act as a symbol for the intellect and the red and yellow parts characterize emotion. All in all this creates a good and memorable logo.

¹⁶ Author of Emotional Branding: The New Paradigm for Connecting Brands to People (Allworth Press)

¹⁷ Professor of business administration at Harvard Business School and author of Brand New: How

Entrepreneurs Earned Consumers' Trust from Wedgwood to Dell (Harvard Business School Press)

¹⁸ http://www.fastcompany.com/articles/2001/10/redbull.html (14.10.2003)

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2.2.4 Expansion of Red Bull’s product range

Recently Red Bull launched its first product derivate in certain countries: The “Red Bull Sugarfree”. “The flavour is basically the same as the original one but with artificial sweetener thus not very exciting. In addition, the company used the same packaging as the original which is not very innovative. Overall, it's the same old stuff, but with a different sweetener.” ¹⁹ The packaging is not exactly the same but very similar to the “Red Bull Energy Drink”: The dark blue colour on the can has been replaced with a light blue colour and the expression “Energy Drink” has been substituted by the word “Sugarfree”.

Although this case study concentrates to the most well-known product - the “Red Bull Energy Drink” and its sugar free version another of the Red Bull company’s products will be shortly mentioned. The “LunAqua” a table water which is presented as “pure, natural spring water which is only drawn - from a previously undiscovered Alpine source - after it has reached its highest quality.” ²⁰ “LunAqua” is sold as a quite exclusively table water and at the moment it is only availably in Austria and the Netherlands. The logo is nearly the same as the one on the energy drink: Two red bulls charging against each other in front of the full moon that replaces the big yellow-orange spot in the energy drink’s logo.

¹⁹ http://www.bevnet.com/reviews/redbull/ (14.10.2003)

²⁰ http://www.lunaqua.com/start_en.html (14.10.2003)