Brand Development and Marketing

A brand is a marketing symbol or a name that is used to uniquely identify the source of a given product or service. Branding is often important as consumers are known to associate in their mind, certain products and their values to the brand. A brand can therefore impact greatly on the value that a consumer attaches to a given product. This concept is of branding for marketing purposed is referred to as brand equity. According to the Center for Management and Business administration, brand equity refers to an intangible asset that is a function of any associations made by the consumer.

This may be on three dimensions namely financial, brand extensions and consumer based . In this regard, there exist different sources of brand equity in Red bull. According to an article, “Red Bull: Building Brand Equity in Non-Traditional Ways” one of the sources of Red bull’s brand equity is their product flavor. The article notes that Red bull’s flavor was intended to communicate the company’s product value. The flavor was sweet with a carbonated cola, in additional to having what some consumers referred to as medicinal taste.

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Further, the article notes that to the consumers, the strong taste indicated that the Red bull products were more than mere refreshments . According to the writings of Marco and others, the basic premise of brand equity is the power of the brand in the consumer’s mind. Such writers reckon that values such as taste, flavor and color can be thought of as added value endowed to a product and often inform the thoughts, words and actions of consumers . The other source of brand equity for Red bull’s product is packaging.

The article notes that Red Bull drinks at first came in a single package that was slender and silver for 250ml cans. It further recons that these small cans that had originated from Japan was a message to the consumer that the contents of the product were both different and stronger than the traditional soft drink. These cans, notes the article, had a Red bull logo that was an oriental idea, with two red bulls just about to collide in front of a yellow sun. Immediately below, the words “Energy drink” clearly inscribed .

To show the role packaging in brand equity, the article records that Red Bulls developed a brown glass that was to be put to use in locations where such mentioned cans could not be listed. Customers often associate Red bull drinks with cans and not with bottles. When they launched their products in Germany, the demand quickly outweighed the supply only to fall drastically with the introduction of bottles . This clearly indicates that Red bull derives much of its brand equity from its packaging. The other source of brand equity for Red bull’s products is its positioning.

The slogan, “Revitalizes body and mind” conveys the tangible benefits of the product in an easy to understand fashion. The product is positioned for consumption at any time whenever the consumer needed a lift, whether in the morning, at noon or even in the evening. This meant that Red bull’s products consumption is not limited to any specific occasions as even their advertising doesn’t tie itself to such condition, thus further facilitating elastic positioning, not forgetting that the product is not only a restaurant drink but also a nutritional item .

Lastly, pricing strategy is also another source of Red bull’s brand equity. The company uses premium pricing strategy, therefore being a bit more expensive than other soft drinks such as cola. Charging the same price as other soft beverage drinks would not have customers believe that the product carries any energy enhancing capabilities. Further, the premium price would ensure Red bull products would take up a unique position in the market. According to the writings of Elliott Richard, what a business needs most is an upside price elasticity relative to its downsize elasticity.

The greater the upwards difference, the greater the brand equity since a strong upside elasticity reveals an increased perceived value for the brand . Those sources however change depending on the country since different countries have different requirements in terms of rules and regulations as well as pricing strategies, though the same country may have different markets. This can be proved by the concept of packaging as one of the sources of Red bull’s brand equity. The article reckons that when Red bulls launched in Germany, the demand was high though went down after the introduction of brown bottles for packaging .

In Australia, the company had problems in approval for sale. This is because the Australia government had only three categories of foods and related products, and Red bull’s energy drink did not fit in either. It therefore had to be categorized as a functional food, the category that was later defined and included products known as nutraceuticals, composed of products that carried medical benefits beyond dietry richness . 2. 0 Red Bull’s Marketing Strategy The first strategy used by Red bull in marketing its product is through testimonials otherwise called world of mouth, the oldest media in the world.

Later the brand supplemented this marketing strategy with sponsorship for social events such as athletics. This is a strong marketing strategy as a testimonial from a customer who has used a product is likely to be naturally more effective than any other type of media while the word of mouth moves faster than any other means. In addition, promotion of social events such as athletics is much in line with energy giving products. To run, one needs energy, while such events are likely to be attended by young people who value such products.

According to Nancy White in his article “Word of Mouth Marketing-WOMM ”, she reckons that human voice and human contact are the most powerful tools of marketing, with a normal person receiving over 1000 messages a day . The other marketing strategy applied by Red bull involved the company placing empty Red Bull cans in pubs and clubs to create an illusion of their product popularity. This is not only wise but also very creative. Through this strategy, its popularity spread over to countries such as Germany and Hungary despite the product being on sale only in the neighboring country, Australia.

Because the product could not be exported, enterprising individuals often sneaked it across the boundary thus helping the company in further marketing. The main idea behind all this was to cause buzz which is one of the best marketing strategies. According to Dawn Iacobucci and others, marketing through buzz approach is like transmitting a viral disease, where in a wired community, the infection is always a click away . As a market entry strategy, Red bull often used what they called seeding program, which targeted on the elite and those considered to be the cream of the society.

The elite, hopefully, would influence the rest of the society down the pyramid and mainly through the word of mouth. I addition, the stage managed limited availability often contributed to brand’s cachet and prestige. Further, the brand targeted opinion leaders who most likely could influence purchases, while premarketing even before the product was introduced and gave the brand even more hype. All these approaches can be said to have one characteristic in common, that they all targeted at the customer psychology aiming to create a permanent image in the customers mind.

Sports marketing, also a strategy applied by Red bull greatly contributes to the brand equity. It sponsored individual athletees and also established credibility among the opinion leaders who participated in such activites as surfing, skateboarding, rock climbing , mouting biking and many other endeavours. Later, in the year 2006, the plan to move to America’s motor sports and start a new-two car NASCAR team in the year 2007 season, in which one of the cars would bear number 83 represesnting the 8.

3ounces in each Red bull can only be seen as a major boost to the company’s brand equity . As stated earlier, one of the key componens of a brand extension and growth is extension of the customer base. This strategy by Red bull achieve’s this precisely well. However, among the weaknesses in the marketing strategies were segreration of the market in the United Kingdom from that in Australia and treating the two as separate entities. In the United Kindgom, the company marked the drink as a sporting drink and not a stimulation drink as it had been treated in Australia.

In addition, it did not persue the word of mouth strategy, but rather chose to sell via the largest beverage company in the United Kingdom. The result was more than $10 milion in losses . These factors coupled with the adoption of the slogan, “Never underestimate what the Red Bull can do for you”, were a complete flop. They did not contribute to the growth of the brand equity. This was particularly the case because the United Kingdom already had its sports drink , lucozade, and which had been in the market for long.

3. 0 Maintaining the Marketing Momentum Red bull can maitain the marketing momentum first through maintaining its olden ways of advertising such the power of the word of mouth and ensuring that their products continue to get the buzz they once got in Australia and her neighboring countries in period between 1987 and 1992 when the product was only available in Australia . In addition, the company should hold the stand that the product is nothing less of an energy drink.

Whereas other beverage companies may give out samples and trials at a random in an effort to reach a maximum number of consumers, Red bull should reach out for customers only on ideal situations, namely when the consumer needs to boost their energy. For this reason, Red bull free samples should only be given out in sporting and other related activities. Red bull should also define its market niche. According to the recordings of Susan Martin, one of the easiest ways to capture customers is to figure out which group of people forms a prospective market, and then going for that group exclusvely .

Energy giving drinks would be more popular in sporting activities, concerts and other related activities. Such are often associated with young people. Martin notes that many profesionals are often afraid of selecting a certain market segment due to the fear of locking out some potential customers, but she hastily adds that marketing experts agree that niche marketing is the easiest and the most effective way of getting customers. Red bull may not need to develop a brand extension, atleast for the moment, but rather should first concentrate on perfecting on the economic niche that they already have.

With coverage in the United Kingdom, Australia, Hungary and other countries, perfecting on the customers available would put it in a better position rather than developing new brand extensions. As an example, they could adopt the use of Customer Relationship Management(CRM), a software that could help the organization in managing their relationship with customers in a proper way . Prior to the current advancement in technological advancement, the separation of the producers such as Red bull from the consumers of their goods or services was as a result of the natural outcome of the industrial era.

Recent disciplines have however revealed the need for cooperation between the various stake holders in a business. According to the writings of Gaurav, a discipline known as “Relationship Marketing” focuses on the relationship between the various stakeholders, summarizing the various variables linking them as Trust, Cooperation, interdependence and power, shared technology, social bonds and commitment . With corporate objectives, mission statements and vision statements, the role of ensuring customer satisfaction is no longer the responsibility of the marketing department alone but rather, is addressed at all levels and by all departments.

Gaurav reckons that in industrial marketing, relationship is built over time with increasing experience, reduction in uncertainty and greater commitment. He believes in quality and service in marketing with focus on customer satisfaction and value . The better the value delivered by the organization, the better the relationship and the two are inseparable. Whatever school of thought, customer acquisition and retention are the bases of Relationship Marketing, and this is probably what Red bull needs most.

CRM in Red bulls would help integrate the functions of sales, customer services as well as goods and service supply chains that enhance greater efficiency in the delivery of customer service. It can then be seen as the marriage between the advancing technology and customer orientation that nurtures the bond between an organization and its customers, bringing the dream of enjoying such a long term relationship with a customer, especially the profitable ones to a reality . CRM to Red bull would therefore not be an end but a means to the end of achieving success in the field of marketing. 4. 0 Recommendations

From the foregoing, Red bull may have performed well in the past, especially due to their creative marketing strategies such as using the word of mouth. However, to position itself properly for the future especially in the current competitive markets, it needs to improve on certain areas such as narrowing down to a particular market segment as suggested earlier. Further, it first needs to concentrate on the relationship with its customers, and possibly customize it. This can be enhanced through the use of a CRM software as disscussed, as technology appears to be the driving force of any business in future.

Bibliography Center-for-Management-and-Business-Administration. "Brand Equity. " 2010. 9 July 2010 <http://www. netmba. com/marketing/brand/equity/>. Elliott, Richard and Larry Percy. Strategic brand management. London: Oxford University Press, 2007. Gaurav, Kunal. "Relationship Marketing: A Literature Review. " 2007. 7 July 2010 <http://www. indianmba. com/Faculty_Column/FC569/fc569. html>. Iacobucci, Dawn and Bobby J Calder. Kellogg on integrated marketing. New Jersey: John Wiley and Sons, 2003. Martin, Susan. "Advertising, Sales and Marketing. " 1999. 9 July 2010 <http://www. businessknowhow. com/marketing/top7mark.

htm>. Petty, William, et al. Small Business Management: Launching and Growing Entrepreneurial Ventures. New Zealand: Cengage Learning, 2009. "RED BULL: BUILDING BRAND EQUITY IN NON-TRADITIONAL WAYS. " n. d. 9 July 2010 <http://www. scribd. com/doc/15882080/04-SGRed-Bull-Vf>. Tansey, Stephen D. Business, Information Technology and Society. New York: Routledge, 2002. Vriens, Marco and Rajiv Grover. The handbook of marketing research: uses, misuses, and future advances. London: SAGE, 2006. White, Nancy. "Word of Mouth Marketing - WOMM! " 2005. 9 July 2010 <http://www. fullcirc. com/writing/wordofmouthmktg. htm>.

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