Introduction

In today’s society, consumers are bombarded with promotionalmessages from organisations. Consumers receive these messageswhen they listen to the radio, watch television, read a newspaper,commute to work or simply walk around a city centre. Effectivepromotion relies on the message reaching the consumer in anaccurate and timely way. However, there are so many messages itcan be difficult for a business to reach its target audience.

Promotional messages can easily become simply noise. Theycrowd the marketplace and make everything more confusing forconsumers. This creates a marketing problem. To address thisproblem, some marketers look for new ways to communicate withconsumers. They seek to break the traditional rules of marketingby reaching consumers in innovative ways. Dietrich Mateschitzfounded Red Bull in 1984 after discovering the widespreadpopularity of tonic drinks in the Far East. He developed the Red BullEnergy Drink, launching the product on the Austrian market in 1987.

Since then, Red Bull has launched a range of products, includingRed Bull Cola in 2008 and Red Bull Energy Shots in 2009. TodayRed Bull has annual sales of around 4 billion cans in 160 countries.It employs more than 7,700 people. Red Bull has a distinctiveapproach to marketing. It uses a progressive marketing strategy.This type of strategy aims to constantly evolve and develop thebrand. This approach allows Red Bull to engage with consumersusing new and exciting channels of communication.

In recent years social media has become a vital marketing tool formany organisations. Its increasing popularity, predominantly withyoung audiences, has had a huge impact on modern marketingtechniques. Digital and social media campaigns are integral to RedBull’s marketing strategy. This case study illustrates how Red Bull,the manufacturer of the world’s best-selling energy drink, uses arange of innovative promotional techniques to improve the processof communication and drive consumer engagement and loyalty.

The role of the marketing function

To meet the needs of its customers, every organisation seeks adistinctive marketing mix. This is often referred to as the 4Ps. Itinvolves focusing on:• product – the specific features and benefits of the product • place – where and how the product is sold• price – setting the right price in each market• promotion – using the most suitable form of promotion to reach

customers.

Curriculum Topics

• The marketing function

• Promotional approaches

• Word of mouth (WOM)

• Evaluating promotional

activities

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Noise: Barrier or filter to communicationbetween the sender and receiver of amessage.

Innovative: Tending to devise and/oradopt novel or breakthrough ideas.

Marketing mix: The combination ofproduct, price, promotion anddistribution (place) used to generateprofitable sales – often called the 4Ps.

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Engaging consumers through word of mouth marketing

Sender EncodingMessage ReceiverMessage

ChannelDecodingMessage

Noise

Message Channel

The Communication Process

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For example, the marketing mix for Red Bull Energy Drink is basedaround:• a distinctive product - the taste of the product is unlike any

other, it also has a functional effect in comparison to other softdrinks

• it is easy to obtain as it is sold in a variety of places - includingretail outlets and food and drink establishments

• Red Bull uses a premium pricing strategy. The product ispriced above that of competitors’ products. Consumers willpay a premium for Red Bull due to the quality of the productand the product’s benefits. This is reflected in the fact that it isthe world’s best-selling energy drink.

However, perhaps the most interesting element of Red Bull’smarketing mix is its approach to promotion. Red Bull embracesinnovation within its promotional activities and as such is able tocreate a lasting impression on consumers. The concept behind itspromotional activity is to give people ‘Wiiings’. This translates aspushing the boundaries of what is possible and nurturing people'stalent so they can achieve their goals and dreams. The aim of thepromotion element of the marketing mix is to grow the businessand increase market share.

Businesses develop a promotional strategy in order to encouragecustomers to purchase their products. Many base their approachon AIDA principles. AIDA is an acronym that is shorthand for thestages in a sales process.

Promotional approaches

There are several traditional approaches to promotion. Perhaps thebest known is advertising. This is a key element of what is known asabove-the-line promotion. This type of promotion usually deliversmessages to a wide audience using the press, television, radio andthe internet. Although this makes it easy to reach a large audience, itis more difficult to deliver a memorable message that is tailored to aspecific target market. It can be costly: for example, television advertsat prime time are very expensive. In addition, businesses cannotcompletely control who sees or hears their adverts or how theyrespond. Red Bull’s above-the-line promotion primarily helps toincrease top of mind brand awareness amongst consumers.

Below-the-line promotions encompass all other forms ofpromotional activity. To reach targeted groups of consumers,Red Bull focuses heavily on developing inventive below-the-linepromotions. Unlike many businesses, Red Bull does not usetraditional sponsorship as a method of below-the-line promotion.Red Bull takes a different approach. It creates and organises itsown events around the world. These events provide a platform fortalented athletes to showcase their skills and ambition. Sportingevents include Red Bull X-Fighters and Red Bull Air Race, wherethe world’s top FMX riders and pilots respectively perform worldclass flips, turns and tricks in front of tens of thousands ofspectators. These events help to establish the brand values.They also begin the AIDA process with the participants andaudiences for these events, creating awareness and interest inRed Bull products.

A key aspect of Red Bull’s promotion is about creating genuinerelationships with individual athletes, such as Robbie Maddison,who was able to achieve his lifelong ambition when he performedthe first ever motorcycle back-flip over a raised Tower Bridge inLondon. Through supporting these athletes in pushing themselvesbeyond their limits, Red Bull is able to engage with consumers.Red Bull events provide experiences that excite, surprise andchallenge participants and spectators.

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Above-the-line: Promotion throughadvertising on television, radio and theinternet and in the press.

Top of Mind: What is present in theuppermost level of consciousness; themanufacturer or brand that people inmarket surveys name first when askedto list products in a specific category.

Below-the-line: Indirect salespromotions using techniques other thanadvertising, such as price promotionsand point-of-sales displays.

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A awareness – capture the customer’s attention

I then stimulate interest

D this creates a desire for the product

A action occurs when the customer purchases the product

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For example, events in summer 2011 included Red Bull cliff-diving inthe south of Italy and the Red Bull Flugtag event in Leeds. Red BullFlugtag challenges brave and creative individuals to design, buildand pilot their own home-made flying machines off a 30ft-high flightdeck. Almost 100 Red Bull Flugtag events have been held aroundthe globe. Teams are judged on the distance flown, as well as thecreativity and originality of their flight machine idea. They also winpoints for their performance during their pre-flight speech to thethousands of spectators.

Events like these support the brand ethos and contribute to theRed Bull experience. They are based on a belief that massawareness can be achieved without requiring big budgets. Infact, the large-scale activities, such as the Formula 1 team that isowned by Red Bull, are not the cornerstone of its promotionalstrategy. These activities are focused on building talent andpushing the sport to new levels through innovation. However, theemphasis is on local activities that can have a big impact andcreate interesting media coverage. These have the advantage thatthe company can quickly and inexpensively change anything thatis not working. It can repeat or develop ideas that work and seemto have good public appeal. The programme is managed throughan annual activity plan, which is based on a three-year overviewof promotional work.

Word of mouth (WOM)

Word of mouth (WOM) promotion is based on the principle ofpull marketing. It relies on the transmission of a positivemarketing message from person to person through conversationor a personal communication such as email or text message. Pullmarketing gets consumers to bring other consumers to theproduct. In contrast, push marketing uses above-the-linepromotional techniques to put products in front of consumers inorder to generate sales.

Red Bull extensively uses pull marketing. This approach involvesgetting consumers excited about the product and conveying thisexcitement to their family and friends. It is also about trying to getcoverage of Red Bull events in the press. This coverage canencourage consumers to find out more about the product.

It helps to generate momentum, through creating interestingstories for people to talk about, which in turn help to createbrand awareness and grow sales.

The founder of Red Bull used pull marketing to promote hisoriginal product in the 1980s. He hired a Red Bull Wings Team togo out and talk to people one-to-one about the product. Thishelps to create consumer interest in the product. As peopleexperience the drink and appreciate its qualities, they becomeadvocates for the brand. They share their opinions with otherconsumers when they talk with friends. The promotion thereforecreates a ripple effect.

Red Bull continues to use this process to reach consumers ininnovative ways. Initiatives include: • Red Bull Wings Team – The team of students go out on the

road in their Red Bull mini to help launch the product in newmarkets. The branded mini has a Red Bull can on the back ofit. The team offer a cold can of Red Bull to people in need ofenergy to demonstrate the product’s qualities. Throughengaging consumers in a fun, non-threatening way they createa personal and positive product experience. For example, theWings Team attended the 2010 London to Brighton mini run.The team were there for the early start to offer competitors acold can of Red Bull.

• Student Brand Manager Programme – Individual students helpactivate a variety of events on campus. They organise activitiesaround the UK to get people talking about the product and getstudents actively involved on their own university campus.

• Red Bull Bedroom Jam – This is a competition to help teenagemusicians get out of their bedrooms and onto the big stage,giving them an experience they may never have been able tohave. Red Bull records bands playing live from their bedroomsfor the world to see via the internet.

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RYBrand ethos: The character and values

of a brand.Mass awareness: Consumers whounderstand the underpinning valuesassociated with the brand.

Word of mouth: Communication of apromotional message between groupsof consumers.Pull marketing: Marketing strategy thatfocuses on consumers, encouragingthem to come to the product.

Push marketing: Using above-the-linepromotions such as advertising to putproducts before consumers in order togenerate sales.

Brand awareness: Degree of customerrecognition for a brand.Advocates: People who argue in favourof another cause, person or point ofview.

Push marketingadvertising

(above-the-line)activities

consumer

Pull marketingWOM promotions(below-the-line)

activities consumer

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The bands that create the most attention online then competefor long-term career support and the opportunity to play at UKfestivals and be tour support for established musical acts. Thishelps create interesting media coverage that gets people talkingabout the brand.

• Red Bull Reporter – This project provides opportunities foraspiring writers, film-makers and presenters to report on world-class Red Bull events, giving them the chance to have theirwork published in a variety of credible publications.

These creative and original projects help Red Bull to capture theattention of its increasingly knowledgeable audience. They aim tobuild brand loyalty by creating relationships with consumers.

Digital and social media are core elements for all of Red Bull’scampaigns. These tools provide direct and relevant lines ofcommunication with Red Bull’s core youth audience. Facebook,Twitter and online blogs make it easy for people to exchangeinformation quickly between themselves. These channels ofcommunication make word-of-mouth and other pull marketingstrategies more effective. To remain competitive and interact withconsumers Red Bull is constantly creating new ways of reachingits audiences online. Red Bull also uses a variety of smart phoneapplications to promote its campaigns. These methods createconnections with consumers which minimise the risk of ‘noise’affecting the promotional message. Unlike advertising campaignswhich have to be planned months in advance, the greatadvantage of some of the techniques that Red Bull uses is thatthey are easy to adapt and refine. Red Bull constantly creates newmethods and techniques to engage with consumers. This is vitalin such a competitive market.

Evaluating promotional activities

For promotions to remain effective, Red Bull has to analyse theimpact of different campaigns. Word-of-mouth promotions can bemore difficult to measure than some traditional methods of promotion.Although healthy sales are an important measure, Red Bull uses othermeasures to evaluate the effectiveness of its activities. For example:

• Setting targets for sales returns from the smaller promotionalactivities.

• Evaluating the amount of editorial coverage its activities receivein the media.

• Measuring the number of blogs related to Red Bull’s productsand the frequency of comment on these blogs.

• Evaluating the online influence of Red Bull activities in thesocial media. For example, on Twitter there are around260,000 followers of Red Bull activities. On Facebook, morethan 21,000,000 consumers ‘like’ Red Bull.

• Conducting an annual brand health-check with consumers toensure that they like the brand.

Measuring the outcomes of Red Bull promotions is not just aboutreturn on investment. These figures do not create the wholepicture. This is because it can be difficult to value word-of-mouthpromotions on paper. Sales returns do not take into account otherfactors such as longer-term brand loyalty.

As a specific example, the Red Bull Wings Team has proved to bea very important part of the marketing strategy. When Red Bullhas launched products in countries without this programme aspart of its promotional mix, they have not been received as wellby consumers.

Conclusion

Red Bull adopts a progressive marketing strategy which isconstantly evolving to push the brand forward. Social and digitalmedia is at the heart of all of its promotional campaigns. This typeof strategy allows Red Bull to adapt its promotional activity toreflect technological and social changes, for example, theincreasing use of smart phone applications as a channel ofcommunication to its audience. Consumers’ expectations arehigher than ever, as such Red Bull strives to use innovativemarketing techniques to reach its audience.

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Return on investment: Profit over aperiod (usually one year) relative to thelong-term capital employed. Calculatedas: operating profit/long term capitalemployed x 100.

Promotional mix: The selection ofmethods used by a business topromote sales of its products, such asspecial offers, tactical price reductions,special displays etc.

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QU

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1. Describe what is meant by the promotion element ofthe marketing mix.

2. Explain how the process of noise can reduce the valueof promotions within a busy and crowdedmarketplace.

3. Analyse why pull marketing is better for targetinggroups of consumers than push marketing.

4. Evaluate how different promotions can be used tomeet current and changing expectations of consumersin today’s fast-changing society.

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