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Brand equity

BRAND EQUITY FOR RED BULL AND BRAND EXTION
Course

Marketing Management (MKTG 4853)

21 Documents
Students shared 21 documents in this course
Academic year: 2022/2023
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University of Arkansas

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  1. Describe Red Bull’s Sources of Brand Equity. Do they change depending on market or country? According to Keller (2008, p 53), brand equity is the strong, favorable and unique brand associations in the memory of customers. He goes on to define (p 54) two sources of brand equity: 1.) Brand Awareness; and 2.) Brand Image. Red Bull has well defined tactics for both sources. 1 The Brand Awareness Source for Red Bull Brand Equity Keller (p 54) notes two elements to Brand Awareness: 1.) Recognition; and 2.) Recall. He postulates that if buy decisions are made at the point of purchase, then brand name, logo, packaging and the other elements of brand recognition are important factors. If the buy decision is made before arriving at the point of purchase, then brand recall is centrally important. Duncan (2005, p 140) concludes that low- involvement purchase is usually done for products that are relatively cheap, bought frequently, and are low risk. In such cases, in addition to traditional advertising, with its reach and frequency drills, it would be productive to spend time getting the name, logo and packaging correct. Red Bull did just this. In our reading, Pearson Case Study 4 (2006, p 70) describes how Red Bull selected a distinctive, slim can. They also created a prominent and eye-catching logo of two bulls and a yellow sun. Package wording effectively communicates the products benefits: Energy Drink. The packaging is an important part of the branding, as we might expect for a low-involvement product. Pearson Case Study 4 goes on (p 70) to note that changing the carefully selected package elements, in Germany substituting a glass bottle for the slim can, resulted in a dramatic drop off in sales. To increase brand recall, Keller (p 55) advises that a slogan or a jingle can establish the memory linkages that improve recall. Pearson Case Study 4 (p 69) relates that Red Bull developed an effective slogan, “Red Bull gives you wiiings.” They use

little advertising but when they do it consistes of unusual animated shorts that end with the slogan, “Red Bull gives you wiiings.” 1 The Brand Image Source for Red Bull Brand Equity Keller (p 56) gives the necessary strategy for building a brand image: “link strong, favorable and unique associations to the brand in memory.” There are two factors to strengthen brand association: 1.) Personal relevance; and 2.) Consistence in its presentation over time. Keller (p 57) goes on to say that direct experiences create the strongest brand benefit associations. This fits into Red Bulls strategy according to Pearson Case Study 4 (p 73). Their entry strategy is to seed happening places such as shops, clubs, bars and stores. They thus focus initially on opinion leaders who obtain positive direct experience with the brand. Once word of mouth has created a buzz about the product, they then widen distribution to areas surrounding the “in” spots. Keller (p 57) postulates that word of mouth advertising is particularly effective at building positive brand image in the product categories of restaurants and entertainment. It is not a stretch to see that this happened with Red Bull as well. Keller (p 58) discusses how desirability and deliverability are critical factors in creating a favorable brand image. For Red Bull, Pearson Case Study 4 (P 70) gives the energy boosting and detoxifying benefits for the product. Red Bull improves endurance, increases mental alertness, improves reaction time, and eliminates waste substances. These are favorable for athletes, business people, and clubbers. In addition to favorability, Keller (p 58) says another factor to stimulate desirability is believability. Direct experience and word of mouth from opinion leaders is very believable. Deliverability does the product deliver what it promised? Pearson Case Study 4 (p 69) gives the pharmacology of Red Bull. It consists of caffeine as a stimulant, and two amino

category and therefore was unable to compete with the already entrenched Laco energy drink (see Pearson Case Study 4, 2006, pp 77). What I believe happened with the initial foray into England is that Laco recall blocked out Red Bull recall through the part-list culling effect. Research confirms part-list culling (see Keller, 2008, p 54), in which the recall of some information blocks out recall of other, such as recall of Laco blocks out recall of Red Bull as an energy drink. When Red Bull regrouped and assaulted the market with its proven approach it was successful. On the other hand, there it is also evidence that Red Bull is niche constrained. The Pearson Case Study 4 (pp 71), describes its weakness in expanding into different age segments. It goes on to note (p 74) that Red Bull’s primary age demographic is 14-29 year olds, despite the efforts of Red Bull to reach all demographics equally. The study (p 81) concludes that the vast majority of their business is with the youth market. Their current strategy is to passively let their current market gracefully age into the older demographic segments. They have also experienced use pattern limitations, being considered a mixer more often than desired. Red Bull also wants to be known as a nutritional product. Their advertising, while effective for building buzz, has not reached older age- demographics and does not show other usage of the drink. In summary, there does not seem to be any advantage to a geographic based modification of approach. However, there does seem to be a need to alter approach to reach the older demographic and to expand usage patterns. This is consistent with Keller’s postulate (p 59) that brand association may or may not be situation or context dependent. 2. Discuss Red Bull’s Marketing Program and how it contributes to brand equity. 2 Red Bull’s Marketing Program and their contribution to

brand equity. According to Keller (p 38), Strategic Brand Management has four steps and the marketing program is the second step and a critical aspect in building a brand. The four steps are: 1.) Positioning; 2.) Marketing Programs; 3.) Measurement; and 4.) Sustaining. He goes on to say (p 39) that Brand Marketing Programs depend on three factors: 1.) The initial definition of brand elements and how they interact; 2.) The way brand is integrated into the marketing activities; and 3.) Indirect associations resulting from linking to other entities such as sports stars. Keller (p 40) states that the brand elements, the first factor in a successful marketing program, include brand name, logos, symbols, packaging and slogans. Pearson Case Study 4 (2006, p 70) describes how Red Bull used the name of a product already successful in Southeast Asia. Note that the name has connotations of both energy (red) and power (bull). They also created a prominent and eye-catching logo of two red bulls in competition under a yellow sun. The logo is central to the art on a distinctive, slim can selected after an exhaustive search. In addition to the logo, the wording energy drink and product claims about both energy and healthful detoxification are on the can. The slogan “Red Bull Gives You Wiiings” further amplifies the desired brand effect of the other elements. Altogether, they speak clearly that this is a new and different product, in a new and different food category, and a product able to make claims that others cannot. Again, the brand elements are an important part of the branding and marketing for a low-involvement product, especially when focused like a laser into the consumer’s memory by distinctive packaging. The appealing packaging also fulfills the second factor in a marketing program, integrating brand into marketing activities. Pearson Case Study 4 (2006, p 73) details the firm’s entry strategy. The genesis of a campaign is a seeding

marketing programs (see Keller, 2008, p 40). The Brand Elements are conspicuously placed on point-of-sale refrigerator units (p76). 2 Strengths and Weaknesses of Red Bull’s marketing Programs As you might expect with so successful a brand, the marketing programs have many strengths. By partnering with a pharmaceutical company, the brand gained credibility from the start. By pioneering a new food category, the brand gained prominence for itself in that new product category. They know their brand benefits. Their marketing programs do not (p71) specify any “consumption occasions” resulting in elastic positioning ability. They use direct product experience and word of mouth, two approaches to build strong associations for this type of product (see Keller, 2008, p 57). Furthermore, Red Bull sponsors events that will appeal to individuals who have a natural inclination to use the product. The uniqueness of the events results in synergistic public relations. The company’s focus on product features and benefits in its TV advertising makes their ads easily adaptable across the globe. Finally, their product sampling approach is efficiently directed to situations of consumer need rather than the more traditional carpet-bombing with low response rates. No marketing endeavor is perfect, however. Several weaknesses are apparent in the Red Bull marketing programs. The marketing programs have not been effective at establishing all expected product use and management is concerned over the over-emphasis on Red Bull as a mixer in its current audience (p 71). Additionally, the company is not reaching beyond the youth segment although that has been its clear intent all along. A broader advertising campaign, now that the brand is established, would address these issues. The current ad campaign, and I viewed it last week on cable TV, is now part of the weakness just described. It does not elaborate

the product usage and does not reach to the older, missing demographic. 3. How can Red Bull Maintain its Marketing Momentum? What about Brand Extensions? Would you use same marketing strategy with them? Momentum Red Bull has increasing competition from the major beverage companies such as Pepsi, Coca Cola, as well as a host of startups. To deal with competitive threats, Keller (p 56) advises that a shift in emphasis needs to occur in Red Bull marketing with an increased focus on category. Red Bull has already established strong brand recognition. Furthermore, strengthening category links should not be difficult given its historic role in defining the function food category. This fact should be showcased. Keller (p 59) goes on to say that the strength of the brand association to the product category is critical for long term awareness. The company has been able to expand sales geographically up to now, but it will next need to expand demographically to maintain momentum. The market effectively reached today by Red Bull is based around its energy boosting benefits, and this reaches a large market segment focused on clubbers, business and athletes. However, there is a large population they are not reaching as a nutritional product, although according to Norbert Krailhamer (see Pearson Case Study 4, 2006, p 71) the drink should be regarded as “a nutritional item.” It is not clear if their current appeal has the legs to carry them into the population of all potential consumers in the functional food category. Advertising would be the quickest method to introduce new usage patterns for Red Bull in the minds of consumers. According to Keller (p 58), however, advertising is likely to create the weakest associations. He recommends a mutually reinforcing mix of direct experience and word of mouth (p 57),

triathlons and other more traditional sporting activities such as football games. This change in tactics would introduce the extension product to the new category audience. Likewise, certain brand elements might need changing such as package wording and the slogan for the new extension. “Electrolyte and Vitamin Replacement” wording might be better than the existing “Energy Drink.” The approach of establishing direct experience, cultivating word of mouth and then branching out is highly successful and appropriate for the extension.

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Brand equity

Course: Marketing Management (MKTG 4853)

21 Documents
Students shared 21 documents in this course

University: University of Arkansas

Was this document helpful?
1. Describe Red Bull’s Sources of Brand Equity. Do they
change depending on market or country?
According to Keller (2008, p 53), brand equity is the strong,
favorable and unique brand associations in the memory of
customers. He goes on to define (p 54) two sources of brand
equity: 1.) Brand Awareness; and 2.) Brand Image. Red Bull
has well defined tactics for both sources.
1.1 The Brand Awareness Source for Red Bull Brand Equity
Keller (p 54) notes two elements to Brand Awareness: 1.)
Recognition; and 2.) Recall. He postulates that if buy decisions
are made at the point of purchase, then brand name, logo,
packaging and the other elements of brand recognition are
important factors. If the buy decision is made before arriving
at the point of purchase, then brand recall is centrally
important. Duncan (2005, p 140) concludes that low-
involvement purchase is usually done for products that are
relatively cheap, bought frequently, and are low risk. In such
cases, in addition to traditional advertising, with its reach and
frequency drills, it would be productive to spend time getting
the name, logo and packaging correct.
Red Bull did just this. In our reading, Pearson Case Study 4
(2006, p 70) describes how Red Bull selected a distinctive,
slim can. They also created a prominent and eye-catching logo
of two bulls and a yellow sun. Package wording effectively
communicates the products benefits: Energy Drink. The
packaging is an important part of the branding, as we might
expect for a low-involvement product. Pearson Case Study 4
goes on (p 70) to note that changing the carefully selected
package elements, in Germany substituting a glass bottle for
the slim can, resulted in a dramatic drop off in sales.
To increase brand recall, Keller (p 55) advises that a slogan or
a jingle can establish the memory linkages that improve recall.
Pearson Case Study 4 (p 69) relates that Red Bull developed
an effective slogan, “Red Bull gives you wiiings.” They use

Students also viewed

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