Red Bull Marketing Strategy: Strengths, Risks, and Sponsorships

Competitive Advantages and Market Risks

Red Bull holds several distinct advantages as major competitors such as Coca-Cola, Pepsi, and Monster enter the energy drink category. First, Red Bull knows its audience well and has built a solid reputation among the young consumers who helped pioneer the popularity of this beverage. Additionally, Red Bull has cultivated significant social standing with its audience, to the point where there are certain social situations and settings in which consumption of the drink is deemed appropriate — particularly those associated with perceived needs for energy, excitement, and youthful behavior.

Red Bull's marketing approach is also unique and difficult for less experienced entrants in the energy drink market to replicate. The potential risks the company will likely encounter stem from its position atop the market. The aforementioned newcomers will probably attempt to duplicate most aspects of Red Bull's strategies — from conspicuous methods such as patterning products and placements to resemble Red Bull's, to more subtle approaches involving sampling and sponsorship opportunities. Furthermore, Pepsi and Coca-Cola possess vast, loyal audiences that may be willing to follow them into the energy drink space.

At this point, it would be premature for Red Bull to adopt more traditional advertising. The company has made considerable progress and achieved sustained success through its unconventional methods, leaving few incentives to shift toward conventional approaches. Importantly, the company's unorthodox tactics align closely with its target audience. Young adults and teenagers gravitate toward different approaches and ways of engaging with the world around them.

The Case Against Traditional Advertising

Alternative methods of reaching this demographic — such as sponsoring cars in Formula 1 racing (Anderson, 2015, p. 14) — can achieve a degree of resonance that conventional advertising cannot match. An analysis of Red Bull's past and current revenue performance supports this conclusion. The demographic Red Bull targets has clearly responded to its unconventional marketing. Traditional advertising tends to resonate with audiences outside those this organization seeks to reach — it may perform well with older consumers and, for that matter, with younger segments other than Red Bull's core base. The company's strategy of launching its grassroots campaign efforts at bars and nightclubs has been invaluable for capturing market share among its 16-to-29-year-old audience, as advertising in those settings is viewed as fashionable and authentic by that demographic.

On the whole, Red Bull's sponsorships represent a credible use of the company's marketing budget. There are several reasons that reinforce this assertion. Events such as Red Bull Stratos and the company's sponsorship of the 2015 Milton Keynes Snozone (Noble, 2015, p. 50) help distinguish the brand from other non-alcoholic beverage companies. These events are inherently daring and are built around the sense of momentum and adrenaline that sits at the core of both the marketing campaign and the product itself — the experience consumers are meant to associate with Red Bull.

These events also align with other facets of the broader marketing campaign. Red Bull's signature slogan, "Red Bull Gives You Wings," finds natural expression in the kind of daring spectacles the company sponsors. In the case of Red Bull Stratos, a skydiver attempted a record-breaking freefall from the stratosphere — a feat that gave tangible, dramatic credibility to the brand's messaging. Such events are therefore a coherent and appropriate use of the organization's marketing budget.