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  • Subject area(s): Marketing
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  • Published on: 14th September 2019
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Red Bull Gmbh: MNC with Wings

With its headquarters in Fuschl am See, Austria, Red Bull Gmbh is a multinational company which is best known for its popular energy drink “Red Bull”. Red Bull is such a wildly successful product on the international front and has been so effective in its global marketing campaigns that most Americans would likely mistake it as a domestic brand. All of this success has been achieved at the adversity of an incredibly competitive beverage industry- an industry with products which can take a great effort to differentiate on an international scale while still being appealing to each country. Red Bull has overcome this situation by balancing global marketing campaigns with domestic adaptations of advertising and products, all while navigating several international legal issues along the way.

The Company

In 1982, Austrian businessman Dietrich Mateschitz was visiting Hong Kong and discovered a popular local beverage which seemed to give him energy and alleviate his jet lag. Having never come across anything quite like it, he prophesized that the product could be a hit in Europe and any westernized society and sought out the creator of this “Krating Daeng” or “red gaur” in English. This search led him to Thai investor Chaleo Yoovidhya who owned the brand, and together they established Red Bull GmbH as a multinational company and international brand. Although the drink as it existed in Thailand (as “Krating Daeng”) was mostly consumed by blue-collar workers for energy and focus on the job, Mateschitz shifted its image into a more up-scale, fashionable product when introducing it to Europe- at first through Austria. The differentiator lied in its pricing, with Red Bull costing relatively more than Krating Daeng. The beverage saw much success and popularity in the more westernized Austrian market, and by 1992 Red Bull had gone international by entering the markets of Hungary and Slovenia, followed by the United States in 1997 and the Middle East in 2000.

Today, the brand is active and thriving in over 100 countries, and actually controls around 50% of the world's market share for energy drinks based on 2016 data from Euromonitor International. The name of the corporation has two distinct parts- “Red Bull” refers to the English translation of the company's derivative beverage “Krating Daeng” and “GmbH” stands for “Gesellschaft mit beschränkter Haftung”, which is an Austrian legal entity similar in structure to LLC's in the United States. In addition to their namesake energy drink (which in itself comes in a several flavor, sugar content, and caffeine content varieties), Red Bull GmbH also distributes and markets soda Simply Cola and herbal supplement beverage Carpe Diem- though neither of these brands have expanded beyond Europe.

Innovative Global Marketing

In a highly saturated international beverage market, the thing that makes Red Bull stand out has been their incredibly diverse marketing venture portfolio. Though they do have occasional print adverts and TV commercials, this conventional form of advertising makes up a very small percentage of their total output. The target demographic for their international campaign consists primarily of males aged 16 to 25 who are interested in sports, extreme activities, music and videogames. Red Bull strikes these targets by either sponsoring popular figures or holding special events which pertain to each of these genres.

Within the world of extreme sports, they have held several extraordinary events which have garnered international intention, including The “Red Bull” Cliff-diving World Series, Drifting World Championship, Cape Fear Surfing Competition, Argentine and Spanish Motorcycle Grand Prix, and even a “Storm Chase” in which windsurfers competed in specifically dangerous weather conditions. Red Bull has also sponsored several international racecar, biking, and motorsport teams and endorsed big name, commercial U. S. athletes such as Reggie Bush of the NFL, Dion Phaneuf of the NHL, and Rickie Fowler of the PGA. The company currently owns major football (soccer) teams in Brazil, Germany, Austria, and the U. S.- all of which feature the Red Bull logo on all of their equipment and contain their trademark in their titles.

In an attempt to appeal to their more sedentary market, specifically in the United States, Japan, and Korea, Red Bull has penetrated the world of video games in a similar fashion. Within the social network of Sony's Playstation Network for their Playstation 3 and Playstation 4 gaming platforms, Red Bull has created a virtual world as an advertising campaign for the drink and to promote their various racing and sports events. They have also sponsored eSport atheletes such as Super Smash Brothers player William Hjelte of Sweden and Street Fighter player Daigo Umehara of Japan. Perhaps most prominently is their sponsored team in the massive online multiplayer competition League of Legends- the Red Bulls. The Red Bulls are an internationally ranked team who compete each year in the European League of Legends Series, the largest eSport event in all of the EU, and are the only team with such outside corporate sponsorship.

Red Bull GmbH has gone to the point of creating a separate international subsidiary just for marketing purposes- Red Bull Media House. Activities of this media company include the publishing of several international magazines (such as The Red Bulletin, Seitenblicke, and Bergwelten), the European television network Red Bull TV, and one of the world's leading action sport photography enterprises, Red Bull Photography. Red Bull Media House actually launched its own record label in 2007, Red Bull Records, and established a headquarters in Los Angeles with auxiliary offices in London and New York. Red Bull Records currently sports a roster of 7 different artists/bands across several different genres to maximize the cultural reach for the brand.

So all of this money and effort begs the question: how do these forays into the world of sports and entertainment circle their way back to an energy drink? Herein lies the innovation of the Red Bull marketing structure. Due to the similar nature of the products found in the energy drink industry, with most beverages tasting similar and producing similar effects, the main component of a brand that will lead to its success is loyalty within its consumer base. By entrenching themselves in the worlds of their consumers, Red Bull has developed an uncanny brand loyalty among young men around the globe-lending them a distinct competitive advantage.

This dedication to establishing brand loyalty can be seen best in their more regional campaign and distribution methods. At large American and European universities, Red Bull has begun the practice of recruiting young, hip, and adventurous students as brand ambassadors for their campuses. These brand ambassadors can be seen around campus driving Red Bull branded cars full of free sample cans which they distribute to various student organizations such as Fraternity houses, student unions, and activity centers. This practice not only promotes the product's brand awareness within these young populations by making Red Bull ubiquitous and tantamount to a sense of style and belonging, but it also allows new users to develop a taste for the specific product.

From their popular slogan “Red Bull gives you wings” to their plastering of names and logos across several extreme sports and up-and-coming entertainment, Red Bull GmbH has successfully established their namesake product as a beverage for the young and adventurous worldwide. Having cemented themselves in this realm of general association, Red Bull's next level of multinational entry strategy involves developments it has undergone to appeal to regional tastes in specific cultures.

Adaptations to Different Markets

Because their more ambitious, more expensive marketing ventures have been conducted with an international strategy, with much consideration for global integration, Red Bull is received with about the same perspective and appeal in any given country. As a result of this, very little adaptation is actually necessary at this point in the product's life cycle. As Harvard Business School Professor Nancy Koehn explains in her 2001 text Brand New : How Entrepreneurs Earned Consumers' Trust from Wedgwood to Dell, “Red Bull really looks like a product from a 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. That matters.” It can thus be construed that Red Bull GmbH themselves have recognized this phenom, and have thus not prioritized differentiating their product since its consistently appears to be beneficial.

However, a more multidomestic approach has in fact been necessary in certain oriental markets such as China and the drink's region of origin in southeast Asia. Rather than focusing on an extreme or youthful brand image, Red Bull GmbH has seen more success in their Chinese market by emphasizing the function of their products to garner appeal. This strategy is reflected in the different slogan used in China; rather than “Red Bull gives you wings”, advertisments read (translated) “drink Red Bull when you feel sleepy and tired.” Chinese consumers value the energy drink almost exclusively for its ability to grant users alertness and energy and thus perform work more effectively. Additionally, the packaging sees a redesign n China as well, with a golden can with black lettering as opposed to the familiar blue and white can with red lettering seen in other countries. These differences have been implemented to better appeal to local tastes in this region, which can differ significantly from more westernized cultures.

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