Companies and Brands
Red Bull Challenges Pepsi and Bud in Marketing Push
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Red Bull, the ubiquitous energy drink, has such a broad array of marketing campaigns that it has started to challenge PepsiCo Inc.’s (NYSE: PEP) flagship and Anheuser-Busch InBev S.A./N.V.’s (NYSE: BUD) Budweiser in terms of brand visibility.
In the most recent BrandZ Top 100 Most Valuable Brands, Red Bull’s brand value is $11 billion. Pepsi’s is $11.5 billion. Budweiser’s is $24.4 billion, but its brand is decades older than Red Bull’s, which was launched in 1987.
While it is hard to say what brands Red Bull pulls customers from, it is likely to be soft drinks, sports drinks and coffee. Red Bull claims it was the top-selling energy drink in the world in 2013. Its flagship product contains caffeine, taurine, B-group vitamins, sucrose, glucose and alpine spring water. The mix is meant to give consumers a shot of “energy and focus.” That is not entirely different from the effects of a Pepsi.
Red Bull’s marketing goes well beyond its ingredients and supposed benefits. It invests tens of millions of dollars to capture consumer interest, primarily via sports marketing. Much of this is aimed at younger consumers, which is Red Bull’s primary target.
Red Bull’s major marketing efforts are in car racing, extreme sports, motorcycle racing and rock music. For years, many of these have been targets for beer and soft drinks. Its race car presence is so visible that Ford is a co-sponsor on one of those cars. Red Bull is a major sponsor of the Dutch Grand Prix. Bud has been a sponsor of the event as well. Many major brands that target younger adults can be found with signage across some of the same events and athletes Red Bull sponsors. As Red Bull presses into extreme sports that are relatively new, other beverages are almost sure to follow it. Red Bull’s presence is too important to ignore.
Red Bull and other drink sponsors eventually may find that marketing of energy drinks is a zero-sum game. If so, market share will be hard to come by. For the time being, it appears that Red Bull is having more than its share of success.
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