Red Bull is an Austrian energy drink, famous for being the first of its kind. The brand is used by almost 1/4th of American consumers and is a well-known name in the beverages industry. Founded by Dietrich Mateschitz, Red Bull has a 4-decade history of innovative marketing strategies that has kept the brand alive and constantly growing.
In this article we will by analyze some of the primary strengths, weaknesses, opportunities, and threats of the Red Bull brand in the current market scenario. We will take into consideration a variety of aspects that affect the brand and create a well-rounded opinion of its market status.
Here is the SWOT Analysis of Red Bull energy drink.
Table of Contents
Red Bull Strengths
Following are the key strengths for Red Bull
Brand Value
Red Bull’s brand identity is extremely strong. It can be compared to that of Coca Cola within the American market. If there exists a store anywhere in the world which sells energy drinks, it is most likely to sell Red Bull. From the product packaging design to the unique slogan, every aspect of Red Bull’s advertising is to create a strong presence within the market. This form of global market leadership has allowed the brand to thrive on for ages and also gain quick recognition in emerging markets.
Sports Marketing Strategies
Red Bull has thrived as a major sponsor of sporting events all across the world. It also sponsors individual athletes in various sports. The brand’s presence as a sponsor can be seen in thousands of such events. Such a strong and linear marketing approach makes the brand’s presence unmatchable in its league. This marketing strategy owes its formulation to the founder of Red Bull, Dietrich Mateschitz. The company has since used its financial position to create its unique presence.
Red Bull Weaknesses
Here you will find weaknesses for the energy drink brand Red Bull.
Small Product Range
Red Bull’s product range consists of the primary self-titled energy drink and a few of its variants. This particular business choice has allowed the company’s capability to remain limited throughout its history. If the brand was to foray into other food and beverage markets, they would face imminent success owing to their strong branding. Red Bull does have certain flavor variations available in select regions which have also shown that product diversification can be a major success method for the brand.
Health Concerns
Red Bull being a primarily sugar-based drink has had to face large amounts of criticism in recent times from health groups. The current generation of consumers is increasingly becoming health conscious and thus a high sugar drink such as Red Bull is unable to penetrate their market. Although the brand has a sugar free counterpart available, its popularity and availability is nowhere close to that of the original product.
Price Strategy
Red Bull serves as a premium product. Its high pricing allows it to enjoy high profit margins but at the same time it also misses out on a huge portion of the consumer base. If the brand was to diversify their product range into lower priced products, they would be able to reach out to new layers of the market. But this would also lead to the brand being not considered as a premium one anymore.
Red Bull Opportunities
There are three majors opportunities that can increase Red Bull brand presence and profitability.
New Markets
Consumer income is countries of Asia and Africa is facing a steady growth. These are markets that the premium pricing factor was unable to penetrate before. However, in recent times Red Bull is becoming an increasingly popular energy drink in these markets. The sale of Red Bulls is directly proportional to increment in consumer purchasing capability. At the same time, lowering of the price range for these markets would create a strong opportunity for Red Bull to achieve a leadership position more quickly.
Diversification
As stated in the last section, diversification of its product range is one of the primary methods Red Bull can employ to increase its customer base. Markets such as sports supplements, protein mixes, etc. would be a great opportunity for the brand as it is already a strong presence within the sports and athletics community, and thus a major revenue increment can be achieved from such diversification.
Healthier Products
Red Bull needs to keep up with the times. The popularity of energy drinks is currently fading due to its unhealthy ingredients. This is something Red Bull can review by either changing the components of their original product, or by providing newer products that cater to the health-conscious consumers. The brand can also consider certain rebranding techniques to ensure that they are not being considered as an unhealthy drink.
Red Bull Threats
Below are the Major threats that can affect the energy drink band Red Bull.
Oligopolistic Market
The energy drink industry has very few premium brands and a similar product such as Red Bull may be introduced to the market at any point in time. Certain cheaper energy drinks have already penetrated the market and are serving as a cost friendly alternative to the popular energy drink. Red Bull’s unique brand image is able to protect its market for now, but unless changes are made these cheaper brands are surely to cover more ground through aggressive marketing techniques.
Government Regulations
In multiple countries including the United States, there are embargos being placed on the amount of sugar or caffeine that food and beverages can contain. If any such future regulation disrupts the energy drinks market then Red Bull will be required to completely rebrand themselves, and also redesign their core product. This major threat to Red Bull may lead to loss in sales as the original taste will not be retained by the brand and it may also significantly shoot up production costs. Introducing new products that are health conscious is the best way to avert such a massive market disruption.
Wrap Up SWOT Analysis of Red Bull
While Red Bull is truly a unique product that captures the market with its innovative techniques, the brand also needs to rediscover themselves as per the 21st century consumer needs. The positive factor is that Red Bull already holds a strong market presence that it can build on top of, and the increasing purchasing power of consumers is also helpful to their cause. But the ability to capture emerging markets through diversification will be key to its growth in the near future.
