Description Of The Organization Red Bull Commerce Essay

Energy drink is “a soft drink containing a high percentage of sugar, caffeine, or another stimulant, typically consumed during or after sporting activity or as a way of overcoming tiredness” (Oxford Dictionaries, no date). In other words, energy drink is a functional beverage whose purpose is to boost mental and physical energy by stimulating ingredients.

There is no accurate information on when the first energy drink was invented and who the inventor was, but Red Bull is often called a “pioneer” of energy drinks in Europe in many different sources.

Nowadays, the energy drink industry seems to be an attractive industry since the consumption and popularity of energy drinks are constantly growing. If in the beginning Red Bull was a company with a unique product on the European market, then now, shops and other distribution channels attract more customers with a wide range of energy drinks, presented by different companies. So, Red Bull must put great efforts in order to be favored by consumers.

Recently, the health impact of Red Bull energy drink aroused a huge interest among scientists. A lot of researches show that such essential ingredients of energy drink as caffeine, taurine, and other stimulants have negative impact on human organism.

Thus, it is important for the company to project and maintain a strong positive corporate image – “the way the company is perceived [by different stakeholder groups] (Cornelissen, 2009, p.255) – in order to succeed in the industry. According to Cornelissen, “investing in the development of a corporate image for the organization has further strategic advantages for organization” (Cornelissen, 2009, p.60). As a corporate image is a broad notion and includes many important stakeholders such as employees, suppliers, communities and so on, we decided to focus on studying of a common perception of Red Bull among its customers.

Hereby, the problem statement is:

“How Red Bull is perceived by its customers?”

While writing our case study we also answer the following research questions:

What image in the minds of customers does Red Bull wish to project? (corporate identity)

How does Red Bull project a desired image? (corporate communication)

How does the criticism of Red Bull’s impact on the health influence the customers’ perception of the company?

The background of choosing Red Bull as a company to analyze in terms of corporate image is obvious: Red Bull was and remains to be a leading company on the energy drink market in spite of criticism by scientists and raised competition.

1.1. Methods and theories

Our approach is to explore the early mentioned issue is based on the company development and history review. Thereafter, we examined the accidents of Red Bull with France, Germany and Norway.

To collect relevant information we used the Red Bull website and other Internet sources, as well as a course book “Corporate Communication” written by Joep Cornellisen.

We have carried out a survey of the reactions of Red Bull’s customers to its products and activities. Forty three people took part in answering our survey questions. Then, we have analyzed obtained answers and reported our findings.

Based on the collected information, we conducted the research of results with following conclusions. All findings are described in the “Conclusion” section.

2. DESCRIPTION OF THE ORGANIZATION: RED BULL

To start with, we examine the background of the company: how it was found, what the company’s business is, and which place on the market the company takes.

Red Bull GmbH is an Austrian company, founded by Dietrich Mateschitz in1984. The core business of the company is producing and selling of same named energy drink Red Bull.

The idea to bring energy drink to the European market emerged, when Dietrich Mateschitz was visiting Thailand in 1982. There, he discovered a tonic drink, whose primary purpose was to cure jet lag – the feeling of being tired and slightly confused after a long plane journey (Oxford Advanced Learner’s Dictionary, no date). The drink was already very popular in Asia. So, after three years of studying and modifying the original Thai recipe of energy drink, Dietrich Mateschitz launched his first Red Bull energy drink in Austria in 1987 (Red Bull, 2012).

As Mateschitz said in an interview with Forbes, “When we first started, we said there is no existing market for Red Bull. But Red Bull will create it. And this is what finally became true.” His product was unique in Europe, so Dietrich Mateschitz needed effective marketing strategies to make Red Bull successful. Thanks to his marketing education and working experience in such big company as Unilever, Dietrich Mateschitz has built not just a strong brand that became very popular around the entire world, but a new category of product (Forbes, 2012).

Nowadays, Red Bull is presented in more than 160 countries. The company takes the first place in energy drink market with a total of 4.631 billion cans sold worldwide in 2011 (Red Bull, 2012).

For the moment, Red Bull energy drink is available in three sizes: 250 ml, 355 ml and 433 ml, and has three flavours: Red Bull Energy Drink (the original taste), Red Bull Sugarfree and Red Bull Cola. There is also Red Bull Energy Shot – the concentrated version of Red Bull Energy Drink and Red Bull Sugarfree, which is just 60 ml (Red Bull, 2012).

3. CREATING A CORPORATE IDENTITY

According to Cornelissen, “Corporate identity is the character a company seeks to establish in the mind of its stakeholders” (Cornelissen, 2009, p.255). In order to understand, how the company actually wants to be seen by its stakeholder (with a focus on customers) we need to have a look at three key attributes of corporate identity: symbolism, communication and behavior.

3.1. Symbolism

In accordance with Oxford Dictionaries, symbolism means “the use of symbols to represent ideas or qualities” (Oxford Dictionary, no date). Thereby, a company projects its symbolic identity by four main components: corporate name, logo, colors and slogan (Zinghan et al., no date).

The company’s name Red Bull concurs with the name of energy drink it produces, which is, in turn, an English version of Thai “Krating Daeng” – an energy drink that was a basis for Red Bull. The founder of Thai energy drink, Chaleo Yoovidhya, took the name from gaur – a large bovine that dwells primarily in South Asia (Wikipedia, 2012). The image of two red bulls opposing each other against the sun is a company’s logo. The combination of selected colors and images of the bulls and sun represents courage, strength, aggressiveness and risk-taking. Blue and silver colors are used in design of the can and the company’s website. Blue color symbolizes freedom and purity, while silver usually represents security, reliability, and intelligence.

The company’s slogan “Red Bull gives you wings!” is very widespread and points to Red Bull’s power to provide energy and “vitalize body and mind” in order to stay mentally and physically active (Red Bull, 2012). Moreover, the shape of the can of energy drinks resembles a battery that can ‘charge’ you.

3.2. Communication

Corporate identity reflects the ways the company communicates with different stakeholder groups, customers in particular. Here, we examine how Red Bull establishes and maintain relationships with its customers and create awareness of its brand and products. But first, we have a look at who are the customers of Red Bull.

The target market for Red Bull is primary Generation Y – the generation born between 1977 and 1994, so it consists of teens and young adults. According to the company’s website, Red Bull is for “people who want to have a clear and focused mind, perform physically, are dynamic and performance-oriented whilst also balancing this with a fun and active lifestyle” (Red Bull, 2012). However, the company mainly focuses on reaching young males, as can be seen from their business development strategies.

In order to establish a desired image in the minds of customers, Red Bull uses innovative and successful communication strategies.

So-called “street marketing” is a wild used approach by Red Bull. It enables the company to raise brand awareness in positive terms and attract new customers.

Red Bull makes its brand visible and memorable for consumers by ‘showing’ it in various public places (Biz/ed, 2012):

Red Bull’s campaign car – the little car, colored with brand’s colors (silver, blue and red) with the can on the top.

Distribution of free Red Bull energy drinks on the street to people who have been identified as “in need of energy”

Distribution of Red Bull in clubs, restaurants, bars

Event marketing is yet one more approach of Red Bull. Red Bull has rapidly become popular due to its active participation in various sports and entertainment based advertising campaigns. The company support such extreme sport events as cliff diving, wind surfing, BMX, skateboarding, snowboarding and many others. Red Bull also often associates with motorsport and football. Naturally, Red Bull organizes or takes part in events related to ‘flying’ (Red Bull, 2012). These events are ranging from Red Bull Flugtag (Flight Day) – an event, organized by Red Bull, where participants compete with each other on building homemade flying vehicle, to Red Bull Stratos – a joint project of Red Bull and famous skydiver Felix Baumgartner, who made a freefall on 14 October 2012 from the record high – 39 kilometers (Red Bull Stratos, 2012). Thus, associating with such popular and active events, Red Bull promotes not just an energy drink, but an active lifestyle brand.

Besides unconventional strategies, Red Bull applies to the common used advertising approaches as billboards, print and broadcast advertisements, and television advertising. Red Bull easily reaches its audience, because of its simple drawings that tell funny stories.

3.3. Behavior

It is not possible for Red Bull to influence salespeople, as the Red Bull is distributed through shops, restaurants, bars and other points of sale, so Red Bull has found another way to spread the word-of-mouth and project a positive image when it comes to employees.

The company has created Red Bull Wings Team to “to put a Red Bull product and leaflet in the consumers’ hand and offer a memorable experience that will drive brand loyalty” (Red Bull USA, 2012). In other words, the core mission of Wings Team Members is to communicate with customers, collect the information and comments on consumers’ perception of the product and create a positive image of the drink. Moreover, Red Bull has developed a Student Brand Manager – a person, who “brings the Red Bull brand to life in the world of all things college” and helps to build “a global brand” (Red Bull University, 2012). Thus, the company is more likely to promote a good image and perception of its brand, and communicate closely with the target consumers, spreading the popularity of the drink.

4. INFLUENCE ON RED BULL’S IMAGE

Here, we are focused on negative publicity and ban on sales of Red Bull energy drinks in several countries. This will help us to find out which outside factors may influence Red Bull’s image.

4.1. Negative publicity

Red Bull is often used as a quick way to receive energy and mental simulation for a short period of time. Because of the large amount of caffeine in this energy drink, you will gain some energy, but also a risk of serious conditions. One can of Red Bull contains 80 milligrams of caffeine, which is four times more than it is in one coca cola can (YAHOO, 2012).

There are several health risks with Red Bull. Only one Red Bull raises the risk of heart attack and stroke. Dr Scott Willoughby said that by drinking only one Red Bull, your blood system will no longer be normal. The sugar free version of Red Bull, the one that “gives you wings” increase “stickiness” of your blood and raises the risk of life threatening clots. Dr Willoughby also tells people with underlying heart or circulatory problems that they should think twice before drinking this energy drink (Mail Online, 2012).

Young people often mix this energy drink with alcohol, especially vodka. According to Denmark this makes a “slow death drink”, because of the ingredients GLUCURONOLACTONE. This ingredient with alcohol can have a deadly outcome (Diet, Health and Fitness News, 2012). An 18 year old boy died after drinking two cans of Red Bull, his heart rate went up and he did not make it. After that, this energy drink has banned from Denmark and France (The New York Times, 2012).

4.2. Bans on Red Bull energy drink in some countries

Nowadays, Red Bull is selling in more than 160 countries around the world, but Red Bull did not get market approval in some countries for several years because of its impact on health – such ingredients as caffeine and taurine, contained in Red Bull energy drink in large quantities, are dangerous for human organism. Some countries, where energy drink was banned, have introduced regulations, specifying the production and marketing of energy drinks before they are legalized in these countries.

Canadian manufacturers have obligated producers of energy drinks to indicate on the packaging the information on the maximum daily consumption, which should not exceed two cans, as well as warning that the drink should not be mixed with alcohol (Bevwire, 2012).

For several years in Norway Red Bull was sold only in pharmacies. Nowadays, this energy drink is permitted to be sold in supermarkets, but there is an age limit. New EU regulations specified a permissible content of caffeine in the energy drink in EU countries. Regulations have affected Norway, even though it is not a member of EU. Red Bull was no longer be classified as pharmaceutical agent. Due to the EEA agreement, Red Bull was allowed to appear on the Norwegian market, but the content of vitamin B had to be reduced. (VG NETT 2012; Dagbladet, 2012).

There have been 12-year ban on energy drink Red Bull in France. The reason for prohibition of the product for so many years was that health authorities in France have been concerned about bad, but not specified health implications of taurine. Yet one more reason was that other countries have also banned the product. However, France had to legalize the drink for same reasons as Norway did. According to the France’s food safety agency website, European Union regulations state that if the product is sold or made in other EU countries, it cannot be banned until a health risk is proven. Nowadays, modified version of Red Bull, that contains caffeine, but not taurine, has got a permission on sell in France. Even though, Red Bull has got regulatory approval to sell its products, a French Minister for Health, Roselyne Bachelot, expressed her distrust of Red Bull energy drink, and asked to keep the drink under surveillance. She also said that the public should be informed of the possible negative effects of the drink (Reuters, 2012).

Austria-based Red Bull agreed to indicate health warnings about the high content of caffeine; recommendations concerning limited consumption of the product, as well as advertising against drinking Red Bull by pregnant women and children (Reuters, 2012).

In May 2009, news agency DPA/AFP announced, that six states of the Federal Republic of Germany asked sellers to cut off their sales of Red Bull Cole energy drink. The reason was that the German food regulators discovered a small quantity of cocaine in cans of Red Bull Cola. The National Institute of Health confirmed the information that cans of Red Bull Cola contained 0.13 micrograms of cocaine. That gives 0.4 micrograms in one liter. German Federal Institute for Risk Assessment said that the cocaine concentration is too small to show a negative effect on people. Nevertheless, officials in Hesse, North Rhine-Westphalia, Thuringia and Rhineland-Palatinate have banned the drink after health officials noted trace amounts of cocaine in cans of the cola (DW, 2012).

5. SURVEY

A survey, we designed, consists of 8 questions and is based on the results of our qualitative research. The objective of the survey was to investigate consumers’ attitudes and perceptions of Red Bull. Using the convenience sampling method, the survey was distributed online to our friends.

The survey was sent by email. We received responses from 43 persons living in Norway, France, Germany, Spain and Russia.

1.

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We have questioned a large population with different ages because there is no age to appreciate a drink. The results of the first question are shown in Figure 1.

2. 3.

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In regard to the second research question, 100 % of the people have already tasted an energy drink. Therefore we can easily see that that the majority knows what an energy drink is and has tasted it. As a result, we can say that the energy drink market is well known by the consumers. In turn, the answers on the third question showed that Red Bull energy drink is also well consumed among all energy drinks. To be more detailed, the 65% percent of respondents drink Red Bull’s energy drinks.

4.

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At the same time, respondents were asked if they are aware of Red Bull’s negative impact on health. Thus, only 5 respondents (11%) were indifferently to this energy drink and we can assume that most of people are informed about the negative impact.

5. 6.

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To explore the consume behavior of the respondents, the next two questions were asked about how they will consume Red Bull energy drink according to their familiarity with negative impact of Red Bull. Figure 5 shows, that the majority will still consume Red Bull. Figure 6 show, that those, who were already aware of Red Bull’s impact, are more likely have reduced the consumption of this energy drink or it has not changed at all. Some of the respondents have stopped drinking Red Bull, and some even increased the consumption.

7.

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In regard to the one of the common areas of our survey, respondents were asked to estimate how good their general perception of the Red Bull company is. Poor and bad perceptions were represented by 7% of responses. In turn, good insight was expressed by 43 % of responses. Surprisingly, but the half of all respondents, in spite of the negative impact, exerted by Red Bull energy drinks, are still impressed by the Red Bull company.

8. Open question: Is there something you don’t like about Red Bull products? If yes, please, specify.

Twenty nine people answered this question. Hereby, other fourteen are satisfied with Red Bull products or indifferent. From the answers, we found out that most respondents are not satisfied with the price of Red Bull energy drinks (17 answers) and a flavor (8 answers). Some respondents also mentioned the design of Red Bull cans (5 answers). Three respondents answered that they wish that Red Bull energy drink could provide more energy.

6. RESULTS

6.1. Problems we faced

While working on our case study report we faced several problems:

First of all, we had a lack of information on Red Bull’s website, which is the primary source for collecting data about the company, its businesses and its products. The website www.redbull.com contains the most information about events it organizes or sponsors as well as videos, photos, audios, etc. connected with these events. The information about the company itself and its products, as well as any comments on health problems caused by Red Bull energy drink is only a small part of whole information published on the website or is not mentioned at all.

A lack of statistics is yet more problem. The statistics on sales before and after the ban on Red Bull energy drink in several countries would help us to evaluate to what extent it influenced customers’ buying behavior and the company’s image as a consequence.

To make a relevant survey was a big challenge for us, as we could not decide on what kind of questions should be included in order to study the Red Bull’s image among the customers. The questions we included in our original survey did not help us to answer the main question that we stated at the beginning of the case study report. We prepared a new one, more relevant survey, but as the result we have not got as many responses as we expected.

6.2. Conclusion

The research we made on Internet and other sources shows that it seems that Red Bull perceives itself as a company that produces not just a drink, but a lifestyle.

Red Bull is everywhere, mainly in dangerous sport and events. The company organizes competitions, creates the teams, sponsors the sportsman and etc. This company’s approach of delivering its products leads to the association with extreme, dynamic way of life, with brave and courage people. The communication strategies of Red Bull are focused to achieve a simple goal: wherever and whenever consumers need energy, the company wants to appear in their minds automatically.

Thus, the company is more focused on promoting extreme sports and active lifestyle, rather than its products. We can see that Red Bull does not pay so much attention on developing the energy drink itself – the flavor, the form, or something that can distinguish the company more from its competitors.

From the survey results, we can say that it looks like Red Bull has succeeded in creating a positive image among its customers. Most of the people, who participated in the survey, estimate the company quite high.

It seems that even the publicity that do not stop informing people of Red Bull’s health impact, has not influenced a lot the perception that the customers have about the company. The survey showed that most of those, who answered. are aware of Red Bull’s impact on health. Just a few of them have reduced the consumption of Red Bull, or have not changed the consumption at all. Surprisingly, but some of respondents even increased the consumption of Red Bull energy drink. A reason for it might be that prohibition of something, on the contrary, sometimes just raises the interest among people. Those, who did not know about Red Bull’s effect on health, would likely continue to consume Red Bull energy drink, rather than stop consuming it.

The survey also shows that two more popular reasons (besides health impact) why customers prefer other energy drinks to Red Bull are an overestimated price and taste. It is true, that Red Bull energy drink costs much more than other energy drinks. Some customers cannot afford to buy Red Bull as often as they want or simply do not want to overpay if there are some other similar energy drinks. The overstated price is might be a marketing tool to make Red Bull a product not for “universal use”.