Red Bull. A brief analysis of the energy drink market

Red Bull’s strength seems to be based on their strategy of concentrating on its main product; the company seeks to develop a strong brand image through sponsorship of important events while focusing on its core competences of Red Bull drink and its sugar free variant.

The development of such a strong international brand means that the company’s products have powerful recognition before they are even introduced to new international markets. Young people nationwide have developed a natural affinity with the brand finding great utility in the core benefits of the product.  Careful selection of appropriate distribution channels and the creation of a brand image created around extreme events and high profile sports have helped quickly establish a premium position within the market.

Energy and Stimulant drinks have settled themselves as a fixture in the non alcoholic drinks market, the continued popularity has boosted the market’s value and despite increasing sales and increased competition, prices are still at a premium.

This sector is lucrative as consumers appear to be prepared to pay a relatively high price for single-serve units of the convenient energy boosting drinks. Increasing numbers of ‘Cash Rich – Time Poor’ individuals has resulted in functionality becoming a key factor, new flavors, sugar free variants and bottle changes have all been attempted by the leaders in the market.

The Energy drink market are not just competing with each other but also the whole non alcoholic beverage market as consumers are drinking them for not only sport reasons. Many external factors have influenced the demand for this market, especially those related to the increasing popularity of fitness lifestyles and rising gym membership.

Possibilities for future development of the brand include diversification, changes in flavor, special editions, more/less caffeine versions could be created. 

The final suggestion is for the targeting of potentially lucrative social groups such as older adults and those looking for rejuvenating and stimulating properties from a drink, however this would involve alternative advertising as currently most stimulant drinks are aimed at the 18 – 25 year old market.