Red Bull, the drink that “gives you wings! ” began a worldwide revolution of how soft drinks are perceived by the younger adult population. Energy drinks are common items in every refrigerator for its applicability is versatile to most situations; whether it is an effort to prolong the pursuit of academia or nocturnal activities, a boost of energy enables us to do things in a 24 hour day that naturally would be too much to handle. What started as a small beverage company in 1984 is now a multimillion-dollar industry with several beverage corporations racing to compete with this budding enterprise.
In 2001, statistics show that Red Bull controlled approximately 70 percent of the market with a capital gain from domestic sales in excess of 140 million dollars. Their primary market “are young adults, better known as kids in their 20s… the company works hard courting the college crowd and has established itself in the black-and-blue world of extreme sports” (Noonan, 2001, p. 63). Aside from the fact that Red Bull pioneered this newfound soft drink craze, their differentiation strategy enables them to maintain their presence in the market.The young adult population in particular uses more hours in the day, productively or not, so a commodity that allows younger adults to be more alert. Because this market is so large, major soft-drink companies began to produce their own derivatives of the energy drink; principally among these companies would be Rockstar, Monster, and Sobe’s Adrenaline Rush.
Rockstar, a product of Coca-Cola, is the next highest shareholder of the energy drink market. In 2004, Rockstar possessed 7. 7% of the market with sales in excess of 15 million dollars, with its increase in market change by an astounding 128. % (Russo, 2004, http://www. bevindustry. com/content.
php? s=BI/2004/09&p=9).Their target market would be the American young adult population, for its origins are in Las Vegas and their nightlife would be the primary target for this company. Sobe’s Adrenaline Rush is the next biggest shareholder, possessing 6. 9% of the market with sales in excess of 14 million dollars.
Monster, the least of the 4 major companies, possesses 4. 6% of the market with sales in excess of 9 million dollars. Their target market is similar to the other beverages, ranging from the young adult to nightlife population.Due to the dominant presence Red Bull already possesses over its rival companies, the only thing the company must sustain is its advertising prowess over its rivals.
For example, founder Dietrich Mateschitz, utilizes “’buzz marketing’ strategy that herds consumers to exclusive and exciting events that get high media coverage” (Gschwandtner, 2004, p. 2). To insure their marketing success, Red Bull could possibly be global expansion to Asian markets, where an already established beverage industry could be lacking in drinks of this nature.It is no wonder that a company such as Red Bull could succeed so tremendously; their marketing expenditures total approximately 30% of their revenue, or 600 million dollars, which dwarfs the expenditures of Coca-Cola’s by 21% (Dolan, 2005, p. 4).
However, since Red Bull does not incorporate celebrities into their advertisement, with the gross income the company has now they can certainly afford to use moneymaking celebrity cameos in their advertisements from now on.
